6 TH April 2011

April 6, 2011
Contents
Future Group News KISHORE BIYANI PROMOTED FUTURE CAPITAL HOLDINGS TO INCREASE LOAN BOOK Industry News REVISITING THE 4 P'S OF COMMODITY MARKETING FETTERS ON FDI HOLDING BACK INDIAN RETAIL, SAY ANALYSTS FDI IN MULTI-BRAND RETAIL IN COLD STORAGE? MONETARY RESPONSE, MUST TO STOP INFLATION FROM SPIRALLING AWAY: GOKARN CAVINKARE LOOKING AT PRIVATE PLACEMENTS FROM BRAND MARRIAGES TO MONTHLY SWAYAMWARS SPAR TO INVEST RS 550 CRORE FOR EXPANSION E-STORES OFFER OFFLINE PAY OPTION TO LURE BUYERS LATE ENTRY IN INDIA HAS ITS ADVANTAGES LG MOBILE EYES RS 3,000 CRORE REVENUE IN INDIA FMCG INDUSTRY JITTERY ON PLASTIC PACKAGING ISSUE MAPRO PLANS FRUIT SOFT DRINK BRAND F20 BRAND YUVRAJ: THE GAME HAS JUST BEGUN TOSHIBA PLANS RS 200 CRORE SPEND ON MARKETING >>more
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Future Group News
KISHORE BIYANI PROMOTED FUTURE CAPITAL HOLDINGS TO INCREASE LOAN BOOK SIZE TO 5,000 CRORE The Economic Times, April 6, 2011 http://economictimes.indiatimes.com/news/news-byindustry/banking/finance/kishore-biyani-promoted-future-capital-holdings-to-increaseloan-book-size-to-5000-crore/articleshow/7880338.cms Future Capital Holdings, the financial services arm promoted by Kishore Biyani, plans to increase its loan book size to 5,000 crore by the end of this financial year. The company has grown its asset size by 100 percent from 1,500 crore to 3,000 crore at the end of March 2011, said Future Capital vicechairman and managing director V Vaidyanathan. "We will offer loans for homes, properties and gold loans. Protection for these loans will also be offered through our insurance products." The company aims to set up 100 super stores in this financial year through which it would provide basic financial needs of customer borrowing, investment, protection and financial planning. It plans to disburse 1,000-crore loans through these centres. The stores will be integrated with the group's retail outlets like Big Bazaar, E-zone and Hometown.
(Same report also covered in The Financial Express, Business Standard, Financial Chronicle, The Hindu Business Line, The Statesman, Mint, Hindustan Times, Business Standard)
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Industry News
REVISITING THE 4 P'S OF COMMODITY MARKETING The Economic Times, April 6, 2011 The 4Ps has been the Bible for marketers. Given the intense cost pressures and competition today, commodity industries are now realising the importance of four new Ps that provide real customer differentiation specifically in the B2B setting.
Personalised proposition Personalisation is the name of the game; however, the only caveat is to guard against the backend in delivering these personalised solutions. Partnership model The price discounting route alone can prove to be fatal in B2B industry. However, partnering with customers on integrating supply chains to reduce inventories, or collaborating on a new product development to produce consumer relevant innovations can build strong entry barriers and also provide a win-win arrangement to both parties. Professional networks There exist networks of Influencers who can be used to develop lasting professional networks masons, fabricators, mechanics, village headmen etc. The caution here is to choose your influencer group with care, as the wrong group can erode your brand equity and an overtly biased influencer may deter customers. Pass-through promise Uncover hidden differentiators to entice customers for examples: many things can serve as the basis of differentiation for and subsequent branding of your commodity. These attributes can apply to your product itself, your service, your company, the support you offer, or other intangible qualities that are unique to your total product offering thereby insulate the marketer from commoditisation. Gupta is chief, marketing & sales (flat products), Tata Steel; and Bhagwati is principal, Accenture. The views are personal
FETTERS ON FDI HOLDING BACK INDIAN RETAIL, SAY ANALYSTS The Hindu Business Line, April 6, 2011 http://www.thehindubusinessline.com/industry-andeconomy/marketing/article1602817.ece?homepage=true The Indian consumption story is still strong but lack of foreign investment could curb expansion of Indian retail, say sector analysts. The Indian retail industry is estimated to be between Rs 12 lakh crore and Rs 14 lakh crore, with about 5 percent of its sales coming from the organised sector. The industry is growing at 10 percent annually, with modern retail growing at 25 percent. Its inherent long gestation period before yielding returns necessitates retailers with deep pockets to scale up and sustain their operations, explains N.V. Sivakumar, Leader, Retail, Industrial and Consumer Products, PwC India. Arvind Singhal, Chairman of consulting firm Technopak Advisors, says the stand taken by the Government defies both economic and political logic, as the Government is grappling with inflation in the last two years. The issue is not about growth of the modern retail industry. The bigger ground reality is how to make the producer-consumer and the farmer-consumer supply chain more efficient. Foreign investment would also help create millions of jobs for those who are not well-trained or qualified to take up other careers, points out Singhal.
FDI IN MULTI-BRAND RETAIL IN COLD STORAGE? The Hindu Business Line, April 6, 2011 http://www.thehindubusinessline.com/opinion/article1602668.ece The Union Finance Minister, Pranab Mukherjee, deserves compliments for not succumbing to the corporate lobby pressure to open up multi-brand retail to foreign direct investment; and more importantly for taking on board serious apprehensions expressed by several groups about the utility of such investment in bringing about positive changes in the agricultural marketing set-up. From another angle, his demand for a larger consensus' on the complex' issue not only reflects the nervousness of the government in taking a unilateral decision, but also concern that such a decision can go frightfully wrong and wreck more damage than one can imagine. For building a larger consensus, the Centre will rope in State governments. The consultation process is sure to take several months, if not years.
PMEAC FOR USING ALL POLICY OPTIONS TO TAME INFLATION The Hindu Business Line, April 6, 2011 http://www.thehindubusinessline.com/industry-andeconomy/economy/article1602047.ece The Prime Ministers economic advisory panel wants the Government to utilise all available policy options to bring down inflation to an acceptable level of 4-5 percent from 8.31 percent currently. We must use all our policy instruments to bring down the current inflation and re-anchor the inflationary expectations to the four-or-five percent comfort zone, Dr C. Rangarajan, who heads the Prime Ministers Economic Advisory Council, said. Pointing out that the last four weeks have witnessed a rise in vegetable prices, one of the primary causes of food inflation this year, he said inflation is expected to come down in the coming weeks.
MONETARY RESPONSE, MUST TO STOP INFLATION FROM SPIRALLING AWAY: GOKARN The Hindu Business Line, April 6, 2011 http://www.thehindubusinessline.com/industry-andeconomy/banking/article1602361.ece In yet another indication that the Reserve Bank of India will press ahead with its calibrated rate hikes, the RBI Deputy Governor, Dr Subir Gokarn, on Tuesday said the central bank cannot afford to be slack on inflation merely because it is coming from a certain set of factors. Monetary policy, according to the top RBI official, cannot stay idle on the assumption that inflation is not from the demand side. For much of the past several months, the dominant contributors to food inflation have been pulses, milk, eggs, fish and meat and fruits. The increase in prices indicates that supply is just not keeping pace with demand. The only way to keep food prices in check is to produce more of what people want to consume.
INDIA BANS FOOD IMPORT FROM JAPAN FOR 3 MONTHS The Hindu Business Line, April 6, 2011 http://www.thehindubusinessline.com/industry-and-economy/article1602611.ece India has banned import of food articles from Japan for three months with immediate effect, the Government said in a statement. The ban will remain till such time that the radiation hazard has subsided to acceptable limits. India mainly imports processed foods in small quantities from Japan. The Food Safety and Standards Authority of India in a recent meeting with experts from Board of Radiation & Isotope Technology, Bhabha Atomic Research Centre (BARC), Atomic Energy Regulatory Board and the Indian Institute of Toxicology Research reviewed the situation arising out of nuclear disaster in Japan.
NAVRATRA DEMAND SENDS FRUIT PRICES SOARING The Pioneer, April 6, 2011 http://www.dailypioneer.com/329483/Navratra-demand-sends-fruit-pricessoaring.html In view of ongoing Chaiti Navratra, fruits prices have increased two fold in Dehradun and people have no option other than paying higher prices. This credit goes to middle men because prices of fruits in mandi and shops vary between three to four times. Uttarakhand Agriculture Produce Marketing Committee official said that due to less supply of fruits, which come from neighbouring States, prices of fruits have gone up. Following festive season, its consumption have also increased four to five times if we compare with a normal day. This price will come down once Navratra would be over or after a week or so.
CAVINKARE LOOKING AT PRIVATE PLACEMENTS The Economic Times, Page 4, April 6, 2011 http://economictimes.indiatimes.com/opinion/interviews/cavinkare-looking-at-privateplacements-chinni-krishnan-ranganathan/articleshow/7879529.cms There's a lot on the plate of Chinni Krishnan Ranganathan. The CMD of Chennai-based CavinKare, which came up with the blockbuster idea of selling shampoos in sachets in the early 1980s, now plans to relaunch some of its brands including its oldest brand Meera. Ranganathan has his agenda ready: relaunch key FMCG brands, explore overseas markets for food brands, consolidate salons business to make it the country's largest and rejig the restaurant business and improve its margins. He plans to raise money through private placement of shares. Excerpts: How do you plan to revive your haircare business, where the competition has become very tough?
Meera (CavinKare's oldest brand) will see a makeover and be re-launched in May. We want to push it more aggressively. We are taking Chik, Nyle and Fairever fairness cream to Mumbai. And there are plans to relaunch them. Will you revisit your IPO plan? We are ready always, but not for an initial public offering. We are looking at private placements.
FROM BRAND MARRIAGES TO MONTHLY SWAYAMWARS The Economic Times, Page 3 (Supl.), April 6, 2011 Marketers of the current era have grown up studying books that said, 70 percent of consumer products choices are made out of sheer habit. You largely buy what you bought last time. So we set out to do a status check on this, by asking aspiring urban folks two questions; How many soap, shower gels, hand wash, face wash, shampoo, body lotion brands do you have on your bathroom shelf right now? Last month, how many of them were different? The answers were, to say the least, a revelation and it sure poses fresh challenges to conventional marketing thinking. If brands were folks and we had relationships with them, then the method of buying from the corner store was more like a marriage, where month-in-month-out we bought the same brand for lack of any other option or way of exercising it, simply as a matter of habit. In the new market place, the relationship paradigm has visibly changed to one of dating and mating with like-minded brands. If the shop shelves are where the monthly swayamwar is to be held, individual brands will have to fight to look their best and work with the stores to be first in the line of the customers attention. Brand swayamvars need an important service supermarkets. Without these courtship venues there would be no avenues for the aspiring new brands. In fact, the two things feed off each other.
(Author: Damodar Mall, Director-Food Strategy- Future Group)
INDIANS FLOOD MALLS TO HANG OUT, NOT BUY Mail Today, April 6, 2011 The mushrooming malls in the metros and smaller cities are attracting huge footfalls but most of the customers use these malls as hang out places because of their air-conditioned eateries and multiplexes and prefer to shop for consumer durables and luxury goods from markets outside. This trend has been revealed in a recent survey carried out by Track2realty, a real estate market tracker company. Seven out of 10 Indians with high disposal incomes go to shopping malls at least twice a month but dont buy the monthly stock of food and grocery, apparels or consumer durables over there, the survey said. About 88 percent Indians who go to shopping malls either just hang out with friends at cafs, food courts or go there for the purpose of watching a movie rather than actually shopping, the survey said.
SPAR TO INVEST RS 550 CRORE FOR EXPANSION Business Standard, April 6, 2011 http://www.business-standard.com/india/news/spar-to-invest-rs-550-cr-forexpansion/431105/ Max Hypermarkets, the food retailing chain of the Dubai-based Landmark Group is investing Rs 550 crore for its store expansion business across 30 cities in India.
E-STORES OFFER OFFLINE PAY OPTION TO LURE BUYERS The Times of India, April 6, 2011 http://timesofindia.indiatimes.com/business/india-business/E-stores-offer-offline-payoption-to-lure-buyers/articleshow/7879929.cms If shopping online wasn't your thing because you were wary of online scams, you can do it the good old way-using cash. Cash on Delivery (CoD), where the customer pays for what he/ she purchased once the items are delivered, used to be popular in the US when credit cards hadn't gained popularity. Now, Indian e-commerce is also switching to CoD to increase their customer base. "We started CoD mainly due to the under-developed nature of the Indian payment system. In the West, the preferred method of payment online is the credit card whereas in India we have only 8-9 million unique credit card users," said Ajit Balakrishnan, founder-CEO of Rediff.com. Sales from CoD account for 40-45 percent of Rediff's revenue. Flipkart, which introduced CoD last April, saw a dramatic jump in sales. Even travel portals like MakeMyTrip and Yatra have jumped on to the CoD bandwagon.
E-SHOP TILL YOU DROP The Economic Times, April 6, 2011 The dot-com boom in early 2000s saw a number of companies being set up online with varied models. Today the space is once again getting inundated by Indian entrepreneurs looking to make their millions. Different portals are coming up with different business models. One such new player in the space is LetsBuy.com, co-founded by Hitesh Dhingra and Amanpreet Bajaj, that has positioned itself as an online retailer of computers, consumer electronics and communication products. The portal aims to be an online equivalent of an electronics retailer. A research conducted by Internet & Mobile Association of India (IAMAI) about online commerce in India shows that the purchase of computer and computer peripherals, cameras, mobiles and MP3 players is the second largest category, after the online travel industry and is pegged to be a 950 crore market. It is this pie of the e-commerce market that LetsBuy.com is eyeing. The
portal recently received funds worth $6 million from venture capitalists and is targeting to close this year with 100 crore turnover.
JOHN PLAYERS NEW CASUAL WEAR RANGE Financial Chronicle, April 6, 2011 http://e.mydigitalfc.com/DCF/DCF/2011/04/06/ArticleHtmls/06_04_2011_007_050.sh tml?Mode=1 John Players' refreshing new range of casual wear. includes denim shirts, classic shorts, polos, chinos and T-shirts in bright check and colours like aquamarine greens, ocean blues and lemon yellows. The collection also offers knitted shirts and tees in patterns and prints which are a must have this season. The bottoms with regular and slim flat fronts fits vary from lighter shades of beige, browns and greys.
1.5% REDUCTION IN PROPOSED DUTY ON BRANDED CLOTHES The Indian Express, April 6, 2011 http://www.indianexpress.com/news/1.5-reduction-in-proposed-duty-on-brandedclothes/772333/0 A few visits, demonstrations and a hunger strike later, the agitation for getting excise levy on labelled garments removed stands where it was, except for a small concession of duty reduction of 1.50 percent in the proposed 10 percent tax levy. This has brought the tax levy down to 8.5 percent, but the garment trade has stuck to its demand of a total rollback. Vijay Purohit, who heads Gujarat Garment Manufacturers Association (GGMA) said the fast unto death ended last week at the instance of state Congress president Arjun Modhwadia.
LATE ENTRY IN INDIA HAS ITS ADVANTAGES Financial Chronicle, April 6, 2011 http://e.mydigitalfc.com/DCF/DCF/2011/04/06/ArticleHtmls/06_04_2011_006_055.sh tml?Mode=1 Puma India, the Indian subsidiary of the third largest global sport lifestyle company Puma, feels that its relatively late entry into the Indian market lends it many advantages. Puma India MD, Rajiv Mehta, spoke on the company's expansion and product sourcing plans in the Indian market. Edited excerpts: You are a relatively late entrant into the Indian market where the competitors such as Nike, Reebok and Adidas are already well established. How do you plan to make up for the lost time and market share and address the drawbacks? There are drawbacks if you enter a market late. There will be a lot more catching up to do because brands like Nike, Reebok and Adidas have been here for 15 years and are steadily growing. They've
got prime retail spaces at much lower rentals, which we may struggle for. So, their business profitability is probably higher. They are more entrenched in the minds of the consumers because they have been present for long. However, the biggest advantage for us is we can start learning from their mistakes.
LG MOBILE EYES RS 3,000 CRORE REVENUE IN INDIA Financial Chronicle, April 6, 2011 http://www.mydigitalfc.com/companies/lg-mobile-eyes-rs-3000cr-revenue-india-836 Korean handset maker LG Mobiles is eyeing a turnover of Rs 3,000 crore this year with the launch of new smartphones and other feature-rich phones in the country. The company, which will launch 10 smart phones this year, registered an about Rs 2,000 crore revenue in 2010. "We have a strong product lineup for this year. This will include 10 smartphones and other featurerich phones. We expect our revenue to touch Rs 3,000 crore by the year-end," LG Electronics India Business Head (Mobile Communication) Vishal Chopra said. The company today launched its new smartphone 'LG Optimus 2X' in the country, priced at Rs 30,000.
LG PLANNING TO BRING 3D TABLET TO INDIA IN JUNE The Economic Times, April 6, 2011 http://economictimes.indiatimes.com/tech/hardware/-lg-planning-to-bring-3d-tabletto-india-in-june/articleshow/7879838.cms LG Mobiles is planning to bring its yet-to-be-globally-launched 3D tablet to India in June, a senior executive in the company said. It will compete with Samsung's Galaxy Tab and Apple's iPad and is likely to be priced between Rs 30,000 and Rs 40,000. Vishal Chopra, LG Electronics business head for mobile communications, said the tablet could be priced lower than Rs 30,000 depending on currency valuation and import duties at the time of the launch. "I will be in a better position to say (about price clarity) around last week of May," he added.
FMCG INDUSTRY JITTERY ON PLASTIC PACKAGING ISSUE Financial Chronicle, April 6, 2011 http://e.mydigitalfc.com/DCF/DCF/2011/04/06/ArticleHtmls/06_04_2011_006_025.sh tml?Mode=1 The Rs 1,30,000-crore fast moving consumer goods industry is jittery after the Supreme Court issued notice to the government asking why there should not be a complete ban on the use of plastic in packaging of various daily use products. Plastic is widely used in packaging of products like milk, milk products, edible oils, soaps, shampoos, toiletries, salt, fertilisers, fast food, juice and sweets.
COO (operations) of Godrej Consumer Products RK Sinha said, "If there is any such notice by the SC, then the entire industry will have to work on it. As of now, we have not spoken to the government on the issue." Sinha said it would be difficult for the company to cope with any new packaging guideline right away. Nagarajan S, MD of Mother Dairy, said that "30 percent of Mother Dairy's milk is distributed without plastic packaging and sale of loose milk is being increasingly encouraged". So far no substitute has been found for milk packaging, he said. Amul's MD RS Sodhi said, "The only alternative to plastic packaging is selling loose milk which is not very hygienic."
AMUL TO RAMP UP DISTRIBUTION The Asian Age, April 6, 2011 http://epaper.asianage.com/ASIAN/AAGE/2011/04/06/ArticleHtmls/06_04_2011_016 _003.shtml?Mode=1 Gujarat Co-Operative Milk Marketing Federation, which sells dairy products under the brand "Amul", on Tuesday said it will expand its the distribution network to 3,000 towns over the next six months, as it targets to be a Rs12,000 crore brand by next year. "We will appoint 200 super distributors over next six months period in remote towns of India so as to expand our network to 3,000 towns," Gujarat Cooperative Milk Marketing Federation (GCMMF) managing director, R.S. Sodhi, said. At present, Amul has presence in all the major cities covering around 1,000 towns, across the country.
MAPRO PLANS FRUIT SOFT DRINK BRAND F20 Financial Chronicle, April 6, 2011 http://e.mydigitalfc.com/DCF/DCF/2011/04/06/ArticleHtmls/06_04_2011_007_042.sh tml?Mode=1 Jam and beverage maker Mapro Foods, a Panchgan-ibased company, plans to launch a litchi and mango soft drink pack under the brand `F2O' next week in the Mumbai-Pune belt. "We launched F2O last month in the hill towns of Mahabaleshwar and Panchgani," Mayur Vora, managing director, Mapro Foods said. He said the 500-ml pack has been priced at Rs 30. The company sold a total of 25,000 bottles of the two drinks last month. "Our plan is to double annual revenue in 2011-12," he claimed, without giving the revenue figure. A company official pegged the revenue for 2010-11 at Rs 80-90 crore.
VADILAL TO EXPAND CAPACITY TO 3.25 LAKH LITRES/DAY The Hindu Business Line, April 6, 2011 http://www.thehindubusinessline.com/industry-andeconomy/marketing/article1588160.ece With its Rs 80-crore expansion-cum-modernisation plans completed, Vadilal Industries Ltd, India's second largest ice-cream maker after Amul, is all set to increase its production capacity from the existing 2.25 lakh litres per day to 3.25 lakh litres at its two manufacturing plants in Gujarat and Uttar
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Pradesh, from Friday. The Rs 40-crore expansion at each of the plants Pundhra in Gandhinagar district and Bareilly in Uttar Pradesh has been carried out with internal accruals and borrowings, Rajesh Gandhi and Devanshu Gandhi, both Managing Directors said here today.
BRAND YUVRAJ: THE GAME HAS JUST BEGUN Business Standard, April 6, 2011 http://www.business-standard.com/india/news/brand-yuvrajgame-has-justbegun/431087/ After he smashed India to World Cup victory, the cricketer has moved to a new orbit in the endorsement circuit
TOSHIBA PLANS RS 200 CRORE SPEND ON MARKETING Financial Chronicle, April 6, 2011 http://e.mydigitalfc.com/DCF/DCF/2011/04/06/ArticleHtmls/06_04_2011_007_027.sh tml?Mode=1 Toshiba plans to spend Rs 200 crore in the next six months to market its digital products as it plans a nationwide expansion. The Japanese consumer durables company has targeted selling 3 lakh LCD TVs in the current fiscal and 12 lakh units in 2012-13. "April 2011 onwards we have aggressive marketing plans. We're expanding all over India. We want to double our sales this fiscal and acquire 5 per cent market share in this year and double it in 2012-13. Considering all these, spending on media becomes essential," said Pranab Mohanty, head consumer product division of Toshiba India.
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April 6, 2011

Future Group News

(Author: Damodar Mall, Director-Food Strategy- Future Group)

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