The Indian Retail Industry - Big Movers & their Strategies

Some recent trends in the Indian retail markets: 

Bharti Retail

Bharti Retail, a unit of Bharti Enterprises, has announced on 27th September 2010 to enter western India with its first hypermarket in Mumbai. Sunil Mittal's company has signed a 60,000 sq ft store in the Neptune Magnet mall of Mumbai's Bhandup area, and this is expected to open in Q1, 2011. Post this launch, the retailer also plans to open 20 such stores across Pune, Mumbai and Nanded.

The company is planning to set up a distribution centre on the Mumbai-Pune highway to cater to the western markets. Bharti, unlike Reliance, does not want to go pan-India at once, but focus and consolidate on one region before entering another.

Currently, Bharti Retail operates 90 stores in the northern states of Punjab, Haryana, Uttar Pradesh, Uttarakhand and New Delhi. These stores include the smaller 'Easyday' neighourhood stores and the hypermarket format called 'Easyday Market'. Bharti also runs cash and carry stores called Best Price Modern Wholesale under the joint venture with Walmart.

Bharti's ambitious plans also include opening stores in the south. Earlier this year, Bharti said that it had planned a total of 140 stores across the country by the year end. However, for these ambitious plans to succeed, Bharti has to work doubly hard. In 2007, it had talked about major plans of retail areas of 10 million square feet by 2015. 

Reliance Retail

Mukesh Ambani's Reliance Retail, launched in 2006 expects to break even in a year or two. It was originally planned to break even in September 2009. In May, new plans for growth were announced post the scale-back on expansion due to the economic slowdown. 

The new plan includes improving infrastructure to world-class levels, while strengthening presence in multi-format stores while leading in fresh food stores.

Reliance Retail today runs about 1,150 stores. It plans to open 3000 new stores across the country by 2014-15.

Dabur Retail

While, on one hand we see bigwigs setting up retails for expansion, Dabur has chosen to go the franchise route.

Dabur India has announced its plans to adopt the franchise route to spread its  retail brand 'Newu', while focussing on smaller format stores to expedite expansion. 

Dabur India's subsidiary, H&B Stores Ltd. that currently operates 22 'Newu' stores in North India, is looking to open up to 150 new stores in 2011-12 and enter in the western region.

It is also trying express or smaller formats that have quick turnaround time, besides focusing on 'beauty' as a category, as it looks to break even in the next two years.

The company wants to try franchise option in North India, while company-owned outlets will be set up by next year to mark its entry into the western region starting with Mumbai.

H&B Stores started operations in 2008. It suffered during the 2008-09 economic downturn forcing it to go slow on the expansion and closing down some stores.

Aditya Birla Retail

Aditya Birla Group's retail arm, Aditya Birla Retail Ltd. came into being with the acquisition of Trinethra Super Retail, a south-based retail chain in 2007.  'More' chain of retail stores, is run in two formats, super markets and hypermarkets.  Today, Aditya Birla Retail has over 600 super markets and 5 hypermarkets  across the country. 

The retail industry already bears the names of well-established players that include Big Bazaar (Future Group), Star Bazaar (Tata Group), Shoppers Stop (Raheja Group), Spencer's Retail, to name a few. Godrej operates a slightly niche 'gourmet' retail chain under the brand name 'Nature's Basket'. Most of these stores also promote their own brands that compete with the brands they stock.

For the 4th time in five years, India has been ranked as the most attractive nation for retail investment among 30 emerging markets by the US-based global management consulting firm, A T Kearney in its 8th annual Global Retail Development Index (GRDI) 2009.(Source: India Brand Equity Foundation)

With more and more established biggies coming into organized retail,  India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organised retail, meaning that the opportunity in India remains immense.

The 'talking' Volkswagen ad

Anyone who picked up the Times of India dated 21st September would have been, taken aback by a 'talking newspaper'. Volkswagen brought out, what you may call a pathbreaking innovation in using the medium of print.

The full-page ad on Volkswagen's latest offering - the 'Vento' had a small black voice box with a light-sensitive chip stuck onto the ad. When the newspaper was unfolded, the chip got activated by light and the readers could hear a recorded message that spoke of the features of the Vento. This message would stop when the newspaper was folded back.

This creative ad was carried in Times of India and the Hindu across New Delhi, Mumbai, Pune, Bengaluru and Chennai. MediaCom India took care of the positioning; while DDB Mudra developed the creative concept for the ad.

Sources at Volkswagen are tight-lipped on the spends for the ad. However, it is believed that the sound chips cost the company less than Rs.10 each.

Going for a media where everything has been done to death and adding the element of 'sound' to something that is essentially passive is, least to say, a pioneering effort. It also has set new standards for exploiting of the print medium.

Volkswagen has historically been known for trend-setting advertising campaigns. Campaigns for the Beetle which bore the headlines 'Think Small' and 'Lemon' were all creative expressions that established a clear USP for the brand and the 'Beetle' car.

Check the ad out: The Volkswagen Vento ad

New Media - A Business Perspective

“I hear YouTube, Twitter and Facebook are merging to form a super-social media site - YouTwitFace"

− Conan O'Brien, The Tonight Show

The above quote, though trivialized, probably brings out best the one prime characteristic of the media industry today – CONVERGENCE within the industry and this is what makes it most relevant for businesses today. 

To better understand significance of social media as a channel of business, we first need to recognize the true nature and capabilities of 20^th century’s most significant contribution to the world of communication. Social media can be defined as the manifestation of the traditional and contemporary forms of media onto newer forms of communication technology such as the wireless mobile devices, computer-based interactive consumer programs, and of course, the Internet. What makes social media so popular and talked about is its ability to impart an interactive dimension to the otherwise one-way approach of the conventional forms of media. New media cuts across an assortment of demographic groups of varied customer profiles. This has helped revolutionize marketing and advertising strategies for businesses the world over. Companies are today working on ways to reach out and involve the ‘customer’ in different ways and build customer loyalty. Also, social media is not just restricted to B2C businesses, its benefits are effectively applied to B2B businesses as well.   

   

Brian Solis, one of the prominent thought leaders in New Media has, in his blog, discussed results of the annual study conducted by the Centre for Market Research at the University of Massachusetts Dartmouth on the adoption and practice of social media by the Inc. 500, a list of fastest growing private companies in the US.  This study revealed that companies who did not use social media whatsoever who were 43% in 2007 plunged to 9% in 2009. The study also found that most companies have realised the importance of customer engagement and interaction, and reported the incorporation of at least one social media tool in their business practices. Such is the power of penetration of new media, the world where the user is both a marketer and a consumer. 

The New media industry shares an intimate relationship with many market segments including broadcast media, interactive computer-based program design and development and business verticals of marketing, advertising, public relations and customer support. It is in this ambit that sites like Facebook, YouTube and Twitter are booming. These websites serve as a link between the firm and their end users, and hence have a substantial influence on the user’s experience with the company and its offering. 

With more and more people becoming media-savvy and companies striving hard to gain ‘mind space’ and ‘media space’, online platforms will only become more powerful as channels to build brands and online presence.  As Seth Godin puts it, “Marketing is no longer about the stuff that you make, but about the stories you tell.” New Media, if used right, can help your business and brand become a ‘BEST-SELLER’.

'Dabangg' makes Zandu Balm dearer to Emami

'Le Zandu Balm hui, darling tere liye' is what seems to be on everyone's lips at Emami these days. Yes, Emami's gamble with the in-song brand campaign seems to have paid off. Zandu Balm has clocked a whopping `25 crore in August, `5 crore additional to what it generated every month prior to the release of Salman Khan starrer 'Dabangg'. Riding on this success, Emami plans to extend this initiative to its other brands and try some regional language films.

Weak marketing was a concern for Zandu Pharmaceuticals in 2002. Post-coming under the Emami family in 2008, Zandu Pharma became the associate sponsor for the IPL Mumbai Indians team for 2009 and 2010. Emami has set a marketing budget of `20 crore for Zandu Balm for the current financial year. As a start to this, they cashed in on the success of IPL by signing up Delhi Daredevil players Virender Sehwag, Dinesh Kartik and Amit Mishra as brand ambassadors.

The pain balm market in India is estimated to be about 450 crores. Zandu Balm leads the market due to its extensive penetration but is currently perceived as a product for the elderly. It now wants to popularize the brand among the Indian youth and have come up with new ad campaigns with the Daredevil icons. From the days of 'Zandu balm Zandu balm peeda haari balm...', to little or no advertising, Zandu Balm has once again  initiated extensive advertising with proxy-brand campaigns and new television commercials.

With a fine lineage, substantial market share, iconic brand ambassadors and a decently-sized budget, the company should now also look to go the viral route.

 

One Celebrity, Many Brands... Confusion!

Indian obsessions begin with cricket and film celebrities and end right there. Advertising, most often than not is a victim to this. Take the example of Mahendra Sing Dhoni. Dhoni endorses over 20 brands.These include Pepsi, AirCel, Big Bazaar, Reebok and many more. But how many of us exactly remember each of these brands when we are out for purchase?

For a customer to connect with a celebrity endorsement of a brand, a few aspects would be of prime importance: 

Relevance: Any product that is endorsed, should match the celebrity. A good example of this would be Bipasha Basu endorsing Dabur's Real Activ fruit juices or Kareena Kapoor's endorsement of the 'slim' Sony Vaio laptops.

Diverse Brands: Any celebrity should ideally endorse brands that are diverse from one another. This helps differentiate the brand from the others. This is where Dhoni's endorsements cause confusion and clutter in the consumer's mind, when he fails to recognise Dhoni's presence between one ad and the other.

Brand bigger than Celebrity: This is an aspect brands, celebrities and agencies alike fail to realise. While signing up a celebrity of the stature of Amitabh Bachchan, it is inevitable to land up with the product or brand being secondary to him. Even though this may have been successfully capitalised upon by some brands, and could have led to easy association and hence success of the brand in its initial stages, AB everywhere on television selling too many products caused overexposure and once again, poor brand connect. This is definitely not desired when it comes to quality of the product offering in light of competition.

Whether Dhoni, the ad agency or the advertiser is responsible for the confusion and clutter would be a point for endless debate,the brand is the one that would lose its sheen.