Top Companies in the Indian Retail Industry
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The India retail industry: who’s who
The Indian retail sector has been a euphoria over the last five years. India topped the A.T. Kearney’s Global Retail Development Index for two consecutive years and this has infatuated Indian as well as foreign retail players to go gaga on the merchandising track. According to geographical expansion, Delhi/NCR and Mumbai are the felicitated regions as the top companies have rated the spending potential of consumers in the vicinity of the national capital and the financial capital as excellent. Other metros such as Kolkata, Chennai, Hyderabad and Bangalore have caught the sight of investors but their fortunes are yet to be illuminated. Companies like The Future Group, Reliance, Bharti-Walmart, DLF etc. have shown the way for other to enter. The country is expecting a surge in the growth sprint and let’s hope for the best.
Top Companies: An analysis
Big Bazaar- Big Bazaar is a chain of department stores owned by the Pantaloon Group (Future Group)and headed by Kishore Biyani and headquartered at Mumbai. It offers all types of household items such as home furnishing, utensils, fashion products etc. It has a grocery department and vegetable section known as the Food Bazaar and its online shopping site is known as FutureBazaar.com. The real estate fund management company promoted by the Future Group expects to develop more than 50 projects across India covering a combined area of more than 16 million sq. ft. On April 1 2007, Big Bazaar had to shut its outlets in Mumbai as the 120 retrenched employees called a strike with the support of Bhartiya Kamgar Sena (the trade Union wing of Shiv Sena). Later the management agreed to reinstate the sacked workers.
Bharti Retail-, a wholly owned subsidiary of Bharti Enterprises. has announced two joint ventures (JV)with the international retailing behemoth, Wal-Mart. The first JV ensures cash and carry business, in which 100 percent FDI is permitted and it can sell only to retailers and distributors. The second JV concerns the franchise arrangement. Sunil Mittal, Chairman of the Bharti Group assured that the ventures will use “low prices every day” and “best practices for the satisfaction of the customer”. Processed foods and vegetables will be delivered by Bharti Field Fresh, Bharti’s JV with Rothschild. Bharti Retail aims to foray every city with a population exceeding 1 million. It has plans to come up with an investment of more than $2 billion in convenience stores, supermarkets and hypermarkets spread over an aggregate 10 million sq. ft. The expansion drive looks ambitious but analysts are worried that Bharti may face stiff competition from Pantaloon and Reliance as they too have sanguine plans to flood the markets with thousands of retail outlets in the coming five years. Bharti Telecom also has plans to offer all its fixed and mobile telecom products and services from a single window to the SMB (Small and Medium Business) enterprises under the Bharti Infotel division..
Reliance Retail- Reliance claimed last year to start a retail chain that will be unique in size and spread, will lead to the welfare of one and all ranging from Indian farmers, manufacturers and ultimately consumers. It is known as Reliance Retail Ltd.(RRL) and is a 100 percent subsidiary of Reliance industries Ltd.(RIL). Soon after the Bharti-Wal Mart tie up, there was the news that RIL (Reliance Industries Ltd.) Chairman Mukesh Ambani met Commerce Minister Kamal Nath to discuss the apprehension of cheap imports from China. Reliance Retail has plans to open 4,000 outlets across 1,500 towns for an investment of $5.6 billion. Reliance is not away from agro-business. According to Buddhadeb Bhattacharjee, Chief Minister of West Bengal, “Reliance will hold demonstration farming, produce good quality seeds and give inputs to farmers”. Its most significant participation has been in the food procurement business in Madhya Pradesh and Punjab. This has in fact compelled the government to import wheat this year. Reliance Retail has also been reported to have entered into an agreement with footwear manufacturer Bata India Ltd. so that they will involve in selling each other’s products.
DLF Shopping Malls- DLF Retail Developers Ltd. is one of the troikas of the DLF Group. Besides being India’s largest real estate developer, DLF is also of the leaders in innovating shopping malls in India. It caught public eye when it launched the 2,50,000 sq ft. shopping mall in Gurgaon. It has brought a dramatic change in the lifestyles and entertainment with its City Centres and DT Cinemas. DLF has plans to invest Rs. 2000-3000 crore in all the emerging areas from metros to A class cities in the next two years. Till last year the company was involved in building 18 malls out of which 10 were in the NCR region. Future plans of DLF involve opening up of 100 malls(speciality malls, big box retailing and integrated malls) across 60 cities in next 8-10 years. They are slowly transforming into ‘lease’ and ‘revenue share’ models.
Local players like ITC, the A.V. Birla Group and Tatas have given the hints to enter organised retail. France’s Carrefour SA and Britain’s Tesco too were recently in news for their future plans to explore the Indian retail market.
