Alan Noddle, Royal Ahold: Veteranspeak

How big an operation can you run with 160 employees at the headquarters? If you were Royal Ahold, a Euro 67 billion retail empire spanning 9,000 stores in 28 countries. Founded in 1887, by Albert Heijn, the Dutch retailer has grown through joint ventures and acquisitions. Last fortnight, its recently-retired executive vice president, Alan Noddle, was in India to deliver a talk at KSA-Technopak's Retail Summit 2002. BT's R. Sridharan caught up with the industry veteran to find out Ahold's experience in emerging markets. Excerpts:

	The Trouble With Cranky Radios
	Missing The B-School Rush
	Hobbit Vs Boy Wizard
	The Green Shoe Gambit

Q. Is Ahold planning an entry into India?

A. It's too early for us to be in this market. With our business model, we need a premier local operator who has demonstrated consistent growth and profitability, and who has a desire to join hands with a global partner. So for us the most important thing is astute local management and successful enterprise, which we don't think India has at the moment. Secondly, the infrastructure isn't yet sophisticated...in trucking and transportation, wholesaling, and warehousing.

How has your experience been in other Asian countries like Malaysia and Indonesia?

We have some good partners and some that aren't as astute in retailing as they should be. In Malaysia we now own all of the (joint venture) company. In Thailand we have a partner, and in Indonesia you can't have a partner but you can have a technical assistance agreement. We have over 110 stores in all those countries already and continuing to grow. Indonesia is close to break even, Thailand is profitable, and Malaysia is still not profitable.

How would you compare India to these countries?

Retailing there is far ahead compared to India. One of the problems India has is that it's always comparing itself to itself. All of yesterday, people were telling me that you should have been here three-four years back. Look how fast we've grown. Yeah, but the other parts of the world aren't standing still. In your own region against China, Philippines, Malaysia, and Indonesia, India is way below.

Since 1999-2001, Ahold has done huge several of acquisitions worldwide. Why not in Asia?

Simply because the availability is not there. You only have one large player in the whole of Asia-Dairy Farm of Hong Kong. And they have their own problems. They just got out of New Zealand, Australia, and are suffering terribly in Hong Kong.

How is Peapod, the internet grocer you acquired in 2000, doing?

Much better than before. What we've done is linked (Peapod) with our local operating companies, so the customer gets the trust of the local brand name that they've been shopping in for years and the ability to shop through the internet with home delivery.

In the auto industry, we keep hearing that there is room enough only for six players. Is something like that going to happen in retail?

Oh, yes. There are going to be only five-six retailers left in the world and in my opinion those will be: Wal-Mart, Carrfoure, Ahold, Tesco, and maybe Casino and Shawn get together, maybe not. That doesn't mean there won't be successful local or national companies. But global food retailers, there will only be five or six.

SMALL TECH
The trouble with cranky radios
They were supposed to take tech to the masses. But two Indian-made handheld devices, once celebrated, now resemble vapourware on the long, hard road to market.

Vinay Despande: Great idea, but when will it hit the market?

Some said it would be ''Alladin's lamp in the hands of the poor''. An MIT brain declared it ''should be more than adequate to meet any foreseeable computing, internet, or web need in any developing nation within the next five or more years''. Time magazine said ''mass adequacy never sounded so good''.

Srikanth Manikatti isn't quite so euphoric about the made-in-India hand-held device called the Simputer (simple inexpensive mobile computer). Manikatti, a leading hardware vendor in the city of the Simputer's birth, Bangalore, says the little computer just isn't making it to the market. Nearly a year after the Simputer was launched-on April 1, All Fools Day-in a blaze of publicity as the computing device for ordinary folk like farmers and fishermen, it now seems a bit of vapourware.

''We are technocrats, not entrepreneurs,'' says Vijay Chandru, one of the inventors and a professor in the department of computer science and automation at the Indian Institute of Science. ''We have formed the Simputer trust and the basic code is available to anybody who wants to download it from the web. It is now up to others to commercialise the device.''

And whose responsibility is that? Vinay Deshpande, founding member of the Simputer Trust is also the CEO of Encore Software, and one of the men tasked to take it to the market. Deshpande says the Simputer will be ready to hit the market in a couple of months after his techies make modifications to the initial prototype. That includes a colour screen, doubling battery life to 10 hours using AA-size batteries (instead of AAA), changed ergonomics, doubling memory to 64 VRAM and 32 flash, and an additional extendable port to attach it to other devices. ''The user interface has also been improved to make it more intuitive,'' says Deshpande.

''We have been making some modifications to the initial prototype developed.'' Deshpande claims that there has been ''enormous demand'' for the device, but lack of governmental support has been a hindrance. ''We have requested the government to waive the 16 per cent excise tax and the 4 per cent sales tax. If this is accepted, the cost of the device will come down by a fifth,'' he says. Encore's colour-screen version of the Simputer will then cost Rs 18,000. That's just too costly, says Manikatti. ''One can actually purchase a low-end assembled desktop for that price.''

Another wannabe mass-computing device that's stuttering is the iStation from Bangalore's iNabling Technologies. Priced at Rs 7,000, it was supposed to revolutionise net access and ''bridge the digital divide'', in the words B.V. Jagadeesh, famed US techie and angel investor, who is one of the main promoters of the iStation.

Unlike the Simputer, the iStation was a commercial product from the start, but a year since its launch, iNabling Technologies has sold less than 100. Vendors complain that the company hasn't paid their dues. ''They want to offload those unsaleable devices in exchange for office stationery material I have supplied to them,'' says one aggrieved vendor who requested anonymity. The iStation's main drawback was that it could not take graphics, pictures, and colour. Critics says its like being fobbed off with a cranky radio in the age of colour television. Despite repeated attempts, the company officials were not available to BT for comments. What was that people say about the old Indian failing of not following through on great ideas?

-Venkatesha Babu

PLACEMENTS 2002
Missing The B-School Rush
Initial placement results indicate that this will be a lean season for the Class of 2002, at India's B-schools.

Tense student at the Indian Institute of Management, Bangalore

Across the top business schools in the country, there's just one prayer on the lips of students and placement officers. It's not about eye-popping salaries, foreign postings, or even plum consultancy jobs. The plea is altogether simple: 100 per cent placement. Yes, as industry battles a bad slowdown and infotech companies cut back on recruitment in the face of vanishing projects, B-schools are going through a relatively dry placement season. Although placements aren't over at most B-schools, the first flush of results paint a grim picture. At IIM-Bangalore, the Class of 2002, is getting initial offers between Rs 6 lakh and Rs 11 lakh per annum. (At iim-Ahmedabad, placements hadn't yet begun when BT went to press.) Says Arvind Thippanaik, 24, who's taking up Johnson & Johnson's offer of Rs 6.8 lakh per annum: ''I thought it would be a blood-bath because of the downturn. In comparison to, say, IIM-Lucknow, we are doing much better.'' Things at tier-two B-schools are expected to turn out much worse.

One B-school that had students, recruiters, and even rival institutions watching it was the Hyderabad-based Indian School of Business, whose first one-year MBA batch passes out this year. Placement data was still being compiled at ISB when BT went to press, but reports suggest that the offers were significantly below the school's and students' expectations. Better luck next time?

Harry Potter and The Fellowship of teh Rings: Blockbusters

M-PICS
Hobbit Vs Boy Wizard
Two of the highest grossers ever will soon hit Indian screens. What's in store?

First, the news that is of relevance to the masses. Harry Potter and the Sorcerer's Stone will open in Indian cinemas-across 100 cities-in mid-April. And it won't be a quiet opening for the second highest grossing film of all time ($925 million, next only to Titanic's $1,835.4 million): the release (which will happen in English, as well as Hindi and Tamil, courtesy, dubbed versions) will be accompanied by a blitzkrieg of promotions with companies like Mattel, Coca-Cola, Lego, and Weekender. Now, for something that will appeal to a far more select audience: Warner's other blockbuster, The Lord of the Rings: The Fellowship of the Ring (seventh on the same list with takings of $716.5 million) will open in the middle of March, only in English, and only in 35 cities. ''The selling platform for this will be the Oscars,'' says Blaise Fernandes, Managing Director, Warner Brothers India referring to the motion picture's 13 Oscar nominations. A Hindi version won't be out till June, and the only promotion in the offing is one with MTV and the New Zealand High Commission (The Fellowship...was shot in that country). Fernandes claims it will be ''difficult to say'' which of the two releases will do better, but given the contrasting promotional offerings, and the penchant of the Indian audience for ''family-entertainment'', it isn't hard to predict that.

-Shailesh Dobhal

INNOVATIONS
The Green Shoe Gambit
A market innovation may have made all the difference to Bharti Televentures' issue price.

Sunil Mittal: A green shoe may have made things better

Green shoe option: an option granted by a company to its underwriter giving it the right to sell 10-15 per cent more shares (than the stated size of the issue) to meet heavy investor demand.

The day sunil mittal rang the bell to mark the listing of the Bharti Televentures scrip, its price rose all the way to Rs 55, before ending the day at Rs 44.10, marginally below the issue price of Rs 45. Over the next two weeks, it went down further, and was quoting at Rs 42.65 on February 25. A green shoe option could have made all the difference in this case. Put simply, such an instrument allows the underwriter enter the market short. If the price goes up, the underwriter can exercise the option and cover the short at the issue price (Rs 45 in the case of Bharti Televentures). If the price falls, the underwriter can cover the short by buying the stock at the prevailing market price. The rationale? As Hemendra Kothari, Chairman, DSP Merrill Lynch and one of the lead book runners to Bharti Televentures' 100 per cent bookbuilding issue puts it: ''Provision of green shoe option would enable us stabilise the share price in the market.'' In effect, the book runners or underwriters play the role of market makers to the issue. An accepted norm in the global markets, the primary markets committee has written to SEBI suggesting that the green shoe option (so named after the Green Shoe Company that was the first to issue such an option) be allowed in India. Thus far, no go.

-Roshni Jayakar