|Kishore Biyani: Having found
that discount stores work, he wants to add new categories of
Biyani's Spartan office at knowledge House in Mumbai's Jogeshwari
may not impress visitors, but its occupant's vaulting ambition is
there for all to see. Just across Biyani's shiny teak table, on
the wall above, hangs a collection of portraits of great men and
a woman. The "hall of fame" (that's what Biyani calls
it) includes photo portraits of J.R.D. Tata, Rahul Bajaj, N.R. Narayana
Murthy, Rabindranath Tagore, Sam Walton, and Mother Teresa. But
placed strategically next to the portraits is a mirror, which at
an angle reflects a swarthy, mustachioed face-Biyani's own.
quirk? Hardly.The scion of a textile family, the 42-year-old Biyani
has often articulated his ambition to be India's biggest retailer.
In 1999, when he was just a struggling, six-store retailer of ready-to-wear
garments, Biyani set himself a target of reaching Rs 1,000 crore
in revenues by the end of 2005. Today, he's already pushing Rs 750
crore a year, and straddles a wide spectrum of retail formats: from
departmental store (Pantaloon) to discount store. He's got 14 Pantaloon
stores, six Big Bazaars (discount stores), and two stand-alone Food
Bazaars, all spread over some 6 lakh sq ft of retail space. In terms
of revenues, this year, Big Bazaar will fetch Rs 270 crore, Pantaloon
some Rs 260 crore, Food Bazaar Rs 175 crore, and the new Gold Bazaar
(launched in June this year), Rs 45 crore.
Over the next three months, Biyani's Pantaloon
Retail India will set up new stores in Nagpur, Bhubaneshwar, and
Ahmedabad, taking the tally of Big Bazaar to 14 by the end of 2004.
Included will be two "category killers" (specialised bazaars),
one for footwear and another for financial products. For the former,
Biyani is talking to Liberty Footwear, and the for the latter he
has already launched a co-branded credit card with ICICI Bank. In
days to come, his financial bazaars will also offer insurance and
mutual funds. For such reasons, Biyani reckons he'll breach the
Rs 1,000-crore mark before 2005.
Success hasn't come easy to Biyani, though.
Soon after Pantaloon went public in 1991, he landed smack in the
middle of a controversy on the use of IPO money, partly because
of his flamboyant lifestyle. To make matters worse, Biyani dabbled
in movie-making (his only two movies were unmitigated disasters)
and sports personality management, with cricketer clients such as
India's Ajay Jadeja, South Africa's Hansie Cronje, and Sri Lanka's
Sanath Jayasurya. However, today, by his own admission, Biyani has
lost all passion for cricket and movies; retail is his life. He
prefers calling himself the Chief Knowledge Officer and his group,
the Pantaloon Knowledge Group Company (remember, his corporate HQ
is called Knowledge House).
Unstated in that name is the belief that he
knows retail best. Indeed, industry "experts" laughed
at him when he wanted to set up discount stores. Today, his Bazaars
are closely watched by his competitors. "The so-called consultants
make money out of fooling people," Biyani thunders. "India
is a nation of shopkeepers, and managing retail comes naturally
(to us); it is quite simple," he says, by way of explaining
why India needs new retail formats of its own and not American copies.
If Biyani's formula delivers, the mirror in his office will almost
certainly give way to another portrait. His own.
Times Ahead For FMCG? Don't Bet On It
Not lack of demand, but downgrading by retail
finance-enamoured consumers is hurting FMCG growth.
way the stock of Hindustan Lever Ltd (HLL), the beacon of the fast-moving
consumer goods (FMCG) sector, took off in the recent bull charge
would probably make even Chairman Vindi Banga blush a deep shade
A gain of 50 per cent in the past four months,
and a price/earnings multiple of just under 24, have been fuelled
by rampaging foreign institutional investors-who obviously feel
more at ease placing their chips on a dour Unilever counter than
on an unknown devil-and expectations of buoyant rural demand on
the back of good monsoons. The pundits have been predicting agricultural
growth of 6 per cent for the current year.
And that's one reason why a section of investors
is over the moon, predicting the return of the good times and double-digit
growth for HLL and the FMCG sector.
Whilst doubtless the monsoons will play their
part in reviving rural demand-which accounts for at least half of
HLL's sales-double-digit is still very much a pipe dream.
That's because not all the speedbreakers slowing
down the FMCG bandwagon lie in rural India. To be sure, it could
well be you dear reader who's responsible for HLL's loss of marketshare
in key categories like toothpastes.
Yes, you the city-slicker, who has his hands
full paying back either a housing loan or a car loan or a consumer
durable loan (or all of them), or mobile phone and credit card bills
to square up.
That's why you're opting for cheaper soaps
or detergents or toothpastes or skin creams or hair oils as you're
feeling the pinch of a lower disposal income since a chunk of your
wages is being diverted towards those monthly installments.
This phenomenon of ''downgrading'' might manifest
itself most visibly during recessionary times, when consumers typically
scrounge for cheaper goods. But FMCG managers now theorise that
it could well be downgrading courtesy retail-finance fuelled consumerism
that's putting the brakes on FMCG growth.
That's why the smaller players-this magazine
featured a story last year about how they are outdoing their bigger
peers-aren't hurting as much as the big boys, and that's why HLL
and Procter & Gamble have been compelled to reduce the premium
on their products.
Eventually that price-slashing strategy, coupled
with the generosity of the rain gods, might just about prop up those
sluggish top lines. But double-digit growth...I wouldn't bet on
To Toonz Animation India (heard of them? Their show Tenali Raman
appears on Cartoon Network) for consistently making a mark at international
festivals. The Trivandrum-based studio's most recent achievement
is the three nominations it has received at the Chicago International
Children's Film Festival.
To HCL Tech chairman Shiv Nadar for consistently disappointing the
Street. The company was breathing down the necks of Infosys and
Wipro a few years ago, but seems to have lost its edge now.
"This Gets India Closer To The Action"
Farmery has just taken over as the Managing Director for
South Asia at ACNielsen ORG-MARG. Farmery was earlier in charge
of retail measurement services across the APAC region. Armed with
a business degree in Agricultural Marketing he joined ACNielsen
19 years ago, as a field researcher. It's been a long journey and
as Farmery puts it to BT's ,
''as a Kiwi I never thought that I would be running India.''
Your predecessor Titoo Ahluwalia is considered
the last word in market research in India...
Titoo has built a great business which has
1,600 people today. He had announced his intention to retire and
the company decided to bring me in. I do feel that this raises the
profile of India and the region since I am an executive committee
member of ACNielsen in the APAC region. In theory, this gets India
closer to the action. From my viewpoint I also see a lot of opportunity
in terms of services we can provide to people globally. In a sense
its outsourced work, but more importantly I see an opportunity where
talented individuals at ACNielsen India will move into global postings.
Where does India stand in the overall scheme
of things at ACNielsen?
Today, India is small, but we do a massive amount
of research; it's just that the pricing is low. China, India, and
East Europe are the markets of the future.
Sometime ago the list of households in the
people-meter sample of one of your group companies leaked out.
The leak should not have happened. Our methodologies
in India are right, the procedures, correct and the services, in
Last fortnight, Tata Motors rolled out
its first batch of rover-badged Indicas that will sell in the UK.
So just what will the India-made car go up against in the British
market? There's a clutch of competitors including the Renault Clio,
Toyota Yaris, Fiat Punto, Peugeot 106 (or Citroen Saxo), and Ford
Ka. We decided to pit the CityRover against the cheapest comparable
car in the UK, and came up with the Fiat Punto. On almost every
count, the CityRover proves to be "more car per car".
Will the Britons agree? We are watching.
Engine Size: 1242 cc
BHP: 60 @ 5000 RPM
Weight: 875 kg
Environment-friendliness: Euro III
Engine Size: 1405cc
BHP: 85 @ 5500rpm
Weight: 980 kg
Environment-friendliness: Euro III
|Coimbatore: F&Os anyone?
The brokers are laughing all the way
to the bank. They set up offices in cities such as Ludhiana, Lucknow,
Baroda, Chandigarh, Jaipur, and Coimbatore-not metros, but not one-horse
towns either-on the hunch that investors there would be interested
in the futures and option (F&O) market. Boy, have they been
The share of Mumbai in the total F&O turnover
has decreased from 68.33 per cent in 2000-01 to 40.57 per cent in
2002-03. And the share of the smaller metros (as these cities are
classified) has increased from 5.08 per cent to 17.37 per cent.
That seems natural, given that these cities were partial to badla
(the carry forward system) trading.
Thanks to all this trading, the total trading
in derivatives on National Stock Exchange has jumped from Rs 1,01,925
crore in 2001-02 to Rs 1,40,363 crore in August 2003, alone. And
daily trading turnover has zoomed from Rs 413 crore to Rs 7,018
Indian telcos have no shortage of suitors.
|RIL's Ambani: Sprint may just be the
India is one of the world's few remaining
telecom hotspots. The base of wireless (irrespective of whether
it is GSM or CDMA based, or on whether the service is being provided
by a cellular telephony company or a basic telephony one) subscribers
is expected to grow at 75 per cent a year and hit 150 million by
2007. And industry-revenues are estimated to increase by around
20-25 per cent a year. That's enough lure for global telcos such
as Sprint-it is in the process of finalising a technology consulting
contract with Reliance Infocomm-Telstra, AT&T, ST Telemedia,
Equant, Vodafone, British Telecom, and Cable & Wireless. Some
of these companies exited India in the late 1990s, but are now being
drawn to one of the world's fastest-growing telecom markets.
Hold the bubbly, though. Most companies will
prefer to wait for six-12 months-the window within which the ceiling
on foreign investment in Indian telecom companies is likely to increase
from 49 per cent to 74 per cent-and then make an entry. Then, there's
the current regulatory flux. "You won't see any increase in
foreign investment until the WLL situation is finally resolved,"
says Ty Graham, a member of the board of Idea Cellular. Graham's
reference is to the ongoing court battle on whether basic telephony
companies can provide cellular services using the Wireless-in-Local-Loop
(WLL) platform of the CDMA technology.
Indian telcos need the money; it will finance
their expansion, a requisite in a booming market. Already, banks
have increased their lending to telcos. In the past 12 months Rabo
has arranged over Rs 200 crore in debt for Bharti Televentures and
Idea Cellular, the bulk of the amount residing in its books. For
global telecom majors, emerging from a slump, the Indian market,
and the need companies here have for capital, spells opportunity.
The great outsourcing phenomenon (business process outsourcing)
has ensured that there is a huge demand for bandwidth to pipe data
into India. "For this reason, India is pretty high in the priority
list of all telcos," says Kobita Desai, the Principal Telecom
Analyst at Gartner. Now, if only the regulatory regime would play