Reliance’s retail hiring goes wholesale

Fourteen months into the business and the headcount stands at over 6,000. It’s hiring over 100 people a day, touching 3,000 people a month and this is just the initial warm-up phase. That’s what happens when a group that thinks big and executes fast decides to put its muscle and might into a red-hot sector of the new economy. This is the revving up of the Rs 25,000-crore Reliance Retail venture. And if the rollout goes according to plan, it sees employee count touching a million people by the year 2010. Reliance Retail has roped in the who’s who of Indian retailing to put the plan on ground. One of the imperatives for a business that would need many shop-floor staff is putting in place a robust internal process of recruiting, training and retaining talent across all functions. Sources said that it’s systems-oriented HR team numbers more than 500. Backing it up is a research team which tracks the best practices of Fortune 500 companies to assimilate learnings and incorporate them into its own processes. The venture may be just 22-stores old now but Reliance retail has readied the framework necessary to scale up aggressively towards the 1,500 stores across verticals from food and groceries to consumer electronics. “Within HR, there is a team solely responsible for researching and collating the best practices from MNCs like Wal-Mart, Tesco and Citi-group. The processes have been created by analysing the HR practices of existing players within Indian retailing and also global companies,” sources said. The system ensures that every minute detail is documented. “Details like hiring a car, uniform colour of store personnel to even requisition for office stationery have been incorporated and put on board the technology platform. Employee retention tools like stock options and referral programmes like each one bring has been instituted as part of talent engagement and sustaining employees,” sources said. Reliance Retail sources told ET that in the last 14 months, the firm has been readying its HR strategy with emphasis on recruitment, training, retaining and sustainability of employees. “The roadmap was created, processes have been developed and have been mapped on board the technology platform,” sources said. They added the system put in place can handle recruitment of one million employees all over India in the next four-five years, from the current base of 6,000. Though Mukesh Ambani announced plans for the retail business as late as June 2006, it is understood that plans to create the necessary internal process was put in motion much before that. While professionals like Bijou Kurien from Titan, Gunender Kapur from Unilever, Raghu Pillai from the Future group were roped in for various verticals to be rolled out under the initiative, the group brought in Bijay Sahoo, former global HR head of Wipro Technologies as president and chief people officer of Reliance Retail to create the framework for recruitments. Reliance Retail has roped in Susan Bloch, chief cultural and diversity officer, HR. The move to hire Bloch, former partner at Whitehead Mann and director executive (coaching) with the Hay group consultancy, comes as the group is emphasising on creating leadership skills within, enabling them to create opportunities for employees to move up the ladder.

UK to invest in India’s food, agri retail sectors

The largest-ever 150-member British business delegation in India, led by Cobra Beer chief Karan Bilimoria, has committed investments in the areas of food processing, agri retail and manufacturing. It is also likely to press for the liberalisation of sectors like financial & legal services and retail. The delegation is expected to meet Congress president Sonia Gandhi apart from finance minister P Chidambaram and Planning Commission deputy chairman Montek Singh Ahluwalia. The delegation is accompanying UK trade & industry secretary Alistair Darling. This is a precursor to UK’s chancellor of the exchequer and future Prime Minister Gordon Brown’s visit on Wednesday. UK’s environment secretary David Miliband is also slated to visit India on January 23. Talking about the agenda of the India visit, Mr Bilimoria said, “while we would ask for the opening up of sectors like legal services, banking, insurance and retail, we would also like a two-way flow of opportunities. Representatives from the London Stock Exchange (LSE) are in India who want more Indian companies to get listed on the LSE. They are also looking at collaborating with the Indian stock exchanges.”

Meanwhile, in a closed-door meeting with Haryana chief minister Bhupinder Singh Hooda, some member-companies expressed interest in investing in special economic zone (SEZ) projects in the state. “We would make substantial investments in the state. There were some infrastructure concerns earlier, most of which have been addressed,’’ Mr Bilimoria told ET.Following the meeting with Mr Hooda, the delegation also met minister of state for industry Ashwani Kumar. “The feeling we got from our interaction with him is that retail would be further liberalised on a step-by-step basis,” Mr Bilimoria said.Talking of the rising interest in the UK about India, he said, “during a debate in the House of Lords last week on competitiveness of the British economy vis-a-vis the world, every speaker mentioned India and China. This would not have happened a few years ago,” he added

UK’s Home Retail Group considering India foray

While the status on Tesco’s entry in India is still not clear, a new buzz making rounds is that UK’s Home Retail Group Plc has signalled its intentions for entering the Indian market. In fact, company officials expressed that the management is studying the Indian market very closely and going forward will look at expansion in developing countries. While the company’s strategy for its India entry is not very clear at present, the market has it that it is close to signing a joint venture deal with K Raheja Corp’s Shopper’s Stop for opening its Argos stores in India. In fact, a trade magazine Retail Week reports that the catalogue retailer is just weeks away from agreeing terms with the Indian retailer. Home Retail Group is the UK’s leading home and general merchandise retailer with sales of over £5.5 billion in the last financial year. It sells products under two distinctive and complementary retail brands, Argos and Homebase, which are household names in the UK. Founded in 1973, Argos is a unique catalogue retailer recognised for choice, value and convenience. It sells general merchandise and products for the home from over 670 stores throughout the UK and Republic of Ireland, online and over the telephone. In the last fiscal, Argos’ sales topped £3.8 billion. Argos serves over 130 million customers a year through its stores, taking four million customer orders either online or over the phone.

Retail boom blooms on B-school radar

Thanks to the retail boom, XLRI will now offer a course on retail management as an elective from the new academic year. The course content would include the global scenario of the retail industry, its trends, success stories and experiments in the field. Strategies of the Indian retail industry, its growth areas and managerial role would also be included in the curriculum. Retail industry stalwarts would be roped in to share their experiences with the students. In addition, students would attend seminars and conferences to get hands on experience. Very few B-schools in the country have such courses and by offering the course XLRI would be part of the select few. Few organised retail companies have tied up with a couple of B-schools for the course. Pantaloon India (Retail) has tied up with two Mumbai-based institutes — Wellingkar Institute of Management, and K.J. Somaiya Institute of Management Studies — for a diploma course on retail management.

Kishore Biyani - 'International Retailer of the Year'

Pantaloon group has done proud to the Indian retail industry. Kishore Biyani, head of India's largest retail group Pantaloon was honoured with the International Retailer of the Year Award by the US National Retail Federation at its annual convention. American retail industry registers a whooping 4.5 trillion dollars of annual sales. It’s for the first time that an Indian retail group has made to the top.Pantaloon Retail India Ltd has also informed BSE that Staples, Inc. (Nasdaq: SPLS) on January 17, 2007 has announced a joint venture with the Company and its new office products business unit, Future Office. The agreement establishes a platform for Staples to enter the $10 billion office products market in India and allows the Company to benefit from the industry expertise and sourcing network of the world’s largest office products Company. Staples Future Office will serve businesses of all sizes through delivery as well as cash-and-carry locations, offering a wide range of office products from core office supplies to printers to computers. Future Office, which recently acquired B-to-B online office products Company Officedge, will expand its delivery operations to include Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, Pune, Ahmedabad, Indore and Chandigarh.

Argos closes in on deal to open stores in India

Argos, the catalogue retailer, is close to signing a joint venture deal that will see it open stores in India. The retailer is said to be just weeks away from agreeing terms with K Raheja Corp, an Indian retailer. The memorandum of understanding could eventually see the Argos format used in India. Argos, which is owned by Home Retail Group, is one of a number of UK retailers eyeing the Indian retail market, which is currently dominated by small chains and family-run stores but is estimated to be worth more than $300bn (£170bn). The Indian retail group owns Shoppers Shop, a department store chain and HyperCity, a fledgling hypermarket chain. Shoppers Shop is reported to have franchise deals with both Austin Reed and Mothercare.

Subhiksa crosses halfway mark, on its way to 1,000 in 2007

Subhiksha – the chennai based, no frills, discount retail chain, which recently hit the 500-stores mark, has catapulted itself into one of the country’s largest supermarket chains, with over one million sq. ft. of retail space, spread across five states of the country. With Maharasthra Subhiksha will complete its 600-store target, and then Phase 2 of the expansion plans foraying into 5 more states including Chandigarh, Punjab, Madhya Pradesh, Uttar Pradesh, Haryana and West Bengal will be activated. Unlike Big Bazaar, its discount, food and grocery, retail counterparts, Subhiksha believes in setting up non-air conditioned small neighbourhood stores (near the community) measuring around 2,000 sq.ft. in retail space. As such, while Subhiksha competes with big store chains on regular discounts, it competes with traditional ‘father and son’ kirana stores on close proximity to its customers.

Subhiksha operates in four verticals — fruits and vegetables, pharmaceuticals, FMCG and telecom. Beside loyalty discounts and regular discounts of 10% on medicines and 8 to 10% on FMCCG products. The retail chain also makes the Every Day Low Price (EDLP) offer to its customers, which is sustained through discounts obtained by the chain from direct supply arrangements with manufacturers, along with bulk purchase and cash transactions. While the discount model of Subhiksha is based on world famous Wal-Mart strategy, the carpet bombing model is based on the ‘Starbucks’ strategy, in which the coffee retail chain opens a cluster of stores in close proximity to each other, in a geographical area which has high population density with purchasing potential. This enables the chain to cannibilise sales within its own network rather than allowing them to go to other individual stores or retail chains. Even, Reliance, so far seems to have followed a similar strategy having opened a Cluster of ‘Fresh’ stores in Hyderabad and Jaipur.

While, the decade old, Rs. 340 crore in turnover, Subhiksha retail chain, has invested about Rs. 300 crore on its first phase of expansion, the total outlay for 1,000 stores will be around Rs. 500 crore. It may be recalled that ICICI Venture Capital holds 24% of the equity in the company. The company is mulling over making Initial Public Offering (IPO) in the second half of 2007.

Indian DVD-by-Courier Companies

iLeher writes about Madhouse, another Indian DVD-by-courier (the mail service is not reliable in India so they use couriers instead) company that was recently received $228,000 in funding.They have introduced a concept of Movie point. These are existing retail stores that will agree to become DVD return outlets. Slowly they can expand these channels as pickup points. This will create indirect channels at reduced or fixed SAC targeting customers who are not going online. This is important as reverse logistic (returning DVDs) makes a big chunk of operating cost for Madhouse.

The Mukesh Ambani’s Reliance group has been showed its presence in India’s growing retail sector. Now, the Rs 65,000 crore group has another plan for business expansion. It is planning to enter the money-spinning automotive servicing sector. This will be the latest initiative as the part of the group’s retail plans in which the group on way for setting up of hypermarkets, supermarkets, convenience stores and malls in different cities in India. A team of executives professional, who have the experienced in service at automobile companies has been hired by the group. The team of highly experienced professionals has been started working on the standardization process for spares and quality levels. According to the reports, the company is also looking for the support from automobile manufacturers to add to the credit value of the venture. This is a common practice in the developed market that people get their car washed or serviced while they go for malls for shopping. It is going to be a regular feature in India too. The MNC retailers are coming to India and Reliance is now gearing up for this. There will be a chain of such workshops in shopping malls in India soon. However, there is no any period reported for the service stations to start operations. The team has been working on this proposal and plan for over six months. The TOI has reported that the service stations will come up with the Reliance retail establishments in big cities. It can take 12-18 months to begin its operations. On this new idea of the Reliance group, the Industry experts have said that if Reliance successfully establishes its credibility in the automobile service and support space, The new venture could be a good stand alone business with a good margin of about 200-300%.

Indian Railways to get into retail

In a bid to enhance revenue, the railways is set to join the retail bandwagon through a public-private partnership venture by leasing out land to retailers. The contours of the plan have already been discussed with the leading retailers and those supplying to these chains, including the likes of Reliance Fresh, ITC, Cargill India, IL&FS, Pantaloon, Adani and Agrovet, to name a few. Railways, India's biggest land owner after defence ministry, plans to start the initiative from around a dozen stations initially. It is estimated that railways owns 4.2 lakh hectares across the country and initiative will be driven through Railway Land Development Authority, a dedicated body set up last year. With public private partnership, the railways proposes to build "national retail hubs," by leasing about 100 acres at stations located near capital cities. It also plans to develop similar retail hubs at stations close to district headquarters and even at local levels. Thus 25-100 acres will be given to highest bidders. It proposes to give land on long-term lease, ranges from 30-35 years. The private player will be permitted to build malls but at the same time they will have to ensure back-end business like cold storage, godown, sorting and packaging facilities. Railways will only provide them with transportation facility.

Sears & IBM entering into Second Life

American retail store, Sears, is entering online marketing with a 3-D virtual showroom in the Second Life online world. IBM has new ideas up its sleeve as it plans to build virtual stores for Sears Holdings and Circuit City Stores in the popular online world ‘Second Life’. The deals could help IBM expand its consulting services to corporate clients interested in the growing number of people who belong to online environments, dubbed '3-D Internet'.Sears Virtual Home will let visitors explore and custom redesign kitchens on the Internet, experimenting with different cabinet styles and facings and changing the color of countertops.

Second Life Looks to Open-source Move for GrowthOn the other hand, in the first week of January 2007, Second Life Grid had made available the Second Life client source code for you to download within the guidelines of the GNU GPL version 2.The Second Life development work currently in progress is focused on building the Second Life Grid—a vision of a globally interconnected grid with clients and servers published and managed by different groups. Expect many changes and updates in the coming months in support of this architecture.The initial move means outsiders will be able to modify the Second Life viewer software. That practice isn't a guarantee for success, but it has worked well with other open-source projects such as Linux and Apache. Second Life participants already have written millions of lines of script code to control Second Life objects and It would be a little silly to not allow that talent and energy to be applied to the client (viewer software) itself.

Second Life is a virtual world where people's avatars can chat, fly, buy goods and interact with programmable objects. Basic membership is free, but Linden Lab sells real estate to those who want to set up shop.

Starcom sets up second agency to handle Future group's media duties

In a strategic move, Starcom MediaVest Group, a leading media network in India, has floated a second agency to handle the media duties of Kishore Biyani’s The Future Group. This is only the second time in India’s advertising history an agency has been set up exclusively for a business group. Almost a decade ago, JWT (formerly known as HTA) had set up a dedicated media agency ‘Fulcrum’ to handle Hindustan Lever Ltd.

The Future Group has earmarked an ad budget of Rs 200 crore this year. Headquartered in Mumbai, Starcom's new agency FutureWorks will exclusively work for the media strategy and investment needs of The Future Group’s six companies in India. In June, 1995, HTA had launched Fulcrum to handle HLL’s FMCG business and Starcom has now revived the concept of second media agency in India – to handle a retail brand. The Future Group’s brands include, Pantaloon Retail, Home Solutions Retail India, Indus League Clothing, Galaxy Entertainment, among others. Company has explained the rationale behind the new launch, that communication needs of a retail brand are fundamentally different from that of packaged foods and other classical categories.

Retailers train sights on Gulf, SE Asia for mid-level execs

Reverse brain drain is slowly picking up in organised retailing. Buoyed by rising incomes in the ever-growing organised retail sector here, Indian professionals working in the organised retailing sector in the Middle East and South-East Asian markets of Dubai, Sharjah and Malaysia are now looking to return home. And Indian retailers, quick to pick up on the trend, are welcoming them. The focus on overseas talent comes as organised retailing in the Middle East and South-East Asia is a very well developed market. Expertise in operations, supply chain, category heads and distribution centre managers and merchandising specialists from these regions are much sought after by Indian players. So sought after, that they're willing to match dollar salaries for their expertise — certainly not a deep-discount strategy.

However, observers believe that the trend is likely to be restricted to seeking specialised expertise from the Middle East. “While there may be lot of Indians looking to come back, the fact is markets like Dubai and Sharjah are still zero-tax regime. That still makes India an unattractive market,” says Govind Shrikhande, CEO, Shoppers’ Stop, adding that like India, even markets like Dubai are expanding at a fast pace, so it is unlikely that there is going to be any dearth of opportunities there. Also, retailers in India have to factor in the cost of hiring talent from overseas.

Zicom to open 300 retail outlets by 2009

Security goods and solutions provider, Zicom Consumer Service Group, plans to open 300 retail outlets in India by end 2009 reported by Business Standard. The Rs 850 million company ventured into retail in September and plans to expand the number of stores from 12 to 35 in three months. The company plans to have a total of 50 stores by March 2007, 200 by end of March 2008 and 300 by March 2009. Security is a growing need for every segment be it government, religious institutions like the Sidhivinayak Temple and Ayodhya, defence, enterprises or the home consumers and small and medium enterprises, reasoned Pramoud Rao, managing director, Zicom Electronics System. Security is a Rs 10 billion market and growing at 30% to 35% to become a Rs 17 billion market by 2010 he added. The company estimates the home and small business segment to be a Rs 2.5 billion market and expects it to double in size over the next three years.