Showing posts with label Joy Alukkas. Show all posts
Showing posts with label Joy Alukkas. Show all posts

21 March, 2014

Reliance wins handsdown

The first store for Reliance came up in Hyderabad. It was a grocery retail format and many skeptics wrote off the idea, citing intense competition in this segment. Gross Margins are low, two-digits and net margins, if any are a mere 4-6%. So, how would the company ever make money? Further, there were already established players in this segment, especially in the South (of India) such as Foodworld, Spencers, Food Bazaar, Nilgiris, FabMall, Trinetra (now together More), Fresh @ from Heritage Foods – the list could go on! But patience and perseverance has helped the company in the long term. According to a report in the most respected Hindustan Times newspaper, the company would become the largest Retailer in India by Sales in 2013-2014. The company is expected to close the year with $2 Billion in Sales, approx. INR 12,000 Crores. And it made a meagre INR 78 Crores last year and has made INR 278 Crores in 2013-14. That’s not bad at all. The company has been able to achieve scale over the past 7 years and its many Chief Executives of respective businesses have built the business brick by brick, sweating and toiling between Board Rooms and Store fronts.

Take a quick look at how the numbers stack up;

Reliance Retail

It’s a commendable achievement for Reliance Retail to achieve this position. Those who know me well would now agree what I have been saying ever since Reliance joined the fray in the Retail sector. I predicted right in the beginning that they are here for the long term. With a cash pile of INR 90,000 Crores and managing the largest Oil refinery in the world, Reliance has real deep pockets. And its Chairman Mukesh Ambani is not someone to open and shut businesses. Its not in their blood. Dirubhai Ambani, the patron founder of the group tht every household in India should have a Reliance product in some form or the other. The group created a furore in 2002 when the Reliance Mobile network was launched with an exciting Rs. 501/- package making it the most affordable mobile phone of its times. Similarly, they forayed into various other businesses and turned around all of them, albeit patiently.

One of the biggest reasons why Reliance has been able to reach where they are is also because of steadfast focus in the formats that they have opened and operated. They just have one Hypermarket, One Digital Electronics Format, three formats in Fashion, one in Jewelry and half a dozen international brand tie-ups. Makes it easy to focus on scaling up each vertical constantly. Reliance operates small supermarkets which compete with Kiran Stores and other organized players such as Spencers, Foodworld, Food Bazaar, etc. Reliance hyper directly competes with Metro AG, Best Price (Bharti Retail), Hypercity (K Raheja Group), Total (Jubilant  Retail), Big Bazaar (Future Group) nd other local wholesale markets and APMC operated mandis. In the fashion segment, Reliance Trends is positioned against Lifestyle (Dubai based Landmark Group), Shoppers Stop (India’s largest Department store Chain) and Pantaloon (now owned by Aditya Birla Group). Reliance Footprints has a unique positioning and doesn’t have major names for competition except Metro and Mochi who have a pan-India presence. Reliance Jewels competes with the local jewelry stores in each micro market. Reliance Brands such as Diesel, Quicksilver, etc. compete with their international competitive brands.

This is just the beginning. Look how Reliance is going to grow leaps and bounds in times to come. I am still sure that they wouldn’t have a JV with the global biggies such as Wal-Mart, Carrefour, etc. They would rather grow organically in times to come.

The game gets more interesting.

12 October, 2010

Chitti wears Ray Ban, drives a Bentley, shops at Joy Alukkas & Lifestyle

Chitti, the Robot created by its scientist Dr. Vaseegaran (both characters portrayed by the Superstar of Indian Cinema Rajnikanth) in the tamil film Enthiran (Robot in Hindi) that is directed by Shankar wears Ray Ban, Police and other designer sun glasses all through. There is a particular scene where the two of them shop diamond necklaces for their common girlfriend at Joy Alukkas, a leading name in ornamental jewellery in the southern markets in India. And the villainy Robot drives a Bentley, ransacks a Lifestyle Department Store only to stock up everything that’s needed for its lover. The scientist and his robot travel in a Mercedes CLK while the scientist’s home is shown as an exquisitely designed villa. All through the film, the leading characters including Aishwarya Rai wear designer stuff, exclusively crafted by ace designer Manish Malhotra who shot to fame since the late 90’s when he designed outfits for the likes of Shah Rukh Khan and his contemporaries of the Hindi film industry. This is Manish’s second outing in the South after the previous hugely successful Sivaji (2007) which had the super-hit combo of Rajnikanth & Shankar. Meanwhile, Salman Khan’s recent Dabangg portrayed him as a Police officer whose moustache and Ray Ban became more popular at some stage than the plot of the movie itself.


So, what’s with film actors and Brands? What is the underlining message? Well, there are two, in my opinion. One, that the film shows the characters as having been “evolved” using the latest – be it gadgets or cars, clothes or accessories. Second, “brand placement” or “product placement” is seen as a great opportunity by many brands (including retailers) to create aspirational value. While the trend has been popular in English and European movies for many decades (James Bond and his love for cars and gadgets, for example), the trend has been on and off in Indian movies. I remember another Tamil movie “Tenali” (2001) which featured Kamal Hassan as a “hyper” patient who is scared of almost everything in life, portraying Toyota Qualis as a very reliable car when it hits the edge of a mountain wall and nothing happens to its occupants. Shah Rukh Khan in the movie “Don” (2006) sported Tag Heuer watches which became hugely popular among the relevant target groups. Most recently, Sonam Kapoor in the film Aisha (2010) sported trendy bags and sun glasses while also shopping at Delhi’s DLF Emporio, the most upmarket Mall that houses Dior, CK, etc.


But the big question is do these product placements have any impact on “consumers”? Yes and No. While there is certainly an impact on the consumers about the awareness of the brands and products, the aspiration to own them is limited, given the fact that most of these brands appeal to the top-end of the society. As much as a Rajnikanth or Salman fan who pays over Rs. 300 for a movie ticket during the first week of release would love to own one of those sun glasses, he just can’t afford it. And it applies to clothes, accessories, and even cars. So, do these placements atleast bring walk-ins into the Retail stores? Ace designer Deepika Govind feels not necessarily as those who wear designer stuff may not want to wear something that’s very common. “Such clients follow global fashion and hence do not pick up something off the shelf worn by actors and actresses that are available off the shelf”, she says. It could be a bit different for street wear as promoted by the likes of Hrithik Roshan or Ranbir Kapoor but the following is limited and appeals mostly to the urban audience. Budding designer Aarti Tibrewal opines that the characters portrayed by films stars have indeed impacted what the audience what to wear. “At the same time, the commercial success of the movie has much to do with the brand recall,” she says. For example, the Anarkali dresses worn in them movie “Devdas” (2002) were popular also because the movie was a box-office hit, while Aisha didn’t fare as well as it was expected to be and hence the follow-up was also mute.


Retailers like Cafe Coffee Day and many other restaurants and bars allow a lot of movie shootings at their outlets so the audience are able to connect easily with their favourite hang-outs.  While some charge the producers for letting their “space on hire” a few exchange it for the publicity they would derive. Brands, on the other hand use this primarily as a promotional tool, taking their product range to a wider audience. While the topic of “success on product placements” can be debated a lot, immediate results vouch for its success. A quick check at the eyewear counters of Department Stores in Mumbai and Chennai / Bangalore confirmed that there were a number of enquiries for sunglasses after shoppers saw Dabangg & Enthiran respectively. May not be the same for the Mercedes and Bentley though. Anyway, I am planning to increase my Ray-Ban collection, so what about you?  


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