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Tuesday, August 12, 2008

Tesco to set up shop in India

Two years after it ended joint venture talks with the Bharti group, the UK’s largest retailer Tesco today announced it was going solo in the Rs 1,500-crore cash-and-carry sector in the country. The firm would invest nearly Rs 485 crore in the next two years. Tesco is also simultaneously signing an exclusive franchise agreement with Trent, the retailing arm of the Tatas. The agreement will give Trent’s hypermarket chain, Star Bazaar, access to Tesco’s supply chain, computer systems and inventory and infrastructure management. Trent will pay a “nominal fee” to Tesco for using its services.

Tesco unveiled its plan a year after Wal-Mart, the world’s biggest retailer, signed on Bharti for a wholesale joint venture. Wal-Mart and Bharti aim to have their first outlet in business by the end of this year to meet a goal of opening 10 to 15 wholesale stores in seven years. Tesco will set up its wholesale stores first in Mumbai and then in cities such as Delhi and Bangalore and use a “hub-and-spoke” model to expand its distribution network. However, Tesco will not supply to other hypermarkets apart from Trent.

Trent currently has four hypermarkets — larger version of supermarkets — with plans to grow to 50 stores over the next five years. In September 2007, Trent inked a deal with Benetton of Italy, under which Trent would be the exclusive franchisee for one of Benetton’s premium brands Sisley. Sisley has seven stores in the country. For Trent, which also runs Westside, an apparel chain, and Landmark Books and Music, the tie-up is expected to boost the expansion plans of Star Bazaar. For Tesco, the entry is expected to add to its existing sourcing capabilities in the country. Tesco already sources over £170 million worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur. It also employs nearly 3,000 Indian staff at its Hindustan Service centre in Bangalore, providing IT, financial and business services to the entire Tesco group.

The UK company has shops in emerging markets from Turkey to Malaysia and generates more than 25 percent of sales outside Britain. Trent surged Rs 41.95, or 8.4 per cent, to Rs 541.20 on the Bombay Stock Exchange today. The gain was the biggest in more than seven months. Tesco shares also rose in London. Germany’s retail giant Metro has opened its wholesale store in Bangalore and Mumbai and announced other stores in the north and eastern parts of the country. Carrefour, the world’s second-largest retailer based in France, is also planning its Indian foray in 2009 from metros such as New Delhi, Mumbai, Bangalore and Chennai.

Carrefour is said to be talking to many Indian companies, including Delhi-based Parsvnath, and is expected to announce a tie-up soon. The sector has seen the entry of domestic retailers such as Future Group, Reliance, Wadhawan Group among others, in recent times.

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Crude oil futures touched $112.48 the lowest since May 2 2008

Crude oil was little changed as Russia called off military action in Georgia and the dollar dropped from a 5 1/2-month high against the euro, curbing the appeal of commodities as an inflation hedge. Crude oil for September delivery fell to $112.31 a barrel on the New York Mercantile Exchange at the time of going to the Press. Futures touched $112.48 earlier on Tuesday, the lowest since May 2. Prices are up 60 per cent from a year ago.

Prices rebounded after Russian President Dmitry Medvedev announced the end to the five-day offensive in Georgia, a country that connects the oil-rich Caspian Sea region with world markets. BP stopped pumping oil into a pipeline from Azerbaijan to the Black Sea coast because of concern over security. The dollar declined 0.1 per cent to $1.4923 per euro at 9:02 am in New York, from $1.4909 yesterday. It touched $1.4816, the strongest since February 26.

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Saturday, August 9, 2008

Reliance Communications expected to start nationwide commercial operations of its Big Digital TV DTH service

Reliance Communications expected to start nationwide commercial operations of its DTH service from August 15. ‘Big Digital TV DTH’, a subsidiary of RCOM, is betting big on the huge potential of home entertainment in the Indian households. It is estimated that India has over 124 million TV households, with roughly 80 million using the conventional cable delivery platform.

DTH operators in the country, Tata Sky, DishTV and Sun are estimated to have a user base of around 7-8 million. Big Digital TV DTH would announce its tariff plans in the next few days before the launch of services. When contacted company spokesperson refused to comment. Sources, however, said Big Digital TV DTH would unleash an aggressive launch plan with an aim to become the largest DTH operator in the country in the first year of operation.

The company is believed to have placed order for 5 million Set Top Boxes with Korean and Taiwanese vendors to meet its requirements in the first year, they said, adding Big Digital TV is targeting to capture a substantial share of the DTH market that is projected to cross 25-million user base in the next three years. The company has already completed trial runs across 2,400 towns and the service is currently available for customers of other Reliance ADAG group companies for Rs 1,000.

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