Category — Market Entry

India Contemplates Opening Up Food Retailing

Foreign food retailers may soon be allowed to sell personal care products made in India up to 25 percent of their total merchandise sales. India’s Department of Industrial Policy and Promotion has for the first time endorsed this proposal. The idea behind the move is to encourage “organized” (mass market)  retailers to source goods made in India.

The excerpt below is from an interview that India’s  commerce and industry minister Nirmala Sitharaman had with the Economic Times:

Economic Times: On food retail, are you looking at allowing more products? Could we see some announcement soon?

Sitharaman: There is a lot of discussion on it. We are already talking about what is grown and [can be] value added in India. The food ministry is saying that you would need something more to attract consumers. He would want to buy other things as well, like cosmetics.

The Seattle-based online retailer, Amazon, sought government permission to enter the food retail business in India. It proposes to invest $570 million in over five years to sell third party and its own private-label food articles, sourced and packaged locally. Other applications received by the government in food retail are from Grofers and Bigbasket.

While a political consensus needs to be reached for further opening of the retail sector, the government is also examining the proposal of opening up Foreign Direct Investment for all goods manufactured in India.

Food Retail

May 8, 2017   No Comments

Walmart to Set Up 50 New Outlets in India

Walmart will open 50 new wholesale  stores across India over the next three to four years which will be located in the states of Telangana, Andhra Pradesh, Maharashtra, Punjab, Uttar Pradesh and Haryana. President and CEO, Walmart Canada and Asia, Dirk Van den Berghe, said Walmart was committed to India, and the country with its efficient economy was an important market for them.

Each store will be spread over 50,000 to 60,000 square feet. The company will invest $10 to $12 million in each store which will serve 300,000 wholesale customers; hotels, restaurants, caterers, offices and institutions; and 30,000 mom-and-pop grocery shops.

Walmart Store

IndiaRetailing reports that Walmart currently sources 97 percent of the products within India. 15 percent of its merchandise is sourced from the region where its store is located. The company proposes to work with small and marginal farmers and offer training and education to all stakeholders in the value chain.

 

May 7, 2017   No Comments

Apple Sets New March Quarter Record for India

“We set a new March quarter record for India, where revenue grew by strong double digits,” Apple CEO Tim Cook said in his opening remarks as part of the earnings call. Chief Financial Officer Luca Maestri quantified the “strong double-digit” growth for India — over 20 percent.

Growth in India revenue is due to Apple’s aggressive marketing focus with discounts and cashback offers, especially on older iPhone models and products like the iPhone SE. More recently, the iPhone 7 and iPhone 7 Plus have been available at reduced prices as well, reports Gadgets 360.

iPhone

“We continued to strengthen our local presence across the entire ecosystem, and we’re very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure,” Cook added.

Starting online stores is among Apple’s plans for India, while phased manufacturing is something that Apple may be already discussing with the government.

 

May 6, 2017   No Comments

Pepsico Enters India’s Dairy Market

New York-based Pepsico will launch dairy-based beverages in India under its other brands, including Tropicana. PepsiCo India Holdings Pvt. Ltd, is venturing into the Indian dairy market—one of the toughest for a foreign multinational to break into.

Deepika Warrier, vice-president (nutrition), PepsiCo India, said, that the company’s Quaker Oats brand ready-to-drink milk is a ” value-added, grain-based, fiber-fortified dairy beverage that is targeted to cater to the nutrition needs of breakfast.” The Quaker Oats+Milk, will be available in 6 ounce on-the-go cartons priced at 50 cents in India’s top cities and towns.

Pepsico Logo on a botle cap

The company is also working on “fusions” (a mixed beverage with milk, fiber, fruits, and more), and Indian dairy-based products like chhaas (salted buttermilk) and lassi (sweet buttermilk) reports Livemint.

 

 

May 6, 2017   No Comments

Kia to Manufacture Cars in India

Kia Motors Corp., affiliate of South Korea’s Hyundai Motor Co., will invest $1.1 billion to build its first factory in the state of Andhra Pradesh in India. The plant will have a production capacity of 300,000 vehicles a year, and it will produce a compact sedan and a sport utility vehicle tailored for the Indian market. “Our new India plant will enable us to sell cars in the world’s fifth-largest market, while providing greater flexibility for our global business,” Kia Motors president Park Han-Woo said.

Kia Motors

Reuters reports that Kia will likely leverage Hyundai’s supply chain network built around its factories in the neighboring state of Tamil Nadu to gain a foothold in the Indian market, tipped to become the world’s third-largest by 2020. Hyundai is India’s No.2 automaker by sales.

May 5, 2017   No Comments