Marketing review

19 Jul 2007


Shopper''s Stop to enter into catalogue retailing
Shopper''s Stop is to start catalogue retailing in the country under a franchise agreement with the Home Retail Group of the UK.

Explaining the catalogue retail business, the company''s Managing Director B S Nagesh said it is a business where a customer orders through a catalogue that lists numerous products. Customers can order a product and get it home-delivered, and can even order via the Internet. Under this format, the store can reach customers through different ways.

The Home Retail group is a £6 billion UK Company. Shopper''s Stop has an exclusive franchise agreement with the company, he said.

The company is to conduct a pilot test in the last quarter of this year in one of the metros before going pursuing it on a larger scale.

Cisco India repositioning itself into solutions provider
Network service provider Cisco India is reportedly repositioning itself as a solutions provider from a product-based solution provider.

According to Cisco vice president Anil Bhasin, "Earlier, we used to look into any one area of business. Now, we are looking at solutions aimed at helping the business achieve its objective".

Cisco India is a strategic advisor to Kishore Biyani''s Future Group, and is in talks with other retail players as well. The company is looking at Special Economic Zones as a driver for growth.

Dell launches new range of notebooks, desktops
New Delhi:
Dell announced its launch of a new range of notebook and desktop computers, under brand name ''Vostro,'' designed specially keeping in mind the needs of small businesses.

The Vostro brand products and services have been designed specifically for simple network and businesses with less than 25 employees, and are priced in the range of Rs22,000 and Rs36,000.

Dell will initially import this new range, and will later it will manufacture it in India. The company will use its existing channels for distribution, and is in talks with big players in the segment, with plans for direct sales as well.

Dell expects a growth of over 30 per cent in revenue in the current fiscal, on account of new product launches. Last year, its turnover was Rs2,000 crore.

MetLife partners with Barclays Bank
MetLife India Insurance has entered into a banc assurance agreement with Barclays Bank, eyeing 5 per cent market share in the booming domestic insurance space, up from its current 2.5 per cent.

The company is also to strengthen its agency network to 40,000 from the current 25,000 via the tie-up.

MetLife is to inject an additional capital of Rs231 crore that will be raised from its foreign partners. Subsequently, the total capital would Rs761 crore.

Having commenced operations in India in year 2002, Metlife has a gross written premium of Rs344 crore. The company has also achieved sales of Rs274 crore in the first six months of this year. It has operations in life insurance, automobile and home insurance, retail banking and in other financial services, and has partnerships with UTI-bank, Jammu & Kashmir Bank, Karnataka Bank and Dhanalakshmi Bank in Insurance business.

Cartoon Network''s Boomerang targets adult viewers
Cartoon Network has launched Boomerang, a two-hour programme block from 9-11 pm, to cater to its more adult viewers. The channel says 50 per cent of its audience is over 15 years of age, and about 30-40 per cent of this are over 25. Boomerang is targeted at the parents or the adults with a child in them. Cartoon Network''s primary audience is the 4-14-year-olds.

The shows in Boomerang block would include Tom & Jerry, Johnny Bravo, Popeye and Scooby Doo. This block of programming is being promoted as a relief to adults returning home after a long tiring day at work.

Cartoon Network has tied up with to create micro sites for Boomerang, aiming to build a community around Boomerang to allow viewers to converse about it, download wallpapers and play games based on the shows. Subsequently, a micro site devoted to Johnny Bravo will be built.

Cartoon Network also has plans to promote Boomerang on-air and in print

Banks, financial institutions, telecom companies and others such as Microsoft feature among the channel''s advertisers, indicating that the channel has a following among adults.

About 35 per cent of Cartoon Network''s revenue comes from these non-traditional advertisers, and the channel hopes to bring in new advertisers with the launch of Boomerang. About 200 brands currently advertise on the channel, which has 21.7 million viewers. Pogo, Turner''s other children''s channel, has 21 million viewers.

TAM ratings for January-June 2007 indicate that 98 per cent of the top shows are on these two channels, which occupy first and second place among channels of their kind.

Bipasha is brand ambassador for Kinetic''s new 125cc scooter
Kinetic Motor Company has signed up actress Bipasha Basu as brand ambassador for its upcoming Kinetic SYM scooter.

The actress has been signed for a contract period of a year and a half. The agreement allows her to endorse all Kinetic models, but the company plans to primarily see her endorse the upcoming Kinetic SYM model.

The new 125cc scooter is primarily targeted at female customers, hence the choice for the right celebrity (actress) to endorse the product, after a detailed study. The actress would be promoting the new scooter at its launch next month.

Prospective customers can call the one-point call centre for test drive, sales and after-sales service. This centre serves as a direct point of contact between the company and the customers.

This would be the first SYM model to be launched in the country and will be manufactured at the company''s plant at Pithampur in Madhya Pradesh.

Initially, the scooter will have 10-15 per cent import content from Taiwan, for parts such as telescopic suspension and the cylinder head. The company is looking for sales of 55,000-65,000 units in the first year, and is projecting an annual growth of 15-20 per cent.

O&M scouts for specialist agencies to take over
Ad agency Ogilvy & Mather (O&M) is on the prowl to acquire specialist outfits in high growth areas such as new media and healthcare communications, and is planning around four or five acquisitions in India. It is looking for the acquisition to be compliment existing businesses in cultural, commercial and in product terms.

Apparently, there aren''t many outfits around that would be fit to be acquired. O&M has huge investment plans for India, with a focus on Bangalore. The agency network is also taking steps to globalise out of India, by using the Indian agency as an outsourcing base. It sees this outsourcing opportunity leveraging high value creativity, rather than low cost.

The lower ad spends in India as a percentage of sales, are on account of an antiquated distribution system. The usual effect of advertising where you put in something quickly through the modern retail trade hasn''t worked with India yet. Advertising usually explodes with a concentration of retail trade.

IPG buys out FCB Ulka
IPG (Interpublic Group) has bought out the residual 49 per cent stake in FCB Ulka. The agency was a 51:49 joint venture between FCB (Foote Cone & Belding), an IPG company, and Ulka Advertising and was set up 1961.

M G Parameswaran, executive director, FCB Ulka, said, the agency would now have a more integrated global system, with more people from the agency working on global assignments.

Simultaneously, IPG would bring in its global skill sets into the country. Recently, the IPG Group bought out the balance stake in Lintas India, another IPG-owned agency. The amount for buying out the residual 49-per cent stake remained undisclosed.

Specialty stores under Peter England brand soon
Aditya Birla Nuvo is planning to open a chain of family oriented specialty stores under the Peter England brand. The 12,000-15,000 sq feet stores will sell both apparel and accessories catering to men, women and children in the value category.

Currently, Peter England operates mainly as a men''s wear brand in the mid-priced value category. The first few stores are expected to be test marketed in the South, with the company investing around Rs400 crore in this venture.

Recently, Madura Garments (part of Aditya Birla Nuvo) separated its fashion brands (Van Huesen, Allen Solly and Louis Philippe) and its popular brand Peter England.

Peter England recorded retail revenues of Rs200 crore in the last fiscal. The brand has been growing at 25 per cent year-on-year, with its retail network covering around 230 franchise stores, 30 company-owned stores and a number of wholesale stores across the country.

Aviva Life plans tie-up with co-op banks
Aviva Life Insurance is planning to unite with the cooperative banks in India in an alliance to expand its reach, besides augmenting its direct sales force.

Currently, Aviva (which holds 26-per cent stake in the joint venture company with Dabur) has tie-ups with Centurion Bank of Punjab, ABN Amro, American Express Bank, Lakshmi Vilas Bank and IndusInd Bank, among others.

Bank assurance accounts for 60 per cent of Aviva''s distribution, with the remaining 40 per cent contributed direct sales.

Tata Coffee plans another 100 retail outlets
Tata Coffee Ltd (TCL) plans to launch 100 coffee outlets in the country over the next five years to enhance its presence. TCL currently has one such outlet under the brand name of Tata Mr Bean Junction at Kochi in Kerala.

Another five are planned for the current financial year, for which the locations have not been finalised. Hyderabad, Chennai and Bangalore are on the list for selection, which will be owned by the company. All subsequent outlets are planned via the franchisee route.

The company plans to launch a brand in the Russian market, possibly ''Eight O'' Clock'' which it acquired last year from Gryphon Investors for Rs1,015 crore. It is also evaluating new markets such as Australia.

The company plans to add 15-20 rooms to its Holiday Homes in Coorg in Karnataka this year.

Vodafone Essar adds 1.5m more
New Delhi:
Vodafone Essar has extended its lead over PSU telecom company Bharat Sanchar Nigam Ltd (BSNL) in June, in terms of global system for mobile communications (GSM) subscriber numbers.

Vodafone Essar (formerly Hutch Essar) has a lead of 2.33 million subscribers on BSNL as of June. Earlier, the gap was just 1.3 million in the previous month, as per figures released by the Cellular Operators'' Association of India (COAI).

BSNL was the No 2 GSM player in India, in terms of subscriber numbers, till two months ago, when Vodafone Essar redefined the hierarchy, and now it appears to be consolidating its lead.

The UK-based Vodafone, the world''s largest mobile operator, acquired a controlling stake in Hutch Essar earlier this year.

Leader Bharti has also increased its lead on Vodafone Essar. While it earlier lead by 11.5 million GSM subscribers in May, the difference now is 11.95 million. Bharti''s market share has increased to 31.4 per cent in June, up from 31.2 per cent in May.

Other operators showing an increase in market shares include Vodafone Essar with 22.61 per cent (22.36 per cent in May), Idea with 11.86 per cent (11.69 per cent in May), Aircel with 4.98 per cent (4.91 per cent in May) and Spice with 2.33 per cent (2.30 per cent in May).

Market shares of many GSM operators have dipped as well. BSNL''s share has come down dropped from 21.43 per cent to 20.90 per cent, Reliance Telecom''s from 3.3 per cent to 3.2 per cent, MTNL''s from 1.95 per cent to 1.92 per cent, and BPL''s from 0.83 per cent to 0.80 per cent.

The slip in BSNL''s GSM growth is being attributed to a delay in its mega tender. Though Ericsson emerged as the lowest bidder for the 45-million line tender, communications minister A Raja wants a re-look at the whole exercise, saying that $107 per line cost quoted by Ericsson is far too steep.

There are 135.9 million GSM subscribers in the country, as on June 30, 2007, against 130.6 million in May. The total addition in GSM numbers was 5.4 million in June.

Growth in the segment is being driven primarily by aggressive network expansions by the operators coupled with decreasing tariffs and increasing affordability.

Jet seeks an Atlantic tail wind
New York:
Jet Airways is going all out to win over business class travellers from the US to India.

Jet is offering competitive premier tickets on the Newark-Brussels-Mumbai flight for $6,150, compared to standard club fares starting at $6,792 for most European carriers. New York newsprint has been carrying full-page advertisements announcing Jet''s inaugural Newark-Brussels-Mumbai flight on August 5.

Jet is offering eight first-class suites for $10,085, about 20 per cent lower than comparable British Airways offers. Jet''s new Boeing 777 will offer the world''s longest first-class bed at 83 inches, complete with storage closets, a dining table and other technological gizmos.

Industry experts opine Jet''s expensive gamble to offer a lot of frills may be somewhat of the mark, as what American executives really want is time-saving flights to India. Jet, with no immediate plans for a non-stop flight to India, is likely to find it difficult to win over business travellers loyal to long haul US carriers.

Air India too is commencing a daily non-stop 15-hour flight between New York''s JFK airport and Mumbai on 1 August, a first in a planned series of new non-stop, long haul connections between the US and India.

Jet counters that the decision for a pit stop in Brussels to pick up passengers would ensure flights flew fully booked. Jet, which is offering the largest economy passenger seat in the world for $850, also wanted all 274 of them filled.

Dena has general insurance, credit cards on its mind
Dena Bank is thinking of entering the general insurance business and plans to foray into the credit card business via an agreement with a leading public sector bank.

The bank does not intend to enter the life insurance business because of larger capital availability and long gestation period, and a possible conflict of interest with bank assurance partner Life Insurance Corporation. Instead it is exploring the idea of a general insurance venture, where the bank would have a minimum 26-per cent stake. If the deal does come through, Dena will be the second bank to foray into general insurance, following Allahabad Bank''s pioneering footsteps.

Dena Bank is also said to be exploring a pact with a bank for its foray into the credit card business, with the rumoured partner being none other than State Bank of India. If this fructifies, Dena will get a royalty although it may not have to carry the credit risk.

Dena Bank has recently entered into a business tie-up with the ministry of railways, installing 117 ATM machines at various railway stations along with 85 kiosks. The bank is aiming for a total business of Rs56,000 crore this fiscal, estimating growth to be around 22 per cent this year.

Café Coffee Day changes gears to take on Starbucks
Café Coffee Day (CCD) is saddling up to take on Starbucks in India, while simultaneously mapping aggressive plans for enhancing its overseas presence.

The company is looking at 700 café-outlets across the country as an ideal number to battle Starbucks.

CCD, the division of ABTCL, presently has some 440 outlets in India, Vienna and Pakistan. It has plans to set up a total of over 2,000 outlets over the next four-and-half years, forecasting that coffee retailing is poised for interesting times in the coming decade. CCD aims to be among the top-three global coffee giants over the next five years, by building a presence in some 2,000 locations across 65 countries.

CCD is adding 20 odd outlets a month, and plans to hit the 750-mark by June 2008. The company has two outlets each in Vienna, Austria and in Karachi, and is looking to expand in both countries. It is also looking at Germanic speaking countries in Europe such as Switzerland, Germany and Czechoslovakia to expand operations via its overseas outfit, the Cyprus-registered Café Coffee Day International.

Domestically, CCD has had good success in Guwahati, Jammu and Katra among other places, and plans to add three outlets in Kashmir. Majority of CCD''s outlets are concentrated in Bangalore, Mumbai and New Delhi, though it has a presence in over 80 cities across the country. The company is setting up a captive furniture plant in Chikmagalur to meet its café expansion requirements.

Gokaldas plans a revival for Wearhouse chain
Gokaldas Exports is planning to re-launch its Wearhouse chain of retail outlets in about sx to eight months. Around two years ago, Gokaldas had shut down most of its 36 Wearhouse outlets across India, in cities such as Chennai, Ahmedabad, Bhopal and Delhi. As on date, only three outlets of the company are operational, all in Bangalore.

According to Rahendra Hinduja, director, Gokaldas Exports, the company had invested around Rs35 crore in Wearhouse, but the ROI of about 10-15 per cent did not match the company''s expected rate of return. As the retail sector stabilises, the company would re-launch the chain, starting with the South.

Since four months, Gokaldas has been supplying in bulk its ''Camel'' brand of products to the German retailer Metro.

RCom to market Yipes products in India
Reliance Communications (RCom), plans to market the products of its latest US-based acquisition, Yipes Holdings, with a planned spend of Rs1,000 crore over the next couple of years.

According to Punit Garg, president, global business, RCom, the company will be spending about Rs1,000 crore in the next couple of years to roll out Yipes products across the globe. For India, Reliance plans to roll out some of Yipes'' products on the existing infrastructure platform.

Yipes currently services nearly 1,000 enterprise customers across verticals such as finance, legal, government and healthcare. Yipes Managed Premium Internet, Yipes Hawkeye, Yipes OnDemand are some of the products that the company has in its portfolio.

Its financial product FinancialConnect! (for electronic trading and market data distribution) are used by the New York Stock Exchange, Chicago Mercantile Stock Exchange other major exchanges for communicating with the traders.

RCom aims to bring these technologies to Indian stock and commodity markets and replicate their success here. Reliance also plans to initiate talks with various government agencies to showcase e-governance and e- connectivity related Yipes products.

RCom chairman, Anil Ambani, at a press conference to announce the deal with Yipes, said the company has invested Rs2,000 crore for the expansion of Flag network, and the entire investment was made from the cash flow generated from Flag''s operations, which is profitable at the net level for the first time. Reliance plans to invest about Rs6,000 crore in Flag''s Global Next Generation Network in the coming years as part of its global expansion plans.

RCom''s subscriber base has swelled by 20 million after it was listed on stock exchanges in January 2006, taking its total to 35-million subscribers.

Reliance to re-launch the Vimal brand; plans to set up retail chains
Mukesh Ambani''s Reliance Industries is to re-launch its textile brand Vimal.

Starting August-September, the company plans to set up retail chains in fabric and garments across India, and has partnered an English architect with expertise in retail concepts for the venture.

The company apparently plans to use the element of surprise in its favour, by surprising customers with its designs and prices at their outlets. Vimal has invited Italian designer Maurizio Bonas of ''Made in Italy'' fame, to instruct Indian tailors in Italian designs for trousers and jackets via a workshop last year in which about 80 tailors participated.

Apparently, the designer liked the company''s work culture, and is now in talks for a long term partnership. His designer labels are available in Tokyo and London, and he hops to bring them to India via Vimal.

Leveraging ''aggressive'' business plans, the company will first make available its fabric at the existing Vimal outlets in Bangalore, Chennai, Kochi, Hyderabad, Mumbai, and at its flagship store in Ahmedabad. Thereafter, it will expand across the country.

The plan is to first utilise existing retail infrastructure before entering malls. The company is investing in its back-end business and is working with its fibre division to innovate by introducing antiperspirant, anti-bacterial, quick dry and soil release materials.

Tata ventures into Saudi Arabia cars market
Indian auto major Tata Motors has ventured into Saudi Arabia''s passenger car market with the launch of three car models.

Tata launched its 2008 models of the Indica, Indigo and the Marina, all of whom conform to safety, quality and reliability specifications of the Kingdom of Saudi Arabia, at a price range of SR30,000-35,000.

The upscale brand, Indigo-Marina station wagon has a price tag of SR33,400. The company has appointed Mohamed A Alhamrani & Co Intertrade Ltd (AIT) as its sole distributor in the Kingdom.

The company''s focus would always be on after-sale service, for which they have set up an alliance network of 35 service points to cater to the different needs of their customers.

ITC entrs into branded organic spices segment
ITC Foods has its foray into the branded organic spices segment.

Initial offerings comprise chilli, turmeric and coriander powders under the Aashirvaad Select Organic Spices range. Aashirvaad had earlier obtained India Organic Certification for its range of select organic spices, and the packaging was made of ECF (elemental chlorine free) board which does not contain chlorine and is therefore totally environmentally friendly.

Ford India likely to introduce a small car, but not at the Rs1 lakh price point
New Delhi:
Ford India is mulling the launch of a compact car for the local market, but not in the Rs100,000 price range as proposed by its competitors. Ford does not have any product in its portfolio in that price range.

Ford currently sells only mid-size sedans in India, such as the Fiesta, and premium hatchback Fusion and SUV Endeavour in the Indian market. It has an entry level sedan, the Ikon, competing head to head with competition''s Maruti Suzuki Esteem, and the Mahindra Renault Logan.

Fiesta diesel presently contributes nearly 70 per cent to the overall sales of the model. Ford India has achieved localisation levels of 60 per cent on Fusion, while Fiesta is made from 80-85 per cent locally sourced components.

Air India ready to join airline grouping Star Alliance
New Delhi:
The ''new'' merged Air India, is all set for an induction into 17-airline global grouping - Star Alliance.

Air India will make a presentation about its strengths before a working group of the Star Alliance on September 13. The CEOs of the member airlines of the alliance would meet on December 13 to take a decision on the induction of Air India as a partner.

If Star Alliance decides in the affirmative, integration of the airline with other members of the group would take between 12 and 18 months.

The alliance includes Singapore Airlines, Lufthansa and United Airlines. Other similar alliances are SkyTeam and Oneworld.

Such alliances facilitate partner airlines to jointly undertake many activities, including passenger and baggage transfers, and sharing of airport lounges.

Mirc Electronics set to launch LCD TV sets by August
Onida brand owner Mirc Electronics, backed by an Rs100-crore R&D budget and a new production line, is ready to make and launch a range of LCD TV sets by August. The company will produce all but the LCD panels, which will be imported from Samsung and LG, at its new facility at Wada near Mumbai.

Apart from significant cost savings, the new facility will also allow the company to bring into the market a new range of slim TV''s, a segment with the most rapid growth in demand. It will introduce a 29" slim and 21" ultra-slim model. The 29" model would be slimmer by almost 15 per cent than existing 29" flat TVs, and 21" model would be at least 40 per cent slimmer than existing models.

The company, under the ''Onida'' brand, markets air-conditioners, washing machines, microwave ovens, home theatre systems and DVD players. It also intends to roll out a new range of fully automatic washing machines. TV sets remain the mainstay of Mirc''s business, contributing 60 per cent of the company''s Rs1,600-crore turnover.

The company has earmarked an overall marketing spend of Rs80 crore for the year. Ad agency McCann Erickson manages the company''s creative account.

The company is looking at a Rs2,000-crore turnover for the current fiscal

Ford''s new car qualifies for excise relief
New Delhi:
Ford India launched a diesel variant of Fusion, which allows the company to avail excise duty benefits offered to diesel cars with engine capacity up to 1.5 litre and petrol cars with 1.1 litre engine capacities.

The company''s diesel variant is priced at Rs6.59 lakh (ex-showroom Delhi), and will be powered by a 1.4 litre Duratorq engine. The new product is an attempt to increase the company''s offering in the diesel segment. Currently it has Fiesta, whose diesel variant contributes 65-70 per cent of total sales of the model.

The company has a capacity of manufacturing 100,000 units, but production hovers at about 65,000 units due to certain bottlenecks.

Garden Silks losing out to big players
Gujarat-based Garden Silk Mills, known for the Garden Vareli brand of saris and dress materials, will restrict production to the current numbers and has no expansion plans. This is on account of a continuous fall in revenues from the segment, attributed to the entrance of big retailers.

The company informed BSE that it has tied up with China Textile Industrial Engineering Institute to set up a continuous polymerisation plant with a capacity of 2,60,000 tonnes per annum, is in keeping its plans of expanding its backward integration, which is more profitable than the fabric business.

Of over Rs1,200-crore sales of Garden Silks, only Rs200 crore comes from saris and dress materials, the rest coming from its yarn and polyester manufacturing.

The company has also tied up with Oerlikon-Barmag of Germany and TMT of Japan for the supply of machinery and technology for the polyester yarn plant with a capacity of 55,000 tonnes per year.

The company is open to tie-ups with malls for setting up shop, but has declines to make any further investment in the retail business. It currently has 293 retail outlets in 65 cities, including 18 company owned depots.

O&M re-launches Meridian
Ogilvy & Mather is planning to initiate its second agency Meridian''s Mumbai operations, and has plans of extending a branch office to New Delhi in the future. At present, Meridian is a mid-sized Bangalore- based agency, with accounts such as Arvind Mills, Dockers and Himalaya Drug Company, among others.

Meridian Communications P Ltd has appointed Rensil D''silva as executive creative director and Kumar Subramaniam as president.

At a press conference, Piyush Pandey, executive chairman, and also national creative director, O&M (India & South Asia), said, "We are re-launching and re-charging Meridian with the Ogilvy values and Ogilvy thinking. The purpose is to build everlasting brands and create solutions for clients and give a thrust to the business."

Having merged its other agency David with Bates recently, O&M is now focusing on its Indian initiative with Meridian.

A press release from O&M said that the agency was ranked at number three in the worldwide WPP ranking. The ranking is a combined tally of the offices of Ogilvy in Mumbai, Delhi, Bangalore and Kolkata.

Ogilvy Mumbai alone is No. 7 in the worldwide ranking. There is no Indian WPP company in the top 19 other than Ogilvy & Mather India, said the release.

Zee Entertainment to start a new youth channel
Zee Entertainment Enterprises Ltd would launch a channel targeted at a young audience as it expands beyond its traditional base of senior viewers.

ZeeNext, a general entertainment channel, will focus on a younger audience without alienating the senior age group. With half of India''s billion-plus population below age 25, broadcasters are now going beyond cartoons and movies dubbed in regional languages to hook young adults.

Walt Disney, which operates the Disney Channel and Toon Disney in India, bought a children''s Hindi entertainment channel last year from UTV Software Communications Ltd., and also acquired 14.9 per cent in the Indian broadcaster.

Star India has a Hindi-language channel for young adults, while Time Warner''s Cartoon Network dominates the kids'' entertainment space, though it has initiated some level of engagement with the working young with a programming slot branded as Boomerang.

India has 71 million cable TV homes, the world''s third-largest base, and is slated to become the top pay TV market in Asia-Pacific by 2015.

Indian mobile services market to surpass $25 bn by 2011
New Delhi:
The cellular services segment in India, which the world''s fastest growing wireless market, is expected to more than double to $25 billion by 2011, as per global consultancy and research firm Gartner.

Total earnings of cellular services market in 2006 was $8.95 billion and would reach $25.617 billion by 2011, growing at a compounded annual growth rate (CAGR) of 18.4 per cent.

Cellular market penetration is also projected to shoot from 12.7 per cent in 2006 to 38.6 per cent in 2011.

This overall penetration will be primarily driven by a sharper focus on the rural market. By 2011, Gartner predicts that 58 per cent of the rural population and 95 per cent of the urban population would be covered with mobile connections.

The growth, however, could be restrained because of problems in the allocation of scarce spectrum, which could impact expansion plans and quality of service, mainly because of inadequate investment in or upgrading of networks.

The agency opines that there was still scope for reducing mobile tariff, since call rates have dropped to about 2.6 cents per minute, which is high compared to fixed line tariffs of 0.9 cents per minute.

The rural market presents immense growth opportunities as mobile penetration was just two per cent. Many companies are planning to tap this market by introducing handsets that would cost below Rs1,000.

Taiwan''s bullet train eats into domestic air carriers
Taiwan''s first bullet train has somewhat dented domestic aviation, forcing airlines to cut back on flights or shut down services altogether amid warnings the situation will get worse.

UNI Airways Corporation was the latest carrier to move on costs, requesting the closure of two daily flights between Taipei and Chiayi in the south.

The inauguration of the island''s first high-speed railway, capable of handling 100 million passengers a year, in January had dealt a lethal blow to domestic airlines.

Airlines struggled for the last decade due to the general economic sluggishness and completion from the island-wide highway system. The bullet train could be the last straw.

Commercial operations of the Japanese-built high-speed train were launched in January, with Taipei finally linked to the southern port city of Kaohsiung in March. Passengers pay $1,490 dollars (US $45.40) for a standard class seat from Taipei to Kaohsiung - which amounts to 70 per cent of the price of an air ticket - for a 90 minute trip at speeds of up to 300 kmph.

Since launch, passenger numbers on flights have dwindled dramatically, dropping 24 per cent year-on-year in February, 42.7 per cent in March, 43.6 per cent in April, 49.1 per cent in May and then 58.8 per cent in June. The Taiwan High Speed Rail Corporation (THSRC) initially scheduled 19 round trips a day, but is now expected to increase frequency to 37, with 88 daily services as the ultimate goal.

To give Taiwan''s four major domestic carriers a boost, the CAA has reduced landing fees by 50 per cent, but that could well amount to locking the stables after the horse has bolted. Mandarin Airlines, one of the domestic players, swung into a loss of about $10 million in the first half of this year from a net profit of some $80 million dollars in 2006. TransAsia Airways said numbers on its Taipei to Kaohsiung flights have plunged 50 per cent.

Future group ties up with Talwalkars for fitness centres
Kishore Biyani''s Future Group inn partnership with healthcare chain Talwalkars plans to invest around Rs100 crore over the next three years for launching 50 ''Fit and Active'' centres in shopping malls across India.

The two companies have united efforts to form a joint venture, Talwalkars Pantaloon Fitness Private Limited. The company plans to spend Rs2 crore as initial investment in each of these centres.

The area of each such centre would be around 7,000-15,000 sq ft depending on the availability of space. These centres will be equipped with equipments imported specially from some of the world''s best fitness equipment makers including Nautilus, Trecor and Schwinn, and would also offer fitness regimes like yoga, aerobics, spin-cycling and others.

The joint venture also plans to launch health clubs with gyms, spas, and swimming pools, offering customers a complete range of options in the areas of health, wellness and beauty. Around 3,500 personnel would be employed in the 50 centres, which are aimed at reaching Tier I and Tier II cities via retail outlets.

Within the next few months, the first two centres would come up in Bangalore, followed by one in Siliguri and another in Noida. By year end, around 10 centres would be operational in various parts of the country.

Talwalkars is also planning stand-alone gyms in Singapore, the Middle East and other Asian countries in the next two years.

Lee opening 25 exclusive outlets
Lee, the denim fashion brand, will open another 25 new exclusive outlets across India by year-end. The company currently has around 75 stores across the country, including 35 exclusive outlets, and is looking at a total number of Lee outlets in all categories of about 125 by the end of the current financial year.

As part of its marketing strategy, Lee is open to setting up franchise-based exclusive outlets, and even share shelf space with other brands in partnership.

Reliance Retail opens more stores
Reliance Retail Ltd has added three more stores, in addition to the existing three, and is planning to set up another six more in the next two months. The three new stores have been set up at Peda Waltair, Dwarakanagar and Santipuram in Vizag, and are in the non-food category. These new stores will feature a new section for avid mobile handset purchasers, offering a wide variety at affordable prices.

Raymond launches Notting Hill
Raymond Apparel Ltd has launched Notting Hill, the new brand apparel, in the Kerala market.

The new apparel brand under the popular price segment would feature wide a spectrum of men''s lifestyle products ranging from formal wear to relaxed casual wear, and will target young professionals between the age group of 22-30 years.

The range comprises suits, shirts, trousers, jeans, t-shirts and accessories such as ties, handkerchiefs and socks.

Notting Hill would be retailed across the country in a phased manner, via 400 distribution points by the end of this year. Notting Hill adds to the company''s existing brand portfolio, which includes leading apparel brands such as Park Avenue, Colour Plus, Parx, Manzoni and Zapp.

Raymond has recently set up a Design Studio in Italy that provides the company''s various apparel brands with access to international quality inputs in the areas of design and product development.

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