Retail Chronicle Issue 6 (1 - 15 November)

J Somaiya Institute Of Management Studies & Research,Mumbai
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RETAIL
CHRONICLES
Fortnightly Newsletter | Issue 6 | 01 - 15 november 2016
: Festival of
Diwali
not just
light,
02
sparks!
04 The Gold Reign!
Pg. 2
Electronics
Diwali
Market
06
08
Pg. 4
News at
Retail
Glance! a
Pg. 6
Pg.8
Retail Lab SIMSR
retaillab.simsr@somaiya.edu

A L L T H E B E S T T H I N G S
T H A T I D I D C A M E
F R O M N O T H A V I N G
M O N E Y A N D N O T
H A V I N G D O N E I T
B E F O R E
- STEVE WOZNIAK

Diwali: Festival of light,
not just sparks!!
Yawning and stretching his arms, he woke up
this morning late than usual. Holidays bring in a
mood of indolence especially when it’s Diwali
time - festive season. He got ready in a hustle
for there was a lot of shopping to do. Walking
around the market this year was a new feeling,
an altogether new experience. With social media
trends of “Cracker-free, Green Diwali” and
NGO’s sporting the league, these local markets
seem averse to it. All you see are colored
decorated shops with storming customers
shouting all the variants of fireworks their little
vocabulary could support. But, this time we have
a new campaign running, or to say patriotism
touching heights; NO TO CHINESE POP-POPS.
Customers wary of buying Chinese firecrackers
due to recent events of china’s support to
Pakistan in grueling tensions between India and
Pakistan. It is the upsurge of nationalism or to
follow social leagues, who knows? What we see
is its impact on firecracker Industry.
No one wants Chinese
goods. They all ask for
‘Made in India’. You
know the reason. No
one wants to be seen
as anti­national
.
As one shopkeeper said, “No one wants
Chinese goods. They all ask for ‘Made in
India’. You know the reason. No one wants
to be seen as anti-national”. Even the
retailers and wholesale sellers have started
stocking local made crackers instead of
Chinese ones. They say we don’t want to sell
harmful cheaper products and would prefer
Indian crackers. But, it’s not the whole
picture. For those small local shops, made in
India poses a great cost.
BySHIVANI AGRAWAL
02

They continue selling Chinese pop-pops but,
fake labels of only made in India to attract
unaware consumers. We can’t deny, they offer
more variants than desi trio (phuljhadi, anar and
chakri). Even kids love to buy new modifications
with amazing sounds.
Let’s talk numbers…
Indian firecracker industry is the second biggest,
for but obvious winner China which
manufactures the largest crackers across the
world. Around ₹1500 crore worth of crackers are
illegally imported every year in India. This year in
spite of the ban, sale of Chinese crackers
doubled to 40% which led to shrink of sale of
local industry products by 25%. The Chinese
firecrackers been 20-40% cheaper in prices over
local ones. These figures clearly depicts, no
matter how many health drives we run, for
Indians it’s always been the Cost.
Is cost the only factor…
The prices and loss to local industry is not the
only factor driving Government to enforce a ban
on Chinese crackers. The key ingredient
potassium chlorate/ perchlorates is the
dangerous chemical which on mixing with high
amounts of Sulphur turns fatal. It leads to skin
irritations, breathing issues, bronchitis, kidney
and nervous damages.
Its substitute potassium and sodium nitrates
are expensive, hence local industry (Sivaski
which is Hub of cracker industry in India)
products are priced higher. The chemical
potassium chlorate in turn bursts faster with
more colorful sparks and more distinct
sounds, the reason being preferred over desi
crackers. But the amount of noise and air
pollution is severely higher.We can only hope
that the awareness among customers’
increases and we all have a safer, healthy
festival of light.
03

The Gold Reign
By NEETI NARAIN GUPTA
We see lights and sparkle and immediately we can
think about our most beloved festival DIWALI.
Indians have quite a strong association with
highlighted things, and when we can say that a gift
you can spend on is actually an investment, we are
on board. What is the most common question every
household has on DIWALI or DHANTERAS? It’s
simple, to buy gold or silver. May be the retail
market is all up with these really jazzed up sales and
jackpot offers , online or offline, the biggest market
sharers and sweepers are hands down the ornament
industry with whooping gold and silver up on their
alley.
Gold delivered 15 per cent returns CAGR over
the past 15 years and after negative returns
for three consecutive years, gold has given
positive returns.
This year, DIWALI and DHANTERAS was quite
the golden year for traders. Somehow it all
worked out for them in the best ways. The
price was almost 5% hiked then 2015 rates but
still the footfall was quite high as compared to
other years this season.
But should investors really invest in gold? We say
“yes”. With the ongoing rally in the domestic equity
market, which is close to its all-time high level and
growth in the economy returning, will gold still be a
good investment avenue?
Over the long term, investing some part of savings
in gold always fetches good returns. At the same
time, it creates protection against erosion of
purchasing power either to the exchange rate or
inflation.
04

05
Traders were really happy with almost 20%
more trade happened in a long time line. You
pick big brands like Tanishq, TBZ, Kalyan or
local family jewelers; everybody had a strategic
plan ahead of them to lure in the customers to
make this sale a big hit for them. The global
economy is going through a peculiar phase of
anemic growth and much of the developed
world is sinking into the negative interest rate
territory. As such, gold would certainly be one
of the preferred asset classes for investors.
Most of the companies have made special
arrangements at showrooms including food
counters, sales staff in ethnic wear and pandits
to perform on-the-spot puja. Demand is likely
to remain strong even post Diwali with
marriage season setting in, top officials from
companies such as Maruti Suzuki, Hyundai, LG
and gold retailer Gold Souk. Softening of
prices has led to higher purchase of gold,
retailers said. Gold’s price was at around Rs
32,000 per 10gm about two months back,
which is now down to Rs 30,000. We have seen
a near 15% growth in buying this Dhanteras.
Brisk buying was taking place in case of gold
and silver coins, Lakshmi-Ganesh idols and
sovereign gold bonds.
Traders are becoming more giving as well
like Surat diamond tycoon Savji Dholakia, is
once again giving away hundreds of cars and
flats to his employees as a bonus for
meeting company targets. Dholakia, who
runs a diamond export firm in Surat,
announced his company will give 1,260 cars,
400 flats and pieces of jewellery to his
employees on diwali. These kinds of
strategies do lure in brand equity for
merchants.
This season lit up fairly well for all, and may
diwali showers upon more every year, as it is
a win -win for all.
So happy shopping and happy DIWALI

Diwali Electronics Market
By SURBHI JAIN
Eleven million orders shipped
in one fest!
A huge 18000 orders an hour!
Rs 500 crore worth of mobile
phones Add a little in a bit day! of body text
Five mobile phones per
second!
A 350 Percent Sales jump!
Astounding! isn't it?
These are stats from one of the retail giants
"Snapdeal" as per OCT 2015. Diwali does turn
out to be a Delight for the Electronics retail
market with the Purchasing culture in India.
The stats in 2016 have crossed the previous sum
and is expected to double the profits with
around 6 million orders in a day. The Company
saw nearly 17-fold Growth in sales, 10-times
growth in orders and 5-fold increase in the user
base during the first sale itself.
While Diwali is a time for many to go on
a real shopping spree, trend seems to
have changed this Diwali with the online
mega thrones capturing the biggest
counts for their sales. Diwali can fall
anytime between mid-late October and
early November, which means day for
celebration varies from year to year.
Well, Its a Sunday (30th Oct) for 2016.
Studies have claimed that Retail market
activity is greatly influenced by the
festive Date. Retail traffic is expected to
be much higher on a weekend with a
expected rise of 26%.
06

With the growing financial power, India has started
to become the major purchasing power.
Electronics market, have given a rise of nearly 18-
24 percent each year. India has around 1033.20
million Cell Phone Users as per may 2016 statistics
with over 300 million people using the featured
smartphone. A Purchase of 1.1 million smart
phones is done in this festival of light, 2016.
Indeed, It is now time to believe that the festival of
light has become virtual with Smart gadgets in our
hand and this is a now a virtual reality which is the
biggest impact to the Retail. A business worth
thousands of crores.
07

RETAIL NEWS AT A GLANCE
Pepperfry to open 10 more offline
stores in 6 months
Titan's Helios ties up with
Raymond Weil
Reebok starts making shoes in US
again
Tommy Hilfiger, Gigi Hadid tieup
to co-design 'Tommyxgigi
Collection' for spring
SBI to replace 6.29 lakh debit
cards
CAIT claims 60% dip in sales of
Chinese goods this Diwali
U.S. mall investors set to lose
billions as retail gloom deepens
Online share in revenue to double
in next 4 yrs: TTK Prestige
Amazon's quarterly revenue
jumps 29 pct
SPOTLIGHT
Alibaba reshuffles entertainment units, to
raise 10 bln yuan fund
Gold futures
rises 0.17% on
firm global cues
Tata Sons' FY16
Profit Falls 67%
PAPSCO nets Rs
14.10 cr revenue
through spl Diwali
bazaars
08

RETAIL NEWS AT A GLANCE
ShopClues to fund select
innovations by merchants on its
platform
Flipkart CFO Sanjay Baweja
quits
Flipkart ropes in designers like
Pitti Imagine and Timzy Batra to
help sellers create world-class
products
Investment firm Kinnevik raises
Quikr valuation
Facebook-owned Instagram
getting into shopping
Repeal gutka ban in state:
KSACSF
Nike shuts 35% stores in India to
cut losses
Gaming startup MadRat develops
wear and play platform for kids
DLF Brands to exit luxury biz, to
focus on mass market
SPOTLIGHT
Nestle Q3 net up over 100% riding on
Maggi, new products
Coca-Cola goes less
sugary to bring back
consumers
Dabur to acquire
personal care firm
in South Africa
KFC owner Yum
Brands completes
spinoff of China
business
09

Our Team
Content Heads
Akhilesh Prabhu
Meghna Bamankar
Junior Team
Retail Chronicles is a bi-monthly newsletter
of Retail Lab, the Retail committee of KJ
Somaiya Institute of Management Studies
& Research, Mumbai. Images used in Retail
Chronicles are subject to copyright.
Anchal Pandey
Neeti Narain Gupta
Shivani Agrawal
Surbhi Jain
Vipul Varkar
Design Team
Abhishek Kemminje
Abhirup Banerjee
Hima Doshi
/retaillabsimsr
@Retail_LAB
retail_lab
K J Somaiya Institute Of
Management Studies & Research,
Mumbai
retaillab.simsr@somaiya.edu
+91 9158256641
+91 9769886091