Review of Storrz.Com - First Online Mall to Accept Credit/Debit Cards?

By Vipin Agnihotri

Storrz.com is a fine example of online retailing in India. The best part about Storrz is that it is using interesting methods to break the online shopping barrier. In my opinion, Storrz.com is probably the first online shopping mall in India that accepts payment at home through any credit or debit card.

Interestingly, Chennai-based retail chain Subhiksha has delayed launching its online store. One reason Subhiksha has done this because the top management of the company is of the opinion that it is much simpler to walk to your nearest grocer and buy than to place an order online for delivery.

The layout and design of website is quite good with only limitation being that the service at this moment of time is restricted to Bangalore only. May be they are using Bangalore as a testing ground but fact remains that there is a vast difference between retailing situation in Bangalore and Uttar Pradesh.

Signing up is quite easy in Storrz.com. What’s more, they also run number of discount schemes. For example, they give Rs 1,000 gift hamper every week through Shop & Win scheme. First time shopper get Rs 50 off on every first purchase.

Storrz.Com is owned and operated by JustOnDemand Technologies Pvt Ltd. When you go to the ‘About us’ page of Storrz.com you will see below-mentioned message:

“Storrz.com provides a complete ecosystem where real world retailers can interact with consumers on line and trade their produce. The Marketplace has been designed with the best features of a traditional mall and the latest on on-line shopping.”

All in all, if you are a Bangalorean who prefers to devote some quality time with your family and don’t want to go to grocery store for shopping then Storrz is tailor made for you.

The India Street Rating: 8/10

Suggested Reading:

• The India Street Opinion on the Right to Information Act in India

• Retail: Next big thing in India ~ The India Street - Business ...

• Reliance Industries Limited on a shopping spree! ~ The India ...

• India Mall Boom – Will it lead to a Mall Bust? ~ The India Street ...

Cashing in on India’s retail sector

By Dr Suvrokamal Dutta

While there is no doubt that investment in Indian retail sector is not for everyone but there are ways for investors to cash in. Theoretically speaking, a budget of between Rs 30-50 lakh buys you into the rampaging retail roller coaster.

If experts are to be believed, malls are the formats that grab all the headlines- and earn the highest ROI- but you can safely forget about getting a piece of the action if you do not have a disposable nest egg of at least a crore to play with. Moreover, it is worthwhile pointing that large chunk of mall developers prefer to lease out rather than sell space within their malls.

“High-street shop space in the city centre is out too, since capital rates in Mumbai’s retail intense localities like Linking Road, Breach Candy, Churchgate and Mahalaxmi range between Rs 25,000-80,000 per square foot,” pointed out Rahil Nandan, retail expert.

Though, when you take into consideration the fact that the space ATMs occupy in flourishing market areas like Linking Road, Colaba Causeway, Bandra and Lower Parel technically qualify as retail space. While ATMs see a plenty of activity in almost any residential or business area, people need ready cash most often in retail-intense areas.

In my opinion, investing in space large enough to warrant the presence of a major bank’s ATM in such a locality is an economical option within the above-stated budget. In general, ATM occupies around 174-250 square feet. Since ATMs are small spaces, they also give rents higher than the average high street store. “Any bank that leases such a space to locate an ATM in will pay the usual interest free security deposit for 6 to 12 months,” pointed out Kadam Ali, noted business journalist based at India.

The pivotal factor here is that this money will earn you interest in the bank in addition to your future rental earnings. Once such a space has been obtained, one can approach major banks with an ATM-specific lease proposal.

In case if one’s option in South Mumbai are limited to 100 square feet or thereabouts, the scope enhances vastly if one considers the suburbs or Tier II/III markets. You may not believe at first but in a budget of Rs 40-50 lakh, one can purchase a retail space of up to 700-1000 square feet there. In my opinion, this can turn out to be extremely lucrative in both the short and long terms, since there is a definite scope for appreciation.

As is the case in any property investment, make sure that the property has a clear title and is free of encumbrances. A lawyer’s services are highly advisable in this regard.

No Quality Retail Space in Southern India

There is a lack of real estate opportunities for retailers in Southern states which have certainly hampered the region's rapport as area offering potential growth.

Falling retail real estate in the region has led to the South accounting for just 22% of the total retail market in the country at a value of Rs 2,62,930 crore and a fifth of the 50 million people working in the sector, as per the data showcased by Images F&R in partnership with property consultant Cushman and Wakefield.

Around 50 million sq ft of space is going to come up across the country. However, only 16 million sq ft of the new construction will be a part of the South. An additional space of 41 million sq ft. will come up in the northern region. While in western India, around 35 million sq ft. of new development in retail sector is evaluated to be added by this year's end. A large part of retail expansion in the South is likely to come from rapidly expanding tier-II cities like Kochi, Coimbatore, Vishakapatnam, Mangalore, and Mysore.

The Nilgiris chain, the country's first supermarket, was established in Bangalore in 19045 whereas the Spencer's Plaza is believed to be the country's first mall. The situation is no same. There is lack of quality real estate space which has been a major concern for retailers.

With people's growing appetite for quality products ands services, the South possesses a potential to make marks in the retail sector.

Retailing in the South has suffered partly as real estate developers concentrated on constructing the commercial space that house technology companies across the southern region.

Retailers in India lack the required skill that they need to learn as a part of mall management. Real estate developers such as Salarpuria are eager to cater the growing demand for quality retail space in South India. Salarpuria is constructing a 1.4 million sq ft. of Market City, a retail space within Hyderabad's technology hub, the Hitech City.

In Bangalore, the developer will construct two shopping malls in the city's western and northern suburbs at an average size of 0.65 million sq ft.

- Source India Property Blog

Retail: Next big thing in India

By Vipin Agnihotri

Lucknow, India: There is no doubt that retail is the next big thing in India as retail shops are doing a brilliant business at present. Lots of Indians believe that the retail shops are a good idea as they provide goods at a discount. After all, why pay more when you get it for less at the retail shops?

Now the Mega Corporation Reliance too has come into the fray of retail market. A chain of convenience stores with the name of ‘Reliance Fresh’ is now spread across the NCR area with an estimated investment of Rs 8,000 crore ahead of Bharati- Wal Mart. It is worth mentioning in this regard that this tie up has thrown up a big and one of the world’s most attractive retail markets with a population of over one billion.

Apart from groceries, fresh fruits and vegetables along with medicines are also available in the shops with a discount that attracts lots of people to these stores. Interestingly, the entry of the big players in the retail business has also brought in its wake considerable controversy.

But despite that, advocates of chain stores are adamant that their entry will not only change the economy and lifestyle of the Indian consumers but also that of the farmers. For example, the stagnation in the earnings of the Punjab farmers would be a matter of the past. Reliance ‘farm to fork’ project will handsomely contribute to the increased incomes, as the farmers will be getting fair share of the price.

“Indian consumers are smart and they are all price conscious and they want to finish the work as fast as they can. They do not go to a provision store for fun. The retail shops are helping the consumers save more and in some way it is capable of supporting the middle class of India,” pointed out Dr Suvrokamal Dutta, renowned financial expert.

Statistic wise: India’s retail sector is wearing new clothes and with a three year compounded annual growth rate of 46.46 per cent, one can safely say that Retail is the fastest growing sector in the Indian economy. Experts believe that traditional Indian markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. What’s more, western style malls have started making their presence felt in metros and second rung cities alike, giving Indian consumer an unparalleled shopping experience.

According to Prashant Jha, correspondent of local business daily, India’s big middle class and its almost untapped retail industry are pivotal attractions for global retail giants interested in entering newer markets. While organized retail in India is only two per cent of the total US $215 billion retail industry, there are some reports, which are depicting that it will grow at the rate of 25 per cent annually, driven by changing lifestyles, strong income growth and most importantly favourable demographic patterns.

By 2010, organized retailing in India will cross the US $21.5 billion mark from the current size of US $7.5 billion. This is quite different to the situation ten year ago when there was not one shopping mall in India. At the present juncture, in Delhi, Mumbai and their suburbs, there are about 700 malls. Organized retailing in small towns in India is growing at an impressive 50-60 per cent annually compared to 35-40 per cent in the bigger cities.

Will Property boom sustain in India?

By Dhruva Jyoti Chowdhury

Kolkata, India: Presently, there is no asset bubble, so nothing to worry for people possessing property in the Indian Real Estate segment. After a bullish run for two years, the graph of the booming real estate market seems to have begun to slide. This has resulted in a virtual meltdown in the real estate segment which was considered to be overheated until a few months back. Now the realtors are setting their sight on sub urban areas for development due to the competitive land prices pushing themselves away from the metropolitan high ends. The experts in this segment suggest that in the three primary segments of the real estate development; primarily residential, commercial and retail, the strong growth with sustainability is achievable by the year 2010. Despite of the graph sliding down, ranking fifth in the retail sector from amongst 30-emerging global retail markets, the Indian real estate segment is being predicted to witness an investment of Rs 100 billion the next two financial years. And if the corporate survey is to be believed, the country will also see a steep rise of 1.19 lakh job opportunities in the real estate segment in the next financial year. The good news for investors and developers is a survey conducted by Knight Frank, a global real Estate consulting group. It states that the real estate segment in India is growing at an annual rate of 30% on the overall basis while a 20% growth rate for the organized retail segment by financial year 2012 is in the offing indicating the retail industry witnessing over a Rs. 100-billion investment up to financial year 2010. Industry feedback and business associations indicate that a large number of firms have evinced interest in setting up special economic zones (SEZs). In the commercial space segment, business opportunity is led by the unprecedented outsourcing activity in the country that in turn is driven by Information Technology (IT) or IT-enabled services. Many global firms are setting up back offices and outsourcing their work to India. According to research carried out by Knight Frank, as the trend gathers pace, commercial space requirement will expand to 100-million sq. ft. by financial year 2008. Of this, almost 75% to 80% will be contributed by the IT / ITES industry. Growth in this sector is being fuelled by incentives given by the Government of India, which has attracted huge Foreign Direct Investment. For example, the Dubai-based real estate major Emmar group is busy setting up SEZs in Haryana at an estimated investment outlay of $1.5-billion. Now days, developers are not risking their moolahs on high priced lands and are under heat at this point of time. The main problem persisting in the real estate market is the affordability. With the prices of all the three segments Sky rocketing, affordability has become a cause of concern for the realtors. This is also because of the high interest rates applied on the developers which are virtually passed on the consumers when they buy properties. Another reason for the realtors for backtracking is the increasing prices of not only land but also allied purchases including cement. The developers are feeling the heat as they are also not finding if feasible to control the labour problem at this point of time. The static income level of the middle income grade individuals who are the real investors in the market, has also added to the woes of the developers. Developers feel that the time is ripe when the Government should step in and introduce salt pans for development to woo the foreign investors who are looking forward to invest in the country. After the strict guidelines by the Reserve Bank of India to the banks directing them to only approve loans selectively and to those only with proper approvals for the land, the business has further being held up. While, investment in the residential segment is estimated to cross the Rs. 9,000-billion mark in the next five years, the number of households that are estimated to be built in the next five years stand at over 5-million. And, all this real estate construction is expected to create a surge in the growth for demand of raw materials, such as cement. Presently, 30-million sq. ft. of available mall space in India is expected to increase to 100-million sq. ft. by financial year 2010. Of the total mall space to be developed, around 75% is in cities like Mumbai, Pune, Bangalore and Hyderabad and National capital Region (NCR). The rest will be in Tier-II and Tier-III cities of Nagpur, Ahmedabad, Chandigarh and Ludhiana. And over the next three years, 300 malls are to be developed in the country including those in the sub urban areas. Reliance Industries announced its retail venture with pan-India footprint covering 1500-cities and towns that will involve an investment outlay of Rs. 25,000 Crore.

Merrill Lynch in its report on real estate trends predicts that the number of malls in these five cities - Mumbai, Bangalore, New Delhi, Hyderabad and Pune will to reach up to 250 by the financial year 2010.

Inflation Increase May Mean More Fears Ahead

Although, India can today boast of its bullish economy which is growing more than 8.5% annually since 2003 but has brought with it a significant drop in number of consumers who are unable to carry the burden of rising prices anymore.

The situation has become worst with interest rates on loans hitting the sky, which has made it a Hercules task for borrowers to repay loans, which have been rising at a faster rate than incomes have risen.

While property rates in India and real estate stock prices continue increasing at such a pace, its enormous impact on overseas investments cannot be ignored. However, both the government and Reserve Bank of India (RBI) are trying hard to cut the inflation.

In a step to cool the growth, RBI raised interest rates a number of times over the past year thereby persuading banks and housing finance companies to increase lending rates, in turn causing consumers with adjustable rate loans.

The consumers find themselves in a situation to break their bank in order to pay their monthly mortgage payment which has witnessed a jump of over 20% to $41,000.

However, the weaker section of society will be the worst sufferers if inflation persists as the costs of basic commodities like vegetables and cooking oil have already gone high in the past three years.

The inflation rate (As far as wholesale prices are concerned), has reached the mark of 6.73% in February and has been above 6%. Contrary to this, retailing in India has risen as much as 10% from what it has been a year ago.

Adding to woes of RBI is the ever increasing inflow of foreign direct investments (FDI) and remittances in India which has left banks flushed with funds.

Loans have marked an increase of 30% annually. Interestingly, banks are showing more exposure towards the commercial real estate. For that reason, the central bank is releasing more stringent guidelines for the banks to cut their interests towards the commercial segment. Some major players in banking sector have already begun focusing what could potentially turn into risky assets.

Indian Retail Real Estate fund pegged at US $1-Billion

Indian Real Estate: Moolah Raising Tata Group

Joining hands with the Xander Group Inc., a private equity firm through its group company Trent earlier this month, the Tata group has firmed up plans to raise $ 1-billion for an institutional retail real estate fund.

Xander group, through one or more of its fund vehicles will invest in the development of an institutional retail real estate portfolio in India in partnership with high quality Indian developers. Tata Group’s real estate arm, Trent will anchor tenancy rights and participate with Xander in managing the portfolio and monitoring its growth.

The Tata group is not alone, but quite in line with other big retail players like the Future group that controls retail company Pantaloon Retail and has floated two real estate funds, specifically for the retail sector. And, has prompted the Aditya Birla group to also consider floating a real estate for fuelling its own retail growth.

Xander Real Estate Partners, part of the Xander group, have also recently bought a 20% stake in a Reliance Industries and the Maker Group joint venture, to develop commercial, residential and retail real estate.

Organised retail, which currently accounts for only 3% of the $230-billion (Rs. 9, 40,000-crore) is expected to grow phenomenally at 45-55 %, creating a demand for around 220-million sq. ft. of retail space by 2010. Little wonder then, the Tata group known for its rather aggressive business moves will make a big bang entry into the development of such space.

Industry estimates confirm the organised retail space currently available is only around 27-million sq. ft. Another 90-million sq. ft. is expected to be added by 2008 from 263-mall projects of which 18-million sq. ft. each in Delhi and Mumbai, 9.5-million sq. ft. in Ludhiana, 6-million sq. ft. in Chandigarh and 3.6-million sq. ft. in Ahmedabad.

Source: www.ibef.org