Mumbai, Apr 25: It is action time at the Rs 6,400 crore RPG Group's retailing business. Besides expansion across the existing retail formats, the group is currently considering a foray into retailing on the World Wide Web as well. ``We are in the process of examining the possibility of retailing on the internet in the country,'' says a company spokesperson. Towards this end, the group is currently conducting a feasibility study, which will cover various issues like mode of payment, number of net surfers and distribution logistics.The group already has an internet web site which retails music accessible at www.saregama.com. While details are not available, the company is considering retailing a wide range of goods and services like value-added foods, cosmetics, music and entertainment, through the internet.
As part of its restructuring operations initiated two years ago, the RPG Group has identified retailing as one of the five thrust areas for growth. Accordingly, the company has made a foray into whatis projected to become a Rs 250,000 crore market by the year 2005with three formats and 41 stores across the,country.
These include FoodWorld, a chain of stores for value-added foods, Health & Glow for pharma and colour cosmetics and MusicWorld, a series of destination stores for Music and entertainment. The group is also contemplating a foray into a tyre-batteries-and-accessories (TBA) chain in the country.
The group plans to increase the total number of retail outlets to 100 by the year 2000, and 170 within the next three years. This would include increasing the number of FoodWorld outlets to 100, MusicWorld outlets to 25, and Health & Glow to 40, in the next three years.
According to a company spokesperson, the group will soon set up shop in Mumbai and Delhi with MusicWorld. High real estate prices have prevented the group from establishing stores in these cities so far. Where a destination store concept like MusicWorld is easy to establish in cities like Mumbai and Delhi, a neighbourhood chain storeconcept like FoodWorld pose problems.
Besides a fully developed hub-and-spoke system, a FoodWorld like chain requires the presence of a large number of stores in a particular city to be able to make an impact on bottomlines.
It is here that the internet brings a whole new opportunity into focus. Retailing on the net will not only help the group save on start-up costs, but will also help in being able to contact a large consumer base at the same time.
``The RPG group will be able to address the distribution and logistics issues associated with e-commerce effectively because of its large scale presence across the country through its 35-odd group companies,'' says an analyst.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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