Retail: Watch Industry

Watch cos want cap relaxed on FDI in retail:

It is now the turn of the watch industry to push for relaxing the foreign direct investment cap on single brand retail.

The timewear industry has said FDI restrictions are not allowing international brands to have complete control over retailing and hence posing an impediment to its growth.

The All India Federation of Horological Industries and Technopak Advisors, which released a white paper on the Indian watch industry, also said the high duty on imported watches, grey market and taxation structure could prohibit the industry's growth.

The last mile connectivity to the consumer is provided by the retailer. FDI restrictions are not allowing international brands to have complete control over retailing.

Subsidiary companies cannot invest due to regulatory restrictions and this could be an impediment. Fresh money inflow in the market shall lead to better distribution and marketing of brands.

‘Modern retail '

modern retail will be a great enabler as it triggers impulse buying behaviour.

Currently, 51 per cent FDI is allowed in single brand retail and 100 per cent in cash and carry. It is banned in multibrand retail.

Stating that the Rs 4,000-crore watch industry could grow to a whopping Rs 9,000 crore in three-five years, The watch market in India is expected to grow between 10 and 15 per cent annually.

The white paper also sought lower import duty on luxury watches and rationalised taxation structure.

It said factors such as growing economy, increasing consumerism, strong middle class and a large number of high net worth individuals would favour the growth of the market.

The industry has to invest in brand building while the government must recognise the potential of the industry in becoming a manufacturing hub for watches and watch components.

Only 27 out of 100 people in India wear a watch today. The industry would ideally like the number to move to 70 in the next couple of years. Industry need to learn from sectors which have grown due to duty rationalisation and excise benefit.

More jobs

According to the report there is an opportunity to generate additional total employment of around 80,000 people.

It also said employment in watch retail can reach up to 2.15 lakh people in the next five years.

Kraft Foods sues Britannia

Kraft Foods sues Britannia over Oreo copyright:

US foods company Kraft Foods has dragged Indian biscuits giant Britannia Industries to court for ‘infringement of trademark and copyright, passing off and unfair competition of its globally reputed Oreo brand of cookies.'

Britannia's recently-launched Treat-O biscuits, Kraft Foods alleges, has the ‘same look and packaging as Oreo.'

Kraft Foods Global Brands LLC says that it ‘has filed a suit in the Delhi High Court against BIL, seeking an injunction to prevent BIL from manufacturing, selling, marketing, advertising or in any other manner using and/or allowing or permitting third parties to manufacture, market, advertise or use the distinctive elements of ‘Oreo Cookie Trade Dress' and its packing.'

When contacted, a Britannia spokesperson said, “The company will take the right and appropriate action as it always has.”

‘Unique features copied'

Kraft Foods says that Britannia has copied the unique and distinctive features of the ‘Oreo Cookie Trade Dress' and its packaging in its newly-introduced Treat-O biscuit product.

The company said that the shape of the cookies sold under the brand Oreo, a round shaped cream-filled sandwich cookie, has unique etchings consisting of fine edge linings, inner rings and florets embossed on it, which is known as the ‘Oreo Cookie Trade Dress'.

Kraft Foods has alleged that the edge lining on Britannia's product, the inner rings and the florets and their placement on the product are identical to the original Oreo Cookies.

Consumer Durables: price hikes

Durables to feel the heat of higher steel prices:

Rising steel prices are likely to have an impact on the durables industry, with the sector mulling a round of price hikes. Prices of refrigerators, washing machines and air conditioners could move up 2-10 per cent in the near-term.

While a slew of companies in the durables business such as Samsung and Godrej has raised prices 1-4 per cent, many like Whirlpool, Haier and Panasonic are contemplating a hike too. Industry watchers observe that air conditioners, washing machines and refrigerators could be costlier by 5-10 per cent. They note that the price hike is also due to rise in prices of other components such as copper and polymer.

Earlier this week, the largest steel maker, the Steel Authority of India Ltd, increased the prices of its products by three per cent or Rs 1,000 a tonne. Private players such as Tata Steel and JSW have also hiked prices following higher input costs.

Samsung India, have undertaken a one-five per cent price hike with immediate effect. Prices of direct cool refrigerator could move up anywhere between Rs 100 and Rs 1,000 while prices of semi-automatic washing machines have been increased by Rs 200. The biggest impact has been on air-conditioners which will see a hike of nearly 10 per cent.

The Haier India, would shortly announce a 3-5 per cent price hike on products like washing machines and air conditioners, among others.

Air conditioners are likely to have the maximum mark-up as use of steel is highest. Steel accounts for nearly 25-30 per cent of its input materials. Prices of steel and copper are at an all-time high. Costs have gone up tremendously in the last one year.

Inflation

Industry watchers note that the hike will have an impact on the margins of the companies. Panasonic India, try to absorb the maximum increase of commodity price hikes. Currently, they are not intending to pass it on to the consumers. However, if commodity prices continue to move up further, they will also have to undertake a price correction.