Retailing: Piramal Holdings Plans Global Sourcing  ( April '26,2004, FE)

Piramal Holdings Ltd, which has formats like Crossroad, Piramyd Megastore, Piramyd Supermarket and Jammin, has chalked out plans to source its products from outside the country to cope with competitive pressures.

As a first step, teams have been sent out to markets like China, Indonesia, Malaysia and Hong Kong to explore sourcing opportunities in toys, gift articles, fashion accessories, food and household products for its formats.

As a result, the first consignment of imports will reach Indian shores in three months. For fashion apparels, sourcing opportunities from Italy will be looked at in the second phase of global sourcing.

Speaking to FE, Crossroad, Jammin and Piramyd Supermarket CEO and Piramyd Megastore director & CEO KN Iyer said the need to explore various markets for global sourcing comes with the objective of creating a differentiator on the shelves.

“Also with the decrease in the duties which is expected by 2005, it becomes a viable proposition to source products from China, Indonesia, Hong Kong and Malaysia. Therefore, our buyers, who are essentially merchandisers and buyers, have fanned out to various markets to source quality products at reasonable prices,” said Mr Iyer.

The categories identified for sourcing are kids toys, gifting articles, fashion accessories, food and household products for its various formats. “For Jammin, which has many redemption games, we are looking at toys and gifting articles. Similarly, for Piramyd Supermarket, the sourcing of food and household products from countries like China is being explored,” said Mr Iyer.

As a result of the sourcing, the first consignment of imports from China, comprising toys, gifting items and fashion accessories, is expected in the next three months. Mr Iyer said a senior team will also be visiting China this month to finalise tie-ups with local manufacturers. As a result of the sourcing, roughly five per cent of the total sales for next year will accrue from imports.

“We are looking at a turnover of Rs 100 crore from the three retail formats that we have by next year. Lower costs will definitely boost the bottomline as well the topline,” he said. Piramyd Supermarket and Megastore have footprints in Mumbai, Pune and Nagpur at present. Five properties in Delhi and three in Punjab have been signed for Piramyd Megastore.

The second phase of global sourcing would involve exploring opportunities in fashion apparels. Mr Iyer said Italy is one destination which has been identified for sourcing opportunities. “Sourcing will be for the autumn winter collection, which is the festive season in the country. We will look at fashion imports from Italy,” he added.