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With eyes set on the high margin food and grocery business, Subrata-Roy promoted Sahara Group has ventured into the consumer product retail segment.
The company said it will sell 800-odd products through its hybrid direct selling retail format ‘Sahara Q Shop’. “We have made an initial allocation of Rs 3,000 crore towards this business. We will increase the investment according to the need as we go ahead,” Subrata Roy, Chairman, Sahara India Pariwar, told reporters.
Speaking on the business model, Roy said that Sahara Q Shop will be housed in an area of 330 sq ft. It will essentially be a delivery centre for its products in categories such as staples, personal care, general merchandise and lifestyle. He said that at the moment some 800 Q shops have been set which will be expanded to 60,000 outlets.
Consumers can place their order through Sahara’s six lakh sales personnel and call centres. The products will be delivered from various warehouses to be set up across the country.
“We plan to have about 305 warehouses,” he said. The company is looking at a sales target of Rs 20,000-25,000 crore in the first 12-18 months.
The first phase of the retail business will be launched on August 15, covering 60 towns across Rajasthan, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand.
Sahara India plans to launch Sahara Q Shop in 998 towns and cities by March 2013.
Subrata Roy also said the company is looking at organic food, a gourmet range besides entering dairy business shortly. He, however, clarified that the company would not be entering the brick-and-mortar retail format but would stick to its current model – which is a mix of online and service delivery model. Sahara’s entry into the $13.1 billion FMCG business comes at a time when various foreign retailers are making a beeline for the domestic Indian market.
Sahara said foreign direct investment in retail is welcome as long it brings quality product into the country. He, however, said that foreign retailers should not be allowed to import and a there should be a clause that ensures that they manufacture in India.
Acquires hotels in New York, stake in Digicable
Sahara India Pariwar on Monday confirmed that it had bought out a majority stake in digital cable company Digicable. It also said it had completed acquisition of the Plaza Hotel and Dream Downtown hotel in New York. It will hold a controlling stake in both hotels.
“We have bought out Digicable for $ 52 million for a 90 per cent stake in the company,” said Subrata Roy, Managing Director, Sahara India Pariwar. He, however, did not specify the future course of action with the Digicable acquisition.
Talking about the hotels business, Roy said the company has completed acquisition of the Plaza Hotel in New York and is now gearing to make a big splash even in the domestic sector.
“We plan to have 25,000 rooms positioned in the 5-star category and 15,000 rooms in the 4-3 star hotel in the next two years,” he added. These hotels will be constructed by the group. He added that after Dream and Plaza, the company is not looking at other international acquisitions. The group has shown interest in the Taj Mansingh project, if the property is put up for auction.
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