Retailing is low margin business. Now doubt. But see how these retailers are converting footfals for other products sales. Take for example, Pantaloon, they are getting into
- Credit
- Media advertisement
- Insurance

In these businesses, margin is higher and in most of the cases, the income earned will directly goto their bottomline as expenditure would be less.

When Future Capital started their business, one of the banker is commenting that

- since it is not a bank, it is not bound by RBI rules like CRR and so on

- they can start any no. of branches

- eventhough cost of money may be higher by 2%, their distribution cost will be nil as customers would be coming to the mall

These business will form a moat around the main business "RETAIL"

Let me put few lines regarding the retailing business in Japan. Here almost 90% of the day to day articles are purchased from Malls like Big Bazar. These Malls have almost all the articles, from electronics to vegratables and flowers and Air Tickets. And there are many such chains operating here and they cater to different strata of the soacial class.There are Malls like Daiei, which cater to Middle class and there are other Malls like Daimaru and Sogo which cater only to upper middle class and upper class society. The Malls which are concentrating on the middle class population are generally doing good businesses. But the high end Malls are less crowded, coz the price is very high. One more interesting thing is that the Malls like Daiei those who caters to Middle class, import most of their goods, even vegetable from China or other low price countries. But the high end malls used to have Japanese made goods or goods made in Europe or US.

This is quite interesting.

Mukesh Ambani’s Reliance, Mahindra Invest In US Mobile Startup LocaModa

This looks like an under the radar deal. Indian business houses Mahindra & Mahindra and Mukesh Ambani owned Reliance Ports & Terminals have funded a US-based company that has developed a technology which connects mobile phones with a digital signage boards.
The company in question is LocaModa Inc., a US based developer of location-based text-messaging services. It has raised $6.18 million in Series A funding from Mahindra & Mahindra, Reliance Ports & Terminals and Dace Ventures, reports PEHub, quoting a regulatory filing in the US.
LocaModa has developed a platform that makes out-of-home networks in retail and social places interactive, and connects them to the web. So consumers in social or retail environments can use their mobile phones to interact with digital signage that has been mobile-enabled. Essentially the platform makes any phone on any carrier a “remote control”. For instance, it has a product called Wiffiti (wireless graffiti) using which coffee shop patrons can send text messages to large screens. For Reliance group, which is planning a nationwide network of retail chains, there is synergy in investing in such a company.
LocaModa is founded by Stephen Randall, a serial entrepreneur with over 15 years experience in mobile computing. He was the founder of Symbian, the London-based wireless joint venture between Ericsson, Nokia, Panasonic, Psion, Samsung, Siemens and Sony Ericsson.
This is probably first such investment by Mahindra group and Reliance Ports & Terminals overseas. Moser Baer has invested in three solar technology startups in the US before.

Source: VCcircle.com

Sometimes, I feel ...