|
India’s biggest retailer sets up a sourcing operation in Hong Kong
Pantaloon Retail (India) Limited is India’s leading retailer with over 1,000 stores across 53 cities in India, employing over 25,000 staff. It operates multiple retail formats in the value and lifestyle segments of the Indian consumer market. The company has recently invested in a sourcing operation in Hong Kong and China, to achieve economies of scale, reduce costs and achieve a competitive edge. Pantaloon Retail is the flagship company of Future Group, one of India’s top business groups.
It made business sense to locate the head office in Hong Kong
To be competitive and follow a just-in-time business model and not hold excessive stock levels, the company was buying goods locally from distributors and wholesalers in India. However, as the company expanded and much larger volumes were being managed, it made commercial sense to source merchandise direct from China. The company therefore needed to have a presence in the region. “Everybody knows that despite Hong Kong being more expensive than China, it makes business sense to locate the sourcing operation’s head office in Hong Kong,” Mr Sandeep Poddar, Director of International Sourcing, Whole Wealth Limited (a Future Group venture) explained. Hong Kong’s many advantages include speed, efficiency, business transparency, documentation, expert finance, effective logistics and dynamic, skilful staff. These business factors more than outweigh Hong Kong’s higher costs, which are a direct result of the ongoing business success of the city.
Establishing a business in Hong Kong is easy
In comparison with other places, setting up a business is quick, easy and relatively inexpensive in Hong Kong. Mr Poddar continued, “Hong Kong has all the business service providers to manage the peripheral work, allowing me to concentrate on the core work. So I don’t waste time and money. Hong Kong also has a very strong systems-based structure, ensuring a level playing field and no discrimination. This is a very big thing for overseas businesses and expatriates.”
|
|
|
As well as the Hong Kong head office the company has opened two representative offices in the Mainland in Guangzhou and Yiwu, to manage merchandising and sourcing. The Hong Kong office is the profit centre facilitating business for the two Mainland representative offices, providing supplier management, quality control and payment services.
The Hong Kong business, Whole Wealth Limited, is one year old and is a 35-member strong team. Turnover is forecast to grow to US$100 million in the next two years in line with the aggressive expansion plans of Pantaloon and the opening of new retail outlets and increased merchandise sales.
Growing synergy between India and Hong Kong
The emerging economies of China and India are both booming in comparison to other economies in the world and Mr Poddar believes they are becoming increasingly inextricably linked. China is the factory of the world and sees huge potential in India, due to its large population to consume the products China supplies.
Hong Kong is a popular tourist destination and shopping paradise for Indians and is a transit point between India and the US. The city is home to a large Indian community of around 45,000.
Indians now have the increased disposable income to fly more frequently between the two regions. This increased demand for flights resulted in a new air services agreement between Hong Kong and India which has led to the start of Jet Airways and Cathay Pacific opening more airline routes, furthering trade and investment opportunities between the two regions. Mr Poddar believes one such business opportunity is the development of Indian schooling in Hong Kong, catering for Indian and expatriate children whose parents want to give their children the opportunity of an Indian education that is held in high regard internationally.
Hong Kong gives you a lot
Mr Poddar is a frequent traveller to Hong Kong and sees the many advantages the city offers expatriates. “For professionals in Hong Kong, you can enjoy a smooth run business and a smooth run life.” Hong Kong’s many advantages include its cosmopolitan lifestyle, low level of crime and corruption and excellent education, medical and finance systems. And there is a very wide range of Indian food and numerous Indian organisations and clubs in Hong Kong. “Everything is taken care of,” Mr Poddar concludes.
www.pantaloon.com
|
|