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HUL losing money in the water-purifier business

HUL has lost Rs140 crore over the last six quarters in the water-purifier business and is facing tough competition from Tata’s water-purifier brand ‘Swach’

The water-purifier business is now a hot battlefield with the Tata group recently launching its ‘Tata Swach’. However, Hindustan Unilever Ltd (HUL), which also sells a non-electrical purifier ‘Pureit’ is going through a tough time. Over the past six quarters, HUL has lost about Rs140 crore in the water-purifier category, according to an industry report.

“Only a miniscule fraction of the population in India uses purifiers today. Pureit therefore sees its role as one of educating consumers, getting them to appreciate the benefits of safe water, and then adopting Pureit. In a sense, we see ourselves as helping build the water-purifier market in India. This task is very different from the task of competing with other brands for a share of an existing product market,” said an HUL company spokesperson.

The price of Tata’s purifier is likely to throw up a challenge for HUL. ‘Tata Swach’ has a price tag of Rs749-Rs999 and its filter system refill that costs Rs299, has a lifespan of 3,000 litres. On the other hand, HUL’s Pureit costs about Rs2,000 with a filter system lifespan of 1,500 litres. The Pureit filter system costs Rs350.

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    The MobileStore to open independent, large-format consumer durables stores

    The MobileStore, which recently acquired consumer durables electronic retail chain X-Cite, will be coming up with new stores in Chennai, Mumbai and Kolkata

    Essar group company The MobileStore (TMS) has said that it is planning to launch independent, large-format stores for consumer durables and electronics in Chennai, Mumbai and Kolkata over the next three months.

    “Currently we are present in New Delhi, Gurgaon, Bengaluru, Hyderabad, Ahmedabad and Pune and now we have plans to enter Chennai, Mumbai and Kolkata with independent large stores,” said Rajiv Agarwal, chief executive officer and director, TMS.

    Last month, TMS bought large-format electronics chain, X-Cite, from Impact Retail—a franchisee of Kuwait-based Alghanim Industries for an undisclosed sum.

    The Essar group company is looking at opening 50 such consumer durables electronic stores in the next one year and adding 5,000 TMS retail outlets by the next two years. At present, TMS has 1,300 stores in about 200 cities across India.

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    1 decade ago

    What will happen to the X-Cite brand?

    ADB expects India will see solid economic recovery in 2010

    ADB has urged Indian policymakers to address rising inflation and widening fiscal deficit to insulate the country against future shocks

    The Asian Development Bank (ADB) on Friday said that India is poised for a strong recovery this year and urged policymakers to address rising inflation and widening fiscal deficit to insulate itself against future shocks, reports PTI.

    Noting that India has quickly regained growth momentum, the bank said the country has emerged from the global financial crisis relatively unscathed, mainly on account of stimulus measures, past reforms, robust domestic consumption and banks' limited exposure to the global financial system.

    "India's economy is poised for a solid recovery in 2010 as the global financial crisis fades, but policymakers need to address inflation and the widening fiscal deficit to buffer it against the impact of future global shocks," ADB said. The conclusions are part of the study 'Impact and Policy Responses—India', commissioned by the bank.

    India's gross domestic product (GDP) grew 7.9% in 2009’s third quarter. However, the report said positive economic developments were offset by signs of increasing inflation and a worsening trade deficit in the latter part of 2009.

    "India was fortunate the crisis was not protracted, which would have tested the government's ability to continue fiscal stimulus measures for a long period, and potentially compromised its efforts to boost the economy.

    “Moving forward, India will have to try and improve its fiscal position through more disciplined fiscal management," the study noted.

    Emphasising the need for subsidies to be streamlined or replaced by more targeted measures, the bank said a “new fiscal management framework should rectify shortcomings of the Fiscal Responsibility and Budget Management Act (FRMBA) of 2003”.

    The multilateral lending agency said that India should provide fast acting social "stabilisers" to help poor communities, which would help in building greater resilience to withstand future crises.

    "This could include quick support for workers laid off as a result of a recession. On the monetary policy front, policymakers should make the consumer price index the primary indicator of inflation, instead of the current two-tier measurement system, which leads to inconsistencies and confusion," the study noted.

    According to ADB, wide-ranging measures, including reduction of fiscal deficit, bringing down bad loans of banks and lowering dependence on imported oil, are required to shore up the economies in other parts of South Asia. Yesterday, the bank said Asia is set for accelerated growth in 2010.

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