How well do you know your workforce? | Accenture Outlook

One company, faced with high attrition among its managers, was able to discover the root cause, address the issues and improve retention. Another successfully performed a diagnostic of its enterprise learning capabilities to determine which forms of training would have the greatest impact on performance.

Still another analyzed how to improve customer satisfaction and workforce performance in its retail channel and was able to achieve double-digit growth in sales productivity. In each case, the companies were able to avoid other remedies that would have been more costly and less productive.

How did these organizations do it ? Through talent analytics— a precise, science-based analysis of employee performance and how a workforce is supported. This ability to process literally millions of data points can help executives make decisions based on objective data rather than hunches and intuition. And by giving organizations new insights into the patterns in workforce and HR performance that spur innovation and improve business performance, talent analytics can also provide them with a real talent advantage.

In addition to offering significant organizational improvements, talent analytics is giving HR executives not just a seat at the table but the basis for strategic discussions with the C-suite based on the substantive insights provided by hard numbers and the ability to more accurately predict the likely business outcomes of different kinds of talent initiatives. It is also helping companies prioritize and focus on those initiatives that are more likely to have a significant impact on productivity, customer experience and cost management. Furthermore, it is improving hiring and retention by identifying the factors and capabilities that are best matched to a particular job. And it’s supporting business strategy in more substantive ways, such as increasing top-line productivity.

The journey to better ROI : 

Not surprisingly, companies are at different points along the journey to a better return on their talent analytics investments. Where they are is a function of not only the maturity of the organization’s data environment but also the analytics tools being used, level of available analytics skills, and the ability to push insights into key processes and decisions.

Companies can begin by improving their basic reporting capabilities; then work on improving such functions as recruiting, training and retention; and finally move into broader areas, such as workforce planning and organizational change. Ultimately, the goal is to develop more advanced analytics capabilities that enable companies to optimize performance and even predict which workforce changes and investments are likely to produce the best results.

” Lessons from leaders ” : As companies continue on their talent analytics journey, there are a few important lessons they can learn from those that are further along.

  1. Don’t wait for “perfect” data. For most organizations, standardizing global HR systems is a long-term challenge. But that’s no reason to wait to do talent analytics. It is possible to see useful results by doing some basic data cleanup and analysis. Indeed, this approach is really the only way to get better in the long term. Talent analytics is about continuous improvement over time. But that means starting sooner rather than later.
  2. Begin with pilot projects. HR should begin with pilot projects focused on the top two or three issues their organization is facing with its critical workforces—attrition, perhaps, or the inability of new hires to perform well quickly. Identify these problem areas and begin a pilot to prove the value of the longer-term talent analytics enterprise. Such initiatives can demonstrate value to the business and help justify investments in data infrastructure and business intelligence technology for human capital management.
  3. Align with business strategy. Don’t think too small. Stay aligned with business strategy and constantly question how better insights from your talent data might help improve business performance. Cost savings, improved retention—these and other specific HR points are important, to be sure. However, talent analytics is enabling HR and talent executives to have entirely new—and more important—conversations with the business.
  4. Take an enterprise view. Talent analytics should be viewed from a holistic, enterprise perspective rather than as a one-time project. The lessons learned from banks and retail organizations that have developed customer analytics capabilities suggest that the benefits of talent analytics can be sustainable if an organization creates an overall roadmap that identifies the data, analytics and organizational capabilities required to advance on the overall analytics journey and to address the most strategic HR issues being faced across the organization.
  5. Consider how to develop an analytics team and where it should be placed in the organization. One of the key issues being debated today is how to structure and place the analytics unit in the organization. Many HR organizations are struggling to place analytics, a nontraditional function, within the traditional reporting structure.
  6. One high-tech company has been successful at moving HR toward better data-based decisions by having its talent analytics team report directly to the vice president of HR. The team also has a representative in each major HR function. So whether it’s performance management or recruiting or training, someone from the analytics team is available to provide guidance in using data to make decisions.
  7. Another alternative for companies is to begin with a central group—sometimes called a “center of excellence”—which can be a way to develop deep skills faster and then apportion them appropriately to parts of the organization where the potential for business impact is greatest.
  8. Don’t forget the people. It is a paradox, but in the rush to execute in new ways based on insights from talent analytics, it is possible to overlook real people. This applies in several ways. First, of course, experienced analysts are required to interpret the data and reach sound conclusions. Second, the team needs more than just analytics and business skills. The data is, after all, about human beings, so having people who are trained in the social sciences and in change management is critical to a successful talent analytics initiative.

One of the findings from a retail workforce productivity project conducted for a telecommunications company was that several stores were significantly overstaffed and others understaffed. From a pure analytics perspective, the answer might have seemed obvious: move people from one store to another. In reality, however, there is much more to consider. Depending on location and other personal factors, such transfers would not take place successfully without taking into account the dimensions of change management.

Improving HR reporting – 

Many companies are still struggling just to get basic reporting right. In some instances, they may not even know exactly how many people work for them, in what jobs and in what regions. And many still rely on first-generation spreadsheets to manage HR data.

This problem could be rooted in having disparate information systems where data is in incompatible formats, or even in something as simple as having two parts of the company using different titles for the same job. These companies face a longer-term challenge: to consolidate HR information systems and to develop, across units and locations, an intelligent and consistent “datamart”—an archive that organizes data in ways that are relevant to specific business needs and easily accessible to users needing information. These steps could dramatically advance the companies’ ability to perform meaningful talent analytics. But in the meantime, a number of actions can be taken.

For example, companies can design pilot analytics projects that involve cleaning up only some of the data and running limited sets of numbers. Developing sound talent analytics capabilities is a longer-term journey, but pilots can help companies acquire the skills they need (or identify where those skills could be sourced externally) while demonstrating the business case for analytics and improving the reporting environment from an HR perspective.

There are a number of tools in the marketplace that can help organizations achieve what is often referred to as “intelligent reporting” and can aid them in improving their overall data environment. Such tools can provide alerts about anomalies in business transactions, identify locations or units that are underperforming on key metrics, and also track performance trends on key business activities.

Analytics capabilities built into software-as-a-service (SaaS) HR applications offer another option for jump-starting talent analytics capabilities. SaaS solutions can enable organizations to correlate multiple data streams (such as HR financial and CRM data) and analyze them in light of business goals. Administrators at one technology university knew that a high percentage of the academic workforce would be retiring soon. The analytics embedded in the school’s SaaS HR solution enabled the administrators to develop a proactive HR strategy, working in a global talent marketplace, to identify promising prospective hires. When HR professionals can deliver analytics-based information it increases the respect conferred to them by administrators and the finance department.

Finding patterns – 

As an organization’s data environment improves, analysts can look for patterns in HR data that can help companies improve areas related to hiring or attrition, or pinpoint areas where labor-related savings can be found. Improving performance in specific areas of the employee lifecycle can produce impressive financial results, considering that the cost of replacing a worker who leaves can be as high as 150 percent to 300 percent of the employee’s annual compensation. At the leadership level, the cost of correcting a bad hiring decision and replacing an executive can run into the millions of dollars.

Applying analytics to specific HR areas can yield impressive results. Take the case of a communications company that set out to understand the drivers of employee absenteeism at its call centers as a means of improving overall call center productivity. One hypothesis was that a major cause of absenteeism was the distance between an employee’s home and the center. As it turned out, a much more important factor was the employees’ family obligations, including caring for aging parents or young children.

The finding was critical. If the company had based changes in hiring policies or employee support programs on the original hypothesis, it could have wasted money, constricted the hiring pool and even increased rather than decreased absenteeism.

Better, more predictive hiring has been another benefit of talent analytics, especially as HR departments have come to realize that many traditional data points in assessing candidates—college grade-point averages, standardized test scores and even interviews—are notoriously poor predictors of future performance. Instead, companies such as Google are using analytics to determine why their current top performers are doing so well, and then feeding that information back into the hiring process.

Other analytics-based resources and tools are being developed to assist in the hiring process. Matchpoint Careers, for example, provides psychometric assessments of job candidates’ reasoning aptitude, behaviors, emotional intelligence and other factors to identify, at the application stage, those who have the potential to be top performers in a particular job. By comparing the assessment results against a database of profiles and answers from millions of candidates, HR can have greater confidence about the potential of new hires.

Another company, Silicon Valley startup Knack, uses games to help identify recruits with a higher probability of becoming successful employees. Recruiters use the games to look at a variety of capabilities and traits, from cognitive ability to creativity to learning to decision making. One of them, “Wasabi Waiter,” asks the player to assume the role of a waiter at a sushi restaurant. Players take orders and then analyze customers’ facial expressions—such as “happy,” “angry” and “sad”—to decide how to proceed. How applicants play the game indicates how well they read social and emotional signals. Performance is benchmarked against the top performers among a company’s current employees to help identify the most promising recruits.

Beyond these kinds of discrete offerings is a bigger trend, known as Big Data, which is about mobilizing and managing large volumes of data that are internal and external to the enterprise. Big Data analytics enables companies to run analyses of datasets as large as many exabytes and see patterns and causality well beyond what the human brain can process on its own. The HR department can begin with a hypothesis and see if it is supported by the data. But HR can also just say, “Let’s see where the numbers are taking us and what story is being told,” toward the end of extracting hidden, differentiated value. Big Data analytics is key to delivering on the full promise of talent analytics: predict workforce and marketplace developments and take action in advance.

With these tools and technology capabilities, companies are discovering important trends about their workforce. For example, a large technology company performed an extensive analysis on a representative sample of its workforce to study the multiple factors that went into whether an employee stayed or left. The analysis was complex, looking at the interrelationships among approximately 200 different HR and finance factors and more than 100,000 individuals over two years.

The results, not surprisingly, were also complex. In one part of the company, certain factors (such as opportunities for advancement, training offerings and the quality of supervision) made a difference between an employee staying or leaving. But in another part of the company, different factors were at play. Analytics can help parse these complexities into meaningful information for decision making.

An Asian life insurance company used talent analytics to make better decisions about employee recruiting and retention. The company began working with an HR outsourcing provider, primarily to improve the efficiency of its recruiting and onboarding processes. As the relationship progressed, however, the company asked the provider to help with a more serious business problem: retaining people in one of its most critical workforces—managers at its affiliated agency locations. The company was experiencing 100 percent turnover among these employees, with many leaving after only six months—a situation that was impeding overall corporate growth.

Executives had several hypotheses. Perhaps it was about compensation, or maybe it was an issue with the quality of life at the locations. The provider was able to use predictive analytics to determine the actual predictors of success in terms of the performance and retention of these workers. Among the insights: Educational requirements for incoming managers had set false expectations about the kind of work actually involved. The company had been requiring that all new managers have MBAs. In fact, the analysis showed that these recruits were often among the company’s poorest performers. This data enabled the company to alter the job profile, which also opened up the position to a broader group of candidates.

An important lesson of the company’s experience is that the results of an initial talent analytics program need to be revisited over time to continue to validate the findings. One point of comparison had been between managers working at branches within their home state and those working in a state other than where they had grown up. An initial analysis seemed to indicate that managers who had moved around frequently and had previously been forced to establish new networks were performing better. A year later, a more complete analysis of the parameters found that the reverse was actually true: Managers working within their state were outperforming the outsiders.

The results of this talent analytics program were impressive. Six months after the company changed its hiring profile, new-hire performance shot up by more than 100 percent and new-hire attrition went down by 50 percent.

Managing the organization – 

The patterns found using analytics can also help executives with larger-scale organizational planning and performance. Workforce planning, for example, has become a much more challenging part of HR’s charge, in part because of the expanding footprint of many companies and also because organizations are more likely to use a mix of internal employees, contractors or contingent workers, vendors and consultants.

Preventing temporary skills gaps can be critical to a company’s competitiveness, and analytics can help prevent talent shortfalls or shorten their duration.

One leading international insurer, after setting a new course for growth, had realized that its strategy could be undermined if it did not have the right people in the right numbers. An analytics initiative enabled the company to perform a detailed assessment of the most critical roles and the business drivers of workforce demand across functions. The team then estimated future needs; analytics also enabled the team to project attrition, retirement and promotion rates. The insurer used the analysis to consider different approaches to resolving anticipated workforce gaps, and to determine if such gaps should be addressed by retraining existing employees or through external recruiting.

Another important benefit of the new generation of analytics: helping executives keep their companies on track during periods of significant organizational change, especially periods when multiple change programs must be managed and coordinated. Although it is well known that the success rate of major change initiatives is low, most organizations persist in using such traditional tools as project management software and employee surveys. Analytics technologies offer an alternative: a data-based, insight-driven approach that provides objective information about progress and uses predictive modeling to give executives insights they can use to steer the organization more effectively through a complex journey of change.

For example, one digital analytics system that supports organizational change uses a research-based questionnaire to collect data from the organization about its change goals and internal capabilities. It then uses pattern-recognition technology—based on a database of more than 600,000 individual questionnaire responses— to predict the optimal path to improved performance for that organization.

As noted, the ability to handle large datasets is a unique and critical characteristic of the technologies that support predictive analytics. Although the findings are provided in easy-to-understand, graphic “maps” of the change progress, the map that serves as the basis for ongoing analysis of organizations was based on more than 33 billion calculations.

The feedback is configured so that management can identify the particular drivers of change for their organization covering the impact of growth, restructuring, cost reduction and technology implementation programs. Using predictive modeling techniques, executives can test the effects of various strategic choices on overall company performance.

Results can be impressive, especially as organizations are able to use the system to link financial information (key performance indicators from reporting systems) with the subjective data gleaned from the scientifically designed questionnaires. One company was able to turn around a $100 million IT implementation that had gone $4 million over budget. The analysis pinpointed the areas to address, and the actions based on those results brought operational costs back within budget in six months. Customer service also improved, and unit costs were reduced by 50 percent.

Supporting business strategy – 

Talent analytics can also take companies beyond improving specific aspects of the employee lifecycle and organizational management to identify, in a more open environment of potential ideas, ways that different HR strategies and initiatives can better support strategy and business performance.

One business environment where talent analytics has proven to be especially important is the corporate call center. These workforces tend to be large, so companies look for ways to optimize their spending in terms of getting the best performance for their investment.

Using analytics, companies can, for example, compare the performance of full-time and contract workers—not just in terms of cost but in terms of real performance metrics, such as customer satisfaction and first-call resolution. The analysis can look at the type of call, how it was handled and what category of worker handled it. Thanks to this talent analytics approach, a company can often deploy a new workforce segmentation strategy with the potential of delivering better customer satisfaction while also saving millions of dollars.

Another story about using talent analytics to support overall business improvement comes from another telecommunications company with a significant consumer retail channel. The analytics team worked with management to consider core channel performance issues, how to drive growth and customer satisfaction through the retail channel, and the role the workforce could have in such growth.

Three years later, actions taken as a result of the analysis, supported by large-scale change management efforts, delivered workforce productivity improvements of more than 19 percent in the retail channel. This translated to several hundred million dollars in additional operating cash flow.

Results like these, driven by talent analytics, are game changers for companies looking for insights that can improve the productivity and performance of their critical workforces. From the perspective of HR practitioners, they now have unique tools in place to deliver significant business impact rather than just a few percentage points of savings or productivity improvements here and there. And from the perspective of the BPO field, providers can use their analysis of talent and other factors to, in some cases, be bold enough to make contractual obligations for certain business outcomes around a variety of talent factors, including retention and new-hire performance.

For years, the human resources function has shouldered much of the responsibility for managing people, but it has often had to do so with too little real information and too segregated from the business. Talent analytics can change all this—revolutionizing not only the practice of HR but also how insights about workforce performance can be derived and applied to achieve real improvements in business performance.

“FOUR Things to Get Right” in “Fast Growth Markets” |by: Jonathan Berman| Chief Executive

As chief executives in the US scour the world for growth, they find the largest opportunities in some of the youngest markets. The fastest growing continent in the world is Africa, a two trillion dollar market where a third of the countries are growing at an annual rate of six percent or more. Here’s how to get one’s investment in fast-growing markets right. 

Even as the IMF has reduced projections for growth in China and India, African growth estimates continue to hold. Companies like GE, Coke, SAB Miller and Diageo are obtaining their fastest growth in these markets, and increasing investment in them.

What are the traits that make those bets pay off ? The most successful CEOs operating in Africa, both global and African display five traits that distinguish them from the executives who get burned in Africa and other fast growth markets :

Embrace uncertainty – Uncertainty characterizes Africa, and executives and companies operating there have to be comfortable with it. Jeff Immelt of GE has gotten used to it over three decades. “I’m an old global hand and I’ve seen how markets form so I have a broader tolerance for risk than most.” Jeff recalled an instance in which GE was faced with an inability to contractually secure land tenure in Angola, a problem that had held up a local joint venture for over a year. “I said to our people, ‘Listen, the opportunities in this country are great, so let’s just figure out the risk, and let’s go.’ If you insist on waiting until everything is understood, you will never go. Companies don’t do well in Africa because they can never get started. And there’s a thousand ways not to get started.” 

Engage the society – Executives of U.S., European, Japanese, and even Korean companies tend to stay in emerging and frontier markets. In their work and especially in their social lives, they often set up pockets or channels of isolation. It’s comfortable, but from a commercial standpoint, it’s a death knell. Take it from Bharat Thakrar, who runs Scangroup, the largest communications firm across Africa. “You cannot do this thing of sitting in a board room,” Bharat says, “developing these plans, bringing expatriates to run the marketing for you. They put their kids in fancy international schools, have some fancy international lifestyle. You’ve got to go out there and find out what the hell is going on.” 

Build what you need – Many companies have thrived in the U.S. and other mature markets by narrowing where they play on the value chain, and then excelling at that. That strategy often needs to be rethought in frontier markets where both the government and reliable private providers of critical inputs may be in short supply. Vimal Shah is the most successful agribusiness executive in East Africa (a market of 180 million people). His strategy of comprehensive vertical integration includes not only the full supply chain, but the supporting infrastructure. “Here an executive operating a company has got to know about the water, the power, the labor, where the people will stay, and security, “Vimal says. “If I were operating in the U.S., all of those would be a given. Where will labor stay? It’s a given. Power? It never goes off. Water supply? It’s always constant. Security, you don’t even have to worry about it. It is the state’s concern. Here you’ve got to do these things yourself. Your organizational capabilities have to be different.” 

Tailor to local culture – Every company operating abroad has to adapt their practices locally. In Africa as elsewhere, it’s important to identify core values which can bend, but not break. Tom Gibian is the founder of private equity firm ECP, which has invested in companies from Algeria to Zimbabwe. Tom describes a conversation he has with nearly every potential investee. “There usually comes a moment in the discussion when you say to them, “Look, we know this is a unique environment. But we want you to know that, on topics like bribery or the value of our word, you’re talking to one company and we all share a single attitude. That’s just who we are, If we’re to do business together, it has to be who you are too.”

None of these attributes are particular to success only in Africa. But they rise above a throng of platitudes to become real guideposts for the companies and leaders who succeed in the fastest growing, toughest places on earth. 

Italian car maker “Lamborghini” bullish on US & India as crackdown hits China sales | VCCircle

” Annual sales of luxury cars in India stand at just about 1% of the total car market, compared with around 7 % in China”.

Italian car maker Lamborghini will struggle to find another China as sales of its super sports cars in the world’s biggest auto market have hit the skids due to a government campaign against conspicuous spending.

Automobili Lamborghini SpA, owned by Germany’s Volkswagen AG, however, sees long-term potential in the nascent Indian market and hopes better-than-expected sales in the United States, its biggest market, will offset the China sales slowdown, Chief Executive, Stephan Winkelmann said.

“Unfortunately, there are not so many Chinas around the corner. And China for us is a challenge right now,” Winkelmann told reporters in New Delhi.

“Still it’s a big market, it’s our number-two market. But I think, you know, as much as I know about the local policies, and what the government is doing, for the time being it is a little difficult to buy these type of goods.”

Lamborghini sales in China grew steadily in recent years to about 230 cars last year, making the country the ‘fighting bull’ brand’s second biggest market after the United States. 

Sales of the car are expected to be around 200 this year, said Winkelmann, who was in the Indian capital to launch Lamborghini’s second dealership in the country.

The China slowdown is due in part to the new political leadership’s campaign against lavish spending and graft.

Super luxury brands, such as Lamborghini, are seen as especially vulnerable to the crackdown on lavish spending as pricey sports cars have come to symbolize corruption in China.

“It was an incredibly rising market for three years when out of nowhere it came to number two market. To answer very clearly, there is no other market which, in this period of time, can grow in this sense,” Winkelmann said.

India potential : 

Global luxury carmakers are piling into India, Asia’s third-largest economy, and recent high-profile launches include the Jaguar F-Type, whose price starts at about 14 million rupees ($226,000).

But high import duties, with tax on some luxury cars exceeding 100 per cent, as well as potholed and congested roads in major cities are a challenge for luxury car makers like Lamborghini, which expects to sell more than 20 cars in India this year, up from 17 in 2012.

The base model Lamborghini in India starts at $370,000. Annual sales of luxury cars in India stand at just about 1 per cent of the total car market, compared with around 7 per cent in China.

Although the Indian economy has slowed over the last year, luxury carmakers see tremendous growth potential in the country, which, according to a Consulting Group, had 164,000 millionaire households in 2012.

“This is an opportunity we see for our future. And we hope that sooner or later, in terms of taxation, in terms of infrastructure, this is going to be easier to market, and then you have the opportunity to grow in numbers,” Winkelmann said.

The luxury car sales in India is expected to rise to 41,339 in 2018 from an estimated 16,524 this year, according to LMC Automotive. China’s luxury vehicles market is expected to rise to 1.5 million in 2018 from an estimated 800,364 this year, it said.

In an effort to raise sales that far lag emerging Asian rival China, the German big three of Mercedes-Benz, Audi AG and BMW AG are trying to win buyers outside the ultra-rich with locally-made hatchbacks and smaller cars.

The bet seems to be paying off, with Audi reporting a 19 per cent rise in its January-August sales, while Mercedes said its sales rose 32 per cent in the April-June period, helped by the launch of its compact A-Class model.

IHS Automotive forecasts Lamborghini will sell 44 vehicles in India in 2018.

“(Taxation) is a challenge for the super sports cars. The traffic, the road conditions. I remember first time I came to India, it was very different. So I think that there is a huge effort which is done, but still, but it is a small market, and taxation is not helping us as I said,” Winkelmann said.

The “Next Big Move for Luxury”: Changing Face of Luxury Retail in Asia-Pacific | Retail in Asia

Luxury brands have continued to deliver strong sales in Asia although sales in European markets are stagnating. Increasing middle class spending power and sophisticated brand marketing suggest that luxury retailing in Asia will continue to diversify which requires the luxury retailers to seek larger stores, more creative flagship designs and a greater emphasis on “online & smart-phone” interactivity with customers. 

The report, examines where the luxury sector is heading and also looks more broadly at how innovation and local customer needs are driving retail real estate requirements across the region.

The report predicts that the shopping experience will become more exclusive to meet the desire for personalised luxury as luxury brands start to include VIP rooms in their stores after they find big-ticket sales of exclusive pieces are often made in private locations.

It also reveals that innovative technologies and greater interactivity with customers are revolutionising the way retailers utilise store space, design and marketing.

When international retailers are aggressively expanding in Asia-Pacific, they need to take into account key – factors, such as Real-estate Location, Price-points and good Supply-chain management as different Asian countries are at different stages of development of infrastructure and logistics capability.

“ Luxury Retail in Asia-Pacific is evolving and Retailers & Mall-Managers are responding to the desire for a more Tailored-Experience…We examine where the luxury sector is heading and also look more broadly at how innovation and local customer needs are driving retail real-estate requirements across the region”. 

The luxury retail sector has rebounded strongly from the financial crisis, with global luxury sales estimated to total EUR 212 billion in 2012, a 10% increase from 2011.

Across Asia, upscale brand sales are booming – and Chinese shoppers are at the front of the queue. By 2015, Chinese purchasing could account for over 20% of the world’s luxury sales, according to a report by McKinsey.

Definitions of luxury are also evolving in Asia’s dynamic consumer markets. Today’s savvy shopper is increasingly exposed to globalised branding and advertising. Experiential value, rather than just image, is coveted, and there exists an insatiable thirst for the new season’s luxury collections. Tapping into this broadening clientele while maintaining the premium appeal of a product is challenging. “The real luxury lifestyle must be rooted in authenticity,” says McKinsey.

“ If luxury brands stray too far from their roots, they will be reduced to little more than faded labels.”  

Evolving Brand Perceptions : 

In recent years, several upscale brands have eschewed logos and monograms in favour of more subtle product labelling. Louis Vuitton created a collection of bags without its famously intertwined initials, while understated brands, such as Bottega Veneta, are experiencing strong sales growth. This logo-less trend shows no sign of abating, while emerging design-led brands, including Rick Owens, Neil Barrett and Kiton, are repositioning themselves to target Asia’s knowledgeable consumers.

Luxury has also diversified beyond “Fashion, Watches and Jewellery”.

Take Fuel Espresso from Wellington, New Zealand, which has positioned itself as a luxury ‘espresso boutique’. Founded by Sanjay Ponnapa, the ambience of each Fuel Espresso store matches the world’s leading luxury brand boutiques, and delivers first-class service plus superlative coffee.

This perfection is paying off. Fuel’s boutiques in Hong Kong, Shanghai and New Zealand each sell several hundred cups of coffee per day, with the majority of clients hailing from the finance, insurance and real estate sectors.

Challenges for Retailers : 

As perceptions of luxury products shift, mall-owners must balance the demand from brands for larger flagship stores – particularly in Hong Kong and China – while maintaining a competitive, compelling tenant mix. Luxury retailers often desire their Asia flagships to be a minimum of 5,000 sq ft, and include large, decorative store facades to entice shoppers.

Once inside, store designs are responding to consumer trends. VIP rooms are now highly cherished by consumers because privacy and personalised pampering are a valued part of the luxury lifestyle. It is in such rooms that big-ticket sales of exclusive pieces are often made.

Even brands that usually require smaller retail spaces, such as Swiss watch brand Breitling are now including VIP rooms in their stores. In a recent meeting with David Reid, Managing Director of Melchers, during the launch of Breitling’s first mono-brand flagship store in Hong Kong, he noted that VIP rooms are a critical feature to cater to high net-worth customers who seek a deeper understanding of the brand, its heritage and the craftsmanship that goes into its products. This, Mr Reid affirmed, can only be achieved in a comfortable, relaxed and private location within the store.

New Mall – Designs : 

Increasing middle class spending power and sophisticated brand marketing suggest that luxury retailing in Asia will continue to diversify. For brands, this will require larger stores, more creative flagship designs and a greater emphasis on online and smart-phone interactivity with customers. The shopping experience will become more exclusive to meet the desire for personalised luxury.

Premium brands, such as Louis Vuitton, Prada, Gucci and Chanel, want to be present at the table from the initial stages of a new mall’s development. This enables them to shape the best, most efficient stores in tandem with the developer’s original design. It also helps forge long-term relationships that can benefit both the developer and the brand in a highly competitive market. Ensuring a premium level of comfort and exclusivity is a high priority.

Many large brands now expect ‘VIP drop-offs’ at the front of their stores, dedicated lifts and exclusive entrances for big-spending customers. As a result, millions of dollars are being invested in luxury store designs and fit-outs to create an unparalleled atmosphere of exclusivity from start to finish.

The Retail Transformation – Innovative technologies & greater interactivity with customers are revolutionising the way retailers utilise store space, design and marketing.

Retailing in Asia Pacific is undergoing a revolution. Competition among brands to entice and retain consumers in fast-changing markets is placing a stronger emphasis on the shopping experience. Store formats are being carefully tailored and marketing activities are formulated to exceed the expectations of tech-savvy, brand-aware shoppers.

Some of the retail innovations being introduced across Asia-Pacific appeal to human emotions as well as purchasing capacity by creating shopping experiences that are enhanced by sight, sound, smell and spacing. The use of LED screens and interactivity is becoming an inventive part of the retail experience.

Burberry, for example, now incorporates cutting-edge technology and video screens that enable customers to mix and match outfits whilst in the store. Sensory selling is also becoming more prevalent. Several retailers now scent their stores so that the fragrance evokes a particular memory when customers enter the store. Shanghai Tang and Abercrombie & Fitch are leading purveyors of this approach, while shopping centres such as “ifc Mall” in Hong Kong have commissioned bespoke scents that are circulated through the air-conditioning system.

New technology is at the heart of new retail marketing innovations that combine the ubiquity of smart-phones in Asia Pacific with the rising influence of social media. Founded in 1985, French menswear brand Cielo has stores in 70 countries. “Cielo is focused on developing business in emerging markets, and India is at centre of its global play” says CEO of Cielo Future Fashion Ltd. 

“Digital technology is a fast method to create brand salience among our target clientele, and we have aggressively grown our customer database in stores and on social media.” This strategy includes Celio Fantastic Rewards, a mobile-based loyalty programme. “Customers with a smart-phone can instantly access their points, purchases and offers, as the app is compatible with all major social media platforms.”

Community-based inclusivity is another contemporary tactic : 

“ Several retailers are enhancing the shopping experience to keep people in store rather than online. Nike has established the Nike Run Club that is free to join and meets several times a week in store to warm up and then run on planned routes with Nike staff around the city”.

A vibrant collective of artists and independent retailers, such as Zara Bryson, Pigeonhole and Miss Brown Vintage, became temporary neighbours for nine months, forming the first pop-up community in the Perth CBD. Inventive fit-out solutions enhanced each store footprint, improved sightlines and supported contemporary merchandising solutions. These pop-up stores were linked throughout the property, enhancing the presence of existing retail offers to drive visitation and spending.

International Retailers are aggressively expanding in Asia-Pacific and becoming more flexible and focused on local-market requirements : 

Until recently, several high-profile American and European retailers had been reticent about committing serious investment dollars to expanding in Asia Pacific. Times have changed. Now, convinced that rising incomes and relatively low dependency ratios will continue to drive consumer spending for the foreseeable future, retail brands are moving swiftly and decisively.

Having watched and waited, leading international retailers evaluated individual markets and ascertained the similarities and differences in consumer behaviour that exist between, and within, Asian countries. Consequently, they are localising store formats, product lines and the marketing and advertising mix to make direct connections with consumers from Delhi to Dalian and Saigon to Sydney.

The diversity of Asian retail markets means that conducting detailed research and studying the demographics of residential clusters is crucial.

“To be effective in Asia, international retail strategies need to be tailored to the nuances of the local market”. 

“Different Asian countries are at different stages of development of infrastructure and logistics capability. Therefore, retailers must take into account key factors, such as real estate location, price points and good supply chain management. Such issues hardly exist in the developed world.”

Fashion and luxury products are prime examples of nuanced markets. A strong appetite for both is evident among consumers across the region, but affordability and value are both highly prized. “International retailers that have little disparity between price and service from country to country have outperformed peers that lack that same consistency”.

Tailoring products to local tastes and preferences is increasingly in vogue. In 2010, French luxury brand Hermes opened the first Shang Xia store in Shanghai. The China-inspired clothing, accessories and home decorations brand was specifically created for aspirational Chinese consumers, and will expand to Paris in September. Also in China, carmaker BMW and its partner Brilliance have created a new brand, called Zinoro, specifically for the Chinese market.

Upscale shopping experiences continue to appeal to consumers in established and emerging Asian markets, and the success of retail expansion often depends on the strength of the brand and brand recognition. Revered Paris-based department store Galeries Lafayette recently opened a branch in Jakarta, while fashionable watch purveyors, Breitling and Maurice Lacroix, opened mono-brand stores in Hong Kong. London’s Harrods department store has announced it will extend its brand into the luxury hotel sector, with one of its new Harrods Hotels to be located in Kuala Lumpur.

Other fast-expanding retailers have devised “fast fashion” to bring affordably priced products to market in quick cycles. High-profile brands such as Gap, Zara and Topshop have all entered Australia in the last three years, and are rolling out new stores. Zara stores feature clothing collections exclusively designed for the southern hemisphere’s seasonal trends, and frequent stock turnover ensures new options are always available.

Food & beverage retailers are similarly extending their reach, particularly as mall managers seek a more diversified tenant mix to attract and retain shoppers. Coffee shop chains Starbucks, Costa Coffee and Coffee Bean & Tea Leaf are ubiquitous in Asian cities, as are McDonald’s and KFC which both offer menus tailored to local tastes. In Japan, KFC even teamed up with local potato-chip brand Calbee to create and market the Savory Salt Ginger Chicken chips. Supporting these Asian store rollouts and new brand concepts are a variety of market-focused strategies. Giordano’s localisation approach in China is a good example.

The clothing retailer revamped its management structure, to direct operations in the strategic cities of Beijing, Shanghai, Wuhan and Guangzhou, plus the company’s e-commerce site. “Significant improvements were seen in various areas, such as local marketing and merchandising, franchisee consolidation and new store expansion programmes”.

Giordano has also promoted greater autonomy and flexibility in each region, enabling managers to react to market change and local needs swiftly and effectively.” As international retailers expand across Asia Pacific, their strategies and objectives will continue to evolve.

One thing will not change, however – focusing on the changing needs and preferences of Asian consumers will remain a high priority.

Kidding becomes a serious business: “Kidswear Retail”|by: Neha Malhotra | IndianRetailer

Global recession affected almost every segment of the apparel industry, the children’s wear market remained strong as against the men’s wear and women’s wear categories in the past one year and the luxury brands are now eyeing the market.

Kids business is unlike their appetite. 

Global Industry Analysts, Inc. (GIA), a US based market research company claims that the global market for children’s wear is projected to reach US $ 156.8 billion by the year 2015. In India, the Associated Chambers of Commerce and Industry estimates that the kids wear industry is worth Rs 38,000 crore, and growing at a compound annual rate of about 20 percent to reach Rs 80,000 crore by 2015.

Overall, the baby and children’s market in India is pegged at over $5 billion, growing at 20-25 per cent a year. According to a report, the overall children’s market in India can be broadly divided into five segments: super premium (above Rs 2,500), premium (Rs 1,000-2,500), mid (Rs 500-1,000), economy (Rs 250-500) and lower (up to Rs 250). The research firm said by far the mid-segment, with a market share of 31 per cent, is expected to reach 58 per cent by 2020.

Factors fuelling the growth :

In an analysis on “ Market of Indian kids wear ”, it has been pointed out that Kids fashion has percolated down to Tier II and Tier III cities like Dehradun, Chandigarh, Pune, Nashik and Indore, Varanasi etc.

There have been obvious reasons for such a shoot in the business. Rising income levels, trend towards nuclear families and potential desire to offer the best to their children are some of the factors attracting consumers into this.

Kids have become independent buyers :

The other important change that is taking place in this area is the emergence of kids as an independent buyer group. Influenced by mass media and peer pressure, today’s kids are more informed and self-conscious.

Kids are aware of branded goods and brands are also realising the potential of market and are increasing their presence in this segment. Children’s apparel includes clothing for kids between 1 and 14 years of age.

The market for girl’s wear is far greater than boy’s wear throughout the world. Boy’s apparel tends to centre on basics. Girl’s wear, however, thrives in all channels from specialty stores to department stores to discounters.

From the manufacturer’s perspective: Low stitching and manufacturing costs and relatively less competition are the prime reasons for international brands luring Indian market.

Status conscious parents : 

Before the children become the product of any esteemed college or university, they are the products of their parents. Reflection of the personality of their parents, these small legs have become the walking billboards of celebrity and rich parents.

Mothers are now spending enormous amounts on clothing for their children, as they believe that the way a kid is dressed is often a reflection of the parents’ sense of style. Higher-cost brands are generally reserved for special occasions this is due to the fact that parents tend to dress their children like themselves, and will seek to incorporate brands that fit with the family’s lifestyle.

Celebrity influence : 

Suri, the celebrity daughter of Tom Cruise and Katie Holmes, has a wardrobe collection estimated at $ 3.2 million. 10 year old daughter of pop-sensation Will Smith, Willow Smith and David and Victoria Beckham’s eight-year-old son Romeo have already made it to GQ magazines best dressed list. All of this has ignited the spirit in the rich Indian clientele to see their little ones in same international labels.

Players : 

Creating a category in the form of kids luxury wear, high premium brands have entered the kids wear market. They are targeting the young ones which will help them build clients for life.

£ 66 million of Burberry’s 2011-2012 revenue came from the sale of children’s wear, marking a growth of 19% for the category, driven by the Asia Pacific region. They recently celebrated children wear launch in Mumbai.

Recently, Giorgio Armani has confirmed the launch of Armani Junior in India, with the assistance of local designer Suneet Varma. The store is just a few steps away Les Petite, a 1,500 sq. ft. shop that is home to labels such as Baby Dior, Miss Blumarine and Fendi Kids. The range starts from Rs 5,500 and goes all the way up to Rs 1, 71,500. In her opinion about the growing opportunity, Founder, Les Petite, Swati Saraf said, “It’s when fashion magazines and newspapers flash photographs of Suri, daughter of Tom Cruise and Katie Holmes, often sporting designer attire and accessories that affording parents in India want to see their little ones in those labels as well and cannot wait for their next trip abroad. The other big target segment is the expat community – be it the high commission and the embassy staff or the top executives of the multinational companies, especially from Europe and Americas, stationed in India owing to their work. They too love coming to Les Petits for they now have an access to best brands, as they have in their own respective countries.”

Varma’s firm, Unique Eye Luxury Apparel, signed a three store deal with Giorgio Armani, identifying the future potential in kids wear as a key opportunity.

Indian Label, Kidology has tied up with designers Gauri, Nainika, Gaurav Gupta, Namrata Joshipura and Ritu Kumar to design apparels for children upto 10 years old. Beside its own stores in Delhi and Mumbai, Kidology also sells through other retail outlets in Mumbai and Hyderabad and are planning new stores in Chandigarh and Ludhiana. Children’s outfits priced at Rs.12,000 may sound way too much but the partners say there are takers at that price. Kidology has been growing at 40 per cent y-o-y basis.

As these international players are eyeing Kids of rich Indian parents, fancy dress competitions held in schools will be very soon called designer dress competition. With an excess of options in the near future, the kids will have a problem of plenty, where ignorance will no more be bliss.

“SIX Key Elements” of Strategic Thinking for CEOs |by: Samantha Howland | Chief Executive

Strategic thinking emphasizes the need to balance today’s performance with future opportunity in order to manage risk and navigate through the uncertainty of the business landscape. The ability to think strategically sparks new ideas and future business propositions that are the lifeblood of long-term success, but many CEOs and senior executives continuously struggle to look past the present and put the future in focus. In fact, Chief Executive has previously reported that a staggering seven out of 10 leaders don’t consider themselves to be strategic.

So, where have all the strategic leaders gone ?

The reason for this gap in strategic leadership is simple — the ability to think strategically is not naturally developed on the road to the c-suite. In fact, research shows that more than 60 percent of leaders say their organizations have failed to invest at the required level to build strategic talent in support of long-term growth, and more than 70 percent of leaders report struggling to develop strategic leaders within their organizations. Strategic thinking skills are not developed solely as a virtue of experience or promotion either. Rather, they must be actively and purposefully practiced.

At the same time, however, strategic thinking can be quite elusive and the concept of being “strategic” is often overused or misused. What does it really mean to be a strategic thinker ?

Based on two decades of experience as well as targeted research with more than 20,000 professionals in 176 countries around the globe, we have identified six skills that, when mastered and applied together, allow leaders to truly think and act strategically 

  1. Anticipate : The ability to foresee changes at the periphery and adapt to evolving conditions is imperative. Embrace the uncertainty in the marketplace as a source of potential advantage, rather than a threat, and stay vigilant in monitoring emerging trends both within and outside your industry that might blindside the organization or uncover opportunities for innovation. 
  2. Challenge : Rather than accepting conventional wisdom at face value, challenge long-standing assumptions and examine sources of uncertainty to understand how they may impact expected results. Re-frame a problem from several angles to understand its root causes, and seek out diverse views to see multiple sides of an issue. 
  3. Interpret : Strategic thinkers continually demonstrate curiosity to connect multiple data points in new and insightful ways to make sense of complex, ambiguous situations. Use both analytic reasoning and seasoned intuition to recognize meaningful patterns, and test multiple working hypotheses before coming to any conclusions. 
  4. Decide : Decision-making is an important aspect of strategic thinking, and it is necessary to show the courage to set a distinctive strategic direction and make tough choices, even with incomplete information. Balance long-term investment for growth with short-term pressure for results when making decisions, and balance speed and rigor when making complex decisions, especially in fast-moving environments. 
  5. Align : Even the most strategic leaders must engage stakeholders to understand change readiness, manage differences and create buy-in to ultimately drive the organization forward. Identify those who have a significant stake in change initiatives or strategies, and assess stakeholders’ tolerance of and motivation for change to pinpoint and address conflicting interests. By rallying the team around a compelling strategic vision, you will ensure the right capabilities, resources, commitments and accountability metrics are in place to implement strategic initiatives. 
  6. Learn : Continuously reflecting on successes and failures to improve performance and decision-making is key to being strategic in the long-term. Learn from interactions with various customers, partners and market segments to better predict industry shifts to make your company more adaptive in the face of change and competition. Don’t be afraid to encourage experiments as a source of innovation, and conduct ongoing check-ins and after-action debriefs to surface early indicators of success and failure. 

Consider this framework as you hone your own strategic capabilities and work with others throughout the company to develop the strategic skill-set of rising leaders. 

In doing so, you and your staff will be better prepared to anticipate market change, seize profitable opportunities and adapt your business to consistently win over time.

“Single-brand Retail scene” in India more encouraging | LIVEMINT

“Between April 2010 and May this year, the govt approved a total of 18 FDI proposals worth $173 mn in the single-brand retail sector”.

India has had better luck with “single-brand retailers.”

Between April 2010 and May this year, the government approved a total of 18 foreign direct investment proposals worth $173 million in the single-brand retail sector.

In May, it cleared Swedish furniture chain Ikea’s Rs.10,000 crore investment proposal. Soon after, another Swedish retailer, H&M, put in an application to invest Rs.700 crore (this proposal is still to be cleared)

In February, the finance ministry cleared four proposals from foreign retailers for single-brand retail, including two from French sport goods retailer Decathlon and American fashion retailer Fossil Inc.

Head of the retail and consular practice at audit and consulting firm PricewaterhouseCoopers, said interest in single-brand retail remains high, although some companies are still looking for Indian partners (they needn’t), or waiting for the economy to revive.

In January 2012, India allowed 100% investment in single-brand retail.

Still, there are policy hurdles here too. Business Standard newspaper reported on 18 September that H&M’s proposal has been held up because there is some confusion as to whether the sourcing the firm currently does from Indian suppliers for its international operations can be included in the 30% local sourcing criteria.

Such kinks have to be ironed out, said Head – consumer products & retail practice at Bain and Co. India.

The “Rise of Compassionate Management”| by: Bronwyn Fryer| Harvard Business Review

All of a sudden the topic of compassionate management is becoming trendy. 

A growing number of business conferences are focusing in on the topic of compassion at work. There’s the International Working Group on Compassionate Organizations. There’s the Changing Culture in the Workplace Conference. Then there’s Wisdom 2.0, dedicated to “exploring living with greater awareness, wisdom and compassion in the modern age.” The speakers are no slouches: eBay founder Pierre Omidyar, Bill Ford (yes, that Bill Ford), Karen May (VP of Talent at Google), and Linked In CEO Jeff Weiner top the bill. At TED, Karen Armstrong’s talk about reviving the Golden Rule won the TED prize in 2009 and has given rise to a Charter for Compassion signed by nearly 100,000 people.

More evidence of this trend comes from the Conscious Capitalism movement, whose membership includes companies like Southwest Airlines, Google, the Container Store, Whole Foods Market, and Nordstrom. One of the cornerstones of the movement is to try to take care not just of your shareholders, but all stakeholders (investors, workers, customers, and so on). One member is Tata, the Indian conglomerate, who makes no bones about it: “Our purpose is to improve the quality of life of the communities we serve.”

While the importance of compassion at work has long been touted by scholars like Peter Senge,Fred Kofman, Jane Dutton and others as a foundational precept of good management, managers of the traditional, critical, efficiency-at-all-costs stripe have scoffed. This isn’t surprising: given the number of nasty managers still sitting at the top of organizations, it’s easy to assume that the compassionate ones don’t often get hired, let alone encouraged and promoted. In fact, a Notre Dame study found that nice guys really do finish last, with more agreeable people earning less than those who are willing to be disagreeable. And all too often, compassionate people lack boundaries, thus allowing themselves to be used and abused; they become “toxic handlers” who absorb the organizational pain without much personal gain.

But something in the zeitgeist is changing. At Wisdom 2.0, LinkedIn CEO Jeff Weiner told the audience that he is on a personal mission to “expand the world’s collective wisdom and compassion,” and that he had made the practice of compassionate management a core value at the company. For example, he described a former colleague who was publicly disparaging someone on the team. Realizing that he’d made that mistake himself, Weiner took the fellow aside and said, “If you are going to do this, find a mirror and do it to yourself first. You’re projecting your perspective and assumptions onto that person.”

To manage compassionately, Weiner noted, doesn’t come naturally to most managers. It requires spending the time to walk in someone else’s shoes — to understand what kind of baggage that person is bringing to work; what kinds of stresses she’s under; what her strengths and weaknesses are. In high-pressure environments, such a time investment is anathema to most of us. But such an investment is analogous to the work of a carpenter who carefully measures a piece of wood three times before cutting once: spending such “compassion time” with an employee, Weiner insists, pays off in that person’s much greater efficiency, productivity and effectiveness (and obviates later regrets). It’s not just altruism: as it turns out, companies that practice conscious capitalism perform ten times better than companies that don’t.

Findings like this may be one reason for compassion’s rise in the workplace: perhaps years of research are finally making a dent. Over and over, it’s been shown that compassion concretely benefits the corporate bottom line. Marcus Buckingham’s work on employee engagement has shown that engagement is critical to organizational success. Plenty of others have shown that practicing compassion is good  for your business. Consider what happened when a call-center company called Appletree consciously set about increasing compassion among employees. The company set up the equivalent of a “Make A Wish” foundation to serve its adult employees, which it called “Dream On.” The CEO, John Ratliff, claimed that the gambit changed the culture of his company. (Call centers have a notoriously high turnover rate, largely because the employees listen to unhappy callers all day.) The Dream On program allowed employees to express compassion to each other on an everyday basis. As a result, the company’s turnover rate dropped from 97% to 33% within six months. (You can learn more about this story and much more about the effect of compassion in organizations here.) 

The evidence also shows that compassion boosts employee well-being and health — another important contributor to the bottom line. And as my good friend Dr. Edward Hallowell shows in his book Connect: 12 Vital Ties that Open Your Heart, Lengthen Your Life and Deepen Your Soul, the more we compassionately connect, the better we feel, and the more others are there to support us when we need it, as even the most seemingly invulnerable of us someday, inevitably, will.

I also have a suspicion. It’s just a hunch, but I suspect most of us are experiencing cynicism fatigue. The overwhelmingly bad news springing from the news media leaves most people with two options: either they become cynics who drown themselves in their own pleasures, or they try to make a difference. Most of the smart people I know are little a bit of both, but they fight their cynical side. They try to work on something of worth at work and in the world. There is no better way to start doing this than to practice the golden rule on an hourly basis.

Of course, some of us are inherently more compassionate and empathetic than others. But the good news is that it’s possible to strengthen one’s compassion muscle — and so become a better manager. Researchers from the Center for Investigating Healthy Minds at the University of Wisconson-Madison’s Waisman Center found that engaging in compassion meditation — where you practice feeling compassion for different groups of people, including yourself — seemed to increase a sense of altruism.

To me, this is all great news.  The more compassion we can practice (starting right now), the better. And given that we spend so much of our lives at work, there is no better place to start than with the person in the next cubicle.

“Tata Sons & Singapore Airlines” to form JV, to invest $100 million for a full-service carrier in India | The Economic Times

Tata Sons, the holding arm of the diversified business conglomerate, is forming a joint venture with Singapore Airlines Ltd (SIA) to launch a new domestic full-service carrier in the country, almost two decades after a failed attempt to sew a deal with the foreign airline which could have marked a return to the aviation business for the group.

Once operational, the venture—coupled with Tata’s investment in AirAsia’s upcoming low-cost carrier—would make the group a formidable aviation-player in the country.

Tata Sons, Singapore Airlines to form JV; invest $100 million for carrier in India – The Economic Times.

“FDI norms” for Real Estate / Construction sector in India, likely to be eased | Realty Plus

The Government of India, has started work on easing Foreign Direct Investment norms in the construction industry in order to help attract more foreign capital into the cash-strapped sector.

The Industry Department is finalising a draft note (that will soon be submitted to the Cabinet) proposing to relax conditions related to entry guidelines , minimum-area requirement and minimum lock-in period for investments, an official in the Department of Industrial Policy and Promotion told Business Line. The note has been prepared based on inputs given by the Ministry of Housing and Urban Poverty Alleviation.

“ We will soon finalise the note and circulate it to other Departments and Ministries concerned for their comments. We will then place it before the Cabinet for clearance,” the official said.

At present, the FDI policy permits 100 per cent foreign investment, including in housing, townships and construction infrastructure, but several restrictions apply.

These include “a three-year lock-in period for investments in housing and townships”, “a minimum built-up area of 50,000 square meters” and “minimum capitalisation of $10 million for wholly-owned subsidiaries”. 

” To make the sector more attractive,the Housing Ministry has proposed that the minimum lock-in period be reduced, the built-up area required be brought down to 20,000 sqm and minimum capitalisation reduced to $5 million”.

“ We have incorporated most of the suggestions made by the Housing Ministry to the extent possible. It is also important to get the views of others such as the Finance Ministry and the Planning Commission. We will incorporate all views in the final note,” the official said.

Meanwhile, industry players said the proposed changes may not help attract funds immediately as foreign players will closely monitor the fine-print before doing so.

There is country-risk, exchange rate risk and even policy risk associated with FDI. The Government needs to maintain clarity. A drastic change in policy midway will be detrimental to India’s investor confidence, was what industry players said when asked to react to the move.

“ To make an investor take the final decision of investing his funds in India, the domestic real estate story needs to be strengthened and stabilised. Interest rates in India are one of the highest; consistent support and incentives for the sector are lacking . If these areas can be worked on, there is a huge appetite that exists; but investors will now judge both intent and commitment of the policy makers before making long term commitments,” said Senior VP, Head — Research and Consulting, PropEquity.

The construction sector attracted a little more than $22 billion in FDI between 2000 and 2013, accounting for 11 per cent of the total FDI that came into India, but foreign investments into the sector have started drying up since 2012.