Indian Retail Czar - Arrived
When I entered
the retail business with our first store at Juhapura in the year 2004 I hardly
knew much about this sector. Having spent most of my professional career as an
advertising and media executive, food-grocery retail remained alien to my
knowledge.
While I was
struggling to learn the ropes of retail I saw many corporates rode the retail
wave and there were scores of retail chains cropped up in food-grocery domain.
Amongst the prominent ones were Future group, Adanis (which later sold the
chain to Reliance), Reliance retail, Subhiksha, More (Birlas) etc. But there
was one name which never made it to this ‘prominent’ list’ – D-Mart. It is
irony that most of these ‘prominent retail chains’ who were touted as a game
changer of Indian retail industry are struggling today while D-Mart is the talk
of the town.
Much of the
credit for this success of D-Mart goes to its approach to the organized retail.
While most of the Indian retail chains blatantly copied the western formats,
D-Mart remained unperturbed with this wave and rather continued to work out a
niche for itself. This slow but steady approach helped the chain to create its
own unique slot in the consumer mind-space.
To further
elaborate on this point let me compare the two retail chains. Kishore Biyani
has mentioned about ‘chaos of Indian bazaar’ in his book – ‘It
happened in India’. His idea was to keep this experience of ‘unorganized chaos’ intact
with his organized retail chain as he believed that the Indian consumers were
accustomed to purchasing that way.
Mr. Biyani was
successful in creating initial hoopla around the organized retail as he was a
pioneer of organized retail in India but later on he ended up in aping the
western retail chains and could not create the much needed differentiation
which Indian consumers needed. Indian consumers were looking for something
beyond an intangible chaos. They wanted a store which supplies them with the
inventory which is closer to their needs. They were fine with limited inventory
but it should fulfil their needs. D-Mart worked on it and created a ‘need
inventory’ in its store. With this lean inventory it was easier for the chain
to negotiate good price and offer discounts. This helped.
Last year I
got the opportunity to explore the UK market. I was amazed to see the typical
Indian retail stores thriving amidst giants like Tesco and Sainsbury’s. While
in India we were trying to copy the formats of western stores, in the UK, the
formats were customized to suit the requirements of Indians staying there. Only
D-Mart did something similar in India and results are there to be seen. Few
smart moves of D-Mart are listed below which contributed to its growth:
· Consumer focus: Indian consumer even
today is averse to purchasing lifestyle and electronics goods from the food-grocery
hyper markets. That is the reason these sections in the hyper market does not
carry huge range as compared to the specialized electronic or a lifestyle store.
The limited inventory in hyper markets thus add to the cost and eventually it
becomes dead or has to be disposed of by way of discounts and promotions.
D-Mart smartly never forayed into this. It kept its inventory lean and focused
on the basic needs of food-grocery.
·
Indianize Format: D-Mart is a ‘Pure Indian Kirana format’ as it never
tried private label and e-commerce. We tried e-commerce with our chain of
supermarkets but failed miserably. E-commerce is a highly investment oriented
format and it works on brand pull. You need to pump in huge monies to gain a
sizeable traction on your e-commerce site. D-Mart ignored this fad and instead worked
on creating a physical network of stores in the states it was comfortable with.
This helped in creating a steady footfall in all its store as customers knew
the chain well. It did not go to newer states rather consolidated its presence
in the same state by opening new stores there.
·
No Private Brands: We are into
private brands and doing reasonably well. D-Mart avoided private brands. It
needs huge investment to promote your private brand and sometimes inventory
management is also difficult though it gives good margins if you are able to
manage this. Thus someone might debate the decision as this is the only avenue
from where a retailer can think of getting good margins. But with his success
Mr. Damani has broken all the stereotype attached to the organized retail and
proven everyone wrong.
We are sharing
the same space with Mr. Damani and hence his success story is a huge personal
inspiration. It is a story of self-belief. Take away from his success story is
that there are no written rules to succeed. You can break the stereotype and
still grow and make your mark.
A friend suggested
me to launch my own IPO soon and thus ‘ride this success wave’. I winked at him
and said I learnt from Mr. Damani to remain unperturbed with any wave and
rather to work diligently to create my own niche while launching an IPO.
(Writer is
the Founder & Chief Mentor of Hearty Mart, www.heartymart.com)
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