When Big Bazaar opened its doors, it also opened with it a completely new chapter for retail in India. As commonly referred to as the poster boy of Indian retail, Kishore Biyani can easily be credited of changing the way India shopped. He set a trend for many to follow. And the journey still continues….
From setting up the first Pantaloons store in Gariahat, Kolkata in August 1997 and then the first Big Bazaar in Mumbai at the High Street Phoenix Mills in 2002, Kishore Biyani has redefined a lot many rules. But as he better puts it across for us, “I based everything on one philosophy: rewrite rules but retail values. Chase your dreams but don’t compromise on your belief system.” Today, with a pan India presence, Future Group is a well-known household name. From products to insurance to real estate, the company has its wings spread far and wide. To come to think of it, end number of accolades fall short for Kishore Biyani and his empire that he has built – right from scratch that too!
The story of his journey is pretty well-known. A lot many times it has been discussed and spoken about at various seminars and conferences. We all know what led to the inception of Pantaloons. Perhaps, keeping the context of the 7th anniversary issue in mind, it is only apt then that we talk about that makes him what he is!
As with most other children belonging to a middle-class family in Indi, Biyani’s childhood was far or less on the same lines. School, friends, organizing society events, cricket and college. But what perhaps was different was his approach to all of the above. Reminiscing the early days, Biyani shares, “We were the quintessential Indian household and watching movies was a family passion. In the evenings, our grand-father would give us lessons in Indian values and we all would assemble around him. Once a year, we were required to read the whole Ramayana and occasionally visit the Hanuman Mandir at Lohar Chawl in Mumbai, none of which I particularly enjoyed. From a fairly early age, I was completely against any religious practice or rituals and was quite open about it. I was always eager to get into an argument with my elders at the drop of a hat.”
Adds Biyani, “From the very beginning, I was obsessed with rationality. To make me do something, someone had to give me a very good reason or offer some amount of logic. May be I had read somewhere that human being are rational and that stuck on, so I never had qualms in breaking dogmatic rules. In fact, I liked being a rebel in an extremely traditional family.” For him, this attitude of his to question everything has helped him in many ways. As he puts it, “If things are accepted the way they are ongoing, then there is little scope for anything new to come up.”
From early on, Biyani had his goals in place, not defined to anything in particular but he was sure he had to do something different – something that would be known. His first mental mentor was Dhirubhai Ambani. Shares Biyani, “In college, we used to visit Oberoi’s Samarkand restaurant at times. The reason why I liked to visit this hotel was because I came to know that Dhirubhai Ambani came to the hotel’s health club almost other day. Even if I could get a glimpse of him, I would be overjoyed. Reliance in the early 1980s had established itself strongly. I was quite fascinated by the company and its growth. I started reading about business during my college days and Dhirubhai Ambani was my first mental mentor, my personal role model. To me, he was a living proof of my belief that irrespective of one’s background, it was possible to scale the heights of success.” Elaborating on this, he further shares, “I did not have a mentor and most successful entrepreneurs don’t necessarily have the luxury of having one. I created my own ‘mental’ mentors, studied various subjects ad eagerly sought knowledge. I strongly believe that there is a hard and arduous journey that one has to undertake alone.”
Having a background in Commerce, Biyani went ahead to pursue vocational training in typing, he then did a course in import and export of garments and joined a programme run by the silk manufacturers’ association – Sasmira. As he says, “At one point, I almost decided to become a chartered accountant and even cleared the preliminary exams. But then I figured that CA coursework was too specialized and not meant for me. Rather than a specialist, I wanted to be a generalist – a jack of all trades and master of some.”
Biyani’s first brush with retailing was when as a teenager he visited the Century Bazaar store in Central Mumbai. Recounting his experience then, he shares, “It was bigger and brighter than what it is today. It had low ceilings that made it seem crowded and everything was sold over the counter, from vinyl records to apparels. The sheer size of the place and variety of merchandize got etched in my mind. It was probably then that I decided to create something similar or even better than this.” Towards the final year of his college, he started visiting his family office at Kalbadevi in Mumbai. Not too happy with the way the business was being carried out, he decided early on that he wasn’t going to continue in the family trade. As he shares, “I saw little reason in becoming the ninth member of the family to get involved in the same old routine. What I found very disagreeable in the business was the obsession with the financial control. The business was following a modified version of parta, a traditional form of accounting practiced mostly by the Marwari community in India. This system allows ibe to micro—manage, but it doesn’t help one to grow the business. And if there are only accountants in each part of the business, where are the entrepreneurs going to come from?”
Biyani categorizes entrepreneurs in three categories – creators, preservers and destroyers. For him, his father and uncles, much like most other entrepreneurs in India, were preservers. “I consider myself to be both creator and destroyer. A continuous process of change and of growth has to be there in every business. If a business doesn’t grow and evolve, it is not an enterprise at all,” shares Biyani.
With this bent of mind, Biyani went ahead to carve a niche for himself and his group across various categories and in the bargain he was often asked – “What is your core competence?” Some companies make only cars, some make only steering wheels and some make only ball bearings. But how does a retailer sell insurance, run restaurants, manage private equity funds and charge brands for airing their advertisements on LCD screens within his store? Explains Biyani, “The notion of core competency is no longer defined in terms of a single product or service. It has to be defined in terms of knowledge, ideas and intangible assets. Our core competency lies in understanding and delivering to Indian consumers. We wont make steel, neither will we build cars or set up large petrochemical complexes. But wherever there is a direct customer interface, we will try to capture some values in some form.”
– Zainab Morbiwala
As penned for STOrai 7th Ann Issue
Two Italian brothers started Monginis in the pre-Independence era at Fort in Mumbai. The set-up was more of a restaurant cum banquet hall catering to the rich and elite. Post Independence the brand changed hands to one Khurana family before being finally taken over by the Khorakiwala family. The restaurant cum banquet hall was refurbished into a departmental store by the name Akbarally’s but the cake and pastry counter was kept intact considering there were hardly any cake shops in the vicinity. Elaborates Zoher Khorakiwala, chairman and managing director of the company, “We did not close the cake counter as we thought it was an add-on to our departmental store. Also, we realized that it was attracting a lot many customers from across the city since the trend of cake shops wasn’t so prevalent then. Demand for our pastries grew and we started supplying them to the local mom and pop stores. We later discontinued as we realized that the shop-owners weren’t particularly paying much attention to the products as for them it was just an additional SKU. As time passed, we started getting enquiries for exclusive cake shops selling only our products, and that is when we took the expansion route and started having Monginis outlets at various locations.”
The first exclusive cake shop of Monginis opened at Bandra in 1970. The brand had clear goals from day one that their concentration would just be on product development and quality while the retail expansion would be taken care off through its various franchise stores. Explains Khorakiwala, “We strongly believed that our expertise was in product development. For retail expansion, it was best to partner with people from a particular area where we wished to open our store. They would know the area much better than us and if they are investing in our brand, they would surely take utmost care to maintain their customers and keep them happy for the sake of better business.” Currently, the company has just 4 company-owned-company-operated outlets. The rest 650+ outlets across the country are franchisees.
The manufacturing unit was still operating from Fort till they had about 30 stores. Post that, they shifted their factory to Marol at Andheri East in Mumbai. As the number of stores grew and the product category expanded, the need for bigger space made them shift their base to Andheri West in 1986 and eventually they opened their second unit at Thane in 2004. As offers from other cities started pouring in, the promoters thought of even setting manufacturing units in those cities on franchisee basis. The know-how was shared. Till they were dealing in butter cream, logistics was not an issue but the changing preferences of their customers made them shift to fresh cream. Shares Khorakiwala, “That is when the problem started coming in as we now needed a cold storage and also the supply chain had to be streamlined. We had no predecessors in this category to look up to and hence all that we did was from scratch. Bringing in international know-how and replicating the same to suit the Indian market, training the manpower to taking care of the maintenance aspect; all of it was challenging but a good learning experience.”
As Monginis spread itself in the market, the learning’s started coming in. Like the latent demand for vegetarian cakes. Soon the company started offering all-veg cakes to its patrons and today more than 60 per cent of their business comes from veg-cakes. Says Qusai Khorakiwala, a third generation scion of the Khorakiwala family, “Though we have veg cakes, it is still a challenge for us to get into the houses of people where the older generation still believes that a cake cannot be all-veg. We are directing a lot of our efforts to do away with this myth. Our major competition comes from mithais and we still have a long way to go when cakes and pastries will replace mithais.”
Since the last seven years, the company has been actively taking interest in the open market business. Elaborating on the same, Qusai says, “Seven years ago, Monginis was entirely focused on one business unit which is the cake shop business – which is a centralized manufacturing unit for cakes and pastries supplying to various satellite stores. The cakes usually have a shelf life of two to three days and the unsold cakes are returned to the factory. This second line of business is the open market which is long shelf life cakes and which go to the other formats of retail outlets other than just the cake shops. Five years ago, it was only the Western part of Maharashtra and parts of Gujarat but now we cover over 17 states across India and reach to over 1000 distributors. We also have been actively looking at our third line of business which is the ecommerce business. We have developed cakes which remain fresh and intact for three days and have tied up with Blue Dart and FedEx. They deliver cakes within 24 hours. An extremely unique packaging has been designed by us which thaws the frozen cake on its way in span of 24 hours.”
Qusai strongly feels that when it comes to food, ecommerce still has a long way to go. Elaborating further, he says, “Today, ecommerce business is the fastest growing but in this category, food perhaps comes at number 8 or 9 and within this, cake probably comes right at the bottom. But it is just a matter of time, till people will get accustomed to buying and ordering cakes online – either for themselves or as gifts.” As on today, Monginis has around 5 thousand visitors everyday to its ecommerce portal and about 1500-1700 orders on a daily basis.
Qusai is modest enough to say that attracting the youth is difficult. “Youngsters! Distracted minds, its difficult to keep them engaged. Well, there isn’t much that we can do to keep them attracted. Our focus is not the youth. It is mass market – the middle and upper middle class. Today, almost 78 per cent of population in India is vegetraians. Cake has a perception of being non-veg. I am not targeting the demographics. First, I need to change the perception that cake can be veg. We have got approval from Vegan Society. To market our veg offering, he have danglers, posters and also do a lot of in-shop branding.”
Sharing his views on maintaining the leadership position, he says, “It is difficult to maintain the number 1 position. Nationally you can achieve that, but locally it is very difficult. I am strong in numbers. We prepare around 40,000 pastries a day, 10,000 birthday cakes and approximately 3 lakh muffins a day. No other player can beat this kind of production that we have.”
The terms and conditions for franchises are very simple. All that the interested partner needs is a decent space, Rs. 1.5 lakhs as refundable deposit, Rs. 25,000 as non-refundable deposit and about 5-10 lakhs on interiors as per the space that is there. Minimum that Monginis looks for is 200 sq.ft of space. A special franchisee cell is there for quality check which ensures that the outlets keep only fresh products thus ting care of the brand image which has been maintained for over half a century today! With all the back end well in place, the one thing that the company needs to strictly look into is the standards followed by their franchise outlets who more often than not resort to selling stale stuff. Personally, I have always had a not-so-good experience with the brand!
Multinationals can come and go, the big guys can flex their muscles with an all-India presence and national advertising but there are some brands in India which have impacted the collective consciousness of the buyers that in spite of just a solitary store, they are still known across the country and globally too. Mumbai’s Roopam is one such store
With a humble beginning in 1968, today the brand is a hit with its target audience which includes NRIs too. Their annual sale literally is no less than a stampede with customers vying to have their shopping bags to the brim. Sharing bits from the yesteryears, Viren Shah, Roopam says, “Roopam is the brainchild of my father – Raichand Korshi Shah. He started the brand borrowing money from my grandfather. This was in 1968. The name has its origin in Sanskrit, meaning beautiful image.”
Shah’s grandfather had come to the island city at the age of eight. He worked for a local store before setting up a brand for stationary, files and notebooks under the name ‘Prabhat’. Says Shah, “Roopam began with as a 500 sq.ft. store and since my involvement it gradually expanded. Today we occupy a space of 30,000 sq. ft. across six levels.”
Roopam in a way has become a landmark in the bustling neighbourhood of Crawford Market. Citing the initial challenges, Shah states, “Challenges were not too many initially as there were very few stores in our league which could possibly compete with us. Things are different now with the advent of a malls and stand alone stores. The earlier roadblocks that we faced were on the lines of having a healthy debate with the family whether to spend lakhs on advertisements which they gradually then got accustomed to having witnessed the results. The advertisements helped us to reach our target audience not only in India but also helped us get a good chunk of NRI clients.”
Elaborating on Roopam’s advertisement campaigns, Shah says, “Our advertisements formed a part of our milestone years. Specially our advertisement campaign – Catch me, if you can where ours was the only store to have an advertisement done abroad every year. We were the first to get a permission to shoot at the Universal Studio in USA and even at Sun City in South Africa. In fact, post out Sun City shoot, the destination has become a tourist destination for Indians. Post that, we shot at Las Vegas, Bali, New York and other exotic locations. Our most recent advertisement has been shot at the Santorini Island in Greece and we also shot in Switzerland.”
According to Viren, from 1984 onwards, Roopam became a household name due to its advertisements, woolen department and franchises and branches across India. Gradually the brand expanded and opened Roopmilan Sarees at Marine Lines and Dadar in Mumbai. Roopam then had franchised outlets at Bandra (Mumbai), Delhi, Pune, Kolhapur, Dubai, Mauritius, Australia, USA and South Africa.
Though now except for Mauritius, all the other outlets have shut shop. Explaining the reason behind the discontinuation of the outlets, Shah explains, “Some of the franchise terms got over and some franchises’ did not do well as it was difficult to handle operations from Mumbai. The only operational franchise as of date is at Mauritius. We are open to having a franchise network abroad but not in India.”
Citing the USP of Roopam, Shah says, “We were always number one for woolens and this was primarily because we would sell woolens throughout the year and not just restrict it to the winter months. This brought in a lot of clients for us who would travel abroad.”
The brand managed to carve a niche for itself with an international clientele through their advertisements in Hindi Movie Cassettes which went all over the world. Roopam early on associated itself with designers, namely Rocky S, Neeta Lulla and many others. Shares Viren, Devdas costumes were made at our Roopam factory and they were designed by Neeta Lulla. I designed and gifted clothes to Michael Jackson, Jermaine Jackson and also Bill Clinton and Hillary Clinton during their visit to India.”
As the brand grew, it expanded its product category as well to include a host of other merchandize other than apparels. Says Shah, “Well this decision was of my younger brother – Jiten Shah who felt that with a space of about 30,000 sq.ft we could be a one stop destination for everything under a single roof. It has been seven years since we have diversified our product category. Besides our wedding and woolen specialty for family wear, today we have a wide range in the category of imitation jewellery, night wears, kitchen-wear, new born babies and accessories. In fact, our toy department is one of the largest in Mumbai.
Shah proudly claims that the success of Roopam is due to the strings still being held by the family. He says, “With our sales service, brand, goodwill and specialty department, we have kept the momentum going in spite of the stiff competition from other brands in the malls and on the high street. But I can confidently say that for woolens, traditional wear, toys and newborns, we are way ahead of others.”
Keeping pace with the growing ecommerce craze, Roopam has managed to carve a niche for itself in that space as well. Explains Viren, “We are doing excellent online business of traditional wear from abroad with delivery within just a couple of days post the order is confirmed. We tailor the garments as per the measurement.”
Commenting on the changing market dynamics and consumer preferences, Shah says, “Today, consumers do not want to waste time in purchase, they know their taste well in advance and do not bargain. Growth of retail in India is inevitable. Almost all international brands are available in India today. But somehow I do feel that the pace we have set for ourselves is fast and we are aping the West thus ignoring the ground reality and peculiarity of the Indian market and consumers. The issues that we face in the country include lack of infrastructure, cost of overheads and margin. We need to keep in mind that the buyer in India and the Indian conditions are not similar to what we find in the Western countries.”
Penned it for STOrai 7th Ann issue
There is no dearth of choice in the country when it comes to ice-creams. But there is one brand of ice-cream in the country which has its root well set in the country since its inception from Mumbai in 1984. Any ice-cream lover will vouch for Natural Ice-creams which has managed to carve a niche for itself over the years with its all natural offerings!
When Raghunandan S.Kamath could not clear his seventh grade exams, his father decided to discontinue his schooling and brought him to Mumbai. The first impression that you get reading this is of feeling bad for him, but then this was a blessing in disguise. Since Kamath had a good experience and know-how of fruits (thanks to his father being in the business of fruits), and also because he had a certain liking towards ice-cream, he combined his knowledge and love and went ahead to launch the all natural ice-cream, Natural Ice-cream.
Rewinding a bit to set the context, Raghunandan Kamath and his brother started off with a small South Indian restaurant called Gookul Refreshments from where they used to even sell ice-creams in the evening. As time passed and the family got re-organized, Raghunandan S.Kamath gauging the popularity of their ice-creams went ahead to open a 400 sq.ft exclusive ice-cream shop at Juhu in Mumbai. Keeping in mind the concept of their ice-creams which was prepared from all natural ingredients – from milk to fruits to dry-fruits; he named it Natural Ice-creams. The brand was an instant hit and popular with the local crowd in the area. Eventually, it gained so much of popularity that people from across Mumbai would visit the shop to feast on the all-natural ice-cream preparations from Natural Ice-cream.
This first outlet started with an initial investment of Rs. 3 lakhs and with the help from three workers. His wife helped him with the interiors of the store. Talking about the brand, 27-year-old Srinivas Kamath, the young and dynamic scion of Raghunandan Kamath who is also the director, Kamaths Ourtimes Ice cream Pvt. Ltd., puts in, “We use traditional methods of manufacturing ice-creams and we can proudly claim that we are India’s highest retailer in artisan ice-cream. But the journey came with challenges. Since the thrust of our brand was preparing ice-cream with natural ingredients, my father faced problems with the equipment used to prepare the ice-cream. It became quite a task to increase the production capacity. This led him to customize the machinery himself which would help produce more ice-cream using the same method thus not compromising on the technique and quality of hand-made ice-creams.”
One major set back took place in 1994 when there was an IT raid in the company. For Kamath this came as a shock since he had never anticipated such a thing to happen considering he was a law abiding citizen. The reason for the raid was his ignorance in maintaining the account books. Post the raid, the business was streamlined and the books properly maintained.
As the country entered a completely new era of consumerism from the 1990s with the big brother McDonald’s entering the country and to a large extent contributing in changing the ‘eating out’ habits of the country, senior Kamath took interest in expanding his base and responding to the umpteen queries of franchises that he was getting till then. Says Girish Pai, managing director, Kamaths Ourtimes Ice cream Pvt. Ltd., “For R.S.Kamath expansion was never on mind till then as he was fully emersed in the process of improvising on his product. He would go to any length to introduce new flavors and enhance his production. The brand was a passion for him. But as enquiries for franchises started coming in, he gave it a thought to expand and since then there has been no looking back. The first franchise outlets came in at Borivali,Malad,Andheri Lokhandwala, Bandra and Vile Parle. This was in 1994. It was in 2000 that we ventured out of Mumbai and had an outlet in Pune followed by one at Ahmedabad, Goa, Hyderabad and Bangalore.”
Following expansion, the company set-up a unit at Laxmi Industrial Estate with funds provided by Saraswat Bank. Some time later, another unit at Mira Road was set but owing to logistical and other problems, it was shifted to Charkop for sometime before opening a huge 22,000 sq.ft factory at Kandivali. Kamath meanwhile was also in the process of innovating various technique to be used to produce better quality products in less time and with less efforts. During the launch phase of the brand, the Custard Apple flavoured ice-cream had become an instant hit. This led to an unprecedented demand of this particular flavour but de-seeding the fruits posed a big problem. From the very beginning, Kamath always had this attitude of seeking help where needed and not having any reservations against it. He knew he was strong with his ideas but for execution he had to go and take professional help. For this particular task too, he knew exactly how the deseeding could be done but for the product development he went ahead to take professional help. Thus came into being a new machine that could deseed the fruit in no time and give an exceptional output. Kamath has also developed special packaging to keep his ice-cream intact for inter-city deliveries. The packaging is unique as it can hold more of the ice-cream in very little space.
Coming back to what makes Natural Ice-cream special, Srinivas Kamath adds, “Our product is deeply rooted in tradition and we use traditional methods to prepare our ice-cream. All the ingredients we use are almost completely natural and are sourced within the country. We do not use any preservatives, stabilizers and artificial colors or chemicals, which is why our ice-cream is delicious and wholesome. Also, our ice-cream contains less air which makes it rich and creamy.”
The passion that Kamath had for his product led him to experiment with many different flavours. What perhaps helped him was paying close attention to feed back from customers. Shares Pai, “A lot of our customer would travel abroad and then come to us and tell us about their various experiences. They would share with us the different flavours of ice-creams that they had come across. And this helped us a lot in our menu development activities.”
Joining the family business around two years back, Srinivas has brought with him a fresh perspective to make the brand more relevant to the changing preferences of consumers today. Elaborating on this, he says, “I want the youth to connect with our brand too. The target audience that patronizes our ice-cream now would fall in the category of middle age. We are in the process of a re-inventing ourselves in terms of extending a young image to ourselves. It shall take time as we are taking one step at a time beginning from training our staff across each of our 116 stores spread throughout the country. We basically work on the franchise model but no royalty fee is charged. All that we need is that the franchise designs his store through the third party architect that we have and maintains the uniform price structure that we have set for each of the city we are present in.” The concept that the brand follows is to have a sit-in attached to each of its outlet. Says Srinivas, “We want our customers to enjoy our product sitting at our parlors just like they would feel at ease sitting at a coffee shop.”
The brand has a long waiting list of franchisees waiting to partner with them across India and going by the ethics and principles the company follows; it is definitely not going to be an easy wait for all.
Change is the name of the game and people who accept this are the ones who can move ahead in times of competition. Chetan Sangoi, a strict believer of this philosophy today proudly has his 2000sq.ft store at Dadar running successfully for almost a decade now. Ask him what has made him successful and pat comes the reply, “Adapt yourself to the changing market needs.”
Had Chetan Sangoi not mustered the courage to bid adieu to his garment shop and merge that shop with his small time neighborhood banaya shop; today Sarvadoya would not have been what it is – a modern retail trade outlet. “It was Kishore Biyani’s Big Bazaar that gave me food for thought. There was no looking back then.” As Sangoi’s story goes; the family had two shops adjacent to each other – one selling pulses and other handful of FMCG products in the category of daily needs and then there was a garment shop which was looked after by Sangoi. In 2002 when the doors of Big Bazaar opened at Phoenix Mills which was in proximity to Sangoi’s store, it affected his business to some extent. Curiosity of what Big Bazaar was all about led Sangoi and his family to visit the store one Sunday. To their surprise they saw a lot many of their customers there and what amazed them was that their customers were there with their entire family. Says Sangoi, “That was the trigger point for me. I immediately realized that this format was here to stay and if we wanted to survive and also make money, there was no other option but to adopt practices of modern trade – not only for our business to grow but also for our customers to shop in a modern environment.”
Sangoi immediately set out to re-design his business operation and thought of closing his garment shop only to merge both the shops and open one big shop in lines of a self-service store. Racks were put in place, stocking was done, cash counters were put in place and other things similar to that of a modern store were decided upon. But as Sangoi shares, “Things weren’t easy as I thought they would be. The problem with people like us who have been in this business of traditional trade is that we think we know it all. The attitude we carry is – Humko kaun sikhayga. But the reality is different. It took us a lot of time to understand, learn, implement and execute the nitty-gritty of modern trade. I learnt it gradually that there is detail in retail. The biggest challenge though remained of convincing my father and uncles to let go off the reigns and allow me to handle the business. And this remains the biggest challenge for many others in my business community. The older generation is extremely skeptical of passing on the power to the younger generation. And this attitude of theirs often de-motivates the younger heirs to expand the business as per the changing market dynamics.”
Coming back to the history of Sarvodaya, the store began its operation in the traditional format way back in 1972. When they changed their format in 2002, for the first six months they carried on based on the trial and error method but within the first six months, Sangoi came across S.C Mishra who was a private consultant to a few of the traditional retail stores which had converted their stores to a modern format. Says Sangoi, “I had attended a few seminars where he used to be invited as the speaker. Through my business associates I then got in touch with him and invited him to my store. The day he came in, the first thing he told me was that my store would not succeed and I would not have my customers returning. I tried reasoning out with him that why not? It had all elements of modern trade. The point he brought to my notice was the ramp space between the opposite racks which was just about 3 feet. He explained that the minimum requirement was 5 feet. He explained to me the logic and science behind it and similarly many such more lessons were shared.” Sangoi was also an avid reader and observer. In all the international visits that he undertook, he made sure to carry back all the learnings’ back home and implement the best of it to this store.
Sangai feels that as against the common perception, manpower isn’t really an issue for shopkeepers like him who want to convert their stores. As he says, “In fact it is more difficult to source for manpower for a traditional format. People don’t really like being called ‘bhaiya’ but change the format of the shop, have uniforms for the staff, racks and air-conditioning at the store and the salesperson are automatically treated differently. This becomes a motivational factor for manpower to work at our stores. All that is needed then is training. I have staff at my store that has not even completed their primary education. They can just recognize alphabets. Based on their knowledge of recognizing alphabets and colors, I have trained them in stocking and I make it a point to rotate their duties in different categories so that they have holistic knowledge of each and every category to guide my customers’ right. In retail, for the floor staff, everything is monotonous after sometime. Challenge is to kill the monotony. This rotation keeps them charged up in a way.”
Sangoi has a monthly footfall of about 40,000 customers. Shoplifting was an issue initially but then through their observation they realized that customers would shop lift small ticket items but majority of the shop-lifting was done by the staff. Systems were out in place then and today there is dismissible amount of shrinkage that he sees at his store.
Sharing lessons from his experience book over the years; Sangoi feels that retail in India is growing and if the small neighborhood stores gear themselves up, then FDI is no reason to worry. He advocates the importance of manpower training and specially because there are no institutes which would extend manpower training for the front end / floor staff. Talking about the change in market and consumer dynamics, he says, “Over the years consumption patterns have gone through a sea of change. A lot many newer categories have developed – like ready-to-eat, health food etc. But then a lot of work still needs to be done in this area. We need to work towards upgrading our consumption pattern. Products which carry aspirational value need to be put before the customer in a way that he gets used to them and makes them a part of his daily life – e.g. hand-wash, ketchup etc.”
In his parting note, Sangoi wishes to convey to the FMCG brands to consider stores like his as part of the modern retail trade. He says, “In a way we are in full sense modern retail formats. I do agree that we cannot be put in the league of the Big Bazaar’s, Reliance Super, More etc but we too offer our customers ease of self-service, check-out, air-conditioning etc. Why then are we being singled out when it comes to sharing various consumer offers with us?” A question perhaps if answered can in a way help change the face of retail in India!
– Zainab Morbiwala
penned this for STOrai Nov – Dec 2012
In Varanasi one can’t ignore the Jalans. Game changers in a lot many ways, Jalans retail venture stocks everything from fabrics and apparels to toys and utensils to shoes and accessories. The crowd at the store will make you feel for a moment that you are perhaps in an open market as there is hardly any space to walk in spite of the store being really huge.
At the helm of affairs of the ever buzzing retail outlets of Jalans is the 27-year-old dynamic Bhagirath Jalan. Having studied in the UK and then working for a year with the Future Group gave this young scion of the Jalan family enough experience to return to his family business and turn it around completely bringing in not only newer categories but also hordes of new customers. Sharing the history of the brand, he says, “We started in 1974, when my grandfather came to Varanasi from Ranchi where they had a big wholesale business dealing in fabrics. He wanted to do something on his own and having settled in Varanasi he began his own wholesale trade. Till then, the city had no other player in this business and Kanpur was the base of the biggest wholesale market in the eastern part of UP. He started with the wholesaling of sarees, dress material, dhoti cloth and suiting’s and shirting’s. Since he developed a practice of offering ‘fixed price’ goods, he managed to win trust of his clients. Till about 1999, our business was only restricted to wholesaling of fabrics and materials.”
The family explored retail soon after that and opened a retail store dealing in fabrics and materials. Shares Jalan, “The first store we opened in Varanasi was at Gyaanvapi. That store still manages to generate excellent sales. It is about Rs. 5000 per sq.ft / per month. In 2005 we opened our second retail store which has become our flagship store. As of date, we have four retail stores in and around Varanasi and two wholesale stores.”
Following his return from UK and completing a year at the Future Group, he took charge of the retail division. While at Future, his mentor, Damodar Mall had advised him to take things one at a time and not rush through all the decisions. This is exactly what he did. Shares Jalan, “I sensed a lot of opportunity to expand our retail business having witnessed the growing aspiration levels of the locals and also because we had a lot of space to spare that could be used to spread our product category. I would minutely go through all the feedback /suggestion forms and came across suggestions to include footwear in our stores. However my father and grandfather refused to accede to my request to include footwear as it involved in dealing in leather. Around the same time I came across someone who suggested we start retailing of Titan watches. My grand-father who was an admirer of the Tata Group okayed my proposal but on a condition that if it did not yield results in a year, I would have to close it down. Fortunately, the category did extremely well and from day one we witnessed a huge demand. In fact today we are the second largest retailers of Titan watches in Eastern UP. Gathering courage I went and sought permission for the footwear category. After much reluctance they agreed but on the condition that I had a month to prove myself. I had already made a very good business plan for the retailing of footwear and had a strong vendor in place too. On the first day itself we sold around 115 pairs and all this without any promotions. It was just a soft launch. Today our average sale of footwear is about 450 pairs a day. Next in line came the category to sell utensils. Again, from the first day onwards it was a major hit. In fact on the first day, we had trouble handling the crowd. Since then, there has been no looking back. Today, our store sells practically everything except furniture and electronics.”
To make sure that their customers remained with them, they assure a price guarantee compared to rates in the market. Says Jalan, “For this, we have our executives going out in the market at least twice a month to check on the rates our competitors offer.” Jalan also has initiated a very niche service for their customers who walk into the store and are looking at buying a bouquet of products. Elaborating on this, he says, “We have a team of about 10-12 who help them to choose products across multiple categories.”
What has always helped the group is the open-mindedness that they have towards everything. From sending their son to an alien country for studies and allowing him to work in a non-family firm, to letting him take business decision from a very young age; the Jalans have also been pioneers in adopting best retail practices. Shares Jalan, “Sometime in the late 1980s, my father visited Harrods in UK and was astonished to see how everything was computerized. On his returned replicated the same in his company. This was when we were still in the business of wholesaling but he went ahead to streamline the system and had a software in place that accelerated his business. Since then, we have always given a lot of importance to IT and today it is the lifeline of our company.”
Considering the shops are always choc-o-block full, the issue of shrinkages always looms large but according to Jalan the internal threat is much more than that of customers indulging in shoplifting. “The customer will only take as much as his pocket will allow him to hold, it is the internal staff that is more of less responsible for shrinkages in any retail organization. We have a system where we reward the Category Head if the shrinkage is less than 0.3 per cent and in case it is more than we reprimand him / her. This ensures a smooth sailing.” The group makes it a point to take care of its employees in the best possible manner that they can. Free lunch for every employee is provided and the directors make it a point to meet all the new joinees, whether s/he is at management level or housekeeping.
From pioneering the concept of having browsing gondolas to self-service, the Jalans in a way have revolutionized the Varanasi retail market in a lot many ways. Exceptional customer services keeping in mind the target audience they cater to and also very friendly HR policies help the group maintain its leadership position in the city.
– Zainab Morbiwala