20 years in Retailing

We were 42 of us who arrived at Spencers Plaza at Chennai, one of the only few malls in India in 2001. Most of them had come outside of Chennai. We all had one common reason to come together, through all the diverse backgrounds that we had. We were the Retail Management Trainees to join RPG Group for a 3-week induction at the HQ located on the fourth floor of the same building. Imagine a career, where you have to work amongst shops selling grocery, beauty products, food and beverage and all within a full air-conditioned environment. Only that this luxury would be short lived until we moved back to our “regions” – our destinations to write our own destinies, all by ourselves. The day was 4^th June 2001. One of the most memorable days in my professional career. 

I had unofficially joined the retail industry way back in 1997 when I would scoop ice-cream part time at a Baskin Robbins parlour, the first one in Chennai and second in India. Though I was pursuing software languages in the morning at NIIT and a graduation in Commerce in the evening at Ramkrishna Mission’s Vivekananda College in Chennai, retail and consumer business became my first love, instant love, right from the first scoop I sold. For an eternal introvert until then, I never knew I could sell something to someone for a consideration, an expensive one at that, let alone the ability to speak with my chin up. 

To my utter shock, I was posted to Musicworld Kolkata for my 1^st year assignment. For the record, I hadn’t ever crossed Chennai city limits in my entire life, save for an annual vacation once in 3-4 years to Mumbai where my maternal grandparents lived or to my father’s hometown at Kumbakonam, where the entire extended family would congregate once in a while for a religious festival or a wedding. I dreaded travelling 1.5 days by train from Chennai to Calcutta. That it was 2^nd class A/c was a silver lining. After all, I was going to be travelling in a/c for the first time, that far. The only other time was one of the first rides from Delhi to Lucknow when Rajdhani was launched in the late 80s. I wondered what would I do alone, in the train, all day. And then, all alone in an unknown city, unknown people, unknown language and an unknown destiny. I am glad I took that train, much to my own chagrin, lest I won’t be writing this Anniversary article today with a sense of fulfilment and happiness. 

The memories I have etched of the city of joy, is perhaps one of the greenest that I would carry to my ashes. I made some amazing friends in Calcutta, spoke Bengali in a few months, and most importantly learnt the fundamentals of retailing at Park Street. Mr. Sanjiv Goenka was based in town, so we were always alert for he may turn up anytime. Seeing consumers spend hours together to pick up a cassette worth Rs. 27 was truly amazing. With 80% of volume business coming from cassettes, 15% from CDs and 5% from VCDs and Games, the 8,000 sft store would do a monthly turnover of Rs. 65 lakhs. Yes. In 2001. And the business grew 30% more during Pujo period and during Christmas! Amazing days. 

After a year, I moved back to Chennai on “job rotation” model of RPG Group’s HR Policy to join Foodworld, where I was in charge of the first store of the group. It was here, between 2002-04 that I decided that I wish to spend the rest of my life in Retailing, selling something or the other to end users. Extended Family members around me laughed, wondering why would someone study MBA to work in a grocery shop after all. Neighbourhood was worried if I was qualified enough for an arranged marriage. 14 years later, I received my first professional award – “Top 50 Retail Professionals in India” decorated by Asia Retail Congress. And then, three more awards in Retail and F&B in the past 6 years. In between, speaking at 100s of forums on Consumer Business & Retail in India, Singapore, Malaysia and China!

Before and after my first “public recognition”, my work in retail spoke more than what I could imagine to write. Designing and establishing India’s first ever Travel Retail environment across any private airport in India in 2006 at Bangalore; setting up 140 cafes across India for Café Coffee Day; driving and doubling the dealer network of Royal Enfield from 140 to 300 in just 2 years; and growing the topline of Levista Instant Coffee by 79% during the pandemic year 2020-21; I still try my best to stay grounded and humble without taking up any of the honours on my head. 

Every time I begin my lecture at a B-School as Visiting Faculty teaching Retail Elective to 2nd year students spanning 20-30 hours for the last 16 years, I still feel it is my very first day in Retailing, my tone and throat trembling for the first few minutes in to the class. Completing 20 years in a single Industry feels like an achievement. 

But for me, as I always say – I have just begun and I have Miles to Go before I sleep. Miles2Go. And needless to say, I am a self-proclaimed “Retailer by Profession and Choice. Since 1997”. For a reason!

100 Days of Employment

It’s ironical that I am writing this article on my 100 days of Employment from home. So be it. Out of the 100 days, 25 have been Work from Home, a first of it’s kind in my 2 decades of being employed. The first day of my job and almost everyday thereafter have been on the shop floor, meeting, interacting and solving consumer challenges – from helping them to choose the right merchandise to closing a sale, somehow. But the last 25 days have been very different, thanks to Covid-19 Crisis and the ensuing lockdown. More on that later.

 

Mid-December 2019, I was lounging with my classmate who had come to India for a vacation. We were at Westminister, Crowne Plaza (though we still call it as Park Sheraton) which is our favourite hangout for the past 20 of the 24 years we have known each other since studying UG together. The Waiter who used to serve us way back then is now the F&B Manager of the Hotel, something that makes us feel happy that everyone around us has been growing. I received a call from an unknown number and the caller identified himself as an HR Consultant and spoke briefly about a Coffee brand. In the next 24 hours, my tickets were booked to Bangalore for a face-to face Interview with the Management and in the next 7 days, an Offer Letter was sent while I was on vacation at Jim Corbett National Park for Christmas holidays. Things moved very fast, to my own surprise but that’s how God’s grace has always been. He surprises us without even us realizing what He is up to. I joined the company on 3 Jan., on my Father's Birthday!

 

I completed 100 days recently at Levista Coffee as Vice President managing Sales, Marketing, Supply Chain, Logistics and everything in between. It has been a very short tenure yet, but a very fulfilling one. Be it setting up a Corporate Office from scratch (Furniture, Interiors, what not), to plan a detailed Business Plan for the next 24 months as I lead the company to greener pastures with a vision to accomplish 5% Market share of the Rs. 2,200 Crore Instant Coffee Market annually in India of which 80% is held between HUL and Nestle, who’s majority of business comes from Southern India. I have been fortunate to interact with executives and experts from the Indian Media Industry – small, big, large as well as meeting staff members along with prospective new recruits to join and grow the Sales & Marketing team meaningfully. Have also met and interacted with some very bright minds from the Indian Retail ecosystem who have been very supportive to a baby brand that we are, which is only 27 months young now.

 

After 100 days of this tenure, everything seems surreal. I was an Accidental Entrepreneur, thanks to a turn of events in the family way back in 2014. I was not prepared for running Retail Businesses or E-Commerce although Consulting was always on the cards. While all my entrepreneurial escapades went bust including a few Crores of personal savings between my wife and me, what has remained are memories and learnings. Something which I will cherish all my life and of course, am putting them to good use every day. Working for a retail company is very different than running one, for it’s easier to get paid than to pay employees. My hyperlocal ecommerce venture, which is incidentally the most utilized today during the N-Covid Crisis, where we delivered FMCG from nearby Retailers to Consumers was way ahead of time, perhaps. I received messages from a few friends over the last few days and even potential Investors who appreciated my forethought but was difficult to execute it then, due to lack of funds then.

 

Miles2Go Advisory Services, my Consulting firm worked with at least 50 Entrepreneurs on business ranging from Jewellery to Organic Bio-Manure, Agri-products to Idli-Sambar serving restaurant chains. Airports, Railways, Travel Retail Concepts were some of the areas where I worked in various consulting roles. This rich experience and exposure for over 60 months has helped me immensely as I wade my way through this complex maze of Retailing, yet again wearing a new hat (and new clothes!). I am learning every day; with a clean slate every morning – that I do not know anything about Retailing or the Retail Industry and that I get one more day to (unlearn) and learn from scratch.

I have Miles to Go. I have just begun.

H for Hyperlocal Retailing

One of the most used and abused words for the past 3-4 years in E-Commerce in India and all over the world is “Hyperlocal”. What exactly is Hyperlocal retailing? How does it help customers? What value addition does it provide to Retailers? Is it a viable business option? Let’s explore.

The Indian Retail Industry is estimated at $500 billion with over 1.30 billion people in the country. Out of this less than 12-15% is Organized while the rest remains with traditional businesses such as Kirana Stores, Mom & Pop stores, road side vendors, etc. While Retail has seen a CAGR of over 15% over the past decade, it is E-commerce that has grown leaps and bounds in the recent decade, thanks to Wall Street Funded companies who morphed themselves from being mere technology companies to retail behemoths that they are today. Within the E-Commerce Retail Startups as well as a few established ones, Hyperlocal Players are the buzz of the day, what with a new one commencing operations every day for another that shuts down almost every day.

So what is Hyperlocal?

The term has been coined to connect offline retailers in a locality to customers in the same locality, but through digital means. This is nothing new, honestly. Through the late 90s (in India) when we witnessed the highest landline telephone penetration, it was common for customers to call a nearby Retail store and request them to deliver products for immediate use. During the early & mid-2000s, it was the mobile phone boom where household maids, servicemen like Plumbers, Electricians, Carpenters and many more were available over a call. The world seem to be lot more connected and we all loved it.

It was early 2014 and we saw a slew of technology companies building websites and mobile apps that connected customers to shops and service providers over a click of the button. Honestly, this was nothing new compared to what “Just Dial” and “Yellow Pages” were already doing. Even neighborhood newspapers were in a way Hyperlocal, connecting local services and people to customers in a particular locality especially for finding rental accomodations.

It is quite amazing to see that Hyperlocal has suddenly become a billion dollar opportunity with a lot of Investors throwing money at such start-ups. Most of the large Hyperlocal companies that took heavy funding have left the space, notable among them being “Ask Me” which had not only shut down a few months back but also headed in to legal troubles with outstanding payments.

Hyperlocal is a very simple business idea that has been complicated a lot with too much of technology being pushed on to the customers. A mere signage at the

Retail stores (the ones Zomato put up initially) bring a lot of visibility and access to customers. The startups pick from the nearest store and deliver to customers in the shortest possible time thereby increasing merchandise offtake for Retailers. Sometime, it is the simplest task that is complicated the most. Hyperlocal Retail is one such example.

How does Hyperlocal Apps work?

Hyperlocal Apps connect nearby stores and service providers on their app and act as an aggregator. When a customer looks for a product or service, the offering in the neighborhood shows up usually with a cost / time attached to it. For example, if a user is looking for a carpenter, the app shows how much time it would take for the Carpenter to arrive and also the cost per hour / relevant charges. Similarly, when a customer is looking to order tomatoes or rice bags, vegetables or household articles, the app would show up the product, their prices and estimated time of delivery and convenience charges, etc. It is a presumption while building a Business Plan for a Hyperlocal App that such customers will continue to order from the app regularly while also adding new customers everyday. And over time, the App keeps adding more and more retail partners and service providers while also expanding the geographies served.

Is Hyperlocal viable?

Trust me, it is viable. I have done the maths and it is actually possible to make money with a Hyperlocal App. They key here is not the idea or the strategy but the execution. With my own Hyperlocal app Oyethere, I have experimented various means through which we reach out to existing and prospective customers. While both are tough (meaning retaining & adding customers), it is quite possible to get the business going through innovative ways of sales outreach. For this, we need the unstinted support of the Retail Store, which is the key in making a Hyperlocal App successful. Most times, we have seen Hyperlocal App companies splurge on mainstream media and attract a lot of PR while the business remains in the lurch due to execution issues. At a unit level, the app makes a margin from the Retailer, so while the volumes increase, there is a business break-even. The only challenge here is how much to “invest” in acquiring and retaining the customer and controlling overall marketing spends.

Are Offline Retailers ready for Hyperlocal?

At the face of it, Retailers do not support Hyperlocal Apps because they believe the proposed digital marketplace is lethal and could do a lot of harm to their businesses. But it is not. When a customer looks up a product on the app, they would merely choose the one that suits their need – Brand / Retailer-connect, Time of Delivery, cost of the products and convenience. If the Retailer doesn’t stand up to all these measures and based on a permutation by the customer, the choice of Retailer varies and there are chances that a few non-performing ones may get pushed back. Indeed, it is quite interesting that a few Retailers are experimenting Hyperlocal. Food Bazaar and Hypercity work closely with Amazon Now; Heritage Fresh and Spencers have their own Apps which is being tested in a few markets. However, aggregating Kirans remains the biggest opportunity here while the greater challenge is that they do not make enough margins to be shared with the App aggregator. The same applies for Service Providers on apps like Urban Clap.

The market is ready, just waiting for Retailers to catch-up on them. Let’s hope.

G for Grocery Retail – Then Vs. Now

From shopping grocery at Kirana stores to Government Ration Shops to one of the first organized retail shops in India to the supermarkets and hypermarkets and finally now with my own mobile Apps for Grocery, I would say I have been lucky to see them all. My tryst with Grocery shopping is cut to the early 90s when I would accompany my father to the state-run TUCS shops and PDS shops and bring, rice, dal & kerosene kept on the back of our bicycles. During the late 90s, a retail shop named Subiksha opened in the heart of South Chennai – a store similar to a PDS but a bit modern with staff in uniform who assisted customers with their shopping needs and a computerized bill to support the transaction. I remember cycling 5 kms to buy 3 kgs of sugar, which would save us 10-12% than buying from the neighborhood Kirana shop. I used to be amazed at how shopping was revolutionized in the late 90s with the advent of “Shop n Stop” a modern retail store close to my house in Royapettah that encouraged self-service, which was not just a fancy thing but also a very convenient one.

I was fortunate in the early 2000s to join and work with RPG Retail’s Foodworld Supermarkets, which was one of the earliest organized retail stores in India. From consumer offers to world class shopping experiences, the company paved the way for future entrants with this format of retailing. When I joined the Future Group, I witnessed how a humble 1,500 sft of a supermarket had morphed itself into a hypermarket with Food Bazaar spread over 10,000 sft at its largest outlet then in 2004 and that too on the fourth floor of India’s first seamless Mall, Bangalore Central. Till date, our family has shopped only at Food Bazaar in over 95% of cases. That’s some loyalty, rather just the convenience of shopping the entire household I would say. Late 2000s was the challenging periods for Retail, although not as worse as what we’ve been witnessing for the past 24 months. Hypermarkets reduced their sizes and have found the 4,000 sft model as their sweetspots and are still tweaking their models.

Since the turn of the decade in 2010, we have seen online retailers come and go and behemoths like Big Basket stay on with a supposedly proven model. I would like to cite the example of IBuyFresh.com which was the online effort of Kovai Pazhamudir Nilayam, a Coimbatore based Retail store that started with fresh Fruits & vegetables and later moved on to the Grocery & Household segments. The e-commerce start-up, which was serving over 800 orders a day in just 6 months of commencing shut down abruptly one day due to viability issues. Others like Peppertap and Local Banya raised millions of dollars to eventually shut down their ventures leaving smaller players like my own Hyperlocal start-up Oyethere.com in jeopardy, what with Investors sitting on the fence not wanting to experiment on new models any further.

Much has been spoken about Amazon’s self-service, self-check-out store in America which is a dubbed as a smart-store where customers pick products off the shelves which get billed while picking-up and the check-out is super quick with just a tap of their credit cards or mobile phones (NFC payments). Grocery shopping worldwide and in India has been seeing a lot of new opportunities, of course with challenges but perhaps, remains the most interesting retail format.

Why I suspended Oyethere Delivery!

This was an idea that I set out with while studying at NIIT in 1996, that one day I would be able to order pretty much anything on my computer and it would reach my doorstep within minutes or hours. That it took me 20 years to realize that dream is another story. Thus was born Oyethere.com, my hyperlocal ecommerce marketplace which delivered (yes, we are past tense right now) products to customers within 30-300 mins from the time of delivery. We started with Tender Coconut, being the only website in the world where you can order one, and moved on to Patanjali, Grocery, Household, Books, Baby products and more. We delivered special T-Shirts with pics of matinee idol Rajnikanth and his signature dialogues printed on them ahead of the release of Kabali. In Sep. 16, we delivered authentic eco-friendly Ganeshas (Clay Pillaiyar) for the Chathurthi festival. And then we shut down. Meanwhile, we got noticed on media, print, radio and Tv for our unique efforts. But potential investors remained myopic. A few of my friends came forward to support me with small sums of funding when I reached out to them around Aug. 2015. That investment came along for a year. We were not “burning” money; no full page Ads, no high-decibel paid digital campaigns and so on. We did not even hire the so-called elite and erudite Digital Marketing Agencies who sadly learn their business at our cost.

 Meanwhile, Swiggy, by far one of the most funded hyperlocal delivery companies in India reported a 65-fold increase in losses as per a report on Live Mint. Yes, you read that right. Here is a quick analysis of what they did;

Revenue for FY 2016: INR 23,59,00,000 (commission on transactions)

Revenue per day in FY 15-16: INR 6,55,278

Daily Transactions: Approx. 21,843 @ Rs. 30 per transaction as commission

Losses for FY @015-16: INR 131,18,00,000 (INR 131 Crores)

Which means, Swiggy spent Rs. 204 (Edited) to get a transaction!  This is Wow.

In the meanwhile, Oyethere was revenue compliant from day one. We made Rs. 5 per tender coconut from the roadside vendor. And 5-25% margin from our partners such as Patanjali, CDS Supermarket, Odyssey, Brown Tree & so on. We had between 1-4 delivery boys at the max and were delivering between 1-10 orders per day. We broke even our Opex from Day one. Absolutely NO CAPEX. I was spending frugally on Marketing offline & online, while also meticulously building PR & positive visibility all around. Sadly, we didn’t have backers. Those who promised the moon and beyond (on investments) backed out citing market conditions. We didn’t have access to popular and noteworthy Entrepreneurs & Angel Investors who funded startups out of Delhi, Mumbai & Bangalore.

On Nov. 1, 2016, I decided to suspend operations temporarily until we get a decent amount of funding. Talks are on currently with various people, but sadly most Investors neither understand Retail nor Investing. So there is a big gap between what I propose and what they understand. For sure, Oyethere will not make losses like others. No way I shall allow that to happen. But that, only when we get the next round of funding. Till then, I am on a break.