Organized
sector retail in India is having only 5 to 6% share of the total retail market
size. This certainly does not mean that out of every 100 retailers (mostly in
multi-brand grocery category), 5 or 6 are super markets or multi-brand outlets
in a mall. Organized retail outlets are even lesser in number – perhaps only
one out of every 100 small unorganized retail stores spread over in various
localities of urban, semi-urban and rural areas of India. But this big size solitary retail outlet in your city or
town is a part of the retail-chain that belongs to a corporate retail business
and accomplishing at least 5% of the total business volume, while the remaining
99 small unorganized retail stores – all together are able to get the remaining
95% share of the market. This means each such small retailer on an average gets
less than 1% of the market share.
About Reliance Fresh:
Once,
I rang up to one of the Reliance Fresh outlets in Bhopal to inquire about the
prices of certain commodities. Nobody picked up their fix-line phone (a local
one). After some time I tried again but in vain. No one attended to the ringing
phone that led me draw a conclusion that in ‘Reliance Fresh’, it is no one’s
responsibility to pick up a ringing phone – a characteristic of a big brand in
organized retail.
Abut
Hypercity:
I
have been told Hypercity is a multi-brand grocery retail outlet of Shoppers’
Stop. Before that, by looking at this name I thought it was a real estate builder’s
name or project. Anyway, they have opened their outlet about a year and a half back
in Bhopal (in 2010) at Dainik Bhaskar’s ‘DB Mall’. On the inaugural day, I
happened to visit Hypercity by chance. Many items on day-one were without any
price tag. I was told it was because of inaugural day and would take some time
to settle down. However, even if one visits Hypercity now, some of the items
can still be found without any price tag. Further, another customer-unfriendly
practice that is common there, is two different prices for the same item of the
same package or size. For e.g., if you pick up an item for price P from the
shelf (such as unbranded items without M.R.P.), it may show another price of
P+x at the payment counter’s computer. If one does not notice the bill invoice
(as many customers tend to avoid because of “status complex”), one will end up
paying more than the displayed price tag at the shelf. This also happens with
the items displayed for ‘discount’. Customers pick up the items for ‘discount’
offers on M.R.P., but when they get the bill, the M.R.P. price is charged. So
as a customer at checkout counter, if one fails to notice this discrepancy,
s/he will end up paying the M.R.P. and losing the discount offer. When I
recently pointed out this practice to the customer care counter of the outlet,
a senior staff was ignorant about such thing. I gave him an example to verify.
After verifying, he found my complaint as true. Then I pointed him out that
this was a regular practice at Hypercity. He tried to assure me that this would
not happen in future.
Hypercity
has an All-India toll-free number (1800-xxx). Sometime back, I wanted to
inquire about the availability of certain item and its price at their Bhopal
outlet. Based on my positive experience with organized retail outlets in a
developed country, I dialled Hypercity’s toll-free number. After recorded
messages, I chose the English language option. When a human voice took over, I
put my query to her. She was not aware of what items were available at their
Bhopal outlet and the prices. So, I requested her to provide me a local phone
number of Bhopal store. I was startled to receive this reply which I quote
here: “We are not authorized to give prices and telephone number of any branch”.
To get doubly sure, I again called up their toll-free number and this time
chose the Hindi language option. I put the same queries to their call centre
operator who surprised me for the second time with his same reply: “We are not allowed
to give prices and telephone number of any branch”. One wonders what
they are allowed to do at customer care except to waste customers’ time and
irritate them.
Now
consider the organized retail market in a developed country – New Zealand where
I lived in for a long time. Although New Zealand is a very small country in
terms of size and its tiny population, yet organized retail market is much more
developed than in India. The prominent retail chains like Pak n Save, New World, The Warehouse, Farmers, etc. are operating there for decades. The Farmers are the multi-category,
multi-brand, non-grocery very successful large-format retail chain. They have even completed
its centenary year (100 years) in 2010. It was beyond my imagination to
assimilate what could be the population of New Zealand in 1910 when it was only
4.2 million in 2010 – equivalent to a B-class city of India. When a retail
company can sustain and survive for 100 years in such a tiny population, what a
retail business can do with a colossal population in India. I was told by a
local resident that ‘Farmers’ were catering to the needs of country’s farmers
in the initial years (1910 onwards). Hence the name ‘Farmers’ originated. With
the changing times and needs of the buyers, ‘Farmers’ retail changed its policy
and now became a large-format supermarket chain of multi-brand, multi-product
categories starting from cosmetics; readymade dresses; designer clothing; fashion
accessories; bathroom, bedroom and drawing room furnishings; kitchen appliances
to consumer durables. However, when I started analyzing, I realized
‘population’ (or number of buyers in a country) was not the only driving factor
to survive and sustain a business. A leading Indian retail chain called ‘Subhiksha’
had to shut down in 2009 – within 12 years of beginning. Changing with Time (like ‘Farmers’ of New Zealand),
really caring for each and every customer – even prospect, talking
to buyers to understand their needs and wants, helping them locate an
item they are looking for in the supermarket, behaving
nicely and friendly with everyone at the checkout counter putting self-ego on shelf are some of the key
driving factors that help survive a business for a century. India’s organized
retail businesses of any kind and their so-called customer care call-centres lack
almost all the above factors. On many occasions, the staffs behave rudely and
ignore the customers. Only capital investment in retail business with a
so-called big brand name cannot help survive and sustain a B-2-C business nor
any amount of advertising. An investment on selecting, training and paying
handsomely to human resources is equally important. The retail outlets in New
Zealand have automated phone numbers for customers with choice of extension
numbers. If you don’t know the extension number, your line will automatically be
directed after a few seconds to the ‘receptionist’ to help you out. India is the
second most populated third world country where there is no dearth of
customers; rather it has an enormous number of them. However, in general, most
customers belong to an ‘unaware’ category – no matter even if they are educated
ones and irrespective of their financial status. That explains why the
government has to run a social ad campaign in Hindi called “Jago Grahak Jago”
(Be Aware Customers). Most Indian customers are only aware of their pseudo-financial-status
embedded in their minds. They find it below dignity to look at the ‘quantity’
of commodity printed on the wrapper and what ‘price’ they are paying. The same
customer that goes to a mall or visits a big organized-sector retail outlet,
proudly takes out his credit or debit card and pays the bill happily. But when
s/he goes to a neighbourhood small Kirana shop, s/he maintains a credit account
to buy now and pay next month because Kirana shops (grocery stores) do not
usually have swipe machines to accept a credit/debit card. However, a miniscule
number of dissatisfied or outraged customers – ignored or misbehaved by an
egotist floor staff of a branded retail outlet, can lead to havoc in terms of bottom-line
results.
A
month back, I visited a small retail grocery (Kirana) shop in the city for the
first time. I found that certain items were not only cheaper than other
retailers but also of better quality. The shop-owner’s behaviour was not bad
but normal as compared to a typical negligent behaviour of an organized
retails’ staffs. Before leaving the
shop, I did not forget to take shop’s phone number and the owner’s name. During
the last one month, I dialled up that shop’s phone number twice to enquire
about prices of certain items. Each time the shop owner himself picked up the fix-line
phone and readily provided me the prices of the required items. However, my
recent experiences of two organized retailers viz., Hypercity, and Reliance
Fresh were bad enough when I compared them with the small retail (Kirana)
shop.
Indeed
small grocery retailers of unorganized
sector cannot compete on product
range and prices to some extent with the big fishes of organized retail, but
the former do have certain edge over the latter such as personal attention for,
communicating with and recognizing each and every buyer, replying
satisfactorily to customers’ phone calls, free home-delivery to their vicinity,
credit facility for reliable customers, friendly behaviour with everyone,
ability to respond quickly for their buyers’ needs, low rental cost for
premises and maintenance and so forth. By acquiring such strategies, small
grocery retailers can not only survive in the market but also raise their
percentage of market share to some extent against the big fishes of organized
retail. I have found certain small grocery retailers have even managed to offer
2 to 3% discount on many grocery items they sell. One of the biggest advantages
they have is their neighbourhood proximity
where buyers can approach and reach anytime in a day as against organized
retail store’s location in a mall or business complex at a distant place where
people visit once or twice in a week only.
~Gunjan Gupta, Esq.
