Home > india, marketing, retail > In India, giving the customers what they want means offering the art of chaos

In India, giving the customers what they want means offering the art of chaos


Great article: (as appeared in the times, UK):

http://business.timesonline.co.uk/tol/business/markets/india/article3181925.ece

Kishore Biyani knows the Indian consumer. “You see that lady,” he says, pointing to a young woman with a shopping trolley laden with goods from channa to Colgate toothpaste. “She is a domestic help. She’s wearing her best sari and gold jewellery because this is a social outing and she may see people she knows. Her boss must be somewhere.”

Sure enough, a woman with an authoritative air returns with more shopping and marches to the checkout counter. Pushing the trolley in her wake, the servant smiles at another girl in a mirror-image scenario.

“They’re friends, you see,” Mr Biyani, 46, says knowingly. The shopping magnate’s smile soon fades, though, and he rushes off to berate the store manager in Food Bazaar, an extension of his successful discount hypermarket brand Big Bazaar.

It is one of several admonishments dished out to panicky staff for poor display arrangements, checkout delays and wayward trolleys. “It is so stressful coming in to my stores. All I see are mistakes.”

It quickly becomes clear that conducting an interview in one of Mr Biyani’s flagship malls, to put into context his extraordinary rise from textile merchant to India’s largest listed retailer, was a bad idea. He cannot stay still for a minute. Between outbursts of micro-management, conversations on one of two mobile phones and random approaches from wide-eyed fans, it is difficult to sneak in a question.

The place is absolute chaos – deliberately so. Whereas Mr Biyani thinks that Western retailers such as Tesco have turned supermarket shopping into a science, he believes that he has made it an art form.

His canvas is India and its many sub-identities, which he aims to recreate in his 76 stores across 50 cities. In one corner, the grain seller is yelling out prices as customers jostle to weigh their spoils. It is like the local market without the haggling.

Elsewhere, a man pushes a 2,000 rupee (£26) washing machine around in a trolley while announcing its bargain price over a megaphone. It is like the village mela (fair) without the elephants and magicians.

It is a format that has proved a success and exposed the underlying characteristic of the average Indian consumer: they prefer goods stocked in piles rather than neat rows, want to dig around in buckets to feel as if they are getting a bargain and won’t set foot in a place that is quiet and pristine because that equals expensive.

Curiously for a man who is selling to the Indian masses (his stores attracted 200 million shoppers last year), one of the retailers that Mr Biyani admires most is Abercrombie & Fitch, the all-American clothing brand that employs beautiful people as shop assistants. “They have models, I have megaphones. It’s all theatre, in a sense.”

For any international multibrand retailer looking to crack India, once the Government drops obstacles that limit foreign investors to wholesale, his business provides clues about the diversity of this market. By realising that one size does not fit all in India, Pantaloon Retail, the flagship component of Mr Biyani’s Future Group, has achieved sales of £476 million and now operates about seven million sq ft of retail space. Its target is revenues of £3.8 billion and a presence in 90 cities within four years.

Even now, 20 years after he left the family textiles business to sell stone- washed denim, Mr Biyani can get it wrong. A high-end coffee house in the Orchid City Centre Mall in Bombay, which Future Group operates, failed because it was too upmarket. The shopping centre, which is in a largely Muslim area and was a cowshed only two years ago, is Mr Biyani’s testing ground. Shops selling burkas, specialist saris, tailor-made suits and fashionto the college crowd, the latter with the backdrop of deafening DJs, are all new, own-brand concepts that seem to be taking off. If they work, they will be rolled out around the country. If not, they will be closed. The pace of the consumer revolution in India is why Mr Biyani, whose retail infrastructure fund has attracted investment from George Soros, the billionaire financial speculator, visits one of his stores every weekend. “I am a little scared the market is changing,” he says. “Nobody understands all categories of the business today, so we are building up expertise.”

He admits to borrowing ideas from foreign retailers – a new loyalty scheme, offering instore credit and loans, is much like the Tesco Clubcard – but he constantly returns to the fact that everything must be distinctly Indian. “India is not an individualistic society. I never thought the Western way would work,” he says.

Still, he is leaving nothing to chance. It may be that he merely has first-mover advantage, so he has hired McKinsey to advise on his next move. He is also considering joining forces with a foreign retailer for a cash-and-carry venture to rival Wal-Mart’s alliance with Bharti Retail. “We need more scale and efficiency before the competition comes in,” he says – and then he is gone, peeling away to tell staff how to improve the flow of customers around the shop.

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