For large retailers, catering to the tastes of 45-60% of a 1.2-bn market makes sound business sense and leading players are brainstorming over this model.
HYDERABAD/MUMBAI: Call it a mall revolution for the masses. If an idea currently being toyed by retail giants fructifies, India’s huge middle- and lower-class population will have something to cheer.
And why not? If retail stores start selling TV sets at Rs 40 per week or, for that matter, kitchen mixers at Rs 10 a week, the hoi polloi are going to be the ultimate beneficiary.
For large retailers, catering to the tastes of 45- 60% of a 1.2-billion consumer market makes sound business sense. Leading players in organised retail are currently brainstorming over this retail model for the middle- and lower-class.
The proposed model will cater to drivers, maid servants, hamalis, rickshawalas and slum-dwellers in the mini-metros, besides those in Tier-2 and Tier-3 markets.
One may be tempted to term it bottom-fishing, given that the idea originated from C K Prahalad’s book, Opportunities at the Bottom of the Pyramid. The format seems to be an Indianised version of the successful Brazilian Kasa Baiya and Mexican Electra retail models.
Speaking to DNA Money from New Delhi, Harminder Sahni, consultant with KSA-Technopark, said: “The retail model in discussion is a format very successful in the western countries and I won’t be surprised if Indian retailers are looking at introducing it in the country. The said market segment is highly promising and it’s all about creating consumption. A very apt example to cite here would be the pre-paid mobile telephony market, which has changed the face of mobile communications in the country.”
While industry experts confirm that there are over three Indian retail majors toying with this idea, they refrain from disclosing names, citing confidentiality clauses. DNA learns that the Kishore Biyani-promoted Pantaloon Retail India Ltd is one of them.
Elucidating the approach in detail, Pantaloon Retail chief Biyani believes that the Indian consumer market can be divided into two - India one, comprising the affluent haves, and India two, the underprivileged and the hitherto ignored masses of the populace. Presently in the design stage, Pantaloon’s next big push will address this market.
“While most of the players are currently targeting ‘India one’, it is actually ‘India two’ where the big opportunity lies. It is just a question of putting money into their hands and they will buy whatever they need,” said Biyani.
So, to that extent don’t be surprised if you come across retail stores that start selling TV sets at Rs 40 per week or for that matter kitchen mixer at Rs 10 a week.
The immediate question then is how different will the model be from the current hire purchase or loan schemes given out by the various consumer durables outlets?
“Well, the difference is that none of these sections have bank accounts and, thereby, do not lend the comfort of security. Therefore, everything sold to them has to be on trust,” said Biyani.
Asked if the company was seeking to expand into the villages through the new model, Biyani affirmed that adopting the format had nothing to do with addressing the rural or the urban populations.
Biyani said that he has already decided what will it be called and how large it will be. But no more details. All that he is ready to say at this moment is, “the new chain will kick off with an urban focus addressing slums and such conglomerations of the target customers,” he said. If that’s sure to happen, details can certainly wait.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}