Re-tales from Traditional Indian Retail – The Sarvodaya Way
It was 11:00 PM. Chetan Sangoi (Sangoi) locked the store and looked up at the familiar building. It has been two decades since he took the reins of Sarvodaya and so many things had changed. Sarvodaya used to be a traditional brick and mortar store run by Sangoi’s family, whose offerings included groceries, dry fruits, spices, and personal as well as home care products. It was he who understood the potential of converting the once regular kirana (grocery) store into a modern trade retail store. After the conversion, in a mere span of 6 months, the revenue of Sarvodaya skyrocketed from US$ 51,000 per month to US$ 147,000 per month. Such growth is rarely seen in the Indian retail sector in such a short span of time. In the year 2017-18, Sarvodaya achieved a revenue generation of US$ 2.7 million.
Traditional Trade in India
Trade has been an inclusive part of the Indian economy since the medieval era. Earlier it was carried out with bartering system which slowly transitioned to unorganised retailing. And now India is on global map surpassing many economies in terms of retail growth, and omnichannel trading is spreading its footprints across the geography. After the economic revolution in 1991, India started allowing FDI in cash and carry wholesale from 1997. However, a government approval was required, which was later automated in 2006. Till then, the Indian retail market was unorganized and the value chain was dominated by traditional retailers and middlemen. The customers had limited options to choose from. However, many foreign players started entering the Indian market in the first decade of the 21st century.....
Indian retail Industry
India, being the world’s largest democracy, also surpassed France in the global economy in 2017. As per PwC’s report, India will overtake the UK by 2022 in terms of GDP. In 2018, India witnessed a GDP growth of 7.3% in 2018 and it is expected to grow on an average 7.5% per year till 2022. The retail sector of India accounts for more than 10% of the country’s GDP and approximately 8% of the country’s employment...............
Traditional & Modern Trade stores in India
Kirana store is a type of mom-and-pop store. In India, majority of kirana stores are run by family members. The beauty of kirana stores is that they have last-mile presence to the most interior parts of India where even basic services (like postal service) find it difficult to reach...........
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Inception of Sarvodaya
Sarvodaya Supermarket is a household name and a one-stop retail store for the people living in Dadar West (Mumbai). Situated on the busiest streets of Mumbai, Sarvodaya Store has its own story. Founded in 1900 by Damji Sangoi, as a 2,000 sq ft kirana store, Sarvodaya store was popular among local customers...........
Drivers of Strong Growth
Sarvodaya started its journey with the sole purpose of delivering the best value to its customers and be a one-stop solution to their day to day needs. The very fundamental driver of growth is treating the customer above everything. This philosophy has been embedded in all employees of the store..................
A) Deep understanding of consumer behaviour
Indian consumer follows a family centricity approach unlike that of the western consumer who is more individual-centric. The shopping for daily needs is almost always carried out by the Housewives and they consider the needs of their spouse, children and parents................
B) Meticulously planned offers and discounts
Keeping in mind the competition in the area, availing appropriate offers on products before the competition does is important. The offers availed are strategically designed either to boost sales or retain customers. Since sugar and oil are consumed by every customer regularly...........
C) Leveraging existing facilities and behaviour centric planogram
Mr Chetan believes in central decision making and decentralising the delivery, and, hence, very less inventory is kept. “The fact is that brands in India already have a fantastic distribution system. Maggi is available at Rohtang pass! So, you shouldn’t unnecessarily create parallel systems......
D) Flat and Performance-based Organisation Structure
Mr Chetan frequently asks the opinion of employees and encourage them for taking up more responsibilities. He believes in empowering his people. Ordering of regular...........
E) Technology and Digital Presence
The inventory and POS data are managed by a modular software ‘Retail Wiz’ for the past 20 years. There are several modules in it. For example, one module is dedicated to standard items like biscuits, shampoo. POS data directly linked with inventory data and when inventory..........
The Road Ahead
On his way to home, Sangoi is musing about the future of Sarvodaya. He knows that today Sarvodaya enjoys a larger pie of customers around Dadar and he takes great pride when customers are satisfied with the great retail experience at Sarvodaya..........
Assignment Questions
I. What is your understanding of kirana store and modern store? Which parameters one should consider while transitioning from kirana format to modern trade?
II. Which distinct characteristics have you observed in typical Indian consumer behaviour?
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IV. ...................
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Exhibits & Annexures
Exhibit I: Indian Retail Industry
Exhibit II: Typical Kirana Stores - Traditional Stores in India
Exhibit III: 28 Categories of Retail at Sarvodaya
Exhibit IV: Sarvodaya Supermarket: Valentine’s Day Theme
Exhibit V: Sarvodaya Supermarket – Stock Arrangement
Annexure I: Sarvodaya Supermarket Layout
Annexure II: Sarvodaya Supermarket – Location map and Picture