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United we stand: Rajkot
Chamber of Commerce's Bagdai (middle, both arms raised)
with local retailers |
Driving
into Rajkot's Dharmendra road, a down town shopping area, from Ahmedabad
on a recent afternoon, one doesn't expect to see too many people
in the streets. For one, Rajkot is a relatively small town (population:
1.35 million). For another, it's a weekday. But there's a third
reason, and the one that has prompted me to come all the way from
Delhi: Rajkot's traditional retail formats (for the sake of simplicity,
I will be referring to them as kiranas, or neighbourhood stores)
are under attack, and, no prizes for guessing, the culprit is modern
retail.
At this point in Rajkot's history, modern retail
boils down to just one mall, the Iscon Prozone Mall, anchored
by Kishore Biyani's hypermarket chain, Big Bazaar, and lifestyle
store Pantaloons. There are other retail chains as well, including
Subhiksha and Adani (now part of Reliance Retail), but these entered
the city only last June. Therefore, to say that the 400-year-old
city's mom-n-pop retailers are under attack may sound like a lot
of exaggeration. But talk to the small retailers, and they will
tell you-besides pointing to the empty streets-that they can already
see the writing on the wall. "My shop is 40 years old and
we sell utensils and crockery of reputed brands like La Opala,
Borosil, Coral, and Diplomat, but ever since the malls started
selling cheap Chinese crockery and smaller brands that had never
entered the city before, my sales are down more than 20 per cent
over the last six months," laments Nayan Kotecha, a 29-year-old
who mans his family store in Dharmendra market. With more retailers
headed to Rajkot (see Destination Rajkot), Kotecha and his peers
have plenty to worry about.
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The big competitor: Big
Bazaar at the Iscon Prozone Mall |
But, then, don't forget that this is Gujarat
(Rajkot is about 218 km from Ahmedabad), and home to some of the
savviest business communities in the country. So, far from rolling
over and playing dead, Rajkot's kiranas, some 3,000 of them, are
coming together to take on modern retailers at their own game. A
brainchild of Rajkot Chamber of Commerce & Industry (RCCI) President
Hitesh Bagdai (who, in turn, roped in Delhi-based consultancy Technopak
to devise a strategy), the Rajkot experiment is both ambitious and
unique. The plan is really simple: Create an umbrella association
under which Rajkot's fragmented retailers can rally around and start
becoming more organised in terms of how they buy and sell, and how
they manage their inventories and customers. "I think the Chamber
is on the right track and if survival means getting together and
spending a bit more on marketing, I don't mind it," says Kotecha.
A question of survival it is, as Bharat Thakkar,
owner of Options, a four-storeyed branded-goods store in Rajkot's
tony shopping district, Dr Yagnik Road, has discovered. Come March
31, Options, Thakkar says, will see a 10 per cent drop in sales
over last financial year. The store's in-house merchandiser says
that he has had to change his sourcing points, as his customers
have become more brand-conscious with the advent of big retail
in the city. In fact, apart from losing customers, Thakkar has
lost employees as well to the bigger retailers. Others tell similar
stories. "With diminishing sales, I have almost halved my
sourcing and even removed the HLL Super Value scheme and started
keeping locally-made products to supplement my income, but I am
sure that with the Chamber's help, small grocers like me will
also be part of (the manufacturer's) promotional campaigns and
eventually get my customers back," says 43-year-old Raju
Bhai Manwani, who says sales are down for the first time in 23
years.
| GETTING ORGANISED |
| If you can't beat 'em, join 'em,
say Rajkot's kiranas. |
The Front-end Plan
All the 3,000 small-time retailers plan to rally under one
shopping mall or complex, and offer modern facilities such
as food courts, ATMs, and entertainment (gaming)
The Back-end Plan
Do collective buying to increase the negotiating powers
of small retailers vis-à-vis the bigger, modern retailers
Wooing Customers
Offer same quality, hygiene and service levels as modern
retailers, while continuing to do things like home delivery
Sharing Logistics
To reduce infrastructure costs, create common warehousing
facilities, database and connectivity, besides common parking
facilities
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The Rise of 'Small-Marts'
To start with, the Chamber plans to develop three
market clusters in the first year. The first cluster to be developed
will be in the old areas of Rajkot, comprising the three parallel
markets of Dharmendra Road, Lakhajiraj Road and Gheekanta Road,
which also happen to be the oldest market lanes in the city. Here,
the shops range from tea shops to garment/saree shops to those selling
electrical appliances. The Rajkot Municipal Corporation (RMC) has
already widened the roads here and although the complete makeover
will take some time, the vendors are excited about the project.
"When conceptualised, this will give us the scope to not only
retain our customers but also become a shopping centre as attractive
as the malls," says Sarju Karia, who runs a hosiery store,
Liberty, in Dharmendra market.
| DESTINATION
RAJKOT |
| A handful of malls is to open
in the city by the end of 2007. |
Iscon Prozone Mall
Operational, 170,000 sq. ft (Pantaloon and Big Bazaar)
Reliance Mall
200,000 sq. ft
Crystal Mall
150,000 sq. ft (Anchor: Croma)
Iscon Mega Mall
200,000 sq. ft (Westside)
Ozone Mall
100,000 sq. ft (PVR) |
The second cluster to be developed would be at
Dr Yagnik Road and the third at Kalawad Road. These clusters will
be developed like any other shopping complex, with street furniture,
decorative lighting system, systematic billing and hygienic food
outlets. There will be common sourcing and warehousing of goods,
common advertising, marketing and below-the-line activities and
a single identity created via common designs and colour schemes
for all stores on the street. All stores in this model will have
a unique identity and shoppers would be given discount coupons
on purchases from any shop on the same street (see Getting Organised).
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Prabhudas K. Tanna's saree shop is three
generations old. He fears he may lose customers once branded
saree stores come to town |
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