Zone-wise expansion

Your perception on the Indian retailscape

I think India has got to be the most attractive destination for the retailers. Every single economic number you look at points to the fact that India represents a large opportunity. Whether it is GDP growth, rising income levels, the stock exchange numbers, everything looks good. It is also a marketplace that has got a colour of optimism and optimistic consumer. And all of these spell good news for the retailers.

The difference in approach while leading Easyday from one during Hypercity days

 Eayday operates in a slightly different market environment and targets a slightly different customer. Hypercity is targeting SEC A customers; at Easyday we are looking down lower at the scale, and the other thing is that we are very much focused on everyday low price and delivering great value. So, I am not looking forward to any kind of a copy paste thing here.

Footprints enhancement strategy 

Our strategy is to open a big box in a city and then populate more small stores around them. So first we go for Easyday Market (the big retail format) and then surround it with Easyday stores. In some cases, the acquisition of the big box property has fallen slightly behind the smaller ones. Hence, we do have some areas where we have put small stores and there isn’t yet a big one. But basically, it is a geographical spread, so what’s happening till now is that we have targeted North India and we are actively seeking property in the West and the South. The reason is that it’s very difficult from the logistic perspective if you open one store deep in the South and the other store in the West. Getting products to them in this case becomes a challenge. So for us, it works better if we go to one geography at a time, rather than touch dots all over the place.

We have got 95 stores at the moment and we have a plan to introduce another 125 Easyday stores and 13 Easyday Markets by the end of this calendar year.

Rectification in the multi-layered distribution network

The infrastructure in India from the logistic perspective is quite tough. But the fact is that we have a very sophisticated delivery mechanism that has been working out over decades. But it is a very expensive one. The country’s manufacturers and suppliers have been delivering to over a million of kirana stores for decades now. There are multiple layers of distribution efforts that go on with products been handed to one distributor from another and then eventually to kirana.   The trouble with it is that it’s too long a process and is too expensive. The distribution cost in India is disproportionately higher, compared to the markets with a better infrastructure. So, it continues to be the biggest challenge and obviously we are trying very hard to minimise the cost of the same in order to keep the prices low.

The differentiator factor 

Easyday provides clean, hygienic, well-lit and easy shopping conditions. And most importantly, it provides everyday low prices. So, we don’t carry products at a high price and discount it for one day of a week. We have consistent everyday low price scenario. It gives confidence to the consumers so that they don’t have to check whether it is today’s price or tomorrow’s price or whether it’s a specific day of a week offering a better deal. So, there is a comfort to our customers that they will be paying low prices throughout the week.

The impediments actually hurting the interests of organised retail in India

Accessibility to the real estate is the biggest challenge. Very often, the real estate may have multiple owners. So, something as simple as signing a lease agreement with the owners could involve 20 to 30 different signatures. It is a challenge. And I think, getting through an infrastructure perspective, we have lots and lots of little pieces of space. I think, even some of the malls that have been constructed in the last 4-5 years is perhaps not going to work. We have seen some casualties of shopping centres and malls. So, that provides another challenge. Also, we have a couple of unique things in India. Like the mall developers selling the individual store to individual investor, which makes it really difficult to manage the property.

The groundwork for setting up a store

Firstly, we do some very detailed analysis of the demographics to understand the number of households, their level of income to understand the shopping habits and the competition. Our real estate team does a detailed analysis of every property that is proposed and then we make a decision as a team. Some senior executives also visit the potential site and give their views on that and then the senior management takes the call whether to go or not.

Marketing strategy

Our advertising and marketing at the moment is very geography specific and it is mainly in the form of leaflets that we do very frequently and the communication is very much along the lines of explaining the everyday low prices on the regular product.

The competition with so called kirana or mom & pop stores

I think we can very happily co-exist. The kirana will always have a very more personalised relationship with the consumer. They can stock products if any family wants it. They are very well equipped and know their customers personally and very well.  We will continue to work on the USP of selling products at everyday low prices in hygienic atmosphere.

Is Delhi one targeted city?

Absolutely. But again it’s all about finding the right real estate at the right price. You know, we have come through a phase of huge optimism amongst real estate developers around retail, and there was a period when some pretty crazy prices were being asked for. I think that will settle down now and will continue to settle down more as people will become more realistic. But certainly, we are looking for space in metros and Delhi in particular.