Retail chains are gearing up with new concepts to capture increased footfalls. Retail chain Savemax is focusing on the platform of being a wholesale warehouse for the end consumer. Vaibhav Singhal, managing director, Savemax, talks about the chain’s expansion plans and how the retail trade will co-exist with the online format.
Q: What led to the diversification from family business of commodity trading to retail especially in a challenging environment?
A: We have been in the commodity business for almost seven decades now. The changing market dynamics makes all commodities trading business very cyclic even after trading in multiple commodities. The idea was to create a model that is sustainable and scalable as well.
Also, it should give an opportunity to create a powerful brand. Retail fits all of the above and is a natural extension to our existing business as well.
As for support from environment, we took it positively. All supposedly larger players were in a correction phase. This gave us a good window to set foot and come in reckoning. Also, since the venture was funded by our internal accruals, we need not have looked out for support.
Albeit, much needs to be done to make the retail environment an even playing field for all stakeholders.
Q: What are your expansion plans?
A: From a current retail footprint of approximately 1 lakh sq ft, we plan to cross seven lakh sq ft by the end of FY 2017-18. This would give us approximately 20 to 25 stores with an average size of 30,000 sq ft. We are in the process of opening one store each in Ludhiana and Mohali this month. While we plan to focus on North India for few initial expansions, we are studying North-East, West and Central parts of India as well for business opportunity. Along with this, we also plan to get into an omni channel strategy which would mean launching more channel verticals as well. We are looking at a total fund deployment of over Rs 200 crore during this period.
Q: What is the wholesale club concept?
A: Wholesale concept is where the end user of a product gets all the benefits of wholesale rates without any restrictions. Once this benefit gets limited only to members then it forms a club.
Though we were initially looking at a club model, we realised it is too early for India. While we bring wholesale benefits to all consumers, we may look at club once the markets are ready.
Q: What kind of traction are modern retail stores getting?
A: The evolving buying behaviour of the consumers is moving them closer to the so called modern retail. More as “Retailtainment” is taking over the overall shopping experience. It is now up to the retailers to evolve their models further to adjust not just to the evolving environment but to the incremental footfalls as well.
Simultaneously, traditional retail is also learning new skills to increase efficiencies.
We believe that it is not fair to categorise markets as traditional and modern. They are simply markets or trade. It is all about bringing the best benefits to the end consumer. All formats have their own USPs. All formats shall coexist.
Q: How do you see the competition from the online format to brick and mortar retail model?
A: Early days as the online models have to still evolve to justify costs. No businessman would endlessly fund losses. We have tied up with a number of online players who source from us.
This helps us add more customers in our kitty. Also, the markets are big enough for all formats to co-exist and thrive.
Q: What led to the diversification from family business of commodity trading to retail especially in a challenging environment?
A: We have been in the commodity business for almost seven decades now. The changing market dynamics makes all commodities trading business very cyclic even after trading in multiple commodities. The idea was to create a model that is sustainable and scalable as well.
Also, it should give an opportunity to create a powerful brand. Retail fits all of the above and is a natural extension to our existing business as well.
As for support from environment, we took it positively. All supposedly larger players were in a correction phase. This gave us a good window to set foot and come in reckoning. Also, since the venture was funded by our internal accruals, we need not have looked out for support.
Albeit, much needs to be done to make the retail environment an even playing field for all stakeholders.
Q: What are your expansion plans?
A: From a current retail footprint of approximately 1 lakh sq ft, we plan to cross seven lakh sq ft by the end of FY 2017-18. This would give us approximately 20 to 25 stores with an average size of 30,000 sq ft. We are in the process of opening one store each in Ludhiana and Mohali this month. While we plan to focus on North India for few initial expansions, we are studying North-East, West and Central parts of India as well for business opportunity. Along with this, we also plan to get into an omni channel strategy which would mean launching more channel verticals as well. We are looking at a total fund deployment of over Rs 200 crore during this period.
Q: What is the wholesale club concept?
A: Wholesale concept is where the end user of a product gets all the benefits of wholesale rates without any restrictions. Once this benefit gets limited only to members then it forms a club.
Though we were initially looking at a club model, we realised it is too early for India. While we bring wholesale benefits to all consumers, we may look at club once the markets are ready.
Q: What kind of traction are modern retail stores getting?
A: The evolving buying behaviour of the consumers is moving them closer to the so called modern retail. More as “Retailtainment” is taking over the overall shopping experience. It is now up to the retailers to evolve their models further to adjust not just to the evolving environment but to the incremental footfalls as well.
Simultaneously, traditional retail is also learning new skills to increase efficiencies.
We believe that it is not fair to categorise markets as traditional and modern. They are simply markets or trade. It is all about bringing the best benefits to the end consumer. All formats have their own USPs. All formats shall coexist.
Q: How do you see the competition from the online format to brick and mortar retail model?
A: Early days as the online models have to still evolve to justify costs. No businessman would endlessly fund losses. We have tied up with a number of online players who source from us.
This helps us add more customers in our kitty. Also, the markets are big enough for all formats to co-exist and thrive.
