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Subhiksha
The first Subhiksha store was opened in Tiruvanmiyur in Chennai in March 1997. Today, the chain has about 164 outlets in Tamil Nadu and Pondicherry; its turnover has reached Rs 224 crore. "At Subhiksha, we provide value to the shopper," said its Managing Director R Subramanian in an exclusive interview to Sify.com.
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Excerpts from the interview:
Tell us how you started Subhiksha.
I decided to get into discount retailing after a lot of research. In the mid-nineties, our finance business was doing well and we were having plans to diversify. We studied two options, retail and software, and eventually zeroed in on the former.
We were encouraged by the findings of a survey we had conducted to study the retail market for groceries in Chennai.
Among other things, we found that customers were conscious of the distance of the store from their house, availability, quality and price of branded groceries. People did not seem to care what kind of a shop they bought their groceries from and whether it was air-conditioned or not.
We cannot blindly mimic what they do in the United States. The way we shop here is very different from what exists in the US. In the US people measure distance in time. For them hundreds of miles is couple of hours drive. Their purchase power and lifestyle are also very different.
For example, take the milk-buying pattern of the two cultures. Many families here have the habit of buying milk everyday. There are families that buy milk two times daily, both in the morning and evening. But in US people have one week's stock of milk in their fridge.
The first Subhiksha store was opened in Tiruvanmiyur in Chennai in March 1997. It became a huge hit. Thereafter, we started to expand rapidly. Today, we have about 164 outlets in Tamil Nadu and Pondicherry and we have reached a turnover of Rs 224 crore.
What is the future of discount retailing?
Worldwide discount retailing of groceries is the fastest growing sector. Groceries constitute the largest component of human expenses. There are 15000 grocery shops in Chennai.
If you have to stand out in the crowd and draw customers, you need to give value to the customer. That's where this concept proves useful.
At Subhiksha, we provide value to the shopper. You have the feel of an Indian shop but you get added value like high-speed transaction, lesser price, free home deliveries, etc. We have not spent money on developing frills like ambiences at the shop. All the same we keep the place clean and hygienic.
We want to cater to the middle class segment, who constitute the majority of shoppers.
What is your driving mantra at Subhiksha?
There are two ways of looking at retail business. You could either choose to make higher profit and do less business or aim at less profit and more business. I decided to do volumes. When we do more volumes we get a better deal from the suppliers.
Have you ever tried online selling?
We had tried it some two years ago but discontinued it due to poor response. The site was doing well in terms of page views and we were getting about 20000 page views per day. However, a very small percentage was turning into business. We were doing about Rs 6 lakhs per month.
What are the weaknesses you have identified in the Subhiksha chain of stores?
We are not perfect. There are certainly things that people complain about us. One common complaint is unavailability of products. This happens due to different reasons and we are constantly striving to fulfill customer expectations in this regard.
Another complaint is the crowd at our stores. The crowds are even bigger at festival season. Our Deepavali firecrackers discount sale is very popular among the public.
During last Deepavali season I was passing by one of our stores in Chennai at 11.30 pm and found it crowded. The next morning when I was again passing by that way at around 7.30 am there were already quite a few men hanging outside the shop, reading newspapers, waiting for the shop to open.
Are you happy with your growth?
We are steadily growing. In 1997-98 we were making a turnover of Rs 12 crores and a profit of Rs 10 lakhs. In 2003 it has grown to Rs 224 crores turnover and Rs 3 crores profit. We have major plans in Karnataka where we plan to open 40 stores in Bangalore in the next nine months and another seven stores in Mysore in the same period. In all we want to open at least 250 stores by 2005.
How do you spend your free time?
I work hard. I usually work from 8 in the morning till about 10 in the night. I don't work on Sundays. It is the only day I get to spend with my family. I relax at home reading or listening to music.
What is your vision?
We want to emerge as the largest retailer in the 'Food Grocery Pharmacy' segment in all the geographical regions we operate from.
Who are the people who have inspired you most?
Mahatma Gandhi and Mother Teresa
P C Vinoj Kumar |
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