From the Shoulders of Giants - Other Views on MT

Not posting any major stuff today - just a few links discovered after googling "Modern Trade blog" - (alas, this one still does not feature in the top two pages even now !! ) 

This one shares an overall perspective on MT and its evolution. It also shares a Technopak estimate of how MT is expected to grow in the next 5 years. I sense that Technopak has taken a quite a punt on the MT contribution to retail environment in 2018. Its been some time since the FDI bill was passed in whatever distorted form, and there does not seem to be much enthusiasm in the industry going by the lack of announcements of either new entrants, or new partnerships. Its analysis of the 2008 and 2010 years also seems retro fitted basis actual events. So, my take - highly optimistic number - slim chances of materializing. 

The other one here is possibly an answer to why the Technopak number may turn out to be the aforementioned punt. It narrates a shopper's comparison of her experiences at a neighbourhood kirana vis-a-vis the modern trade supermarket, and could, possibly, hold a nugget of insight - the shopper will  not  compromise on convenience !! It also brings to mind David Ogilvy's famous words - "The consumer isn't a moron; she is your wife".  And I am pretty sure there are people in the industry who have already realized this, and are shaping their organization's strategy accordingly.

Lastly, I loved Mr Nitin Paranjpe's candour and awareness of HUL as an organization, when he makes a few observations on the importance of modern trade and how HUL adapted to it - see here

A "Convenient" Truth..

I have been saying this for some time now that franchisee led expansion of the convenience store format seems to be the only way to get Modern retail closer to shoppers. 

I have talked about KBFP's franchisee programme here. 

Seeing this article on my Linkedin timeline today made me feel strangely Nostradamus-like ! 

While KBFP had announced the launch of the franchisee programme nearly 9 months ago (Aug 2012 to be precise), there had been no indicator of any movement on this till now.

This article mentions that the group is looking at opening up a 1000 new stores in the next 2  years ! These stores will come up in Delhi, Bangalore and Mumbai. 

Going with the assumption that a kirana store caters to around 500 persons, and assuming a minimum of 1.5 crore population per city, the TT outlet universe would be around 40,000 stores. 

330 new ones on a base of 40,000 would barely register ! 

But if played smartly, I think this strategy could work.

The new stores could be launched by locality. Select the target localities (those with the right shopper profile)  and saturate the larger ones first. This would ensure a few things - 
1) Operational stability - it would be easier to serve more shops in selected locations rather then spreading oneself too thin.
2) Greater visibility and impact within selected locations.
3) Creation of pull - once the concept clicks with shoppers, the stores would start getting feedback. This could aid the decision to expand. As the trade starts to see merit in this, KBFP would get more requests and greater enrollment.

The rural experiment is another game changer in store - and FMCGs will be quick to see the value that this would add to them - significantly lower distribution costs, and reach to new consumers are the most obvious benefits! 

Let's see where this round of crystal ball gazing ends up !