Chottu runs Bhavana
general stores ,which is situated round
the corner from where we live. It is a decent sized grocery and general shop
that sells everything that one would need to run a day to day household
from milk to mosquito repellants all under one roof.
Chottu’s uncles and
relatives run many grocery shops all
around the city. When Chottu’s uncle invested in Bhavana general stores, the
only customers around the place were construction workers who had pitched their
tents and lived on the daily wages building out the apartments and houses in
the vacant plots around the area. This could have been around 10 years back. Ours is a locality that has seen abundance of construction and new development in the last 3-4 years thanks to being close to the IT hub.
The business model was
simple. Staples like rice, wheat flour, oil and pulses were available in as
little quantities as was required for two square meals a day till the next
daily wage arrived. Occasional credit was given if the customer found himself out of work for a day or two due to illness or
some other interruption. The margins were obscenely
high when you convert wholesale prices to retail prices in this kind of a
business model.
Over the last few
years, the constructions took shape and landscape changed. Dotted with
Apartments and some independent houses this concrete jungle is now a highly sought after locality to rent for the Tier 2 workers of the IT and BPO hub situated
just a few kilometers away from Bhavana general stores.
Chottu , unlike what
his name suggests is no more the little boy that he was when he freshly arrived
in Bangalore from Gujarat after failing his class 10 exams. He has grown up
along with the city. His uncle set up
and then handed over Bhavana general stores’ proprietorship to him as a part of
his family obligation in a joint family of five brothers.
Chottu’s father, the
eldest among them trades in wholesale pulses market at the Agricultural produce market
corporation ( APMC) in Navi Mumbai. He
procures his wholesale produce from Traders and farmers in Gujarat. His brothers
and their sons are all scattered all over India especially in bigger cities.
Chottu’s uncle is the
youngest of the five brothers and migrated to Bangalore much before it was
coined the silicon valley of the east. Over the years many of Chottu’s cousins
have apprenticed under him running grocery shops of similar kinds all over Bangalore
much the same way his other cousins have taken over or expanded family business
from their fathers, uncles and other relatives. Their's is a close knit large family with firm
traditional roots.
There are few
customers of Bhavana’s who are now construction workers. Most of them have
moved away to other construction sites after construction work dried up over
here. In keeping with times Bhavana has
also changed its looks and the way it deals with customers. We moved into this
area about 3 years ago when about 50% of the vacant plots were still under
construction. About 700 meters from the
corner where Bhavana’s is situated, is Hypercity, the one of its kind
supermarket that stocks up international
brand items including packaged foods from the Marks and spencer. When we looked out for a place to shop for
our monthly groceries the choice was between Reliance fresh, Hypercity and
Bhavana general stores.
While I would have
chosen a Reliance fresh, if not
Hypercity, my parents chose Bhavana General stores. They were a product
of the 1970’s India when being frugal was not so uncool , but a neccessity.
Having been used to huge supermarkets abroad I have explained to them many time over that it is a
myth that a big supermarket like Hypercity or Reliance fresh would sell their
products any more expensive than Bhavana general stores. If anything, their
mass volumes made up for their bargaining power with suppliers and things were
bound to be cheaper in supermarkets than at small corner shops like Bhavana.
Like with many other
things we have agreed to disagree on
matters where we think it is a ’generational gap’, with them firmly rooted in
their age old wisdom and me in my new age exposure of how things will come to
shape over the next few years in a more modern India.
For example, a decent level of affluence
assures us not to have to depend on the ‘pay day’ and to
on anyday of the month for our monthly groceries. Yet my parents unfailingly draw up the
grocery list on the last of the month and order for it on the 1st of
the next month. (1970’s licence raj hangover) .
Chottu delivered our
monthly groceries at home this afternoon as unfailingly as he does on the first
of every month after he is handed over a hand written list jotted down by
my mother in the morning, handover over to him when my father ventures out for his morning
walk.
I asked him about what
he thought about the Foreign direct investment and impact on small traders like
him . In what ensued to be a 10-15
minute long talk was a much more insightful
conversation than what I had come to believe reading half a dozen
business magazines covering the pros and cons of FDI in retail in India.
For starters I did not fathom Chottu could have been known
by a more formal and respectable name like
Suresh Aggarwal . Everytime I
accompanied my mother for her ad hoc grocery shopping, she always reprimanded Chottu
for this and that… for not stocking up her favourite pooja item or for not attending to her as quickly as he
could have instead of ranting over on his mobile phone ever since he got engaged,
for keeping his shop closed on every amavasya ( new moon day) without caring for lost business or for not
keeping a strict vigil on the boys who worked in his shop ( there were many
more Chottu’s who were now his underlings).
He did not look the kinds who took her
rantings as serious customer feedback. Rather he behaved like he was used to
reprimands and nudges from matronly middle aged women who were old enough to be
his mothers.
Suresh and the rest of
the Aggarwal clan believe that while the FDI may change the retail landscape in
India, it does’nt worry them and they are confident their business model will
survive. He went on further to
say that the members of Aggarwal clan go out to survey products and costs at
the supermarkets all over the city.
While reliance fresh
or Big bazaar give the customer big discounts on onions and potatoes or other
such frequently purchased items, they make up for it by inflating the cost of
oil, pulses and grains like rice and wheat. The
not so smart customer remembers
the price of onions and potatoes she bought last week, but tends to forget the
cost of Toor dal, tamarind and Atta that she stocked up a couple of months
back.
My mother interrupts perhaps to prove a point here or may be
genuinely to corroborate the fact that, Tamarind is 26.50 in Reliance … whereas it
was 18 at bhavana last month.
That is a trick game
small traders like the aggarwals need to fight with the onslaught of Retail
giants like big bazaar and Reliance
fresh and the likes of walmart. ( I can understand Reliance and Big
bazaar , but I was surprised that a 10th
class drop out would mention wal-mart. For wal-mart is not even an existing
brand in india at this point in time. ).
He then went on to
explain how they differentiate themselves from the supermarkets.
Hypercity that is just
700 meters away from Bhavana , is situated at on the main road where you could only shop if you got your car
because no residential complex exists in its vicinity. Not all people own cars
and not all people who own cars might
want to take their cars out to buy themselves some adrak-mirchi from hypercity
.
At 7.00 am in the
morning when hypercity’s shutters are still down for stock taking, morning walkers, busy workers go to the corner shop like Bhavana's to buy doodh-dahi – adrak – mirchi in as small a quantity as they wish. This is how they establish customer relations. Once a customer trust is established and they
understand the value of the relationship, their business with the customer is a
repeat business.
Now my mother is
getting a little insecure and thinks he is getting a little headstrong. She
interjects saying she does have to worry about the cleaniless of rice or tamarind
at reliance fresh but there is every chance that the boys in Chottu shop will
palm off poor quality stuff onto her were she not very vigilant.
The Aggarwal’s or
other people who are into this business open their shops very early in emerging
areas where a supermarket will not get built for atleast ten years. They also look
at the kind of people who live in that area and choose to open their shops in
what modern day economists would categorize as an area with a demographic
profile of lower middle class / below
poverty line people. As affluence starts
kicking in, they would loose customers to big retail giants, but sooner or
later people would come back to them.
There exists an
abundance of population in this country that would do business with small shops
because their prices are competitive and they are more friendly. I would assume
he means flexibility with credit that shopkeepers like him would extend to
customers, affluent or otherwise which a more formal set up of a supermarket
cannot afford to extend.
I asked Suresh, if he
was not concerned about the money power of the retail giants that would help
them mass procurement and supply chain
networks that enable them to bargain and
get deep discounts directly from manufacturers .
He answered saying all
the money that they would save by direct dealing with wholesalers would get spent on overheads such as an airconditioned
infrastructure, till boys and girls, huge advertisements and other
overheads.
I got a feeling he was
being Naïve… but that could just be his lack of articulation. Afterall he comes from a family of
traditional businessmen whose diaspora is spread and firmly connected all
across the world.
He went on to add that
small shops like his can afford to remain competitive with their retail prices
because of their family and clan networks that enables them to have the supply
chain linked directly with traders and
producers. His father traded at the APMC, his uncles and other relatives
retail all over the country. Their shops may be small, but the collective
worth of their business is certainly not.
I asked him if he
would mind if I took a photograph of him for a blog that I was writing. Not very sure if he understood what I was
saying, my mother explained to him how I
wrote about all ‘non sense ‘ everyday things and put them on the internet along
with silly photographs for foreigners to see. :) ( That being a very inaccurate description of my simple passion for writing about everyday things ... i let it pass ... )
On noticing that he was very obligingly posing
for my camera, she once again nudged him saying his wife was going to give him
good when she saw his photograph on the internet.
Many times when that sullen, battered looking black woman swiped my card at the till
in the supermarket before finalizing my
purchases and wished me a mechanical ‘good day Ms. Gopal’ after reading my name on my credit card with
a plastic practiced smile, I would smile back at her, quickly read the name tag on her
uniform and give a reply ‘thank you Maria’ or thank you <name tag> … depending
on what the name tag read.
I realized today,
customer relationships could run far deeper than that. And it is not going to
be easy to break that away. ..