Friday, October 05, 2012

Unusual occupations : Grocery shop owner

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. ..  

1 comment:

  1. Very good analysis of retail in India and lucid style of writing


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