The Economic Times,  February 2003

     Shefali Srinivas

    A New brand of shops is mushrooming in India. Their right neon signs manage to stand out amidst Mumbai's urban clutter of store front signboard. And their message is simple

    Though the paradoxical concept of a bargain-yet-fixed price store is not new to the unorganized retail sector in India, this newly-packaged flashy version seems to be gaining in popularity.  

The new Breed of single price point stores aims to take the branding our of retailing

     Rex Mehta, founder and president of Dollarstore USA, says he's "impressed by the transitions made by Indian retailing in the last decade from a largely informal, disorganized marketplace to the increasingly corporatised industry that it is today." Dollarstore Inc is a privately-held company and franchiser of Dollar Stores around the world. Mehta, who believes his chain of stores will appeal to the very Indian concept of paisa vasool (value for money), says he aims for value, quality and to take the "branding out of retailing" .

Kishore Biyani, managing director and group CEO, Pantaloon Retail, says "the 'fixed-price' store idea has been around for years."It isn't new. But certain products were unavailable due to duty restrictions, and as they become procurable, you'll see more such Stores 

Can You Spare

A Buck?


According to Mehta the qualitative difference between the function and lifetime of products with differential pricing but similar usage is negligible. An acetaminophen is a painkiller, so is a Tylenol.  But the latter is a branded product, which somehow seems to suggest that it has a higher medicinal value. This is not necessarily true 

. This is not necessarily true. We offer the same thing for less than one third the price of Branded product. My vision of Dollarstore is based on deep discount retailing on a variety of products, so I work on taking the branding out of the retailing.

Mehta's approach may sound contrarian at a time when global brands are seducing the Indian market. It contradicts the basic definition of organized retailing which is built on growth and expansion of recognized national and global brands. As anti-branding maverick Naomi Klein writes, management theorists in the mid-1980s developed the "innocuous idea" that "successful corporations must primarily produce brands, as opposed to products." And as management guru Tom Peters exhorts, the idea is to "brand, brand, brand".


However, Mehta says most consumers are more discerning than retailers give them credit for. "Most know the extra price branded goods command and what that extra signifies. The world's most popular brands command high prices due to the value addition they signify, in terms of Quality, aspirational image and status that they  accord the wearer or user," he says
That means people would be open to the idea of buying good quality products at a decent price, even without a marketing blitzkrieg aimed at linking the product to an enhanced image of themselves.

 India's first Dollarstore, all set to open in Mumbai, occupies 2500 sq ft. The store would have Single Price point of RS 99. "These stores are aimed at the middle- and upper middle-class. But I also see it as being a store where your cook or maid can shop without feeling intimidated by the prices," Mehta says.

The merchandise mix he's picked includes food and beverages, cleaning products, kitchenware and bath products, party supplies, stationery and office supplies, health and beauty aids, school supplies, toys and videos, paper products and hardware. "About 95 per cent of the products would be foreign-made, but Indian and foreign-made products would be available at identical price points," Mehta says.

In India, while Dollarstore will install point-of-sale (POS) systems and invest in supply chain management, franchisees will have to pump in funds for interiors and staff. 

Mehta has set a target of around 60 outlets in major Indian cities in the next two years.