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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
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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".
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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.
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