With an aim to have 50 outlets in India by 2020, METRO Cash and Carry India Pvt. Ltd, the Indian enterprise of the world’s largest wholesaler, sees the country as one of the top markets to focus on.
In order to achieve the geographical footprint target, the German wholesaler recently opened its second store in Delhi on 15 October, taking the total number of the company’s wholesale stores in India to 19.
Besides physical stores, the company is also looking at the online space — a first for METRO worldwide — to reach and serve a wider consumer base, Rajeev Bakshi, managing director, METRO Cash and Carry India, told Indiaretailing.
The company has started a pilot called METRO Direct on October 9 in Bangalore. It is an online service that allows existing customers to order non-food items online.
“Rather than a pilot, we would term METRO Direct a prototype. Since we only launched the portal as a test on October 9TH, it is still too early to evaluate or comment on its performance,” said Bakshi.
METRO is following what its rival Walmart India Pvt. Ltd has already done. In July, the local arm of the American retailer announced that it has brought all its 20 wholesale stores in India to its e-commerce platform called www.bestprice.in that enables small businesses to place orders online to get products delivered at their doorstep.
Elaborating further on India as one of the important markets for the company, Bakshi explained,”We are continually evolving towards a more profitable business model every year in the Indian market. This is based on three main factors: (a) a more nuanced understanding of our customer segments – such as small kirana stores and the HoReCa sector; (b) a sharpened and finely targeted product offering; and, (c) a unique cost efficient sales format designed to suit Indian business needs. All this is built on quality and innovations in the supply chain and our continual investments in employee training. This has worked very well for METRO in the Indian markets, which make the country a sustainable growth engine in our portfolio.”
METRO invests anywhere between INR 60-70 crores in each new distribution centre and the size is determined on the basis of localised market strategy, customer catchment area and the specialised assortment intended for that customer base.
To achieve the target of 50 stores, the company is looking at cities with a population of 1 million or more, Bakshi informed.
“Any city that has a population of 1 million or above is a suitable market for METRO to enter. Having said that, ours has been a top-down strategy, fortifying our presence in existing markets and strengthening the supply chain in these clusters so we can expand in a sustainable manner.”
The company entered India in 2003 and operates 19 wholesale distribution centres aross Bangalore, Hyderabad, Mumbai, New Delhi, Kolkata, Ludhiana, Jaipur, Jalandhar, Zirakpur, Amritsar, Vijayawada and Indore. METRO Group operates more than 2,200 stores in different formats such as hypermarkets, wholesale, electronics and department stores in 32 countries.