He is no more in the army of Vishal Retail. However, he continues to claim the venture as his brainchild. He says he entered the arena at the age of 10 when his father, owner of a small kirana store under the name Vishal in Cuttack, Orissa, used to lay the responsibility of the store on his shoulders. What started at that tender age continued with an MBA in finance. He, along with his brother, Ram Chandra Agarwal, is termed as a pioneer of Indian retail story. In 2002, he parted himself from the Vishal family to start V Mart Retail. Meet Lalit Agarwal, managing director of V Mart Retail.
Today, V Mart is one of India’s leading value-retailers operating a chain of medium sized hypermarkets of 38 units across 32 cities in northern and western India. Currently covering over four lakh square feet of retail space, the company is moving ahead with a CAGR of 70 per cent. V Mart’s offering includes apparel, grocery, household items etc. Quite recently, the company relocated three of its stores and plans to open 35 more stores by the end of March ’10, hence taking its total retail area to 10,000,00 square feet.
IndiaRetailing (IR): What was termed as retail boom, less than a year ago, is now being considered as a replica of what happened to IT. Your comments…
Lalit Agarwal (LA): What is being seen today is because most of the players in the arena are treating the business in a step-motherly way. To be precise, those who joined the league with ‘me too’ concept have failed to create magic. One of the primary factors, I feel, is that it is not the core business of most of the players. Further, the selection of retail format, place, products or excess discounts can be counted as the other factors contributing to them being laggard in the race.
Meanwhile, technology may be an issue with those who are not performing well. For those who use technology from overseas, the problem persists in terms of maintenance as they are not local.
Also, unlike other countries, India does not enjoy a unified tax structure. MRPs are generally different for different states. Understanding the demography, besides the knowledge of geography and customs, plays a vital role in the success of a retail venture. At V Mart, we have different product offerings for different stores. That is because we take into account the varying customs and tastes of the particular regions where our stores are located.
IR: What is that one mistake at V Mart, that you think helped you to understand the industry?
LA: One incident I remember as a ‘learning’ occurred in our first store in a mall. This was a mall in Ahmedabad. Our opening in this property turned out to be a complete flop show for us, courtesy wrong tenant mix in that mall. Since then we never attempted to mark our presence in malls.
There was a huge hue and cry accompanying the advent of the mall culture in India. It was believed that malls would spell the death knell for high streets. However, high street areas continue to flourish, that too at a higher intensity.
IR: What’s your vision for V Mart vis-à-vis retail in India?
LA: Considering the scenario of retail in India, the neighbourhood store is here to stay. Studies have already proved that the Western model of retail cannot find success in India. Here, most modern chain retailers continued to expand aggressively, the result of such excesses is not hidden any more. The bigger you are, the more you are exposed to risk. Yes, we also wish to attain a store count of 100, but at the same time we want to stay grounded and proceed with wisdom.