LOTS to Open 15 Stores in In­dia Over Three Years

LOTS fol­lows a clus­ter ap­proach. The brand sets up stores ba­sis the sup­plier/ cus­tomer base so that they can pro­vide them with a has­sle-free ex­pe­ri­ence and build a ro­bust sup­ply chain and make the de­liv­ery process faster…

Images Retail - - CONTENTS - – By Charu Lamba

LOTS Whole­sale So­lu­tions, a part of the US $50 bil­lion Charoen Pokp­hand Group (CP Group) and a wholly owned sub­sidiary of Siam Makro Public Com­pany Lim­ited of Thai­land, has re­cently un­veiled its first whole­sale dis­tri­bu­tion cen­tre in In­dia at Ne­taji Sub­hash Place in New Delhi.

The newly-launched store will cater to over 50,000 reg­is­tered mem­bers which in­clude Ho­tels, Restau­rants and Cater­ers (Horeca), ki­rana stores, cor­po­rates, MSMES and in­sti­tu­tions such as govern­ment agen­cies, ed­u­ca­tional in­sti­tutes and hos­pi­tals.

Spread over an area of 50,000 sq. feet, the LOTS Whole­sale So­lu­tions store is fully equipped with modern ware­hous­ing and stor­age fa­cil­i­ties for its mem­bers. The com­pany has adopted a 100 per cent FDI route to es­tab­lish its op­er­a­tions in In­dia un­der the name of LOTS Whole­sale So­lu­tions.

“We come with 28 years of ex­pe­ri­ence in the B2B sec­tor. Thai­land and In­dian mar­ket are very sim­i­lar in terms of re­tail space as they both fol­low the same ki­ranas con­cept (known as Sho-hauy in Thai­land). CP Group also has a size­able pres­ence of

100+ hy­per­mar­kets in China. This has given us a good un­der­stand­ing of how to op­er­ate in dif­fi­cult mar­kets. We have also con­ducted a de­tailed re­search about this mar­ket and trends which has helped us for­mu­late our strat­egy and adapt to In­dian mar­ket con­di­tions,” says Sameer Singh, Di­rec­tor Devel­op­ment and Ex­pan­sion, Op­er­a­tions and Sup­ply Chain.

Un­der­stand­ing In­dia

With reg­u­la­tory changes like GST, de­mon­eti­sa­tion, RERA and the Make in In­dia pol­icy bring­ing about a higher or­gan­i­sa­tion on the In­dian re­tail scene, there is no time like the present for re­tail­ers from across the world to ven­ture into the coun­try and in­vest. “Our par­ent com­pany, Siam Makro, has de­fin­i­tive ex­plo­sion plans in the ASEAN re­gion and owing to a positive reg­u­la­tory en­vi­ron­ment, In­dia was the first on our list. We see a lot of po­ten­tial and the right type of in­vest­ing and re­tail­ing en­vi­ron­ment in the coun­try which is why we were ready to take the lead here,” says Singh.

“The In­dia Re­tail Sec­tor is poised to grow; it is the land of op­por­tu­ni­ties. In­dia is also in-line with our 4.0 Makro op­por­tu­ni­ties that fo­cus on pro­vid­ing em­ploy­ment to youth and sup­port our cus­tomers through dig­i­tal in­ter­ven­tion. We also feel that we can con­trib­ute to the ev­er­grow­ing Horeca com­mu­nity with so­lu­tions that can pos­i­tively im­pact their busi­nesses. In In­dia, since we are only fo­cus­ing on the Cash & Carry seg­ment, we have our en­tire force work­ing to­wards achiev­ing what is best for our cus­tomers, sup­pli­ers, and the com­pany,” he adds. Ac­cord­ing to var­i­ous stud­ies, In­dia’s re­tail mar­ket is ex­pected to nearly dou­ble to US$ 1 tril­lion by 2020 from US$ 600 bil­lion in 2015, driven by in­come growth, ur­ban­i­sa­tion and at­ti­tu­di­nal shifts.

There has been an over­all growth of the In­dian econ­omy which has in­creased the pur­chas­ing power of the peo­ple in ru­ral ar­eas open­ing devel­op­ment op­por­tu­ni­ties for the com­pa­nies to ex­pand their pres­ence. This of­fers a huge po­ten­tial for Cash & Carry play­ers to tar­get B2B cus­tomers – like ki­rana stores – and ca­ter­ing to the ru­ral au­di­ence.

Oper­at­ing in the In­dian Mar­ket

LOTS plans to source di­rectly from lo­cal pro­duc­ers and sup­pli­ers and the fo­cus would be to get the right prod­uct and best qual­ity at the right price. It has even part­nered with all ma­jor na­tional and in­ter­na­tional brands across cat­e­gories.

“Our prod­uct se­lec­tion is based on de­tailed re­search that is spe­cific to the re­gion as well as the com­mu­nity. A crit­i­cal ele­ment is to pro­vide sup­port to the home-grown brands – an es­sen­tial com­po­nent of our re­gion-spe­cific business strat­egy. There­fore, apart from en­gag­ing with in­ter­na­tional brands, we are work­ing very closely with In­dian brands and lo­cal farm­ers,” says Singh.

This ap­proach is ex­tended to the daily needs and gro­cery sec­tions of the prod­uct range of LOTS as well. All ef­forts are made to source fresh pro­duce from lo­cal farm­ing com­mu­nity, which helps farm­ers earn bet­ter while re­duc­ing wastage dur­ing trans­porta­tion and stor­age.

Apart from this, the im­ple­men­ta­tion of GST has cre­ated a favourable en­vi­ron­ment for com­pa­nies like LOTS that aim to es­tab­lish and ex­pand op­er­a­tions across In­dia. It rubs off pos­i­tively on sup­ply chain ef­fi­ciency, uni­form as­sort­ment of goods and fi­nally it sup­ports end con­sumers.

Business Model

The core aim of the brand is to be close to the cus­tomers and en­able them the convenience of bulk buy­ing.

“Our par­ent com­pany

Siam Makro has evolved into seven sep­a­rate store for­mats and we are bring­ing all th­ese for­mats and this knowl­edge to In­dia, ready to ex­plore both large or small sizes and even mul­ti­level sizes. We can look at 4,000 m2 or 5,000 m2 kind of sweet spots, which could help us at dif­fer­ent lev­els. It gives us that ex­cite­ment to be part of the catch­ment it­self, oth­er­wise we might be stuck on a cer­tain for­mat,” ex­plains Singh.

LOTS fol­lows a clus­ter ap­proach. The brand sets up stores ba­sis the sup­plier/ cus­tomer base so that they can pro­vide them with a has­sle-free ex­pe­ri­ence and build a ro­bust sup­ply chain and make the de­liv­ery process faster.

Ac­cord­ing to Singh, LOTS of­fers so­lu­tions to mem­ber com­pa­nies, which help them un­der­take a path of sus­tain­able growth.

“We pro­vide in­ter­na­tion­ally bench­marked qual­ity prod­ucts to our cus­tomers. We achieve that by con­trol­ling our pro­cesses at ev­ery step of the way, from sourc­ing to re­tail. Our stores pro­vide prod­ucts ba­sis the lo­cal de­mand in a par­tic­u­lar catch­ment area,” he ex­plains.

“Our value-based prices and easy pay­ment and de­liv­ery so­lu­tions of­fer un­matched convenience to the cus­tomers. We are also work­ing to­wards cre­at­ing an ecosys­tem that will en­able In­dian sup­pli­ers to ride on our dis­tri­bu­tion net­work and ex­plore ex­port op­por­tu­ni­ties,” he fur­ther adds.

Be­ing Tech­no­log­i­cally Strong

Bank­ing largely on tech­nol­ogy, LOTS Whole­sale So­lu­tions, will be geo-tag­ging its cus­tomers for ef­fi­cient deliveries, e-mark all prod­ucts and elec­tron­i­cally dis­play prices and ex­piry dates on shelves, among other techen­abled ini­tia­tives.

“We have started ac­quir­ing and reg­is­ter­ing our cus­tomers for our first store. We are geo-tag­ging them on a reg­u­lar ba­sis, which makes it ef­fi­cient to al­lo­cate re­sources and save time,” says Singh.

Geo-tag­ging al­lows lo­ca­tion in­for­ma­tion of lon­gi­tude and lat­i­tude for ac­cu­rate deliveries. LOTS had tied up with an In­dian IT com­pany for geo-tag­ging, which helps serve cus­tomers bet­ter.

Elab­o­rat­ing on their de­liv­ery mech­a­nism, Singh says cus­tomers can ei­ther walk into the store to buy whole­sale goods, call up the sales force for de­liv­ery to its catch­ment area of geo-tagged cus­tomers or or­der through a business-to-business e-com­merce por­tal.

The com­pany is plan­ning to put bar codes and QR (quick re­sponse) codes on veg­eta­bles, fruits and poul­try prod­ucts, among oth­ers, to pro­vide full in­for­ma­tion to cus­tomers.

“As in Thai­land, we will put elec­tronic trace­abil­ity in prod­ucts for qual­ity as­sur­ance and trust fac­tors,” he adds.

Ex­plain­ing this, Singh says that by scan­ning those bar

codes or QR codes a cus­tomer will know from which farm the prod­uct has come.

Ad­di­tion­ally, like other LOTS stores in Thai­land, the com­pany elec­tron­i­cally dis­plays on shelves the ori­gin of the prod­uct, its ex­piry date and price.

Strong Brand Ethos

The com­pany brings spe­cially cu­rated as­sort­ments, cat­e­gorised into food and bev­er­ages, kitchen­ware, house­hold ap­pli­ances, home decor, fur­ni­ture, bed­ding, tex­tiles, sta­tionery and of­fice sup­plies, elec­tronic prod­ucts and oth­ers; mak­ing LOTS Whole­sale So­lu­tions a com­plete one-stop shop.

At LOTS Whole­sale So­lu­tions, the main fo­cus is on cus­tomers’ needs and sat­is­fac­tion. The com­pany of­fers a var­ied set of ben­e­fits to its mem­bers in­clud­ing a wide range of prod­uct se­lec­tion at its stores, based on de­tailed re­search specif­i­cally catered to the catch­ment area and mar­ket de­mand. Through trans­par­ent pric­ing, round the year pro­mo­tions, con­sis­tent prod­uct avail­abil­ity, cus­tomised last mile de­liv­ery and credit fa­cil­i­ties, the com­pany aims to pro­vide a has­sle-free shop­ping ex­pe­ri­ence to its mem­bers.

Un­der its re­gion-spe­cific business strat­egy, LOTS Whole­sale So­lu­tions will pro­vide sup­port to home­grown brands and lo­cal sup­pli­ers. Fresh pro­duce will be di­rectly sourced from lo­cal farm­ing com­mu­ni­ties, which will help farm­ers in­crease their in­come whilst re­duc­ing wastage dur­ing trans­porta­tion and stor­age.

Om­nichan­nel - The Way For­ward

Since In­ter­net has pen­e­trated the heart of In­dia, with e-com­merce reach­ing re­mote ar­eas where phys­i­cal stores aren’t present, the on­line front is some­thing most com­pa­nies are look­ing to cash in on – and LOTS is no dif­fer­ent. How­ever, the brand will pay equal at­ten­tion to cus­tomers who pre­fer the in-store shop­ping ex­pe­ri­ence. Hav­ing an Om­nichan­nel ap­proach from day one opens all av­enues of suc­cess for the brand in In­dia.

“We have launched our e-com­merce plat­form par­al­lelly with our first store. We are start­ing off with a web­site and even­tu­ally launch­ing an app,” says

Singh, adding, “We are techen­abling our sales force, so for each store we have ded­i­cated num­ber of em­ploy­ees, who will go out to the mar­ket and col­lect or­ders through An­droid de­vices.”

Ex­plor­ing Ut­tar Pradesh

LOTS Whole­sale So­lu­tions has signed a mem­o­ran­dum of un­der­stand­ing (MOU) with the Ut­tar Pradesh

(UP) govern­ment to open whole­sale out­lets in next three years in the state with a pro­posed in­vest­ment of Rs 250 crore.

LOTS Whole­sale So­lu­tions ex­pects to gen­er­ate 1,5002,000 di­rect and in­di­rect em­ploy­ment within the state of UP through their stores. The com­pany had re­cently an­nounced their plans to launch 15 stores across North In­dia in next three years with the first two stores to open in Delhi and Noida within 2018.

The next phase will see ex­ten­sion into other ma­jor cities of Ut­tar Pradesh such as Lucknow, Agra, Varanasi, Kan­pur, Meerut, and Al­la­habad.

Talk­ing about the plans for the state, Singh says, “Ut­tar Pradesh is one of the most pro­gres­sive states in the coun­try and we are keen to be a part of the ini­tia­tives that cre­ate a win-win for both states and busi­nesses. This MOU paves the way for an ex­ten­sive re­tail roll­out by us which will pro­vide mul­ti­ple op­por­tu­ni­ties for small and medium sup­pli­ers to grow their business as well as Ki­rana and Horeca seg­ment who will re­ceive ser­vice par ex­cel­lence. We aim to work closely with lo­cal farm­ers to im­prove their yield and en­hance qual­ity of prod­uct through our global ex­per­tise.”

Singh un­der­lines the com­pany’s com­mit­ment to the state by say­ing, “Our first store will be rolled out in Noida this year and soon we will open stores across Lucknow, Kan­pur, Varanasi, Al­la­habad and other cities in UP. Our stores will cre­ate jobs for the tal­ented youth of UP and also im­part train­ings that will en­hance their skills.”

LOTS Whole­sale

So­lu­tions will es­tab­lish spe­cial col­lec­tion cen­tres in key lo­ca­tions within the state of UP to source raw ma­te­rial from farm­ers di­rectly and sup­port lo­cal hand­i­craft like khadi through man­u­fac­tur­ing of uni­forms etc. The com­pany brings ben­e­fits of convenience aided by tech­nol­ogy and digi­ti­sa­tion, last mile de­liv­ery at com­pet­i­tive pric­ing for its cus­tomer base of Horeca, traders and ser­vice cus­tomers.

Fu­ture Plans

Once the brand has es­tab­lished its pres­ence in the northern re­gion, it is look­ing at ex­pand­ing to other re­gions of the coun­try.

“We have com­mit­ted

₹1,000 crore over the next five years to aid our plans in In­dia. Our aim is to be­come prof­itable in next five years,” con­cludes Singh.

CP Group and LOTS Whole­sale So­lu­tion Lead­er­ship team with Thai­land am­bas­sador Chutin­torn Gongsakdi

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