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Despite the setbacks in 2007, Reliance Retail has drafted new plans to open specialty stores in 2008
Much has been talked about Reliance Retail’s elephantine project and its aggressive expansion plans. But what most of us are unaware of is the fact that the Reliance strategists are set to create new and different kinds of splashes in the Indian retail market. Spearheading this movement is an astute thinker-performer, who is charting out a new road map for the group. Yes, after being browbeaten by political parties, and restricted by traders and shopkeepers who came out on the streets to oppose Reliance Fresh outlets in 2007, Reliance Retail’s President, Raghu Pillai, has decided to think afresh in 2008. He’s deft and determined, and in an exclusive conversation with B&E, this leader revealed his new mantras.
It was an early morning appointment on an exceptionally wintry day, but Pillai was dot on time. Punctuality may well be his middle name, because that set the tone of the interview. “I had to rush for this interview and I didn’t manage to have breakfast,” he confessed as he readied himself for a bite, and B&E’s questions. The first question that came to our mind was the obvious one: is Reliance Retail prepared for future challenges?
“Oh yes, and it’s not only our claims. Our statistical growth figure proves so. In spite of the baseless allegations against us, in a time span of just 13 months, we are present in 13 states and in 11 formats,” came the pat reply from Pillai. He believes that in the long run, no one can stop the Reliance retail juggernaut.
Bucked up with such confidence, he is testing the water for newer options. Since the most successful mantra for retail lies in creating a house brand, Reliance is trying the same. Affirms Pillai, “We will venture into new formats and, in the coming year, we will focus on creating our own brands as the margins are always high in one’s own brands. But, at the same time, we are also open to the option of having exclusive tie-ups with other brands.” So, what exactly is this grand Reliance Retail blueprint?
After having kickstarted Reliance Trend, which deals exclusively with garments, the company will get into four new segments. It will have specific and special stores that will either sell health and pharma products, jewellery, auto components and accessories, and home-related products and services. Without getting into too many details, Pillai claims that all these specialty stores will be up and running by 2009 or the beginning of 2010. Reliance Retail will manage 580 stores of all kinds, and will present in all Indian states. The only doubt, say industry sources, could be in the case of Uttar Pradesh, where Chief Minister Mayawati has decided to stop the expansion of organised retail.
But then, all the retail players seem to eyeing exclusive tie-ups. And even giants from other sectors wish to enter the retail arena. And who knows how the protests against organised retail will pan out in the future? Tell Pillai all these, and his response is immediate. “There’s room for everyone to grow. When it comes to the protests from the kirana stores, I can’t recall any small shop shutting because we are operating in a particular state. However, now we are also focusing on collaborations with people involved in the supply chain, like farmers. This time, our rural initiatives are more full-fledged as we are testing the water to uplift the social status of the villages where we will be operating.”
Clearly, Pillai is experimenting with ITC’s e-Choupal-like model. But the shrewd Pillai will strategically avoid those villages, where the tobacco major has expanded its arms. Obviously, Reliance doesn’t want to ruffle too many weathers, especially the corporate ones.
In addition, before the Bentonville beast Wal-Mart, comes to India, Reliance Retail hopes to spread it wings in every nook and corner of the country. However, Pillai denies that his company is worried about Wal-Mart. Reliance’s plans, he says are a part of its growth strategy. In fact, Pillai doesn’t wish to follow Wal-Mart’s economical-pricing model. “We don’t want to become the Wal-Mart of India, and we have never made such punch lines on pricing. We believe in giving the best quality at the lowest possible price. At the same time, our products should match with the tastes of the consumers. In retail, two things are necessary – understanding consumer behaviour and having a strong supply chain. Success depends on these two parameters as the space-layout problem is a macro problem, which has to be faced by all players,” elaborates Pillai.
In fact, Pillai is optimistic about his team. He believes that in a venture like retail, one needs to have a sturdy and experienced team as a lot of collective decision-making is required. “You can’t be autocratic in a business like ours, and we might start our day a bit late, but we work six days and we know what our responsibilities are. As a leader, the focus should not be on how many hours people spend in office. Rather, it should be to help people take up responsibilities,” explains Pillai. A true leader cannot be created by digesting management theories, and Pillai’s philosophy is that a leader is born through circumstances and that there’s no definition of an ideal leader. So when asked about his ideal leader, he refused to comment: “In our organisation, we are motivated to take risks, whether we are a leader or not. We are buyers for execution and no post mortem is done. So, in Reliance, there is always some sort of projects happening.”
In spite of activities in the Mumbai head office, Pillai knows how to find time for personal life. This workaholic leader does take time out to devote time for his family. “My family is in Chennai, and I manage to meet them on week-ends. I am happy with my work, and this happiness helps me to manage things earlier. I start my day with swimming, and I often mange time to go for holidays or adventure,” comments Pillai.
The opposition to organised retail is not deterring the expansive plans of Reliance Retail. It’s into a nascent mode, but is brimming with potential and hopes to back in action soon. “We have got our plan and we are making sure we offer different and value added services to consumers. We will develop the country’s best supply chain,” promises Pillai. It seems to be a noble cause that can also reap rich benefits for the company. As we bid him goodbye, he said that Reliance’s efforts will result to a radical change in retail and it will emerge as the country’s largest retail organisation. “The concept of marketing is going to change in India as lots of revolutions will happen. As the country’s socio-economic status improves, there’ll be new changes in India. What is good for consumerism is something that no one can stop,” predicts Pillai.
B&E edit bureau: Angshuman Paul
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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