Lalit Agarwal established V Mart Retail in the year 2002. The company made its foray into the retail sector in October 2003 by opening its maiden showroom in Ahmedabad. As of now, he has successfully driven the business to have a 150 crore plus turnover and have a presence with
57 fully-integrated stores in 44 different cities spread in an area in excess of 400,000 square feet. Agarwal speaks to DARE about his entrepreneurial journey, and shares his knowledge about the industry
How would you describe the genesis of V-Mart Retail?
My family has been in the business of retail since 1975. I formally entered the business in 1999. I come from the same family as RC Agarwal of Vishal Retail, who is my first cousin. We started our business from Calcutta, and we were among the first ones to enter the market in an organized fashion. We saw slow but steady growth in our business, which I believe happened due to us being very open to implementing innovations, such as bar-coding products, being a fixed price shop, opening up a chain of stores etc.
In 2003, we realized that we were not thinking on same lines, and we decided to part ways. That is when I started this retail chain called ‘V-Mart’. We opened our first store in Ahmedabad, Gujarat in 2003, and since then we have not looked back. Our store is basically a mini-hyper-mall kind of a model, wherein each of our stores is approximately 10,000 square feet, catering to the middle class segment of the market, and mostly women and kids. We also nurture the aspirations of the middle class and have top-end products with us. By doing so, we have always had wide horizons on X-axis as well as Y-axis.
Our group started its corporate journey with a mission to bring quality garments within the reach of the common man. We have a huge product line that lives up to our punch line “Sabse Sasta Sabse Achcha” (cheaper than all others, better than all others), wherein we try to get into the customers psyche, and make it a point to not charge any royalty, or offset product prices based upon the store location, and such. We offer products at the minimum margin and try to give the customers value for their money. As of today, we have 57 fully-integrated stores in 44 different cities spread in an area in excess of 400,000 square feet.
In your experience, what are the five key things that one has to keep in mind in the business of retail?
First and foremost, you need to identify what products you are going to deal in. When you zero in on that, ask yourself if you know what is the best way to source the product, price the product and display the product. Secondly, you should know where to sell these products, in terms of store location, as well as placement of the products within the store. Price is the third key thing to keep in mind. If you are targeting the masses, and even slightly overprice it, it will result in a lot of bad business. Also, you should know that you should arrive at acceptable price points of products, while keeping in mind things such as the investment that you have put in, and such. The fourth important element is to understand this Hindi phrase, “Jitni badi chaddar ho, utna hi pair fehlana chahiye” (spread your legs only as much as the sheets can accommodate). This is very important when thinking about expanding your business. The fifth and final thing is that you should put a lot of thought into knowing how to market your products, your brand, and publicize your chain of stores.
What products typically do not do well in your format of retail chain?
Almost everything that is out there in the market reaches the customers through a retail format. In our experience though, even though we have managed things very well, we have seen that electronic goods have not done all that well. Also, we have seen a similar thing happen with retailing footwear, which could have done much better than it has.
What is the one big challenge in the retail business?
Every entrepreneur in any segment of business will face various difficulties when they set up a business or try to grow the business. However, in retail, human resource is a big challenge. One does not require a lot of highly educated manpower, but you do want them to have good general knowledge, be street smart, have a sense of loyalty and be principled. As an entrepreneur, you should be very particular about how you want you handle your manpower and frame the HR policies that facilitate your vision.
Your first big taste of success?
The biggest success for me, I would say, was setting up our first store in Ahmedabad. This store was the first one in our venture and we were the first to enter in the markets in the west of India. We begun as an ordinary retailer in this category and we tasted grand success almost instantly.
Any mistake that you learned from?
Well, we had opened a store in Navi Mumbai, and that turned out to be a learning experience. This store did not do well at all. The reason behind it was wrong selection of place, wrong selection of market etc. The city itself is so large and just having one store out there does not really help in making your presence felt. This experience made me realize that one should not over estimate and enter markets that are not suitable for you or markets that you are not ready for.
Did you see a downfall in your business during the period of recession?
I would not say that I did not see a downfall of business. While the market has seen a lot of retail chains close down many of their outlets, we also had some of our outlets relocated. Now, relocation is a part and parcel of the business, and is not so much directly related to the slowdown of the economy.
One mistake, which in your opinion, any aspiring entrepreneur should avoid?
I would say one should avoid getting carried away with the existing business scenario. It is common sight to see people drift away into a mindset wherein they think that doing a business is all about investing some money, doing some marketing, giving out some discounts, and the business will flourish. The aspiring entrepreneurs should not be thinking so much about profitability, as much as about product line or services.
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