The Retail Remix

Last weekend was about entrepreneurs! Its become some kind of a habit for me to spend a day each week with startups. Saturdays turn out to be the best days. VC’s, and PE’s are winding down their mad travel schedules…a bad economy is a great time to place medium to long term bets! Entrepreneurs, usually a self-obsessed, jittery lot, try to consciously stop to breathe in intoxicants other than inhaling their own exhaust fumes.

So a friend said, there’s a new chai bar we must stop by. He was impressed with the name and signage, and the fact that a man was wearing the sign- walking signboard style- in the parking lot of the market.

So we went, the place which had opened just a month back had a new paint and furniture smell mingling with the North Indian conception of chai- Karak ( Strong) with a whole load of spices and boiling milk. I instinctively said, this place is gonna rock, noticing the offer of free wifi and a few creative individuals sitting with their Macbooks open.

Question: How do you make out a creative individual? If it’s a man, he’ll either have a shaved top, with a stylish beard, preferably with thick shell spectacles. If it’s a woman, she’ll have tattoo ink peeking out, and neon accessories. Both will carry a backpack.

So, we go over, pore over the menu and decide a few samplers, my friend is a member of the city’s gourmet club, and takes his role seriously, and after the customary Facebook food shot, FourSquare Check-in and Twitter shout out, we start looking around, trying to guess how much this startup might be making. Suddenly, the Barista slides across a sampler, this is a mini-sandwich with bread and Maggi. I detest the wheat on wheat combination, would rather have a straight-laced BLT, but they don’t have it on their menu. So, I invite the young 20-something to join us at the table, and ask him what? How? Why? When?

It seems the coolest thing today at IIT Delhi is to do a startup. Young man here, got into an online education startup with 3 friends straight out of college. The venture lasted less than a year. They had over estimated interest in better results, and hadn’t worked out the gestation period and funding. So, this chai bar is a second venture. Not really! Another college senior had started this concept at another location, our young friend joined in as a founding team member to lead this outlet. And the work description includes,

  1. standing as the billboard man at the parking lot, when business is slow,
  2. Getting behind the counter and helping folks discover their favorite concoctions and snacks
  3. Experimenting with the menu- its all on the blackboard, there is no printed menu yet
  4. Managing the money and orders, and the staff

So you’re the CEO of the Galleria branch? I ask. There’s a sheepish grin, and then follows the spiel, how QSR ( Quick Serve Restaurants) are growing in the down cycle, and how folks are investing, and how they have been speaking to angel investors and VC’s to get a look into a new concept. Tea costs INR 41, in a clean paper cup, with Starbucks kind of markings on the side, with free wifi and climate control airconditioning. The 20-cover outlet does 100 tickets a day, which is good for an outlet less than a month old, and about 20 yards from the nearest street corner chai shop which sells chai, as above, on small plastic ( food-grade?) cups at INR 6, alongwith everything else, you’d expec

Later that night, am at a party with large MNC CEO’s, and other C-suite folks, HR consultants, and the conversation veers around to the economy. How bad is inflation? Are marketers spending? Will things change post ( regime-change?) elections? I notice the two PE’s in the room looking smug. PE One just concluded a valuation discussion, and though he isn’t saying, things probably went very well. A down economy is one where entrepreneurs spooked by the falling cash flows, will happily discount future earnings a lot more to get some investment through the door.

PE Two has just invested his own money on a fish retail venture, and is smiling even more broadly. He hands out a card complete with Google map location, and Facebook Page. I ask him what makes a FMCG and Retail honcho decide on opening a Fresh Fish outlet, and he shares the market size numbers. Chicken or poultry is a INR 30K Crore business, while fish is INR 100K Crore. Poultry is highly organized right down to consumer retail, fish is still sold in an unorganized ( ala Unhygienix) way. And I participated in the dream of organized modern retail replacing the neighbourhood fishmonger, just as I heard of the IIT Delhi alumni planning to replace the chaiwala.

If these entrepreneurs succeed in changing the hearts, minds and spending patterns of India’s consumer masses, So what will the chaiboy or the fishmonger do now? A leading newspaper group has an answer. They ran a very high decibel ad campaign on how reading, writing and `rithmetic can make a chaiboy into a server at an organized retail chain. A transformation that could lead to a 10X growth in low-skill income!

So are these entrepreneurs engaging with such prospect employees, and is that leading the change? If the successful experiments of Costa Coffee and now, KFC, in hiring hearing and speech challenged workforce in new retail outlets is an indication, India’s large population of low-skill workforce might just be the beneficiary of this wave.

What does that mean for the traditional street chai vendor, and the fishmonger? As real estate gets more organized, the space for the farmer’s market, the unorganized, mucky space where one would go and test negotiating skills, not to mention, ability to check for freshness of produce via all five senses and a sixth one, reading the retailer behind the counter, is about to become passé. The last time I checked, the street side paratha, sandwich and chai joint had been cordoned off for a fresh block of apartments, and the old fresh produce market is now a swank office complex. One of the chai vendors have become a real estate broker, and served me his special chai at his new office, the fishmonger who hailed from Bengal, I heard has gone home and is now supplying bricks to construction firms.

So finally, just one unanswered question? Why hasn’t education, and its easiest delivery model- online, or its wildly popular version MOOC ( Massively Open Online Course) with brands like Coursera not played out here yet? That way, the IIT Delhi and FMCG Honchos could be adding new layers to the economy rather than trying to replace, at high cost, the old ways of doing things, and impacting traditional livelihoods. Could it be that education in India needs a massive makeover, starting with values, ethics, behaviours first, followed by skills, vocations, and professions?

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This entry was posted in entrepreneurship, Jay Vikram Bakshi, Jaywalking, marketing, money, social enterprise, sustainability and tagged , , , , , . Bookmark the permalink.

2 Responses to The Retail Remix

  1. Vinay Rao says:

    What a waste of tax-payers’ money and years of quality education if an engineer has to start a chai outlet, no matter how swanky it is. If Tea and brewing were his passion, his knowledge is instead better invested in creating the perfect brew via a machine, low enough in cost that tens of thousands of street side chai vendors take micro loans to buy it, and overcome issues of productivity, consistency and hygiene. As for ‘Fresh fish, it’s luverly’, I hope that he is able to overcome the logistics nightmare that is this country. I’m most intrigued by the supply chain that high end fresh catch demands. I’ve often thought that the answer would be a mobile app where the fisherman advertises his catch (lady crab, etc) with an image, for immediate auction, to those who man the ice trucks, even before his boat is back to shore. And who will in turn auction them to the stores and restaurants before the break of day. I can’t see the outlet itself being ‘organised’ without a robust back-end.
    The MOOCs will make it anywhere, once the professors find the time to make and edit interesting videos. It is great visibility for them too (no more books to write?). I’ve met Andrew Ng and the work they are doing is fascinating, even if the final purpose and business model are not evident now. As for India, the internet infrastructure is not there yet (Imagine watching a lecture on a 2.2″ screen phone on a 2G connection) for those who really need it.

    • jvbakshi says:

      Well put, Vinay! Sometimes, I wonder why we buy the ‘feel good’ internet and entrepreneurship will change our lives stories, when basics like power, bandwidth, and transport infra, are still decades behind?
      And education seems still reserved for the elite, even at a time when India needs to create 10 million new jobs each year, or lose its youth to separatist and insurgent movements.

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