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Rediff News  All News  » Business » Local firms in rural retail thrust

Local firms in rural retail thrust

January 24, 2007 01:14 IST

At a time when Indian retail has caught the fancy of global players such as Wal-Mart and Tesco, domestic companies have lined up investments of over Rs 5,000 crore for setting up rural retail chains.

With more than 60 per cent of the country's 109 crore population concentrated in rural areas, companies do not want to miss the growing business opportunity.

Most of them made their rural foray in 2002-03 and, enthused by the initial success, have drawn up expansion plans. DSCL, for instance, opened its first Hariyali Kisaan Bazaar store in 2002 and the annual revenue per store has jumped from Rs 1.5-2 crore to Rs 5-6 crore.

These stores are offering the same kind of goods and services to rural consumers as available to their urban counterparts, and that too at competitive pricing. They sell everything, from pesticides and fertilisers to loans and radio sets to TV sets.

ITC's Choupal Saagar has 12 stores in rural areas of Madhya Pradesh, Uttar Pradesh and Maharashtra. 

"Larger investments in infrastructure -- physical, social and institutional -- leading to higher rural income will drive the growth of rural retail," said S Sivakumar, chief executive of ITC's agribusiness.

"Our unique selling proposition is that Choupal Saagars are an integral part of the unique two-tier hub-and-spoke architecture where the village level eChoupals operate as spokes while the Choupal Saagars operate as hubs for a cluster of eChoupals. As a result, our interaction with the rural customers is year-round. Together eChoupals and Choupal Saagars improve incomes and bring quality products and services to rural consumers," he added.

DSCL has plans to go national with HKB, even as it aims to transform them into complete rural malls, "a one-stop shop for farmers as well as their family", as Ajay S Shriram, chairman and managing director of DSCL, puts it. At present, DSCL has 50 HKBs in Rajasthan, Punjab, Haryana, Uttar Pradesh, and Uttaranchal.

Triveni Engineering & Industries' Khushali Bazaar has 33 stores spread across UP and Uttaranchal.

"The rural customer is demanding superior quality products and services. A customer sitting in UP has the same exposure to a product or service as a customer sitting in Delhi," said Tarun Sawhney, vice-president of Triveni Engineering. Godrej's Aadhar has 31 stores in Maharashtra, Gujarat, Punjab, Haryana, Andhra Pradesh, Orissa and West Bengal.

"Our aim is to build capabilities among the rural folk in two way -- by improving agricultural productivity and making same quality products available to them as are available to urban consumers," said C K Vaidya, chairman and managing director of Godrej Agrovet.

On competition in the sector, Vaidya said, "There is no question of competition. India has 6 lakh villages. Even if one store caters to 20 villages, the country still needs 30,000 such stores."

Apart from these players, rural retail has also attracted Tatas who are present with their Kisan Sansar stores and Mahindras who have opened Shubh Labh stores.

Ajay Modi in New Delhi