Kishor Biyani : Disruptive markets needs more than a roaring

In 2010, when I did markets most of the distributors complained why cash and carry had an advantage over them. That we were not being fair in giving different pricing structure to Modern trade ( MT ) and general trade (GT). Back then retail was supposed to be the new buzz in town. The story of retail, was assumed to be a wave of glory. A good talent drain happened from manufacturing companies in retail sector to retailers like Walmart, Bharti, ABRL etc. Shopkeepers feared their existence.

Half a decade later we can say speculations went grossly upside down. Modern trade ran into losses. Their heavy expansion plans came to a halt.Cracking tire 2 and 3 was a hard nut. Malls had become an air-conditioned hangout place rather than a shopping paradise. Retail could never figure out how to get it right. Counterfeit, tax evasion, non-accounting gave GT a lead. They rode on the brand and the status equity for a while but eventually most brands were made available in local shops too.

Even before GT Vs MT results were out a third player jumped into game. A valuation bubble or a genuine flow of traffic e-com created disruption in market. Certainly organized retail was the first to lose. No one knew that some business like this could exist hence no one made a regulatory law when it was e-com. Working capital, smart accounting and heavy discounting with the easy of ordering killed what was left.

Meanwhile GT learned few tricks of trade. They offered credit which neither e-com nor retail do unless you have a credit card.WhatsApp proved to be a another spot on tool of GT. A vegetable seller could send images of fresh veggies of day with pricing to his regular customers.He would home deliver orders without a platform like infrastructure.Why was MT with best of talent so slow to adopt?

MT must admit they were too slow to adopt.Why didnt D-mart allow telephonic order? Or why could they never make it easy for you to check in and check out? Every time you safe lock my bag it felt you don’t trust me.Every time I stop at billing counter you waste my time. On the other hand e-com came up with bar code scanner. So you could visit any retail store try a dress, take a bar code picture on your cell phone and order online for a better deal.

Biyani is roaring like a tiger on the media on his aggrieve plans. But where are the actions? And what made Modern trade such laggard in innovation? An app for Big bazaar in 2015 and not in 2010 ? I certainly feel they underestimated the power of technology. It is quite a late reaction though in the right direction.

The big miss in entire show is neither retail nor e-com has looked into the importance of supply chain as a competitive advantage. While pricing or a brand quo can give you initial traction a sustainable business has to give best value to its customers. Wining them does not necessarily means not making profits. It can also mean that you be so efficient at every leg of your chain that you can retain margin and customers with your differentiated value.

The debate on the competitive advantage of technology Vs supply chain is unending till we see a clear winner. But creating a classy chain needs decades of process set up. Technology on the other hand is a fast pace game. Quick results and quick replication. Biyani is hence ferocious to threaten technology. He has signed up to copy the technology, beat the heat and match the game.

Munching Balaji chips (Ohh!! they too are a copy but better value than their expensive airy concept ) I am watching the match at a distance.Ohh the space is getting hotter.