LOTS Wholesale Solutions, a part of the US $50 billion Charoen Pokphand Group (CP Group) and a wholly owned subsidiary of Siam Makro Public Company Limited of Thailand, has recently unveiled its first wholesale distribution centre in India at Netaji Subhash Place in New Delhi.
The newly-launched store will cater to over 50,000 registered members which include Hotels, Restaurants and Caterers (HoReCa), kirana stores, corporates, MSMEs and institutions such as government agencies, educational institutes and hospitals.
Spread over an area of 50,000 sq. feet, the LOTS Wholesale Solutions store is fully equipped with modern warehousing and storage facilities for its members. The company has adopted a 100 per cent FDI route to establish its operations in India under the name of LOTS Wholesale Solutions.
“We come with 28 years of experience in the B2B sector. Thailand and Indian market are very similar in terms of retail space as they both follow the same kiranas concept (known as Sho-Hauy in Thailand). CP Group also has a sizeable presence of 100+ hypermarkets in China. This has given us a good understanding of how to operate in difficult markets. We have also conducted a detailed research about this market and trends which has helped us formulate our strategy and adapt to Indian market conditions,” says Sameer Singh, Director Development and Expansion, Operations and Supply Chain.
Understanding India
With regulatory changes like GST, demonetization, RERA and the Make in India policy bringing about a higher organization on the Indian retail scene, there is no time like the present for retailers from across the world to venture into the country and invest.
“Our parent company, Siam Makro, has definitive explosion plans in the ASEAN region and owing to a positive regulatory environment, India was the first on our list. We see a lot of potential and the right type of investing and retailing environment in the country which is why we were ready to take the lead here,” says Singh.
“The India Retail Sector is poised to grow; it is the land of opportunities. India is also in-line with our 4.0 Makro opportunities that focus on providing employment to youth and support our customers through digital intervention. We also feel that we can contribute to the ever-growing HoReCa community with solutions that can positively impact their businesses. In India, since we are only focusing on the Cash & Carry segment, we have our entire force working towards achieving what is best for our customers, suppliers, and the company,” he adds.
According to various studies, India’s retail market is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015, driven by income growth, urbanization and attitudinal shifts.
There has been an overall growth of the Indian economy which has increased the purchasing power of the people in rural areas opening development opportunities for the companies to expand their presence. This offers a huge potential for Cash & Carry players to target B2B customers – like kirana stores – and catering to the rural audience.
Operating in the Indian Market
LOTS plans to source directly from local producers and suppliers and the focus would be to get the right product and best quality at the right price. It has even partnered with all major national and international brands across categories.
“Our product selection is based on detailed research that is specific to the region as well as the community. A critical element is to provide support to the home-grown brands – an essential component of our region-specific business strategy. Therefore, apart from engaging with international brands, we are working very closely with Indian brands and local farmers,” says Singh.
This approach is extended to the daily needs and grocery sections of the product range of LOTS as well. All efforts are made to source fresh produce from local farming community, which helps farmers earn better while reducing wastage during transportation and storage.
Apart from this, the implementation of GST has created a favourable environment for companies like LOTS that aim to establish and expand operations across India. It rubs off positively on supply chain efficiency, uniform assortment of goods and finally it supports end consumers.
Business Model
The core aim of the brand is to be close to the customers and enable them the convenience of bulk buying.
“Our parent company Siam Makro has evolved into seven separate store formats and we are bringing all these formats and this knowledge to India, ready to explore both large or small sizes and even multilevel sizes. We can look at 4,000 m2 or 5,000 m2 kind of sweet spots, which could help us at different levels. It gives us that excitement to be part of the catchment itself, otherwise we might be stuck on a certain format,” explains Singh.
LOTS follows a cluster approach. The brand sets up stores basis the supplier/ customer base so that they can provide them with a hassle-free experience and build a robust supply chain and make the delivery process faster.
According to Singh, LOTS offers solutions to member companies, which help them undertake a path of sustainable growth.
“We provide internationally-benchmarked quality products to our customers. We achieve that by controlling our processes at every step of the way, from sourcing to retail. Our stores provide products basis the local demand in a particular catchment area,” he explains.
“Our value-based prices and easy payment and delivery solutions offer unmatched convenience to the customers. We are also working towards creating an ecosystem that will enable Indian suppliers to ride on our distribution network and explore export opportunities,” he further adds.
Being Technologically Strong
Banking largely on technology, LOTS Wholesale Solutions, will be geo-tagging its customers for efficient deliveries, e-mark all products and electronically display prices and expiry dates on shelves, among other tech-enabled initiatives.
“We have started acquiring and registering our customers for our first store. We are geo-tagging them on a regular basis, which makes it efficient to allocate resources and save time,” says Singh.
Geo-tagging allows location information of longitude and latitude for accurate deliveries. LOTS had tied up with an Indian IT company for geo-tagging, which helps serve customers better.
Elaborating on their delivery mechanism, Singh says customers can either walk into the store to buy wholesale goods, call up the sales force for delivery to its catchment area of geo-tagged customers or order through a business-to-business e-commerce portal.
The company is planning to put bar codes and QR (quick response) codes on vegetables, fruits and poultry products, among others, to provide full information to customers.
“As in Thailand, we will put electronic traceability in products for quality assurance and trust factors,” he adds.
Explaining this, Singh says that by scanning those bar codes or QR codes a customer will know from which farm the product has come.
Additionally, like other LOTS stores in Thailand, the company electronically displays on shelves the origin of the product, its expiry date and price.
Strong Brand Ethos
The company brings specially curated assortments, categorised into food and beverages, kitchenware, household appliances, home decor, furniture, bedding, textiles, stationery and office supplies, electronic products and others; making LOTS Wholesale Solutions a complete one-stop shop.
At LOTS Wholesale Solutions, the main focus is on customers’ needs and satisfaction. The company offers a varied set of benefits to its members including a wide range of product selection at its stores, based on detailed research specifically catered to the catchment area and market demand. Through transparent pricing, round the year promotions, consistent product availability, customised last mile delivery and credit facilities, the company aims to provide a hassle-free shopping experience to its members.
Under its region-specific business strategy, LOTS Wholesale Solutions will provide support to home-grown brands and local suppliers. Fresh produce will be directly sourced from local farming communities, which will help farmers increase their income whilst reducing wastage during transportation and storage.
Omnichannel – The Way Forward
Since Internet has penetrated the heart of India, with e-commerce reaching remote areas where physical stores aren’t present, the online front is something most companies are looking to cash in on – and LOTS is no different. However, the brand will pay equal attention to customers who prefer the in-store shopping experience. Having an Omnichannel approach from day one opens all avenues of success for the brand in India.
“We have launched our e-commerce platform parallelly with our first store. We are starting off with a website and eventually launching an app,” says Singh, adding, “We are tech-enabling our sales force, so for each store we have dedicated number of employees, who will go out to the market and collect orders through Android devices.”
Exploring Uttar Pradesh
LOTS Wholesale Solutions has signed a memorandum of understanding (MoU) with the Uttar Pradesh (UP) government to open wholesale outlets in next three years in the state with a proposed investment of Rs 250 crore.
LOTS Wholesale Solutions expects to generate 1,500-2,000 direct and indirect employment within the state of UP through their stores. The company had recently announced their plans to launch 15 stores across North India in next three years with the first two stores to open in Delhi and Noida within 2018.
The next phase will see extension into other major cities of Uttar Pradesh such as Lucknow, Agra, Varanasi, Kanpur, Meerut, and Allahabad.
Talking about the plans for the state, Singh says, “Uttar Pradesh is one of the most progressive states in the country and we are keen to be a part of the initiatives that create a win-win for both states and businesses. This MoU paves the way for an extensive retail rollout by us which will provide multiple opportunities for small and medium suppliers to grow their business as well as Kirana and HoReCa segment who will receive service par excellence. We aim to work closely with local farmers to improve their yield and enhance quality of product through our global expertise.”
Singh underlines the company’s commitment to the state by saying, “Our first store will be rolled out in Noida this year and soon we will open stores across Lucknow, Kanpur, Varanasi, Allahabad and other cities in UP. Our stores will create jobs for the talented youth of UP and also impart trainings that will enhance their skills.”
LOTS Wholesale Solutions will establish special collection centres in key locations within the state of UP to source raw material from farmers directly and support local handicraft like khadi through manufacturing of uniforms etc. The company brings benefits of convenience aided by technology and digitisation, last mile delivery at competitive pricing for its customer base of HoReCa, traders and service customers.
Future Plans
Once the brand has established its presence in the northern region, it is looking at expanding to other regions of the country.
“We have committed Rs 1,000 crore over the next five years to aid our plans in India. Our aim is to become profitable in next five years,” concludes Singh.
