Even as organised retail in cities slows, some firms say that business in rural areas is maintaining a steady growth of 20-25%. Vikram Shriram, vice-chairman and managing director of DCM Shriram Consolidated Ltd that operates 300 rural outlets in eight states, spoke in an interview of the challenges, aspirations and evolution of the rural retail market that accounts for almost 40% of India’s about $300 billion annual retail business. Edited excerpts:
Rural penetration: DSCL’s Vikram Shriram thinks the budget has inspired the Hariyali business model to improve further on. Ramesh Pathania / Mint
How the latest budget being viewed by a rural retailer like you?
The budget certainly gives us further encouragement that there will be further money going into the rual India and that will increase the buying power of rural India. It will improve the business plan and improve the business case of the Hariyali business model. So it gives us further encouragement. We already have strong plans and we are committed to the business.
What is your roadmap for the coming months?
One is increasing the penetration of our agri-advisory. We are beefing them up and we are focusing on that in a very big way. Second is increasing our product range and third is improving our systems, processes and back-end—getting them in a much more robust way. But the focus is agri-advisory.
We provide information about weather, mandi (market) prices for different crops, but much more important than that is agronomy practices. Every store and outlet has a trained agronomist whose only job is to advise the farmers. In the larger outlets there are two or three people and in the smaller outlets there is one person. Their job is to advise the farmers how to improve his yield, how to improve his product quality and ultimately, how to improve his profitability.
The underline theme of Hariyali Kisaan Bazaar is to improve the profitability of the farmers. We believe the last-mile delivery of agronomy is the missing link today in India. We have seen that on the ground through our interaction with farmers through our many businesses, whether its sugar, agri-inputs, fertilizers or hybrid seeds. It’s the last-mile adviceon a package of practices.
You have been doing it for several years. What are the results?
We have seen that this is creating an impact. We have seen its actually improving the profits of the farmers. Its actually creating a stickiness and creating a reason for the farmers to come back to Hariyali. Otherwise, it’s just another store.
But this is one place they know that they will be given the right advise—not just we have a particular product which has a higher profit margin. We tell them this is the chemical you should use and there are three brands available and you choose what you want. We tell them, for example, this is the time when north-west India is going through a severe drought-like condition.