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3A Bazaar

by Sagar Gubbi last modified 2008-01-14 13:58

Organized retail in rural India

‘Retail’ is the new tale to tell in India nowadays. Organized retail has been the business buzzword in India for the past 3-4 years and every big Indian industrial house has made a foray into retail. Mumbai-based Future Group was among the first to make a successful foray into retail, with its chain of lifestyle (Pantaloons) and supermarket (Big Bazaar) shopping malls. There have been a spate of new chains coming up recently, most notably the Reliance Group’s Fresh and Jewellery outlets, the Tata Group’s Star India Bazaar and the Aditya Birla Group’s ‘More’ hypermarkets. Everyone seems to be in a tearing hurry to cash in on this retail boom before global majors like Walmart, Tesco and Carrefour make their entries into India. There are several other smaller and niche chains too. However, as with all high growth industries in the past, the retail industry has ignored rural and semi-urban India so far. Or, so I thought until I found out about 3A Bazaar.
 
3A Bazaar is India’s first mobile retail company which was launched in early 2007. The company is owned by the Paramount Trading Corp Pvt Ltd, an exporter of metal handicrafts and primarily operates in the Jyotiba Phule Nagar district of Uttar Pradesh in Northern India. The company is the brainchild of Mr. Asad Shamsi, who was inspired by a few similar retail chains in Europe. ‘3A’ represents the first letters of the names of the three Shamsi brothers, all of whose names begin with ‘A’. Before starting 3A Bazaar, Mr. Shamsi conducted extensive research in rural India and found out that India’s rural population does have disposable income, but not regularly. However, value for money, good quality and a product’s criticality were some of the factors that were to be considered. There are about 5 vans which carry goods worth 2-2.5 lakhs of rupees everyday from Mr. Shamsi’s storehouse to about 700 villages in JP Nagar district. However, most of the villages are visited weekly or fortnightly or monthly. This fits with the irregularity of incomes of villagers and the mobility eliminates the drawbacks of a static rural retail shop. The daily average sales are in the range of 8-10 thousand rupees and Mr. Shamsi is looking at increasing the size of his fleet. It will be very interesting to follow the progress of 3A Bazaar.
 
Meanwhile, Tata Nano, Tata Motors’ ambitious Rs. 1 lakh car ($2500), was launched at the Delhi Auto Expo last week, amid much fanfare. Even though doubts remain about safety and environmental impact of the ‘people’s car’, coming out with a full-fledged car at this price is an achievement nevertheless.

RE:

 Posted by Rakesh Kumar Gopchandani at 2008-01-20 12:40

This is Rakesh from across the border. I was curious as to what is the comparison of prices of the goods sold on 3A Bazaar trucks to those available via conventional nukkad-shops (corner-stores) in villages?

Prices

 Posted by Sagar Gubbi at 2008-01-23 11:32

Rakesh,

As far as I know, 3A Bazaar offers all its products at prices equal to or lesser than those at kirana shops in villages. I don't have any specific figures at the moment, but, given the business model of 3A Bazaar, I think it is possible. I will try to get some comparitive figures for you.

Sagar

3A-bazaar

 Posted by Poornima Raj at 2008-01-30 11:34

This is Poornima.

Just curious to know about the kind of stuffs promoted by 3A-Bazaars 'coz many a times even in the petty shops its hard to find our own Campco or Amul chocolates whereas one can find all flavours of Nestle and co.

3A Bazaar

 Posted by Ahmed Khan at 2008-04-01 06:54

As far as I know 3A Bazaar is selling it's products in very less margin in intrest of rural market and they are also doing social activites like eye camps etc...

Tata needs to sell 30,000 Nanos a month

 Posted by mahemallmal M mall at 2008-08-01 03:25

A Mint poll of six analysts yielded a median figure of 32,500 units a month, or 390,000 cars a year—some 56%more than the firm's start-up capacity of making the small car. The highest estimate was 45,000 a month and the lowest 20,000 a month—the range indicating the analysts' view of the mix of the various variants of the car.

The car's trial production at the Singur plant could begin this month or in early August

A big jump in raw material prices since development on the vehicle first began in 2003 and company's decision to hold on to the Rs1 lakh price at the factory gate are huge factors in fixing profitability, they said. All said that the car was unlikely to contribute to the company's fiscal 2009 results, typical when new models are introduced by a car maker. “The break-even depends on the realization and product mix,” said Vaishali Jajoo, analyst with Angel Broking Ltd, Mumbai.

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