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Organised retailing in slums!

Sunday, 12 August 2007 - 10:36am IST | Agency: PTI

Kishore Biyani,who changed the country's retail landscape through unconventional ways, is taking a step further by tapping the potential of urban slums.

NEW DELHI: Kishore Biyani, whose Future Group changed the country's retail landscape through unconventional ways, is taking a step further by exploring possibilities of tapping the potential of urban slums.

On the heels of setting up neighbourhood new format stores named KB's Fair Price shops, the group is toying with the idea of taking retailing to the bottom of the pyramid in urban areas -- the slums.

According to sources, the group recently conducted a study on Mumbai's slum dwellers detailing out their lifestyle, earning and spending behaviour, consumption pattern and attitude toward shopping destinations and brands. With eight million out of Mumbai's 12 million population living in slums, the potential of retailing in those areas appeared very big.

When contacted, a Future Group spokesperson confirmed it had conducted a study to understand the market potential of slum areas. "However, there is no concrete plan as such on whether to enter this space or not at the moment. We were just exploring possibilities," the spokesperson said.

If it finally decides to open stores in slums, this will be yet another innovative method from Future Group which changed the rules of retailing with throwaway prices at its Big Bazaar chain of outlets.

Industry sources said the study was a natural extension after the group charted out plans to set up 1,500 new format fair price neighbourhood shops over the next two years at an estimated investment of up to Rs 200 crore.

The fair price stores will sell leading brands of around 300 essential items at a rate almost 10 per cent cheaper than the market price and the local brands up to 20 per cent less.

The Future Group study of Mumbai slums focused on migrants, who are involved in a variety of vocations such as milkman, car washer, watchman, maid and vegetable vendor.

These migrants account for about 60 per cent of the population that provide all the services in the city.

The study found that the populace there considered fancy shopping destinations to be far off requiring a full day's preparation, besides having the mental block of being charged extra for "the drama".

Cost of travelling, coupled with the feeling of being among strangers and the apprehension of kids' reactive demands also deterred them from going to modern stores.

With brands enjoying the novelty value, those selling in sachets and small packets were the most successful in the slums, the study found.

The retail market, which is completely dominated by unorganised players, has already evolved into mostly fixed price shops highlighting tempting price points.

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