There are a lot of favourable economic policies that have been implemented. Things like GST (Goods and Services Tax) are good for business, says Tanit Chearavanont, Managing Director of CP Wholesale India Pvt Ltd (LOTS Wholesale Solutions).
LOTS Wholesale Solutions, a 100 per cent subsidiary of Thailand-based Siam Makro PCL, which is a part of $50 billion Charoen Pokphand Group, recently announced plans to launch operations in India. The company operates in wholesale cash and carry segment. It is planning to open 15 wholesale distribution centres across North India with an investment of over Rs 1,000 crore in the next five years. Tanit Chearavanont, Managing Director of CP Wholesale India Pvt Ltd (LOTS Wholesale Solutions), in conversation with Business Today, discusses why it is the right time for the company to enter the Indian market.
Why do you think this the right time to enter the Indian market?
There are a lot of favourable economic policies that have been implemented. Things like GST (Goods and Services Tax) are good for business. We can actually think how we can structure our supply chain in an efficient manner, rather than based on whatever state taxes I need to pay for moving good. You also have the RERA (Real Estate Regulatory Authority) Act, which I think is beneficial for all players in the market, because it will help drive down the artificially high prices of real estate.
Many global players in the segment tried entering the market but quit and left after a while. What do you think will work in your favour?
The trends in Thailand are quite similar to India. We also have a large 'kirana' population. The way hotel-restaurant catering segment in Thailand has evolved, I am seeing that happening in India today. Coming from Thailand, we are dealing with very similar customer groups. And our 28 years of experience in the segment gives us confidence to invest in India, and replicate that success here. Obviously, the biggest learning here is how we replicate that success without just lifting and shifting - there has to be a proper localisation.
What changes are you bringing in to your services to adapt to the Indian market?
First of all, I am the only expat that has been dispatched here. Almost all our hiring is local talent. Because India is a tech capital, we are leveraging our technology solutions, which will make it easier and adaptive to the environment. Supply chain is another change, as supply chain in India is really different from everywhere else. We are trying to evolve and 'glocalise' it. For us, that is a critical piece. One factor for our success in Thailand is our ability to adapt. If you look at our first 10-odd stores, we have sales areas that range between 100,000 - 1, 20, 000 sq ft. Now, here we are opening much smaller stores that go down to even 1,000-2,000 sq ft. With that type of flexibility, I think, will allow us to be able to enter the Indian market.
How do you plan to overcome the challenge presented by e-commerce players in the country?
Omni-channel is the future. Taking that into account, we are doing a lot of tech-enabled things. For example, we are looking at setting up an e-commerce platform for our B2B customers. We are tech-enabling our sales force, so for each store we have dedicated number of employees, which will go out to the market and collect orders through Android devices, etc. Indian customers, you know, now-a-days are getting very used to the online front, so we cannot run away from that. Simultaneously, certain customers also still appreciate the store experience. Having an omni-channel approach from day 1 will allow us to be successful in India. We are actually looking at launching the e-commerce platform in parallel with our first store. We are starting off with a website and eventually launching an app.
How many employees do you have in India?
We have above 100 employees in our head office. Plus each store will have 100-150 odd people direct and indirect because these stores are large. So we will roughly hire about 5,000 people directly and indirectly.
Your first store will be launched in Noida?
We are deciding between Noida and Delhi. We have signed an MoU with the Uttar Pradesh government to work with them across various cities. It means we are committed to investing in UP on two fronts. One is opening stores, because Delhi NCR has two major cities that are part of UP -- Noida and Ghaziabad. Later, we would like to look at other UP cities -- Lucknow, Allahabad, and Varanasi. Another important aspect is that UP is also great place for sourcing. We are looking at setting up operations in UP in terms of store, hence, we have a commitment of Rs 250 crore to the government.
How large is the store being launched in Delhi/Noida?
We are looking at ranges between 30,000-45,000 sqft of sales area. We have only incorporated this company in January 2017, and are targeting our first store opening in July. In less than a year-and-a-half, we are already on track to open our first store. We'll lease it and about Rs 15-20 crore will go in the first store, plus stocks.
Where else are you planning to open stores besides Uttar Pradesh?
Initially, we'll focus on northern India. After Delhi NCR, we'll focus on the periphery states, including Punjab, Rajasthan, Haryana, and UP. Then we'll move towards the western part, eastern part and then the southern part, depending on the clustering.
Total number of stores you plan to open in next one year?
We'll open two stores in the next one year. But, we have plans to open at least 15 stores in the next three-four years.