Sahara India Pariwar Managing Worker & Chairman Subrata Roy on Monday announced his group’s entry into the retail sector was triggered by the increasing adulteration of food products in the country. By August 15, 60 cities in Uttar Pradesh, Uttarakhand, Rajasthan, Bihar and Jharkhand would house ‘Sahara Q Shops’.
Yet, later, Roy told Business Standard the move was also due to the increasingly stifling regulations in the financial sector. That is why Sahara has now decided to invest Rs 3,000 crore in a business that aims to capture 20 per cent of the Rs 27,50,000-crore Indian retail market in three years.
“We are so much active in the financial business. Now, I have started terming some of the regulators banning agencies, not regulators. If I had to start Sahara today, I would have probably reached a business of a crore or two,” he said.
Now, Roy hopes his retail model would deliver a monthly turnover of Rs 15,000-20,000 crore in the first year and a half, and up to Rs 40,000 crore once the entire network is in place.
Sahara’s retail foray is based on building a massive back-end support structure, which would eventually comprise 200-300 contract manufacturers and packers, 305 warehouses and encompass 10 million sq ft of space, said Sahara Q Shop Executive Director Romie Dutt. This would be used in tandem with about 60,000 stock-keeping units countrywide, which would house and then deliver the merchandise to consumers at their homes. The warehouses and the stock-keeping units would be a combination of the company-owned and franchisee models. There would be no stores per se, substantially reducing cost.
Dutt said though customers may visit these units for additional purchases, the Sahara Q Shop model relied on consumers placing their orders through prescribed forms —via Sahara representatives.
As a result, initially, only existing Sahara India consumers would be able to use the group’s retail offering.
Sahara Q Shops would only stock and sell its own products under 73 categories.
The company hopes initially, at least a million of the group’s 65 million existing customers would use Sahara Q Shops for their monthly shopping. “Our research shows families with incomes of Rs 20,000-35,000 a month tend to spend Rs 3,800-4,000 on monthly shopping,” he said.
Despite its ambitious plans of reaching 998 cities across the country by March 2013, Roy emphasised he didn’t require any foreign direct investment (FDI) for the venture.
