The Elusive Exclusivity

When Vijay Mallya was sitting with Prestige to chalk out what they were going to build on the plot where the erstwhile UB bottling facility stood, I am sure that there were shining plans thanks to the central location and quantum of land available. They planned to build a landmark. Something that nobody could escape knowing about; with a luxury mall, 5-star hotel, service apartments, one of the most sought after office address in Bangalore; the UB City looked all set to become one of the most awesome landmarks in the city.

Then something went wrong...

To begin with they decided to ape the architecture of buildings from New York (The Empire State and the Chrysler Building). In this day and age to pick up on the architectural design of a building that was the benchmark of the 60's and copying just the design and leaving out the grandeur of the 100 story structure was where the possibility to market a winning story was lost. The designers never thought of the fact that this structure that was going to be a landmark in the city, had to compete with international benchmarks in order to capture the imagination of the citizens as well as the visitors of the city.

Half a century after the construction of the Empire State Building, tourism alone contributes a good deal to the buildings revenues, which is a result of the marketing and the recognition that the building has got over the years. They charge an average of $20 per person for the ride to the top of the building and get over 3 million visitors per annum and growing. Now there is a lot of money being made.

Ok they made one bad decision, let us not crucify them for it...

Then some years later the place opens up for business and the road outside the building is clogged. Wait its not just the traffic that is clogging it, there is an overflowing drain as well. To add to that they number of vehicles parked across the road really makes the road and more so the structure look ordinary and is a huge compromise on security.

There is little that needs to be done to improve the situation, but either the developers are not at all concerned, or they are not able to think up of a solution for the same.

Let us say...

Mr. Vijay Mallya will certainly not lack the political leverage to ensure that the traffic flow issues, drains, etc. on that road are taken care of and it gets done the way his marketing team says it should be. Some amount of effort needs to be put in, in order to make sure that the beautification of the road and the area around lives up to the luxury that the mall promises with all its big brands. Considering the 380 crores of investment made to construct the entire UB City, it would be a miniscule additional investment, but one that will make the development live up to the promises of exclusivity and luxury that it has made.

All that needs to be done is, in steps, they need to first of all resolve the issue of the open drain that is flowing like a river across the road. Ban parking of vehicles on the road, let them use the pay parking available at the back of the building or park elsewhere. Get the entire stretch of road re-laid in a better manner (instead of dropping mounds of mud when it rains heavily). Then the look of the entire road needs to be re-done, pavements, lamp post, et al. The idea is to give an exclusive feel to the entire area. For a road that bears the name of his father, it is not a huge ask. In the end it is not about the amount of cash and work that is put into the project, but the level of details that are taken care of, no matter how trivial it may seem.

Reflecting on what I read in one of Seth Godin's books; marketing is about creating a story, one that although not authentic, leads one to believe that it is; through the meticulous adherence to details and by using exclusive elements, designed to reflect the same. It is often trivial things, that complete the story.

The Great Indian Retail Business

Since the beginning of time India has been the land of the intermediaries. There are more people in this country who make money being the intermediary in a business than those who do by adding real value to a business.

What is the whining and howling that the modern retail stores killing the Mom and Pop stores all about? In the end through several surveys and studies, it has been clearly established that even at the current pace, the modern trade is going to only be having only 10% of the pie. Despite this the howling continues... Let me tell you its not the small stores that are creating the noise, but the intermediaries, the guys with the financial might who go to the press. The issue here is that the intermediaries make money due to the scale of their operations, and they have fewer people to serve in the event that a store such as Wal-Mart becomes a part of the Indian retail landscape, which means, much less turnover for them.

I say the Wal-Marts should become the new intermediaries. They have the economies of scale. If we take the case of the Indian farmers; a large retail company can cut a long term deal with the farmers for purchase and management of their produce which they pick up at an already agreed upon price. This relieves the farmer of a lot of worries, their produce is managed the right way, they are assured a sum for their produce and it also create greater efficiencies within the system (Less wastage of stock, Better pricing due to reduction of intermediaries, etc.). These efficiencies will then be further passed down the system.

If the general trade stores were to buy their requirement from these large retailers (sort of like the cash and carry businesses but on a much larger scale). This would in effect be the entire supply chain turned upside-down. The large retailers actually supplying to the smaller ones and making the entire system more efficient and beneficial to all parties involved.

The question raised would be - Wont these large retailers become monopolies? The answer is to open up the sector, let one and all participate and let us see who comes out the winner. What is the problem if someone is better that all the rest? If someone can monopolize despite the entire world of investors and businessmen knowing the idea, then so be it.

I am sure that this is not the course that India retail is going to take, but would it not be awesome if this sort of a solution could be worked out? If general trade store could be branded under a retail major, where each retail major competed with the other. It would finally be the customer at the top.

My Blog

I have decided to dedicate this blog to the things that I feel are wrong with the way things work in this world. I feel on many occasions that there are several solutions available for the real world problems that plague us. Instead of chasing the easy solution that is available we go around doing all the wrong things, namely, sticking to erstwhile solutions that does not work in the given context.

Let us take this journey forward.