NEXT Retail started with a single showroom of consumer durables. Today, it has penetrated the country's interior, traversing metros, tier II and III cities and districts. K.S. Raman, Director, NEXT Retail India Ltd, in an interview with Pallavi Majha elab
NEXT Retail started with a single showroom of consumer durables. Today, it has penetrated the country's interior, traversing metros, tier II and III cities and districts. K.S. Raman, Director, NEXT Retail India Ltd, in an interview with Pallavi Majha elaborates on the company's entrepreneurial journey.
What led to the inception of NEXT Retail?
The idea of starting NEXT Retail was purely of P.N. Dhoot. He wanted to start a showroom of consumer durables and spread it across all the country. This expansion could not have been possible with only company-owned and company-operated (COCO) stores and hence, he opted for franchising.
How many NEXT Retail stores are there and where are they located?
We have more than 600 stores across the country, of which around 400 are franchised. We have presence in around 25 states and 300 cities of the country.
When did you start franchising?
The franchise route was there right since stage one but it is being aggressively pursued since the last two-and-a-half years.
How would you compare the performance of company outlets to that of your franchise stores?
The contribution from both the formats is 50-50.
Is there any difference in the marketing strategy the brand follows in company-owned and franchise outlets?
We have one major advantage, which is that we have a solid manufacturing base and a plethora of brands in the group itself. Along with this, we also have private label brands - NEXT and Hyundai, which are exclusively for NEXT Retail. The strategy is to reach out and serve the customers in as many geographical locations as possible. Also, we do not differentiate between company-owned stores and franchise stores, as they are equal business partners in our enterprise.
How would you define the scope of tier II and III cities across India for expansion?
The expansion strategy is to create a model in one single state and then replicate it across India. This will enable us to consolidate our position in that state. The blueprint is ready and implementation is going to start from June 1, 2011.
What parameters do you follow while shortlisting your franchise partners?
Mainly we ensure that the location of the proposed franchise store is either on a high street or within a mall. The required area for starting a franchise store is between 1,350 sq.ft to 3,500 sq.ft. We also check the investment capacity of the franchise along with his entrepreneurial skills, commitment and dedication. NEXT Retail has developed a unique franchise model, which is profitable to both the sides.
What are your expansion plans?
Our plan is to go up to 2,000 stores by 2014 and we will try to maintain the same ratio of company-owned stores and franchised stores, as today.
How many segments (categories of product range) does NEXT Retail cater to?
Some of the major categories that we have are consumer electronics, home appliances, IT, telecom and small appliances. We have tied up with practically all the brands in the above-mentioned categories. The space allocation is done purely on the kind of support that the brand extends to NEXT Retail.
Do you customise NEXT Retail product range as per cities?
This is the success mantra of any retail chain. What sells in Trichur will not sell in Kolhapur or Udaipur. The local market is analysed first and enough data is collected and churned before the merchandise for any location is finalised. And this is an ongoing process.