Financial Daily from THE HINDU group of publications
Monday, Dec 06, 2004
Financial Daily from THE HINDU group of publications Monday, Dec 06, 2004 |
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Corporate
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Outlook Marketing - Interview Odyssey bullish about scope of leisure stores R.Y. Narayanan
A view of the newly opened Odyssey store in Salem
Coimbatore , Dec. 5 EVEN as the concept of leisure stores is still evolving in India, what was earlier a predominantly metro phenomenon is now reaching out to smaller cities too . These stores, which offer a variety of products, are facing competition from online stores but the industry seems to be gung-ho about its future since online shopping culture is still to take deep roots in India and concerns regarding security of payment through credit cards is strong among the people. Mr T.S. Ashwin, Managing Director of Odyssey India Ltd, which recently opened its showroom in Salem, shares his views on the concept of leisure stores and the growth plans he has chalked out for his company. Excerpts. How much the concept of leisure stores has been accepted in the country? You are present not only in big urban centres like Chennai but also in places such as Varanasi. Has the awareness spread so well? If so, what are the reasons for it? Leisure store, as a positioning, has not been done much. Family stores and other speciality stores are there. We have gone in for this positioning because of our mix of products, which cater to this kind of an audience. It also refers to a family where all of them want to spend some time outside, or a teenager who wants a place to hang out, or anyone else who wants to take their mind off all issues and just relax in a nice ambience. While it is true that this concept is more readily accepted in the metros, in all other tier -2 cities also, there is a growing acceptance. Aspirational levels have increased among people. They are up-to-date with what's happening through the media and Internet. Income levels have increased and families have become smaller, meaning more attention on children. There is a general feeling that the reading habit among the people, particularly among the younger generation, is coming down because of the influence of TV. Is that so? A few years earlier, it had indeed dropped noticeably because of TV and rising prices of imported books. But over the last few years the urge to perform and excel has increased, income levels have gone up with the youth (courtesy BPO and software), hugely popular books such as Harry Potter, etc, have all ensured that the reading habit is back. Two indicators are the huge number of self-improvement and self-help books released last few years. Also the sale of children's books has increased ever since Harry Potter came on scene. All this coupled with parents realising that children need to read to improve their GK has helped. How are you different from the pure bookstores? How do you face up to competition from them-in terms of number of books stocked, variety etc? Pure bookstores have a different ambience - generally serious in interiors, rows and rows of books, etc. Books alone as a product will not make any economic sense with overheads such as power, salaries, etc since the audience is limited. Which is why we add on a lot of other products so as to ensure enough variety for a larger audience. While books ensure a certain class of customers and a positioning above that of a department store, the other products bring in the turnovers and margins. As far as variety, yes we might not have everything in stock. But we do have tie-ups to ensure any book in print can be sourced within a reasonable time. We find that a lot of online purchase options at a discount to the listed price are now available for books. Do they pose a serious competition to the regular booksellers who do not offer such concessions to the buyers? What do you do to stave off competition from online sellers? Online sites offering books at a discount do pose a challenge to bookstores like us who do not offer such prices. But it is still not a threat since online buying is yet to catch up in this country. Also credit card culture and paying online using credit cards is a long way off - a lot of people are afraid to use their cards on the Net because of poor security for the data. A book lover will always like to browse around, flip through the book, read a little, touch and feel the book before he buys it. Such people will never buy on the Net. Where people buy on the Net is if they need the book urgently and it is not available in stock or will take a while to get. Very rarely, it is for the price. What a lot of sites do is offer a special price, which, in a lot of cases is no different from the retail prices of the books - the cover price of books is in a lot of cases different from the selling price. We source books at special prices and pass on the benefits to customers as bargains. How many stores are in operation now and how many you plan to open in the next one year? There are eleven stores in operation - Chennai - 4, Hyderabad - 3 and one each in Tiruchi, Coimbatore, Varanasi and Salem . Work is in progress in Chennai for next store - Anna Nagar, 16,000 sqft with café attached, which would open in February or March next year. Also in Chennai - relocating the existing store in Gandhi Nagar, Adyar to a larger area of around 20,000 sqft on the same road which is scheduled to open in June-July 2005. How many players are there now in the field? What is the growth the industry is witnessing now? Which State is witnessing the highest growth? Any reason for that? What is the age and income profile of your customers? Are you present mostly in upmarket areas? Odyssey, Landmark, Crossword, Oxford are the major players in books- related retail. There seems to be expansion happening with all these chains in the last few years. Everyone feels Bangalore and of course Mumbai have the highest potential because of the buying power and cosmopolitan crowd there. Our strategy, however, is not to concentrate only on the metros but also on tier-2 cities where we have the first mover advantage and create a name for ourselves.
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