The Hindu Business Line : `Booming real estate prices an irritant in retail expansion'

Chennai, March 2 Meet Mr Samir Modi, `a man full of ideas', as he describes himself. He heads `Twenty Four Seven Convenience Stores'. A `chain' in Delhi that caters to `the changing needs of the young urban Indian population, that needs a concept such as a convenience store that is open 24 hours a day and 365 days a year,' Mr Modi, tells Business Line.

We ask him, "Does the Reliance model of retail appeal to you?" He quips, "I would not like to comment on that, as I have not given it much thought - because not only do we operate in a different market space, but also our business model (24x7) is very unlike theirs."

Mr Modi is also Managing Director - ColorBar Cosmetics, Executive Director - Godfrey Philips India Ltd, Vice-Chairman - Modicare Ltd and a Director of both the Modi Apollo International Group Pvt. Ltd. and Modi Entertainment Ltd. Plus, he is the Vice-Chairman of Modicare Foundation, an independent, non-profit, non-governmental organisation committed to prevent the spread of HIV/AIDS.

Here is more, from his recent interaction with Business Line:

`Twenty Four Seven' - How has it been doing? What are the numbers? What are your plans for the year ahead? Any specific irritants you have encountered?

These stores have become an easy access point for consumers not only for their basic necessities of bread, butter and eggs, but also for utilities such as a pharmacy, ready-to-eat foods and beverages and services such as photo development, credit card facility, mobile and utility bill payment, courier services, movie tickets and the like.

The success of these stores can be judged from the fact that 60 per cent of the shoppers of our stores visit us during the night and only 40 per cent shop in the daytime. We currently have four stores running in Delhi. They are located at Lajpat Nagar, Saket, G. K. II Market, and Defence Colony. A fifth store is due to open in April at Nehru Place. We plan to open about 178 stores by the end of the financial year 2007-08 in Delhi and Mumbai and some 1,000 stores in the next five years in all the major Indian metros.

I think the only irritants that we have faced in setting up these stores are the lack of proper licensing policies and the booming real estate prices.

Your comment on the Government's retail Foreign Direct Investment (FDI) policy - More specifically, about the Wal-Mart angle in Indian retail.

I think opening FDI in retail will help the Indian economy as a whole. It will build infrastructure and increase margins for all. However, some checks and balances should be taken.

ColorBar - what are its USPs?

`ColorBar' calls itself the `keeper of colors.' It has the largest number of shades in the Indian cosmetics market. Being the only player in the `masstige' segment of the Indian cosmetics industry, it has carved out a niche for itself. With its international formulations, it is at par with leading prestige brands such as Mac, Bobby Brown and Chanel, but at a very competitive price. With some 350 SKUs (stock keeping units), the brand has already garnered 12 per cent of the market share in northern India and about 5 per cent at an all-India level. We have over 500 beauty advisors on board and more are joining us. We put in extra efforts into research and development and make it a point to understand the changing needs of the Indian consumer.

Chemicals, tea, restaurants, education and direct marketing... what are the new areas you plan to enter in the next five years?

We are planning to enter the luxury goods market and build on our distribution capabilities.

Can you elaborate on the innovation process that happens in your companies?

We do a lot of consumer research and benchmarking with products and concepts from all over the world. We have various product and innovation teams within all our companies working on design, formulations, ideas and process innovation. We use various processes such as 5S, Kaizen, and Six Sigma within the group. We use a range of research facilities and have people in Japan, Italy, France, Greece and Germany, besides our own research and development (R&D) facilities. We spend a lot of our resources in employee skill building and training, along with process changes and product development. We believe that R&D is the backbone of all our businesses and it is the only way through which we can get to a leadership position.

Can you describe your style of management?

I like to implement new philosophies of management that involve innovation and lateral thinking and help me in conceptualising new, groundbreaking ideas. I like getting involved in the lives of my employees and being there for them, personally and professionally. I believe in management change and like to try new things to build motivation and fun in the workplace. I think that no job is menial as long as you do it with passion.

I have introduced various new initiatives within my company - such as everyone addressing each other on first name-basis, casual dressing, singing on the stairs, `chaat' parties, fancy dress parties. My concept of business is to be involved with my team and to create a jovial, friendly atmosphere at work.

For example, it is very important for any business to understand the needs and expectations of its consumers, and so as a policy every management employee of the Twenty Four Seven Convenience Stores chain has to spend one day per month on the shop floor, behind the counter. This way, the person not only understands the needs of the consumer but also the challenges faced by those who are catering to these consumers.

Modicare Foundation is fighting against HIV/AIDS. What are the challenges?

I think the biggest challenge anyone or any non-governmental organisation that deals with HIV/AIDS can face in India, is the lack of sex education and the taboo on the whole idea of an open discussion or debate on sex.

The absence of any such education/discussion, when coupled with the lack of awareness on the importance of contraceptives and the proper use of condoms is what has led to the growth of HIV/AIDS.

A dilemma that the Modicare Foundation faces is in dispelling the myths and misconceptions about the disease. These are spread over all echelons of society, irrespective of class. This catapults the discrimination towards those infected with HIV/AIDS to greater extremes, leading them to lose their jobs and being ostracised from their surroundings.

Our challenges are not only to spread awareness about the disease but also to make other corporate houses aware of the need for the infected to have jobs, for the corporate houses to have an HIV/AIDS workplace policy, to spread awareness in children and adolescents about the disease and its prevention and making the vulnerable population aware of their rights, while providing as much medical and psychological support as we can to the infected and their next of kin.

You are active on the corporate social responsibility (CSR) front. At the same time, you sell cigarettes in villages. Isn't there a contradiction?

No, it is not a contradiction. My involvement in CSR-lead activities is because I believe in giving something back to the community and the country. It has nothing to do with the type of businesses I am in.

Any acquisition plans on your radar?

No, but we are always looking for opportunities that come our way.

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