Fast and steady: Viveks beats the odds in consumer durables retail

R. Ravikumar | | Updated on: Nov 23, 2017
BL11_VIVEKS

BL11_VIVEKS

BL11_VIVEKS_2

BL11_VIVEKS_2

BL11_Snapshot_NET.jpg

BL11_Snapshot_NET.jpg

From selling rice to retailing consumer durables is an unlikely transition. But the Setty family, which owns the Rs 450-crore Viveks retail chain, has successfully done that.

The ball was set rolling almost half-a-century ago, when the late B.A. Lakshmi Narayana Setty, a qualified engineer, decided to branch out of the family’s traditional rice-selling business at Kolar in Karnataka.

Consumer durables, which only meant radios, tape recorders, bicycles, steel almirahs, folding chairs and tables in the 1960s, were his calling. Setty zeroed in on Mylopore in Chennai to sell them out of a 250-sq ft outlet, naming it Viveks after Swami Vivekanand.

Early days

“It began with an initial investment of Rs 5,000 and an auspicious credit of Rs 10 from my brother’s close friend,” recalled B.A. Kodandarama Setty, Chairman of Viveks and brother of founder Lakshmi Narayana Setty.

Since the 74-year-old took over in 1968 following his brother’s demise, he has steered the company to meteoric growth. His other younger brother, B.A. Srinivasa Setty, is also into the business.

Initially, the growth was slow.

Those were the days when, to purchase a Godrej steel almirah, a buyer had to place an order with full payment and wait for his turn to come.

“Even a small electrical appliance or piece of furniture was considered a luxury,” said Setty. But the Settys were busy sowing the seeds of a future retail giant. They opened their second shop in 1969 at Purasawalkam and the third in 1980 at T. Nagar.

But Viveks grew rapidly only in the 1990s. As the Indian market opened up to foreign brands, a number of electronic giants such as Japan’s National (now Panasonic) and Korea’s LG and Samsung brought in a slew of products. “In the first 30 years, we had only three showrooms. In the next three years we added 30,” recalled Setty.

Today, Viveks is a retail behemoth in the South, with 42 large-format showrooms in Tamil Nadu and nine in Bangalore.

Different Strokes

Setty has carefully preserved a copy of The Hindu dated June 28, 1995. It carries an ad published by the company calling for vice-president for procurement and logistics, general managers for retail, project and HRD. “All these things were unheard of in the retail context in those days,” he said. But Viveks knew how to tap into talent outside the immediate family.

Not only did the company professionalise retail almost two decades ago, it also pioneered the now much-talked-about New Year sale. It introduced the large-scale discount sale in 1977.

As the retailer buys in big numbers, brands give a sizeable discount which is passed on to consumers during the three-day sale period.

The retail chain also offers ‘one-point after-sales service’. Irrespective of the brand, customers can get their electronics items repaired at Viveks’ service centre. “We are the only retailer in the country to offer after-sales service ourselves for almost all the brands we retail in,” Setty pointed out.

Challenges Galore

But the chain is facing some challenges now. The market has undergone a sea change. Earlier, trader was king. “Today, consumer is the God — not just the king. Every retailer has to ensure customer delight, rather than just customer satisfaction,” Setty said. Besides taking a cut in the margin, a retailer also has to offer some value-added services, such as free delivery, installation and financing. Viveks is doing all that and more to hold on to its customer base.

Since intense competition has forced price cuts, the profit margins have come down drastically. “Though I consider competition important, with big corporates coming into play, it has become a lot tougher. The country’s richest man is my competition today,” he said, referring to Mukesh Ambani’s Reliance Digital.

Real estate is also an area of concern. Finding the right place is a big challenge, and one with a reasonable rent, even bigger. Viveks paid a monthly rent of Rs 225 for its first showroom, including a store room. Today the rent would run into lakhs of rupees. “Thankfully we own it now,” remarked Setty.

The company is reported to be in talks with a few private equity investors to fund another round of expansion. The second generation of the family is slowly getting into the business. “They are all educated abroad and got trained at global retail giants such as Walmart and Target. You will see Viveks’ next round of growth very soon,” said a confident Setty with a wink and a broad smile.

> ravikumar.r@thehindu.co.in

Published on November 10, 2013
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you