‘It is not just capital that we bring to India’

Leading wholesale chain Metro Cash & Carry plans to double the number of its stores by 2020. India is a key market for the company and Metro is also looking to increase sourcing from the country for its global operations, said Pieter Boone, COO, Metro AG and CEO of Metro Cash & Carry, who was in India to attend the World Food India conference. In an interaction with BusinessLine , Boone said his cash-and-carry chain which services kirana stores, hospitality players and service providers, is also keen to grow its private label business in India. Excerpts:

How do you see your business growing in India?

We currently have 24 wholesale distribution centres. Of these, 8 have opened in only the last 24 months, indicating that India is the key focus market for us.

Our objective is to double our footprint in the years to come and that not only requires a commitment from us in terms of capital, but also in bringing in our expertise in terms of capability building. Creating jobs fits in well with our mission, which is to be a champion of independent businesses by growing our nationwide footprint. Recent decisions of the Indian government, like demonetisation and GST, are bold steps and will help transform the country and create more transparency in doing business.

What fresh investments have you committed for your India operations?

It is not only the euros that we bring to the market, but, for us, even more important is the expertise we bring to India for capability building. So besides expanding our footprint, we are also investing in human capital. The main focus in the Indian market is to help kirana stores take their business to the next level. The success of small and medium businesses and kirana stores is our success. It is also about building a value-proposition for the hospitality sector by leveraging our global expertise.

How do you intend to step up sourcing from India?

Firstly, nearly 85 per cent of products sold by Metro in India are sourced locally. Through our collection centres, we source fresh produce directly from farmers and help them realise better financial value for their products. From the global perspective, there is a huge potential to source from India. We are using India as a hub in order to source and distribute products to other countries, where we have a presence. India has a rich diversity of products and our international procurement team is working hard on tapping the sourcing potential with our local team.

What is the potential for your private label business?

In India, it is still in single-digits in terms of sales. We are committed to double-digit sales growth in the coming years. I see huge potential for our private label business in categories such as breakfast solution for the hospitality sector, canned goods segment and cleaning products for our kirana store owners. There is huge opportunity in frozen produce such as vegetables, and frozen value-added products among others.

What are issues which you have raised with the Indian government during this visit?

We believe there should be a single-window mechanism for clearance to obtain permits required to open new stores as it takes about 12-18 months for these clearances to come through. The government has given us constructive and positive feedback and acknowledged the need to speed up these processes.

We have also discussed ways to improve the logistics infrastructure. We also talked about how the public-private partnership model can be encouraged with subsidies to further improve the infrastructure.

What’s your omni-channel strategy in India?

India is witnessing a massive digital transformation. We are working on building a proper omni-channel value proposition for our customers with various tools. Our business is different from B2C so we also have to continue to focus on building relationships.

We have recently given e-pos systems to kirana stores in Hyderabad and Bengaluru, to enhance their abilities such as issuing GST compliant invoices, to do proper price setting, track their profitability and optimise their working capital. We are also working with young start-ups in this space. From the delivery perspective, we are enabling our sales force with digital tools. Digital tools will play a key role in reduction of wastage and better stock management.

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