Thursday, September 6, 2018

I love Swiggy - Food Delivery Giant - My Prediction








------------

















https://www.swiggy.com/





How online food delivery platform had
made a remarkable business growth in terms of customer acquisition and
valuation. 
Started in August 2014 Nandan Reddy (29) and Sriharsha
Majety (31,) both alumni of Birla Institute of Technology and Science
(BITS) Pilani came jointly for a common cause and Swiggy was founded in an
office space in Koramangala, Bangalore. One neighbourhood, six delivery executives
and 25 partner restaurants is what Swiggy started off with in the beginning.
Almost four years into the field, Swiggy now has a major presence in Delhi,
Mumbai, Pune, Bangalore, Hyderabad, Chennai and Kolkata. 
By 14
August, the duo made their dream into a reality by rolling out Swiggy, the
country’s first online food ordering platform. They roped in Rahul Janimini, an
IIT Kharagpur alumni, to do coding work for the platform 



What is Swiggy stand for ? 


Online,  The platform of Food Delivery.  "Swiggy is a food ordering and delivery company based out of Bangalore, India. ... A single window for ordering from a
wide range of restaurants, 





Swiggy has its own exclusive
fleet of delivery personnel to pick up orders from restaurants and deliver it to
customers.  The population of 7 Major cities is appx.100 Million. the consumer
now changing their food habits,  and we can see more foody people in the
areas.  So daily order from 10% of the population is peanut for Swiggy and related
online food delivery company.    





Backed by Investors: Coatue Management,
Meituan-Dianping, SAIF Partners, Accel Partners, Norwest Venture Partners -
NVP, RB Investments, Bessemer Venture Partners, DST Global, Naspers, Harmony
Partners




Swiggy's latest funding round in June 2018 was reported to be $210 m. In total,
Swiggy has raised $465.5 m. Swiggy's latest valuation is reported to be $1.3 b.


--------------------------------------------------------Based on the news 
that swiggy is targeting to achieve 1 million orders per day by 2020. 
.......   if we keep this data for projection and average basket size
we take Rs. 500/- then we  can estimate that 360 Million order annually
would be there which will have network sales around 18000 Crores  or 
USD 2.77 Billion.  This projection sale is network sales but how
much gross profit per order Swiggy is going to earn.  Taking all things
and keeping average basket size Rs.500 per order, we assume that per
order Rs........ will be the revenue of Swiggy ( Service - Network revenue)
on per order delivery. 







OTHER REVENUE MODEL:    Swiggy should
start   Packaging solution for their suppliers,  Courier Service
in the city through their network.  should open cookery Institute where
manpower will learn how to serve the customer in Swiggy's style. Spices & Ready
to cook  Private Label branding for Suppliers.   




Taking all
projections for the next 5 year,  it is revealed that Swiggy will have
appx  USD 5 Billion Valuation by end of 2022 .....  USD 5 billion
network sales shall generate Tentative Gross Profit of Rs.............. Crores.  




However,  in long run it is very much needed for Swiggy to control operational costs and it should be below industry
parameters.  Other competitors will give tough challenge in near
months. Achieving network sales of USD 3 billion is not a big mountain
peak but for this annually need 20% to 30% growth in the number of orders and also
average basket size need to be increased.  



The Indian Food market is huge
and changing food habits will definitely provide Swiggy  a better platform
to perform,   If we go by population and demography  getting
yearly 1000 million order is not a big task,   one who has this
caliber and passion can get it.
   for getting above data 
reference has been taken from : 




Based on the projection nobody can predict that after 5 or 7 years what will happen but business having a dependency on IT having more challenges. so here Swiggy has to make them self ready for the innovation in IT-based services and accordingly for making short term sustainability they have started other avenues so that they can sustain in the short run.  No doubt funding support is there but since things are moving as desired so it can go as per plan. 





We are confident that Swiggy will have USD 5 Bn valuation by end of March 2022. 





Written by : Balwant Rana,  


Simranriceinc@gmail.com

Year 2018































Reference
































Reference



























Thursday, September 21, 2017

Changing Business Scenario in India Retail & Opportunities

As a professional, I am working closely on the ground of Retail
since 1999 in bits & pieces, but after 2012 it becomes my core business
interest, based on my ground-level working I must say that Retail is not easy
to understand because it needs detail working. However, lots of changes are
happening as regards to new developments, adaptions and modifications.


I was among the team when we first time introduced  Pulses in 1 kg packaging in the brand name " Mother India" in the year 1999 in Delhi, a visionary brand of Sharp Menthol.  Later on, branding was done in the name of " Sharp". Now this brand has a billion-dollar valuation. 





During 2014, E-commerce like Big Basket and Grofers got Funding and started catering groceries to end consumers. When I first time introduced my Omnichannel program with Flipkart during 2012, it was a different thought that coming era is about to go for hyper-local facilitation and retailers whether they are from physical formats or E-comm they all need last-mile connectivity.





My concept “Pragati” came with innovation that it can be done by opening new stores. This idea was discussed with Mr Sachin Bansal in 2012, but things were before time so that time, no one could digest that Kiranawala can be the partner for last-mile connectivity. Idea was to bring all such new stores under one uniform name and providing them various benefits and connecting them to end consumers there they will facilitate as a last-mile delivery points for Flipkart. but unfortunately I was talking on all these before time and  my this proposal was declined. However, my confidence was still firm that Retail is changing, omnichannel presence shall be the need of the hours. 
















The year 2015 shall be dedicated to Indian Retail, where
companies from all over the world shall have an eagle eye to capture the vast market.
Many more investments companies in the form of an angel, seeds, VCs, and
Private Equity shall have a more diverse portfolio, and they will be
mushrooming very soon in India. 





We are talking about Indian Retail which is 600 Billion
Dollar in size of which 60% is grocery retail covering 12 million Mom & Pop
Stores. The buzz we generally heard is about organised trade which is just 10%
of total Grocery retail means 88% is still open to exploring because it is
still unorganised. 





We know about Amazon, Flipkart, Bigbasket, Grofers, and much more b2c commerce website & App but they are just below 3%
of total Retail, so where we are standing, we are in India where Retail has
ample opportunity.





Indian Retail providing employment to 6 Million people
directly and contributing 10% to Indian GDP. Do you think writing on such a
blissful market is so easy, Experts are guarding all such information with full
proof?





I had heard news and whispering during 2012 when big-name
retailers came into existence, that time they were used to say we will open our
more stores in this area and in that area, the market will be ours, and all
these small-2 Kirana stores will vanish but after 2014, at a sudden air took
different directions. They started chanting Kirana retail has future and no one
can finish them, complete them, now they are there to empower them. Some is
coming with the POS system and saying we are enabling them, no doubt using
digital applications will help them to pace with modern time, it is good. All
of a sudden, yes, it happens when the market is significant.





China is brilliant, and they know that Indian is a big
market. People need a solution, no matter that is durable or not but
temporarily there should be a solution, so they started infusing money through many
doors.





They invested billions of Dollar in the Indian Start-up
Ecosystem.  I will not mention the name
here, but they are now valued in billions and far big Unicorn in India. 





It is not a fault of China or countries like China, and
all have rights to seek their business interest. There is nothing wrong.  





What is wrong & what being right this is a visionary
measurement for Govt because it is in their preview to grant permission to
someone in India and invest in their ecosystem. 
Let us have a look at India’s retail scenario, and the journey starts
right from 2012, 





The PM unveils start-up India program- Narendra Modi
during 2014, Mudra loan scheme and many more schemes were introduced to support
new start-ups, but very few could take benefits out of it. No doubt such
initiative has brought a revolution in Indian Retail and IT sector immediately
after the year 2014, Companies like OYO, Flipkart who were struggling to get
funds, start getting VC funds in millions.





Uber India, Ola rides came into the picture with substantial
investments, they brought Asset light model concept in business. 





After 2016 we have seen companies like Zomato, Food Panda, Ube Eat etc. came with high Technology, specially Zomato made food
delivery the best option to bring home ready to eat food in 30 minutes, food
from Consumer’s favourite restaurant made it a positive disruptor.





I love their Application, and on the tech platform, it
was made, very smooth and accurate GPS, bringing it closer to Consumer's heart.
All such changes are making Retail a different viewer. 





Also have seen Byju’s Application which is a unicorn in
education provider application, big funded… 





Same way Delhivary a logistic 3 PL provider also got
ample Funding and doing great in this segment. More than 100 start-ups are now
valued above US 150 billion




All unicorn startups are either founded during 2014 or afterward. 







After visiting a few modern stores, we are thinking of customer preferences, behaviour and talking about the ambience but still, 90% population of India is buying from nearby Kirana Shops.


                                                                               



Era of standalone stores: Luring or lucrative to people from a different line of business.
Recent year development made people open Standalone supermarket in cities, even
in the rural areas by people who either got retirement from Govt services,
people from Real Estate and Gem’s & Jewellery business quickly adapted this
business, all such supermarket has either 1000 sq feet or more in size, and
they are investing Rs. 20 lakh to 1 Cr.





Too many people to open such stores. But they have their
problems, and many got shut down in its six months or 1-year timeline, I would
say infant stage.





I could smell the storm in 2013, later on when Grofers
started their B2C marketplace in grocery through hyperlocal association with
local Kiranawala.





They started operation in Jaipur in 2014, I have seen how
their delivery man was wondering about collecting products from one store to
another, bringing back to a hub store and then matching to complete the order
for delivering it to customer. 





There is no issue with the model, but, no one understands
how it will work. Not a single Kiranawala has symmetry /uniformity in the
product category, assortments so how one retailer can fulfil the order consumer
placed with Grofer’s Application. Is it possible to spend 1 hour to complete an
order which a delivery guy has to collect from 3 to 4 retail stores?





How it would be a sustainable model, and if this model is
sustainable, then how it will be operated at a low cost. There was lots of
question in mind that time, and one was particular that why and on what Softbank
made criteria investment because for me this bank has some high class of
analytical, ground realities, Sustainability and more than that scalability,
but I was totally in the blank on all such questions. 





I asked Albinder to forget about hyperlocal deliveries at
the current level of status of Kiranawala and you, i.e. Grofers need to set up
own DC and should opt inventory model.  So, you can see there is nothing
special or serious if we talk about funding scenario, one can get fund even
model is not sustainable in the current situation maybe it happened before time,
but the different mindset has different thought process. 





During this period, Cash and Carry came with more
aggression, Metro & Walmart started opening new megastores in other cities
and were talking to capture 20% share of the Indian grocery market. However,
Walmart has that appetite, but no one understands Kirana Retailers that at what
side this camel will sit at what time. So they just started a prediction that
things will be in their forte.





More focus was given by Metro to streamline the B2B
supply chain to Kirana stores. However, things were not going as it was
presumed or expected because Kirana retailer was enjoying Credit facility from
distributors, so they only opted for products having reasonable pricing or
promotions.





Moto of cash & carry was to sell them their private
label, but again the question was how to crack the credit market sentiments,
later on, maybe they will have some factoring solution or channel funding
systems with microfinance companies of they will go for some special
arrangements with their banks of in 2013 it was not possible.  





On the other hand, organise Retail is taking shape and
expanding from city to city. A new world, however really it is not new, but in
terms of organising Retail, this is a trendy word – Private Label products. FMCG
companies tried to build up a separate vertical in the name of Modern trade to
facilitate supply chain to retail stores like Spencer, Subhiksha, 6teen,
Reliance Fresh, More, Easyday, Nilgiri, Vishal, big apple, Big Bazar and many
more, it happened after emerging Retail in cities, and FMCG companies start
getting excellent visibility in the name of Modern trade.





But they were not lean to sacrifice their portion of
margin to MT trade more than it was required for them to fetch their substantial
cost. So, a new way was built by them that if they have to sustain with such an
asset-heavy setup so there they need to introduce their products in various
categories.





Later on, i.e. after 2014 it was known as “Private Label”
this trend was however started in 2005 when Fair price, Subhiksha and few other
started selling product in loose or in simple pouch packing but it was just a
cost savy in the prospects of Consumer, those were not brand and as a sentiment
not possible to replace existing famous consumer brands. Making big money in
private label, they have to introduce them as a brand, identical or category
wise. 





Revolution came with Big Bazar and Reliance when they
started printing packing
material in different-2 brand names like Big Bazar
introduce Golden Harvest in 4 categories, Karmic in Dry fruits & Tasty
Treat, Fresh & in Snacks etc. same way Reliance introduces good life.  





I must say the birth of Private Label happened just after 2014,
and now this has emerged a significant market driver in almost all categories.
The prominent example is “ Patanjali” who made an empire in a short period—even
giving a fierce competition to old giants in many types. 





India’s retail market is so big, and there shall not be
any sign saying if we say it the Pacific Ocean. A market which has a depth to touch of USD
1 Trillion controlled by 2020 and by 12 Million Small, medium and large size retailers.
Said to have 90% market still unorganised, Online penetration is less than 2%
and big retail giants like Future group’s big Bazar, easy day etc., Reliance,
More, are talking about their bullion dollar turnover and valuation for just
8-10% of organised retail space. 





Such a significant merger & acquisition was the
history for Walmart, and later on, it was the big one mistake, but it has
propelled investment energy in the retail ecosystem and investor started
pumping money in various start-ups.  I
must say the way Sachin & Binny got benefited after selling a big loss-making
venture at a dignified exit and given high returns on investments to all old investors,
also to employees who were helped with ESOPs.






The year 2015 was the Expansion of Business for them and is doing fantastic. I would say that such disruptions are positive and helping retailers to centralise their maximum sourcing. 




The year 2017 onwards there were few significant
disruptions happened and this word ‘disruption’ emerge with some new good
change philosophy, new Tech-based start-up like  Shopkirana, Jumbotail in
Tier I and II will be more aggressive, and  with perfect Technology, and in rural, there are lots of
small b2b aggregators working. One prominent name is also there in the name of
“Store King”, All are funded companies and started aggregating Supply Chain for
facilitating supplies to Retailers.








During 2015 one Big-name came into picture “
Dmart”, Dhamani’s dream product which has brought a different kind of
revolution, one of the first company in Indian Grocery retail which has shown a
profit in their financials on real ground, PAT was more than 3%, theory or
concept was simple, pay cash to supplier and get more margin on sourcing,
Instead of renting stores buy real estate and save rent rather book
depreciation in books for the property.  They are in going for an IPO which probably will be in 2018 or 2019





Now, after Jio’s disruption in telecom brought some sense
of stress to all retail fertility that Reliance may come with some significant
way in Retail, especially all B2C e-comm players are under heavy pressure that
what Reliance will do in this ecosystem. 





Still, things are not bright, but I am based on my sixth
sense can say that Reliance will come with a click and Collect model for which
they need hyper-local points, the possibility is that Reliance will go with Jio
name or will find a new name for running an E-Commerce website or App or shall
go with Reliance fresh. 





The possibility is that Reliance will work PAN India and
shall cover the maximum retail Market. Also, they will go with some hyper-local
association with Kirana Retailers. Reliance’s stand for doing something big in Retail
is making a chest pain to Amazon, Grofers, Bigbasket, Flipkart, Snapdeal.   





All such things will bring lots of disruption in the

retail market, but the field of fight shall remain “Kirana Retail/Grocery
Retail” Only. Rest retail segment will have business as usual.  



After all exercise and practical, experience and
different kind of burning money game still things, there is no much change in
organise trade, the market is expected to grow 20% by 2025, and some are saying
by 2030 and online is still a long way to go. 




Mobilerana

Above was just a brief about Indian Retail journey, the
purpose of giving such glimpse is to understand that how mindset can be changed
for new entrepreneurs and how they can think that money is the last “M” for
making a business operational.  





Writer : Balwant Singh Rana







Saturday, December 17, 2016

Investment in startups - Facts and changing Scenario in future





Just
a month back when I was reading business headlines from economic times. 
It was having full coverage on how OYO is going to expand its market in various
areas.


This
is just a beginning in the contrast of new developments in India and South Asia
market.

OYO
is the brainchild of Ritesh Agarwal and one of his friend, and during 2014 he
started implementing his thought and ship is built in the sea.  This idea
was shared by one of the guy in Delhi who was then writing mini-blogs on new
startups, so this was the same idea which I read in one of the blogs during
2012. The creator can be the executor, but sometime creator only create the concept
and some other people work on its execution, so they are known in the
ecosystem.   Many examples are there, and you can find many more
startups who succeed to create a valuation of more than 16 Billion Dollar. 
Flipkart is one of the best examples. 





Purpose
of writing this blog is to predict the future of Startups in the coming
days.  I am very much sure that Founders, Co-Founders are going to lose
control, and they are going to leave their brainchild in the hands of
Investors.  





Let's
figure out the latest successful startups companies and how they will go in the
hands of the investor in the coming days. 





Here
are the talk of the town these days.





1.
OYO


2.
Paytm


3.
Flipkart


4.
Swiggy


5.
Ola


6.
Makemytrip


7.
Bookmyshow


8.
Grofers


9.
Bigbasket


10.Cardekho


11.Urbanladder


12.
Policybazar


13.
Justdial


14.Shopclues


15.Zomato


16.Snapdeal


And
many more. 





Must
have an analysis that common instinct is above all startups. Just make a
brainstorming? 





Okay, 
Lets us figure out the instinct and driven force which is giving acceleration
to these startups is " Technology" driven platform. IT  makes
them reach beyond the boundaries and scaling them to become a billionaire club
member. 





Let's
take a few  from the list where I will give some small pin and pain points
which help you to understand what they will do in the near future and who is
going to benefit. 





OYO
Rooms: 





The
concept is straightforward  but innovative as it was not tasted before in
India in the hotel industry. USD 460 million valuation as on August, 2016,
and Softbank has more tha 50% stake in this startup.  Yes, OYO  is brainchild of Ritesh Agarwal
who started working on this concept since 
2012.





Bringing
standalone hotel properties under one brand name “ OYO” and promoting their
existence to end consumer through B2C Application and various ATL/BTL marketing
Activities.





What
OYO is doing :











  1.      Standardisation in terms of
    the physical appearance of Rooms, Look and feel and ambience of the hotel
    reception. Simple processes.  

  2.      Digitise end to end
    interface.  Customer can find hotel rooms on OYO App and accordingly best
    deal can connect them to OYO rooms. 

  3.       .  Marketing OYO concept
    through various channels of marketing. 

  4.         Asset Light
    Model.  

  5.   .     Invested in infrastructure
    and manuals.





I
am expecting that by the end of 2019  OYO will have more than 10 billion
valuations and one of the fasted growing hotel chains without owning a single
hotel. OYO is now UNICORN.  





OYO
will be the biggest hotel chain, more than 10 billion valuations by 2019 and by
then Founder will have a 5% or more stake in the company, and still, they will
have handsome money in hand.  But do you think that money will make Founder
happy after creating such a large valuable empire? No, after certain time money
for an individual matter only matter, and passion and fashion become the brain
ride. Social status and sentiments with the company make them more connected.
Ritesh Agarwal is still young, so I will suggest him to do not rush to expand
business amid greed by funding.  You are coming under the trap of
funding.  By 2020 when OYO will have more than 10 billion USD valuation. 
no doubt by then Founder will have 5% stake, but that will have worth more than
expectations. But, then VC funds will have direct control and maybe time will
tell whether you will be minority regards to stakeholding. 





I
am not sticking to 5% will be his stake in the company, maybe he can find some
financial institutes who can finance him, this way he can grow his stake up to
30% or more by infusing debts. But it depends on the strength of the brand that
time. No one can predict the future, but things go accordingly. 








PAYTM: 
 PAYTM 
 one
of the brainchild of Vijay Shekhar, an One97  communications brand. So far
raised USD 1.7 billion funds from various VC funds and currently valued at USD 7
billion. Here we can see the valuation matrix how it went from scratch to sky
just after demonetisation.  In only two year growth is more than three
times.  A big investor like Alibaba is playing a major role where they are
going to have a total controls in the next five year. Things are changing
dramatically, but why.  You need to think that Paytm is working in India
where more than 100 crores population reside. So we should not feel so
astonished because this is just 30% of the population is using online mode of
payments/ transactions so think when these numbers grow to 50% or more. 
Don't you believe Paytm will have more than USD 20 Billion valuations if users
grow at the end of year 2019. 





My predictions
for Paytm :   V
aluaton will be USD 16-20
billion by 2019-20.


Will
have more than 70% stake by the Investors.  





I
am quite confident that Vijay Shekhar will be quite lucky to have more than 20%
stake even after reaching to a stagnant position or saturation.





Above
two examples is enough to acknowledge my write up. 





Another
big example is going to set by the Sachin Bansal and Binny Bansal,
  I think the way company “ Flipkart” is losing financials on year on year basis and the way infusion of money is coming from
investors, both will have below 10% stake in the company in coming two or three
year.
 





Any
way,  at a sudden flood of investment coming from various VC, Angel and
seed capitalists and their aim is to build a virtual valuation over some time
so that they can sale their stake at higher valuation level and reached to
unicorn club.  This is just a myth that Indian companies are going
aggressive in terms of business.  Not actually it is going, but part of
valuation fact is  where there is no
business viability seen even beyond five years, an ideal benchmark for getting
any business sustainable. 





I
think technology is going to drive the next level of business scenarios. 
India is full of opportunities where the retail sector is getting better shape
day after day.   As per the unorganised data Retail will have mor
e
than USD 1 Trillion market by 2020  





Let's
talk about startups which are active in Retail sectors, and I will say retail
players who are driving organised trade in Kirana the Grocery market. 
Let's have a look who are the big players as on date.





Retail
players in B2C in India :  National Level players.  Lots of companies
are there in India who are operating Kirana retail at regional level so about
them I will write later. 





Physical
formats: 


1.
Reliance fresh


2.
D-mart


3.
Future Group  Big Bazar and Easyday


4.
More 


5.
On Door  ( MP based )


6.
Vishal Mart





I
bag pardon from retail companies whose name was escaped while writing the name
in above list.  Here D- Mart is seen growing in a great way, seems they
are targeting an IPO in coming years. As regards to Reliance Fresh, they are useful
at making turnover, but still, profit is a little bit far away.  
Here I am sure that Reliance will go for raise money from foreign investors for
strengthing their Retail business,  here
they will not use their own money. Either they will go for raise money from IPO
or from Venture capital or PE firms.





Now, 
will talk about  Future group of Kishore Biyani.   Here Future
group has more than 7000 crore annual revenue from all formats. As per March
2016 Financials ( Rs. 6844.96 Crore) Kirana contributes approximately 40% of
total income, rest comes from fashion and food stores.  After many years
in the market still struggling to get sustainability. Mr Kishore Biyani is well
known and great artiest of Retail, even who is facing issues so what is left
for else.





No
doubt, I have same feeling for Kishore Biyani, this group has ample debts in
books which can not be paid until someone infuse money in a strategic tie-ups.
I think, there are only two giants in space , one is Amazon and other is
Reliance. I am sure Future group will have great
acquisition by either one.









It
seems that Indian entrepreneurs have some born mindset that they will be exit
from the business once they will reach to a certain valuation, even plan is
preset at the time of starting venture that what will be the exit plan. What
does it mean, business should be on going process so, when founders are in such
thought that they will take a exit at certain time or certain point it
means that are not sure about the concept and business workability, scalability.
  All are going just for changing the hats.





On
the other hand eB
2C players like Amazon is going to deepen their roots in the
ecosystem. They are trying to establish a network of mic
ro stores through will
they can feed hyperlocal need, this will make them competitive. Omnichannel is
the next future for eB2C.  





On
the other hand,  Big overseas players like Walmart, Metro are investing
heavily in creating infrastructure and passionately going to acquire an existing
business platform where they can feel appropriate box for their upcoming ground-level
strategies. Mind-blowing things are going to happen. Thailand based LOTS ( CP Wholesale ) is also planning to come India. 





Now
the retail market is so vast which need separate stream for writing about it in
a whole story or page, so I am feeling the same while writing down about
developments in India retail , so things are little bit going in trenches for
me to make an index of Indian Kirana Retail.







  • In
    this view I am going to categories Indian Retail Market as under :

  • ·        
    Hyper
    Market   ( Big Bazar, Dmart, Hypercity etc.)

  • ·        
    SuperStore 
         ( Easyday, Reliance Fresh, More)

  • ·        
    Hyper-Local 
        (Regional level players, earlier grofers were doing this)

  • ·        
    Last
    Mile Connectivity Connector  ( Retailers for few b2b retailers like
    Shopkirana & Storeking)

  • ·        
    B2B
    Retail formats ( Storeking, Shopkirana, Urbanladder, & Jambotail)

  • ·        
    Ecommerce
    web-based and App  based  ( Amazon, Snapdeal, Grofers )

  • ·        
    Direct
    Marketing   ( very few like Amway, Evon etc.)

  • ·        
    Simply
    Grocers  ( Pure Staples like local kirana)

  • ·        
    Retailers,
    Mom & Pop , Bricks & Motar , Conventional Stores.  ( 12 Million
    Stores )

  • ·        
    Discount
    Masters  ( Mostly in garments and mix products )

  • ·        
    Category
    Killers  ( Not in India)

  • ·        
    Kiosk. 
     ( Mostly in Electronics, Beverages)
     








My
more focus is on point no. 9   Indian Kirana Stores  ( Mom and
Pop stores).  I will have more things to write on Indian Kirana.





Retail
is detail, so there is endless ink to give a perfect write up.





Writer: Balwant Singh Rana


Sunday, February 14, 2016

Delegation of Authorities - A Perfect Corporate Culture





Some times we stuck in our office with some functional crunches. despite proper resources, we couldn't get the desired result in task-based assignments. This happened when we don't delegate authorities. I have seen in many companies where the owner of the company is engaged in all functional areas, though we hired respective domain experts and paying them handsome salaries and perks, trust stay with the owner, I must say trust stay at the corner.

Generally, a company engaged in retail business has proper functioning departments. Depending upon the size of the organization department either is headed by VP level or GM level. a typical organizational hierarchy. in the current scenario, A GM level experienced professional draw 15 to 20 lakh annual package and VP level may go up to 50 lakh.



An average monthly salary comes to a handsome sum. Now, a question comes in mind about why we have a functional hierarchy in our organization if all decision level power stays with the owner. This is not a rare problem I am pointing at but is on a large side. most of the Indian business houses follow it well. When someone asked me to join their company as a management consultant, I directly jump to this area and tried to know that how much interference the company owner has in companies' routine inter-departmental functionalities. I suggest them in my way.



A simple management lesson we had studied in our school or college time that the Delegation of authorities is given to HODs so that they can run their department independently and responsively and can be held responsible for not performing well.

Here are a few tips for my few followers :



1. Hire an experienced professional through your expert HR mechanism.



2. Assign KRA and KPI. based on the KPI delegate full authorities. Of course, there should be checks and control at your end so he or she doesn't misuse authorities.



3. Design department wise MIS format but the format should be simple and should address the KPI factors and measurements. Let them work as per the nature of their Job and do not force a short period review. The review should be done every month or quarterly. especially for departments like Production, Procurement, F&A should be done monthly and for marketing and sales, it should be quarterly. results of any spending by marketing dept will come in a little bit longer period so sales monthly review will not give the desired result in the Retail segment.



4. I appreciate each performer in review meetings. Few of HODs may not perform well, it does not mean that they will not perform in the next review so do not discourage them. Try to find out reasons n give them your moral support.



5. Professionals from an accounting background like CA remain calm and cool. here you need to be humble to them. They need a smooth environment so then only they can think to manage your accounts and finance efficiently.



6. Make a friendly relationship with your team and help them when they need it. Emotions create a big role in personal bounding.



7. If you appoint someone in your company, it becomes your moral responsibility to retain and develop them to your level. reshuffling is the best way to make every employee all-rounder.



8. Develop the skill, it is very economical compare to hiring a skill.



9. Human resources should have prime roll develop Human first.above is just a simple line for new startup company owners. Since many of them follow my simple sayings so hope you will measure these little things and try to adapt in routine life.



Startup culture is different means there people are counted machines so sometimes they are emotionless but for the long run and sustainable growth of organization need a culture carrying " People's First" approach.

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In this topic as a writer I tried to capture few main points which is required to consider for proper delegation of authority, however if we go academic way lots of books are written by renowned writers.







Thanks/

Bs Rana 






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