'We are chasing profitable and sustainable growth in India'

Metro Cash & Carry India, the Indian arm of the German multinational wholesale company, is bullish on India with the implementation of Goods and Services Tax (GST) system as it believes the new tax regime will help it grow its business much faster in India. Arvind Mediratta, Managing Director & Chief Executive Officer of Metro Cash & Carry India explains to Mahesh Kulkarni of DH how the company plans to grow its business going forward in the country. Edited excerpts:


How has been the growth for Metro Cash & Carry in India so far?

It’s been a long journey for the last 14 years. We opened the first store in Yeshwantpur, which is now our flagship store in India. Currently, we have 24 stores in 11 states. Bengaluru is our important market with six stores. We have four stores in Hyderabad, two each in Mumbai and Delhi, three in Punjab, one each in Kolkata, Uttar Pradesh and Madhya Pradesh and two stores in Gujarat, which is our latest market.


What are your plans going forward?

We have lot of projects, where construction is going on currently. We plan to open two more stores by end of 2017. If you look at Metro, we are very clear what we stand for in terms of our differentiation versus competition. However, we are not chasing numbers. Sales is vanity and profitability is sanity.

We are chasing profitable, sustainable growth in India. Today, we are the most successful B2B company in India among both Indian and foreign players.

We have recently restructured our business in India by splitting our business into two -- North and East and South and West, headquartered in Gurgaon and Bengaluru respectively. We have hired a CEO from Bharti Retail to head the South and West region in Bengaluru. We have created six clusters headed by zonal business head in order to reach out to our customers.


How are you different from your competitors?

We call ourself a champion for independent businesses around the world, especially India. We help independent businesses run their business more profitably and sustainably and grow their bottomline. Our main target is smaller kirana shops with Rs 2 to 6 lakh turnover. India has 10 million such kirana stores and their biggest worry is how to compete with ecommerce and modern retail.

We are focusing on hotels run by individual owners, who want clean transactions. Owners can’t go to market and buy everything for themselves. When they buy from us, they will get clear invoice and tax breakup.

They will get the assurance of right quantity at right price and quality. We are a destination for sea food, meat, chicken, dairy food, frozen foods, fruits and vegetables. Third segment is services, companies and offices who come to us to buy pantry items, housekeeping items, office stationary, etc. We are a one stop shop for all.


How do you help kirana stores compete with modern retail and ecommerce?

They get everything under one roof in our stores. Its a big boon under GST for them. Otherwise, for every single supply they have to keep track of invoices, how much GST is paid for different articles, look at sales and claim input tax credit. Second big advantage is we keep every FMCG product of every company. Smaller kirana stores don’t have to buy from the wholesale market.

We have transparent pricing, every article has clear MRP mentioned, their profit margin, etc. Our prices are 2-3% lower than distributors.


How is Metro helping kirana stores comply with GST?

When demonetisation happened, we helped them with payment solutions. Now, we are offering them credit, because banks do not give them credit. We have tied up with Credit Float, a startup, to give loans to SMEs. We give them the cost of credit.

We have rolled out the facility in Bengaluru to begin with. That is how we have been the champion for small businesses. We have set up GST help desk for them, where they get educated on various aspects of GST.

We have tied up with tax experts, who are educating them on how to get registered under GST, understanding HSN (Harmonised System Nomenclature ) codes and how to get input tax credit, etc. So far, we have trained over 10,000 small traders on various issues pertaining to GST.


What are the new initiatives you have taken?

Starting in July we have rolled out a solution called OPD (order processing, payment, collection and delivery) — its version of an omni-channel strategy. We have sales people going to the doors of shops and take orders. We have given tablets, iPads to our sales team, which has virtual store and list of articles. Shop keepers can place orders for the articles they want. All the information on the product prices, availability, quantity is stored on the tablets and they can order.

The delivery is done at a nominal cost. We piloted in Jaipur a year ago and we have rolled out across our 24 stores. We have 390 people in the sales team and 75% of them focus on smaller kirana stores. We have also launched loyalty programme for our kirana shop keepers.

We offer them additional 1% discount on purchase of more than Rs 25,000 worth of goods.