BUSINESS LESSONS FROM SADAR BAZAAR



During my recent trip to India in October, I went to Sadar Bazaar in Delhi.


Sadar Bazaar is the largest wholesale market for household items in Delhi, perhaps in Asia, so if you are looking for a bargain, that's the place to go.


In the bazaar, there are approximately 10,000 plus separate businesses running simultaneously, generating revenue of around Rs 15 crores (approx. 2 million USD), daily.


It employs around 200K people who serve close to 1 million people visiting every day.


Apart from these 10,000 wholesale and retail shops, there are uncountable daily vendors who sell anything from food, to toys, to sunglasses. These vendors always intrigue me and apart from doing business, I chat a few minutes to understand their lives and their business.


Business Transformation


As Diwali is around the corner, Mahesh is enthusiastically shouting to attract the bypassers to buy the firecrackers. He is one of the 14 vendors sitting in a row and although, I have no interest in buying firecrackers, I wonder what he and the other vendors will do once Diwali is over in 7 days time, so I stop and ask him.


"So do you sell these firecrackers throughout the year?" I asked

"No way, only for a month before Diwali" Mahesh replied.

"So what do you do the rest of the year?"

"India is a country of Festivals sir and I am the festival expert"

"What do you mean?"

"We sell goods for 20 festivals in a year. We start in January with 'Lohri' and end with Christmas. Most of the others you see today are not permanently here, but I am always here, 365 days. Most of my customers know me by my name"

"But 20 festivals, which means that you need to change everything about your shop 20 times."

"Yes, we need to do marketing, purchasing, pricing, shop setup, inventory management 20 times. For some festivals such as Christmas (25th December), Lohri (14th Jan), Republic day (26th Jan), we need to do very quickly, within a week or so"

"Wow, that is pretty troublesome isn't it?"

"Well yes, but that's our business, We opted to be in a festival specialty business and as most of our customers are returning customers from around this area, we run a risk that if we don't change quickly, they will go to the other vendors"


"And how do you make sure they come to you?"



Marketing, Customer Management & Delight


"A week or so before every festival, we send a pamphlet to all the nearby homes. Its say that if you bring this pamphlet, you will get a 20% discount, every pamphlet has a code number, so we exactly know which pamphlet went to which house. One of our guys here matches that pamphlet code with the house numbers and if we see that the customer is coming for the first time, I give them 5%-10% extra, without them asking, so that they feel that they got more than expected.


"That's pretty cool"


"Yes sir, we have also employed a chaiwala (tea vendor) and a Balloonwala

(a balloon vendor). The idea behind it is that we want one customer to spend at least 10 minutes in our shop. When that happens, they often buy more than they actually came for. Also, with so much activity happening outside our shop, the bypassers stop out of curiosity and we have one guy whose job is to just lure them to get in and see the variety of crackers we have"


"So when you spend all that money, are you left with any margin?"


Product Positioning and Margin management


"Our margin with Fire-crackers is not that high, it's approximately 20%-30% but apart from this, we sell statues of Gods and Goddesses and there we make most of our money. Most people don't bargain the price of gods." He gave a cheeky smile.


"Oh ok, from outside it looks more like a firecracker shop, I didn't see that you sell statues as well. If that business has better margins, why don't you just sell statues instead?"


"Because you might not buy a new statue every festival but you definitely want to buy firecrackers every year. However once you buy firecrackers, the feeling of celebration is only complete when you buy a brand new statue of God" He winked and replied.


"That's very smart"


"Thanks, Sir, we do whatever we can, to survive"


I wonder how a 25-year-old uneducated man and millions of people like him are such good executioner of concepts we are taught for years in Universities and B-schools. A business transformation, as I have been told takes anywhere between 3-5 years and the best minds of the industry work on it, here this guy, Mahesh does it 20 times a year. And of course he has no education in the marketing mix, product positioning or customer experience management but he does it to perfection.


My biggest question was, why with all the education, support and manpower, businesses more often than not fail to do these activities perfectly and a person who hasn't read a management book in his life is doing it seamlessly?


Something to think about.


Thanks,

The Journeyman

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