Retail Chronicles- 1 to 15 sept

& Culture
Structure
Adani Wilmar: An
of
the smart
Xiaomi
for commoners
TV
Reality
Augmented
Retail
transforming
Walmart-Flipkart
& Bharat Bandh
deal
Retail Lab SIMSR
K J SIMSR, Mumbai
Contact: +91 8896732500, +91 8449248227
retaillab@somaiya.edu
RETAIL
CHRONICLES
Fortnightly Newsletter | Volume 3 - Issue 4 | 1-15 September 2018
Pg 06
02
FMCG Goliath
06
Pg 08
08
10
Pg 02
11
Retail News
Pg 10 Pg 11

Don't find
customers for
your products,
find products
for your
customers!
Seth Godin, Author, Entrepreneur

02
Structure and Culture of Adani Wilmar:
An FMCG Goliath
By Nimish saxena
About Adani Wilmar:
Adani Wilmar Limited (AWL) is a joint venture
incorporated in January 1999 between Adani Group,
the leaders in International trading & Private
Infrastructure and Wilmar International Limited -
Singapore, Asia's leading Agri business group. The
Ahmedabad(Gujarat) based company is the largest
branded oil manufacturer and has managed to grow
its revenue to ₹18,000 crore, becoming the
largest edible oil company in the country with a
share of about 19.5 per cent within 15 years
The joint venture incepted with the commissioning
of India's first port-based refinery at
Mundra, Gujarat. Today, Adani Wilmar owns
refineries in 17 strategic locations across India, has
8 crushing units and 19 packing units. Collectively,
this totals to a refining capacity of 10300 tonnes a
day, seed crushing capacity of 7485 tonnes a day
and packaging capacity of 8500 tonnes a day.
Adani Wilmar has a range of premium edible
oils, Vanaspati, packed Basmati Rice, pulses,
Soya Chunks and also the first National Brand in
Besan. It also has a range of customized
speciality
fats for institutional customers. The product
portfolio of Adani Wilmar spans under various
brands
such as - Fortune, King’s, Bullet, Raag, Avsar,
Pilaf, Jubilee, A-Kote, Fryola, Alpha and
Aadhaar.
Fortune is the most prestigious brand in the
Adani Wilmar’s portfolio. Fortune became the
no.1 brand in the market within just 2 years of its
launch (in the year 2000) and still continues to
be a
leader. Following the success it achieved
domestically, Adani Wilmar took its branded
Edible oil to
markets beyond India and is now exporting its
products to more than 19 countries in the
Middle-
East, Australia & New Zealand, South East Asia
& East Africa.

03
Sales and Distribution:
For a company to hold such a diverse portfolio
and to sustainably grow its profits the sales
and distribution system plays a crucial role.
Company’s responsibility is to ensure optimal redistribution
of the products among the retailers in
the assigned area. They must ensure that all the
brand-packs of all the products
manufactured/marketed by the company are
available in as many
retail outlets as possible in their area. If stock
exhaustion happens in any of the outlets,
company is
likely to lose end-consumers. The Indian
consumer rarely marches a mile to buy a product
- he is
likely to switch, and even if he is not inclined to
do so, the retailer will instigate the switch as he
would hate losing a customer to his competitor
down the street. This implicitly means
distributors
should be stocked with sufficient quantity of all
brand-packs, gearing them for seasonal
fluctuations
and production vagaries.
At Adani Wilmar the distribution channels are
segmented according to the target market, dividing
it into two categories:
General Trade:
Traditional trade is associated with a spread-out
distribution network of small retailers,
dealers, stockists, wholesalers, and distributors. It’s
an intricate network which serves
localized customer demand through regular orders
with short lead times and varying fill
rates.
Modern trade:
Modern Trade (MT) consists of supermarkets and
hypermarkets that retail Fast Moving
Consumer Goods (FMCG). This route aims at
catering masses in urban location via one stop
shops.
These two distribution channels have several
stages depending on how many organisations are
involved:
Channel 1 contains three stages between producer
and consumer - a C&F agent, distributor and a
retailer. After a product is manufactured, it has to
be sent to the market for sales & distribution.
A
C&F (Carry & forward) agent acts as a link between
company and distributors and transfers the stock
from the former to the latter. The Distributors then
distribute the products in the market through
retailers.

Channel 2 contains two stages between producer
and consumer - a wholesaler and a retailer. A
wholesaler typically buys and stores large quantities
of variety of producer’s goods and then breaks
them into bulk deliveries to supply retailers with
smaller quantities.
Channel 3 is called a "direct-marketing"
channel, since it has no intermediary levels. In this
case the
manufacturer sells directly to customers. Factory
outlet store is the prime example of direct
marketing channel. Many holiday companies also
market direct to consumers, bypassing a
traditional retail intermediary - the travel agent.
The company, in order to have real time visibility
and monitor the sales force’s activity has
opted for SFDC with SAAS model. This enables
the company to monitor any exception on mobile
devices based on policy defined as per
organization security guideline and fix it.
The company’s sales structure is
represented by the following
framework:
Sales structure complementing distribution
channels:
Adani Wilmar has the largest distribution network of
edible oil in India. The FMCG giant has a sales
force of more than 600 people and 4000 distributers.
The Sales force process at Adani Wilmar involves
multiple levels of planning including Annual Tour
Plan (ATP), Monthly Tour Plan (MTP) and Daily
Sales Route (DSR).
Every salesman plans his daily tour based on his
MTP and visits a number of agreed outlets
for taking orders. During each outlet visit, the
salesman is supposed to push new product and
scheme, check on how the company’s product is
displayed at the outlet, review sale of the previous
order and take new orders. The distributor delivers
the order after the salesman files it in the system
manually.
ZSM: Zonal Sales Manager
RSM: Regional Sales Manager
ASM: Area Sales Manager
ASE: Area Sales Executive
DSM: Distributor Sales Manager
04

05
Company Culture:
Adani Wilmar is home to over two thousand
employees who claim it to be one of the best places
to
work at. The organisation claims to have a missiondriven
culture, transparent leadership and a
strength-based work environment which encourages
employees to play to their strengths. Adani
Wilmar felicitates its employees for their long
association with the firm with incentives and awards
like ‘Star of the Quarter’, Annual Awards etc. and
aims to nurture young innovators with initiatives
like ‘I have an Idea’. They strongly believe that
learning is a never ending process and hence
encourage the employees to take up initiatives that
can help them grow internally as well as in their
career through various platforms such as
‘eVidyalaya’, Harvard Manage Mentor (HMM) etc.
Having said this, the firm is aware that
recreational activities and team outings are
essential to keep the employees motivated and
function well as a team. In light of this the
company organizes several initiatives such as
Sports Event, Family Fiesta and Outbound
Training etc. throughout the year.
Finally, though attributes like being a process
driven company, having an open door policy to
maintain transparency and smooth operation
through cohesiveness tells a lot about what
Adani
Wilmar is all about, what really defines their
culture is their Values – Courage, Trust &
Commitment;
which enables them to embrace new ideas and
businesses, believe in their employees &
stakeholders and stand by their promises while
adhering to high standards of business.

06
‘Xiaomi’-The
Smart TV for
Commoners
-By Piyush Sinha
Television is a very important invention in the
history of mankind. It was invented by a Scottish
scientist named ‘John Logie Baird’ in the year
‘1924’. The first television transmitted recognizable
human faces and moving objects on a screen. It has
covered a long journey since then. Now television
has become one of the most important means of
entertainment. More than 80% of the world families
own a TV and around 229 million TV sets were sold
in the year 2017. Companies like Netflix have
entered the list of fortune companies just by selling
their products to the media industry.
The current Indian television market is dominated
by companies like ‘Samsung’ and ‘Sony’. There is
also an electronic technology giant which has
stepped up into the Indian market. ‘Xiaomi’, the
Chinese giant has become a major player in the
mobile industry in India.
In just 5 years from having a negligible presence,
it has become the highest selling mobile phone in
India occupying a market share of 31%. It has
become popular in India by selling low budget
mobile phone providing lot of features in its
range. Xiaomi works on the pricing model of 5%
net profit. It capitalizes on the ‘Economies of
scale’. The pricing strategy of mobile phone is a
huge success in India but will this strategy be
successful in the Television market?
According to a Company executive, Xiaomi will
start selling its Mi TV through multi brand stores
by Diwali, apart from the exclusive Mi home
stores and e-commerce websites. Currently Mi
has 3 TV models in India of screen sizes of 32,
43 and 55 inches. Xiaomi India is looking at
proving more unique and innovative product line
to its customers at honest pricing. “Following our
honest price capping, all our Mi hardware
products have been capped at a net profit margin
of 5% thereby allowing our customers enjoy the
best of the innovative offering at a truly
accessible rate,” said the executive.

07
With the entry of Xiaomi selling televisions
aggressively it will be a tough time for its competitors.
We can expect a decrease in the price of television.
The availability of quality television at affordable prices
will enfold as a big Diwali bonus for its customers. In
the near future we can also expect Mi television
models being sold online in just a few seconds. Xiaomi
has captured the Indian Mobile phone market
exceptionally well and now it’s time for them to prove
their worth in the Television industry. It won’t be a
cake walk though, as its competitors are closely
observing every step of the company. But, Xiaomi is
expected to rule until a new idea disrupts the market
and its legacy.
Xiaomi’s 55 inch TV is sold at just Rs 44,999 while
43 inches smart TV is sold at Rs 22,999 and 32
inches at Rs 13,999. The company has
reformulated the smart TV pricing in India which
forced not just the prominent brand to reconsider
their prices but also the price-aggressive online
television companies to further drop their prices.
The company is primarily targeting consumers
aged between 18-40 years for the television,
though purchasing a TV set is a family decision.
The company is attracting its customers through
its varied features and attractive design. A majority
of its customers are the ones who are pricesensitive.

Augmented reality
transforming Retail
I
n recent years, the worlds of augmented reality and
retail have collided spectacularly from shoppable
windows to the products that come alive in our hand.
The retail landscape is overcrowded and customers
are becoming insensate to traditional marketing
methods. That’s where augmented reality comes in.
What is Augmented reality?
by Bharat Gupta
Augmented reality (AR) is a type of interactive, realitybased
display environment that takes the capabilities of
computer generated display, sound, text and effects to
enhance the user's real-world experience. Augmented
reality combines real and computer-based scenes and
images to deliver a unified but enhanced view of the
world.
Brands and retailers are considering new and
innovative ways in which they can capture customer
attention because of the shoppers turning to a blend of
online, mobile, and bricks-and-mortar shopping for their
convenience. Augmented reality can now realise stuff
that we couldn't have even imagined a few decades
back. It is so powerful that it can even convert abstract
things to concrete and can set life to posters, images or
even a product tag.. Customers can see brands and
their stock in an exceedingly new way and engage with
them on a completely new level.
Furniture and lighting is the major retail type in
the planning and designing application. AR is
increasingly being used by furniture retailers to
help customers visualize the select products at
their desired place. This helps customers to buy
furniture and relevant stuff according to their
home or office spaces. The significant example
of a practical application of AR can be found in
the Swedish based launch - IKEA .The firm has
magnificently applied AR in their catalogue to
provide the user a real-life envision of their
product of interest.
This technology used in their application even
appropriately measures the dimensions of the
household products accordingly to the size of
user's room. Adding to this ,the customers can
even get a 3D visualisation of over 2000
products before making a mind to purchase one.
This technology has thus proven to capture the
vital theme-Customer satisfaction". 08

Even the concept of AR has flourished to the
clothing brands.Topshop along with the alliance with
Kinect has restablished AR aided dressing rooms .
So a buyer can get a realistic picture of their product
of choice on them even without trying them on!
Similar applications of AR is seen in the Lenskart
application, where one can easily try on numerous
number of spectacles and decide what fits them
best.
Even the cosmetics and beauty brands have bought
AR into the retail experience. AR apps from
Sephora, L'Oreal and others help users shop with
confidence and virtually test beauty products at
home via their smartphone.
Beyond usability, these apps gives shopper a
delightful experience which helps in gaining
customer loyalty by making the online shopping
experience fun, which is part of the value of visiting
in-store. The AR apps gives an immense source of
data in terms of understanding what consumers like,
what they like less in terms of colors, looks, textures.
For their marketing and their labs, it's a great source
of insight in terms of trends and it helps them deliver
makeup collections.
China’s largest online grocer, Yihaodian, has set
up 1,000 invisible retail stores in parking lots,
parks and popular public places.
How does it work?
As soon as pedestrians open up the retailer’s
app, they can visualize a complete grocery store
with multiple passages. As they pass through the
aisles, they can pick and add products to their
carts and as soon as they’re done, the products
get delivered to their homes.
Let me quote Apple CEO Tim Cook’s views on
AR:
I regard it as a big idea, like the smartphone …
Augmented reality … will have a far bigger
impact than smartphones ever did. I think AR is
that big, it’s huge. I get excited because of the
things that could be done …”
The single most important technological
advancement that would truly change the future
of retail can be summed up in two words:
Augmented Reality (AR).
It's time to say "Hello
AR"!
11 09

Walmart-
Flipkart deal &
Bharat Bandh!
by Subham Thakur
Saturday on August 18, 2018 Walmart announced
their purchase of 77% stake in India’s biggest online
retailer Flipkart. Flipkart is market leader in Indian E-
commerce segment, since Walmart has bought
stake in Flipkart it gives direct entry to Walmart in
Indian retail sector. This is not the first time for
Walmart they have done it in past also in china by
investing 500 million with JD.com in Dada-JD online
grocery store. With this Walmart and Flipkart is
competing neck and neck with Seattle based US
tech giant Amazon. Amazon is second in terms of
market share in Indian E-commerce. Walmart is
world’s largest grocer but Amazon is giving it fierce
competition with its deep discounting and gigantic
cash reserve. In second quarter of fiscal 2017
Amazon registered 31.1% year on year growth while
Walmart’s market share rose by only 0.5%.
After this announcement traders association has
shown their great heartburn. On August 19, 2018
Confederation of All India Traders (CAIT) held their
annual general meeting at Nagpur. CAIT secretary
general Mr. Praveen Khandelwal said the deal has
“violated Press Note No 3 of 2016 of Government
and is a combination with a sinister design to control
and dominate the retail trade through the passage of
e-commerce”. He claimed that it will create an
uneven level playing field and wipe out many small
players in retail industry. Due to their business
module they can provide deep discounting,
predatory pricing schemes and loss funding. Let’s
see what is Press Note No 3 of 2016 of Government
of India? According to that act FDI up to 100% under
automatic route is permitted in Business to Business
(B2B) e-commerce model. (B2B) e-commerce model.
No FDI is allowed in Business to Consumer (B2C) e-
commerce
.
model. However in B2C FDI is allowed in
some of the cases like if products are manufactured in
India then it is allowed to sell through e-commerce
channel, single brand Brick and mortar store is allowed
to have e-commerce as their channel for distribution
and An Indian manufacture is permitted to sell its own
single brand products through e-commerce retail Indian
manufacturer would be the investee company. Which is
the owner of the India brand and which manufactures in
India, in terms of value at least 70% of its product in
house and source at most 30% from Indian
manufactures.
According to them there are two types of business
models Inventory based and Marketplace based.
Inventory based e-commerce model is where inventory
is owned by company and goods are directly sold to
consumer by e-commerce channel. Marketplace based
e-commerce model is where e-commerce is just acting
as facilitator between buyer and seller. Here our Flipkart
is like Marketplace model. It also claimed that no
discounting is allowed and that no inventory ownership
directly or indirectly is allowed by e-commerce
marketplace model.From this deal not only Walmart is
getting benefited Flipkart is also getting handful.
What happens on 28th of September is even bigger
matter but Indian organized retail is going to see some
of the fascinating changes and great discount offers
also. So happy shopping guys!
11 10

Retail news at glance
Paytm mall deepens partnership to counter Flipkart,
Amazon and may buy 10% stake in Future retail.
Foodpanda to hire 60,000 delivery riders in 2 months.
Da Milano continues to expand its presence, opens store in
Aerocity.
The Coca-Cola company to acquire Costa.
PepsiCo enters into agreement to acquire SodaStream
International Ltd.
Rangriti signs Parineeti Chopra as brand ambassador.
Actor Sooraj Pancholi will be launching his own active
clothing brand next year.
11

Our Team
Content Head
Raveena Gupta
Junior Team
Retail Chronicles is a bi-monthly newsletter of
Retail Lab, the Retail committee of KJ
Somaiya Institute of Management Studies
& Research, Mumbai. Images used in Retail
Chronicles are subject to copyright.
Bharat Gupta
Piyush Sinha
Nimish Saxena
Shubham Thakur
Design Head
Debashish Sarmah
Design Team
Ayush Pangoria
Sachin Ghosh
Shiva Tadas
Surabhi Upadhayay
/retaillabsimsr
@Retail_LAB
retail_lab
K J Somaiya Institute Of
Management Studies &
Research, Mumbai
retaillab.simsr@somaiya.edu
+91 8896732500
+91 8449248227