Interview with Raj Jain , Bharti Wal Mart Chief

Bharti Wal-Mart’s chief on Big Retail’s learning curve and the company’s success mantra – supply-chain, supply-chain and supply-chain.

Raj JainSome years ago, it was the big box format — giant super-stores located miles out of town and offering big discounts over traditional retailers — that was expected to change the shopping habits of Indians forever; when it was discovered no one wanted to drive out of town to get a discount, the Subhiksha-type upgraded kirana was touted as the new mantra; now even that’s in trouble. As Big Retail continues its search for the Holy Grail, Raj Jain who heads Bharti-Wal-Mart (the High Priest of Big Retail!) in India insists finding the key to success is still some time away, writes Sunil Jain.

It’s the supply-chain, Jain emphasises, perhaps why we spend the first 15 minutes of ‘lunch’ at his office with Jain showing the various noodles, jams, and toilet cleaners Wal-Mart is developing as store brands which will retail at 20-30 per cent less than the leading brand today and will still be ‘customised’ (“we’ll be able to deliver a different seasoning for noodles every 100 km” — chicken tikka is a possibility for Punjab where, apart from Haryana, most of Bharti’s 20-odd ‘Easy Day’ stores are located).

Whether Wal-Mart succeeds in India, or whether it goes the way of Wal-Mart’s operations in Korea and Germany where the retailer exited after years of trying is to be seen, and Jain says it takes 3-5 years to understand a market — the first Wal-Mart Cash ‘n’ Carry will be up by May and the next 10-15 over the next five years.

The glass-doored conference rooms at the office’s entrance are all full, of buyers and staffers examining designs and doing detailed costing; the office has a low-cost warehouse look (a conscious attempt to keep costs low and convey the right message) with no false ceilings and air-conditioning ducting out in the open; charts on Wal-Mart culture dot the walls (a ‘10-foot rule’ says you have to be polite to anyone within 10-feet of you); Jain says one way to see if people fit into the Wal-Mart culture (Every Day Low Price emanates from  Every Day Low Cost) is to see how many paper napkins they use after washing up in the bathroom! He insists he doesn’t formally count, but knows usage has come down once colleagues soak in the culture.

More evidence of Wal-Mart’s ways comes in the form of the Honda CRV we use to drive down to China Club (as Whirlpool’s India-head, Jain had a Mercedes and flew business class — it’s cattle-class now).

His Tag Heuer isn’t quite in keeping with the EDLP/EDLC motto, and Jain says it’s from a previous job — when I tell him Obama, another Tag Heuer loyalist, has now switched to a cheaper brand, Jain laughs. Jain, who has spent many years in China in Wal-Mart International and at Whirlpool Corp before that, chose the place since it serves, he claims, authentic Chinese food.

They do it through, initially, having Chinese chefs who, once they’ve trained the locals, then leave. Jain does the ordering and offers to give us samples of cuisine from different parts of the country (he counts off eight distinct Chinese styles, but since there are just three of us, we settle for a smaller selection — Ma-Po Tofu, Yacai green beans, prawns with black beans and steamed rice). Jain’s ease at eating the peanut snacks with chopsticks forces me to do the same (not ordering a bowl for the rice is a bad idea, I later realise), our photographer Sanjay prefers to play safe with a fork — the prawns are really spicy, closer to Sino-Ludhiana but Jain, a vegetarian, assures me they’re authentic Chinese.

Before I take off on Sino-Ludhiana, the marketer in my guest (Jain headed Whirlpool in India and began his career with, not surprisingly, Hindustan Lever) rises to its defence, arguing that while China Club’s customers are the niche type, if Sino-Ludhiana is what the market wants, then Sino-Ludhiana is what it will get — recall his-different-flavouring-for-every-100-km rule!

We run down, literally, the evolution of India’s Big Retail and talk of how various models have fared/failed; of how Reliance once wanted, much like its refinery, to light up stores across the country simultaneously, at the press of a button as it were; of how the Future Group is now trying to replicate Subhiksha which is itself struggling.

Jain participates but manages to keep away from running down anyone or any model. And with good reason — the big learning from Wal-Mart was that customers are different (German customers hated the over-helpful Wal-Mart staffers and wanted to be left alone!) everywhere. So, apart from stating that their stores need to be convenient to access, Jain has left pretty much most things open right now. “We need to experiment and see what customers want … we can’t do scale right now because, if you get it wrong, you’ll be fixing thousands of things in front of customers who can be unforgiving.” He talks of his mother who lives in east Delhi and has told him, “‘I’ve stopped shopping at your stores (not his stores, but at organised retail stores) since the vegetables are never fresh.’ She’s basically telling me that if I don’t get my act together, no one’s coming to my shop.”

So how’s he going to get discounts without scale? “We have to work with suppliers who’re willing to be flexible … it’s a … we both have to have the ability to course-correct mid-way …” India’s still years behind China’s supply chain, according to Jain, primarily because while Chinese suppliers/workers are happy to take detailed instructions, the Indian attitude is ‘tell me what you want done, and I’ll figure out how’.

So what’s he going to sell, I ask, even if the format is not clear. Don’t replicate the kirana, he says, since they do a better job on customisation, small orders and even pre-ordering (‘get me Bhuira jam tomorrow’). But isn’t he doing that with store noodles and pickle? Partially, admits Jain, who is eating at a very slow pace, but the idea of doing store brands is that the customer gets his/her full range of consumables, and at a lower price.

But what’s s/he coming in for then? For items which s/he gets nowhere else (Jain talks of cockroach repellants he promises are very different from what you get in the market — the supplier has a novel idea, but not the money to go national, and this is what Wal-Mart will do for him); for the sheer variety; the consistency; the quality … — “there’s a big need-gap in general merchandise that we can fill.” If some of this sounds contradictory (and it does), put it down to the fact that Big Retail is still early on its learning curve.

We’re interrupted by a call from Jain’s son who wants him to meet a friend — Jain says sure, call him home for a cup of tea. Cup of tea? Surely a 20-year-old’s friend would prefer a drink? I thought of that, Jain admits, but thought that it would send the wrong signals. Signalling, you discover, is an important part of Wal-Mart’s learning process.

His boss, Jain says, walks with him (or other senior managers) with a ‘Tazon’ — it’s a device that reads bar codes and tells you everything you wanted to know about a product. So, while walking in the store, the boss would stop at a cup, for instance, zap it to find out all about it and then ask the store assistant/manager as to whether it made sense to keep the cup there since it had sold only two pieces in the last fortnight.

Jain gives other examples of signalling, and talks of a Culture Saturday once a month where, over five-six hours, people talk of elements of the Wal-Mart culture — “We hire for attitude (think paper napkins!), and train for skill … we do not hire even very bright people if they don’t fit into our culture.” An example of culture and the ‘servant-leader’ attitude Jain talks of? The junior-most staffers sit in the best place in the office, with the most natural light — it helps them feel good and, the lack of cabins there ensures the rest of the office gets as much natural light as possible!

With so much effort, even measurement, going into retail, it’s more ‘science’ than ‘art’ of the mart, I realise. But I stick to the title only since, as we drive back to Jain’s office, he talks of how his wife, who sells art online, chose to focus on Pakistani art (Jain rattles off the names of Hussain equivalents) as it was as good as Indian art but a third cheaper. “She wants to be the Wal-Mart of the art world!”


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