Rural Retail Sector in India is super hot!!

Last updated on Aug 28, 2008

Posted on Aug 28, 2008

This is the strangest thing about the Indian scenario – things that seem obvious are not and those that are totally out of the realm of possibility become a hit.

Retail is a hot sector, but not all the ventures are succeeding in the urban areas.  And rural areas, where you would least expect, gets heated like crazy!

DCM Shriram’s Hariyali Kisaan Bazaar (HKB) is exclusively for the rural India.  They have 160 stores and in the last 2 years the sales have doubled in the stores.

Average sales at an HKB store have gone up to Rs 5 lakh a day during the harvest seasons, while it is around a tenth of that during the lean season. That means the turnover of a single HBK store is over Rs 6 crore, annually, while the investment cost varies between Rs 2 crore and Rs 3 crore.

Now, thats a breakeven period of roughly 6 months!!  THAT should be some business model!

And this is just the tip of the iceberg.. imagine using this infrastructure for selling other things – like insurance, cell phones, computers, internet time (by adding a few PCs and broadband and creating a mini cyber cafe), heck even banking!!

And, what do they sell? Everything ranging from Agricultural supplies to household items – kind of like a rural Walmart with a specialized farm department.

HKB not only sells products relating to agriculture like fertilisers and seeds, but also household items as 40% of rural India comprises those that are not engaged in farming….

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