Chief Executive Officer, Essar Hypermart in talks with B&E’s
B&E: Today, Essar Steel Mart contributes 33% to Essar Steel’s overall revenue. Do you have any plans to increase this contribution?
GR: Yes, today we contribute considerably to Essar Steel’s total revenue. We are planning to double our turnover over the next three years. However, our overall contribution to Essar Steel would remain the same as at Essar steel we are planning to increase our production to 10 million tonnes from the current level of 4.5 million tonnes. In the meantime, we are also planning to increase our penetration in the market as well as increase our product portfolio. For the same, recently, we have added heavy plates, colour quoted retail products to our offerings; and it has been appreciated by our customers.
B&E: So far, the only competition you have in this particular segment is from unorganised retail players. But what will happen when more players join the competitive fray?
GR: The steel market in India is huge and there is ample room for everyone. Naturally, the segment will transform into organised retail from unorganised. Having said that, Essar Hypermart will continue to get the first mover’s advantage. Our customers will continue to come to us as we also provide many value added services. For example, recently, we have started investment in IT infrastructure to have a better inventory management.
B&E: Marketing steel as a commodity; how difficult or easy is it? How do you plan to market your products?
GR: It is very difficult to market steel as the product does not carry any brand. Moreover, it changes shape from one form to another, which is not the case in any FMCG or electronic product. However, people over the last couple of years have realised the importance of an organised retail outlet. So, we have allocated a budget of Rs.150 million for branding and marketing exercises. Also, we are focusing on several BTL activities in the rural areas and outdoor media initiatives in the urban areas.
B&E: Apart from giving you the recognition of an organised player, what are the other strategic advantages that the hypermart is providing you?
GR: Essar Hypermart has led us to reach a huge customer base across India. By catering to the retail market, we mitigate the risk of being dependent on a single industry and segment like auto or infrastructure. Further, the retail form of business gives us better margins and adds a great value to our brand. Also, our direct presence in the market helps us to understand the customer in a better way.
B&E: Today, Essar Steel Mart contributes 33% to Essar Steel’s overall revenue. Do you have any plans to increase this contribution?
GR: Yes, today we contribute considerably to Essar Steel’s total revenue. We are planning to double our turnover over the next three years. However, our overall contribution to Essar Steel would remain the same as at Essar steel we are planning to increase our production to 10 million tonnes from the current level of 4.5 million tonnes. In the meantime, we are also planning to increase our penetration in the market as well as increase our product portfolio. For the same, recently, we have added heavy plates, colour quoted retail products to our offerings; and it has been appreciated by our customers.
B&E: So far, the only competition you have in this particular segment is from unorganised retail players. But what will happen when more players join the competitive fray?
GR: The steel market in India is huge and there is ample room for everyone. Naturally, the segment will transform into organised retail from unorganised. Having said that, Essar Hypermart will continue to get the first mover’s advantage. Our customers will continue to come to us as we also provide many value added services. For example, recently, we have started investment in IT infrastructure to have a better inventory management.
B&E: Marketing steel as a commodity; how difficult or easy is it? How do you plan to market your products?
GR: It is very difficult to market steel as the product does not carry any brand. Moreover, it changes shape from one form to another, which is not the case in any FMCG or electronic product. However, people over the last couple of years have realised the importance of an organised retail outlet. So, we have allocated a budget of Rs.150 million for branding and marketing exercises. Also, we are focusing on several BTL activities in the rural areas and outdoor media initiatives in the urban areas.
B&E: Apart from giving you the recognition of an organised player, what are the other strategic advantages that the hypermart is providing you?
GR: Essar Hypermart has led us to reach a huge customer base across India. By catering to the retail market, we mitigate the risk of being dependent on a single industry and segment like auto or infrastructure. Further, the retail form of business gives us better margins and adds a great value to our brand. Also, our direct presence in the market helps us to understand the customer in a better way.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
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