Watch Out Walmart, India’s Got LanMark

The retail chain, which brought together 160 small dealers of white goods under a single brand in Kerala, debuts in Tamil Nadu, to now expand footprint in south India     A novel experiment in retail that began in Kerala is catching on in Tamil Nadu, holding out hope that this hybrid model could be just what small traders require to compete effectively against Big Retail.  LanMark, which has brought together 160 small dealers of white goods in Kerala under a common brand, has quietly made its debut in Tamil Nadu with 12 stores under its fold. It is now ready to expand to the rest of south India.  LanMark was started seven years ago when a group of retail professionals saw an answer to the problems of scale-challenged small retailers. In Chennai, learning that some small stores were on the verge of closing down, the brand studied the city market and found their problems were the same as in Kerala: absence of proper accounting, poor staff attitudes and a lack of professionalism.  "We sensed early that retail hinges not only on scale of operations, but also on financial discipline and a professional approach. And we could impress these on individual store-owners over the past seven years," said Jerry Mathew, MD of LanMark.  Jerry Mathew owns 53% stake in Kochi-based LanMark. The combined turnover of LanMark stores is now . 108 crore, surely just a fraction of that of the big boys of retail. But then it has 160 stores, almost as many as Tata Croma and Reliance Digital put together.  The model is kept simple: retail outlets can join the brand by branding their shops LanMark, but retaining their individual status for accounting purposes, including sales tax registration. Lan-Mark takes care of bulk sourcing of products, their transportation to individual stores, and more importantly, the publicity. "Individual shops hardly had any publicity budgets, but over these years we have spent . 10 crore in print advertising alone," said Mathew, who cites pan-European Euronics network to be the only comparable model of independent retailers. "This is a good development, an exciting thing to do, and perhaps the first of its kind in the country," said Shubhranshu Pani, managing director (retail), Jones Lang LaSalle in India.  Pani said group buying is key in retail and that it is a "phenomenal thought for a group of retailers to come together in co-branding, in contrast to the regular franchisee model.  LanMark has invested in setting up accounting and transportation logisticspractices that are now leveraged for the 160 stores in the group, complete with SAP-based operations for the brand and Tally systems for individual stores. Products are transported to stores in GPS-enabled trucks that can even provide information on the time spent on unloading at a particular store.  The brand also cleared a seemingly insurmountable obstacle in retail trade: getting paid for deliveries on time. Member stores have to strictly abide by the cash-and-carry norm. "If any store delays payment or fails in accounting discipline, we show them the door," said KA Felix, a consultant for the brand. LanMark also takes care of professionalising staff behaviour, providing a formal, syllabus-oriented training module for staff drawn from different stores in batches of 40, and is mulling the option of organising training programmes in association with IIM-Ahmedabad.  Those who have joined the brand have no regrets, having found a new way to compete with bigger chains.  "In the early years, it was alright being a one-store business, but when larger showrooms came along, and manufacturers gave incentives and foreign jaunts only to the bigger players, business started flagging," said Mathew Maliekal, a store owner at Kaduthuruthy in Kottayam district, who started 26 years ago and joined LanMark when it came into being.  "Since joining the LanMark network, my business has grown two-and-a-half times, and the training and advice I get is a bonus." Mathew said getting stores on board was not easy. "But what we discovered was that a number of proprietors did not even know whether they were making profits or losses, owing to loose accounting practices. Once store owners realised that dealer profitability was our abiding concern, they signed up."  Twist in Retail  LANMARK HELPS  scale-challenged small traders overcome disadvantages  IT BRINGS  together white goods dealers under a common brand  MORE STORES  under umbrella than Croma, Reliance Digital  LANMARK IS  in charge of sourcing, logistics & publicity for all dealers  POPULAR IN  Kerala, it has just entered Chennai. Rest of South India on horizon