Many are already tinkering with their business models, collaborating to stay operational, focusing on online sales and are even changing focus towards essential services.

Neerus to Almond House How Telangana retailers are tweaking post-lockdown biz modelsImage for representation: Picxy
Coronavirus Business Friday, April 24, 2020 - 09:41

While retailers across the country are reeling from the effects of the nationwide lockdown on their businesses, retailers in Telangana are a badly hit lot after Chief Minister K Chandrasekhar Rao extended the lockdown in the state till May 7, leaving room for evaluation on May 5.

A webinar hosted by the Retailers Association of India (RAI) brought together industry leaders from Telangana to discuss the impact of COVID-19 on retail business.

However, what is worrying them even more is what the post-lockdown future would look like and how consumer behaviour may change. Many are already tinkering with their business models, collaborating to stay operational, focusing on online sales and are even changing focus towards essential services.

With non-essentials like clothing stores and mobile shops being suspended, for retail stores like Neeru's an ethnic fashion brand, the business has come to a standstill.

"We are witnessing zero revenue days," says Avnish Kumar, Managing Director of Neeru's who is now planning on diversifying its products to increase its digital presence to stay afloat. "We had not tapped online prior to this, we always felt ethnic wear is a touch-and-feel the fabric then select kind of experience. We are now getting into the category of fast fashion, kurtis and bottoms and casual wear. Once they (customers) get an idea of the quality of the product then they would become customers for our higher-end products," says the entrepreneur.

Murali Retineni, the Director of Celekt Mobiles, a brick and mortar mobile store firm, says he has been keenly observing how mobile stores in China and South Korea adapted to customer behaviour post lockdown. “We are planning to screen every customer. Every customer and employee must wear a mask. We have to avoid the use of paper-based finance and go digital. We are creating SoPs, dos and don’ts, a lot of customers touch the demo phones, We will ban demo phones, minimise sofa or chair at the store to avoid contamination. Every business should have long term vision, weak companies will die, we have to come out of our comfort zones. Keeping the team motivated also is important,” he adds.

The retail store doesn’t plan to expand stores this year. “We have to go to where the customer is. We are exploring digital options like selecting a store to buy a mobile phone using your pin code. You can either buy online and get it delivered or pay online and visit the store and have the product brought to your car,” says Murali. 

And while loss in business for several retailers has meant job cuts, these Telangana-based retailers want to innovate their business models instead of trimming their organisation with job cuts, though some are open to the idea of a pay cut.

Collaborations amid lack of clarity in regulations

For food retailers in the state, the lockdown extension has been a double whammy with the CM also banning food delivery, which was the only source of income for them at this point.

Chaitanya Muppala, Managing Director of Almond House, which sells snacks and sweets says his firm had made mitigation plans when COVID-19 struck. “We had a plan, we had steps that we will take...but none of our planning really helped as the way the disease panned out in India,” says Chaitanya who is mulling a reduction in workforce and rationalising a few stores, “We moved to hyperlocal delivery, to gated communities. We thought it would be a way forward but there were regulatory uncertainties.”

This has meant that Almond House will now look to adapt to the uncertain future and pivot its product mix to stay relevant., especially since it no longer can deliver food.

The company is developing ready to cook a range of food to stay relevant in the market, the firm has adopted a collaborative approach. “Our needs for collaborations arose because organic food distributors had permission to move about and make deliveries. They have access to the customer that we at this time don’t,” says Chaitanya.

Almond House is also mulling on collaborating with grocery stores and retail shops to keep their products at their stores as paying distributors 30% to 40% revenue has become unsustainable.

However, lack of clarity from the state government, Chaitanya says, has been its biggest issue. 

“There is a lot of ambiguity in regulation. We have pivoted our product mix to cater to more essential needs of customers but blanket statements like eating dal rice at home coming from the CM, who has left it to interpretation of local authorities has not helped,” he says.

Almond House with its stores mostly in Hyderabad has been unable to open all outlets. The stores stay open only if the police station of the respective locality allows, “and that’s demotivating,” he adds.

Eating habits will change

Yeshwanth Nag, Founder, The ThickShake Factory is of the view that eating habits of the public will change post lockdown, “People will cook at home as they will get used to it,” says Yeshwanth who believes that for the next six months, restaurants will not see much business as there will be poor consumer confidence.

“We are trying to bring in new product lines, we are adding food brands that will help revenue. We are also moving to ready to eat products. We want to be where the consumers are rather than force the consumer to come to us,” he adds.

The Thick Shake Factory garners a large chunk of its orders online through food delivery apps, but with Telangana suspending the service, revenue flow has stopped. “Even before the lockdown, orders for all restaurants were down on Swiggy. The restaurant owners are going to suffer if the government doesn’t provide support many will shut down,” he adds.

Neeru’s, on the other hand, intends to collaborate with hospitals and pharmacies where their masks would be showcased and can be bought.

These Telangana-based retailers are hoping to approach the Centre to extend the moratorium on loans from three to six months, while ensuring interest-free relief. They are also seeking that 5% of the GDP be set aside as COVID-19 relief. 

The Managing Director of Neeru’s hopes the Centre will give rent and electricity bill concessions to mall owners that would then trickle down to rent concessions for retail brands with shops at these malls.

All of them agree that bringing consumer confidence in buying will only return if Centre stepped in with measures to instil confidence. 

Read: Swiggy, Zomato delivery executives lose all income as Telangana bans food delivery

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