LESS IS MORE - SUBHIKSHA:
Ramaswami Subramanian has geared his business for the consumer who demands value for money. 41-year-old Ramaswami Subramanian, Managing Director of Subhiksha, So, what is the strength behind this retail business model which locks in nearly 6.5 lakh bills every day and that has saved almost Rs 250 crore for its customers last year? "Plain logic", says Subramanian. In 1997, he chose to enter the retail market, choosing it over software as he would be an early entrant and have the first-mover advantage. From initial research, he discovered that the reason a customer would abandon his existing store and come to Subhiksha "was price. So, we decided to sell branded products at a lower price."And, consumers prefer buying groceries from closer home, so "we decided to set up 1,500 sq ft shops across the city", quite unlike his competition with outlets almost twice as big. Today, the chain boasts 1,381 stores, with 135 stores in Delhi where there are just 110 post offices. "There are more Subhiksha stores than there are post offices in Delhi. So, everyone can find one in their neighbourhood. It's the survival of the fittest.
Also, what has clicked for Subramanian, apart from his strong reasoning, is his in-depth understanding of the ethos of the Indian consumer. And it is not just the name which was derived from the Sanskrit word Subhiksham (which means 'Giver of all good things') or the soft carnatic music which is the ambient music at the modest corporate office in Chennai when nearly 90 per cent of the 1987 IIT-Madras batch, to which he belonged, went abroad. "I took a call that I didn't want to go abroad and do something here," he reminisces.
VENTURING INTO THE UNKOWN:
He passed out of IIM-Ahmedabad with a gold-medal and the best job on campus with Citibank's investment banking division.In those days, "Salaries were bad. My first was Rs 5,500 and that was the best salary that year." That apart, "it was doing more and more of the same thing," that made him quit that coveted job in three-four weeks.Was it a decision that came easy to him? "While the monetary risk was only Rs 5,500, the social risk of failure was far greater. Entrepreneurship was not an accepted way of life 20 years back. As a failed entrepreneur, would you have place in corporate India was a big question mark. I didn't think about it much."So, after a short stint at two-wheeler maker Enfield, Subramanian told S. Vishwanathan, its Chairman, that he wanted to be on his own. Vishwanathan lent him Rs 2.5 crore and he launched Viswapriya, a financial services company. When he started Subhiksha with a capital of Rs 5 crore in 1997, Viswapriya was a Rs 100-crore company. Currently, Viswapriya is an NBFC with interest in real estate as well, but Subramanian is hands-off that business.What he is hands-on is growing Subhiksha to 3,000 stores in two years and doubling its turnover to Rs 4,500 crore (Rs 2,305 crore currently), saving nearly Rs 500 crore for his customers. He also has aggressive plans to expand the most recent venture in mobile phone retailing to 700 stores by 2010. So, does the logic-driven retailer believe in lady luck, at all? "Luck is being at the right place at the right time. Yes, it has played a huge role — getting financial support at the right time, getting into retail just before property prices shot up, and entering mobile phone retail on a national scale, when the concept was still raw…" he says.
TOUGH ON AMBITION:
For Subramanian, who reads almost 10 newspapers every morning, "work itself is unwinding." He followed the Indian Premier League, not really for the cricket, but because "we advertise during IPL and I wanted to check if it was working." He reads widely on the Internet on supermarkets, consumer industry trends and financial markets, which he is still passionate about. He works six days a week for an uninterrupted 12 hours a day. When he walks on the road, he is busy "noticing the changes in the Indian consumer" and how he can respond to it .His recommended list of reading includes Alfred P Sloan's My Years with General Motors, where the author describes his systematic and of course the "logical style" in which he built the business. At the end of the day, what keeps this Geminian going is, "The vindication of the path I've taken. I like what I do and work with people I like. We are headstrong and steadfast in achieving our goal; we are tough and rational. There is no soft side to us…" Subhiksha has forayed into the consumer durables retail business at an investment of Rs 600 crore. The company plans to launch 150 stores by June 2009. The company also plans to raise $80-100 million by an investment from three foreign institutional investors (FIIs). The investment will come through the listed-arm Subhiksha India Ltd. It was reported that the deal, which will give the FIIs a 9 per cent stake, is on the verge of being inked.
Nandan Nilekani is the second-youngest son of Durga and Mohan Rao Nilekani.He was born in Sirsi a small town in Karnataka, he did his graduation in IIT Bombay .
