Walmart’s international success rests on the fact that in every location where Walmart operates, they are local. The company carries local products from local suppliers that appeal to local tastes, local needs and local fashions. “As a wholesale cash-and-carry business, we work with and develop local suppliers and create local beneficiaries along the supply chain. Approximately 95% of the merchandise sold in the Best Price Cash & Carry clubs is locally sourced within India, thereby creating jobs and contributing to the local economy,” asserts Krish Iyer, President & CEO, Walmart India. A long-term retail professional with global retail experience, Iyer describes the entire retail transformational diaspora and how he plans to capture this vast ocean full of immense opportunities. Excerpts from an exclusive interview…
Having years of experience in the retail sector, how has the entire retail sector transformed over the years?
This is truly India’s time. India is the sole bright spot on the global economic landscape. There is a lot of focus in India today on the fast-growing retail/wholesale sector. Experts see it as India’s next big opportunity in terms of investment, employment, supply chain growth and lifestyle changes. Through the last two decades, economic liberalization in India has opened up new avenues for every economic class, albeit in varying degrees.
India is an extremely attractive market for the organized retail industry to service the traditional retail and also the end-consumers. As per the report titled, ‘Retail 2020: Retrospect, Reinvent, Rewrite’ by Retailer Association of India, the overall retail market is slated to grow at 12% per annum, modern trade will grow twice as fast at 20% per annum, and traditional trade at 10%. e-Retail is undeniably a very big change and is here to stay. Understandably, that is where the consumer is going. We believe the next five years will belong to those who commit to providing the omnichannel experience to customers.
On the policy front, there is visible progress made by the Governments (both, the central government and many state governments) to create ‘ease of doing business’ & planned GST rollout next year and I am convinced the country is headed in the right direction. Recent bold move by the Central Government on demonetization will push digital agenda and support growth of formal & visible economy. There are great initiatives such as `Make in India’, ‘Skilling India’, ‘Digital India’ etc., to realize the common goal of bringing long-term benefits to the country.
A few trends that are becoming prominent in Indian retail environment are:
- Mobile Commerce – Increasing use of Mobile among consumer (4G & increasing use of smartphones will give it further boost)
- We see trends like 'App-only' emerging among several e-com players
- Consumer is using these smart devices in every step of their journey (product research to mobile checkout etc., thus having a series of digital touch-points at a given point in time)
- New non-cash payment solutions becoming mainstream (EMI, Credit/debit, e-wallet, etc.)
- Retailers and tech companies will continue to disrupt the traditional delivery model – as companies go from national delivery to hyper-local to local with customers expecting multiple fulfilment options and cheaper & faster delivery. (Globally we are seeing delivery solutions such as ship-from-store, curbside pickup, expanded pickup in-store, Sunday delivery, delivery lockers, and ride-sharing-like delivery, etc.)
- Experiential retail is fast catching up. Developers are focusing on integrating technology for an experiential shopping experience such as digital trials of apparel, entertainment zones, etc.
- S-Commerce: Commerce will continue coming through social media.
You have been a part of Walmart International before taking reigns of India operations. What are the crucial learnings achieved from that role?
Walmart is a unique company very focused on living its mission of ‘saving people money so that they can live better’ every day. The stint in the USA helped me become part of that culture and mission. I take a lot of pride in our culture and our way of working. The stint there has helped me in leading Walmart India business and growing the similar member-focused & people-oriented culture in our India business. As you understand, India is a unique market for Walmart as we are completely focused on growing our B2B Cash & Carry (C&C) business. Walmart has continued to strengthen its business in India in line with its commitment to the country and build a world-class operation in C&C business, bring global expertise and contribute to the success of small businesses, kiranas, small farmers and other stakeholders.
Companies across the globe follow Walmart model for growth. How difficult and challenging it is to sustain the growth momentum in such a heightened competitive era?
Guided by the Walmart Mission of ‘Saving People Money, so that they can live better’, Walmart India is extremely focused on serving our members across all our 21 stores in 9 states. We believe that we bring great value to our members and they have reposed their faith consistently in us. Their valuable support continues to encourage us as we grow our business in India. Several independent surveys have rated as the best in ‘Cash & Carry format’ and on ‘Customer Service’.
The government has allowed 100% FDI in food retailing. What’s your perception on that and how can it be made more viable for companies wanting to do business in India?
As we have said earlier, the decision by the government to allow 100% FDI under the government approval route, including through e-commerce in trading of food products manufactured and/or produced in India, is very progressive and far-reaching. This step will help in reducing wastage, farm diversification and encourage industry to produce locally within the country. This move will benefit farmers, give impetus to the food processing industry and create vast employment opportunities in the country. We, at Walmart India, are evaluating the guidelines at this point of time.
Walmart is known as one of the best supply chain companies in the globe. What are the salient features of Walmart SCM?
Walmart India’s supply chain focus has always been towards building a foundation of supplier cooperation and operations capability. Managing vendor replenishment & fulfilment and ensuring good inventory metrics (stock levels, vendor fill rates, forecast accuracy, etc.) help us drive the discipline towards cost and efficiency.
Retail Link®, our platform for supplier communication and our Joint Business Planning and other practices, allows for better flow management. We work with our vendors to introduce automated scheduling and appointment capability, for purchase order visibility and other best practices such as direct to store shipments and palletization programs. As we provide the convenience of online shopping and a Best Price app to our members, we have started providing delivery capability (through third-party logistics) and visibility solutions. Technology and processes thus enable visibility at all stages and allow us to efficiently manage costs and maintain a high level of service for our valuable members.
How crucial is enhancing tie-ups with the partners across the value chain to harness business competency? How do you achieve that?
Walmart deals with almost all major FMCG companies and with several regional and local players. There are many small suppliers in various states who have grown profitable and bigger by doing business with the brand. With ’Responsible Sourcing’ being a priority area, the development of suppliers in terms of helping them comply with laws of the country as well as upgrade their facilities, making them understand the right and ethical way of doing a business is equally important. Through consistent efforts and training to meet global food and other safety standards, some of the suppliers have been able to grow their business significantly and find new opportunities to supply to new partners.
What’re your views on the GST implementation and how is it going to impact your business?
GST is one of the critical tax reforms, which has the potential to create one single market in India for goods & services and will boost the country’s economy significantly. Implementation of GST will reduce the transaction cost of doing business, as well as reduce food wastage and bring down prices. This fundamentally will change the way business is done in India. Hence, I am confident that it will not only bring relief to the consumers but also help the retail sector and building supply-chain efficiencies in India in a big way. This is thus a win-win reform for all.
How do you plan to spread your wings across the country?
We are in the country for the long term. As we look at it with a long term commitment perspective, we will continue to contribute to making a difference in terms of helping people save money so they can live better. Our mission for our cash &-carry clubs is about making every small business prosper. The focus is on the customer all the time and in ensuring that the customer saves money. We will continue to be true to our mission and our core purpose. Walmart India plans to take the total store count to 70 in a few years.
One of the key reasons for Walmart’s international success is the fact that in every location where Walmart operates, they are local. The company carries local products from local suppliers that appeal to local tastes, local needs and local fashions. As a wholesale cash-and-carry business, we work with and develop local suppliers and create local beneficiaries along the supply chain. Approximately 95% of the merchandise sold in the Best Price Cash & Carry clubs is locally sourced within India, thereby creating jobs and contributing to the local economy.
You have been taking various initiatives on CSR front. For instance, a recent initiative has been to equip women with professional and personal skills to build robust businesses. Kindly elaborate on some of them.
As a responsible company, Walmart India strives to improve the quality of life for employees, customers, community and country through financial contributions, initiatives, donations and volunteerism. The company focuses on skills training, environment sustainability, women empowerment & community development. The company has a robust ‘Store of the Community’ program which encourages employees to volunteer in their local communities.
Walmart has an ongoing commitment to empowering women around the world and helping Women-owned Businesses (WOBs) succeed and grow. In April 2016 with support from Walmart, Vrutti and WEConnect International launched the Women Entrepreneurship Development Program (WEDP) in India with 32 selected WOBs in the first batch. The nine-month program aims to help the women develop their personal and professional skills to build robust businesses. During the nine-month program, the WOBs will undergo capacity building training, mentoring and technical support customized to the needs of their businesses. The WOBs are located in Andhra Pradesh, Delhi NCR, Telangana, Punjab and Uttar Pradesh and deal in both food and non-food categories. This initiative is designed to help women entrepreneurs achieve higher levels of business growth and help them make more competitive and resilient in today’s dynamic business environment. In October 2015, WEConnect International launched the ‘Women-owned’ logo in India. As part of an overall strategy and goal to source more from WOBs, Walmart supported WEConnect International, to develop the logo to help members easily identify products made by WOBs.
Besides, through training and sourcing, Walmart India’s Women Economic Empowerment initiative is providing sustainable employment opportunities and significantly expanding economic opportunities for women across India. Training initiative focuses on women in agriculture, factories and the retail sector. Walmart India is committed to increasing sourcing from women-owned businesses in order to grow diversity in its supply chain. With a combination of our local programs and support from the Walmart Foundation, Walmart India is positioned to impact more than 75,000 women in India.
You are present in cash & carry and wholesale formats only. Are there any plans of stepping into retailing in the near future?
At Walmart India, we are completely focused on growing our Cash & Carry business in the country and plan to take our total store count to 70 with a full omnichannel strategy. This is an exciting market for us.
UP, CLOSE & PERSONAL
Who is your mentor? I have been fortunate to have good mentors at different stages in my life and each one has helped me developed certain leadership competency.
One of the most important habits that my father, who was also my first Mentor, has inculcated in me very early in my childhood was to learn from all around us and from wherever we can acquire the right knowledge, attitude, aptitude & all that makes this world a better place. He was also a people’s person. I have learnt my ‘people focus’ from my father, who always used to tell me that ‘people’ should always be central to all that you do and every business is a ‘people business’.
During the time, I was doing my Articleship under CA Regulations, VC Darak, my Principal at the CA firm and my teacher have been my Mentor when it came to 'Acting with Integrity’ at all times irrespective of the business result that was required to be driven.
Early in my professional life, when I was working for ANZ Grindlays' subsidiary, Suraj Mehta, who was General Manager in the Bank and my Boss, was my Mentor. His management style and sense of fairness/ justice made a lasting impact on me.
I greatly admire Walmart CEO Doug McMillon for this immense focus on People and Culture. I practice many of the management principles, including agility & focus, advocated by former GE CEO Jech Welch.
Walmart founder Sam Walton has been an idol for his golden ’10 rules for building a business’. I also deeply admire Apple’s Steve Job, P&G’s AG Lafley & Harvard Professor Clayton Christensen for their focus on ‘Game-Changing Innovations’.
What’s your success mantra? For me, the success mantra is ‘People Focus’ & ‘acting with Integrity at all times’! My efforts are always directed towards building four-dimensional leadership among our people. Four dimensions which encompass ‘Passion for People, Passion for Performance, Passion for culture-ethics-integrity and Passion for leading on social & environmental issues’.
Recent book you have read and have implied learnings on the business...I am currently reading ‘Competing Against Luck’ by Clayton Christensen & his co-authors. He is my favorite when it comes to Innovation. According to me, he is the foremost authority on innovation and growth. This book teaches as to how one can convert Innovation from being a game of chance to a robust process-driven initiative. Another compelling point the book makes is that for gamechanging innovation, understanding the customer is not enough. It is necessary to understand the 'job' the customer is 'hiring' the 'product or service' to do.
What’s your passion? Making a difference in the lives of others is my passion. As an example, I take great pride in our work in Walmart India on ‘Women Economic Empowerment by supporting Women Owned Businesses and driving an effective ‘Diversity & Inclusion’ program for our women associates. It is also very fulfilling to see the impact which we make in the lives of thousands of small Kiranas and our small farmers. Our deep focus on renewable energy & waste management across our stores to keep our environmental footprint minimal is very satisfying.
Your most treasured asset…My family is my most treasured asset. It is a source of strength for me in my journey!!
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