In an effort to take on biggies such as Walmart, Metro Cash and Carry as well as Alibaba and Amazon, Lots Wholesale Solutions is planning major expansion of its offline and online bases.
The company, a 100 per cent subsidiary of Thailand-based Siam Makro PCL, opened its second cash and carry outlet in the National Capital Region (NCR).
With an aim to be profitable in the next five years, the company would be opening as many as 13 stores by 2021. “Store-level profitability will happen in the third year of each store’s existence. Right now, we are looking at expanding in northern India. Then, we will move towards the eastern part of the country,” said Lots Wholesale Solutions managing director Tanit Chearavanont.
The company believes that the first phase of growth would make its operations profitable after all its stores (it plans) are opened within a period of seven years.
Lots has been working on increasing the number of repeat customers and will bring in a bouquet of offerings, including digitising back-end operations of grocery stores, financial tech solutions and inventory management, among others.
The company, which started its operations in India in July this year, has a customer base of around 100,000 members. It hopes that its ecommerce business would help in bringing new customers as well as increase the repeat usage by existing customers. “We are doing beta testing of directly ordering online via our ecommerce portal with a few customers. We will open it up to others soon. We expect almost 40 per cent of the business to come from online ordering,” added Chearavanont. Cash & carry, also known as wholesale trade, is fast emerging in India, where Lots Wholesale competes with players such as Walmart, Metro Cash and Carry and Reliance Cash and Carry, a unit of Reliance Industries.
On being asked about plans to open dark stores, Chearavanont said that as operations grow, volumes increase. The company could potentially look at something like that as well.
Asked about the investments Lots Wholesale Solutions has made in India so far, the company did not share the details. Chearavanont, however, said it will invest around Rs 600-700 million for the opening of each store.
The company is directly sourcing from farmers and would build its catchment based on the products available locally, said Lots Wholesale director operations, business development & expansion Sameer Singh said.
“We are getting our supply chain in play. We would have it in larger piece once our demand aggregates,” he added. The company is also planning to get a slew of products from Thailand which it feels would sell well in India. It is also hoping to export a host of Indian products to the southeast Asian market.
Lots plans to open 15 wholesale distribution stores in the next three years and follow the mixed model of leasing and buying commercial spaces for its stores and cold chain network. It will also lease farm land for growing fresh produce.