With 173 stores across 14 states in India, V-Mart Retail is one of the fastest growing departmental store chain in India focusing their expansion in non-metros and tier-II and tier-III towns. The scaling of stores of V-Mart follows an interesting trend of opening every new store without going beyond 100 kilometers of the immediate previous store. Retail4growth speaks to Lalit Agarwal, CMD, V-Mart Retail Ltd, on the growth of retail in non-metros, surprising success in unexpected locations and what’s next for the retail chain.

Your expansion seems to happen in clusters. Please explain on that and also on the number of stores planned ahead?

Yes, we believe in expanding in cluster so that we register well in one vicinity/state before trying another. Though we have large number of stores, we have maximum presence in North, moving towards the East. So, today, 75% of our store population is located in UP, Bihar, Uttarakhand and Jharkhand. Among our 173 stores, we opened about 31 stores in the last fiscal and we are looking at same number by the end of current fiscal in terms of adding stores.

You have your presence in tier-II and tier-III markets. Are you going to even smaller towns. What’s your overall feel about the retail market’s prospect in rural India?

Yes, we have recently experimented with 10 stores in tier-IV markets and we may move towards reaching across those towns. However, we will move to those places if they are part of our cluster-wise expansion.

Small towns pose great deal of opportunities to me. If you ask me, I would say that retail can do wonderful business in at least 5000 towns of India simply by being usable and affordable. I will cite an example here. When we entered Srinagar, we were cautioned on how western wear cannot be sold to this market. To our surprise, it’s one of our top selling store today.

You were into value fashion plus FMCG at one point but you focused on fashion later. What was the reason?

In 2012, we stopped FMCG as the margin was low and we found greater confidence in value fashion. Even today, we have 37 stores where we retail FMCG. However, value fashion is an area that we excel in and we would like to continue with that as our primary business. Today, even in cities like Delhi and Kolkata, we have been able to identify locations, where we are doing exceedingly good business.