The sentiment finds an echo in his business, which focuses on a simple Biblical adage: If you build, they will come. And it seems to be working well for him. Get into a Twenty Four Seven store in Delhi and you can even have Hanuman Mandir ki kachori there.
The idea is simple. People like kachoris made near the Hanuman temple, but hardly get to go there to have it. People love the stuff, and he laughs all the way to the bank. From the introduction of food items to Western Union Money Transfer services, his convenience stores have them all, or at least, try to have everything under one roof. Moreover, the stores are open all the time. The idea is to make life easier, he quips. However, starting Twenty Four Seven was a real test of his character. People said that I was being stupid because nobody would come at night. But if I hadnt done things differently, then I would not be where I am, Modi says.
He bucked the trend and 40% of the sales happen after 11 pm, the busiest hour being 2 am. He has yet to scale it up, though. Today his company has four convenience stores, with plans afoot to open 165 more in the next financial year, mostly in and around Delhi. Moreover, his stores stock about 9,800 items. A large-format store typically carries about 7,000-7,500 items, medium one has 4,000 to 4,500 items and small one, about 2,000 items.
His earlier venture, ColorBar, did not get much encouragement either when he launched it. People said it would be madness to compete with the likes of Revlon or LOreal, which are established brands having deep pockets and a long presence. In contrast, Modi had no distribution mechanism and zero reach. But the venture took off. The company had only 32 products to showcase two years ago. Today, it boasts of 450 products and 650 outlets, with a 5% market share nationally. No company in the country, Modi says (with some pride) has been able to introduce so many products so fast.
His marketing strategy, too, underwent a sea change. Beauty experts, he has learnt, arent necessarily indispensable to popularise a cosmetic brand. As the realisation dawned, corrective measures followed. In the first year he distributed 2,000 soaps among beauty advisers. Second year, the number came down to 1,000, but the business grew by 100%. In the third year it was restricted to 650 only and the business witnessed an outstanding growth of 150%.
When you ask him about competition, Modi says, We are fighting giants in a category that is fragmented. In retail, we are competing with Reliance, Pantaloon and Spencers. In cosmetics, we are competing with heavyweights. They have enough deep pockets. They can spend a few hundred crores a year to create or kill a brand. So be it. That makes it interesting. Clearly the confidence stems from consumers acceptance of his products, which, Modi claims, see a 100% repeat too often.
But how does he view the recent hostility against retail giants in some states I don't see any reason for worry. A lot of these stores in Uttar Pradesh have been carrying fresh produce, affecting small retailers. My whole business is based on partnerships. We are not enemies of mom-n-pop shops, he says. Even reportsof market slowdown dont bother him. The share of organised retail in this country is so small that it doesnt matter whether it is slowing or not slowing because the opportunity is so big.
While most businessmen would like to cash in on the market boom, Modi thinks time has not come yet for his companies to be listed. Listing will come. But at the moment we don't need money. I dont see that as a plus. However, to boost his business, he plans to invest about Rs50 crore this year and about Rs500 crore over the next five years in his convenience stores. Food items will be a priority. The reason: profit margins on other items are low and food can be a prime driver of his retail dream.
Modis family has many successful tie-ups with foreign companies like Philip Morris, Alcatel, Rank Xerox, Walt Disney, etc. His father KK Modis businesses range from agri chemicals, education, tobacco, entertainment, direct selling, gourmet to even beverages. So as a member of one of the largest business families in India, what does he offer foreign partners that others dont Its a combination of right distribution channels, effective management team, vision for brands and passion for the business. Does he promise them a fat profit Pat comes the reply, I promise them a business.
So, is he driven by a passion for money or name He is quick to reply, Anyone can make money. Only some can create brands. Such zeal to create brands is probably his greatest strength as well as weakness. If you can't keep with the pace, get out of my way. Otherwise, I will knock you over. I need to be successful against all odds, Modi says with a sort of flintiness in his voice. It is his education at the Doon school that shaped his way of thinking. He doesnt want to be seen as a rich father's rich son, he confesses.
He may come across as a workaholic, but he is quite a family man. His mother Bina Modi, wife Shivani and daughters Jayati and Vedika are a big influence on him. He watches movies with his family. A fan of Shah Rukh Khan, Kajol and Madhuri Dixit, he watches everything except thrillers. Cricket doesnt get much of this time, though. He is a cricket fan, but not a freak like his elder brother Lalit Modi, who is the vice-president of the Board of Control for Cricket in India. In fact, Modi was a serious boxer at one stage. He has a gold medal in Delhi state boxing championship to show for it. Today he is seriously into gadgets. A self-confessed gadget freak, he can fix all his gadgets at home and in office. Xbox 360 is his favourite. For de-stressing, he has his own prescription. He rewinds by cooking for his family and friends.
He is also passionate about corporatecitizenship. He runs a foundation that focuses on people affected by AIDS. Many people want to do something for society, but they don't have the means. Many people have the means, but they dont do anything. Fortunately I have both, he says. So what lies behind his success story Well, we have a great team, good products, retailers are in love with our products and our pricing is right, Modi explains. Most of the time he banks on his gut feeling. I make no blueprints. They are good only on paper.
Modi sees himself creating a $1-billion corporation in the next ten years and feels the journey has just started. He looks up to Virgin Group chief Richard Branson whom he calls a magician. There are many miles to go and many mountains to climb before we can truly say that we have put our flags in the heart of every body in India, including every woman who believes she is beautiful. Noble thoughts can make for good business, too!