Skip to main content

Nilgiris Acquisition by Future Group

One of the biggest things to happen in a long time in the Indian retail scene is Nilgiris acquisition by Future Group.

Nilgiris is one of the few retailers in south India that has been very successful for a long time and also has been going through ownership changes for some time now. We do hope that Future group would provide good support for Nilgiris.

Having had a chance to work with Nilgiris just once and understanding the dynamics of the Indian retail scene, there are several opportunities and challenges for all the parties involved - Future Group, Nilgiris and the Franchisees.


Opportunities for Future group

  • Working with a franchise network
    • Nilgiris is one of the biggest Franchisee network and Future group can learn a lot from them.
  • Better product mix management for various segments
    • Nilgiri's strong point is that it has got the right product mix for every customer segment and the right kind of store for the location
  • More complicated vendor management
    • As a result of being a franchisee network, it also has a complicated vendor management that Future group can learn from
  • Nilgiris is one of the few retail chains that makes a good net margin.
    • This should boost Future group's top line and Bottom line

Opportunities for Nilgiris

  • More investment on IT. 
    • Their POS has not been developed in almost 5 years. ACTIS put a hold on any IT investment
    • It helps all the parties for more Investment in POS
  • Much needed backend infrastructure investment

Opportunities for Franchisees

  • Franchisees have not had their contract negotiated with Nilgiris for some time now
    • They have agreed on the contract terms because of the Nilgiris brand value
    • Future Group could play it a little less aggressive and this could benefit the Franchisees

Challenges for Future group

  • Handling so many franchisees
  • Integrating with the proper systems
  • Giving independence to franchises on the product mix - 
    • This is the key to a having a successful franchise network

Challenges to Franchisees

  • Adjusting to a new kind of retailing
    • Future group is into mass retailing and the vendor system might be different that how it was under the previous management

Having said that, It would be interesting to see how this unfolds and how the indian retail scene reacts to the development.
Labels:

Comments

Post a Comment

Popular posts from this blog

Organizational growth and turn over

Organisations need to grow. However, they should not grow for the sake of growth. That would be a virus. Orgs should not grow to survive as well. Orgs should grow with a purpose.
Post a Comment
Read more

From Idea to reality - The progress of an Idea

 I have been thinking of writing a simple app for locating trash cans at Chennai. The first thing anyone would do was to see if the idea has been already implemented. Sure enough, it has been. This is the app - Check it out. http://trashithere.herokuapp.com/ When I tried using the app, I found out that there were only few trash cans. This was a crowd sourced application. I guess this app was not used much. The Spark This led me to questioning myself - What problem led me to this application. I yearned to live in a place that was clean. My assumption was that if people found places to throw thrash, they would not litter. Going ahead with your idea
Post a Comment
Read more

Counterfiet goods and the fledgeling e-commerce market places

India has a nascent and a very active market place. With good interest, the right climate for growth and right product mix, the indian retail marketplace seems to be going places. However, there are some alarming signals that seem to be ignored for growth that have a good chance of being dangerous to all the stakeholders involved. The issue I am talking about is the sale of counterfeit goods in all the indian market places. India has not had a history of strong Intellectual property rights. This time it is getting messier. The Indian marketplace model is very interesting and suits well to a country as diverse as India. The market place model floated by all the major e-railers suits the fact that the seller and the buyer can be connected for serving the needs for every day goods that are not necessarily covered by IP laws. India needs more effective IP laws since it is struggling with some products like traditional indian products that cannot be covered by IP versus modern produc...
Post a Comment
Read more