'Almost 95% of the products in our stores will be made-in-India'

Tree years ago, home-grown Bharti Group, till then known only for its telecom prowess, tied up with Walmart, the world's largest company, to enter the retail arena with a $2-billion kitty. While Bharti also ventured into front-end retail through Easy Day chains, the deal with Walmart was to open 15 wholesale cash-and-carry stores by 2015. But those targets are now being reworked. In an interview, Bharti Enterprises vice-chairman and managing director Rajan Bharti Mittal talks about the retail experience and says there may be 15 stores a year now.

There are concerns over how retailers are going to deal with farmers. How are you going about procuring foodgrain, fruits and vegetables? 

We have a Direct Farm Programme running in Punjab and Haryana, and now in Uttar Pradesh, where we deal with a few thousand farmers. We are sharing inputs and technology with them so that we can source from them and they can also upgrade. For grains it is a little different as we probably go to the same miller who works for, say, a company like HUL. So, that person has more business. But it is more about fruits and vegetables. An ecosystem is developing and as more companies come, this ecosystem will get better. 

What about micro and small enterprises? Is the sourcing level around 30 per cent? 

Sourcing from SMEs will certainly be more than 30 per cent. You see, almost 95 per cent of the products in our stores (Easy Day) will be Made-in-India. We don't have a choice but to source locally. I need bhujia and papad in my stores in Punjab;I will get it done locally since the transportation cost doesn't allow me to get it from Bangalore. The tastebuds in Punjab will not accept something that is made in the South. You look at any manufacturer, everyone is using vendors and we are doing the same for our private labels. So, if you need atta it has to come from a local miller. I don't think sourcing is an issue. India will soon be a sourcing hub for MNCs. 

How much is your total investment and what proportion of it will be used in creating back-end infrastructure? 

In our case you should also look at the wholesale cash-andcarry infrastructure that we have (with Walmart). Every store caters to 35, 000 to 40, 000 members, which includes dhabawalas, restaurant owners, institutional buyers and, of course, mom-and-pop stores. The focus is on the bottom of the pyramid. So, we train people, who are either school dropouts or did not go to school, in four academies and many of them join us. Look at the employment we are creating. On an average, any of my stores with a 2, 500 square feet floor area will have 16-17 people. A mom-andpop store, which is 700-800 square feet will have two-three people, including the owner. 

There are suggestions that more safeguards such as hiring local youth need to be built in. Does this make sense? 

For my store in Kapurthala, I am going to hire people from there. It does not make sense for me to go there, hire and then keep them in my store in Delhi or Bangalore. 

With states being authorised to decide on allowing FDI-backed retail chains, there is a possibility that those who have given a green signal to the stores today may do a U-turn when a new government comes to power. Is it going to impact investors? 

That is very subjective since governments change everywhere. States that do not open now, may open up later. If a farmer in Punjab is getting a better price and consumers are happy, there is bound to be pressure on the neighbouring state to do the same. 

Will Walmart buy into Easy Day? Have you finalised the terms of engagement? 

It is a natural progression since the JV is working well. But once the notification happens, we will start discussions around it. It is the next step.