Earlier, there was a perception among people that the department stores were expensive and out of their reach. The perception is slowly changing.
--BY NEWBIZ TEAM
In a household, we need many essentials, from food and clothes to nails and pliers. When we think about shopping for those essentials, we picture it as all the things we need in various bags, holding in our hands despite being very heavy. Regardless of the variation in the category in which all these items belong, like clothing, groceries, hardware, cosmetics, etc., we picture ourselves getting all of them at once. However, almost a decade back, if we had to picture the same shopping in our mind, we would think about carrying items of just one category in our hands. So, why is it that there has been a change in our perception in just a few years? Well, the answer is exactly as it looks. It is because of the change in the shopping culture over the decades.
Previously, there were not many shops available in a particular area. There just used to be few corner shops in a particular area. Even those shops did not put many items for sale. Generally, there used to be one grocery store for one residential area, which only sold food commodities. If a person wanted to buy a cloth, s/he had to travel a considerable distance before reaching the shop that sold clothes. Consumers had to make trips to different shops located at various locations to get what they needed.
After the residential areas started to become overcrowded, many people started to open various shops in the same area. Gradually, there were not just corner stores in a particular area but various other shops as well. People now did not need to travel a long distance to buy the items they needed. The change is continuing to date. Now, although there is a cluster of various shops located in an area, there are still many items that people have a hard time finding. Moreover, people need to make trips to different shops to find the items they need. To address this issue, the concept of departmental stores, where all sorts of items are available in a single place, was introduced, and now, it is bringing changes to the shopping culture of Nepali people.
Established in 1969, Bishal Bazar is the very first departmental store in Nepal. Bishal Bazar was built under the regime of then, King Mahendra. The main purpose of establishing the supermarket was to make it easy for the people to find all sorts of items like food, clothes, medicine, machinery, etc., in the same place. At present, there are many small and big departmental stores across the country. Regardless of the size, the prime aim of the departmental stores is to provide items belonging to various categories under the same roof. According to conservative estimates, over 60% of the families have already transitioned to shopping at departmental stores.
Bhat-Bhateni Super Market (BBSM) is the biggest and leading departmental store chain in Nepal at present. Established in 1984, Bha-Bhateni Super Market is now a common name for Nepali people. Currently, there are 22 franchises of the store employing 4,500 people - 95% of them being women. BBSM is the largest taxpayer in the retail sector in Nepal, with daily sales exceeding Rs 65 million. The departmental store has collaborated with more than 1,500 local and international suppliers to facilitate a comfortable and easy shopping experience for the consumers.
Although there are other well-known department stores in Nepal like Salesberry and BigMart, why is BBSM the only one growing this big? Panu D. Poudel, the chief operating officer of Bhat-Bhateni, emphasised three factors why BBSM is preferred by consumers over other departmental stores. Poudel said, “Save time, save money is the slogan of BBSM. All items can be found in one place with a variety of payment options at BBSM. Moreover, Bhat-Bhateni Super Market is a price-guaranteed place. Every product is 5% to 10% cheaper at BBSM as compared to other places. Since we bring the products, especially the fresh items like fruits and vegetables, we often get them in bulk. It is cheaper for us that way, and we can supply the products to the consumers at cheaper rates as compared to the retail shops.”
He further added that the other reason behind the growth in the consumer base is that BBSM offers the option for products of over 250,000 different varieties. “No other departmental store offers such a wide range of variety in South Asia,” Poudel said, pointing out adequate parking facilities have played a great role in drawing consumers as well. “Nowadays, most people own a vehicle. BBSM ensures that there is ample space for the customers to park their vehicles while they shop,” he added.
BBSM is compatible with foreigners as well since it has a well-managed payment system. Many travel agencies often take foreigners to BBSM for shopping due to the advanced shopping culture offered by the store chain. Consumers can get exotic and foreign foods at BBSM as per their demand. BBSM has a large customer base. The yearly growth of its sales is 35% to 40%. As per COO Poudel, 65,000 to 75,000 billing is done each day with over 200,000 everyday visitors. The given chart displays the number of customers that visited BBSM in each fiscal year.
Not only BBSM, all other malls and department stores have witnessed a growth in consumer footfall over the years. This shows that the shopping habits of Nepalis are gradually changing. Earlier, there was a perception among people that the department stores were expensive and out of their reach. The perception is slowly changing. In addition, the payment habit of consumers is changing with time as well. Earlier, people used only cash to carry out transactions. But now, people have developed the habit of using cards and online payment methods.
As per COO Poudel, the ratio of people using cash to other payment methods is 60:40. If the trend continues, the ratio will be flipped to 40:60 in no later than five years. “We encourage customers to use online payment methods over cash and cards. More cash is difficult and risky to carry. At present, there are more card users than QR code users. Since it has been just a couple of years since the introduction of QR payments, it is going to take the next 5 or 6 years for QR code usage to be prominent.” Poudel also said that the use of QR codes prevents the flow of money outside the country as international payment networks like Visa and Mastercard charge a certain fee for each transaction.
While talking about shopping culture, the trend of home delivery is also on a gradual rise. Nepali consumers are a little different from foreign consumers. They prefer to visit the shops themselves and hand-pick the items they want rather than trust the websites and reviews. However, due to the recent pandemic, busy lifestyle, and the nature of youngsters, home deliveries are slowly gaining recognition. Various e-Commerce companies provide home delivery services to customers, and 2% to 3% of the customers are already e-Commerce users. The home delivery trend is speculated to be massive by the next decade.