Given the ever escalating population of the Kathmandu Valley, the need for convenience stores which can address the basic needs of customers, is being felt more than before. A convenience store is a small store, mostly located in densely populated areas, that stocks everyday items like groceries, toiletries, soft drinks, tobacco and liquor products along with other customised services. 

 

“Convenience stores are a successful business in western countries,” a manager with the Chaudhary Group promoted CG Mart remarked, adding, “We are confident that the idea is bound to pick up in Nepal too.” The people of Nepal are becoming busier and problems of space in core areas are rising, increasing the need for such stores. 

 

As the name suggests, the stores are mainly operated for the convenience of busy people. While some stores operate till late hours for the benefit of people who work in the evenings, they are also meant to facilitate busy and single people for their shopping needs. Some convenience stores also feature spaces where people can get their tea/coffee and ready-to-eat items for snacking needs. 

 

The Shift 

The attitude and expectation of people towards shopping has changed completely. There used to be a time when people hopped from one shop to another looking to buy different commodities. However, the trend of convenience stores offering a wide range of items in a single place has caught on. “Not too long ago, Nepalis used to hesitate to enter convenience stores, but now the trend has witnessed a radical shift with a large number of convenience stores opening, targeting the middle class and offering quality products at reasonable prices,” said an observer. 

 

‘Single shutter’ cold stores have turned to convenience stores in recent times and sell thousands of products from hundreds of local and international suppliers. This has resulted in direct employment of scores of local people in their own neighbourhood. 

 

Expansion Spree 

The movement in this sector has been rather evident. KK Store, a Malaysian chain store brand now operates four stores in Kathmandu. Similarly, CG Mart, Big Mart and Stuti Mero Mart among others too have opened multiple stores and boast of expansion plans in the Kathmandu Valley as well as other parts of the country. 

 

CG Mart also plans to develop convenience stores in a franchise style. “Those who are currently operating a mini-mart or a small supermarket can brand it in our name. However, they need to follow the rules and norms set by us,” said an official. CG is planning to open 10-12 convenience stores in Kathmandu this year and intends to increase the number to more than 100 in another two years. Apart from Kathmandu, the company has aimed to open stores in Pokhara, Butwal and Biratnagar. 

 

Stuti Mero Mart, a local chain of convenience stores, has expanded its presence in Kathmandu by opening outlets in Ghattekulo, Katyayani Chowk and Sinamangal. One of the major aims of Stuti Mero Mart is to expand its presence in all 35 wards of Kathmandu Metropolitan City. “We will be opening 17 more outlets in Kathmandu district within one-and-a-half years,” a store manager said. Upon completion of the expansion process in Kathmandu, Stuti intends to venture into Lalitpur and Bhaktapur districts before penetrating markets located outside the Kathmandu Valley. 

 

Mega Mart, the operator of Big Mart stores, has firmed plans to expand its retail network by opening 11 new stores in Nepal in 2013 including stores at Sanepa, Old Baneshwor, Sinamangal, Kalanki, New Bus Park, Pepsicola and Dholahiti in Patan. A manager at Big Mart said the store expansion programme is part of the company’s strategy to expand into neighbourhood regions. “Our aim is to reach out to as many places as possible for the convenience of our customers,” he said. The company also plans to expand outside the Kathmandu Valley by opening stores in Pokhara and Biratnagar. 

 

Major Players 

CG Mart stores offer everyday items like groceries, toiletries, beverages, tobacco and liquor along with various customised services. Stores located in densely populated areas have been designed to fulfill the daily requirements of people residing or working nearby. Largely famous in Western countries, the company believes that the concept will be equally popular in Nepal. The company has set up its own supply chain so that they need not depend on other agencies for stock. It believes that the supply chain will also help to price the goods nominally. CG Mart opens from 7 am to 11 pm to cater to the needs of people with busy schedules. 

 

ANS Co has ventured into retail business by opening a chain of convenience stores named Stuti Mero Mart in different parts of Kathmandu. An official of the company said the main objective of the mart is to provide an impeccable shopping experience at the local level. 

 

Stuti Mero Mart outlets open from 8 am to 8 pm and boast of a collection of around 7,500 items, both domestic and imported. These items range from spices, meat and confectionaries to cosmetic items, toiletries, liquor and kitchen ware. All its outlets are spread over an area of 2,000 to 3,000 sq ft with each store hiring 8-10 local employees. All outlets of Stuti Mero Mart are also providing free home delivery service for the convenience of its customers. Stuti Mero Mart is also planning to launch an online store soon so that customers can place orders from home. 

 

Big Mart, on the other hand, maintains four stores at City Center in Kamalpokhari, Lazimpat, Shantinagar and Jhamsikhel. Big Mart plans to take its store tally to 15 by the year-end. 

 

Store Locations 

Possibility and feasibility are the prime factors in determining the locations of convenience stores, said a store manager of Big Mart. CG Mart too said it chooses the location as per its plan to penetrate high-potential areas for retail business. “We plan to open stores in highly populated areas to meet daily requirements of people residing there or working nearby,” it said. 

 

CG Mart plans to open around 300 to 400 outlets across the country within the next three years. Outside the valley, CG Mart will expand in areas having high density population like Pokhara, Butwal and Biratnagar. 

 

Target Market 

“We are mainly targeting new and affluent suburbs of Kathmandu,” said a manager at Mega Mart. Big Mart stores cater to the needs of people from all income groups. Besides the usual products, the store also features chicken, goat and buffalo meat. 

 

The ‘Chain’ Effect 

A chain of convenience stores usually have uniform products, mostly consisting of consumables. Even though they do not command large volumes as stand alone units, the numbers start becoming significant when one combines the volume going out to all stores. This factor provides the companies leverage against suppliers, allowing them to negotiate for larger margins. Those benefits could then be passed on to the consumers. The chain stores in Kathmandu are already operating for 16 hours a day and in the future, there is scope for 24-hour stores, said industry analysts. Chain stores in Nepal could also emulate stores abroad and provide tea/ coffee, hot food and other related items that would make these stores even more convenient for consumers, they said.