Monday, December 17, 2012

Warna Cooperative Stores that Indian Walmart should learn from

Cooperatives originally set up on the basis of people’s needs should have retained their character as people’s organization. But in course of time, governments of the developing economies started encouraging them with legal and financial supports. Such support eventually left the feeling that they are government organizations. In fact, they are forms of private sector organizations that are member-driven, member-centric economic enterprises. The sad part is that these cooperative organizations over the years acquired social and political dimensions detrimental to the interests of members. They are today seen in every sector of the economy: from seed to food, milk to silk, production and consumption to distribution, labour to services, thrift and savings to credit. Thanks to great cooperators like Vaikunt Mehta, Kurien, LC Jain and the like, a few in the dairy, fertilizer sectors have built brand images on par with the high-end corporate sector. Although Janata Super Bazars vanished because of government intervention, there are several consumer stores like the Triplicate Urban Cooperative Stores, several employee consumer stores, TTD cooperative consumer stores etc. still functioning but their reach has been constricted because self-centered and rent-seeking managements and governance. In these days of FDI in retail and multi-brand, revisit to some of the successful retail stores in cooperative sector, should open the eyes of both Government and the large number of FDI articulators.
Warna Bazar in Warnanagar is one consumer stores that should be visited. Well, here is the story of the stores I visited a few years back. A recent presentation at the International Conference (Nov2012) on Cooperatives held by the Reserve Bank at the College of Agricultural Banking astounded me as much as it would for anybody who would listen to it.
Warna Bazar is like a Walmart stores in cooperative sector. Warana Bazar was initially started in the year 1979 with a motto of supplying quality goods at reasonable prices to the consumers at large. It is the first consumer co-op. store in rural India. During a period of last 33 years the stores has proved to be a successful model for consumers’ co-op. movement in the country as well as Women Empowerment. It encouraged women in the households of the Warna Sugar Factory command area to produce condiments and consumables according to certain standards in which these women have been trained. They have been trained in packing and labeling. Consumer loyalty has been built over the years with the members’ active part in running the stores. Most of the employees are children of the members of the stores. This stores was the first stores that started with the motto of self-help. This self-help effort made the stores sell the goods at a price that the consumers find attractive.
There were no CCT cameras in the stores. The members keep the vigil when required. They introduced computer billing a decade ago.
               No. of Women share holders – 7909
               No. of Women associated share holders – 11333
               No. of Women in the Board – 11
               Chairperson – Mrs. Shobhatai V. Kore (M. A.)
               Out of 610 staff, Women staff is 190
                            (60 women are from economically weaker sections)
               Dependant women % on Warana Bazar is 35% .

Chart one indicates that their sales grew from Rs.2omn in 1979 to Rs.1320mn in 2011-12 with a net income of Rs.90mn after distributing dividend to its members. The secret of loyalty is the loyalty bonus of 28% they distribute annually to the members and associate members every year. They give value for the buy to every consumer. The story of Warna Bazar tells everyone that success of cooperatives hold a great future for India if the cooperatives embrace member-participation, member-governance, members sharing the gains of their hardship and above all transparency, accountability and good leadership.
This has been published in the digital magazine: Business Advisor Vol 3 (3) 2012 Editor: D.Murali