Hearty Mart is the convenience store based in Juhapura, a locality perceived to be downmarket and riot prone.

Hearty Mart is the convenience store based in Juhapura, a locality perceived to be downmarket and riot prone.

India
Organization type: 
for profit
Budget: 
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We started Hearty Mart in February 2004. It was modeled as an ideal neighbourhood store and positioned as ‘Sabse Khass Ghar ke Paas’. And thus wanted to establish itself as a one-stop-solution for the daily needs of groceries, cosmetics, food grains etc. But the negativity attached with the area made the business operation really difficult. We carried various promotional activities to lure the customers and win the trust of vendors who were reluctant to supply us merchandise. http://www.youtube.com/watch?v=DlDZYFLrnZ4 To cover every possible village of the country and provide them with the best of merchandise and open new employment avenues for them. http://www.thehindubusinessline.com/todays-paper/tp-life/article1086533.ece
About Project

Problem: What problem is this project trying to address?

In Gujarat there is a rural momin community residing mainly in the villages of North Gujarat. My family social status is connected with them and I have targeted them since there is an in-built mutual trust. They are farmers by profession and some enterprising and fortunate of them have ventured into restaurant business in Ahmedabad city and Palanpur-Mumbai Highway. My business revolves around them and it has created a value chain between the community staying in villages and the highway restaurant owners. I provide franchise to these villagers and with my other offshoot which is into food-grocery supply - Hearty Mart Enterprise, which caters to the restaurant owned by them, I get the economies of scale in my purchase of food-grocery and thus the benefit which I get out of this economies of scale is passed on to the franchise.

Solution: What is the proposed solution? Please be specific!

We encourage a villager to invest in his own business by way of investing in the Hearty Mart franchise. On our guidelines he has to start his own shop and develop the infrastructure accordingly. Since we target the social network, we dont advertise but the word is spread through WOM publicity. We believe that once the villager is convinced on his own only then he could do justice with the business. Prior to the identification of location, a prospective village entrepreneur is trained at our store in Ahmedabad for 4-5 months. Once he is ready he needs to find a location for his store in a particular village. We charge a nominal 1/2 percent royalty on his annual sales every year and provide him with skills, knowhow and merchandise. This combination has worked well as it brings several benefits for all: - The organized retail has curbed the menace of selling the merchandise beyond MRP which is prevalent in villages. Thus consumers have gain. - In order to do a better business most of the time villager would move out of his village and shiftbase to a city or a town and do smaller jobs. With Hearty Mart franchise he is getting an opportunity to have his own organized retail business at his door-step. Hence the franchise owner has gained. - Our royalty is based on the annual sales of the franchise. So if sales dips royalty also dips this ensures that we are also equally concerned with the growth of the franchise and hence it has propagated inclusive growth. http://www.youtube.com/watch?v=YDVbpRrOe24
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Hearty Mart primarily deals with food-grocery. In Juhapura the main Hearty Mart is a convenience store catering to the daily needs and wants related to food and fmcg products of the locality. With our village franchise we share this experience of working in a downmarket and help them run their business successfully. As on date it is a network of 11 stores in different parts of Gujarat.
About You
Organization:
Hearty Mart
About You
First Name

Nadeem

Last Name

Jafri

Facebook Profile

facebook.com/nadeem.jafri

About Your Organization
Organization Name

Hearty Mart

Organization Country

, GJ

Country where this project is creating social impact

, GJ

How long has your organization been operating?

More than 5 years

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Innovation
What stage is your project in?

Operating for more than 5 years

Share the story of the founder and what inspired the founder to start this project

A first-time entrepreneur, Nadeem Jafri is an MBA from IMS Indore had previously worked for companies such as The Bhaskar Group, AT&T, Indian Express, Grey Worldwide and Bennett Coleman. Though the jobs were an invaluable learning experience, he always felt the need to do something for his community.

It took one visit to Big Bazaar at Phoenix Mill Compound Mumbai that he inspired him to do something in organized retail business. With the family roots with village community access to manpower seemed to be easier for him and hence after a detailed research on consumer purchase pattern and the potentiality of the business growth, Vishala Circle, Juhapura was identified as a location for Hearty Mart.

Credentials:

He Has jointly written a case-study “Creating a retail brand” with Dr. Hemant Trivedi (MICA) which got published in European Case Clearing House (ECCH)

Hearty Mart case-study was published in "Cases on Business Venturing and Sustenance“ in 29th FDP at IIMA

Awards & Appreciation:

In the 3rd India International Innovation Summit, 2010 held at Taj Lands End, Mumbai. Nadeem Jafri was conferred with the prestigious “Star Entrepreneurship Award” for his contribution in the field of rural retail and encouraging rural entrepreneurs.

Hearty Mart has also forayed into rural-brand franchising and as on date there are 11 stores of Hearty Mart, which are taking care of daily requirements of our rural-customers in the respective villages.

Social Impact
Please describe how your project has been successful and how that success is measured

It has been around 4 years that we have started providing franchise to retailers in small villages and the network is growing continuously.

Food-grocery retail is a tough business as market is largely open and hence it becomes tough for a retailer to sustain. Hence I measure my success when my franchise is out of losses and sustain itself. We continuously work on the progress of the franchises.

In a village named Jethipura, group of 135 members have floated Hearty Mart and thus it has become a unique source for the food grocery needs of these 135 families residing in the village. Since it is owned by them they are patronizing it and hence it has been a success. We encourage this workable partnership as it helps them with finances and the store works as a platform for community bonding.

How many people have been impacted by your project?

101-1,000

How many people could be impacted by your project in the next three years?

1,001-10,000

How will your project evolve over the next three years?

Targeting a rural community by providing them with a franchise and creating a business of hotel supply to their urban counterparts who are in restaurant business we are successful in creating a unique value chain. With hotel supply division we are planning to launch our in-house private label which would be sold through the franchises. This would help them earn better margins.

We have floated following offshoots and in coming 3 years we wish to focus on their growth.

Hearty Mart Tea Packers: A tea company floated to tap the business opportunity of Highway hotels. We are mentoring an entrepreneur.

Hearty Mart Logistics: Supply chain arm run by entrepreneur to connect with the franchise.

Hearty Mart Farms: Farm services to guide farmers to increase-yield, market the produce.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Our lack of financial resources helped us to evolve this unique franchise model at village level. This model has helped us take our brand to different parts on Gujarat without any financial investment. Hence it has worked out well uptill now.

But we do understand that villagers who invest in the business are at times short of financial resources themselves and this hinders their growth. For this we encourage them to create a pool of like minded villagers who invest in the business as per individual capacity and thus create a co-operative fund. The partner who runs the business can take 20% management profit on the gross profit as a share. This concept is working well with two franchises at Pipodar and Jethipura.

We are also in the process of discussing the micro-finance models with banks for this.

Tell us about your partnerships

Franchise Entrepreneur needs to start his own firm. Once the firm is floated there is an agreement for franchise between the firm and Hearty Mart on a stamp paper. The agreement is in detail mentioning the role and responsibilities of both the parties with a proper exit clause.

A one time fee of Rs. 25000/- is taken from the franchise and then the prospective franchise owner is trained at the store in Juhapura for 4-5 months. Before the launch of the franchise a proper research is conducted to understand the market by franchisor and then accordingly the merchandise is purchased for the franchise.

After the launch a periodic visit is undertaken by the managers of the company to help and guide the franchise entrepreneurs. 1/2 royalty is taken on the sales every quarter from the franchise.

Explain your selections

Hearty Mart is a debt-free entity mostly funded by family, friends and close associates.

How do you plan to strengthen your project in the next three years?
Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Underemployment

SECONDARY

Lack of access to information and networks

TERTIARY

Lack of skills/training

Please describe how your innovation specifically tackles the barriers listed above.

Our franchise network is based in villages and it has thus helped in generating entrepreneurs at village levels and hence opened up new employment avenues.

The villages which we cater to are really small in size and hence ignored by most of the companies as it does not make sense for them to invest in supply chain that could cater to these villages. Our network of franchise has helped the rural consumers get access to the products and brands which were otherwise rare in their area. Hence this network has thus become a unique source of information to them.

We train and guide the prospective rural entrepreneurs at Hearty Mart Ahmedabad with modern retail techniques and IT interface. This has helped them get trained and develop their skills.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

TERTIARY

Please describe which of your growth activities are current or planned for the immediate future.

We have floated a consultancy under the leadership of a prominent agronomist from within the community. This is farm consultancy named Hearty Mart farm services.

We have realized that due to lack of skills, knowledge and infrastructure the farmers used to shun farming, this insight gave us new window of opportunity as we intend to help them in their farming, market the produce through our network and purchase most of the produce. Create our own private label through this.

This way modern skills and knowledge would be introduced in their farming domain. Most of our franchise owners have their own farms and hence it would open a new revenue stream for them.

This would further strengthen our bonds with them and would help us augment our franchise network.

Do you collaborate with any of the following: (Check all that apply)

Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

Hearty Mart became global case study in 2008 when it was published by European Case Clearing House (ECCH) through MICA, Ahmedabad.

Again in 2009 it became IIMA case study when it was featured in their 29th FDP Programme.

This association has definitely added to the equity of Brand Hearty Mart and has helped the brand salience to soar. It has become a known brand amongst various public now.

In the Jan 2011 issue of Commodity Vision, a bi-monthly journal being published by TAER, a case study "Creating Social Space through Infrastructural Development" written by Munish Alagh and Jatin Christie is featured. It talks about direct and indirect contribution of the enterprise in development of the locality where it is based. Hearty Mart was mentioned in the same with a two page write up.