How dukawallah family built top supermarket brand

The story of Chandarana Supermarkets embodies the stereotype of the Indian dukawallah in Kenya.

Shantilal Mulji Thakkar, the founder, opened his first grocery store at the Highridge Shopping Centre in Parklands in 1964. It was a different era for retail sales, a time when service was highly personalised, and so instead of browsing aisles and picking items off shelves — as is the practice today — Shantilal served his customers across the counter, handing them brown paper packets of grains, powders and spices.

Each sale was punctuated with an enquiry about the children, the parents, a tidbit of news from India, and a cheek-tug for the child.

Shantilal died a couple years ago, but his personality continues to embody the Chandarana brand. Residents in Parklands remember him standing outside the shop, bespectacled, wearing a white shirt and with a cigarette dangling from the side of his mouth.

Father to son

The name Chandarana is a family name, even though its founder Shantilal alternatively used the surname of Mulji and Thakkar.

When it first started, the business targeted the Asian community. Today, nearly 50 years later, the retail brand continues to be synonymous with Indian foods and spices — which has distinguished it from other brands in the market.

But the shift in leadership from Shantilal to his sons Anil, 53, Sanjay, 49 and Dipin, 39, has seen Chandarana expand outside the traditional Asian residential areas into the more cosmopolitan suburbs of Muthaiga, Lavington and Karen in Nairobi.

“In the last 50 years, Chandarana has grown from one branch to eight; from 12 employees to 500; from 500 products to more than 20,000,” said Hanif Rajan, group operations manager.

While Chandarana continues to be a relatively small brand in the sector with only 2.5 per cent of national market share, in the last decade it has transformed from a family-owned business that had a single store into one of Kenya’s most affluent and niche supermarket brands.

Its market share seems insignificant in comparison to other players who cumulatively have more than 90 branches in comparison to Chandarana’s eight, but Mr Rajan said that in the upmarket A B niche which Chandarana targets, their brand plays a greater role. This is demonstrated by Chandarana’s 50-50 split of local-foreign products, suggesting that its customers have a penchant for imported products.

Significant store front changes have taken place under the helm of the three brothers who took over the business from their father.

These changes have overlapped with the company’s first rebrand, which has seen it move from the traditional blue on white “Chandarana Supermarkets” logo to a green and white “Chandarana Food Plus” concept.

Rolled out at a cost of Sh10 million, the rebrand represents a strategy change from purely prepackaged goods that have a long shelf life to include perishable products, according to the group operations manager.

Chandarana’s diversification in product offerings is a trend that is replicated across local and international supermarkets — and is in part driven by the idea that today’s supermarket is the modern market place which serves social and commercial needs.

Chandarana’s “food plus” proposition, however, differs from that of leading market players since rather than building in-house capacity to offer fresh goods, Chandarana partnered with external suppliers to offer a bakery, a deli and a fresh fruit and vegetables stand within its core store premises.

The fruit and vegetables section in Chandarana is supplied by The Corner Shop, the bakery by Belgian-owned La Baguette and local enterprise Noori’s Patisserie and the deli is stocked with items from suppliers such as Brown’s Cheese in Limuru.

“They run a shop in our shop, and we earn a commission on their sales,” said Mr Rajan, explaining the business model that exists between them and the individual supplier.

The reason for following such a model, he added, was to learn from the experience of a more seasoned practitioner who had specialised in a field rather than be forced to build internal capacity to the detriment of product quality.

The recent changes at Chandarana have been spearheaded by Shantilal’s eldest son, Anil Thakkar. Anil started working at 15 as a salesman at a local hardware store. He joined the Chandarana family business at 18. His brothers Sanjay and Dipin joined at a similarly young age.

Today, business operations are divided between the three brothers. Anil is involved in product selection and purchasing, Sanjay in operations and stock control and Dipin works in finance, IT and marketing.

Anil’s attention to detail has achieved legendary proportions. It is said that when he walks into a store, of the 30,000 products on the shelves he can identify the one that is missing.

The decision to demarcate roles was deliberately taken to avoid the pitfalls that many family businesses experience. The three brothers are the sole directors, and this has kept all business related decisions within the enclave of the family.

The turning point which transformed Chandarana Supermarkets from a single store with a predominantly Asian clientele to a national brand that appeals to a culturally diverse customer happened when Anil opened the Yaya branch in the late 1980s.

It was an ambitious move by the young entrepreneur, and one that his father questioned because of the high rental value. But Anil looks back at the gamble as one which transformed the future of his family’ s business.

The opening of the Yaya shop coincided with the birth of Mehul, his first son, and so the shop continues to carry a strong significance in his personal and professional achievements.

The success of the Yaya store spearheaded the company’s national expansion and in the coming years, Chandarana set up branches in Muthaiga, ABC Plaza, Lavington, Ngara, a second shop in Highridge (this time in the Diamond Plaza complex), and most recently in Diani at Baharini Plaza in the South Coast. They are soon to open a store in Karen, Nairobi.

Mr Rajan explained that Chandarana’s expansion is not only focused on Kenya where they are trying to increase critical mass and build capacity, but it is also eyeing the regional markets.

The launch of an online sales platform in April through which Nairobi-based customers can order shopping online and have it delivered to their door step, took place parallel to the expansion of the physical branch network.

According to Mr Rajan, their customers prefer to pay cash on delivery even when the products have been ordered online. “There’s still that mindset, that skepticism,” he said, adding that the model of e-shopping, like online banking, would take a while to catch on.

The online platform is expected to bring in two stores worth of sales.

Chandarana’s first shop at the Highridge junction — now nearly 50 years old — continues to be one of its most popular outlets. This is in part because the branch retains a sentimental appeal for the older residents in the area.

It is also because the outlet has not changed fundamentally in style and design over the last five decades, and has remained true to what its customers are used to.

The idea of customising a branch to an area is something that the management has applied to each of its branch, selecting services and products best suited to the needs of that community.

“Every branch is very different. For example, in the Highridge shop you will not be able to buy sausages,” said Mr Rajan, because of the predominantly Hindu population (Hindus do not eat meat). “So there are different brand strategies for every branch.”

Just across the road from Highridge, the Diamond Plaza branch of Chandarana sells all chicken and meat products because that store attracts a different clientele. And the Diani branch specialises in items that appeal to a European and tourist clientele.

Chandarana’s Diamond Plaza outlet is also unique because it is the only branch that has a cake and coffee shop within the store. The shop is run by Noori’s Patisserie — which supplies on the shelf bakery products to all of Chandarana branches.

“Noori is very well known in that (Parklands) market. She runs the coffee shop and the in-house bakery, and it does very well. She is primarily there for that market,” said Hanif.

Chandarana’s in-house radio station is also customised to each branch and accordingly selects musical genre and product specials.

Overall management of all the branches is, however, handled through a recently established head office in Hurlingham. The decision to set up a larger management base in the Nairobi suburb in mid April was driven was driven by business growth.

“We are forming a base to build capacity to expand.” said Mr Rajan. “You can’t wake up one fine day and say I am going to have five shops when you don’t have the back end offices ready.”