As tourists drop, supermarkets are trying to entice locals with low prices and flashy incentives.
"Metro Mall - Why pay more?" "Smile! The lowest price all day, all night." "More value for money @ Metro". Bright and colourful signs plastered over the windows and walls of Metro Mall, announce the newest addition to Kathmandu's shopping paradise, and only 24-hour shopping centre, great brand names and tempting deals.
Despite a drop in consumer purchasing power and the current economic scenario, Bijen Jhonchhe, managing director of the new mall is upbeat and all-business. He wants to create an ambience that is bound to draw customers to shop in comfortable surroundings. But he is determined to keep prices competitive. "Just because I give you this ambience, why should you have to pay more?" says Bijen. "We offer branded goods for the lowest prices in Nepal, and even South Asia." On average, goods at Metro are cheaper than in town, but it could just be a promo, so hurry!
Spread over 5000 sq ft of space with plush red carpeting, Metro Mall is situated right next to Fun World at Soaltee. The display of high quality pashmina, electronic goods, chocolates, liquor, baby goods, children's clothes, luggage, perfumes, cosmetics, cameras, and CD-mans is designed to attract tourists, expatriates, and locals, who want to shop in a safe environment while their children are engaged in Fun World. Unlike many shopping complexes, parking here is not a problem. It's also designed to draw teenagers who just want to hang out. Expansion plans include a food court and a theatre, and, more immediately, a grocery store.
As Kathmandu steadily gets steeped in a consumer culture, there's been a growth in friendly neighbourhood outlets like Gemini, Namaste and Akuj which largely sell consumer items and groceries. The bigger shopping complexes like Bhat Bhateni, Kasthamandap off Durbar Marg, Bluebird at Thapthali and Lazimpat , sell a wider range of goods from toys, crockery, luggage, clothing, electrical appliances, and even Nepali produce like pickles and titaura.
But with tough competition in retail sales - almost every second shop in Kathmandu is a grocery or retail shop with a shutter, they have their work cut out. Bijen wants to encourage volume by taking a revolutionary step as far as shopping is concerned. "We have an edge in two ways: first, we source from the right supplier. What we save, I give directly to the customer. Second, I have cut down on overheads so they are comparatively low." He says Metro Mall works on half the usual margin.
But with a downturn in the economy and a drop in purchasing power, stores have had to introduce special schemes to stay ahead. "In the past three years sales have not increased so we had a lot of incentive schemes to survive in the market," says Binod Tuladhar of Bluebird Department Store which will celebrate its 20th anniversary next year. "In the last three years 98% of our customers were locals. Although we managed to maintain last year's sales, the profit margins have dropped. People go for consumer items and less luxury items and the margin is in the luxury goods. For example, where people used to buy 6-7 pairs of dasain clothes, this year they only bought 1-2 pairs. Their purchasing power is dropping drastically."
Despite this, Bluebird has recently added an outlet for branded items: sports, casuals, formalwear and footwear at Thapathali while its branch at Lazimpat has also received a facelift: one more floor with garments, toys, and luggage.
During festival season, the department store promoted the Bluebird scratch n' win card during which a purchase of at least Rs 1,000 could win customers a TV, hi-fi, electronics, and other small items. For local shoppers, an accumulated purchase of Rs 15,000 will win them a one-night stay at the Bluebird Hotel in Pokhara. Then, there are the winter and summer sales. "We have family privilege cards for about 1000 of our regular shopping families. There are free gifts for those who purchase the most items, for instance a TV," says Tuladhar.
At Kasthamandap Bazaar, situated strategically just off Durbar Marg with a comfortable parking lot, finance director Ramesh M Shrestha doesn't have reason to complain. Since he started four years ago sales have been steady mainly because of the prime location. Regular consumer items and groceries vie for space on shelves stocked with luxury items, electronics, clothing, fashion and footwear. "We opened at a time when the economy was being hit by various events, a drop in tourism, tension in South Asia, Nepal's political problems, so we've never really experienced a drastic drop in sales. It was only during the emergency when we felt it was wiser to close early that there was a slight drop. But now we are operating our usual hours 9 AM-9 PM," says Ramesh.
Kasthamandap Bazaar\'s garments boast a higher quality and while consumer items and groceries are sold at competitive prices, clothing is on the higher side. While local Nepali clientele have steadily replaced tourists, expatriates and the Indian clientele that Kathmandu's department stores depended on for business, owing to security reasons, and more attractions abroad, entrepreneurs still want the Indian market.
"This is a big market and we are not creating businesses to capture it," says Bijen. "Ten years ago, Nepal was a popular destination for Indians to tour, vacation and shop. Now they would rather go to Singapore, Dubai, Malaysia, Hong Kong because it is so cheap to fly there and shop. Also, shopping here is no longer attractive. The government tax and duty structure is difficult to work with. On electronics, for example, it is higher than in India.
If the government relaxes its duty structures, then Nepal can earn through tourism and trading, and become a shopping paradise, just like Singapore, he adds.
To attract Indian and other foreigners, Bluebird has coupons in Shagri-La magazine. A Rs 2,000 purchase will get a free gift and a Rs 12,000 purchase will give a free night at the Bluebird Hotel in Pokhara.
Metro Mall Specials
Cashmere by Himalayan Pashmina, suppliers of Donna Karan, New York
Delsey - Luggage made in France
Deep Red perfume
Akuj Supermarket, Japanese Food Store
Fresh salmon from Norway
Japanese edibles miso, sticky rice
Bluebird Department Store
New wing selling branded sports items, casuals, formals, and footwear.
Added a floor at Lazimpat with garments, toys and luggage.