It was exactly in the year 1965, if I remember correctly, on May 3rd, Vivek was born in Mylapore in a small place of 450 sq ft, next to the Sanskrit College. One of my brothers, who is no more: we lost him in 1968: was a staunch follower of Swami Vivekananda. He was responsible for us to come to Chennai and start Vivek. That is how the company was named Vivek and that is how the company was born. In fact, I still preserve the first invitation that was printed 43 years ago. We were a family of 4 sons and 5 daughters that lived in the Kolar gold fields doing rice business, with not many resources. So when my brother suggested that he wanted to come to Chennai and start business, my father tried to convince him against going to a big city like Chennai. Finally my brother convinced him to give him some money to start Vivek. In fact, at that point of time, we did not have any kind of resources. In fact I remember that our property 10 kms away from my hometown, a house, was pledged to a person at Rs.10,000.
Major portion has gone towards rental advance, Rs.450 towards 2 months’ rent for the place where we started Vivek. The property belonged to no other than the publishers of Kalaimagal magazine. Still we preserve the receipt of that rental deposit with us and I remember a cautioning that Balasundari Ammal gave to my brother. She said that my brother was a young boy and asked if he will be able to pay the rent on time every month. Today, Vivek pays Rs.8 crores as rent per annum. This was exactly where we started. I still remember every bit of detail about this company when it started. How it started, what kind of investment went into it, what kind of resources we had and so on.
Funds were a major constraint for us. When I went to the bank, asking for some bank facilities, the manager told me that he would give me Rs.500 overdraft. But I asked him what can one possibly do with Rs.500. I told him that ours was a good account and our first year turnover was a lakh and two thousand. I still preserve my sales tax assessment order. You can understand in 12 months, a lakh and two thousand means it is Rs.8 thousand per month sales, Rs.300 per day turnover. That is the kind of small beginning that Vivek had. After sometime, seeing our records, our transactions, our honesty, the bank agents had the discretion of power of lending Rs.5000 TOD (Temporary Over Draft) with a cautioning that if we availed this facility on Monday morning, we should bring back the credit balance on Saturday evening. That is how the funds constraint was overcome.
When my brother and I went to Usha asking for fans, they asked to go to their authorized dealers and not to come there. When we asked Philips radio dealership, they said they had only exclusive dealership. Since we were selling Bush, they asked us to contact their dealers and told us not to come there. We used to sell radios, fans, cycles and other things. I used to carry money to Broadway to cycle importing companies to buy cycles. We used to buy at Broadway and sell it at installments. We also sold Sumeet Mixers, which was on a waiting list. We had to wait about 6 – 8 weeks to get a mixer. Products were not available and we were at the mercy of the manufacturers. The customer did not have a choice at all. We soon started the daily installment scheme for shop owners. We did not have a capital, since we had to create infrastructure and we had very few resources. Suppose the shop owners buy something for Rs.100, they have to pay Re.1 on a daily basis. My brother and I used to go on a cycle to collect the Re 1 from the shop owners. Soon we moved from the daily installment to monthly installment and then there was no looking back.
Refrigerators were luxury items those days. We had only two types of refrigerators; 165 and 280 litres. The manufacturers would say, “We will give you these refrigerators but you should not sell. You can only book orders and then send the bookings to us, because you do not know how to show demonstration and install it and something can go wrong. So we will deliver and install it for the customers.” Today if you visit one Vivek showroom, we have 180 refrigerators on display.
Vivek always believes in fair price and customer satisfaction. These are highly ethical practices that we have adopted from day one. Personalized service is another aspect that we believe in. In fact, once a customer came to us at lunch time and wanted a folding table and four chairs. I was not able to ask him to leave since it was lunch time and it was difficult to get a customer back. As soon as the transaction was over, he wanted me to come and keep it in his car. I carried the table and chairs and put it in his ambassador car, he removed Rs.5 from his wallet and gave it to me, thinking that I was a worker.
These daily installment schemes were a big boost those days. This way, customers were retained and we slowly moved over to monthly installments. In the year of 1997, we had only two showrooms; in Mylapore and Purasawalkam. Purasawalkam showroom came into existence in the year 1968. Viveks always thinks in the line of ‘what can we do for the customer?’ Anything of interest to the customer, he will respond. If he is not interested, he will sooner or later realize and will not respond. So there was a brain storming session within the organization about what we can do for the customer. They are countless. Even if you want to send a greeting card, it was very difficult in those days. Then we felt that if we want to do some good for the customer, let us take one day and work without any profits. That is how the first time in this country, Vivek brought about the New Year Sale. On the 1st of January, the customers thronged and stood in queues. Hindu wrote an article about the sale under the headline, ‘A tradition has come to stay’. To that extent, the tradition continues even after 32 years. Even today the customers respond. We used to get about 80,000 customers across all our stores for the New Year’s Sale. Last year, our turnover was close to Rs.40 crores in 36 hours time.
In 1980, we opened our store in T Nagar and even today, after 28 years, our T Nagar showroom store is our flagship store. In those days itself, we took architects and designers to Singapore to show them how retails stores and malls were built and worked. We took pictures of them and came here to design our stores with those ideas. In 1980, our T Nagar store was ground plus three floors with elevators and floor carpets.
In the 1980s, when televisions were introduced in India, we had to pay cash in advance and BPL gave us 8 sets per showroom per month. I remember, one of the directors in Dyanora was staying in a hotel and all the dealers from Chennai and Bangalore were waiting in the lobby with cash to ask for quota allotment for their color televisions. Still this gentleman was sleeping and we were all waiting outside. It was a seller’s market.
Customers started buying more and we felt we needed to do something about hire purchase. That is how Vivek Hire Purchase & Leasing Ltd was born. That had helped us retain our customers and increase our turnover and it was a non-banking finance company which was able to accept fixed deposits from the public and also lend hire purchase to the customers. The kind of fairness and the kind of integrity that we had enabled the customers to trust Vivek and that trust has helped us enormously. Recently, the controlling stake of the company that we built in 1991 was given to AIG. American International Group identified and wanted a south based NBFC that had a good track record. In fact, 18 months back, there were 27 Americans here to conduct a due diligence audit. They appointed the top most leading legal firm, Amarchand Associates to go into the accounting and appointed PricewaterhouseCoopers as their auditors. What they found in Vivek was ethics, best practices, fairness and honesty. From day 1, this family did not compromise on any of these things. As soon as AIG took over the controlling stake, their global CEO was in Mumbai. They invited the top 100 industrialists for a get together in Taj. Just to name a few, Reserve Bank Governor, HDFC Parekh, Tatas and Birlas were present. We were nowhere close to them but we were also invited. One of AIG’s officials, in his speech mentioned, ‘We have recently completed a transaction at Chennai with an NBFC. Whatever values we have at AIG, the similar values were found in VHPL (Vivek Hire Purchase Leasing Ltd). That made us take the controlling stake.’ AIG themselves compared the market capitalization and found that their market capitalization is below that of the ten countries in the world. The tenth country’s market capital is AIG’s capital. What they have seen with Vivek is values, system, procedure, fairness and honesty.
Vivek was initially a proprietary company in my brother’s name. Unfortunately in December 1968, we lost him. Then this became a partnership company with my father and 4 brothers. In 1995, we changed this company in a public limited company closely held. Then we had only 3 showrooms. In 30 years time, we were able to grow into a sizeable business from a lakh and two thousand rupees company. In 1995 when we changed into a public limited company, it was at 27 crores. It took us 27 years to see this kind of a turnover. After we went public, our expansion was in Bangalore and Salem and also we had the opportunity to acquire the 3rd largest retail chain called Jainsons in 1999. They had 14 showrooms and they were the 3rd largest in Tamil Nadu. We decided to bid and we were successful. They had a showroom in Spencers which we acquired in 2000.
It took 34 years for me to reach the first 100 crores turnover and again it took another 4 years for me to reach the next 100 crores turnover. It took another 2 years for me to reach the 3rd 100 crores turnover but last year it took 74 days to reach the 4th 100 crores turnover. That is the kind of retail business we have.
Today, we are not represented across the country but have limited ourselves to Tamil Nadu: 17 cities including Chennai in Tamil Nadu and Bangalore and we are the largest consumer durable dealer in the country. I do not know how long we will be able to maintain this because many corporates with full pockets are entering India. They have a lot of resources too.
We have 52 showrooms in India and about 2 lakh sq ft of floor area. The brand image that Vivek has built is the solid trust with generations of customers. There are three generations of customers who buy from us. In fact, I can narrate one or two customer experiences. There was a customer who was working as a clerk in the Provident Fund office. She used to buy many household appliances from us. Even after her marriage, she continued to buy from us. Even after 15 years, she continued. She was promoted as an inspector at the PF office. Once she came upto me and said, “I am a customer with you for the last 35 years. During my marriage days I bought from you, my daughter’s marriage days I bought and recently we had a grandchild. We had a discussion at home as to what to name the child and I decided that with a house full of things bought at Vivek, it will be right to name my grandson ‘Vivek’.” The loyalty, trust, emotions, bonding and relationship that our customers had with us is visible in such instances. I can tell you, we are 3 brothers and 10 grandchildren and none of us have named our grandchildren ‘Vivek’. I still remember another customer whose name is S Janardhana Pillai, 117, VM Street, Royapettah, Chennai - 14. He had a small store and he used to buy regularly from us. One of his purchases was a small Godrej cupboard. Within 2 hours after we delivered the cupboard, he came back and we could see that he had brought some flowers and prasadham with him. He said that the cupboard arrived at a good time and that he just visited the Kapaleeswarar Temple and did a puja. He wanted me to give him the cupboard keys with a one rupee coin. What can I tell him and how can you justify his emotion, sentiment and loyalty? This is what is needed for any successful business.
We used to spend a lot of money on promotion and brand image. We are one of the largest spenders in The Hindu and we spent 10 million over the last 10 years and last year alone, we have spent about 9 crores on 400 crore turnover. We were the first in the country to introduce professionalism in the art of retailing because we have a training centre started in 1991 and a proper induction course started in 1996, instilling proper training and demonstration. Vivek has continuously won Performance Awards for most of our principles. Two years ago, I remember, Haier, the largest Chinese appliances company had launched their products in the North and West and wanted to launch in Tamil Nadu. We had not finalised our dealership and hence they delayed their launch by 4 months. When Vivek started in 1965, it was very difficult for me to get a fan dealership. But today, the world’s second largest appliances company when they wanted to launch in Tamil Nadu, since we had not finalized our dealership, had delayed their launch by 4 months. That is the kind of reputation, goodwill and brand equity that Vivek has built up.
Our success mantras: The only business principle that we know is customer service. Vivek has been built with trust in customer service. When this is the case, you can never betray. If you do not look after a customer, it amounts to betrayal. The customer is lost. We constantly try to give the customer new experiences in products by being innovative. The concept of New Year and Aadi Sale is another success mantra. I remember, 10 – 15 years ago, Aadi was known as the inauspicious month, but today Aadi promotions are going on. Inauspicious has now become auspicious.
Our employees have been the backbone of Vivek’s success. We take care of people and people who joined us in 1968 are still with us. One Mr V K Shankar, who is in the Vadapalani store, joined us in the year 1968. Late Mr Bhaskar from the T Nagar store had 26 years of experience with Vivek. Another gentleman in Bangalore also had a long service. Respect people, whether it is employees, customers, business partners, bankers or anybody for that matter. Treat them well and they will be more cooperative and willing to have a long term relationship with you. Every area and everybody in a business is important.
We are India’s number one retail chain store in India but we still go by the same concept and provide the same service that we had in 1965. There is a beautiful quote: “Success means doing the best with what we have. Success is in the doing not the getting, in the trying not the trend. Success is the personal standard reaching for the highest that is in us, becoming all that we can be. If we do our best, we are successful”