INTRODUCTION:

A consumers' cooperative is a business owned by its customers for

their mutual gain. It is a form of free enterprise that is oriented toward
service rather than pecuniary profit. The customers or consumers of
the goods and/or services the business provides are also the
individuals who have provided the capital required to launch or
purchase that enterprise.
A consumers cooperative may be a supermarkets, convenience stores,
and other businesses owned by independently-owned, and run Co-
operative societies, which benefit from joint co-ordination and co-
operation in managing their businesses. As mutually-owned
businesses, each member of a society has a shareholding equal to the
sum they paid in when they joined.
The first consumer cooperative store was established in Rochdale,
Eng., in 1844, and most co-ops are modeled after the same, original
principles. They are based on open consumer membership, equal
voting among members, limited customer services, and shared profits
among members in the form of rebates generally related to the
amounts of their purchases. Consumer cooperatives have gained
widespread popularity throughout western and northern Europe,
particularly in Denmark, Finland, Iceland, Norway, Sweden, and Great
Britain. Co-ops typically emerge because community residents believe
that local retailers' prices are too high or service is substandard.

DEFINITI0N:
According to the Maharashtra Co-operative Societies Act, 1960. Sec.2
(9) defines a consumer co-operative society as a society, the object of
which is:

a. The procurement, production or processing and the distribution of

goods to or, the performance of other services for its members as also
other consumers,

b. The distribution among its members and customers, of the profit

occurring from such procurement, production, processing and
distribution are in proportion as prescribed by rules or byelaws of the
society.
OBJECTIVES:

1. To encourage the habit of thrift, self-help and co-operation

amongst the members of the society.
2. To raise funds by the way of share capital, deposits, loans,
donations and entrance fees.
3. To procure and produce by self or in partnership, consumer
goods of daily use and undertake retailing of such goods among
the members and other consumers.
4. To provide to the members such services as they may require
as consumers.
5. To undertake processing of consumers goods and its
distribution amongst its members and other consumers.
6. To try to improve the quality of goods produced by the society
and to construct or purchase or obtain on hire godowns required
for storing of goods.
7. To take effective measures to ensure price stabilization and
supply of goods to the consumers at reasonable prices.
8. To undertake distribution or sale of essential commodities
under the authority given by the state government or the local
authority.

REASONS OF SUCCESS OF CONSUMER CO-

OPERATIVE MOVEMENT:
1. Strict implementation of principles of co-operatives
2. Co-ordinal actions with the manager and employees.
3. Linkage of banks with co-operative society so as to gets financial
assistance without any difficulty.
4. Assistance of ladies in making the co-operative movement
successful.
5. Development of co-operative movements in England was
spontaneous and self-managed.
6. Co-operative stores used to Earmark part of the profits in reserve
funds in case of financial crisis.
7. An able and efficient management was also one of the reasons
for its success.

STRUCTURE OF CONSUMER CO-OPERATIVES:

The consumer cooperatives have a four tier structure comprising
primary consumer stores with branches functioning at the grass
root level, the wholesale / central consumer stores with their
branches at district / taluka level, the State Consumer
Cooperative Federations at the State level, and the NCCF of India
Ltd., at the national level. However, in the States located in the
North East and in the smaller States/UTs., composite state level
consumer-cum-marketing federations, dealing also with
consumer articles, are functioning. In rural areas, distribution of
consumer goods is handled by 44,418 village level societies,
including Large Sized Agriculture Multi-Purpose Cooperative
Societies (LAMPS) and or Primary Agricultural Credit Societies
(PACS) at the retail level. As on 31.3.2004, the overall
development feature of the consumer cooperatives in the
country are as given below :-

Primary Consumer Whole sale / Central State Cooperative

Store Consumer Stores Consumer Fedns.

No. of Stores 24078 794 30

Branches 7484 5001 737
(including Deptt.Stores)
Membership (in lakhs) 105.74 22.29 0.21
a) Coop. Store - 0.29 0.05
b) Others - 22.00 0.16

Share Capital (Rs. in lakhs)

Total 16552.41 6894.42 13273.41
Govt. Participation 1808.76 4769.79 12235.07

Working Capital 127214.55 48293.38 32230.72

(Rs. in lakhs)
Sales ( Rs. in crores)
Total Sales 1602.43 2065.60 1437.12
a) Controlled commodities 745.39 1245.77 108.43
b) Non-controlled commodities 857.04 819.83 1328.69
Stores in profit 8820 449 10
Total Number of employees 22068 15000 5518
Trained employees 2455 3163 289

NATIONAL CO-OPERATIVE CONSUMER

FEDERATION (NCCF):
National Cooperative Consumers’ Federation of India Limited
(NCCF) is the apex Federation of the consumer cooperatives in
the country. NCCF was set up on 16 October, 1965 and is
governed under the Multi State Cooperative Societies Act 2002.
The present membership of the NCCF is 136 comprising of
Primary Co-op. Stores, Wholesale Societies, State level Consumer
Cooperative Federations, National Cooperative Development
Corporation and the Government of India.

CHIEF FUNCTION:
1. To help and guide state federations in their operations.
2. To act as the chief spokesman of consumer co-operative in
India.
3. To procure and distribute consumer products such as:
a. Pulses, spices, food grains, tea and other agricultural goods.
b. Controlled cloth.
c. Non-controlled textiles and readymade garments.
d. Imported and domesticated goods.
The federation maintains a consultancy and promotional cell,
which is entrusted with the responsibility of farming operational
and business procedures, administrative norms etc. It also
publishes a monthly news bulletin, which contains information on
the market rates of goods supplied by the consumer co-
operatives.

PROBLEMS:
1. The consumer co-operative movement in India is government
sponsored and initiated.

2. Consumers in India are indifferent to their own needs and still

believe in the private trade system.
3. Consumer co-operatives are not well integrated and are
scattered isolated.

4. The procurement and purchase operations are technically

faulty.

5. They also face problems of low efficiency and low level of

quality of products.

6. There is also intense competition from the private traders who

create various problems for the consumer movement.

DISPUTE SETTLEMENT:
Disputes can be raised by any member regarding Election of a
Managing Committee, or the Officers. Disputes can also be raised
about the conduct of the conduct of the General Meeting and the
management or business of the Society.
Such disputes can be settled in special courts which deal with
only the Co- operative matters. These courts are called as Co-
operative Courts.
· In the case of disputes which arise due to recover of sums
disbursed by the co-operative society. The Co-operative Court
can attach the property of a member,if it is likely to be disposed
off
· A certificate then issued by the official assignee or by an
authorised person or by the Co-operative Court itself shall be
executed as a decree of a Civil Court and also executed as
arrears of land revenue. Any private transfer of the property
thereafter, shall be null and void against the claim Society.

APNA BAZAAR:

“For us customer is First”

INTRODUCTION:

Apna Bazar is probably the oldest and largest consumer co-

operative multi-state society with a customer base of over 12
lakhs. The Rs 140-crore retail chain that, for over 55 years
remained largely “middle-class” has 80 outlets in Mumbai, Thane
and the neighbouring Konkan region. It has recently opened its
first shop outside the Maharashtra state, in Goa. Apna Bazaar
has developed a strong brand image in the mind of the
consumers. It enjoys strong consumer loyalty. There are just 4%-
5% consumers who shift over to other retail stores.

Brand name Mumbai Kamgar Madhyavarti Grahak Sahakari

Mandal Ltd
Date of Incorporation 9th May 1948
Constitution Multi State Co-operative Society
Sector Private
Industry Retailing
Registered Office 106-A, Govingi Keni Road, Naigaon, Dadar
[East], Mumbai 400014

HISTORY:

In 1948 it started with The Naigaon Grahak Sahakari Mandal

Limited, which became Mumbai Kamgar in 1958-59 after other
consumer co. op. societies merged into it. In 1962-63 the
organization became Madhyawarti Grahak Sahakari Mandal. In
1968, the organization started the nation’s first departmental
store on the mill worker dominated areas like Naigaon, under the
name of APNA BAZAR. In a short time the brand APNABAZAR
grew popular all over Mumbai and has never looked back since.
After successfully establishing a wide network of branches all
over Mumbai, new branches were opened along the Konkan
stretch following demand. Further franchisees were encouraged,
giving livelihood opportunity to many entrepreneurs.

PURPOSE OF ESTABLISHMENT:

There was an industrial lock – out as a result of which many

textile workers became unemployed. In order to help these
workers and to provide them with employment, the Mumbai
Kamgar Madhawarti Grahak Sahakari Sanstha Limited came into
existence. They started a co-operative under the brand name
“Apna Bazaar”

HOW TO START - AN APNA BAZAAR:

Being a people’s movement, Apna Bazaar goes by the principle –

It is not people who crave for profits, but those who wish to serve
the society and earning regular income as a source of their
livelihood. This principle acts as bedrock for starting an APNA
BAZAAR.
Those who fall under this category are Housewives, Retired
Citizens, the unemployed and any other persons who are capable
of starting an Apna Bazaar in their neighbourhood. There are four
categories of Apna Bazaars:
Home Apna Bazaar
Mini Apna Bazaar
Medium Apna Bazaar
Mega Apna Bazaar

Those who wish to start one such Bazaar should (as per their
area and number of members) deposit an amount ranging from
RS 1 lakh to RS 5 lakhs with the Consumer Awareness and
Research Society Trust and enroll as a Co-ordinator. Similarly,
the coordinator should also make arrangements for space or
accommodation, from 150 to 1,000 S.R., in accordance with the
class of APNA BAZAAR, to be established. Atleast one person who
has obtained a minimum education of up to 10th standard should
be appointed for supervision and 1-3 helpers can be employed as
per the need and size of the APNA BAZAAR.
After the deposit is made, the accommodation arranged and the
required personnel and assistants appointed and these three
requirements taken care of by the depositor, the CARS Trust
(Consumer Awareness And Research Society Trust) will take the
entire responsibility and care of the remaining things to be done.
They are as follows
· The Government’s Licenses required for the establishment of
APNA BAZAAR, Billing Machines, Weighing Machines, Racks,
Furniture and other infrastructural facilities will be provided (as
per the Deposit) by the CARS Trust. The CARS Trust will also
supply all the items of daily consumption to be sold to the
consumer, at rates fixed by the trust. The goods will be
transported to the Centres in special transport vehicles. Also, the
payment of taxes will be processed by the trust.
· The products rate sold at our outlets at a rate which adds a
minimal 7% to the manufacturing price, the Coordinator will
receive 5% of his total turnover as Service Charge and the
remaining 2% is used for transpiration, cleaning, packing and
other incidental expenses. Depending on the size of the APNA
BAZAAR, the number of members and the quantity of sales at
the Centre, each coordinator will on average earn about RS
10,000/- to RS 50,000/- as service charge alone. If the
Coordinator, while extending full service to the consumer and in
complete keeping with the terms and conditions and rules and
regulations of APNA BAZAAR, manages to increase the turnover
he will then be eligible for an extra income.
· The food items and products will be cleaned, packed and the
rates fixed before they are sent to the coordinator. Hence the
coordinator can conveniently and directly supply the goods to
the consumer.
· The food grains, products and other items obtained from the
sources of production are tested for quality in the laboratories,
before they are packed. The items are cleared, packaged and
then sent to the APNA BAZAAR outlets.
· The promotional and publicity requirements, the pamphlets,
wall posters, banners, Audio, Video materials, applications and
membership forms. Passbooks and Bill books will also be
supplied to the Coordinator by the CARS Trust. Depending on the
occasion and necessity, Radio and T.V. announcements and
advertisements will also be released. The Coordinator will be
given special training by the CARS Trust
· Within the parameters of the CARS Trust rules, the Coordinator
can transfer the Coordinatorship or terminate it.

OUTLETS:

The location for the store is selected taking in consideration the

residential population in the area, the standard of living of the
people, the amount of business the other shops are doing and
also future development that are likely to take place in that area
in future. The minimum requirement of area for setting up Apna
Bazar is 1000 sq.feet. The biggest store is at Vashi, which is
spread across 27000 sq.feet.
In Mumbai it has 68 outlets, 11 outlets in Konkan and 1 in Goa.
Of these there are:
1. Departmental stores – 8
2. Supermarkets – 7
3. Medical stores – 4
4. Food stores – 2
5. Franchisee stores – 37
TARGET SEGMENTS:

The store was started keeping in mind the lower middle class
section of the society. But gradually it has moved up the
consumer ladder with the inclusion of the middle class as its
target consumer. Now slowly it is drawing the upper class
towards it. It now caters to almost all the segments of the society
depending on the location.

Members Benefits:

· Dividend on shares at 12% to individuals, society and

government.
· Purchase rebate on share amount 10% each year.
· Attractive rate of interest up to 9% on fixed deposit by the
members.

INVENTORY:

The F.M.C.G. products are directly from the company whereas

food grains are purchased from a market at Thane, Vegetables &
fruits are purchased from RadhaKrishna food land and Dry fruits
are purchased from market in Vashi. The stock is valued on FIFO
basis i.e. first in first out basis.

MODE OF PAYMENT

In Apna Bazar the mode of payment is Cash, Credit card, Debit

card, Ticket restaurant, and Sodexhopass coupon. No individual
credit is given. However ApnaBazar also supplies commodities to
govt. Institutes, Hospital etc. They supply food grains, Grocery
etc. In this case they give a credit of month.

SOURCES OF INCOME

Ø Retailing is their core activity and a major part of their

§ Income comes from the various retail outlets.
Ø They supply commodities like Dal, Pulses, Food grains,
§ Cereals to Govt. Institutions, Hospitals for their
§ Canteens. A 30 Days credit is given to them.
Ø They also earn income from the company racks that they
display in their outlets. These racks contain the products of the
particular company and the in turn pays Apna Bazar for
displaying these racks. E.g. Maggie, Colgate, Pepsodent, Vicks,
Nescafe etc.
Ø They provide space to companies e.g. MEPL (Electronic goods)
in order to display and sell their goods by charging rent for space
provided.
Ø They have 37 Franchise outlets, which act as a source of
income for Apna Bazar as Apna Bazar supplies 70% of goods.
Ø Provide place to banks for opening ATM center by charging
rent since almost all the outlets are owned by Apna bazar.
Ø MetLife India signed an agreement with Apna Bazar Co-
operative for selling life insurance policies. Based on the
agreement, Apna Bazar Co-operative shall become corporate
agents for MetLife India and offer MetLife India products to its
huge customer base. Henceforth Apna Bazar will enable its
customers to build financial freedom through Metlife India
products based on need analysis. Apna Bazar will receive a
commission of 35% on Premium amount.

QUESTIONS ASKED

Mahesh Kambli, CEO of the co-operative retail chain, Apna

Bazaar, which sells provisions, food products and medicines,
marks fresh food and vegetables segment as the focus area to
sustain its growth. The plans are to consolidate on what already
exists.

1)What is the current strength of Apna Bazaar? Any plans

to increase the number of outlets?

Apna Bazaar has 86 outlets, of which 46 are company owned and

the rest are franchisees. The network includes seven department
stores, six supermarkets, 26 food stores and five speciality
chemist stores. We're now planning improvement on whatever
we presently run.

2)Looking ahead, what are the latest plans?

We are more in to consolidation than expansion, and to form

strategic alliances. We will soon partner with the Japanese
Consumer Co-operative Union (JCCU) in areas of training the staff
force, visual merchandising and setting up a co-operative food
brand. The company is also foraying into co-branding exercises
to offer value to its consumers. We have already introduced a
new section - Food and Vegetables, operational in stores at
Vashi, Andheri, Charkop, Mulund and Fort. We have started with
the Mulund store, and it is the first consumer cooperative store
sector in India to have air-condition.

3) What is the idea behind establishing alliances with the

likes of Japanese Consumer Co-operative Union ?

These alliances will be based on exchanging strengths in areas of

training, visual merchandising and developing co-operative
brands. Their expertise can be used for ours stores that are the
value-additions. These brands will be cheaper than the existing
ones, and the quality maintained.

4) How far has the upgrading skills of manpower reached?

We have roped in consultants to impart training, done through

in-house facilities and affiliations with the Asoka Mehta Institute
of Management and Research. Talks on an exchange programme
of our personnel to JCCU are going on. All the stores have started
staff training.

5) What will be the new focus? Also, which section of the

society are you looking at?

We have marked the fresh food and vegetables segment as the

focus area to sustain growth. They are currently available at four
stores, and will extend it to other outlets soon. We are looking at
building an all-round image by targeting the upper middle class
segment as well. We are bringing in initiatives like specialised
counters and food courts at its department stores and super
markets. People in their 40s are already coming to us. What we
are targeting now is the still younger generation, the people who
possess spending power.

6) What is your annual turnover?

We are projecting sales of Rs 165 crore this fiscal year, including

the franchisee contribution of Rs 30-35 crore, down by Rs 10
crore from last year. We have closed down our export division to
concentrate only on the core activities. The processing unit at
Jalgaon is also closed down. The spices and dal factory at Taloja
are being outsourced now. These moves have affected the sales.

Meanwhile, we have stopped the plans of going online, on the

lines of Sangam Direct, the online initiative of HLL. The home
delivery concept would not work unless there is delivery density.
As such, the earlier plan to start a call centre parallel to this is
also halted.

7) What do you want Apna Bazaar to be known for?

When it comes to food it has to be Apna Bazaar that must come

into one's mind. I will say the punch line for Apna Bazaar will be -
when you think about genuine products, think about Apna
Bazaar.

FINANCIAL ANALYSIS:

TOTAL SALES:
In the financial year 2003-04 the organization’s total sales
amounted to Rs. 127 crores and 36 lacs. There has been a fall of
Rs. 5 crores in the total sales compared to the previous years.
This was due to loss making outlets which were later closed
down.

EXPENDITURE:

Out of the total expenditure incurred by Apna Bazar, Payment to

staff constitutes to more than 40-45% in the financial year 2001-
02, 2002-03, 2003-04. Also Interest on deposits and borrowings
were around 20-25%. Apna Bazar borrowed money in order to
set it off against the losses. These lead to increasing interest
burden and almost resulting into debt trap.

MEASURES TAKEN TO ERADICATE LOSSES:

Since Apna Bazar has incurred losses of Rs. 150 lacs in the
financial year 2003-04, they have taken the following steps to
eradicate these losses:
Ø They are trying to reduce the inventory turnover to two (2)
days with the help of Radha Krishna Food land. These would
reduce the blockage of capital and interest on it.
Ø The concept of Shopping on wheel has been drastically cut
down due to government regulation of disallowing vehicles on
road, which are 15 years old. Another reason is that Apna Bazar
outlets are now available in almost all areas of Mumbai.
Ø Apna Bazar has discontinued the outlets, which are making
losses for many years. Outlet in Bandra was closed.
Ø They are trimming the staff and there has been no new intake
of staff as of date.
Ø Training and Development of staff in order to improve their
efficiency and productivity.

SWOT ANALYSIS:

STRENGTHS:
1) Pure quality commodity and Surety of no duplication
The products of Apna Bazaar are genuine as they purchase it
directly from the companies. Lots of imitations of
consumables such as honey, oil, etc. are available in many
stores. People get cheated, as it is not easy to identify the 2)
Quantity is accurate and All prices below MRP including
medical products
Apna Bazaar makes use of modern technology to maintain
correct supplier bills and giving accurate bills to customers
giving details of each purchase and most importantly showing
him the savings he has made while purchasing from Apna
Bazaar. They also possess total details of their sales and the
percentage of sales in each category so they know where the
sales are high and where they are lagging behind.
3) Guarantee on each product
4) Strong network as compared to competitors
Apna Bazaar organizes a customer meet for their regular
customers called MELAVDA at their anniversary to build
stronger relations with their customers. On this day, the
customers are offered purchase discounts which show that
they have taken corrective steps towards customer
satisfaction.

WEAKNESSES:

1) Ambience not satisfactory

2) Congested (lack of space)
3) Improper management of inventory.
4) No Window display
5) Lack of proper security measures and customer service
6) Lack of parking space
7) Has cloth bags instead of trolleys
8)Some of the goods placed too high on racks so customers
unable to reach them
9) No computers on cash counters but cash machines present

OPPORTUNITIES:

1) Tie ups with Amul, Parle, HPCL, Metlife etc.

2) Start outlets at par with new super markets like D – Mart
3) Opening stores exceeding 50000+sq fts, equipped with air
conditioners, trolleys etc.
4) Efforts to make shopping a pleasurable experience

THREATS:
D-Mart and Giant Hypermarket provides the experience of
shopping which apna Bazar does not provide.
Malls-
There are a large number of malls that offer discounts the
discounts offered by them are as good as those offered by Apna
Bazaar because the malls purchase in bulk and can hence afford
to give heavy discounts to the customers. The customer has an
explosion of choices and will prefer shopping at these big malls
because of the ambience. They get the complete shopping
experience at malls. Hence, malls are a major threat for Apna
Bazaar.

FUTURE GROWTH STRATEGY:

· Increasing the distribution reach is a strategy to counter
competition the co-operative plans to increase its outlets from 80
at present to about 100 by next year. This would comprise
department stores, super markets, franchisee outlets and
medical stores, both in Maharashtra as well as rest of the
country.
· Apna Bazaar Co-operative has embarked on a restructuring
exercise and has appointed Darashaw and Company as strategic
consultants. The restructuring involves exiting certain business
while adding more services, to be provided under its umbrella.
The restructuring plan involves exiting out of businesses like
export of fish and grapes, milk processing, manufacturing bakery
products like biscuits and also pickles papads and spices.
· Expansion in the suburbs like thane and kandivali.
· The first thing on Apna Bazaar’s plans is to work on all 365 days
like other big players.
· Upgrading the skills of their manpower and create vehicle
parking facility are also in their agenda. They plan to have a tie-
up with Citibank on co-branding. Regarding credit card, they are
on the verge of signing a MoU with SBI. As visual merchandising,
a new way for presenting the products will be introduced.
· The National Consumers Co-Operative Federation has
approached Apna Bazaar and enquired about the possibility of
running department stores under the brand name Apna Bazaar in
Delhi and Madhya Pradesh
· Apna Bazaar is planning to open another outlet in Goa as they
have got a good response from the supermarket.
 SOLUTIONS AND RECOMMENDATIONS:

• Ø Getting more tech – savvy i.e. adopting new methods for

billing like computers and having electronic displays of the
currents offers
Ø Have shorter size of racks so customers are able to reach
the products more easily
Ø Change existing iron racks with steels ones which are
polished
Ø Government interference has had a major effect on the
democratic setup of Apna Bazaar. Therefore, lesser
dependence on government should be opted for.
Government should help stores like Apna Bazaar with
credit at cheaper interest rates.
Ø Changing according to times is inevitable. Apna Bazaar
has to change its traditional viewpoints. It should adopt
new techniques and accept change wholeheartedly
Ø Recruit more staff and train existing ones on providing
better customer service
Ø Get trolleys of different sizes i.e. small, medium and
large for the convenience of customers
Ø Provide valet parking or else have a spacious parking
area for its customers
Ø Have electronic detectors at the entrance and exit points
to prevent shop - lifting
Ø Change the ambience by :
· Changing the flooring from tiles to marbles
· Making the store centrally air – conditioned
· Increase the size of the store vertically and horizontally to
give a more spacious feel
· Increase the number of cash counters so the rush will
decrease
· Improving the lighting to make the store look brighter

• CONCLUSION:

Cooperatives are successful because they provide valuable

services and save consumers money. Since the primary
goal of cooperatives is to meet needs, not generate profits,
they can serve their members at low cost.
Cooperatives often provide services to their communities
that are not readily available from for-profit businesses. In
other cases, cooperatives enhance the level of competition
in the marketplace by providing consumers with an
alternative source of products and services.
The central principle of consumer cooperatives is member
control and participation. These member/owners meet
periodically to establish policy and elect directors.
Directors, in turn, hire managers to administer the
cooperative on a day-to-day basis.