LPG monopoly off

The BOI will make available tax concessions for any foreign investor willing to invest in the import, storage and distribution of LPG, subject to relevant approvals, a Board of Investment (BOI) press release stated. 

After 8th December 2000 any new entrants will be permitted to import, store and distribute LPG. However, all industry players will be required to adhere to safety and quality standards set out by the Sri Lanka Standards Institution. 

Presently Shell Terminal Lanka Ltd., own and operate an automated LPG storage and distribution facility consisting of an offshore ship unloading facility, submarine pipeline and four storage spheres with a total capacity of 8000MT. New entrants may obtain the use of this terminal on payment of a throughput fee to Shell Gas Lanka Ltd. 

The industry has significantly expanded during the last five years with the total number of households using LPG increasing from 420,000 in 1995 to over 1,000,000 this year. The present annual LPG utilisation is estimated at 135,000MT. 

The use of LPG as a fuel source for vehicles has also gained increased popularity, as it is a relatively cheap and environmentally friendly alternative. It is forecast that LPG would remain a high growth industry in the medium to long term.

ComNet in Piliyandala

The new branch is connected to 79 other branches of the Bank situated island-wide through ComNet, providing customers with real-time access to their accounts, wherever they may be a Commercial Bank press release stated. 

Other facilities offered by the new branch include a 24-hour banking facility through the CAT automated teller machine and tele-banking facilities through Comtel. 

Commercial Bank's Chairman Mr. M.J.C. Amarasuriya declared open the new branch. 

Speaking at the occasion, Mr. Amarasuriya said that the research conducted before the setting up of the branch showed that people in Piliyandala needed an efficient bank like Commercial Bank. 

He outlined several of the Bank's innovative savings and investment schemes as well as the facility of paying all utility bills at this branch. 

Mr. Amarasuriya added that there was severe competition among banks for business at present, and the only way Commercial Bank could differentiate itself was through exemplary service to customers. 

The Manager of the new branch Mr. M. Abeyratne said that in keeping with Commercial Bank's policies, the Piliyandala branch brings banking to customer's doorstep. 

The new branch is situated at No. 7, Old Road, Piliyandala. 

For a few shoppers more

Bond Street, Beverly Street… London or Los Angeles? well actually it's Colombo, Sri Lanka-the newest destination for shopping in South Asia.

In the past two weeks Colombo has been transformed from a typical South Asian city burdened with the common ills of unplanned urbanization into a shoppers' paradise.

In the heart of the Colombo city has loomed up four new malls (two refurbished and expanded) offering everything from designer clothes to gourmet food. Two well established malls, Odel and House of Fashion have expanded beyond recognition.

Arena, right next to a city amusement park and food court and Beverly Street open day and night have added to the glamour and excitement of a shoppers dream.

If it was two's company and three's fun with big malls competing for clientele in the city, now it has to be 'move the mercer' with still others January the fray.

When the wave of buying frenzy of seasonal shoppers subsides all the malls will be looking to make steady sales and find their respective buyers.

If Colomb's new and refurbished malls are able to cater to foreigners at least in the region the century's capital may find itself on the map as a shopping destination akin to Singapore in South Asia.

House of success

By Chanakya Dissanayake

STB: How do you see the competition you are facing from other malls?

Mrs. J: I do not think that anyone can compete with our prices. We have always catered to all sectors of the society. Our profit margins are low but our volumes are large. Now we have introduced popular brands such as; Tommy Hilfinger, Calvin Klein at prices none can offer. We have the exclusive dealership for these brands. Therefore we are able to offer these brands at lower prices. The value we offer for price is hard to match.

STB: Any plans for expansion, maybe to outstations?

Mrs. J: We are not looking at outstations. I do not think that we could offer the same service elsewhere. Right now customers are coming from outstations to buy our clothes, because of our prices. We will be expanding our parking capability soon. 

STB: During the past few years we saw many clothing retailers going out of business. How did you prosper in a period of economic downturn and low consumer spending?

Mrs. J: We have always made an effort to study the consumer taste and spending patterns. That is the main reason for our success in catering to the consumer needs and wants. Our stock management has also contributed to our success. We have been able to keep our overheads low and pass the benefit to the consumer. During the past few years, we have travelled extensively to study successful foreign departmental stores and have adopted many of their strong features.

STB: Has the spiralling interest rates created problems for your working capital management?

Mrs. J: Due to the large volumes we deal in , all banks have offered us preferential interest rates. We try to keep our working capital costs low by going for high stock turnovers. Due to our pricing, our stocks have always been moving fast.

New kid on the Arena

STB: What are the new trends you see in consumer buying in Sri Lanka.

AK: The concept of one stop departmental stores are catching on in Sri Lanka. We are able to offer many conveniences to the consumer due to our location. Consumers have the access to ample parking and the millennium park entertainment complex. Basically when they visit Arena, they can spend the whole day shopping and using the entertainment complex. Arena is able to offer a true family outing.

Also, the Sri Lankan consumer is travelling abroad much more than he used to. When they see the same brands available abroad at a fair price at Arena, they will recognise that it is a good deal. Consumers are also recognising the value of quality behind a brand label.

STB: What is your pricing strategy?

AK: We are able to offer good value for price, bearing in mind the high quality of our products. Many customers were extremely satisfied with our prices. We are offering brands of international repute at extremely competitive prices. But the shopping experience we offer to the client is not a cheap experience. This building has always been a department store, it is not a house converted into a departmental store.

STB: What is the market segment you are trying to penetrate at this moment?

AK: I think we can appeal to all the segments of the market. Because of the season we have concentrated more on eveningwear for the moment. Our product selection may imply at this moment that we are catering to a niche market. But ultimately we want to be affordable to everyone. We are offering high quality products at comparatively low prices. If we want to be a niche player we could raise the price, but we are not doing that.

STB: Does being in the supply side of the garment industry give you an edge?

AK: It gives you an understanding of the quality aspirations of the consumer. When we supply to European department stores, we learn about the needs and wants of the top end consumer. The experience helps us to choose the appropriate products for the department store. Also it gives us a preview of fashion trends, ahead of others.

Daring to be different

STB: Does your experience about the Sri Lankan consumer through the years of retailing, justify this kind of an expansion?

OC: Yes. It does. Sri Lankan consumer buying trends and fashions has come of age. We find these kind of malls all over the world and we thought, why not the Sri Lankan consumer have this kind of a experience? 

We are providing a total care solution to the consumer. We have top quality branded clothes, a fully fledged kids section and also beauty saloons and a cafeteria an international repute. With one stop, consumers will be able to accomplish many requirements.

STB What is the nature of the competition between ODEL and other departmental stores in Colombo ?

OC: We certainly have competition. But we do have an edge over the rest since we are providing a total solution. Odel is able to offer a totally different shopping experience. Customers will be able to purchase genuine branded clothes at very competitive prices.

STB: What was the size of the investment and how was it financed?

OC: It was partly financed by bank borrowings and private funding. We took a huge risk by going for a expansion of this nature to offer something truly new to the Sri Lankan consumer. I am quite sure that anyone who visits us will appreciate our efforts in offering a different and fulfilling shopping experience. The investment will be amply justified.

STB: Odel has always adopted a social marketing strategy, promoting wildlife, anti- pollution campaigns etc. What really compelled you to adopt this type of promotions?

OC: It basically comes from the heart. I am a biologist by profession and strongly believe in conserving our nature. That is the message we are projecting to our clients and to the whole country. It is a genuine interest, rather than a marketing gimmick.

STB: The profitability of a departmental store depends to a greater extent on its stock management. What is Odel's strategy?

OC: We have had problems with our stock management. Sometimes we have found ourselves holding on to too much stock. But now our stock management is fully computerised and we find ourselves maintaining optimum levels of stocks. We try to maintain a high level of sales so that our stock turnover will be high. 

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