Modern trade: Vikas Singh
Since becoming Managing Director of Fareast Mercantile Company Ghana, Vikas Singh has seen the company quadruple its annual revenue, double the size of its van fleet and double the number of outlets in its coverage area.
Throughout its 150 years of doing business in West Africa, Fareast Mercantile Company Ghana has seen highs and lows. For the last 30 years, the company has been a top-rated fast-moving consumer goods distributor, inked major deals with multinational manufacturers and received numerous awards.
But in 2015, when Vikas Singh was brought in to lead the company’s Ghanaian subsidiary as Managing Director, the future of its success was uncertain. "The years between 2012 and 2015 were a particularly daunting period.
Currency had depreciated and exchange losses were high. Besides, the consumers were not coming to terms with rising prices of imported products," Vikas recalls. He resolved to turn the ship around by redrafting the company’s distribution strategy.
A crucial move was to balance its portfolio of imported goods with regionally manufactured lines. "Our expertise is in FMCG, so we stick to our strength. Today, we are proud to say that 60% of the products we sell are manufactured within the Economic Community of West African States, and we manage consumer pricepoints much better than previously," he says.
Moreover, in the time Vikas has served as Managing Director, annual turnover for Fareast Mercantile Ghana has quadrupled from US$30 million to US$120 million (€25.5 million to €101.8 million), its fleet of vans has grown from 60–140 vehicles, and its coverage has expanded from 10,000–24,000 outlets across Ghana.
Vikas and his team have also signed important new clients, including Unilever, which prefers Fareast’s distribution expertise despite manufacturing locally. "Today, we are by far – I say this with all modesty – the biggest distribution house in West Africa, and definitely in Ghana," he says.
All-weather friends
Vikas’s initial successes in raising Fareast Mercantile from its temporary slump have laid the groundwork for his plans for long-term expansion. It’s technology that lies at the centre of this strategy.
"Over the next three to five years, we’ll be looking at applying new technologies in sales force automation towards monitoring our coverage, even down to the rural level," he says.
The purpose of this monitoring is to ensure that Fareast Mercantile’s network of van delivery routes maximises fuel, time and labour efficiency in order to remain profitable.
Close teamwork and long-term strategy are essential to our relationships. All of our partners understand that fareast mercantile will never leave midway.
"Through our sales force automation and GPS software, we know how much each route is selling, what products the shoppers are asking for and what products we need to sell to the shopper," Vikas says.
"We monitor all the movement and all the trends very closely and we ensure that product availability is there until the last mile. The last-mile execution is done very well as is how the product is merchandised."
Moreover, this software also collects data that helps Fareast Mercantile understand how to budget and improve distribution. "We have a system through which the merchandisers can monitor the rate of sale on a daily and weekly basis and feed it back into the system so that we know this is the rate of replenishment that is needed from us," Vikas says.
"This way, we know how much to stock up well ahead of time. This is modern trade." Equipped with a trove of data and the ability to predict demand accurately, Vikas is able to assure partners and suppliers reliable distribution, even when sales slow.
"Our relationships are based on a clear understanding that we are not fair-weather friends – we are all-weather friends," he says. "For every business or supplier we deal with, we create a special team for them, and this team’s job is to tie into the vision of the supplier. We work very closely with them, with their marketing team, their supply chain team and their sales strategist to execute that vision."
The integration between Fareast Mercantile and its suppliers runs to the top of the corporate ladder. Even the CEOs of Colgate-Palmolive and Mondeléz have paid visits to Ghana to see Fareast Mercantile’s distribution firsthand.
"Close teamwork and long-term strategy are essential to our relationships," Vikas says. "All of our partners understand that Fareast Mercantile will never leave midway."