A Small Observations of the Local Tender Coconut Business

I have always wondered about how the small business functions and from time to time, I ask small vendors on how they run their business. When I say small, I mean at micro level e.g. a man selling tea on the streets with a tea can on his cycle or the women sitting near a temple trying to sell their flowers to pilgrims. Well, here I am going to discuss about the local sales of tender coconut. 

Water is the elixir of life, but to people in Chennai, Tender Coconut is no less than an elixir. Throughout the year there is a demand for it, however the demand varies with season. Among my several interactions with local vendors from time to time, I am going to present the observation I have gathered from my discussion with one of my preferred vendor. Why is she my preferred vendor? Well, I’ll get to that soon. 

While I was talking walk near my home, I stopped by the roadside tender coconut shop that was jointly run by Mrs. Shanthi and her husband, who have been in this business for more than 4 years.  It was much less than a shop, rather a walkway with tender coconuts piled up like a pyramid. For want of a better word, I shall refer to it as ‘shop’.

Distribution Channel and Procurement: The coconuts arrive from Pondicherry and Pollachi (a place near Coimbatore). Due to the recent storm –‘Thane’ that stuck Pondicherry, supply of tender coconuts from here has come to a halt.

Usually the local vendors / shopkeepers place their order though informal means such phone call. Based on the requirements, the load arrives at strategic points for distribution, in our case it the nearby vegetable market located at the beginning of East Coast Road in Thiruvanmiyur. Procurement is usually done once in 4 days for 300 to 400 units, depending on the demand for the season.  The shelf-life of the procured units is max 10 days and varies on case to case basis. 

Sales and Operation: The shop operates throughout the year from morning to evening. It is located in front of a house on the corner of 2^nd Seaward Road, Valmiki Nagar, Thiruvanmiyur.  The target customers are primarily the residents in the neighbourhood. The average per-day unit sales number is around 80 during the peak season, which is summer and at times the numbers shoot up to 100 units per day and least would be somewhere between 40 to 50 units per-day.  During monsoon, which is the off season for tender coconut, the average per-day sales number swing around 35, and tend to dip to 20 – 25 unit sales per-day. 

When the day closes, the stock is covered with tarpaulin and the waste is either given away to people in the neighbourhood who may want to use it as fuel or is thrown away. 

Pricing: The price is predominantly market driven. However, the price varies slightly among different regions of Chennai, why even in different locations in Thiruvanmiyur only. 

With this vendor it usually ranges between Rs. 20 during offseason and Rs 35 at peak. The price as on 25^th May 2012 was Rs. 30 per unit. The pricing is similar to the vendors in Besant Nagar (e.g. near Hotel Anjappar and in front of Calk Walk).  However in Adayar (at a vendor selling near Gandhi Nagar bus depot), it was Rs. 35 i.e. usually Rs 5 more than the area in discussion (the price could have changed in the last 2 weeks). This could be because Adayar is more commercialized location and the target customers are not just residents but also people who commute that way and are mostly tired and are in dire need of a drink before taking the bus or auto or just proceeding. On the other hand, the price of tender coconut sold in Thiruvanmiyur Beach is usually Rs. 5 less than that of the vendor discussed in this case.  The visiting crowd that comes to this beach is mostly not price sensitive i.e. the price elasticity of their demand is not high. Rs 20 or Rs 25 would not mean much to them. So a possible explanation for this reduced price could be to focus on the regular customer’s i.e. the walkers, joggers etc. By selling at a slightly lesser price, they attract and retain their regular customers and preventing them doing business with the nearby vendors next street.

Customer Relationship: The vendor discussed in this case has developed a goodwill relation with the local community. They maintain a fine balance between transactional and personal relationship. Even when they sell under the scorching sun, trying to cool down everybody else, they welcome you with a smile and acknowledgement, at times share pleasantries.  

This is why I prefer this vendor over the one who sits 2 blocks down the street who is completely transaction oriented and cold... 

So, there goes my small observation on tender coconut sales. The interviewee was reluctant for pictures so I did not compel her, but just managed to convince her to permit me to disclose her name.