Priyanka Jethwa meets Bipin Mandalia, one of the founders of Chetan Wholesalers.
In 1971, Bipin Mandalia and his four brothers emigrated from Kampala in Uganda to the UK, fleeing the devastating conflict that had made life parlous for the country’s Asian community. But this was just the start of a journey that saw the quintet end up running one of London’s most prosperous wholesale businesses – Barking-based Chetan Wholesalers.
Mandalia and his brothers were put up in a refugee camp in Bristol when they arrived here. They lived for a couple of months in the camp before moving to London, where they started working for Transport for London.
They also enrolled in a night school to study subjects they had not been able to while growing up. In time, they all landed jobs at banks in the City of London, with Mandalia himself buying and selling currency.
But they all had a strong desire to work for themselves, so the brothers bought a small convenience store in Ilford, East London.
After the success of this venture, they purchased another convenience store on Cannon Street in the City of London. Mandalia subsequently left the bank for which he worked and dedicated his time to the running of the store.
This opportunity soon led to another. Mandalia explains: “Because it was difficult to get products into the City at that time and because there were so few wholesalers around, we saw a gap in the market to start a delivery service. We had spare storage space at the back of the shop in Ilford, so we turned that into a distribution hub and started to deliver goods from suppliers to convenience stores.”
Eventually, the brothers decided to sell the Ilford store and move Chetan’s wholesale operations to their base in the City.
At this point, the business saw huge growth that required the full commitment of everyone. As a result, all the brothers left their banking jobs to commit to Chetan full-time.
After 10 years, Chetan acquired a larger site in Barking, from which all the business’ operations are now conducted.
Key to Chetan’s growth was its decision in 1989 to join the Today’s Group as one of the buying group’s very first wholesale members. This has helped the company secure better deals and prices across the market, Mandalia says.
But in 1992, Chetan opened a “first of its kind” Asian groceries cash & carry. Unfortunately, the business could not cope with running two operations at the same time and so had to close the Asian groceries arm.
“Unfortunately, there was not enough space for us to merge the two businesses,” Mandalia adds.
The business now primarily trades in alcohol, tobacco, confectionery, soft drinks and impulse groceries. Trends that Chetan has responded to in recent times are the rise of craft beverages and a general surge in popularity of all premium alcohol products.
“More people are trading up to buy better quality goods across all categories because of both the increased spending power they have and the fact they are more discerning about what they spend their money on,” he notes.
Over the years, Chetan has primarily grown through word of mouth. It now has 2,450 active customers, some as far afield as East Anglia and Sussex. While mainly serving convenience stores, the business also sells alcohol and tobacco to a few nightclubs.
As is seen across the market, delivered services are becoming more popular with customers due to the convenience element.
Mandalia says: “We find that customers based in the West End of London are those who prefer this service. However, a majority still like to come into the cash & carry with their notepad and pen.”
He adds: “It used to be very easy delivering in the City and I even used to do it myself for 10 years. But in the past 15 years or so, it has become difficult because of all the legislation concerning vehicles, parking restrictions and congestion zones.”
One way in which the wholesaler has adapted to changing times is by introducing an app, following high demand from retail customers.
Mandalia says: “We introduced the app early in 2016, because we found that when younger retailers were joining the trade, with their computer-savvy skills they preferred to place orders digitally rather than come into the depot.”
Although most customers still favour coming into the cash & carry, he says that the company is trying to switch everyone over to the app.
Mandalia also reveals that Chetan plans to develop its alcohol offering and bring in more craft beer lines. The brothers believe that giving their customers more choice in this category is the way forward, not just because of the trend in premium, but because they have seen sales skyrocket following the introduction of the Alcohol Wholesaler Registration Scheme in April last year.
Mandalia is not overly concerned about the so-called ‘sugar tax’, which comes into effect in April, given that the legislation that led to a 20-stick minimum on cigarette packs, has actually boosted Chetan’s tobacco sales. He believes that this particular law has “backfired”, as, in his view, consumers are now smoking more than before due to only being able to purchase bigger packs.
Meanwhile, the collapse of Palmer & Harvey has fuelled an even greater uplift in tobacco sales for Chetan, too.
Although Brexit is often viewed as the biggest challenge the industry faces in both the short- and long-term, Mandalia believes that as well as difficulties, it will bring some benefits to the wholesale channel.
“We actually used to have a lot of imports from Europe, but because of the exchange rate going down, it is no longer a viable option, so we have stopped importing altogether,” he says.
“Ultimately, however, there is a lot of legislation that ties the UK wholesale sector down in terms of restrictions and red-tape, and by leaving the European Union, that red-tape will cease to exist.”