POS Conversion

I bought my first mobile phone, a Samsung R 220 in 2002 when I used to work at Musicworld in Kolkata. Those days, it set me back by over Rs. 9,500. Colour display, trendy looking and all that. Incoming call was Rs. 2 per minute and outgoing was Rs. 5 per minute on Airtel. It was mainly meant for my family in Chennai to reach me whenever they wished to speak with me. I retained it for about three years, and then moved to Nokia for about 4 years. Then came Blackberry and then my iPhones since 2012 although I first used an iPod in 2006 which my friend gifted me. Over the past four years, have got so engrossed and obsessed with the Apple way of communicating. As I always say, Apple is neither a hardware company nor Software one. It is an ecosystem. It is something like Hinduism, a way of living. Once you get used to the Apple way of life, it is very difficult to move out – you are kind of hooked on. Yes, I know and you know many who have moved on, but so be it. After using an iPod for a decade, iPhones for 4 years and an iPad for 3, I decided to buy a Macbook which I did recently. And boy, what a life this is – so well integrated. However, I use the Microsoft Onedrive to store all my data and access it across devices. Photos, of course are on iCloud. So, I have been engrossed in this system, quite well.

Now that I run two startups (OyeThere.com and SmilingBaby.in), I am in the process of releasing their mobile applications. So, being the consumer guy, I want to experience first hand what the user goes through while using the app. And hence started to look for an Android device. Honestly, I have no experience in using an Android OS and hence had neither positive nor negative thoughts about them. I know so many Android fanatics and these are very intellectual people. I know many who swear by a Macbook yet use Android phones. So, am sure they are quite good. As usual, started reading reviews and searched online. Was impressed with the Lenovo K4 Note. I went to the big four sites online but the confused me more than I already was. My budget was sub-Rs. 10,000 and hence the dichotomy was much higher. Since my spare laptop is a Sony Vaio, I thought let me look for a Sony mobile perhaps they may sync well. Walked in to the showroom at Alwarpet and asked the guy for some details. They were so disinterested to even strike a conversation, forget selling the device. One guy was ignorant and the other couldn’t care less. This was the most premium store for Sony in Chennai and among the top ones in India, probably more than a decade old. Shame on the boys and the guy who has franchised it to have such a poor team of Retail sales staff, I thought to myself and walked away.

Next I went to the guys who pioneered Mobile Retailing in Chennai, Univercell. The brand has changed hands recently and the new team has perhaps washed off their hands off their Retail business. The store was stinking of sock’s odour and the boys were generally fooling around. This was the same store which made historic sales at a store level some 7-8 years back. They neither had what I asked for nor were they keen to continue the conversation. I walked in next in to a store called Studio Cell, a small time local retail chain with just a couple of outlets. The “owner” sits at the shop most of the time – I remember visiting the store 6 years back when I bought a phone for my Dad. He was there then too, and every time I went thereafter. He and his team of four listened to my requirements carefully and suggested a brand new model from a company that revolutionized Mobile telephony in India a decade back. The brand was LYF and was from Reliance Telecom. The sales guy was using a handset which we explored. It was 4.5 inches in size, same as my iPhone 6. Apparently, this is the only 4G handset in India at the moment and the call quality was supposed to be superior. Apart from some similar features with the iPhones, it seemed to be quite a sturdy device. And for Rs. 6,700, it seemed to be a steal, well almost. The sale was over in less than 8 minutes and billing done. Screen guard was another Rs. 300. So, for Rs. 7,000 I had a phone with as many features of a smartphone in the Rs. 10,000-15,000 price bracket. The phone weighed quite light and was a great feeling to one a unique piece which no one has around in town.

So, here is the learning. Customers are always looking for products (and services). Brands spend millions of dollars to build themselves and partner with trusted franchisees and companies, only to be let down at the point of sale. Small & Medium Retailers and Store owners on the other hand sweat it out. The phone that I bought could have got him a 15% margin and perhaps also some volume discounts if he sells more. He is not venture funded with dollars from the silicon valley who fund online companies mindlessly who in turn pass on discounts at the drop of a hat and have no clue how to retain customers who are always looking for the best bargain. He is a common man – a Retailer whose bread and butter comes from each Sale that happens at the store. Therefore, the “conversion” of an onlooker to become a customer and a repeat customer is a challenge these guys are addressing very well. He gives a new meaning to the term “Customer Service” which neither E-Commerce nor Organized Retailers have been able to provide consistently to customers.

The above pic was taken around 6.30 pm on a full moon evening from my spare bedroom on my 13th floor house which I use as my makeshift office. You can see the about to be inaugurated Kalaivanar Arangam, a multi purpose hall, the Doordarshan Tv tower, the Chennai Harbour & Port and ofcourse the Bay of Bengal with a full moon... Not bad at all for a 5 MP Camera! Have been using the phone for over 48 hours as I write this post. No major issues found. Ofcourse, it is not anywhere comparable to an iPhone and I don’t expect it either. I have always taken things (including people) as they are and here, I assert that I shall not sulk on this device comparing it to an Apple. As they say, with practice comes perfection and I would probably get used to Android LYF.

After closing the sale and while about to leave, I asked the Store Owner if he sells online to which he said he used to and has stopped because the big boys don’t pay his bills on time. So, I suggested him to take a look at my Hyperlocal Omni-Channel model OyeThere.com We surfed the site for about 10 minutes and seemed to be excited about the way the whole thing works. He has said he will come back with his thoughts to partner with us. He may. He may not. But I am sure, he will remain in business for a long time, coz his fundamentals are strong.

When Ancient meets Modern...

Baba Ramdev's Patanjali products have taken the consumer goods world by a storm over the past 24 months. While the herbal and ayurvedic brand has been around for a long time, Baba Ramdev gained massive popularity while joining protest meets held by Anna Hazare over corruption issues. He later dilly-dallied with Aam Aadmi Party and later found support from none other than the BJP which went on to form the Government at the Centre in 2014. Ever since, Baba Ramdev has been among the most searched figures in the internet, not to mention his Yoga classes and ayurvedic products. He has been, by the way imparting yoga techniques for decades and his programmes on yoga are a super hit on hindu spiritual channels in India such as Aastha Tv.

Patanjali, is a name which also belongs to the founder of Yoga and hence the correlation with consumer goods brand. At the moment, Patanjali has over 400 items across Grocery, Personal Care including skin care, dental care, herbal products, washing powder, soaps and detergents, pure Cow's Ghee, Honey and many more. These products are manufactured at a state of the art factory in Himachal Pradesh, located in the North of India with access to the Himalayas. The Brand has had its share of controversies with Baba Ramdev himself being the centre of attraction (or distraction) in various events. A section of Imams of the Muslim Community asked followers of Islam not to use these products since some of them included Cow's urine, which is considered in Hinduism as a disinfectant. It is another matter completely that there are hundreds of muslims who work at the Patanjali's massive factory spread over hundreds of acres in Himachal. With the fall-out of Maggi Noodles (a Nestle product), Patanjali wowed people with their Atta Noodles, considered a healthier option and launched them in Jan. 2016 ever since it's been a super hit. 

Patanjali has been giving tough competition to national and international brands such as Colgate, Nestle, P&G and many others. On the Sales & Distribution front, they follow a similar model such as the good old days of FMCG. The products are sent from the factory to a Super stockist in each Metro who in turn passes it on to Distributors who then pass on to Retail Stores. The entire Supply Chain seems to be working quite flawlessly at the moment. The demand-supply ratio is currently pegged at 1:4 as per market estimates, i.e., there is one unit available for every four people who are looking forward to buy it. This is massive. In Indian history of consumer products, Bajaj Motors has the notoriety for having made people to book a scooter and wait for several years for delivery. Patanjali is in the same vein. People of all ages and segments of the society have been embracing them.

Patanjali recently tied up with the largest retailer in the country, The Future Group and the products have been available on the shelves of Food Bazaar which is the Hypermarket chain of the company as well as in other smaller retail formats such as Nilgiris, KB's Fair Price, to name a few. This approach of taking ancient medicine to modern retail has been an interesting move by the brand which now rubs shoulders with other well established brands such as Surf, Lakme, ITC, Nestle, etc. It is imminent that no brand, irrespective of their origin or utility cannot neglect Organized Retail which was less than 5% of the market a decade back and is now at over 10% of the USD 600 billion market and growing at 20% CAGR. Patanjali is sure to make a dent in the market share of the biggies and news articles have appeared in international magazines that MNCs are already fretting over this issue.

The brand's popularity is largely due to the power of Ayurveda, the way it has been positioned in the minds of the consumers and the Brand Ambassador which is Baba Ramdev himself, who is seen and aspired as one of the fittest Indians. It wouldn't be surprising of the brand attracts significant Private Equity and grows in scale in times to come. Watch this space.

TieCon Chennai 2015 - Highlights

It's been a year since I turned an Entrepreneur. Ever since, I have been a member of TiE - The Indus Entrepreneurs, Chennai which is a group of current and future Entrepreneurs. The syndicate is professionally managed by a team of able people and has successful Entrepreneurs as Members, Charter Members and various other roles. TiE conducts atleast 3-4 events every month which is open to all members and non-members can join by paying a small fee. In the one year that I've been a member, I have benifited immensely by getting to know some very interesting and knowledgable people, some who have even turned out to be my business beneficiaries. TieCon is an annual event held by the Syndicate which aims to bring together Entrepreneurs of various walks of life. The current year's edition was held on Saturday, 31st Oct. 2015 which was preceded by an Awards Night were a few Entrepreneurs were recognised and honored for their contribution to the ecosystem. The event was held at The Grand Chola, one of the marquee locations in Chennai and is probably one of the biggest of its kind in the country.

The day started from 8am onwards, with bring entry of participants and a quick introduction and networking. The official proceedings commenced with a Drum show (yeah, Jus Drums! was the name of the team that performed) which woke not just the senses but also set a great day in motion. There were addresses by the Distinguished charter Member, Mr. Lakshmi Narayanan, Vice chairman of Cognizant Technologies, which is among the top 5 IT services companies of India,  Current President of TiE Chennai, Mr. Naru Narayanan and Event Chair, Ms. Padma Chandrasekaran. The day started  with a session by Mr. Mahesh Murthy, an angel Investor who has more than 50 companies in his portfolio which was followed with a key note address by Mr. Ronnie Screwala, Founder and CEO of UTv Pictures, a first generation Entrepreneur who was also the first in the country to operate a private Cable Tv Network way back in the 90s. He spoke about his journey, the struggles, the good ones and the not so good ones and the various aspects and facets of Entrepreneurship. 

Mr. Girish Mathrubootham, Founder of Chennai based Freshdesk, a SaaS company that provides tools for customer Service and Support to more than 50,000 clients all over the world was awared Big Billion Baby which included a fireside chat with the man himself, ably conducted by Mr. Chandu Nair, another serial entrepreneur and charter member of Tie Chennai. Girish spoke about his inspiring journey, hailing from erstwhile small town Trichy, having worked with some of the largest companies earlier which provided the same service, his first fund raise, the ups and downs and finally about the recent $50 million funding received by the company. An extremely humble and down to earth guy, he spoke about how Entrepreneurs have to sacrifice quite a bit of their family life and family time. Incidentally, the day marked his Wedding Anniversary too.

After this session, there was various Masterclasses, Mentoring sessions, Luncheon meetings and so on which was well attended enthusiastically by budding Entrepreneurs. 

I couldn't attend any of these sessions, for my latest and upcoming Hyperlocal Ecommerce Venture Oyethere.com was among the Top 20 Finalists for the Pitchfest which is a highlight of Tiecon. We were selected among 100s of applications that were submitted over the past few months and it was an honour and privilege to meet potential Investors and to have a one on one discussion with them. I had the opportunity to pitch to 8 Investors, and the feedback for the venture from each one of them was overwhelming. The Investors acknowledged the hotness of this category and wished me luck for the future. Some of them have said that we could meet in the coming days to discuss further. Will know the course of action and next steps in the coming days. 

After the Pitchfest was over, I joined back the main session which had an interesting standup Comedy session by Arvind Subramaniam of the popular theatre group Evam. The valedictory session was led by Mr. Raju Venkatraman, Serial Entrepreneur and Founder of Medall, a Chennai based Healthcare Company. The final session of the day was on Leadership Lessons from Actor Rajnikanth, presented by Mr. Mohanram, Theatre personality, Actor, Trainer and Entrepreneur. 

The day ended at 6pm with a lot of learning to more than 1,500 people who had gathered for the event. I, for one was double delighted with the recognition that my venture was given as well as meeting and hearing snippets from Entrepreneur stalwarts. 

The Seven Tenets of a Start-Up Entrepreneur

I wrote a column 10 days ago about my completion of one year of Entrepreneurship. It received unprecedented reach from my professional world. Over 2,500 people had viewed it, over 750 “Likes” and more than 75 people took time to comment on the article. A few requested me to keep writing and share more about Entrepreneurship and I am hence writing this as a follow-up article.

I would like to highlight the seven tenets of Entrepreneurship, as I have seen it in the past few years myself as well as from the experiences of those around me. Of course, there could be more but then these would summarise and may include other points as well within them.

All ideas are not monetisable

Most often, as to-be Entrepreneurs or existing Entrepreneurs, we try to build a case on an issue which we think could solve a problem. In some cases, it would solve even an unknown problem that the customer never knew (Read: Apple/Steve Jobs/iDevices). But before you build a Minimum Viable Product (MVP) or a Prototype, do check if the product you are building would be profitable (at some stage), scaleable (across geographeis, for example) and saleable (potential buyer for the business and not just customers). If these three points have a green tick, then you are good to 

Funding an Idea vs. a Person

Most often, one would hear that the Investor is not funding just the idea but the person as well. This is quite true. Most investors look at how the Founder/Promoter approaches the idea or concept and in general, their view of life. Only a few founders who go to build massive companies focus on the larger essence of life which excludes monetary and material pleasures. It doesn’t mean that the Founder takes a Public Transport to work or operates in a dingy pigeon-hole work environment. It means how frugal they are in their thought process about spending every penny that has been invested into the venture by Investors.

Looking for an Angel Friend

Most Entrepreneurs, mostly first gen like me, do not come with the backing of a family office or hereditary wealth. They save up a bit and start off at some point in their life mostly depending on someone else to fund their ideas. While friends and family would encourage them to move ahead, you would also see them exercising caution, not to be myopic in their view of business and life. Those who talk big stuff, usually end up doing nothing for the Founders. Some avoid emails and calls, let alone introductions to potential Investors. But that’s just fine. Don’t mix up Funding and Friendship.

Age No Bar

There is no age for starting up. If you think you are willing to give up your lifestyle (that doesn’t mean a compromise though) and work a bit harder than you are working for someone else ((I mean like, really hard), then give it a shot. Fix a timeline by when you will return back (unfortunately or otherwise) to a day job if things don’t go your way. There is no fixed time for this. It could be a year to five at the max. In five years if you haven’t got it right, with just one idea or probably a handful, then I guess it is time to move on.

Money, Money, Money

Save quite a bit before you start-up. Things could go horribly wrong with your idea, product or service. You may need money to demonstrate, scale-up and prove that what you have founded works. In the meanwhile, you could have other compulsions – family, health issues, insurance, vehicle repairs, etc. It is wise to keep aside your minimum monthly requirements for atleast 36 months before you start your venture to be on the safer side. That is if you are willing to sail that path for so long.

Reboot – Plan B

If one idea doesn’t work over a period of time (as an Entrepreneur, you would know what’s best), then have Plan B, C, D and so on. Never get stuck with just one idea that you believe could change the world dramatically. Have alternate ideas and plans. Remember, it is you who has to click as an Entrepreneur and not just the idea. It’s a two-pronged approach and you need to keep this in mind. Always.

Never Give Up

You will hear advises from all over the world around you. Believe me, talk is cheap and free. At the maximum, data charges for emails and messages and perhaps call charges. The Advisor loses nothing to preach. However, they could be people like you who have started up and failed and their wisdom is speaking. They could also be those who started up and succeeded but probably know the difficulties. If you keep the above six points in mind, then go ahead with what you believe in. Never Give Up. But do remember, all ideas do not work for various reasons. So have the grace to accept and move on.

Hope the above points have helped you as a budding Entrepreneur or if you are already one. Cheers.

One Year as an Entrepreneur!

It’s already been a year, I wondered. What started as a passionate journey has gained momentum in the past 12 months. Life has been very different, as an Entrepreneur to say the least. It is one thing to turn an Entrepreneur when you are in your fifties – you probably have enough savings to dip in, dabble on experiments and have alternate plans if one thing doesn’t work. The world has indeed seen many successful Entrepreneurs who started late in their lives. And it is completely different to start off on your own when you are in your twenties, which currently seems to be the flavour of the Entrepreneurial ecosystem. Lads that age have successfully demonstrated that their ideas can be converted into mega-businesses, touching the lives of millions of people. So, starting off in my late 30s was something I was not very comfortable, honestly, at the outset. I was having a fixed salary, enjoying air travels and hotels across the country, meeting the high and mighty exchanging business cards of large companies who gave me the identity that I probably deserved.

But things changed. They had to. The past two years have been troublesome for me, at a personal front which had an impact on me professionally. Entrepreneurship instincts come naturally to a few, and many others develop it over time. Mine was the latter. That’s probably because being born and raised up in middle class environments taught me the essence of valuing money. It was not too wise to let go of all what you have earned and saved, forget borrowing and running a business. It’s a bit of a taboo too, for an Entrepreneur is expected to do things which one doesn’t have to otherwise. I too, like any other person thought of all these things before I ventured in to the entrepreneurial journey. To say the least, it has been extremely gratifying and satisfying. I have learnt quite a few things more in the past 12 months, which I may not have seen and learned if I was still working for someone.

The decision to start my own venture was a well thought out plan. My wife, who is my pillar of strength (sounds a bit clichéd but a golden truth) and I planned our goals meticulously for over a year before I finally got on to it. We worked on various business plans and models and finally arrived at something what we thought was a profitable, scalable and a saleable model. Smiling Baby (a baby shop that would cater to young parents and parents to-be) was first coined in my car during a long trip we had undertaken followed by the logo designs on a computer screen. Quite soon, the first store was up and ready. We commenced operations on a Friday. We had sunk in (or invested, if that sounds right) almost all our savings that we had accumulated over the past decade or so. It was a roller-coaster ride that we anticipated. And boy, what a ride it has been. I would have met atleast a 100 potential so-called Investors over the past 2 years. The very first one whom we met chided the idea. The person (and I am not going to identify their gender at this stage) discouraged me to pursue Entrepreneurship and instead focus on a day job which was more stable and secure since I had a family and two little girls. I gave a patient ear. And went about what my heart said. No offence to the person’s thoughts.

We prepared and shared a MS Powerpoint presentation coupled with backing numbers on an MS Excel Work Sheet with numerous people. The first question was – “Have you started off?” and this kept bothering me. It looked like they would pour money once we started. And there were quite a few examples that way in the entrepreneurial ecosystem already where professionals had been backed by “Angel” Investors who went on to build successful companies. So, I decided to quite a full time career and start off – 1^st Aug. 2014 was the day I was officially an Entrepreneur. Wishes and congrats poured on my LinkedIn page along with messages and calls from all corners of the world. Friends and Acquaintances appreciated my gall to quit a full time salaried job and pursue my dreams. It was very encouraging and I honestly enjoyed the attention and spot light for a few days.

We spoke and met a number of so called potential Investors. Some displayed grace. They heard our story. They encouraged us. They offered to support us. Many others said this would fail, probably they were a lot more clairvoyant than me for they were seasoned “Investors” who could predict which way things would go. They knew cock-shit about Retail, forget knowing what it takes to quit a full time job and become an Entrepreneur especially when you have a Cancer patient at home and five dependents including your little ones to take care of.

I should have probably listened to them and should have quit being an Entrepreneur. I didn’t since I was already in the game and wanted to give it a whole try. Things were fine for some time. Not a single instance of brick-bats from our customers, who appreciated what we were doing. The journey was turbulent but we thought it would stabilise slowly. Unfortunately, things didn’t go the way we had anticipated. There were a few reasons for this – we were a bit myopic in our thoughts about the business. I was quite confident I could raise money in a couple of months from starting, since the business idea was a strong one. It continues to remain so. And I had a decent pedigree – I was among the Top 50 Retail Professionals in India as recognised by a top research firm in 2014.  

We went door after door, making presentations and pitches, changing our business course as we moved forward from time to time. Our bank balances were drying. And one day, it was near empty. A few good Samaritans came forward to help us cross the bridge. It gave us a buffer. Although a short one. Those who had promised to support us couldn’t, for various reasons. Many emails, messages and calls went unanswered. We were losing hope on people whom we thought would give us a helping hand. I was willing to offer even half of my equity at some stage, just to ensure survival. Things went awry. My lowest point was for a few days when I gave up even on God.

I finally came to terms. It was my life and no one is expected to make an impact on it except me. Probably my close family and a few friends. I decided to shut the first store we had taken on lease. I had built it more passionately than the three houses we had bought in our lifetime over the last decade. I pulled out everything out of the first store, some personally with my own hands. I was choking. But with a glee in my heart, that this was not the end. And probably it could have got worse.

On 31^st July 2015, the day I completed 365 days as an Entrepreneur. This day and date will be etched in my mind all my life. It was a Friday too. The day we commenced our venture. And on this day, I had to legally cancel the lease agreement. It was a couple of hours’ thing and it was all over. Finally. For a venture which was started with so much excitement, it was not the best way to end.

As I wake up, sip my coffee and write this article, I begin my second year as an Entrepreneur. I have stood up, dusted, come to terms with the Ecosystem and have moved on as an Entrepreneur although I have a bit of baggage left as an individual. I have lost faith in people whom I trusted and those whom I didn’t know much – I would get carried away at times by sweet talk, but not anymore. I have realised that people come and go out of our lives for a reason. The “going” and let-go part seems to be more important, on a lighter note.

I always thanked my ecosystem for making me a reasonably successful professional over the past 18 years. In my first job when I used to scoop Ice-Cream 18 years back at Baskin Robbins as a part time job during my graduation, little did I realise that I would be blessed to offer jobs to a few people one day. “My Retail Journey” has been a very exciting one. And it continues to be so. I felt that an important reason for my success was the ecosystem. And I also feel that the same ecosystem let me down as a first time Entrepreneur. Am not sure how much importance should I give anymore to the ecosystem though. But I will continue to respect the views of people around me, although I may not be able to abide by what they say at all times for all issues, unanimously.

I have a few plans for the next couple months on what I should be focussing on. This time, I have not one but multiple back-up plans. Although they are just plans on paper and computer at the moment. But am sure, I am going to crack this, come what may. I cannot and shall not allow life dictate terms to me. This is my life and I shall live it the way it suits me and those around me the best.

I have Miles to go, before I sleep. This is not the end of year 1, this is the beginning of Year 2.

Watch this space. 

Are Cafes sustainable?

The most discussed topic these days in Retail circles in India is the impending IPO of the company that runs the Cafe Coffee Day chain of stores. The holding company, Coffee Day Enterprises is planning to raise ₹1,150 Crores from the Indian Stock Market for which Draft Herring Prospectus has been submitted recently. The company is among the few of its peers such as The Future Group, Shoppers Stop, Trent(Tata's) and Dominos (Jubiliant Organosys) who have gone public with the companies. CDE plans to utilise the money raised for paring debts and for expansion almost on an equal basis. The company started out renting its premises for Internet enthusiasts to browse in 1996 while also encouraging them to buy a good cup of Cappuccino, coffee that is prepared and presented in the Italian style for 5 times the price of a normal cup of coffee. Very soon, the company decided to change its strategy for Internet to consumer and positioned itself as a place for conversations and more. The rest is history. 

A lot happens over Coffee, is not just the tag line for CCd but also something that is real. A lot of things get done at cafe similar to CCd such as Costa, Barista, Coffee Bean and Tea Leaf, and of course at Starbucks, the world's largest cafe chain which entered India in 2012 in a joint venture with Tata's. I was at a Starbucks for over 4 hours yesterday, which included a one hour meeting, a half an hour call and rest of the time on Mails and office work. During those four hours, not more than two tables were empty for more than 5 mins. The cafe was running at full occupancy. There were people working on their Macs and other laptops, a few who were reading stuff on their books and devices and one man sitting next to me who watched a full movie! 

With an Investment of over ₹1 crore in interiors and hefty rents for locations, this SBUX outlet does a Sale of about ₹40-50 Lakhs a month. Compare that with ₹3/5 Lakhs that a CCD would do, albeit with 1/4 th the investment and 50% lesser opex. So, are these cafes really viable in the long term?

Answer is Yes and No. 

Cafes are viable in the medium to long term provided they receive continuous and healthy patronage. Keeping aside the Capex and Opex for a moment, the cafes would be profitable not just financially but as a Brand asset in the medium to long term when their occupancy remains high. Consumers walk in to a cafe for the coffee (and food) for only 30%. The rest is for the experience in itself and a peaceful me-only space that one doesn't get at home or workplace. 

It is far easier to be viable as a single store than as a chain of stores, for Ny format in Retail. Most of the Indian Retailers are bleeding due to unresponsive assets in the form of their stores and high costs of operations including servicing debts. This will change over time with Retailers finding new avenues for their revenues. But what about cafes? CCD took a strategic position to be the nearest cafe in every neighbourhood and that has paid off. There are over 1,400 cafes across four formats in over 250 cities in India apart from a handful of them in Austria and Malaysia. Most of the cafes for CCD are operationally viable and are not seeking money from Corporate anymore. The newer ones face tough competition with the traditional outlets, especially with the changing landscape in the out of home consumption sector.

Cafes have always been viable provided you get the fundamentals correct. So, for every Java Green and Barista, there is a SBUX and CCD as examples. As the saying goes, the 120 bucks you paid for the coffee is actually not for the coffee but for the sofa and a/c. With the increasing trend of people working in casual environments, cafes will have a large impact on our lives. Next - probably a Bollywood fil, on how cafes have made or broken marriages! Watch this space. 

Highway dining is back…

I have travelled extensively (by road) during April 2015 across Karnataka, Kerala and Tamil Nadu. Being a road warrior myself, I love the journey as much as the destination. As age catches up one wants to take frequent breaks – nature’s call, food stop, caffeine, fuel, etc. It’s been difficult to search for good (read hygienic and safe) places, especially when the family is around. It is common to see passengers stop at large fuel stations or one of restaurants on the Highways but then, as I said, one needs to take more breaks to find each of the above mentioned facilities.

Cafe Coffee Day, India’s largest cafe chain has been on a massive expansion and growth spree over the past decade and now has over 1,450 cafes across India and interestingly has over 50 cafes just on the highways. However large this number looks independently, it is indeed a very small share of the immense opportunity that lays ahead. For example, between Chennai and Bangalore, a distance of over 360 km, there are just 4 cafes, 2 on either side of the road. Chennai – Trichy (280km) has just one cafe! Tourist locations such as Virajpet & Madikeri (Coorg), Udupi, Kozhikode Beach, Tanjore BIG Temple, etc. do not have a single cafe in the vicinity. Well, I am not mentioning here about just the CCD chain but any organized F&B player for that matter. With better road conditions and more excitement for road trips among Indians, there seems to be a much larger opportunity on hand than what many Retailers think.

When I read recently that Reliance is planning to open its 1,500 plus fuel stations across the country, I was elated. I have been a regular user of their services when they were operational until 2010 when they had to shut shop most of their fuel stations due to indiscriminate differences in fuel prices between the Govt. controlled OMCs and the private players. However, things have changed ever since 2012 when Petrol prices were dergularised and in 2014, Diesel prices have also been deregularised which is good news for private players like Essar, Reliance and Shell. A1 Plazas, as they were named, Reliance Fuel Stations were as big as football stadiums that had atleast 12 fuel pumps for vehicles, large food courts, both a/c and non-a/c, large open spaces for Car Parking, Garden areas for walking and ofcourse, spic and span rest rooms.

 

These 1,500 Fuel stations can readily take up 1,500 foodcourts, atleast 500 fast food restaurants such as Mc Donalds and KFC plus 1,000 cafes if not more – that’s a whopping number of new retail outlets to be created. Each foodcourt which could be run by players like A2B (Adyar anandha Bhavan), Haldirams, and so on (essentially local cuisine) can employ about 15 people, the restaurant can employ about 15 and the cafe could employ atleast 10. so, we are talking about creating over 10,000 jobs within the next six months in Organized Retail – that many number of families would get benefited. Being a market leader, Cafe Coffee Day has a massive opportunity to scale-up. Their consistency is not up to the mark of late, one of the perils of massive expansion, but then, no other F&B player has it anyway. 

Just 50km outside Chennai, there are several restaurants, fast food outlets and cafes which people are already flocking to. Same is the scene outside Delhi/NCR, Mumbai, Pune and so many other cities. There is one such place called “The Farm” on OMR (Chennai) which raises poultry animals, Horses, Cows and Buffaloes among others.

In a few years from now, I wouldn’t be surprised if many families would be driving for an hour outside their city for a Brunch coupled with leisure activities. Hope F&B players gear up and smell this opportunity, sooner than later.