Duty Free in India – a fiasco or a success story in the making?

“Nuance Group (India) to exit Hyderabad Airport Travel Retail as new Tender looms” read the headline on The Moodie Report – the most respected and authentic Travel Retail news site that never sleeps. Even though the Publisher Martin Moodie, Deputy Editor Dermott David and many other senior people were stranded over the past 10 days due the flight disruptions caused by E15 (that’s the short code for the Icelandic Volcano), the news website kept going. Such is the commitment of the people behind. Back to the headline, which also appeared in a leading Indian newspaper a few days ago, it was indeed a surprise for many of us in the Industry. Or should we say was it a surprise that the news came so late! Well. 

The Nuance Group that operates over 400 shops across 60 airports and 20 countries worldwide and which is among the largest Duty Free operators in the world entered India in the year 2006, with a JV with Shoppers Stop, India’s leading retailer. The JV was specifically formed for the Duty Free tenders that were coming up then, at Bangalore and Hyderabad for the two new Greenfield airports. It was quite a surprise to see this JV and so were many other partnerships – The Oberoi Group with Heinemann, for example. It was the first time that international players were setting their eyes in India. It was initially India Tourism Development Corporation (ITDC), a Govt. Of India undertaking which was the monopoly operator across Indian airports over the past 3-4 decades. And then came in the private monopoly of Flemingo since the turn of the 21^st century. This was challenged by the International players in 2006 when the top five Duty Free operators of the world including Nuance, DFS, Dufry, Heinemann and Alpha participated in the tender process of BIAL. The line-up and interest in the Indian Duty Free was so impressive that many in the industry were hoping for better days ahead, guessing that the international players with their global exposure and best practices would mark a change in the country. Wish dreams were horses!

The first International player to win a tender in India was the Nuance-Shoppers Stop JV at Bangalore International Airport. This was followed by a similar success at Hyderabad International Airport. Other players such as Dufry and Heinemann made a quiet exit from India heading back to their strong bases. Alpha, which had been operating in Kochi and Colombo for over 10 years went back to focus on its territories.

A lot was anticipated by the Industry from the Nuance-Shoppers JV since its victory from the tenders at Bangalore and Hyderabad. With their impeccable track record in India, Shoppers Stop was expected to put things into perspective and bring some method to madness in this crazy business. After all, travel retail was, and is still a very nascent industry in India and who would believe me as an Airport Retail Manager a few years ago when I would say passengers would buy not just books and magazines, but also diamonds, watches, t-shirts and perfumes, even in the domestic departures of the airports! Shoppers Stop is doing an excellent job and one can see this at the Bangalore and Hyderabad Airports. And Nuance, with their global experience and success was expected to negotiate the best rates from its suppliers and pass on the discounts to its customers at the International Departures and Arrivals. Needless to say, this is a true story today and the duty free stores in Bangalore and Hyderabad have been the favourite for most International passengers in recent times, surpassing erstwhile favorites such as Dubai, Singapore and Bangkok Duty Free.

So, what really went wrong at Hyderabad? Honestly, I wouldn’t like to speculate. But there are certain points that were evident with their business model, some of which are discussed here. Sure, these are observations of yours truly and a few people around while personal thoughts of some of the readers may differ. To begin with, the size of the market was over-estimated. Going by previous experiences, the incumbent Flemingo who was operating at the erstwhile Begumpet Airport at Hyderabad did not have such a large duty free area. This, in my opinion should have been the first learning. A large airport doesn’t necessarily mean a large Duty Free Store, many of you would agree. Next, the range included high-end premium products including Scotch and Cigars, which was probably not required. The reason for this being over 60% of international passengers are either proceeding towards or returning from the Middle East and are blue-collared workers, whose primary requirements include some inexpensive chocolates to distribute among friends and family, low-cost tobacco products, whisky and rum. And most importantly, over half of all passengers belong to the Muslim community who do not consume any form of alcohol. This, according to many in the industry was the most important point that should have been kept in mind. Indeed, for the reasons mentioned above, it was widely expected that Alpha Duty Free, now a part of the Autogrill Group, which has been operating in Cochin (with similar consumer profiles) could have been a better bet for this airport.

Most recently, middle of 2009, there was an unsavoury incident at Hyderabad Airport where some of the staff of the duty free were allegedly involved in a racket that included illegal smuggling of customs bonded goods. While the words may sound alarming or confusing, what was happening actually was that the staff were taking goods out of the store that were not purchased by passengers, but by illegally using their personal details. This, according to some in the close vicinity of the Operator as well as the Airport Management was the last nail on the coffin. Afterall, the GMR Group which operates and manages the airports in Delhi and Hyderabad was in no mood to continue a situation that would give it disrepute in any form. The new Terminal 3 at New Delhi is nearing completion and once finished would possibly be the best terminal in India and among the best in the world. So, the latest news is that a new tender is being called for and the new operator “may” have a Joint Venture with the GMR Group directly, just like how Aer Rianta has entered in Delhi.

Having said all of that, Nuance has done a commendable job in Bangalore over the last two years and this is also a reflection of their best practices being continued – they are also doing great in Zurich Airport, which happens to be one of the main shareholders in Bangalore Airport. Their achievements in Bangalore include bringing for the first time in India a Formula One Racing Car to many other exciting promotions that have never been tried in the country. While there is wide speculation that they would wind up their India operations  (naturally by the Indian Media coz they love doing it), many in the know are unwilling to believe so. Bangalore Duty Free, if done well in the years to come would be not just among the most profitable to the operator, but has the possibility to be one of the best in the world. Nuance has proven time and again that it is THE BEST Operator at Singapore and Hong Kong and understands the pulse of this market quite much. I am sure the business will flourish well in capable hands and continued mentoring and look forward to its wining accolades in times to come. So, where is the Indian Duty Free heading towards? Just wait until T3 opens - and the new integrated Terminal at Mumbai International Airport. Just a matter of time, when Indian operators will show the world how this business is run best. Cheers. 

Pay online and gain rewards!

Many of us have been transacting online since the last few years and the size of this market has only been increasing. Most International and a few Domestic Banks provide Net-Banking facility at no additional cost to their customers and this means the customers can use their Debit/Credit cards to perform various transactions –to transfer funds to other accounts within and outside the customer’s own bank; to purchase financial products such as Fixed & Recurring Deposits, Insurance, Stocks, etc.; and of course, to shop! When I mean shop, one could buy almost anything that one desires – from groceries to stationery, cars to real estate properties. Needless to say, one needs to use his/her own prudence while shopping online – whether using a Debit or a Credit card as it is a natural tendency to spend as much as possible, given the various exciting promotions and offers that compel us to “consume” more. Internet payment security has been a great concern over the past years but that’s improving day by day with Banks and their payment gateway partners (third-parties who process the transactions on behalf of the bank’s customers) upgrading their back-end continuously, to ensure that the transactions are not spammed by malicious intentions.

Online shopping has been in existence since late 90s – with many Airlines and Online Travel Agents (OTAs) notably starting the trend. For the sellers, it was mere savings in their operating costs – there is no need for precious real estate and manpower to conduct these transactions; for consumers, it was saving time and effort, and of course, a better deal at the touch of a button. In India, Air Deccan (which was later taken over by Kingfisher Airlines) was among the first to popularize this trend. Over the years, many Retailers such as Shoppers Stop, Crossword, The Future Group, PVR Cinemas, etc have been using this potential in their favour. Then there are generic websites such as eBay and Amazon who have been pioneering this concept since the past decade, where one can purchase almost everything under the sun. Having said that, the size of the Online Shopping/transacting market is not yet very big in India. There are various reasons that one could find that deter people from transacting online, security being a major one but most importantly, it is the “habit” or the lack of it. I know many of my friends who have been living in the US or Europe who shop online for as many products – from hand wash liquids to food items to shirts and ties. That’s because of previous experiences and yes, standardization of products (including Quality and Delivery). I remember when I was at my friends’ place in Hong Kong last year we called and ordered full-fledged meals for three days from a small time Indian Restaurant – order placed, payment done instantly online and food delivered in less than 30 minutes. So, if it can work well in HKG, so be it in BLR as well!

While retailers have been encouraging consumers to shop online more often, Banks and credit card issuers have been doing their bit too. One of the most popular ones in recent times is the initiative by Visa. Visa has its own website aptly named visabillpay.com and the Indian version called visabillpay.in. One can register and pay bills online instantly across various service providers such as Regional Electricity Boards, Mobile and Telephone service providers, Insurance companies, etc. using all Banks’ cards which are issued by Visa. Since the payment gateway is managed by Visa, security factors seem to be well in place. Apart from providing the bank login details, one needs to provide the authentication grid details as well – three out of the ten two-digit numbers that are behind every card issued (recently) must be keyed in to complete the process. Visa, on its part takes special initiatives from time to time. When I had registered two years ago, they had a simple yet effective and compulsive scheme – when a bill is paid through the website, the user gets a 5% cash back subject to a maximum of Rs. 50 per transaction. Recently, they have come up with more exciting offers and have been repeatedly announcing this through the Print Media (across various national publications). As a limited period offer, for every five bills that are paid through the website, the user receives a Gift Voucher from PVR Cinemas. And for every bill worth Rs. 800 or more that is paid through the website, the user receives a Gift voucher worth Rs. 150 from Pizza Hut.And there are some other exciting offers too... 

There have been many programs in the past to reward customer loyalty. But this is a bit different. Needless to say, this is among the brilliant campaigns that I have seen in the past few days when Retailers have tried every trick in the book to woo consumers. In this case, a very smart move by PVR and Pizza Hut! While it is bit more cumbersome in the case of the cinema, the pizza idea seems better. The consumption cycle is not just faster, but obviously the upside sales potential is higher. A family of four would order for atleast Rs. 300-400 during one purchase and the upside value is the hook. In case of PVR too, consumers would visit the cinema, redeem tickets against the voucher but buy food and beverage within the auditorium. That’s again a big opportunity.

In both the cases, chances that first-timers would get tempted are high. If someone has never tried paying online, then probably he would, with the comfort of paying bills online, from his desktop or PDA. In case the customer has never visited a PVR or has never ordered a pizza, then that’s again a great attempt to get them acclimatized to a new way of watching movie or dining.

Whichever way, the more you spend, the more you earn rewards. So, go pay! And get rewarded instantly. 

Kasht-Mar… Customer Service at its worst…

The size of the branded children’s toys and furniture market (within Organized Retail) in India is expected to be over INR 3,000 Crores and growing. There are already a handful of operators in this domain at this moment including notable Indian names such as “Mom and Me” by Mahindra Retail, “Mothercare” by Shoppers Stop, etc. This market has been traditionally catered by local operators such as “Just Born”, “Apple of my eye”, etc. and many large Retailers such as Big Bazaar, Hypercity, Spar, etc. are now stocking children’s products exclusively. Some of them in the business are traditional retailers while many others are mere enthusiasts, who are learning to cater to this complex business. Typically, the range is referred to as -6 to +9 (referring to the time when a woman conceives until the baby is 9 months old) and then children’s line from 1-12 years. Incidentally, the biggest selling category at Bengaluru International Airport is that of toys and childrens-wear! While it is interesting to see the evolving needs of women, whether they are working or home makers, it is indeed quite an exhaustive Merchandising spread that is the need of the hour. The enthusiasm of the couple increases four-fold after child-birth while attempting to shop as much as possible during the infancy of the new born.  Such was the case of a couple whose real life anecdote is mentioned below. Honestly, it is not even a bit exaggerated – a fully true story which shocked me as a Retail professional. Here goes the story;

This Retailer whose name is also that of a precious stone, with humble beginnings on the corner of Brigade Road since the last two decades has risen dramatically over the years with a brand-new outlet at Richmond Road, thanks to increasing purchasing power of consumers and increasingly demanding needs of the family, notwithstanding the fact that most of the products are over-priced and do not last long, as they are cheap imports from South East Asia – a simple Economics theory of Price Elasticity.  Also, there was nobody to offer such a wide offering during the last few years in Bangalore is another strong reason for the meteoric rise of this retailer which is still controlled by the family and managed by store assistants who feel indebted to their owners for reasons best known to them. After seeking various options at over a dozen large outlets such as Bangalore Central, Lifestyle and Mothercare, etc. during the last two months, a couple chose to purchase a baby-cot at this famous toy store in Bangalore. As always, that such decisions are made during the second or third visit, this couple also purchased the product during their third visit to the store – after making sure that their need was met best with this exact product. Not that there were many iterations that were available, but this one seemed to suit exactly what they desired. After spending Rs. 7,500 for the same, the couple gave details of the residence address for Home Delivery – something that the Retailer was reluctant to take up given the distance from the store to their residence but acceded with dirty glances mainly due the high-value of the purchase. Typically, the Retailer would have made a gross profit of 45-55% on this product.

The delivery was promised on the next day, Sunday after the purchase was made just before the store closing time (21.00hrs). The couple along with their family proceeded for dinner at a famous restaurant in the vicinity and was enjoying their meal, feeling ecstatic about the new purchase and how it would make a difference for their young one. Just after the Man ordered the main course, they received a phone call, and the person on the other side introduced himself as the driver of the delivery truck waiting outside their apartment for delivering the newly bought furniture! Wow… that was quick indeed. The man thanked the driver for this service, but excused himself saying that they were out for dinner as the delivery was scheduled for the next day. The driver pleaded ignorance and said that he was “asked to follow orders by the owner” and that’s what he did. (I told you before). The man apologized and said that they would return within 30 minutes and requested the driver to wait and the call ended.

With a few minutes, there was another call, this time from the shop where the product was purchased. The caller explained that the drivers were on leave on Sunday and hence the delivery today. The Man said they would take some more time as they have just ordered food and the family was on its way home. The angry caller yelled at the customer – saying how insensitive they were to their quick customer service! He scolded them for being so irresponsible and told them to hurry up with their food and reach home in ten minutes, for which the Man responded with two things – not to scream at someone and that they would reach home at the earliest. The caller handed over the phone to one of his loyalists who after a brief chat with the other person said that the product was being called back and the Man could come to store to collect his money back. What? Said the man. Yes. You heard it right. Come at your convenience and collect your money, we wouldn’t be interested to have business with you, yelled the voice again in the background. While the Man was explaining his predicament, he heard a blank note after a while – the caller had disconnected a while ago and the Man was talking alone! Left with no choice, the family ended their dinner abruptly to return home with a broken heart and shock.

This, is better known as “Kasht-Mar” service – a slang used in Hindi for Customer Service which actually means “Die of difficulty”. That’s what the Retailer did just now. The fact that this man could spread word about this shocking episode around the globe instantly was of no case or use to the Retailer. After all, how many people can he talk this about…there are thousands who aspire to shop at S*****E, the Toy Shop best known in Bangalore. It is indeed very sad that such Retailers behave with excessive arrogance due to their newly found pomp and popularity, not recognizing that all that they have built over the years was because of such customers and their brand equity erodes over time due to the same customers.  What the Retailer lost was not a sale of a few thousands this time, but that of the next ten years – of this family and many others known to them who would have continuously spent their savings at this store.

As they rightly say, it takes ten times an effort to retain customers than to get a new one; but for such retailers, it doesn’t matter. Alas, they aren’t going to be in business for too long if they continue the same way, so, how does it matter!

Time is the enemy; Add to that staff attitude…

I was reading this morning (Fri. 19th Mar. 2010) on a newspaper that food inflation in India is at a four month low – at 16.30% to be precise. Well, it was on a negative decimal ten months back and everyone was crying recession/slowdown etc. All of a sudden, things are on top gear – as much as it was racing in early 2006. The Economy in general is back in action, real estate prices are steadily rising and companies are announcing bigger hikes and bonuses; Banks are happily releasing home/auto/personal loans and “consumption” seems to have increased over all. My friends in Fashion Retail and large-format Department Stores are gung-ho that the new season launches have been well appreciated (in spite of Discounting being the norm over the past 12 months across formats). Restaurants, Bars and cafes are seeing more consumers and so are Multiplexes (except the last week since the IPL frenzy). Now that I travel 3 days a week, 3 times a month, one of the most important positive impacts that I have personally witnessed is at the Airports. Inland Passenger numbers have grown between 25-32% (YoY) across large Indian airports at Delhi, Mumbai, Chennai and Bangalore and planes are running full. Ticket prices have increased by about 10-15% on an average since Dec. 2009 although passengers seem to be flying more often than ever. Some Airport terminals look like crowded bus stations (although orderly and very well managed) and the aircraft itself looks like a bus in some angles (sic)…

Ask any Retailer at the airport on the business impact and many are not smiling. Reason: More passengers doesn’t necessarily mean more revenues although the potential cannot be neglected. The main reason for this is the lack of “dwell time”. Dwell time is the idle or disposable time that pax have at airports between the processes such as Ticket & Baggage Check-In, Security Check and Boarding. In India, during domestic flights, pax are advised to report at the airport atleast 90 mins before departure. While most frequent travelers report not before 50-60 mins, many actually reach the airport ahead of time. The average dwell time for Domestic pax. is between 20-30 minutes. Most of this time is spent within the Security Hold Area (SHA) which is also the waiting area after Security Check. However, due to excessive crowds at various process points, the dwell time has actually reduced over the past months. That means, the disposable time has reduced considerably since pax are waiting in various Queues – at check-in, security and boarding gates.

The main reason for this is the airport capacity handling – the number of support systems that are required optimally (utopian!). The first Q that one encounters is at the entrance of the Terminal building where the CISF staffs (who manage security installations at all Indian Airports) check every person’s ticket and their identity. That a piece of printed paper can be forged is not taken into consideration although an Identity card such as a Driving License, Pan Card, etc is insisted. The next Q is at Airline check-in counter. Full Service Carriers have as many as 8-10 counters each while the low cost airlines manage with 4-5. At major airports in Mumbai, Delhi and Bangalore, for a peak passenger strength of over 6,000 pax during peak hours (05.00-08.00 hrs and 18.00 – 21.00 hrs), there are not more than 10-12 security booths and thereby, the waiting time in the queue is considerably long. By the time the passenger reaches the SHA, it’s already boarding time… Assuming that a passenger reaches 75 mins in advance, spends 5 mins at the Main Entrance, 15 mins at the Airline Check-In, 30 mins at the Security Check, what’s left over is only 25 minutes, out of which 10 minutes is spent in the boarding Q, 5 minutes to reach the aircraft by bus and 5 minutes inside the aircraft settling down. So where is the opportunity to shop and eat? No answers, unfortunately at this time.

Delhi is awaiting a new Terminal in the next four months and Mumbai will commence using the newly constructed terminal in the next few weeks. Chennai is already gearing up for a new integrated terminal that would be operational by end of this year. Bengaluru International Airport (in which the GVK Group acquired a strategic stake recently and also manages Mumbai airport) will expand its existing Terminal building in months to come. Given this scenario, what is the respite to increase the commercial opportunity at the Airports? I would say, Attitude. There needs to be a cohesive approach between the Airports and their stakeholders such as the Airlines, Security agencies, and all the staff who work at the precincts. I was recently stunned by an encounter at the Delhi Airport. I was flying the country’s oldest private airline to Bangalore and had already finished my web-check early morning. Usually there is a baggage drop facility offered by this airline that is available for such passengers – it is more of a convenience to pax and the airlines than a privilege and I have been doing this often. This time, when I approached the counter, there didn’t seem to be any orderliness with over a dozen people standing confused in a specially created Q by themselves. When I approached the Senior Staff (who was distinct to find as she was wearing a different uniform), she smiled and said “Sorry Sir, we don’t have such a facility”. When I quizzed more, she said it was due to the Airport infrastructure. Indeed, she was not saying the true stuff. While there were over 10 counters, only half that number was working (it was a Friday, 18.00 hrs peak time). There were atleast 40 people in Q waiting for their turn to check-in. What was stunning was the blatant lie by the Airline staff. Having worked in an airport earlier, I know what it means when it comes to Airport infrastructure. But such an attitude by a senior staff was disturbing.

Ironically, in the same morning newspaper, I was reading an initiative by the Delhi Chief Minister ahead of the upcoming Commonwealth Games – to urge citizens of Delhi to be polite and less aggressive as they have been. And many comments around the article that before a system can be changed, people’s attitudes must be changed. How true…

The airline staff didn’t realize that her lackadaisical attitude would affect her own earnings in future. Let me tell you how. Airports are trying their best to increase the commercial revenues so the same could be compensated to the airlines for their high costs. These measures take 3-5 years to be implemented and airports such as the ones at Singapore, Bangkok, Hong Kong, Zurich, Dubai, etc. have actually proven this in the past. The lower costs to the airlines mean savings, which is passed on to passengers on their tickets and staff on their earnings. Ask those who work in airlines for the above mentioned airports and they would vouch for this. Ever wondered how a return ticket from Bangalore or Mumbai to Dubai or Singapore is cheaper than a return flight within the country – this is how.

Staff Attitude needs to change. Airlines and Security Staff have to realize that it is not just important to be personally efficient but also make the airport environment friendly and profitable. Some need training; some need sympathy. Let’s hope.

GVK One

I was travelling two weeks ago on my second official trip to Hyderabad since Nov. 2009 and was naturally intrigued by this imposing structure, rightly called GVK ONE. This Mall which has been in the making since 2005, finally opened for business in full-swing during late last year. Spread over 625,000 sft across four floors and two levels of basement parking that could collectively accomodate over 700 cars and 500 two wheelers, this is by far the largest Mall in the central part of Hyderabad and would remain so for some time to come. The promoter, as the name goes is none other than the GVK Group – leaders in Infrastructure and Power business in India, who manage various TAJ hotels in the city and also operate the Mumbai Airport and recently bought a controlling stake in Bengaluru International Airport (BIAL). I am told that the name of the mall is known to be based on two reasons – one, that it is the address of the Mall on the Banjara Hills and the other being that this is the first Mall project of the group. The location itself is stunning - bang in the middle of the most affluent locality in the city, where according to a survey made a couple of years ago by the Group, the average household annual income among residents is over INR 5 lakhs. From the choice of the paint on the exterior and interior walls to the floor tiles, everything has been done to perfection and the most important nuance is the lighting on the ceiling of the atrium – that is formed as the letters G.V.K.

The anchors include Shoppers Stop, INOX Cinemas and the city’s first Hard Rock Café (there was one within the International Departures of the swanky Hyderabad Airport that is managed by the rival GMR Group, but that was shut down some time ago due to low patronage). There are several other vanilla stores in Retail and F&B which include Calvin Klein, Benetton, Esprit, Bossini, Pepe, Mango, a local Jeweler, Café Coffee Day, Juice Booster, etc. The biggest attraction is a wonderful aquarium that is placed in the main atrium on the Upper Ground which attracts a number of curious visitors – young in age and by heart, and there is a customary photo that is taken alongside (something that we Indians love, irrespective of where we are – at places of worship to shopping centers!).

The mall has a lower ground floor which is on the level of the road as the road enters through the Banjara Hills and then an Upper Ground Floor as the road goes up. Interestingly, both floors have awesome visibility from outside and this helps the Mall developer to lease both floors at attractive rates. And for the Brands, needless to say gives good visibility. This is increasingly seen in India across various Malls of late. Soon, this would become more a fashion, than a natural gradient of the road – hope it is not another scam like the CAM in some cases…

Shoppers Stop is spread over 60,000 sft across two floors from the ground – this is the third outlet for the business in Hyderabad city based on encouraging trends – the city’s shoppers are quite trendy and fashion conscious and contrary to the rather shy image that they carry, people actually shop for colorful stuff – from apparel to accessories, furniture to cars. Incidentally, over 60% of those who shop at Shoppers Stop are members of the privilege program “First Citizen”, the largest retail loyalty program in the country. This could be a big driver of footfalls into this mall, time will prove though. Hard Rock Café, the cult pub and restaurant is located on the Upper Ground, but with a direct access – that means, you don’t have to get into the Mall to enter the place, quite common world over. INOX, spread over 40,000 sft with six screens, is tucked away on the top floors – a straight forward approach on the elevator on any floor would take you to the cinema. There is a large food court serving local as well as national and international delicacies and seems to picking pace among shoppers and visitors.

What I am surprised though is the circulation – very plain and simple. Each floor plate is not more than 40,000 sft and starts and ends in the same place. As one enters, you could walk on the left side or right and just keep walking. Every 5 meters, there is an entry to a shop and every 50 meters there is a breaking point. For all the brouhaha that was created, the layout seemed too simple. I am not a believer in complicated walkthroughs within the mall, but this one is just too simple. Also, adjacency planning between the brands could have been better. There is almost no logic to my mind why certain brands are placed next to each other. In Mall Management, one of the most important focus areas is to place the brands correctly, as much as possible. There has to be a value-addition from every placement – the most popular ones in the corners and the just-popular ones on the way, so shoppers walk as much as possible and are invited into the smaller ones. In India, the trend is reverse – the most popular ones, especially apparel and sports brands want to occupy the entry points! All said and done, what I liked best was the placement of our café – yes, Café Coffee Day is located right at the entrance with an independent access. This is the second café within a 2 sq. km radius in Hyd. (compared to many such in other cities like Bangalore, Mumbai & Delhi).

Overall, I believe it is a good package for the retail-starved Hyderabad – beyond the stand alone Shoppers Stop and Lifestyle stores and Hyderabad Central in Begumpet, there is pretty much nothing for shoppers in the centre of the city. InOrbit at Cyberabad is yet to gain steam, until which am sure GVK One will attract more onlookers and some serious shoppers. Good luck to the team that’s running the show.

Transit - The New Location

Images Group, India's largest publishing house that specialises on Retail and related activities recently conducted the Food Forum India, an annual conclave where the Indian and International Food and Beverages industry congregates to discuss and share thoughts on current issues and best practices. This is one of those very rare events where Pepsi and Coke come together under one roof - yes, Pepsi is the host for the main event while Coke sponsors the Golden Spoon Awards. It was my privilege to be on a Panel discussion aptly titled "Transit - The New Location" under the aegis of National Restaurant Association of India (NRAI), an umbrella entity that is spearheading the needs and wishes of its members.

 At Food Forum India (FFI) 2010 held at The Renaissance, Mumbai, the stalwarts of the industry not only spoke about processing and manufacturing food items but also identifying the correct locations for positioning the products. An engaging session probed into the new-age transit locations as the venue for good food retailing. Sharing statistics and opening the session, Sanjay Coutinho, COO, Barista and anchor for the session Samir Kuckreja, president, NRAI and CEO and MD, Nirula's noted, “There are currently 454 airports in India of which 16 are the international ones. Also there are 18 million commuters in the railway itself of whom 20 per cent travel in the AC coaches. There are already 7,000 railway stations in India and 50 world class stations are being budgeted for in the near future. Thus, the opportunities thrown up by these new locations are endless.”

With travel becoming an important part of the lifestyle segment, more and more food industry players are exploring newer avenues, such as airports, for setting up their outlets. Anoop Sequeira, CEO, Brand Calculus (Booster Juice) stated, “Transit locations such as airports help us to generate business 24-hours as compared to other locations for which we pay rentals for 24-hours but can be open only for 12 hours or so. I agree that the rentals are high but at the same time the opportunity of business is higher.”

S Shriram, GM, Key Accounts, Cafe Coffee Day pointed out that even the location of the outlet within the airport area needs to be strategically chosen. He also brought up the issue about railway platforms being another good alternative location and thus questioned, “Almost 18 million passengers travel by train but do we have enough resource to satisfy even a fraction of them with our products and services? Also, the consumer at the airport or the railway stations are hard pressed for time. So we also need to consider how fast we can deliver to the consumer whose flight is getting announced and the likes.” Agreeing to the views put forward by Shriram, Zahir Abbas, associate director, Travel retail, Technopak Advisors suggested, “A lot more infrastructure needs to be built in the near future.”

Jagvir Singh Rana, Director - Operations and Business Development, HMSHOST Services India said “Having an outlet at the airports requires more hard work in terms of getting clearance for the staff but the traffic is good.” Kuckreja added, “Also there are certain rules to be kept in mind while packaging the food items at these transit locations.”

Rajeev Panjwani, CEO, Travel Food Services, concluded, “The display has to be attractive for the consumer. Also the store design needs to be more open in order to help a customer to move around with his travel baggage. It is all about convenience and now we are also looking at more specific opportunities like catering to the passengers at the delayed flight stage.”

‘Coca Cola Golden Spoon Awards’– Images awards for excellence in food retailing - presented on 4th March at the Food Forum India evening of food titans was a grand corporate ceremony with award presentations by business leaders, and high-gloss entertainment by celebrities. The Awards followed strict international benchmarks in deciding the top honors with IRIS as Knowledge Partner. The selection process involved a countrywide poll to short-list the nominees, jury nominations, self-nominations by short listed nominees followed by performance assessment by IRIS analysts. The awards Jury consisted of prominent names from the branded food industry and business analysts, modern trade teams of global & Indian food majors including Hindustan Unilever, Britannia, Cadbury, Cargill, Dabur, Darshan Foods and Forum of Indian Food Importers.

The ‘Coca Cola Golden Spoon Awards’ acknowledge excellence in food retailing & food services – retailers adopting best practices at the back end and front end – including customer relations, smart strategy, operational efficiencies and innovation across value chain. While Big Bazaar was one of the biggest winners on the night, the audience was mesmerised with scintilating performances by renowned singer Shibani Kashyap and stand up comedian Ash Chandler.


Big Bazaar’s award as the ‘Most Admired F&G Retailer of the Year: Large Formats’ was recognition for the company’s tremendous growth in a challenging financial environment from 110 stores in 2008-09 to 125 today. Big Bazaar narrowly beat out a competitive field of nominees for the award, which included Spencer's Hyper, Easyday Market, Hypercity, Star Bazaar, More MegaStore and Spar.

Walmart's India Retail venture with Bharti Retail's Easy Day with 56 stores won them the Coca Cola Golden Spoon Award for the 'Most Admired Food & Grocery Retailer of the Year: Small and Medium Formats'.

Pantaloon Retail claimed the ‘Most Admired F&G Retailer of the Year: Private Label’ on the back of news that its Future Group division is set to register a turnover of Rs.440 crores for the sale of food and packaged food through its private label. Other nominees in the category were Reliance Retail, Spencer's Retail, Aditya Birla Retail, Max Hypermarket and Trent.

The ‘Most Admired F&B Retailer of the Year: Cafes, Juice Bars & Parlours’ category was one of the most competitive of the night. Cafe Coffee Day was voted the winner by industry members ahead of Barista, Costa Coffee, Baskin Robbins and Jus Booster Juice.

The award for India’s best premium restaurant went to Indigo (‘Most Admired F&B Retailer of the Year: Premium Restaurant) while Dominos Pizza won the award for ‘Most Admired F&B Retailer of the Year: QSR Foreign Origin’ among stiff competition from KFC, McDonalds, Subway and Pizza Hut.

The Coca-Cola Golden Spoon Awards recognise excellence in food retailing and honour the brave innovative spirit of leaders in the dynamic Indian food retail and service industry. Food retailers are leading a change that has redefined consumption habits in India, resulting in a change in food tastes, preferences, awareness, consciousness and choices over the past few years.

T3 - Explore!

I was among the few fortunate to be present at the recent unveiling of the identity of the most promising retail venture of the century – I am not exaggerating… indeed, it is. I am referring to the upcoming new Terminal 3 at Indira Gandhi International Airport (IGIA), Delhi. The Terminal Building spread over 50 lakh square feet would be able to cater to over 30 million passengers per annum (mppa) in 2010 and would be able to scale upto 54 mppa by 2020! By far, this would be among the top five biggest airport terminal buildings in the world and possibly the biggest in India. The Airport is ably managed by the GMR Group – leaders in Infrastructure, Power, etc, who also manage the Rajiv Gandhi International Airport at Hyderabad. Many would know that recently, the Hyderabad Airport was ranked the fifth best airport in the world in the five-fifteen million passengers a year category. The council, an international association of the world's airports, has also ranked the IGIA as the Best Improved Airport in the Asia Pacific region. All this, thanks to the persistent efforts of the GMR Airports Team, ably lead by none other than Mr. Kiran Grandhi, Chairman, GMR Airports Division.

The new Terminal 3 which had a different Retail Identity earlier now has a new one developed by Holland based Marketing, Branding and Communication agency THEY. The new identity efforts, apart from choosing the Retail and Commercial partners, has been led by Suredj Autar, Chief Commercial Officer and Head of Strategic Planning for GMR Airports, The two day event was chaired on Day One by Mr. Martin Moodie, founder and editor of The Moodie Report, the world’s most trusted travel retail news website that never sleeps. Martin introduced Suredj as Supersonic Suredj - “He’s an ebullient, live-wire, irrepressible character who knows only one speed – supersonic.” Indeed, he is. I have known Suredj for over four years now since his previous role as Managing Director of HMSHost when he launched the operations in India and led other initiatives in the Asia Pacific Region.

Back to the retail identity. The Dutch agency THEY’s founder Van der Vorst remarked - “For us, Explore exactly captures the diversity and forward-looking way in which India is progressing – and at the same time it’s a promise, a link to the customer; an invitation to the customer to explore all the great things that can be found in an airport.” The colorful logo was also unveiled and the various commercial partners would be able to integrate the new identity with their own, whether it’s a store that sells books, music, duty free products or coffee (like Café Coffee Day). What I loved most about the new name is its flexibility – it goes well with almost every category!

The Retail areas are spread over 2 lakh square feet (that’s as big as a Mall, someone remarked in the audience). The retail areas have been carefully planned across the domestic and international areas. The common check-in area would have over 100 counters that could be used interchangeably for Domestic and International Airlines (similar to how it is at Bengaluru International Airport where I worked earlier and which introduced this concept two years ago). Focus has been given to walking areas, seating and shopping/dining areas such that each of it is visible from the other. So, when a passenger is walking, he/she cannot miss the shopping areas and the seating areas are close to the dining areas. While most of the shopping areas are on the same floor when a passenger enters, the food courts are a level above. There are two premium coffee outlets planned – a Coffee Day Square in the Domestic Departures and Coffee Bean Tea Leaf in the International Departures. And expect a host of F&B options – from Subway to Mc Donalds, Chinese delicacies to local cuisine, there is everything for everyone’s pallet. The Retail areas would sell almost everything possible, including an exclusive area for Luxury Retail and the highlight is going to be the much expected “Dilli Bazaar”, an area that would focus on the local favorites from the city.

Later in the evening, there was a cocktail, sit down dinner hosted by none other than the Chairman himself which was preceded by a short interaction. When Martin Moodie who was on the stage with him asked how good the new Terminal 3 would be, Mr. Grandhi promised it would be 10/10 to a thundering applause and cheer from the crowd. When I met him later in the evening to introduce myself and to shake hands, he got up from his seat with a smile – a charming gentleman that he is, I couldn’t have expected more! His effervescent personality resonates in his organization and his team. Everyone was so cheerful and enthusiastic and like them, I am also eagerly looking forward to the grandest retail opportunity of our times… Watch this space for more updates over the next months.

Foodstop! - Food lover's paradise

One of my previous columns claimed how this place would change the way Bangalore shops. It's only reassuring to see how true my own words were. Bangalore CENTRAL 2 at JP Nagar, Bangalore South, has indeed realigned the city's shopping needs. During my visit a week back, the new food court aptly named Foodstop! had opened its doors for public. And no better timing than during the Happiness Sale - a biennial celebration that offers upto 51% Discount across various product categories. The Central Sale which is as popular as the End of Season Sale from Shoppers Stop (more of that on my next column) is a huge hit among consumers across cities. Central Malls, which is now present at eight cities across the country, offers shoppers a unique shopping experience that includes great offering with amazing discounts - twice a year. So, if you haven't been there yet, rush NOW.

The foodcourt is located on the fourth floor, where the Box Office (the ticket booking counter) for the upcoming Cinema would be located. So, all patrons who wish to watch cinemas must pass through this floor - a brilliant idea to get footfalls into the foodcourt that would show results in a few weeks when the cinema opens. The foodcourt is well spread and brightly lit and has a busy neighbor - F123, a play area for children and the ones at heart. I beleive there would be atleast 100 seats or more for the six/seven food counters in the area. What I loved the most is the wide offerring - from continental to kannadiga fare, there's everything that discserning food lovers need. What I am bit confused is their adjacency. Will seek answers for that soon from my friends at Central.

The first counter serves Juices and Ice-Creams. In a way this is the last one too. I wonder why this is the first. But maybe there's a reason. The pricing is moderate and the selections are wide. The next one is Bombay Blue, the flagship F&B concept from Blue Foods, which manages various other concepts all India such as Noodle Bar, Cream Centre, etc. and is also the one that runs F&B across various Indian airports such as Mumbai and Delhi. The menu offers lip-smacking continental food varieties, including Soups, Pastas, Sizzlers and the signature "Sizzling Brownie-Ice-Cream", my all-time favourite just as many of you. The portions are large enough for one person and the pricing is aggressive - just as compulsive to make the first-timers try. The next counter sells Indian fare - Rotis, Kebabs, etc. Nothing much to say as it includes almost everything that one needs in this variety. This is followed by Subway, the only branded counter (which was yet to be operational (as of 6th Feb. 2010). And this would be managed by my good friend Griffith David, a US returned techie who's passion to food led him to enter the F&B business a few years ago and is now one of the largest franchisses in South India for Subway and Baskin Robbins and is also opening some of his own concepts, and operates his flagship Subway/Baskin at Bengaluru International Airport since May 2008. My best wishes to him as this is his first in a Mall. The next counter serves traditional south-Indian/Kannadiga fare including various varieties of Dosas and Idlys. And the last counter serves tradional north Indian chat varieties.

However, the missing counter is a Cafe - yes, there is no coffee and beverages available in this floor. I beleive Coffee and short-eats would do well in such food courts that offer continental/western style food as it goes well with such a menu. I am trying my best to fit in one of our cafes there, but yet to see light. However, Cafe Coffee Day is located next to the customer Helpdesk in the second floor , which is mainly targeted towards the youth and offers casual wear clothing along with E-Zone, the Electronics format of The Future Group. The 200+ car parks in the basement ensures that there is enough space for those who drive in, apart from a similar number for bike parking. And there is a new unoffical Auto-stand just outside. this makes the visit to this mall an easy access, one of the most important moments of truth in retail.

What I love the most about Foodstop! is the variety and range with superb pricing. A family of four could have a sumptuos, tasty, affordable meal from across the world for not more than Rs. 400/- (USD 9) which is a rarity today in Bangalore. Kudos to the Central Team for putting up such a fare.

Coffee Conversations...

It’s been almost a year since I started writing this column – recording my own observations about the Retail Industry as well as analyzing and interpreting decisions and actions of Retailers and their activities. I must admit that I have acquired a lot of admirers and a few critics on the way – not on a personal note but more on a professional stance. To make your reading more interesting, I am introducing a new column titled “Coffee Conversations”. In this section, I seek answers for queries that I have from Industry experts and stalwarts, while also discussing my own thoughts about the same. This is not mainline journalism – and I am not a journalist. Nor are those who opine spokespersons of their respective organizations. They are mere professionals who share their thoughts on certain specific topics.

The next column is about the recent advertising marathon by Retailers and Brands – and the recent occasion being India’s Republic day that is celebrated every year on the 26th of January. Almost every brand/retailer have been showering discounts – from 10% - even 60% in some cases on a range of products including apparel, accessories, electronics, household items, etc. The only category missing conspicuously is Automobiles – probably they are happy counting their bucks, thanks to very good sales over the past three months. But this Discounting phenomenon brings some thoughts to my mind – what happens to the Brand‘s Equity in the long run?

I spoke to my good friend Raman Kalia, an Advertising and Marketing professional with varied experience across consumer brands and services who now leads the Marketing division for one of the best managed Airports in India. Excerpts from the conversations that we had recently over coffee:

Shriram (SS): So, Raman, did you see all the nice ads overt the past few days on leading national newspapers inviting shoppers to buy products on discounts? Which was the one that attracted you the most and why?

Raman Kalia (RK): In this season, it is not possible not to see discount and promotional advertising from brands across categories. The season in a way has become synonymous with discounts, so I did notice advertising from apparel brands, electronics brands to host of others categories. There is no specific campaign that stood out in the clutter because these were plain announcement ads with each brand trying to outshout the other but even with these one, even if one tries, not notice the larger formats and in your face advertising. So I did notice Big Bazaar, Croma and some apparel brands advertising, but the bigger question is what I remembered beyond the fact discounts were on - Answer is nothing.

SS: Do you think most consumers tend to shop more when they find words such as “Sale”, “Best Deals”, “Save”, etc.? If so, then why?

RK: It is no secret that Indian consumer is a value consumer and with discount seasons getting well established, purchase cycles are getting aligned to these seasons. It is more important for brands to consider with such seasons - are people spending more or actually less? On the surface, it might give an impression that people are spending more in that particular week, month or season but if a planned or need based purchase is getting aligned to that season, then probably brands are earning less, not more. Against this, if brands are able to build impulses, which are true in certain categories, say electronics or apparel, and expand their base of users, it can be said that consumers have shopped more. Brands should not look at just the season to base their assumptions but look at the full year to make a judgment whether discounts or sales or best deals have added value to their business or not.

SS: In the long run, do you think these brands/retailers would lose their significance? Would consumers shop only when there are deals?

RK: But of course brands/retailers would lose revenue and equity if consumers start buying during season. To take an example, if the MRP of a product is100 and offers a 20% seasonal discount year after year and the bulk of consumers start buying during that time, they are telling the brand we value at 80 and no longer 100, that means its premium has eroded in the consumer’s mind. The prime example of this is Benetton; you would rarely find people buying this, one of the most respectable and recognized all over the world brand, at full price in India any longer. It has become a discount brand, with weak associated imagery.

SS: What about the Brand Equity? Do you think consumers would value the brand as much at a later date when they shop again in full price?

RK: There is no single answer to this question; it depends from category to category. In certain cases it actually enhances the value of the brand because it offers a chance to experience or enter the category. Every brand has three set of consumers – core buyers, fringe buyers and non-buyers. As long as discounts do not isolate or create dissonance in core buyers and at the same time give an opportunity and a reason to fringe buyers/non-buyers such schemes add value.

SS: Which categories according to you think have the least effect on their value? Can you elaborate with some examples?

RK: Discounts, at the end of the day in a way mark the end of something and are a symbol of change, a precursor before the new comes. And in certain cases clearly demarcated time fragments which are well established. Let me explain this by picking up three categories; technology, apparel and hotels.

Let’s start with the simplest one, hotels, you have season and non-season. Discounts and offers during non-season do not impact the rates that hotels charge during the season, why one because people travel less during that time, but it gives a chance to fringe or non-buyer to enjoy that exclusive experience. Even if a core consumer avails the opportunity it still does not erode the value because overall reason of a season is well differentiated from the non-season. Different opportunities, different reason, no dissonance, yet at the same time adds value to the brand in terms of revenue, consumer base and building brand equity.

In case of technology, it is an ever evolving category and every new launch makes the previous obsolete. So when an Apple discounts Nano after the launch of Nano with camera, buyer who has bought Nano at full price also understands that earlier price was an opportunity cost, without impacting the brand equity. Same is true for cars, when a new launch happens, say i-10 vs Santro from Hyundai and Hyundai offers Santro at a discount, it need not kill the demand of i-10. Some value conscious consumers might buy Santro instead of i-10 but in their mind the trade off of price and technology is clear. It does not devalue the brand.

Apparel is far trickier to answer. Fashion is always about change, and in a way reflection of the consumer. Now if new range is distinctive from the old discounts it would not erode the equity but unfortunately it is not true every time. Some brands and their products are so generic that it is impossible to differentiate the two and that’s where the issue comes. Now change could be color, cut, shade, design anything but in apparel a majority of Indian brands have not been to establish that and even otherwise a majority of Indians are not fashion conscious, hence erosion of brand equity with established seasonal discounts gets eroded rapidly.

Bottom-line is, discounts work for brands only when the reason of discount is well established and consumers can answer the brand is offering a discount because of a well defined and well understood reason. Trade off between new and old is when discounts do not impact brand equity, if that difference is not established it leads to dilution of brand equity and loss of margins. And the market is strewn with such examples where brands have not been able to achieve this; white goods, apparel, fashion accessories, footwear and zillion more – and today are victims of “I will buy during the discount season” mentality.

Brands should offer discounts only when-

1. Such schemes will not create dissonance in core buyers or change their buying behavior

2. Reason of discount is well established and trade off is understood

3. It marks the end of something

4. There is marked difference that segregates the old from the new, which is felt by the buyer either in perception or by any of the five senses.

SS: Last words of wisdom for Retail Marketing Managers?

RK: There are no simple or easy answers.

Thank you Raman, and wish you all the best for your upcoming Shopping Festival.

National Shopping (& Savings) Days…

We sold 40,000 cameras, 7,000 laptops and 8,000-9,000 LCD Tvs, during the 23-26 weekend, proclaimed Mr. Kishore Biyani last week, Founder and CEO of India’s largest Retailer, The Future Group. This property famously created as “Sabse Sasta teen din” or “Cheapest three days” six years ago, was experimented at the Big Bazaar Outlet at Lower Parel, Mumbai among others and has hence become a national rage. This year, over 120 outlets of Big Bazaar spread all across the country participated in this challenge. Over the past few years, the other formats of the group have also joined the bandwagon and this was vividly seen this year. The idea apparently stemmed from a simple fact – that consumption in India is driven largely based on two needs – a regular monthly need and a festival/event related one. So, there was monthly shopping of Grocery and Household items and the 2-3 times a year festival/event shopping – Diwali, Id, Christmas, Wedding, Birthday, Anniversary, etc when consumers shopped for Apparel, Electronics and other Home needs including premium and luxury products. The Group wanted to create a day (or rather a period) where consumers could shop without a specific reason – and only for the value and related happiness they derive. Thus was born this unique concept. 26th of January is India’s Republic Day, a national holiday which is always one or two days around the weekend and is usually considered as a long weekend since many take one or two days leave from their work places to spend more time with their family and friends.

Many industry experts have compared this to Boxing Day/Thanksgiving Day like in the West. These are specific days of the year when consumers throng to Retail stores because products are available at the cheapest prices. While most products are outdated or out of season, consumers still see value in the offering. For example, a laptop for home use which would usually cost $ 900 would be sold at say, $ 600 – and this is only for a day. So, consumers plan their purchases in such a way that they wait for the shopping season. A lot of research on the topic has revealed that more than 30% of such products purchased during these times were inconspicuous consumption – the customers didn’t really want them but bought only because it was cheaper… Consumers are the same everywhere – from Amsterdam to Ahmedabad, Bangalore to Boston, show them “value” and they would buy even if they don’t need it immediately. Thus, the value formats of The Future Group, namely “Big Bazaar” & “Food Bazaar” have seen a huge spike in sales.

What confused many of us in the industry is that this concept has been blatantly followed by many other Indian and even International Retailers who are not in the “value” retail formats. Apparel and Department stores were offering discounts, and so were the mono-brand fashion retailers. Electronics saw a huge surge in discounts, with a number of bundled deals and lowest prices for the period. While the offers were tempting enough for consumers to buy, was there a long-term approach in these efforts? Probably not. Beyond a point, discounts will not increase sales but will only decrease – what is famously know in Macro-Economics as “Law of Diminishing Marginal Utility”. Over a period of time, consumers will refrain from buying at full prices and will wait for the discount season. Yes, I agree that this country has over a billion consumers and thereby throughout-the-year shopping will exist, however this would do more damage to the brands' reputation, especially fashion and luxury, in the long run.

The End of Season Sale or EOSS is usually just around Christmas globally but in India, the cycle was a bit behind – many Retailers were planning it around Valentines Day (14th Feb.). But this has also changed of late. Many Indian Retailers have already started their EOSS in Jan. and there seems to be a mad-rush among them for the customer’s wallet. With all the brouhaha around discount shopping (my forthcoming article would delve deeper into this), consumers are smiling away to glory having got the best deals due to intense price-competition among Retailers. So, what happens to the Brand Equity of these players? Would consumers continue to shop at full-prices when they know that the same brand is available at a discount in the near future? Watch this space…

Coffee Conversations...

It’s almost a year since I started writing this column – recording my own observations about the Retail Industry as well as analyzing and interpreting decisions and actions of Retailers and their activities. I must admit that I have acquired a lot of admirers and a few critics on the way – not on a personal note but more on a professional stance. To make your reading more interesting, I am introducing a new column titled “Coffee Conversations”. In this section, I seek answers for queries that I have from Industry experts and stalwarts, while also discussing my own thoughts about the same. This is not mainline journalism – and I am not a journalist. Nor are those who opine spokespersons of their respective organizations. They are mere professionals who share their thoughts on certain specific topics.

The first such column is about the recent advertising fiasco featuring the world’s best known Ice-Cream Retailer and one of the most respected agencies. Many of you would know the fauxpas already – the agency communicated on a signage that entry to the newly launched store was “restricted only to holders of international passports”. What they meant was something else but this irked the Indian sensibilities almost immediately and what followed was brand bashing – offline and online. They say “Any publicity is good publicity” but I guess this is the last the Brand would have wanted even as they move into one of the toughest consumer markets in the world. The agency has been removed from the services of the company with immediate effect and it is yet to be seen what happens next.

I spoke to my good friend Akshay Ananth, a young and energetic advertising professional who leads the Client Servicing Division for one of the best known agencies in the world, which is also the most popular and respected one in India. Excerpts from the conversations that we had recently over coffee:

Shriram (SS): Tell me Akshay, how important is the role of the Advertising agency to get into the DNA of the Retailer or the Brand, especially if it is new in the Indian market?

Akshay Ananth(AA): Whether the brand is old or new it needs someone to communicate with the consumer. It’s the agency that does it right now. The whole idea of an agency is to talk the consumer’s language as opposed to manufacturer speak. Some of the best brands have been created by the agencies. E.g. BBH raised Johnnie Walker to where it is now. Lemon, Axe, McDonald’s. The list goes on.

SS: Is it important for the Retailer/Brand to engage the agency at a very early stage – say, even when the Brand plans to enter the country?

AA: Yes absolutely, the brand that will win the war over minds is the one that makes the consumers tell the right story. If the entry itself provides a story, why not?

SS: Is the agency solely responsible for all internal and external communication that goes out? What about the Brand Management Team?

AA: When s**t hits the roof, somebody has to be holding the can – accolades to the brand team and all s**t to the agency. It’s a hurting fact but its true… Globally.

SS: When there is a result that is not the most desirable (like in this example), what is the stance that the agency and the Brand should take? Defensive? Mud-slinging? Does sacking and replacing the agency help?

AA: I guess there are two things here, do the due diligence (also get someone to wear the black hat) and the second is, get a crisis plan ready.

Mud-slinging is our national sport, so I guess that’s good entertainment. Other than that, if you do not stick with each other thru thick and thin, what team are you? Firing the agency was a knee jerk reaction and an easy one. I would have started with firing the brand manager.

SS: What happens with the image of the Brand? Is it true that Consumers forget and forgive? Can you cite some examples?

AA: Yes, to a great extent. With all the clutter in the consumer space, nobody is an Einstein. People do have very short memories today and a lot of brands to take advantage of this fact. For examples, I will only say Lexus, Mattel and Cadburys & Pepsi.

SS: Last words of wisdom for Brand Managers?

AA: The agency is not your slave, but a partner. If you treat as a slave, like all slaves it will run at the first sign of trouble. A partner will see a problem and solve it, have a back up plan or atleast stick with you. Additionally, clients that treat agencies like dirt always end up paying the price. They see attrition rates shoot through the sky from the other end.

Only one word of wisdom to the agency crowd: one of my bosses was fond of saying: “client ke client ko samjho”, believe me, this piece of advice is invaluable.

Thank you, Akshay for your time and keep up the great work. Best Wishes for your future endeavors. Cheers.

Swagatham! Suswagatham! Welcome to India…

The Indian Ministry of Tourism recently announced Visa on Arrival for residents of Finland, Japan, Luxembourg, New Zealand and Singapore – a move which was debated so much that the Hon’ble Minister of State for External Affairs Mr. Shashi Tharoor even tweeted about the topic, which was covered more in the media than the Visa news itself! The visas would have a maximum validity of 30 days with a single entry into the country which will be restricted to airports at Delhi, Mumbai, Chennai and Kolkata. The four airports account for over 65% of Indian aviation – of the over 110 million pax who fly within and outside the country every year. Whether there are enough takers from these countries is anybody’s guess.

But it’s a welcome move, many say. Martin Moodie, founder of The Moodie Report, the world’s most read Travel Retail website that never sleeps, remarks “Obtaining an Indian visa is a notoriously unwieldy process”. He couldn’t be wrong. He travels all across the world for over 200 days a year and visits India atleast once each year. One of my good friends in the Industry and a mentor of sorts in my professional life, Martin Moodie blogs regularly about his experiences across airports and the Travel Retail business in general. Apparently, the number of Japanese visitors into India grew by 3.5% in 2009 to 151,000. Understandable, since many Japanese Auto companies, Suzuki, Toyota and Honda, command a respectable market share in India. While Suzuki (with a JV with Maruti) holds the fort in the mass segment, Toyota and Honda slug it out in the premium segments and are famous among the Sec A+ and A in the large metros.

So what does it mean to have “Visa on Arrival”… Aplenty. To begin with, it is seen as a country which welcomes visitors. Thailand and Malaysia have been doing this for sometime now and have seen noteworthy results. While the domestic unrest in Thailand did crash the visitor entries in the first half of 2008, the tsunami after effect in 2006 and early 2007 was severe in Malaysia – a country which has a tremendous tourism potential due to its unending sea shore. They are also inexpensive for those from the West and the Pacific as the Dollar conversion works very well – from coffee to cigarettes, from luxury stay to gourmet food. India has taken a giant leap in 2010 by announcing this major initiative, kudos! The move is expected to help the country’s economy to a large extent and how.

One of my presumptions after the Congress Party won the Parliamentary Elections in Summer of 2009 was the main focus areas – Tourism and Infrastructure. And this is exactly what we are seeing. While Infrastructure Development is the mantra all around, the Tourism impetus has been doubled, the least to say. Wish the same focus remains on developing Domestic Tourism as well. The website of Incredible India is not just attractive, but quite informative, exhaustive and engaging as well. And is the entry point not just to India, bit for all those who are looking for information about Indian Tourism.

And with growing Tourism, Retail is sure to benefit in a big way. Global tourist destinations have tourists visit their Malls and Shopping Centers as much as the city residents.

In fact, certain products are always considered to be cheaper in foreign countries – possibly because they are either manufactured there or the country allows cheaper or nil import duties. For example, coir and jute products are famous in Thailand just as Dry Fruits are in Dubai. International Fashion Brands are always the pick of the place at Singapore and Hong Kong. Except for Mangoes and Tender Coconuts during summer and woolen clothes from Punjab and Cotton produce from Tiruppur or Surat, there is little that we have to offer that tourists can grab. But there is enough and more of tourism potential to offer across the country, throughout the year. From Deserts to Sea Shores, from Mountains to Fashion Capitals, India has everything to offer. And while people travel, they are bound to consume. It’s just a matter of time, that we see an uptick in Retail Sales due to foreign travelers. But it’s sure bound to happen, sooner than later

Till then, let’s keep chanting “Athithi Devo Bhava” – Welcome to India…