Three years after the first Lockdown!

On this day, 24^th March 2020, India experienced its first ever full lockdown for 21 days. The entire country came to a halt; abrupt standstill of commercial and economic activities. The State & Central Governments imposed an extremely strict gag order that citizens were not allowed to even step out of home, save for buying medicines along with a proof of the most recent prescription from a certified Doctor. Each one of us in the country had a different story to narrate – some faced extreme medical challenges while many had other stories, such as loss of livelihood and uncertainty of the next meal, especially for the poor, the marginalised and physically challenged at that.

All forms of transportation came to a halt; flights, trains, buses and local transportation such as taxis and auto rickshaws. The retail segment was among the most impacted. It was a double whammy of sorts – those who worked in all other industries eventually spent their monies on Food, Clothing & Shelter. On the one side, shutting down the shops meant loss of business for the day; on the other hand, those who would spend at retail stores were themselves staring at a bleak present and immediate future, for many employers were not sure / clear how to pay for unproductive employees when there was no business at all. 

From the smallest kirana to large retail companies, it was VUCA in full flow – Vulnerability, Uncertainty, Complexity and Ambiguity. None of us knew what would happen next. 

Slowly but surely, things started opening up from June onwards only to once again relapse shortly thereafter. This roller-coaster ride continued until May 2021, when a partial and a complete lockdown was brought back in several states. The festive season in 2020 and 2021 were muted, for, the majority of the retail sector and thousands of retailers were staring at several crores of rupees worth of stocks; unable to liquidate them to pay suppliers, in effect unable to buy new and more relevant stocks as required. Hard times, those were.

By October 2021, there was some semblance of orderliness that was back. People started to step out of their homes risking the dreaded spread of the infection. By then, most of the countrymen and women had taken atleast 1 dose of the vaccine and were now armed with the strength to face any eventualities. Whether the vaccine worked to its full or not – many had tested positive despite taking the shot – people had gained the strength to fight it. 

Three years later, as I write this note, I carry immense gratitude to the Almighty, my family, friends, former employers and colleagues, all of whom stood shoulder to shoulder with each other and overcame several obstacles. Though I too, like millions faced setbacks in the workplace, I am glad that it was this bleak period during which I could shine professionally with a few big ticket accolades to my credit. Signing up with Chennai Super Kings as beverage partner for Levista Coffee will be one of my most cherished moments along with placing the brand alongside Kamal Hassan in Big Boss Tamil. Working closely with Ad-film Directors, I co-scripted and oversaw a dozen films for Levista & Specsmakers during this time.

Joining Indian Terrain was a calculated move, but went awry due to various reasons. Some wrong calculations, despite various measures taken before and during my stint; so be it. Life moves on and keeps teaching us every other day! When we succeed, we learn; but when we fail, we learn a lot more. Wisdom is not repeating mistakes and I hope to gain from some of the key learnings I have taken during this three year period. 

Over the past 15 months, the Indian economy has shown much resilience. Retail Industry is back to its charm pre-pandemic, though there are a number of challenges ahead of us; inflation is pinching the middle class; over all cost of household has drastically increased, including fuel, power, road tolls, etc.; loan books by banks are seeing a huge surge, a sign of good times but fraught with higher risks as well. Nevertheless, I believe Indians are more hopeful now than ever before. And that matters.

PS: By the way, I am glad, that this happens to be my 300th blog article. No, it wasn't planned at all... 

The hype around Air India’s big buy

Much is being spoken, written and debated about the recent purchase of 470 aircrafts by Air India from Airbus and Boeing. So much so, that the US President made an official statement that this could create a million jobs for his countrymen. Many politicians thanked the Indian Prime Minister while so many questioned his role in this private affair between a buyer and a seller – why and how would the Governments on both sides have any role. Leaving all the controversies (if one exists!) aside, let us see the opportunity that we are sitting on. 

In the past 8 years or so, the present Government has reactivated over 70 airports. These are not new ones really, for they already existed. Barely. These were airstrips with an ATC Tower at best built before WW 2 by the British. The Union Government through its ambitious project to make the common man fly – Ude Desh ka Aam Nagarik (UDAN) was activated and many unused airports were operationalised. It is another thing altogether that our railway networks are choked and a small section of travellers do not mind paying a premium for air travel.

A view of the Udaipur Airport developed under UDAN

Altogether, the number of air passengers have grown from 37 mn pa in 2010 to 167 mn in 2019 (sans 4 days of the first lockdown!). The number halved for FY 2021, grew to 123 mn in 2022 and would be around 130 mn in the current FY. By 2027, we expect over 200 mn passengers to hit the sky in a year. To give it a perspective, over 2.2 mn (2 Crores) people took train journeys daily in 2019 of which an estimated 8% of them travel in airconditioned classes.

What excites me, as a (Travel) Retail Professional are the possibilities for retail at airports. To accommodate these new 470 aircrafts plus another equal number from all other incumbent airlines at the moment in India, we are expecting a blast in the skies. Don’t worry, it wouldn’t be so choked like our railway networks where one express train has to stop at times to let the other one travel. But the congestion at airports (runways) would be inevitable. 

IGI Airport, New Delhi

The new Terminal 3 built at New Delhi Airport a decade back is already choking during peak hours. Mumbai is building another new airport and the same is the case at Noida. Bangalore has commenced a new parallel runway last year and a brand new terminal T2 which will be fully activated by Q3 FY 2024. Goa has a brand new airport in the north while there is no confirmation of shutting down the existing one in the south of Panjim. 

Keeping aside the top 20 airports – 2 super metros, 4 metros and the top 16 cities in India – there would be 175+ operational Airports across the country by 2025. The bare minimum would be a daily passenger count of 1,000 pax/day while the maximum would be 30,000. The top 6 airports, by then would be handline 30,000 – 60,000 passengers per day! 

At the moment, the spend per passenger in Indian airports is abysmally low. Singapore’s Changi Airport recently announced their CY 2022 revenues from Travel Retail – USD 870 mn. That would be 38% of 2019 revenues, which means in 2019, it would have been USD 2.2 Bn pa. Dubai’s retail and F&B revenues pre-pandemic were a little over USD 2 Bn pa; Hong Kong, Paris CDG, Frankfurt and Zurich Airport, each had Travel Retail Revenues between USD 600 mn to USD 1 Bn pa. All this crashed due to Covid-19 but is slowly bouncing back.

New Integrated Terminal Building coming up at Chennai Airport

In India, Travel Retail has been a non-starter except at the top airports, especially those which were privatised. AAI continues to operate quite differently, in a manner that is neither exciting nor enticing for retailers to embrace the opportunity. However, change is inevitable and we see a huge improvement coming our way. By 2025, over 5 lakh people would be travelling through our Airports every day. Imagine the  potential retail opportunity that we are eyeing. And these are reasonably affluent passengers with disposable incomes. From a humble cup of tea or coffee to a beer / gourmet meal, F&B seems to be a larger pie than product retail at airports. I had written the reason for this in my previous post. 

Nevertheless, Air India’s purchase of 470 aircrafts is a boon for Indian Travel Retail. Happy to be back here in my new avatar in Travel Retail supporting the Trinity - Airports, Retail / F&B companies and the Consumers.

The Popcorn Conundrum

Just realised that I have seen 3 movies over the last 3 weeks at theatres. Two were in top class cinema halls in a Tier 2 town and another was a Tier 2 theatre in Chennai. Meanwhile, I have also seen twice as many movies on OTT platforms during the same period. The reason to watch movies at theatres, for most of us Indians, is that it is a cherished family outing as well as to see our favourite matinee idols on the big screen on the opening week / weekend. 

As the movies that I watched were all of top heroes, the theatres had a full audience. Except that during the interval break, not even a third of them came to the F&B area to buy anything. 

The Hon’ble Supreme Court of India passed an judgement on 3 Jan. ’23 that Multiplexes & Cinema Theatre Owners had the right to not allow outside food (and beverages) inside the screening areas and that the cinema goers had a choice whether to go or not, and cannot therefore demand to take their own food inside the theatres like how it was 2 decades back. From biryanis to biscuits, fruits to homemade snacks like channa dal & groundnuts, ardent cinema goers carried their own food inside the theatres. Once the show was over, it was a nightmare for the theatre owner to get the auditorium cleaned up before the next show began. 

Enter mid-2000s – the onset of posh Multiplexes across India led by PVR Cinemas and INOX as well as modernisation of screens by standalone theatre owners across India. Around the year 2,000, there were 18,000 screens in India when the country produced over 1,000+ movies pa across 15 languages including foreign-language dubbed movies. By 2019, there were a mere 11,000 screens in India, of which the Multiplex chains had a share of over 2,500. 

Cut to Dec. 2022, there are a mere 8,500 screens of which almost 3,000 are in Multiplexes. 

In 2019, India produced 2,000 movies, running an annual business of over Rs. 30,000 Cr. Hindi  language films accounted for almost 45% while Tamil and Telugu languages made about 300 movies each annually. Post-pandemic, film watching trends have changed tremendously across the world and India is no different. Acc to Q3 FY 22-23 Financials of PVR Cinemas, the occupancy rate has diminished to 29% compared to 36% in the same period in 2019. Tickets prices  have gone up 18% - perhaps keeping inflation in mind. But that’s not the real reason why admissions dropped by a whopping 20% during the said Quarter. 

The reason is the price of Popcorn at theatres! Yes.

For most Indians, watching a movie is a family outing. People plan in advance, get dressed to look their best and travel with glee to watch a movie. Assuming the avg. ticket price pan-India (except Bombay, Delhi and Bangalore) is around Rs. 200 for a decent theatre, the cost per family of 4 is Rs. 800. Add parking charges for 2W/4W and a meal before or after. That would work out to Rs. 1,500- Rs. 2,000 already. Now, if the popcorn at the theatre is going to cost Rs. 100/- per person (usually these are family packs & combos of Rs. 250 and above!), add a beverage or 2 and some more snacks, the food bill is already as much as the movie ticket cost if not more. Most Indians, who were avoiding this madness before the pandemic have completely moved off watching movies in the big screens since 2022 onwards. The numbers speak. 

So why do theatres charge so much for Popcorn and food? Coz, they can never make money & be profitable with such ticket prices, especially if the occupancy rates are so low! 

Ok, Shah Rukh’s Pathaan (2023) has already crossed Rs. 200 Cr in BO collections (in 5 days)  worldwide as I write this; So have 1 or 2 movies each across regional languages, but these are exceptions. Most films of 2022 bombed at the BO. The ones that made headlines were non-Hindi language movies and were (dubbed) releases. 

A theatre needs sustained footfall through the year. 30-40% occupancy during the weekdays and 70% or above over weekends is a theatre owner’s delight. It used to happen until 2015-16. Until Popcorn prices went up! 

Fizzy Coke and Pepsi (with 90% gas & water) and 10% essence have also gone rogue with their sizing & pricing. No one in India wants to drink so much of sugary liquids anyway and in such short duration. To get back audiences to the plexes, we need decent content (of movies). And cheaper F&B, perhaps. One way is to subsidise the food offering; another way is to use them as a bait to get more audience. Afterall, subsidising is a national mantra in India. Sigh. 

Good Bye 2022, Hello ‘23

 

Here’s wishing you all a Happy Calendar Year 2023. May this new year bring a lot of happiness and cheer to everyone. On this day last year, I was working for Specsmakers, leading Sales & Marketing for the 10 year-old brand, the largest optical retail network in South India and the third largest in the country with 250+ stores back then. Around the same time, the scare for a third wave of the dreaded Covid-19 infection was all over the place. It had a new code-name: Omicron! Government of India as well as various State Governments advised several measures, including shutting down of retail stores, malls and commercial establishments over the weekends. Andhra Pradesh took no measure and maintained status quo; Tamil Nadu advised shutting down only on Sundays; Karnataka, however advised a closure for the entire weekend. Most Indians remained in a huge sense of anxiety over their careers, professions, businesses, kids’ education and so on. However, all these worries were put in the backburner as Omicron had limited or very marginal impact on most of us.

This is when the government pushed us to take the second vaccine, which ensured a quick and safe turnaround for the ailing Retail sector, which had taken the worst beating for the previous 18 months, ever since the first lockdown began in Mar. ’20. 

My career too, zoomed along with the fledgling economy. I managed to get back to the apparel industry, jumping ship to Indian Terrain, a 2-decade old brand, most famous for its shirts, especially the Madras Checks. The company operates over 210+ stores across India and I was responsible for the entire retail business, managing a turnover upwards of Rs. 250 Cr pa. Sales, Marketing & Branding, Merchandising, New stores expansion, Project Management, Visual Merchandising and Staff training, all rolled into me. In a span of less than 6 months, I managed to visit 96 stores across India, from Guwahati to Ahmedabad, Chandigarh to Nagercoil and many in between. The month of September was among the busiest in my career, according to Google Trips, which maintains a record of where I went, what I did and so on. 

Onam was the first big campaign that I undertook, visiting the state of Kerala 45 days before the festival and screening the markets. We sensed a huge opportunity with the return of NRI Malayalees to their home towns after a gap of 2 years, due to Covid-19 led travel restrictions. Interestingly and unfortunately, the sales uptick that was envisaged didn’t happen. One, there was a severe rain around the festival week; second and most importantly, sales (for most other brands as well) remained flat before and during the peak shopping weak. This was a learning of sorts. It is not necessary that Sales would surge only before the peak season, for the graph has been on the upward trend since Feb-Mar. ’22. We witnessed somewhat the same across North & West India, just around Diwali as well. No surprises here. 

However, sales for the entire retail industry surrounding fashion, apparel, accessories and lifestyle had reached pre-2019 levels or at par. On the contrary, many brands saw a volume decline (in Sales), but these were due to the making of the brands themselves. Wrong choice of (new) locations, unavailability of merchandise at the right moment and most importantly, staff demotivation due to reasons such as salaries remaining flat, lower than expected & delayed disbursement of incentives for the previous FY and overall lack of interest in the working environment are some of the key reasons why many brands faltered. 

I moved out from the company in November due to differences with the Management. No regrets though, every tenure and every day is a learning after all. Over the past 2 months, I have been introspecting on some of the measures I had taken (or rather not) which led to two quick exists in less than 2 financial years. I am hoping (and working towards) that 2023 and beyond is going to be a more stable period ahead. Everything is in my hands, of course! Happy New Year 2023 once again to everyone and may this year be joyful to all of us! Cheers. 

RED letter day

As the calendar year 2022 ends, I complete the distinction of my “silver Jubilee” year in Retail. I started my career scooping ice-cream in 1997 at India’s second and Chennai’s first outlet of 

Baskin Robbins. Last weekend when I walked passed by that location, I took a photo of that store where another respectable global brand exists now. But it may soon be gone as Chennai Metro Rail works are on nearby. The impact of such civil infrastructure on retailers is immense but that’s for another article, another day. 

Just last week, I had shared a note on World Civil Aviation Day and the image I used for that tweet was that of Air India. Little did I realise that the first aero-trip I took was exactly 20 years ago and it was on an Air India flight too. And the best part was, that the trip was for an interview to Mumbai, with Shoppers Stop. I convinced the HR manager then to get me an air ticket instead of the standard rail fare, a rarity those days. I didn’t choose that position and life moved on. But then, when I look back, there has been so much that has been showered on my by this retail ecosystem for the past 2.5 decades. I cannot thank everyone who have been involved in “My Retail Journey” all these years to make me who I am today.

12.12 is a very important day of the year in the Indian Retail ecosystem even as most large retailers as well as small retail businesses including regional retail chains celebrate the day with much fanfare. Retail Employees Day was first celebrated a decade back and has since  garnered momentum with most CXOs of large retail organisations pitching in with their support. On this day, employees are celebrated for their unstinted efforts, thanked with small and large goodies and gifts and most of all, made to feel special for the sometime-thankless efforts they offer to their customers and their masters. In many cases, employees are recognised for their non-work related  From back then when I stared my retail career to now, so much has changed in the way consumers shop. And the staff members of retail establishments across the pyramid have always kept themselves in tune with their customers.

Let me share an anecdote of how my first employer made me and my colleagues “feel good” everyday – at Baskin Robbins. 

Though it was a neighbourhood ice-cream parlour, it was an American brand and certainly carried an “international tag” when compared to the domestic ones around. Therefore, the clientele was also more discerning and demanding. We were a team of 5 – 2 in the morning shift and 3 for the second shift. All of us were college students or had just finished. Given our age, our modest familial backgrounds and our tendency (perhaps) to have a bite of the beloved ice-creams, I guess he came up with an interesting idea. The Franchisee said that every day, each of us were allowed to sample one scoop of ice-cream on the house after making a note in the register. It was a learning exercise for us, so we know the taste of each of the flavours as well as to ensure we were not sampling it ourselves “off the book”. After a fortnight, we had tasted almost all the flavours amongst ourselves and requested if we could instead take the scoops home. He agreed but after a fortnight, even the folks at home were bored of eating them. 

The franchisee had successfully accomplished two things – ensured the staff wouldn’t steal the ice-cream and instead, take it officially whenever they wished to. More than a view to police us, I saw it as a great way to keep the flock engaged. It was his way to thank us everyday for our wor k, especially since it was the first self-service outlet where the customer was expected to remove their leftover cups and drop them off in the bin – much to their chagrin. So, when some of them sulked, we had to go the extra mile, but the Boss was already rewarding us. It was always a quid pro-quo, after all. There is an age old saying in retailing – take care of your employees and they will take care of the customers (and the business). Very few business owners are walking the talk. And it shows in the business outcomes, after all.

Vande Bharath - Train experience

Travelled to Bangalore earlier this week. Having travelled innumerable times on Shatabdi earlier, the journey was more or less similar. The ceiling looks sleek and refreshing, so are the interiors. At the look of it, seems the makers have used high-quality materials which gives a (relatively) premium feel of travel.

Because of it’s build quality, the ride quality was far superior. The usual jerk that we face in normal trains was missing in this one, especially while crossing tracks, picking up speed or slowing down, etc. In a crude language, the ride was as different as an automatic vs. manual gear shift in a Car.  Food (and it’s quality) is almost the same as in Shatabdi. Except that morning b/f had a Kesari ( a typical south indian sweet). in the plate. The presentation in aluminium containers spoils the otherwise premium feel of the train, but I guess there are fewer options otherwise.

Assuming that these pax have the wherewithal to spend on discretionary spends, what if one can preorder food at an additional yet nominal cost? As a diabetic, I may want to skip the Kesari and order something else. A low-sugar tea pack instead of a normal one. This could be done while booking the tickets, or a reminder SMS could be sent 48 hours before the date of travel. Of course, various other products like mobile Chargers, earphones, etc. could be sold inside the train through a catalogue, with an e-brochure being sent along with the ticket by email.

The seats are quite thinner (like in an Indigo flight) yet comfortable. What was very un-Indian was the water bottle holder was placed near the footrest. In Shatabdi trains, it is placed near the food train which is indeed cumbersome But to place it near the feet - poor design.

The plugs for charging devices are now placed in each seat unlike one per row in Shatabdi. Except that is is located right below the seat! I mean, who even designs all this? For older people, especially senior citizens, this is going to be super difficult. Of course, the design team has made up for this with a slick tray for keeping a laptop, table or even a mobile phone for viewing / watching media. 

The train’s speed and other details are displayed on a digital screen. At many times during the trip, the train’s speed crossed 100 kmph. I am sure, that over time this will improve drastically, making the “Vande Bharath” a super fast and safe train to travel. The rest room has been designed well and looks classy, similar to an airplane. There is a handrail for passengers to hold, while seated or standing (as the case may be) and the entire cabin is more spacious than ever.

The automatic doors which are within the coach are now for ingress and egress to the main coach. Quite an international feel (though Metro rails already have it). I hope they integrate the doors with a QR code, so one can scan the same with their Aadhar biometrics and enter. We can get rid of the role of a TTE. Though humans will find ways to fool the system, I am sure this is just a matter of time.

To punish the haters, there is a video of the train’s inauguration done by Hon’ble Prime Minister at Bangalore on 11 Nov. ‘22, which runs in loop. 

The only negative - if at all, is that the train departs and reaches almost at the same time as the Shatabdi Express. Not sure if they would curtail any of them in the near term or would retain both. Also, to reach the station earlier than the Shatabdi - Vande Bharath departs at 5.50am from Chennai and the Shatabdi at 6am is a pain, especially to get a taxi / public transportation. This could be well overcome by aligning the Metro Rail which comes to the Chennai Central Railway Station.

Overall, very well done ICF and Indian Railways.

Vande Bharath.

Vande Maatharam.

Jai Hind. 

10 years in Madras - A recap

It was on this day 10 years back I returned to Madras (by then it was renamed Chennai) - where I have grown up all my life, after a long stay and various stints in Bangalore city since 2004. On 2 Aug. 2012 I joined Royal Enfield Motorcycles as General Manager – Business Development. Over the next 2 years, I would set up 160 dealerships across India for the niche motorcycle brand. I was also responsible for working closely with the Management and the Design Agency on-board to implement the new Retail identity of the brand, which included the new look and feel of the store interiors – from transforming the dealership as an automobile showroom to a lifestyle-led format. In those 24 months, I travelled extensively across India, as always Wed – Fri. every week, 40+ weeks a year, first flight out, last flight-in. I would have travelled more to Tier 2/3/4 towns, especially across Northern India where the brand had a brilliant parentage and was well received. Forget discounts on bikes, my first and second degree connections would just have one request – if deliveries can be shortened, from a usual 6-9 months to a little less than 3 months. Thanks to a supportive Sales Team, I guess we did manage to deliver a few such instances.

It was a revelation to see how the vehicle meant different things to different people. For a metro male, it was upgrading his lifestyle from a humble scooter or a motorcycle to a macho Royal Enfield; for a student who has just passed out his UG (or one in the making), it was a reward from his lovely family; for a groom-to be, it was a gift from his parents or in-laws to be; and in one such instance, the wife of a good friend of mine gave him a surprise on his 40^th birthday with a Thunderbird 350cc. Lovely memories that I carry from those times. 

We also set-up a first of its kind Royal Enfield showroom at the tony “Saket” locality in South Delhi at the Select Citywalk Mall. Technically, the store was located outside the mall precincts and there was a road dividing the two, so we got the best of both – passersby to the Mall as well as serious patrons of the brand.

For the record, Royal Enfield is the world’s oldest and continuous-in production automobile brand in the world, now over 120 years old. The brand, which was born in the UK found its home in India, at the erstwhile state of Madras in the late 1950s when a city based entrepreneur purchased the rights of the brand as well as to retail the machines – Made like a Gun – as its tagline goes, the bikes which were used in World War 1 & 2. Over time, the brand died a natural death with the advent of Japanese bikes as well as home-grown ones including Hero, Kinetic, Bajaj and TVS Motors. 

In the mid- to late 90s, the brand was on the verge of closure, which is when the new owner Eicher Motors acquired the cult brand to turn it around. They struggled for a few years, but eventually cracked the market and broke records. As per today’s report in the media, the company sold 55,555 bikes in July 2022 incl. exports while the domestic sales at the dealer level was 50,265 units. The company is expected to launch new models later this month. A decade back, the company would produce / bill to dealers around 11,000 units pm! The only thing that hasn’t changed then and now – the craze for the brand and it’s waiting period. 

My aunt, who bought me up since I was one-year old was diagnosed with a rare type of carcinoma in Nov. 2013 – Uterian, Ovarian cancer which is quite uncommon in India. Among women, it is the 7^th most common type of cancer worldwide and 8^th most common cause of death from cancer. Like millions, she too succumbed after fighting the disease for 4 years. Upon the discovery of her ailment, my fledgling retail career came to a standstill. There were days when I shuddered the thought of waking up the next day, wondering what to do without a proper job, a full time career, a sagging start-up I had adventured and piling debts and EMIs. Life moved on. And I survived all these years, to write this column today. 

Life moves on, will keep moving, just like the arms of a clock. But over these years, I have grown wiser, most probably, if anything. A proud Madrasi that I am, I am sure I will make my hometown proud.