Month: May 2013

WWF-India and Woodland light up remote villages in Central India

Corporate Social responsibility no longer remains restricted to just removing a particular amount each year and contributing the same to a NGO or perhaps donating it to an organization. Things are changing. From adopting a small village to bringing up a school, each one is doing its bit in ways that are not only niche but also pretty much thoughtful. Recently we had WWF – India and Woodland joining hands to light up villages with renewable energy.

Woodland, the global adventure wear brand and supporter of WWF-India’s conservation initiatives, donated solar lanterns to over 120 households in 3 villages in WWF-India’s Central Indian Satpuda Maikal Landscape in Mandla District, Madhya Pradesh. This initiative was part of WWF-India’s Earth Hour campaign, which encouraged corporate organizations to go beyond the hour to combat climate change, by providing renewable energy solutions to villages without any access to electricity. The event was organized at the onset of the launch of WWF’s new global campaign which calls for increasing investments in renewable energy and will be launched under the slogan ‘Seize Your Power’.

This initiative to provide energy access to some of our darkest villages in the forest heartlands of Madhya Pradesh is also a way to project the possibility and worth of renewable energy in our country. Timed with WWF’s campaign, this one single activity is a symbolic call for better policies and public awareness towards renewable energy.

Patwahi, Chiklabadi and Bangla Dadar are small villages situated in the most remote parts of two wildlife corridors providing passage for wildlife to move between Kanha and the Pench Tiger Reserve, and Kanha and the Achanakmar Tiger Reserve in Madhya Pradesh. The solar lanterns will be the first form of energy the villagers will ever use, as they do not have any access to energy for lighting or cooking. They depend heavily on forest resources such as fuel wood for their energy needs, which brings them in constant conflict with wildlife in the forests, and sometimes results in the loss of human lives. Due to their distant location, access to electricity is nearly impossible, and standalone renewable energy powered systems are the only viable option for first time energy access.

Harkirat Singh, managing director, Woodland said, “In support of Earth Hour, we launched a collection drive in our stores, encouraging customers to donate towards lighting up villages using renewable energy. The idea received overwhelming response, Rs. 4 lakh in the month of March, and it is encouraging to see how a consumer-driven campaign has generated real benefit for the local communities. This has strong potential to be scaled up in the future. Providing these solar lanterns is the first step towards meeting the basic energy

demands of the village folk, thereby uplifting their lifestyles, as well as benefiting WWF-India’s conservation initiatives in this landscape. We hope these lanterns will help the communities live environment-friendly lives, away from dependence on kerosene and fuel wood, and encourage children to study, thereby securing a brighter future.”

In India, access to clean, sustainable and affordable energy for inhabitants of remote locations is fundamental for development, poverty eradication, stopping deforestation and combating the threats that are now being posed by climate change. Implementing renewable energy solutions for energy access is a step in the direction of meeting the balance between development and conservation initiatives.

Aarti Khosla, International Campaigner for WWF’s Climate and Energy Initiative said, “Lighting of villages using individual solar lighting systems directly points to the benefits and potential of renewable energy. With access to electricity a far dream for over 293 million people in the country, we believe that our dependence on coal, oil and gas is not the only way to secure energy. Renewable technologies based on solar and wind energy, and biomass are becoming increasingly competitive. We’d like to see them also become popular, so that people can make use of better options to obtain energy which will save costs in the long run and offer a cleaner environment. The initiative by Woodland is a genuine step in the direction of providing quick access to energy to communities in remote areas. It is a commitment under WWF’s Earth Hour campaign; as also for WWF’s global call to ask for more renewables, under the slogan of Seize Your Power.”

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In the Lap of Nature: The Story of Hidesign

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For almost a decade post starting his business, he was unable to read his profit and loss statement and today this man is a proud owner of a brand that has managed to generate interest from the international luxury giant Louis Vuitton. We are talking of Hidesign – a cult brand for those who love their leather. The annual turnover of the brand in India today stands at Rs 150 crore in addition to the business they generate overseas through their distributors. To extend that ‘wow’ expression you are still holding; Dilip Kapur, the proud owner of Hidesign started off with just about Rs. 25, 000 and with the help of a local cobbler. STOrai traces the interesting, inspiring, innovative and amazing story of Hidesign over the years.

For Kapur, it was natural to get himself associated with a line of business that had an element of nature in it. Why do we say so? Today, the brand is recognized leader in the research of the ecological use of vegetable tanned leathers for its leather goods. Learning from the centuries old skills of tanning with natural seeds and barks, the brand has created fashionable leathers that age exceptionally well. Hidesign vegetable tanning uses extracts from the barks of Wattle trees and seeds of Myrobalan.  Adding to Kapur’s association with nature, a clue can be drawn from his upbringing as well which comprised of being raised in Sri Aurobindo Ashram in Pondicherry from the age of six. From there his next destination was schooling at Phillips Academy, Andover, Massachusetts. After graduating from Princeton University in International Affairs, Kapur completed his PH.D at University of Denver, School of International Studies in International Affairs. An internship at a leather factory was his first encounter with something that was soon to define his career path. Post his internship he applied at several companies and was offered a job at Poor Richards, a company with a small factory for handmade and hand dyed bags in Denver.

Encapsulating the beginning of the brand, Kapur says, “This short stint was what made me re-look at leather and became a lifelong passion for me. I decided to return to Auroville and wondered what to do next. To keep myself occupied I started making leather bags. What started as a hobby soon caught on the interest of people passing by and I landed up with larger orders. Hidesign was born out of the need to be distinct from the uniformity and synthetic flatness of the mass market. It was almost like giving shape to my instinctive aversion to painted, patented leathers that lose all semblance of naturalness.” Explaining the concept behind the name, “The name, it was hide (leather) and design with ‘de’ in shadows. Later our consultants from London made it one word, Hidesign.”

Executing the Idea
All of the great entrepreneurs of this day and age started off small and Kapur is no exception. Not only did Kapur have scarce resources to begin with in terms of finance but also manpower for his great idea included just his own self and a local cobbler. Talking on this further, Kapur shares, “I started Hidesign with a capital of Rs 25,000 and one cobbler. Through a friend of mine, a German buyer saw my bag and he ordered 1,400 bags from me. Imagine, I had just started my business and had only one cobbler working for me. After six months, I supplied 200 bags. That was all I could make. A friend who was staying in Auroville went back to Australia and was working in a car factory. When he broke his back, he got $12,000 from the company. He came back, bought my bags, and sold them in Australia. He was quite successful in it. That was how we reached Australia. One of his cousins living in England saw my bag and was impressed. She started buying them for the UK market. Then, somebody who visited Auroville from California saw my bags and started selling them there. What gave me satisfaction was designing bags and not the profit I made or the number of countries we conquered. I didn’t know how to read my profit and loss account in the first ten years.”

Hidesign was sold only in the international market, first in Germany and then Australia. Says Dilip, “We had only the rebels as our customers in the first ten years. It took us ten years to conquer the mainstream market. That was with John Lewis, the major super market in the UK buying our products. By then, the whole culture had changed and people became less conservative and more casual. It is the amateurs who were passionate about the product who first started selling Hidesign products.” When the brand started selling in India in 2000, they sold only 6 per cent of their products here. “We could not first find a distributor here in India who understood our products. So we opened our own stores, first in Delhi and then in Bengaluru. A year-and-a-half ago, India became our biggest market; half of our sales are in India. Our customers are from the age group from 25-35. Today our biggest growing markets are in Asia; Malaysia, Vietnam, Sri Lanka,” adds Kapur.

What makes the brand Stand-Out
Talking about the USP the brand holds, Kapur says, “Hidesign is well known for its contemporary designs that stay current for many years. We are not trend led and prefer to create modern classics. Over the years as the brand has grown and is increasingly perceived as a luxury product the designs have also undergone change, they are more refined, urban, sleek and lighter compared to our heavy vegetable tan leathers from 10 years ago. Most Hidesign customers appreciate the eco- friendly leathers, our solid brass hardware and hand crafted quality.”

Hidesign has three design teams based in Milan, London and Pondicherry all working together to create two new collections a year. In addition to the seasonal collections, the brand has classic range, products that in some cases have been made for thirty years with minimal changes and which our customers continue to appreciate. Adding further he says, “Every season reflects our mood. It is a reflection of how we feel and how our customers feel. We bring out 50-60 new styles every season. There are new colours, new leather developments and updates like laptop sleeves, ipad covers and ipod holes in messenger bags to meet customers’ needs.”

A walk into any of the Hidesign stores spell out a natural feeling of well-being due to the ambiance which is not only calm but in a way luxurious too. Shares Kapur, “Hidesign is an internationally successful brand in the “affordable luxury” category. The feeling of luxury comes from providing an exclusive product and service through the exclusive ambiance of our stores that is custom made and shows the luxury of the product. Hidesign shops are made from high quality materials that are natural: solid brass, real leather and wood. The personalized service provided at our stores and shop in shop counters informs the customer on the exclusive nature of Hidesign, advises the customers of what is best suited to their needs and in case of a problem promptly try to solve their problem.”

Reaching out to the Customers
As a brand with tremendous recall, Hidesign had humble beginnings. With a strong product that instantly connected with the user, word-of-mouth communication took Hidesign to newer markets and newer customers. Its relevance to consumer needs, its ability to fit into their lifestyle and inspire them has been the biggest contributor. By taking lead and creating a strong identity for itself the brand has managed to motivate the customer to look beyond great design and quality and move towards an eco friendly lifestyle. Elaborates Kapur, “Hidesign has always kept pace with its consumers. We started print advertising in select magazines that fit the customer profile a few year back. Public relations, events like Hidesign’s annual fashion shows, region and occasion specific promotions have increased credibility and recall. As the Hidesign customer gets younger and more media savvy, we have also moved along with them. Hidesign is now working at increasing its online presence through its revamped website (www.hidesign.com), and social networking sites like http://www.facebook.com/hidesign and http://www.twitter.com/HidesignHQ. Entrance of international brands has brought in a sense of competition, increased activity in terms of promotions and growth in advertising out reach. This is creating larger numbers of customers who are aware and learning to make decisions. An aware customer is a huge plus for a brand like Hidesign.”

Factory Funda
Hidesign established its first custom designed factory in Pondicherry, India in 1990.  Adhering to his commitment to nature, Kapur has taken due care in the construction of his factory. Says Kapur, “You will not find asbestos anywhere in the factory. You will see minimal use of paint, only solid raw brick fired from local earth by Ray Meeker, the well known low cost ecological building expert, himself. The place is all grass. Ray built ponds, waterfalls and streams into the layout of the factory. We try to reduce the amount of pollution we generate and try to find ways to reuse resources. All waste water from the tannery is filtered using RO before it is let out. All water in the factory goes through a natural process of filtration in the water bodies we’ve built as a part of the landscaping and is reused. We use only vegetable extracts for tanning as far as possible. All waste material is separated and reused or sold for reuse. We do not burn anything. Lunch time at Hidesign is pretty much outdoors, under the trees, sitting on rock benches and tables.”

At Hidesign no work space holds more than 100 people at a given time with ample organized workspace for every artisan. Says Kapur, “We prefer to call it a workshop and not a factory. For us the concern for ecology is an ongoing search for better healthier ways to live and work. It comes out of believing in it and making it a core value. We believe that the way you work should reflect your brand – Hidesign does not have a system of mass manufacture. Our work is a craft, and each bag is individually handcrafted by a team of 3-6 artisans.”

Brand Extension
Staying true to its core values, Hidesign has extended its concept of lifestyle by opening two luxury boutique hotels in Pondicherry – Le Dupleix and Promenade. Le Dupleix is a 14 room luxury hotel, nestled in an 18th century French Colonial villa. Now restored and modernized, the hotel is an architectural landmark evocative of the life of Nawabs and historic Governor of Pondicherry, General Marquis Joseph-Francois Dupleix. Elaborating about the hotel, Kapur proudly shares, “Each room is unique in style and furniture – the penthouse suites are stunning with a combination of ultra modern look and sweet smells of old Burma teak. The delicate balance between modernity and tradition gives Le Dupleix a sense of warmth and regal refinement. The Courtyard restaurant serves a wide range of Mediterranean and Pondicherry cuisine with a strong emphasis on organic and fresh sea food. Dining under the ancient mango tree in the Courtyard, you are transported in the old world with the best of international cuisine. The Governor’s Lounge Bar is an experience of its own featuring a magnificent piece of embroidery by Jean-Francois Lesage. The intricately carved ceiling, part of the beautiful wood work commissioned by Governor Dupleix, is one of the finest examples of French Indian art.”

Elaborating further, Kapur says. “The Promenade is located on the ocean front with most of the rooms overlooking the shimmering waters of the Bay of Bengal. With a lively lounge bar and two restaurants, the Promenade is a dining destination in the city. The Lighthouse – its rooftop restaurant-overlooks the ocean.” When one looks at the properties by Kapur, it is difficult to miss the common thread between both luxury hotels  which comprise of the attention to design, a unique recipe of traditional architecture and modern feel which mirror the strong sense of style statement of Hidesign. Says Kaput, “We associate luxury with superior design and high craftsmanship. Serving organic foods in our hotels or offering natural and ecological leathers are our way of engaging our consumers. Our brand value is built through pampering all the senses and feeling good about its intrinsic worth.”

Recently the brand introduced a line of sunglasses which are high on design and quality both. Shares Kapur, “I want our brand to be relevant and one that improves the lives of those who use them and makes them happy. We want to stay natural and ecological. That is very important to us.”

– Zainab Morbiwala

As penned for STOrai magazine

The Story of BIBA (brand for ethnic Indian and Indian fusion wear)

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“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.” The above holds apt for the story of BIBA. From being a wholesaler for salwar suits to today being one of the most well accepted brand in the category of women’s chic ethnic wear, BIBA has an interesting history to share.

In the late 1980’s when Meena Bindra got her first ‘Punjabi Suit’ (as it was commonly referred to then) ready for selling it to her customer from the confines of her house, little did she know that a few years down the line, her creation would meet a day when it would be present in the wardrobe of lakhs of women in India. Elaborates Meena who is also the chairperson of the brand, “I was always interested in designing in any form but lacked the technical or financial skills to set up a business and I did not have much funds either. Therefore I started with a bank loan of Rs 8000 from the house. It seemed the easier business as fabric was the only investment required, started almost 26 years back and the readymade garment industry was in its infancy thus the time was right to start this business.” Adding further, she says, “Luckily, soon after the launch, the brand gained popularity due it to its beautiful hand block prints and styles, and became the first choice for stylish cotton Salwar Kameez sets. Shortly thereafter, Benzer Mumbai became the first exclusive store to stock my designs and I started supplying to various stores.” The association with Benzer happened on reference of a customer who was obviously very much impressed with Meena’s designs. Post then, the journey has been only that marked with ‘growth’.

For a couple of years, post that Meena went ahead wholesaling her brand to the traditional retailers and it was only post in the early 1990s that an individual identity and exclusivity to her creation was given under the name ‘BIBA’. But why the name ‘BIBA’? Explains Meena, “BIBA, in Punjabi means a young, pretty girl or an endearment, normally used for young girls hence I decided to name my brand ‘BIBA’.” This was also the time when Shoppers Stop came into being and Meena retailed successfully through them. Shares Siddharth Bindra, managing director, BIBA, “We take pride in being one of the first few brands to successfully expand using the shop-in-shop model. With Shoppers Stop we retailed using the shop-in-shop model and it worked extremely well for both of us.” But all this didn’t happen as easily as it sounds right now. The challenge before the Bindra’s to set up a brand was mammoth. Back then, women relied most on the local tailors and for a lucky few there were the designers. The concept of ready-to-wear salwar suits was not that prevalent. Also, majority of the traditional shops had their own labels to retail.

Citing the challenges encountered, Meena says, “I have no formal training in design and I faced some teething issues with garment production. I learnt along the way and devised my own methods to overcome those issues. But the biggest challenge for me was funds for expansion. I was naïve and had no knowledge of running a business or handling a brand. There were no competitors in my category – no benchmarks, no brands, no malls. That was a time when the fashion industry was not so evolved and customers used to rely on local garment shops for apparel shopping.

Moreover, my husband was in a transferable job and once, for eight years, we had to stay apart as I had to stay in Mumbai to be able to run my business when he was in Delhi.” A very confident Meena says, “Now, I have 23 years of industry experience. There is a separate category called ethnic wear. Biba is a well known and widely accepted brand and is big both in terms of scale and size. The company is profitable and we are fully equipped to handle any business challenges. We are opening almost 4-5 exclusive stores each month. Industry standards in general have gone up and so has the knowledge of fashion. People are well travelled and their tastes and design sensibilities have evolved. The only thing that remains constant is my interest in creating new designs. I am still actively involved in the creation of Biba designs and constantly interact with my design team.” Siddhart adds, “One of the challenge that we face today is that of the excise duty structure prevalent in the country. It definitely eats upon your profits to quite some bit. Also, because we are an ethnic wear brand, lot of our work is related to skilled labor. Getting trained  (skilled labourers) for our business is also a big challenge that we face besides the issue of streamlining the supply chain.”

The journey of expansion continued thereon with the opening of the first BIBA store at Inorbit Mall in Mumbai. An interesting personal experience led the brand to make the move to offer kidswear (read Indian ethnic wear for young girls). Elaborates Siddharth, “I have a daughter who is 7-year-old. We have always faced a challenge finding apt Indian ethnic wear for her. That is when we decided to expand our portfolio to include kidswear as well. My wife has been a designer and this helped us quite some bit.” It has been a year since the brand expanded its portfolio and till date they have managed to have about 85 touch-points to retail the brand. Says Siddharth, “We started retailing kidswear through some of our exclusive stores and through Lifestyle and Central. We shall partner with a few of the well established traditional retail formats too for this.”

Apart from being a pioneer and one of the most widely available brands for salwar kameez, what makes the brands stand apart from the rest. Sharing BIBA’s USP, Meena says, “BIBA as a brand stands for variety and affordable designer wear. In simple words, BIBA clothes are simple, elegant and stylish.  Each month we launch new ‘mix n match’ collections and 30 new SKD designs so that our customers enjoy a wide range of products inspired from various different sources. I feel BIBA’s style redefines the Indian woman’s style. One feedback we always get from our patrons is that BIBA clothes make them look slimmer. The brand has evolved with the customers, making it so popular amongst women.” Elaborating further, she says, “BIBA specializes in ethnic garments with a modern and contemporary look. We keep changing our designs with the trends, retaining our roots which are steeped in Indian Traditional crafts like Hand Block printing with vegetable dyes, exquisite hand embroideries and many more. BIBA use pure fabrics like silks, chiffons, georgettes etc in vibrant-to-soothing shades to create its designs. The accent here is on fashionable yet affordable designer clothing ranging from medium-to-plus sizes which has won a large and loyal client base.”

A breakthrough for the brand came in during the late 1990’s when Kishore Biyani approached the brand for a movie partnership with film – Na Tum Jano Na Hum. Post that came in a series of movies including the likes of Devdas, Bhagbhan etc. Sharing details of their marketing activities, Siddharth says, “Biba is building brand salience by strategically investing in premium media like top of line fashion magazines, national dailies, leading radio channels and out of home media. The intent is to not just advertise but engage with our consumers at all relevant touch-points. Hence digital and mobile media as well as onground activations are something we are taking very seriously. Recently we started our fanpage on Facebook and have built a loyal base of more than 1 lakh consumers in less than 1.5 months of launching! This just elucidates the popularity of the brand Biba. For the year 2011-2012, we have earmarked 4 per cent of total sales as the marketing budget. We will be launching our own online selling portal in the coming financial year.”

The brand is looking at strengthening its base in the country before embarking for an overseas journey. Says Siddharth, “Currently, we feel the Indian market is not saturated. We are already present in 40 cities but still we get a great response from our consumers each time we open a new store. Hence the focus is on home ground right now. We have already identified 100 cities in India where we would want to be present and the task at hand is to cover these cities in the next 2-3 years.

BIBA has successfully expanded its reach using the franchise route and according to Siddharth the returns have been good. To support the brand’s expansion, capital infusion happened with the selling of 28 per cent of stake to Kishore Biyani’s Future Venture Capital Ltd. Says Siddarth, “Post 2006 we went on an expansion spree and retail is a capital intensive business. We are happy to be associated with the Future Group. The majority of the stake anyways remains with us. There is absolute no interference and they are great partners (in terms of the 28 per cent stake that they have) to be associated with.”

Sharing expert view on the brand, Harish Bijoor, brand-expert and ceo, Harish Bijoor Consults Inc., “The best thing the brand has is its name. A 4 letter word with two syllables that fall easy on the tongue. its focus on ethnic wear helped the brand occupy a vacuum in the space of high end branded ethnic wear. It made for itself a space all its own.  A space which later attracted clones, but the brand remains a step ahead of consumer desire and aspiration in terms of fashion and flaunt value. And that’s its true merit. The brand is alive. Alive  to change and alive to the chameleon consumer at large.”

The brand did receive a set back a couple of years ago when the elder kin of the family – Sanjay Bindra decided to part ways and begin with the retailing of his own brand – 7 East but this has not deterred the mother- son duo – Meena and Siddharth to expand their wings to reach to new territories. Says Siddharth, “On an average, Biba is looking to open 4-5 stores each month to take our exclusive store number to 200 in the next 2-3 years. 80 per cent of the stores will be company owned. We are also planning to launch 4-6 flagship stores across the country in the next 12 months with an approximate investment of 1 core per store. In terms of product line we have recently launched ‘Biba Girls’ – an ethnic wear collection for 2-12 year old girls. We have got a tremendous response for this and we believe this will become a big category for us. There are also plans to launch ‘Unstitched Fabrics’ in a big way.”

– Zainab Morbiwala

As penned for STOrai Jan – Feb 2012 issue

The Story of Amit Jatia and McDonald’s in India

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You will hardly see him at retail conferences or read about him in print. He works silently and prefers it that way. But meet him in person and you just cannot help yourself being in awe of the magnificent persona he carries. Amit Jatia, vice-chairman, Hardcastle Restaurants Private Limited, the man behind bringing McDonald’s to India can leave you at loss of words when he gets talking. Strictly no nonsense and no going around the bush. He talks straight highlighting the finer nuances of business and life that makes him an achiever in whatever he undertakes. His biggest claim to fame is being the youngest McDonald’s partner across the globe but not to forget the various international degrees and fellowships he holds! Excerpts from the story I had done for STOrai 7th Ann special.

He practically wasn’t really born with a silver spoon in his mouth but Jatia has no qualms in accepting that there were no financial struggles he had to face during his early childhood, “Basically I had a good childhood. Essentially we are a business family so I always aspired to get into business since early childhood. It was perhaps in my blood and imbibed in my mind that ‘industrialist’ was the way to go. Our area of expertise then was into manufacturing.” Jatia flew across to the West to complete his higher education but was sure to return to India. He was given an option of taking care of their international business but since he was keen to be a part of the manufacturing business, he opted to return to India. Jatia elaborates, “I had just got through with my graduation abroad. The time I returned was also the time when we had just got into a Joint Venture with an industrial lubricant business and it was a very high technology mechanism that goes into steel mills / mining etc.”

Adding further, he says, “This line was suggested to me by grand-uncle. At that time we weren’t event sure what we wanted to exactly do with the business. But I took it on me to make it a success. I must have been 21 (age) then. The product we were talking about was water based. Till then, oil based products were usually used. The idea was to replace oil to water and it was obviously a high safety and environmentally friendly product. Now in 1988, who cared about environment and besides my product was pegged expensive. I was too skeptical if it would meet with success and if I would really be able to sell. I dug deeper into its study and the market study as well and spent about three months with our collaborator. Based on all the studies I developed a line of products. A lot of raw material was not available in India then. I remember my R&D head always telling me that so and so is not working out and its not available in the country. My only response would be – business is not built by saying it cannot be done. You have to find a way to do things. We wrote to every international supplier, got samples and gave the samples to Indian companies saying – match the target. This is how we built the first line of products.” Jatia personally would go to every steel mill in the country showing his new product line and convincing them to try what he had to offer. Elaborating further, he says, “My main theme was – just tell me your problem. Our job is to solve your problem.”

As Jatia was getting himself comfortable with the business, the Jatia family went in for a structural re-organization though fortunately for them the lubricant business remained as part of their portfolio. This was in 1992. During one of the meetings that Jatia had with Walter Saldana for one of his businesses, Saldana casually informed him that McDonald’s was looking at setting base in India hence looking at a partner. Shares Jatia, “What happened was that for one of my marketing activities, I had a meeting with Saldana who was the chairman at Leo Burnett and McDonald’s uses Leo Burnett internationally. Now, they had written to him asking him to suggest potential Indian partners. Saldana asked me if I was interested. I snapped back saying – You know I am a vegetarian!” On second thoughts post the meeting, Jatia did feel it was a good business proposition, specially when they were looking at diversifying into new businesses apart from the lubricant business of theirs. Says Jatia, “McDonalds was looking for a young partner with a capital to invest and was willing to take the business as their primary business and drive it. We met, had a series of meetings and finally inked the agreement in 1995 and opened the first restaurant in 1996. I went and worked at one of the international McDonald’s restaurant for three days. We took our initial batch for training to Indonesia.”

Considering he had zero experience in the restaurant industry, wasn’t he scared of failure? Jatia is quick to say, “No! Infact being from another industry was an advantage because sometimes when you come from the same industry, you bring with you a lot of baggage. So for me actually not being from the industry in my view has helped the business. Like for e.g. in real estate – I had zero real estate knowledge. Now, the way McDonald’s does business – it is all long term. We do a 20-year lease. That time remember there were no malls and development for commercial spaces was very limited and it was restrictive too. Now when you go to Linking Road and you tell the owner of the building – that I cannot pay you heavy rent and I want a 20-year lease and you cannot enter the building when the renovation is on as we follow very strict terms and conditions. With all this, you can probably imagine that they would throw us out but since I wasn’t from this industry, I didn’t have any reservations in putting forth my terms and conditions. You may be surprised that we got the deal in our favor and we paid zero rent during the construction phase.” Jatia is a man full of patience when it comes to business and he completely accepts the fact that if you have to build something solid – it takes time. As he beautifully reminds us, “Rome was not built in a day. It takes time to set the foundation right. Normally all businesses are marathons and it starts at the bottom and then goes high…so the crux is to build the foundation. For me, my strength is in my people. I have always worked with people right from day one. We have built a very strong team. They are at the forefront to take care of things. My focus is strategy but ofcourse it has evolved over a period of time. In 1996, it was not just strategy that formed my core competence. In 1996, I got my hands dirty too… we went to Indonesia and were there for training for a period of nine months to understand the intricacies of the business.”

The challenge for the group began with the launch of their first restaurant. Says Jatia, “We were bringing in a new concept, people didn’t know about it well. Quick service restaurants were not famous…infact unknown. There was just one somewhere in Bandra which eventually lost public trust due to poor customer service. So when we came in, people weren’t too sure if we in true sense would be a quick service restaurant serving quality food. Another major challenge for us was to build the supply chain and maintain food safety standards as followed by McDonald’s internationally. These all obviously led to heavy investment and our customers then were ready to shell only a certain amount of money on our products. Also, over a period of time we realized that we needed to have more of a vegetarian menu. We had to quickly make changes but McDonald’s was very much responsive to our needs but it still took some time to convince them.”

Jatia explains the four phases the business went through. The first for him was Glocalization where they took all the international norms of McDonald’s and married those with the Indian knowledge and got the model out. This was in  1995-96. There on till 2002, it was the Built Phase. He says, “This was the time when the market also saw the opening of other brands. I remember getting a lot of flak from peers and media as to why our expansion plans were slow but for me, I wasn’t going slow. I was setting my foundation right. For me it has never been a number game. For me, it was always getting the unit economics right, which meant, that every McDonald’s we opened, I had to make money. It was about getting the customers value proposition right and the third thing was getting the right people on board. When we had all this in place, we moved to the third phase which was between 2003- 2010. This was our Growth Phase. This was the phase when what we were doing was building the foundation for ‘eating out’. All this while we were building our own foundation to survive and now we moved on to the next level.”

The model as Jatia very well says was very simple. Explaining it further, he shares, “It is all about value to customers, it is about accessibility and it is about the brand – which is menu, ambiance, look and feel and customer service. We believe if we get these three things right, then it is hitting the target bang on. We launched our Happy Price Menu  – the Rs. 20 burger in 2004 which was game changing for us. Customers found McDonald’s valuable, affordable and they also liked the product. So it was not about discounting a product that people did not like; it was about giving them value in what they liked. In 2009, we launched the Extra Value Meals once we realized that the customer understood our individual products. Recently we have launched our Extra Value Lunch. In our growth phase, we decided that from x number of restaurants, we now had to move to newer cities. I often had to hear why wasn’t I moving to places like Bangalore, Chennai etc. Our philosophy has always been – step by step. India is not going anywhere. It takes time. Whatever you do, do it solid and we did that. We made a lot of change in our ambiance and made the brand relevant to the Indian market. The name of the game is to keep evolving and being relevant to the market at that particular point of time. What worked for me 10 years ago, will not hold true today and similarly what is working for me now, shall be redundant in another couple of years.”

Adding on further, he says, “In 2011, we said that now is the time to accelerate. Now we have got the foundation right and we shall continue to innovate and innovate in every area. So now is the time to expand very aggressively. So what we have done in 15 years, we shall do in the next three years and what we do in the next 3 years; thereon we shall do that in the next one year. For me now, since I have a phenomenal team in this aggressive / accelerate phase, my role has changed; our challenges have changed. No more it is about dealing with things as they were before. Now it is about dealing with growth. Dealing with how can we see the business tomorrow…having a strong leadership in the pipeline. These are my challenges for the day. So I am just trying to make sure that I change fast enough or I will have to be changed. Basically, as long as you recognize that change is the only constant, you are good.”

Mentoring young entrepreneurs or brands which aspire to make themselves successful in the Indian market, Jatia shares, “Today people who are trying to get themselves in the Indian retail market are going too fast. I believe you cannot conquer the market no matter how deep is your pocket. The consumers are only going to evolve at their space. For e.g. if it took us 20 years to evolve customers in the US, India will take may be 5-7 years but it shall definitely not happen overnight. So all I want to share is that it is brick by brick. Be aggressive but at the same time don’t be in a rush to own the market, Get your unit economics right. There are different stages of development and in different stages, you use different strategies. My message is, see where your category is in terms of its evolution at that point of time. Get that right and trust me you will win. Don’t worry how fast others are going.”

Adding on to the business philosophy he follows, “My philosophy is that you have to face reality. Whatever the constraints, you have to develop your business around it. If you only keep crying and cribbing then you cannot move ahead. That is why to my mind there are no villains. You got to adjust to the environment around you and just move on.”

Sharing his views on the retail industry as on today (in India), Jatia minces no words, “I just feel we do not have enough talent and depth in retail today. It is not to do with the people. It is got to do with the age of the industry. So if your industry is just 5-7 years old, the maximum experience someone will have is only that much then. Bringing international talents is no solution as they do not understand the Indian market and by the time they do, the team gets restless and starts moving out. FDI is going to benefit Indian retail to quite an extent. It is going to structure the Indian supply chain. I do not see any reason for us to feat or stop FDI. Why do we need to be scared of them taking our market share? Instead, we need to compete with them and match their standards.”

An avid reader, Jatia’s current favorite is – Great by Choice by Jim Collins. A firm believer of whatever Paul Coelho writes in his book Alchemist, Jatia strongly feels that you just have to take the step and doors shall automatically open for you.  As for this favorite author, its Jack Welch for him. As he says, “He is the man for me. His thoughts and mine resonate and I like the straight, no-nonsense approach that he has in all his writings. Welch says – Face reality as it is, not as it was or as you wish to be.” In my company, I encourage people to tell me how things really are because if you don’t see the real issues, it can impact the business. I also follow Ram Charan’s writing as well. Charan discusses eight important skills for a CEO. He says self confidence is critical; those with self confidence are the ones who succeed eventually. You should have courage in your own ability. But you should not be arrogant. He also talks about traits that can interfere with success. For a CEO, ambition is important but if you use it to win at all costs, it derails you.”

– Zainab Morbiwala

As penned for STOrai 7th Ann issue

Chai – time with Basilur

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When Japanese scholar Okakura Kakuzo said – Tea…is a religion of the art of life he really wouldn’t have envisioned that decades down the line, someone would go ahead to position tea and its packaging in the category of luxury and premium products. A Sri Lankan based tea company by the name Basilur went ahead to not only redefine the most unassuming and  mostly taken for granted beverage but also managed to position it at par with any other premium product.

Not so long ago when a proposal came knocking at the girl’s door for a prospective groom, the meeting would culminate over a cup of chai at the girl’s house where members from the boy’s family would more or less judge the culinary skills of their to-be-daughter-in-law from the taste of the tea served. Tea-time breaks are a must for us – whether at home or at work. This simple yet powerful beverage remains indispensible as part of our lifestyle and it has had its share of adulation but more often than not, it is a beverage we have been taking for granted. Though with changing lifestyle dynamics, tea is now catching the fancy of people as a ‘lifestyle’ beverage with the introduction of flavored tea / green tea / iced tea / tea as part of cocktails etc. Tea began as a medicine and grew into a beverage. In China, in the eighth century, it entered the realm of poetry as one of the polite amusements. The fifteenth century saw Japan ennoble it into a religion of aestheticism—Teaism. The popularity of tea is evident from the fact that today there are kiosks for iced tea and on the menu of any restaurant or fast food joint, there are various options available for iced tea too! Cola major Coca Cola recently went ahead to even launch bottled green tea in Taiwan targeting the large tea drinking population residing there. So much so about tea to set the context of what is to follow.

The Basilur Story in India
The story of Basilur in India makes an interesting read. Perhaps the association of tea with marriage is so strong in India that the entry of Basilur in the country too happened based on an event related to a marriage. When Raghav Gupta  and his family were busy preparing for his marriage to take place in December 2011, the thought of gifting ‘tea’ to all the guests being invited for the marriage crossed their minds considering the Gupta family had business in Sri Lanka and they wished to gift something of the Sri Lankan origin. Now this thought further laid the seeds of exploring the options available and Raghav’s mother who was in total awe of Basilur and their marvelous packaging declared there couldn’t be any better option. The idea finally bloomed into the possibility of being the Indian distributors for the brand! Quite a story, isn’t it!

Adding further, he states, “When we approached Basilur for an order of 2000 packs, out of the blue they suggested a business proposal of us representing them in India. Now, we were looking at a new business vertical under SVA considering my younger brother – Abhinav Gupta had recently then finished with his graduation. Looking at the product and the potential, we said…why not??? Well, there has been no looking back since then. We returned to India, did a bit of our own research. We checked the market potential for a brand like Basilur in India which sold tea in the range of Rs. 6000 a kilo and more. Based on the feedback we received and also out of passion of food and beverage that we both brothers have, we decided to go ahead with it. Two months before my wedding date, the first shipment arrived and we were rolling all out then!” According to the Gupta brothers, the USP of Basilur is evident from their business philosophy where they have no intentions of being a part of the mass market. Add Raghav, “Fancy packaging, flavors and unmatchable quality remains our niche and since the beginning Basilur never aimed at being a part of the mass market.”

The brands has presence in about  The very fact that they joined hands with SVA in India to be their partners based just on a relationship building meeting shows that for them the business of tea is much more than just a ‘business’. Passion rules the brand and also connects them to their various partners across the globe. In Russia, they went ahead to create an exclusive label for a chain of supermarkets and they assured them of exclusivity of that particular brand thus refraining from supplying the same brand to other Russian stores and super / hypermarkets. With the Gupta family, the association was based on the meetings they had where all they took into consideration was the dynamism of Raghav and Abhinav and their lifestyle which was exactly what Basilur catered to.  Says Raghav, “From day one, all that we were told was to just keep the brand image in mind and not allow it to get diluted in quest for bigger volumes. Volumes were never thrust on us and they extend all possible support to us to set ourselves in the Indian market. Inspite of us not even featuring in their list of top 10 countries that they export to, they agreed to introduce ginger flavored tea for our Indian patrons.”

Brewing Further
Available at niche food and gourmet stores, Basilur in India was initially welcomed at Foodhall from where their journey began. Says Abhinav, “Future Group’s Foodhall helped us to gain an insight into the world of retail. With them, we initially began our journey and simultaneously we were also listing down the stores we would have liked to see ourselves in.” Initially, the idea behind introducing Basilur in India was to tap the gifting market specially keeping in mind the packaging of the product. They went ahead to suggest Foodhall to keep Basilur as part of the gift hampers for the festive season. The idea worked but simultaneously they also saw a considerable movement of the packets being picked off the shelves and that is when they thought of paying more attention to retail sale. Explains Raghav, “The strategy we adopted was similar to what a luxury apparel brand would adopt. Would they go about to stores asking for a shelf space or would they wait for retail stores having similar brand image to approach them.”

Pitching Basilur tea as a perfect gift for occasions ranging from weddings to festive to just about  anything, the Gupta brothers personally paid attention to the minutest of details  – be it in terms of maintaining relationships to ensuring that the customization of gift hampers was well executed. Reminiscing the arrival of the first shipment in 2011, Raghav shares, “Our experience related to our first shipment is imbibed in our memory. We were confused as to what would really sell hence we ordered a little of everything from the 200 SKUs. As against what we thought would sell well, we were in for a surprise when flavors we really didn’t think would sell actually generated a lot of interested. Till date, each shipment that arrives gives us some new thing to learn!”

Reaching the Boiling Point
The group went ahead to experiment with designing niche programmes to reach to their target audience. Apart from taking part in various trade shows, they would also go ahead and undertake special orders for setting up of tea counters at various high profile weddings / events. With an in-house tea sommelier in place, they take due care to ensure that the brand leaves an impression wherever it travels. Recently, they also got into a tie up with the Mumbai and Delhi Airports where they served 24 variants of our teas as part of a tea festival. Specially designed tea boxes with different flavors were kept before the audience to choose from the variety of flavors. The event generated a lot of interest specially because so far the only flavors that one can usually pick and choose from include masala chai, ginger / green tea and / or regular tea.

With the brand gaining popularity amongst its target audience, today they have huge corporate orders for gifting purposes which are then directly taken care of by the Gupta brothers. Shares Abhinav, “Today, people do not shy away when it comes to experimenting with various gifting options instead of sticking to mithais, chocolates and dry-fruits. Our product scores very well because of the exquisite packaging and not to forget the various flavors that we have to offer.” The idea of gifting Basilur tea as part of Raghav’s wedding helped them to tap the curious minds of their guests who are not a part of their regular clientele.

Adding Flavors
Across the years, the innovations to tap the market includes setting up of tea tasting counters at the high end retail stores that they are present in, keeping a tab of the regular customers and informing them of any new flavors / offers being launched, having a one on one communication with their customers to have a first-hand feedback and incorporate changes in their approach to reach out to them if necessary. Sharing details on the ‘Tea Tastings’ that they carry forth, Abhinav adds, “We do these in various ways. There is a fixed setup at locations such as Foodhall wherein guests can sample the teas and understand the differences in tastes/ flavors from the sommelier on site before buying. We do a range of private functions also where we offer tea tasting sessions for families and guests to learn about tea and the different flavors of tea.”

The group has also gone a step ahead to have a fully comprehensive and delightfully engaging website which not only tutors its patrons on how they can prepare their cup of Basilur tea but also provide options of enrolling for a membership which entitles them to receive a pack of Basilur tea every month. Commenting on this, Raghav says, “Online retailing – Only place where all our flavors are available. We offer free shipping across India and that really opened our eyes to the Indian market because we would receive orders right from Metro cities to Tier 3 cities. We have also partnered with Teach for India wherein we donate a portion of all our online sales.”

Explaining the concept, Abhinav shares, “We offer a different tea every month for an entire year wherein the flavor of each month is dependent on the season and every flavor will be unique. Each box will be sufficient to last the entire month. This concept is growing in India and have a small base but is increasing. People are enjoying the idea for themselves and also gifting it to their loved ones. The selection of teas is done based on a few criteria’s such as weather, client preferences and feedbacks, previous month selection, new arrivals as well as what we feel would be interesting for our clients.”

The Sri Lankan brand seems to be in safe hands of the Gupta brothers who are not leaving any stone unturned to create a niche for it in the Indian market place. Future plans include setting up of exclusive tea lounges in metros and tier 1 cities and the task looks do-able considering they not only have the required passion and enthusiasm to carry it forth but also hundreds of flavors to offer!

– Zainab Morbiwala

penned this feature for STOrai May – June 2013

Empty Malls? use them as Jogging Tracks!

Yeah! What else will you do with them? Massive structures built by Indian developers being too optimistic of the growing consumerism in the country all remain deserted and empty today and accentuating this is the most recent article appeared to today’s ET which states that the boom has burst, though, currently it is restricted to small towns and cities. But then, if I recollect from my experience in the industry since last 7 years, many of the upcoming malls in metros too changed plans mid-way (somewhere 2009 onwards) and converted their malls and shopping centers into commercial buildings.

Quoting excerpts from the Economic Times article: “The bubble has burst,” says economist Bibek Debroy. “There has been excess capacity in smaller towns and not so much demand. These boomtowns haven’t seen a huge consumption story yet and salary levels too haven’t increased the way they were expected to,” he says. Vacancy levels in malls across the country are growing at an alarming rate, says property consultancy Jones Lang LaSalle. In smaller towns, over a third of the space is unoccupied, as against just 7% in 2007. Supply of retail space has increased dramatically, but demand from retailers and overall consumption have dropped.”Many developers overestimated the appetite for retail in these small towns. They did not realise that the consumption threshold here was low,” says Ashutosh Limaye, head of research at Jones Lang LaSalle.

The entire mall culture in India started off on a wrong note. Crossroads in Mumbai failed to understand its target audience when they pioneered this concept way back in the early 2000. What were they thinking when they made it mandatory for visitors to flash wither their car keys or credit cards before entering the mall? Did they even care to do a simple research to find put that majority of the Indian population does not fall in the category of SEC A and B? Was that massive structure built only for the rich and super rich? But then it managed to create enough curiosity and generate interest amidst its peers to follow the bandwagon and open malls  after malls with little USPs to differentiate one from the other. When the space in the city was satiated, the bunch started exploring the tier 2 and tier 3 cities and towns convincing themselves that India was truly Shinning and these places were the future of the country. Really? Be realistic guys! If these places were indeed the future of the country then the youngsters from there wouldn’t be aspiring to come to the Metros for their work! Mumbai really wouldn’t be house-full all the time! Providing Shopping Cetners and a good F&B and Entertainment option is not what will bind people to stick to their hometowns. Creating employment opportunities for them through your malls will not do the trick either. You pay them but then who pays the people to come and shop at your malls and if people don’t shop then how would you make money and if you don’t make money, how on earth will you create a sustainable model of employment?

India is Shinning and yes, India is Shopping but the majority of it is still happening in city roads and local markets. Glamorous and glittering malls and shopping centers are good for recreation and to beat away the heat during vacations but otherwise, we still have a long way to go!

During the 6th Edition of The India International Shopping Forum, Anuj Puri from Jones LangLaSalle clearly stated, “Only people who are committed and are hands –on involved and have perseverance will survive. It is a product that will require a lot of financial stability. Those on the real estate side who believe you come out with a box that you develop and sell, than that is not the way ahead.” He spoke on how the 6 malls that he sold in the last six month; 90 per cent out of those were sold purely on the land value where no cost of construction was taken into consideration. The structures were slated for demolition to make way for residential complexes to come up. Puri attributed the failure of malls meeting with success in tier 2 and 3 to the herd mentality we have in India of following the West and having a common formula for everything. Here being, these malls blindly copied the deisgn that they saw being accepted in metros and tier 1 cities. The retailers started feeling a pinch to pay the rent and the CAM. Today, developers across the country are not being able to pay even the interest on the debt component with the rentals they charge and hence this is de-motivating the developers to opt for malls and shopping centers. Instead, developers see residential as more lucrative. Puri strongly advocated that for developers to make money they will have to increase their rentals. Otherwise there is no way that the math will have to stack up but then retailers are not in a position to pay more rentals coz their margins are limited. Many of them will have to re-capitalize their companies as their profitability is so low. They will have to find a way out of the interest they paying on their debts to better their profitability. If this simple math does not happen, we shall see more and more developers shrinking their malls and diverting it to having a residential or a mixed use of their land. There is a fundamental challenge today we facing as an industry.

– Zainab Morbiwala

Customer Loyalty ain’t no Child’s Play!

IMG-20130515-01181Let’s admit it…we all like gifts! Better than that we all like stretching our money to get the best from what we spend. Offers and discounts have a magnetic effect and they just manage to pull more and more money out of our wallets. Better still, the very mention of the word – Loyalty Scheme  unintentionally binds us to that retailer and invariably our next shopping happens at his store. Encapsulating the inception of loyalty programmes, Brian Pearson from LoyaltyOne shares, “I think the original loyalty programs were airline programs going back to American Airlines and The British Airways. They were the pioneers. This was back in the 1980s wherein the frequent flyers could collect points and redeem it for something free. Post the airlines, it was the hospitality industry and it was only towards the early 1990s that the retail industry started having strong loyalty programs for their customers. So to speak, we are sitting on something that is just about two decades old.”

Adding more to the history bit he says, “Originally it was just value add to the customers. Only later was it seen as a means of promotion and get people to consolidate more of their spending then they might have done in a more fragmented environment.”

That much for setting the context for what is to follow. Just as modern and organized retail is gaining momentum in India, each retailer is up against the other in offering his customer alluring loyalty schemes. Shoppers Stop set the ball rolling for them. Other’s followed. Swanky cards, email reminders of the point accumulated and how you could win more, SMS reminders etc etc.  There was bombardment of reminders and offers from across! For me personally, it caused immense irritation. So much so that today I just refrain from going to these MBOs and department stores which offer you reward points which are petty to say the least! I dont recollect using any of my reward points so far!

A couple of days ago, I was casually walking down an extremely local market in Mumbai in the area of Dadar. there are hordes of local retailers based there since donkeys years and yes, they have an extremely loyal set of customers. I was due to gift an everyday causal tee to my maid’s son and one of the shop had a good offer put up on its hardly visible facade. I went in and picked two tees, each for Rs. 300. Went ahead to the billing counter to pay and the person there just asked me if I had ever shopped at his store before. When i replied – No, he pro-actively just removed a folded card (the picture that i have put with this blog) which had a few rows and columns in it, attached my bill, wrote something in one of the columns and told me that if till November I shopped for another R. 1400 more then I would be entitled to a free gift of Rs. 200. Simple! No show off and pompousness about any loyalty scheme and information booklet or filling of a form with all my personal details including my birthday, anniversary, hubby’s birthday, pet’s birthday etc etc  and ofcourse  – no swanky card!

I walked a few steps ahead and there was this store of one of the brands I stock for my Indian ethnic wear. The brand is called Cotton Cottage. I visit the place one in approximately 2-3 months and pick up a kurti (top). I did the same this time and went to pay my bill and redeem my accumulated points on the loyalty card that I had. Guess what I get to hear… M’am, our system is down hence you cannot redeem. I tell them, I have it on message the points that I have but the lady is curt enough to cut me off with a – SORRY!! According to her, I could redeem the points on my next purchase. Well, if only she knew that I might not visit her store again!

To conclude, loyalty programe and loyalty schemes are good but then do brands really care to look at them the way they should be looked at? From my experience, in India, the only reason the modern retailers want to offer a loyalty scheme is to collect data and use it for promotional and marketing activities.

For all you big guys of modern retail in India who witohut a wink just ape the West…. local players like the one I visited at Dadar have much more to teach you!

– Zainab Morbiwala