MxMIndia

Category: PRODUCTS

  • At Balaji Wafers, patriarch Chandu Virani reluctant agrees to GenNext's plans to grow the brand with external investment

    Balaji Wafers at the crossroads: Grow solo or with an external investor?

    By Kala Vijayaraghavan & Lijee Philip

     

    In a sentimental outpouring reminiscent of the generational divide among the promoters of Bajaj Auto over choices for its two-wheeler business, Chandu Virani, the man who led the charge to build Balaji Wafers into a Rs 1,000-crore snacks brand, has expressed reservations on the plans of the next generation of his family to bring in an external investor and a professional management.

     

    “It is my old-fashioned view. I am not convinced yet that any multinational will take care of the Balaji brand the way we do,” the 56-year-old Mr Virani said, two days after a Bloomberg news report that PepsiCo, the world’s largest snack-food company, was among the suitors for the Rajkot-based company.

     

    Earlier this month, Balaji confirmed it had appointed advisory services firm EY to raise “growth capital investment” and was in talks with PE investors.

     

    According to Mr Virani, founder and managing director of Balaji, the decision to hire EY was that of his two nephews and son, who took charge of the business between 2000 and 2006. “The company is in a good place today and I am not sure there is a need to scale up,” he says. “Yet, I will not oppose the plan if it goes ahead. Maybe I am completely wrong.”

     

    Public airing of a difference of opinion between generations, in cordial circumstances, is a rarity in family-run Indian businesses. The best-known instance in recent years is that of Rahul Bajaj, the patriarch of Bajaj Auto, disagreeing with his son, Rajiv, on creating independent brands (like Boxer and Pulsar) and driving out of the scooters business. “I feel bad, I feel hurt,” Rahul Bajaj said in a 2009 television interview to NDTV on exiting the scooters business that symbolised much more than a two-wheeler and gave the iconic tagline, Hamara Bajaj.

     

    To which, Rajiv, seated next to him, responded: “I care less for a solution from emotions, I believe more in the magic of logic.” A similar difference – between holding on to a hoary past and letting go to create a new future – hangs over current conversations at Balaji Wafers.

     

    “Balaji is my life today,” says Mr Virani, who is staunchly opposed to selling the business. According to Keyur Virani, his nephew who is currently in charge of the business and is reportedly leading the investor negotiations, the family prefers PE investors as they will bring in a professional management. “Growth is important. We also need to look outside and have a sense of how the global market is evolving,” he says.

     

    “But it is not that we are handing over charge to someone else. We will be involved in running the business.” Last week, Reuters reported that Balaji was talking to PE funds, including Blackstone Group and Actis, to raise $100-125 million (Rs 650-750 crore).

     

    Terming it a “practical decision”, Keyur says: “Ultimately, a brand has to grow, and that may prove to be its downfall. But, at the same time, we will abide by Chandubhai’s view about not chasing growth so blindly that we are unable to handle it well or sustain it.”

     

    According to Rajiv Bajaj, MD of Bajaj Auto, in a family business, 20% weightage should go to the family and 80% to the business. “If we strive to ensure the business is doing well, the family will invariably be happy,” he said. “But if, instead, we seek to ensure that the family is happy, it’s no guarantee that the business will do well.” In a rapidly evolving market, he adds, each generation needs to adapt itself to circumstances that differ significantly from those faced by their predecessors.

     

    Family-business consultant Raju Swamy says Balaji Wafers has to focus on growth for the family’s sake. “If there is work in the family business for only three and there are six more, it leads to conflicts,” says Swamy, founder of Promag Consulting. “A small business may not be able to accommodate all of them. What the next generation is therefore seeking is natural.”

     

    Balaji was set up in 1992 by Chandu and his three brothers: Meghji, Bhiku and Kanu. But its seeds were sown between 1974 and 1982, when the brothers supplied potato wafers and namkeens to Astron cinema hall a school in Rajkot. In 1982, they started making potato wafers at their house in the same city. In 1992, they set up an automated production unit and started Balaji Wafers, named after a family deity, Bal Hanuman.

     

    The next generation started joining the business after 2000. Today, besides Keyur (33), who is the son of Bhiku, there is Mihir (29, also the son of Bhiku) and Pranay (29, son of Chandu). While these three focus on marketing, expansion and R&D, Virani spends a few hours every day visiting plants, talking to suppliers and dealers, and checking product quality.

     

    According to Mr Virani, Balaji Wafers currently has an annual turnover of about Rs 1,000 crore. The company’s products – wafers and namkeens – are priced about 40% below established national brands. Its presence is mostly in Gujarat, MP, Rajasthan, Maharashtra and Goa, where it is estimated to have a 65% share of the organised market.

     

    “Balaji Wafers enjoys a great brand equity due to three factors: affordability, availability and consumer focus,” says Jagdeep Kapoor chairman of Samsika Marketing Consultants. “It has transcended a difficult category in foods, competing with PepsiCo’s Lays and ITC’s Bingo. It has evolved bottom up and has tremendous scope to grow.” Mr Kapoor feels the company will be challenged while scaling up, and going from local to regional to national. “They have to grow state by state, in phases,” he says. “It is better to be a regional king than a national beggar.”

     

    Mr Virani professes to a dim understanding of the modern way of deal-making. “I am not bothered with investment decisions or making money,” he says. “Stock market listing, etc., is all paper wealth. How one grows from the roots by taking everybody along is true success.” His big concern is that Balaji’s partners – dealers, retailers and suppliers – may be affected if a new investor comes in. Mr Virani talks of the close ties with this set.

     

    Rajiv Bajaj feels that if the older generation gives way to the younger, a middle path is the best. “The older generation must provide the younger lot with a meaningful opportunity; and the younger generation must earn their position through performance.” “Ultimately, both must acknowledge that free markets value meritocracy, not aristocracy.”

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • BSB's cross-platform messaging application sees digital marketing campaign comprising four ad films

    Maadar… Taproot crafts bold digital campaign for Hike

    By A Correspondent

     

    Hike, a free cross-platform messaging app from BSB rolled out a digital marketing initiative for India. Tag lined ‘Keep Close Friends Close’, the digital campagn is aimed at showcasing how Hike can enable today’s tech-savvy youth to ‘keep close friends close.’

     

    The new ads showcase the dynamics of an individual with their close friends and how Hike helps them stay connected. Through the month long activation, the campaign aims at driving awareness and encourages the Indian youth to download hike to stay connected to their close friends.

     

    Commenting on the campaign, Kavin Bharti Mittal, Head of Product and Strategy, BSB said: “With the Indian youth being online more than ever before, a pure digital strategy made sense to create a connect with our users.”

     

    Santosh Padhi

    Created by Taproot, the creative compliments the brand’s youthful appeal. Said Santosh ‘Paddy’ Padhi, Chief Creative Officer and Co-founder, Taproot India: “Though we are not one of the first ones in India to bring this service, we are very positive that with the youthful brand positioning of ‘Keep Close Friends Close’ and the quirky communication will make sure Hike Messenger becomes the youth’s close friend soon.”

     

    When asked whether the use of words like ‘maadar’ or ‘boobs’ in two of the films would pass with the self-regulators and moral police,  Paddy clarified that the ads are not meant for television, but digital only. “Even we decide to go for TV for some reason, it will be the water or bike films.”

     

    While the friendly banter in two of the films- the one on the bike and the other pouring water on the head – was clean and fine, why get into areas like ‘boobs’ and ‘maadar’, we asked Paddy. “It’s a mix of things we have portrayed through these digital films – right from abuse to fight to all sort of emotions which close friends share,” he explained adding that these are first set of digital films, there are few more lined post the launch.

     

  • Amazon is here, but it's content to dip its toes while it waits for regulations to change in its favour. If and when they do, it will still face the task of doing something it has never done so far: crack an emerging market.

    Amazon needs to go local to crack an emerging market

    By Shelley Singh

     

    In just three months, MirchiMart, a Delhi-based online retailer of mobile phones, has seen its business jump by 50%. In the same period, another electronics retailer Universal, which runs 500 stores in South India, has shipped tablets and smartphones to every state and union territory in India. And AXA PDA Lounge, a Bangalore-based retailer of mobile phones and accessories, has seen its business grow by one-third, selling products as far away as Srinagar and Imphal.

     

    Behind the increase in sales and reach of these three retailers is their decision to sell their products also via Amazon.in, the Indian platform of the world’s largest online retailer launched in June. While this is doing wonders to their sales, it’s a small step to bigger things for Amazon India, but far from a done deal.

     

    Indian rules don’t allow Amazon to stock and sell products, which is how it earned 60% of its 2012 revenues of $61 billion (Rs 3,66,000 crore). So, as it bides its time for rules to change in India, it is dipping its toes in this $12 billion market by being an online marketplace, hosting and enabling 500 sellers like MirchiMart, Universal and AXA PDA Lounge. “If regulation permitted Amazon. in to be a seller, it would be good for the consumer,” says Amit Agarwal, vice-president and country manager, Amazon Seller Services. “We will be able to offer more choice.”

     

    In his 14 years at the 19 -year-old Amazon, Mr Agarwal has seen the company do that, with great purpose, force and results. Before he relocated to lead Amazon in India, the IIT Bombay and Stanford graduate helped build the marketplace business in the US, started its cloud computing business, did a stint with Amazon international and did two years as advisor to Amazon founder Jeff Bezos. He has seen Amazon power ahead in developed markets. And he has seen Amazon move gingerly in emerging markets, hemmed in by rules, local consumer behaviour and local competition.

     

    India is the 12th country for which Amazon has a dedicated website. It’s only its third emerging market, after China in 2004 and Brazil in 2012, and this is a space where Amazon is yet to stamp its presence the way it has done, say, in the US. “In Brazil, Amazon’s offering is fairly new and focuses on e-books,” says Zia Daniell Wigder, vice-president and research director, Forrester Research. “However, it will face competition from traditional retailers in Brazil, who have now gone online.”

     

    Amazon has been longer in China, which is also a much bigger market. According to Praveen Sengar, research analyst at Gartner, e-commerce in China is a $197 billion market, against $220 billion in US. “China will overtake the US as the largest e-commerce market in a few years,” he says.

     

    “But Amazon is not among the top five sellers in China. Even in developed economies like Japan, local player Rakuten is much bigger than Amazon. Companies have to localise to succeed in emerging markets and Amazon has been unable to do so in China.”

     

    The Local Challenge

    Like China, e-commerce in India is throbbing with local players-75-100 start-ups, driven by entrepreneurs and backed by venture capital. “It’s hard for an executive to compete with an entrepreneur,” feels Sanjeev Aggarwal, managing director of Helion Venture Partners. “The passion and energy they bring is very different.”

     

    Besides, adds Mr Aggarwal, these start-ups understand the local market-like lowvalue transactions, cash on delivery and supplying to 20,000 pin codes. “You can’t run retailing in India with executives installed from the US,” he says. “Amazon will replicate what has worked for it in other markets.” In developed markets, what has worked for Amazon is its large product catalogue competitive pricing, good customer orientation, a culture of innovation, deep pockets (it has about $11.5 billion in cash and marketable securities) and branding.

     

    In India, too, it will gradually leverage all of this.

     

    Globally, Amazon offers products in 40 categories and two million sellers, and draws about 100 million buyers. “Amazon is like Walmart -keep a huge inventory and sell at a low price,” says Anshul Bansal, who quit as vice-president in the investment banking division of Yes Bank in 2011 to become an online retailer of sarees on eBay, another online marketplace.

     

    In India, Amazon is currently offering 13 product categories and is planning to add more in time for the festive season.

     

    Mr Sengar calls it a “timely entry”. According to Pragya Singh of Technopak, a management consulting firm, organised, brickand-mortar retail has 7-8% penetration and does not reach small cities. “E-tailing is less than $1 billion at present, with plenty of headroom to grown, in sync with growth of mobile Internet users,” says Ms Singh, associate director, retail, Technopak.

     

    Ms Singh believes the tipping point in e-tailing is three to four years away.

     

    “VC-funded models don’t have the deep pockets to match global companies,” he says. Amazon too is in no hurry. “We are driven for the long term,” says Mr Agarwal. “We take a 7-10 years time frame for the seed to sprout and not three years or three months.”

     

    Mr Sengar sees Amazon making an acquisition. “It costs Rs 1,200-1,500 to acquire a customer, while an average order value per year is $200 (about Rs 12,000,” he says. “An acquisition will help it obtain customers who are used to buying online, besides warehouses.” Mr Agarwal deflects queries on acquisitions. “At, present we are focussed on customer experience,” he says. “I won’t speculate on future strategy. We are here for the long haul.”

     

    For now, Amazon is content to build its marketplace model by adding sellers from the pool of 14 million small and medium enterprises in India who have something to sell. That model is what eBay is founded on-it does not own warehouses and products are shipped directly from sellers-and it’s what Flipkart,the largest online retailer in the country today, launched earlier this year.

     

    While eBay, which has been in India for about a decade, has 30,000 sellers, Amazon has 500 currently. While sellers can express an interest to be on the Amazon platform, the company decides. “It’s a due diligence we do on the ability of a seller to provide a good customer experience,” says Agarwal.

     

    These, typically, include the kind of stock a seller has and its ability to complete an order on time.

     

    The Building Challenge

    Amazon does not charge sellers for listing products and has no cap on how many products can be listed. For the first year of its operations, Amazon has also waived its monthly subscription fee and transaction fee (about 10-15% of the price of an item). “Buyer ‘footfall’ is the biggest advantage sellers get on Amazon,” says Dinesh Agarwal, founder-CEO of IndiaMart.com, a business-to-business marketplace.

     

    Mumbai-based MX Information Systems has a retail outlet and 14 shop-in-shops or counters in large multi-brand retail stores or malls. It is also a seller on Amazon.

     

    Satish Bathija, its director, says that being on Amazon increases the catchment area for its products, helps sell on the back of a global brand, creates trust among buyers, and offers access to Amazon services like payment gateways, shipping and logistics.

     

    “We see online business grow faster than offline,” says Mr Bathija.

     

    A seller on Amazon can ship products directly or through Amazon, from its 150,000 sq ft warehouse on the outskirts of Mumbai. In case of the latter, buyers can see an FBA tag (‘fulfilled By Amazon’) alongside the product. “We don’t need to invest in manpower for shipping, packing and logistics,” says Mr Bathija, “though we have to pay for payment gateway (for credit-card sales).”

     

    Some retailers feel that if and when Amazon can sell on its own, it will threaten its portfolio of sellers, even as it promotes their interests. “Amazon does not share market research data with sellers and uses that data to push its own products,” says Mr Bansal, proprietor of Old India Republic, a retailer of sarees on eBay. “Small sellers feel threatened by a giant like Amazon.”

     

    Mr Agarwal, today, emphasises on getting the basics right. “It’s just been three months since we launched, and we believe consumers care more about low prices, wide selection and reliable delivery,” he says. “We are focussed on that.”

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Big Bazaar Direct marries the reach of the neighbourhood store with the weight of the Big Bazaar brand and the convenience of technology to home-deliver goods and discounts.

    Will Big Bazaar Direct hurt mother brand ‘Future Group’?

    By Kala Vijayraghavan

     

    Five years ago, the elder daughter of India’s retail man Kishore Biyani, had an idea to take all the promotional and discount deals offered by Big Bazaar, their flagship retail store, and pack it all into an outlet in areas not serviced by organised retail.

     

    Thus Future group, led by Ashni Biyani, set up a 600 sq ft store called Big Bazaar Best Deals in Mumbra, a suburb of Thane in Maharashtra, and started offering deals—in store, through a catalogue and via online retailing. That idea did not gain traction, but it has spawned another idea five years on: Big Bazaar Direct, which marries the reach of the neighbourhood store with the weight of the Big Bazaar brand and the convenience of technology to home-deliver goods and discounts.

     

    Kishore Biyani

    At its launch late last month, Kishore Biyani, CEO of Future Group, said: “If it works, it will be bigger than Big Bazaar”. The operative words here are two: ‘bigger’ and ‘if’. Big Bazaar is a Rs 11,000 crore operation, the mainstay of the Future Group, and the new business is essentially looking to leverage that brand name.

     

    After spending much of the last 18 months on defence, selling pieces of his debt-laden retail empire, Mr Biyani is back doing what he knows best: playing offence, testing another retail format. “I am confident about this one,” he says.

     

    “We are venturing into this after making most of the mistakes in the world.” Big Bazaar Direct (BBD) is the first of its kind, at least in India. Even competitors are admiring it for intricacies and ingenuity. They are watching keenly, but holding back judgement to see how it is execution unravels.

     

    “The idea is very solid, ambitious and very interesting,” says the CEO of a competing food and grocery retail chain, not wanting to be named. One man who has seen it from closer quarters, even shaped parts of it, is Damodar Mall. Till mid-2013, the chief customer strategy officer of Reliance Retail was in the Future Group.

     

    Mr Mall was a close aide of Mr Biyani and he even worked with 28-year-old Ashni on the Big Bazaar Best Deals concept. “If one gets it right, it can be very right,” he says. “But if it goes wrong, it can hurt the mother brand.”

     

    BBD invites people — anyone from shopkeepers to insurance agents — to become its franchisee by paying a deposit of Rs 3 lakh. Say, your local chemist becomes a franchisee. At your calling, the chemist will come home with a tablet, which has a listing of Big Bazaar products that have deals on them.

     

    You can see the deals and the chemist enters your order on his tablet. Instantly, this is transmitted to the BBD back office, and you receive an SMS. You pay the franchisee cash for the order, which is also acknowledged via SMS. The franchisee’s job ends there. Your order is now with Big Bazaar, which home delivers it in three to seven days.

     

    “We have realised that, even today in India, human intervention is required in e-commerce,” says Mr Biyani. Daughter Ashni calls it “aided e-commerce”. The BBD model, thus, is tying to join many dots by making it a win-win-win proposition. The customer, sitting at home, gets goods from Big Bazaar, at its prices and discounts.

     

    The franchisees earn a commission on sales for simply going door-to-door and punching orders on a tablet. The company gets a new sales force, one that capitalises on its local knowledge and contacts, and adds ballast to the Big Bazaar engine without the burden of organising working capital.

     

    Mr Biyani is leading this project himself, along with the Future Group’s start-up team. Flanking him are Vivek Biyani, his nephew, and a panel of five entrepreneurs who have worked with Mr Biyani closely over the years. Rakesh, Mr Biyani’s cousin and the other senior promoter, is involved in the project to the extent that the technology piece reports to him.

     

    According to Mr Biyani, a central thought behind BBD was their reading that Big Bazaar, today, has a greater mind share than market share. In other words, more people know about it than who visit it —primarily because a store is not in their town or is not close enough. BBD aims to bring Big Bazaar home.

     

    “Big Bazaar touches around 35-40% of the Indian population today,” says Mr Biyani. “BBD will be able to touch at least 70% of the population.”

     

    The new partners

    The franchisees will have to enable that touch. BBD has launched in Nagpur (where Big Bazaar has its national warehouse) and Amravati, both in Maharashtra, where it signed up 15 franchisees. Next up: Ahmedabad, Hyderabad, Mumbai and the National Capital Region. “The fulfilment should be checked in one market first before the scale-up happens,” cautions Mr Mall.

     

    BBD is currently inviting franchisee applications. According to Abhay Kumar, one of the five entrepreneurs, the applicants include kirana stores, homemakers, chemists, insurance agents and beauticians. But it’s not as if anyone who pays Rs 3 lakh will become a franchisee.

     

    The group of five entrepreneurs will vet and decide. This group is also selling BBD. So, for instance, it has targeted an interaction with 4,600 prospective franchisees in October across BBD’s upcoming markets.

     

    After the interaction and initial screening, this team meets with applicants in their operating locality to get a sense of them, their business and customer profile. “The biggest criteria we are seeking in our franchisees is entrepreneurship, their ability to collect customers,” says Abhay Kumar, a fabric distributor and garment manufacturer who has been doing business with Biyani for 27 years, and is part of the group of five.

     

    According to Mr Biyani, five things need to fall in place: product, brand, franchisees, technology and supply chain. The most critical and the biggest challenge, he adds, are the franchisees, who stand to earn 7-9% of the value of the goods sold through them. “They have to buy into the idea…and I am banking on them to sell the idea,” says Mr Biyani.

     

    “And believe me, the entrepreneurs who come and meet me ask a million questions about the venture. Their sign-in is not that easy.”

     

    The flip side

    Harminder Singh of Wazir Advisor, a retail advisory firm, feels the “biggest flaw” in the BBD model is the franchisee strategy. “Big Bazaar is not a business that has high margins. So, a partner may get impatient quickly,” says Mr Singh, founder and managing director, Wazir.

     

    “The partner is an individual with a mind of his own. To have control over one’s business model is a better idea.” Hasmukh B Rambhia, president of Mumbai Suburban Grain & Provision Dealers, a group of kirana stores in Mumbai, seconds that thought.

     

    “Maybe some years down the line, when modern retail distribution becomes stronger, it will make business sense to partner big retailers,” he says. “Today, local players have to play to their strengths, of the convenience of buying daily grocery products.” While a Big Bazaar store stocks, on an average, 30,000-40,000 products, BBD will offer 1,800 products in several categories, including non-food, apparel and accessories, furniture and home furnishing, packaged foods and electronics.

     

    It plans to keep adding products in time, and also offer foods and grocery, the back-end for which it is working on. It is also looking to reduce delivery time, the eventual aim being same-day delivery. While the sourcing team for the store and home delivery formats are the same, there are two separate teams on the supply side. “What deal entrepreneurs get will depend, to a large extent, on the supply chain and service levels,” says Mr Mall.

     

    “The machinery will have to deliver reliably given that it is a hi-tech business.” Adds Wazir: “If there are inconsistent supplies in a form that the Sahara Group experienced, customers will stop shopping.” And, as Mr Mall says, the resultant backlash could even hurt the mother Big Bazaar brand. The CEO of a rival firm quoted earlier says it will be an execution challenge to have several hundred diverse entrepreneurs buy into the same idea. “But then that is Biyani’s approach right from day one,” he says. “He hasn’t been afraid to take risks at all.”

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

     

  • Leading brands like Samsung, Peter England, Woodland register a 30 percent jump in festive season sales

    Slowdown? Top brands report 30% jump in festive sales

    By Writankar Mukherjee & Sagar Malviya

     

    The festive season sales have started off well in most of the country with marketers reporting up to 30% jump in year-on-year sales as consumers swarmed malls and markets in the first weekend after the Shraadh fortnight.

     

    Top retailers and brands such as Samsung, Peter England, Woodland, Van Heusen, Indigo Nation, Biba and Scullers attributed the positive start to festive sales to pent-up demand, 10% hike in dearness allowance for more than 80 lakh central government employees and pensioners, and the payout of festival bonus. “The festive season has started off in good spirit,” Harkirat Singh, managing director at shoes and apparel retailer Woodland, said. “There has been a modest 30% jump in sales, with consumers buying for themselves and gifting,” he said.

     

    Consumer electronics and durable-makers like Samsung and LG said that while sales in the east has picked up in the weekend before Durga Puja, in places such as Delhi and Mumbai, consumer enquiries, sales bookings and purchases of large-screen televisions and large home appliances such as side-by-side refrigerators and fully automatic washing machines have increased. Atul Jain, senior vice-president for consumer electronics at Samsung India, said the demand increased by up to 30% last weekend over the previous four days. “This gives us huge confidence as we enter the festival season,” he said. Samsung is targeting a 50% jump in sales in east and 40% rise in national festive sales to around Rs 3,500 crore.

     

    The festive spirit was most palpable in Kolkata where malls were choc-a-bloc this weekend and there were long queues in front of popular stores such as Sreeleathers and Baazar Kolkata on Sunday evening.

     

    Some like Sreeleathers kept their store open from 6 am till 10 pm. SB Dey, partner at the leather products retailer, said that despite extending operational hours, huge rush created long queues outside all his stores. At Great Eastern, the largest durable retailer in the east, sales started picking up from the last week despite heavy rains, its director Pulkit Baid said, adding that sales are up 15-20% over last year. The pick-up in consumer demand has come as a relief for retailers after lukewarm sales during Onam, Kerala’s biggest festival, last month.

     

    Future Group-owned apparel maker Indus League, which owns and sells brands like Indigo Nation, Scullers and Jealous Jeans, said it had to rush in fresh stocks to several outlets across several cities including New Delhi and Mumbai.

     

    “We did not anticipate such a huge demand since Onam sales were comparatively dull this year,” Indus League CEO Rachna Aggarwal said.

     

    Women’s ethnic fashion brand Biba said its sales have grown 35-40% so far this season, almost double the pace of its expectation. “During this season, we usually see a lot of traction in heavy clothing sets which cost around Rs 8,000. But this year, consumers are not shying away from buying garments priced up to Rs 20,000,” Siddharth Bindra, managing director at Biba, said.

     

    Men’s apparel brands Van Heusen and Peter England said their sales are growing 40% and up to 25%, respectively, in the east. “However, sales growth is yet to touch what it was in 2011,” Kedar Apshankar, chief operating officer at Peter England, said.

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Online retailer Flipkart.com has mopped up a further $160 million ( Rs 976 crore) from mostly new investors, taking the total in the fifth round to $360 million (Rs 2,196 crore).

    With $160 mn fresh funding, Flipkart’s $1.5-bn valuation comparable to P&G India, Tata Global Beverages

    By A Correspondent

     

    Continuing its capital-raising successes, online retailer Flipkart.com has mopped up a further $160 million ( Rs 976 crore) from mostly new investors, taking the total in the fifth round to $360 million ( Rs 2,196 crore).

     

    The latest funding values Flipkart, considered the Amazon of India, at over $1.6 billion, or Rs 9,760 crore. This is similar to its valuation in July, when it raised $200 million. Incidentally, Flipkart is worth more than the total market cap of all 15 listed retail companies, including Future Retail, Shoppers Stop etc. Among brand-led firms, Flipkart’s valuation is comparable with heavyweights such as P&G India and Tata Global Beverages (Tata Global Beverages owns Tata Tea, Tetley and Himalayan). It is also more valuable than 28 banks, including the likes of IDBI Bank, Union Bank, Central Bank of India, etc.

     

    Investment advisory firm Dragoneer Investment, investment bank Morgan Stanley Investment Management, private equity firm Sofina and Vulcan Capital participated in the latest round. Tiger Global – one of the first backers of the Bangalore-based company – also invested.

     

    “It’s the quality of the asset that is attracting investors,” said Raja Lahiri, partner at advisory firm Grant Thornton India. “E-commerce is a cash-intensive business. The top four-five players in this space will keep attracting investments in the next few years.”

     

    Experts point out that the latest fund-raising by Flipkart is an indicator of the growth potential of the Rs 10,000-crore online retailing industry, which is expanding at 54% annually, according to Internet and Mobile Association of India. E-commerce is expected to grow to $200 billion ( Rs 1.2 lakh crore) in India by 2020.

     

    Besides Flipkart, online marketplace Snapdeal has so far raised about $50 million ( Rs 305 crore) while fashion e-tailer Myntra received about $25 million ( Rs 152 crore) in risk capital.

     

    “These new investors are willing to participate again if required like Naspers, Accel, and Tiger. Investor alignment with our strategy is very important,” said Sachin Bansal, 32, co-founder of Flipkart.

     

    Started as primarily an online book store in 2007 by two former Amazon India employees – Sachin Bansal and Binny Bansal – Flipkart has till date raised $541 million (Rs 3,300 crore). In the first phase of this round, Flipkart raised $200 million from South African Internet company Naspers, venture fund Accel Partners, and investment firms Tiger Global and Iconiq Capital.

     

    The company has ventured into payment gateway solutions this year by launching PayZippy. Flipkart, which employs close to 3,000 people, has close to 10 lakh visitors on its website every day.

     

    The company’s revenues were Rs 217 crore in 2011-12, according to a filing with the ministry of corporate affairs. But in 2012-13, it soared to an estimated Rs 2,000 crore.

     

    “Flipkart has got its timing, investments and vertical business strategy right,” said Rajesh Sawhney, angel investor and founder of GSF Superangels. “It will be difficult to replicate Flipkart’s success again, as that phase of scale is already over. New entrepreneurs will have to mine newer verticals.”

     

    The company changed its model from being inventory led to that of an online marketplace earlier this year.

     

    As per India’s current FDI rules, foreign investors are not permitted to invest in branded online retail business. Some experts feel that the change in model is also attracting foreign capital.

     

    The participation by San Francisco-based Dragoneer Investment Group ratifies Flipkart’s success globally. A long-term investor, Dragoneer, has backed companies such as Facebook, Alibaba and 360Buy in the past.

     

    “All our investors think long term; this is patient capital,” said Mr Bansal. “Dragoneer also brings a network that is really helpful.”

     

    With inputs from Ramkrishna Kashelkar

     

    Source:The Economic Times
    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved
    Licensed to republish

     

  • Korea's competing biggies Samsung and LG have found their way to the top in India

    Life’s looking good for Samsung & LG

     

    By Ravi Balakrishnan, Moinak Mitra & Amit Bapna

     

    Call it a tale of two strategies. Korean chaebols Samsung and LG waged furious battles against each other and the rest of the Indian consumer durables industry a decade ago. Today, LG claims leadership, but that’s not enough. It wants a bigger slice of the premium market. Samsung shot up the sales and perceptual charts with a record run from its mobile division. It is now trying to transfer some of that equity to its durables business. As Nilesh Gupta, CEO, Vijay Sales puts it, “Most marketers are looking for profitability and not market share apart from the mobile category. They tell us if you cannot sell, don’t buy. They used to go halfway down the crease to hit the ball, now they are on the backfoot. Four or five years ago, they considered India an emerging market and were investing. Now they are telling India we want profits.”

     

    Both players however claim they are just as aggressive as always but are just showing it differently. BE examines how Korea’s finest are finding their way

     

    The LG Story

    With the launch of the G2, LG made its belated entry into the stratospheric premium range of mobile handsets. In a market where consumers are notoriously hard to impress, the phone has some unique bells and whistles to justify its Rs 40,000 plus price tag. LG India’s managing director Soon Kwon hopes such products will be if not the norm, at least less of an exception. And it better happen sooner than later given his ambition to make the Indian operations among LG’s Top 3 businesses globally, by 2015.

     

    LG currently claims a 30% market share for itself in the consumer durables space. According to Gfk figures sourced from the industry for August 2013, its share for microwaves is 39%, washing machines is 38%, refrigerators is 37%, TVs are at 25% and air conditioners at 23%. And yet, the company is in the throes of a struggle. For too long, it has been perceived as a mid-priced middle class oriented brand and for the last few years has been trying to become a more significant force in the lucrative premium segment.

     

    It’s the biggest challenge since its launch in 1997 and the years in which LG transformed from an unknown entity to a ubiquitous presence. Marketing consultant Nabankur Gupta observes, “It got into a volume game when multinationals were perceived to be playing on value. Apart from heavy advertising, certain products were subsidised.” Consumers soon believed they were getting a good deal across the portfolio: a multinational brand at an Indian price tag. Rajeev Karwal, founder and CEO of Milagrow who headed sales and marketing for LG at the time, recalls the many coups the brand pulled off. In a market dominated by exchange offers, LG launched a TV for 7,500 claiming to stand for no scheming. One of its campaigns featured the grandiose claim of making other televisions history. It was all backed by a unified concept says Mr Karwal: “We’d positioned the brand on the health platform which ran through all their communication whether it was ‘Golden Eye’ TVs for wrinkle free eyes or ‘Health Wave’ microwaves. By building innovative technologies and smart marketing, we came across as a lot bigger than we were.”

     

    The health platform is gone, today. More significantly, so is the frenetic momentum. The reasons vary depending on who you ask. To LG’s critics it is evidence of the brand becoming complacent and driven by diktats from the Korean headquarters. On the flipside, LG believes the strategies needed during a launch phase are quite different from those required to sustain and grow.

     

    Addressing LG’s move away from emotional advertising, Mr Kwon says, “For the last 15 years, we may have been known as more of a family oriented brand. But in fact we are also strong in the very high end. We have decided to focus on a different element to the brand which is technology.”

     

    A visible manifestation of LG’s newfound, some would say belated aggression is its mobile handset strategy. Rival brands dove headfirst into smartphones and even dabbled with the nascent tab category because it positioned them on the cutting edge. LG instead was sluggish on smartphones and ignored tablets entirely. It now has to run a lot faster. It’s doing so with a slew of models that offer more for slightly less and a strong dealer push. It’s stated goal is cornering 10% of the smartphone market by 2014 . Kwon expects a 150 crore turnover from the G2 alone.

     

    LG’s priorities on the marketing mix have shifted too. Like many of its contemporaries, it’s investing a lot more on the in store experience. It has around 2000 exclusive stores, a necessity in a market where modern trade has performed below expectations, according to Mr Kwon.

     

    Where LG claims its priorities have not shifted is coming up with India specific products. These are especially relevant to the rural sector where business growth is higher than in developed markets. LG’s mix for these markets includes the ever cool refrigerator and tougher LCD TVs. To reach these price conscious customers who do not have access to easy finance, the units are priced lower and their features and benefits communicated in detail, according to Sanjay Chitkara, head – marketing, LG India. The urban segment on the other hand will be the focus of LG’s Diwali campaign which according to Mr Chitkara is built around launches of premium television sets.

     

    However, others see confusion in LG’s attempt to straddle various segments. According to Mr Karwal, “Samsung changed completely around the launch of its smartphones. It began to internationalise communication and moved out of low end TVs and washing machines. They got the platform LG used to be known for — the cutting edge of technology.” As for LG, he believes, “The company is more focused on margins than marketing. A lot of their inefficiency and poor product planning gets covered up since they there is no alternative for the trade. If today there was a good marketing company that can synergise all its divisions they will have a run for their money.” Given entry barriers have only gone up since LG rushing the market in the early 2000s this falls squarely into the easier said than done category. Mr Karwal concedes, “It has one of the strongest nationwide distribution channels which itself is a competitive advantage.”

     

    LG has a new sign off these days with It’s All Possible. Instead of replacing the old Life’s Good slogan, the new line sits alongside it as a supplementary message according to Kwon, drawing the consumer’s attention to a vast assortment of products in different categories. It can also be seen as an internal affirmation: a brand reassuring itself that it can in fact try to be all things to all people.

     

    The Samsung Story

    It’s typically hard to define the point at which the fortunes of men and brands change. Not so with Samsung. It all changed in June 2010 with the launch of the Galaxy smartphone series. Suddenly from being one of the many consumer durable players dabbling across washing machines, air conditioners, TVs and yes mobile phones, it began to set the agenda for mobile telephony. It dethroned doughty stalwarts like Nokia and Blackberry and currently accounts for 31.5% of the Indian mobile handset market estimated to be worth Rs 35,946 crore according to a Voice & Data survey.

     

    Samsung executives still nevertheless have sleepless nights. There’s the all too real fear of complacency setting in. Atul Jain, senior vice president – consumer electronics, Samsung who has spent two years in the mobile division admits, “We are completely on the edge as far as the next wave is concerned. I’m not satisfied with S III and the Note doing well or with being the first ones to have launched LED smart TVs, two years ago. That streak in our DNA of looking for the next stage is critical. The lack of it is why a lot of companies fall by the wayside.”

     

    Samsung is trying to keep the momentum going. Vineet Taneja, country head – mobile business Samsung India recalls telling the global chief about what he believed the country needed, only to have a product in hand four months later. “Any other company might have taken 12 or 18 months,” he says, speaking of Samsung Grand a mid price smartphone which packed the gigantic screen size of the Note series into a more affordable model.

     

    For people who wanted the most high end devices and couldn’t afford them, Samsung was the first to start EMI schemes. Mr Taneja admits, “Affordability doesn’t necessarily mean cheap. It means I will make great products accessible so consumers don’t have to shell out so much.” It has helped Samsung move to outlets that were hitherto beyond its reach. Mr Taneja speaks excitedly of a small 2X2 store in Hyderabad with an EMI machine which guarantees a turnover. The demand is outpacing the financial system’s ability to keep up. Mr Taneja has met small shopkeepers in a tehsil at Hajipur, Bihar who wanted the EMI option in spite of there being no credit card holders. Asim Warsi, VP – sales, mobile business, Samsung says, “We would love to make, if we could, Samsung mobile like an impulse brand — people come, decide, buy and walk out — like a packet of chips.”

     

    Accessibility runs a lot deeper than affordability. One of the next big initiatives is getting local language interfaces in smartphones. Mr Warsi observes, “People in interior Gujarat or Maharashtra are not poor for sure — they’ll now have access to internet and mobile experience in a language that is their own.”

     

    Samsung’s task is to transfer the considerable equity gained via its mobile business to the other parts of the portfolio, inducing excitement even in age old categories like televisions and refrigerators. Given the speed of technological obsolescence in Smart TVs, it is trying to future proof its models. For instance, the evolutionary kit fitted into Smart TVs upgrades the set to the latest software and firmware a year down the line.

     

    Not all of its technology is that esoteric. Samsung’s tweaking refrigerators to work out how often they are opened, for how long and to run accordingly. It could lead to 40% cut in electricity bills according to Jain who used this as a plank for a theme campaign this March called ‘Samsung’s on, Saving’s on.’

     

    Chief marketing officer Rahul Saighal sees a healthy rub off taking place between Samsung’s various divisions: “Smart televisions are contributing to Samsung’s image as an innovation leader while our success with devices like Galaxy S4, Note 2 and now Note 3 are further reinforcing that perception.”

     

    Even a notoriously hard to please marketing industry is currently a part of the Samsung fan club. Says Nabankur Gupta, “Every phone with a Samsung badge spells value even at the lower end. The consumer will be favourably predisposed even when there’s a durable to be purchased. Both LG and Sony need to create that.” Gautam Talwar, chief strategy officer, Rediffusion YR believes Samsung is no longer competing with LG or Sony or Canon at a mother brand level but with Apple. He says, “It stands for new age technology and hence can pass the software codes to all other categories rather than the hardware codes which brands like LG land up owning. It needs to move the consumers from the utility and feature enriching platform to the magical world of what technology is capable of doing.”

     

    However, a former Samsung executive at a rival firm has a few words of caution, “Nokia got into the trap of believing that they know how to control technology, Samsung should be careful to avoid the arrogance that comes with the leadership position. Its approach has been primarily of a hardware manufacturer more focused on driving hardware specifications than (industry design) that would appeal. The seamless integration of software with hardware is something that is missing.”

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • The assignment entailed conceptualizing the positioning to naming and designing the brand – Avanse

    DY Works creates identify for Dewan Housing’s edu finance arm

    By A Correspondent

     

    Brand strategy and design firm DY Works has created and executed the strategy for Avanse, an all-new brand for Dewan Housing Finance Corporation’s foray in the educational loan category. The assignment entailed conceptualizing the positioning to naming and designing the brand.

     

    Talking about the brand, Alpana Parida, President DY Works, observed, that “the educational loan becomes the key element, the gateway to an enlightened future with the power to redefine a student’s future karma”.

     

    Observing the importance of the engagement, Benoy Joseph, Head of Marketing at Avanse, said “We were looking for a brand identity that would create a strong impact and establish affinity for the brand as a trustworthy entity with all the new age qualities that makes it a preferred and convenient choice for the consumer. When DY Works presented the idea to us, which positioned it as a fresh, contemporary brand, we knew it met all our requirements.”

     

  • Brands, both big and small, hire foreign models to sell apparel in India

    Desi brands go for ‘phoren’ models to sell wares

    By Shramana Ganguly

     

    Louis de Beer is a very long way from home. In his native South Africa, the 29-year-old worked at construction sites as an engineer, clouded all around in the heat and dust. It is a humble profession, without any frills and fancies.

     

    But in India, Mr de Beer exudes charm and (some level of) class as he preens at us from hoardings, catalogues and in-flight magazines. It is an intent stare – Mr de Beer wants you to check out his striped shirt, the finely cut trousers and his coiffed hair while his employers Jade Blue, a multi-brand men’s apparel retailer, wants you to buy the items.

     

    The engineer-cum-model is one in many foreigners who are being hired to sell clothing in India. And lesser-known brands in the country such as Jade Blue are giving a whole new meaning to ‘colour blocking’. There is only one colour that sells apparel (and allied products) these days – and it is white.

     

    There has been an influx of international models to India since 2008. With the crisis deepening, there has been a rise in those seeking work in India, for opportunities that continue to stay afloat amid global economic turmoil.

     

    “Financial risks are minimised in a market like India that continues to be secured and offers plenty of opportunities,” says Mr de Beer, who has taken to modelling full-time ever since Africa’s biggest economy took a stumble. He is on a roll in India, doing photo shoots for as many brands as possible until his stay ends in September.

     

    Indian Market a Big Draw Now

    “Almost every second billboard has a firang model,” notes Harshad Gadhvi, who runs a model co-ordinating agency.

     

    A trend that began with national brands has over time caught on with smaller brands. Regional brands like Blue Buddha, Asopalav sarees, Lady Lyka, Uvaam Clothing or even an e-tailer like Utsav Fashion has embraced faces from Western Europe, Latin America and CIS countries.

     

    Take, for instance, the modelling graph of a 26-year-old Spaniard, Javier Arrausi. He would go on tour in India until November, attempting to bag as many assignments as possible on the way. “Although not as remunerative as other countries, India gives you more work and hence, the earnings multiply. The market is not as crowded (with fair-skinned models) and hence, we have less competition for Indian brands,” says Mr Arrausi, who like Mr de Beer is a civil engineer.

     

    With the Spanish economy in a slump, he sees no point in pursuing a career in engineering and would rather continue to earn a living through modelling. “Although in a market like Germany, the work is five times more. But in India, in one month, you may land 30 assignments and hence, you end up earning as much,” says Mr Arrausi.

     

    Jade Blue promoter Bipin Chauhan explains the advantage of hiring international models for assignments. “Apart from adding to the charm of the brand, they deliver better results with minimum effort required from our end.”

     

    Uvaam promoter Ashish Mehta seconds that opinion. “They are focused and work sincerely for eight hours, are not fussy like their Indian counterparts.”

     

    Typically, an apparel brand gets 25 garments shot in a day, shooting as many as 20 frames with each garment. Model coordinating agencies based out of New Delhi or Mumbai get Rs 40,000-50,000 each day. The models get 70-80% of the payment, after paying 20-30% commission to the agencies on each such assignment.

     

    Assignments in India do not pay as much as other Southeast Asian economies like China or Hong Kong – where models charge per costume, unlike in India where they are paid on number of days worked – but stability of the market and the brands that thrive here became a big draw for those seeking work in the world of fashion modeling, says Ahmedabad-based fashion photographer Manish Lakhubha.

     

    With consolidation of Indian brands and those keen to project themselves as an international brand, it is now imperative to have models with a diverse look, says Ankit Mehta, who runs Inega Model Management in Mumbai. He explains: “We determine the potential of the model and identify brands that he or she ought to endorse. The hair, makeup and cosmetic category clients normally enforce upon a non-compete clause in the agreement, hence the model can sign only a single brand in this case. In other categories, models normally can work on multiple brands. The actual numbers are subjective to the market conditions at the time of the model’s visit and the receptiveness of the model.”

     

    Apparel brand Blue Buddha shot with international models in 2011. Its summer 2014 campaign, due to be shot in January, is likely to have a foreign face. “That is a trend and it adds to the appeal of our brand,” reasons Sanjay Gohel, MD of Zedex Clothing that owns the brand.

     

    Brands are attempting to up the style ante by cutting through the virtual geographical boundaries in the minds of consumers through fair-skinned models. Recently launched personal care brand Layer’r too features foreign models.

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Horlicks is currently in a frenetic expansion mode. It's revitalised its focus on biscuits launched in 1993 and is making forays into areas like noodles and more recently oats.

    Why (and how) GSK is ready with Plan B for Horlicks ?

    By Amit Bapna & Ravi Balakrishnan

     

    It’s a tough job keeping a brand alive for 140 years. It’s tougher yet trying to make it stand for something different after it has spent the bulk of its existence, defining a very specific category: in the case of Horlicks, a malted milk drink. But that’s just what Horlicks has been trying to do, especially in India.

     

    Arriving on Indian shores in colonial times, the brand acquired enormous equity post independence, especially in the East and South. It accounts for 46.4% of the approximately Rs 5,000 crore health food drink category. The Indian subcontinent is currently the brand’s largest market, accounting for 70%- 80% of global volumes. And also the best site for experiments in seeing just how far the brand can go.

     

    Horlicks is currently in a frenetic expansion mode. It’s revitalised its focus on biscuits launched in 1993 and is making forays into areas like noodles and more recently oats. This is hardly unique: many legacy brands are in a similar rush to stand for a lot more – Lifebuoy and Pears for instance, which have expanded into hand sanitisers and face wash.

     

    In the case of Horlicks though, previous attempts to stretch the brand have been problematic. NutriBar, an energy bar launched in 2009 has been withdrawn as also flavoured milk which hit the market around the same time. According to marketing consultant Harish Bijoor, the taste profile of these products militated against expectations from the brand.

     

    It tried to get into the confectionery space with cream biscuits only to back out. Horlicks is now focusing on the high function space with nutritional biscuits. Says Seema Gupta, assistant professor – marketing, Indian Institute of Management, Bangalore, “Biscuits is driven by taste or habit, and fortified calcium and nutrients is not the prime mover of the category.” It can be an added benefit if the variety and taste is as good as that of the entrenched brands, she adds.

     

    The foray into food, currently contributes to around 10% of Horlicks’ share. Of these, biscuits still lead, with recent launches like noodles performing below expectations. At the moment, Horlicks is back to the drawing board, launching oats, diversifying its biscuit portfolio and tweaking noodles. Says Jayant Singh, executive vice president – marketing, GSK Consumer Healthcare, “We found that 40% of households are using noodles for breakfast. When we launched we were operating in all segments but then moved in the higher end, healthy multigrain area.” Adds Zubair Ahmed, managing director, GSK Consumer Healthcare, “Currently we are relooking at our entire positioning and are revisiting the category.”

     

    It’s betting big instead on nutritional and digestive biscuits, as a healthy snacking option and oats to get a larger share of the breakfast table. At 40% annually, oats is the fastest growing segment in the breakfast cereal market valued at over Rs 600 crore. Horlicks is a late entrant in a market packed with Quaker, Saffola, Britannia and Kellogg’s. Starting with white oats in 2011, this year has seen the launch of flavours. On this front the brand is facing a bit of friction and as per industry sources there is a divided house internally.

     

    There is a school of thought that feels the masala association can lead to equity dilution. Says marketing consultant Sunil Alagh, “In many ways, their hands are tied by the UK headquarters who decide what can and can’t be done. They are obsessed with serious health attributes – which is right for their core malt drink. But in snacking the consumer in India is not ready yet. Maybe they could go in for a sub brand since the mother brand is so strongly associated with health.”

     

    It’s a classic chicken and egg conundrum: variants and extensions are on a low base and for them to achieve scale they need push on all sides, which often does not happen due to an over-crowded market, points out the CEO of a brand consulting firm, on condition of anonymity. In Horlicks’ case since the core brand is consumed mostly by children (over 80%), most resources are spent on increasing off take or salience. Even within the milk food drink space, it becomes very difficult for variants, for example, for women or diabetics to create the kind of impact that is required for behaviour change, he points out.

     

    Horlicks is not relying solely on its new portfolio. Its flagship is becoming more accessible to rural markets with SKUs ranging from Rs 5 sachets to a 2 kg pack costing approximately Rs 300. “We have seen our volumes grow 300%-400%. As a part of our access agenda, we look at having close to a billion serves next year,” shares Singh.

     

    By all reckoning, the brand faces an uphill slog. As Dr M G Parameswaran, executive director & CEO, Draftfcb+Ulka, puts it, monolithic brands can get into closely related categories, but cracking segments with different product codes is difficult. Marketing consultant Sunil Alagh who claims to have taken Horlicks biscuits from a Rs 40 crore to a Rs 100 crore business in 18 months in a stint as advisor, points to a more severe problem: “The first rule of thumb is to ensure that you have the best team and never use the existing sales force.

     

    This is because initially the sales tend to be low since it’s a new product. The apparent rewards seem less and it requires more work. No matter what you tell them, the sales team will spend 90% of time on the existing products and only 10% on the new. Brand extensions require the primary task of getting your team out of their comfort zone.” In 2010, when he advised Horlicks, he recalls the biggest challenge was from within. He was able to grow the biscuit category only after insisting on a separate sales force.

     

    The other problem is more intrinsic to what Horlicks stands for. Health was always its stock in trade; an outlandish ad from the 1930s claimed a cup before bedtime prevented “night starvation.” However, health has become an almost generic proposition flogged by everyone from air conditioners to chewing gum. Noodle category leader Maggi has a line that says “taste bhi, health bhi”; by focusing on health, Horlicks is trying to sell fun categories in a serious manner. As Mr Alagh puts it, “the biggest problem and opportunity for the brand is that in the East and South it’s viewed as something that’s a preventive and in the other half of the country its associated with ‘cure’.” So, can the 140 year old learn a few new tricks?

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Titan Watches' 'Giftology' research reveals 55% of Indians find gift-buying for their partner (spouse, boyfriend and girlfriend) the hardest choice of all

    Oh dear! Indians find gifting to partners a pain

    By A Correspondent

     

    Over half of Indians find their partner the hardest person to buy gifts for, with men being particularly perplexed by the prospect; 59 percent of them find their partner’s gift the toughest choice of present to buy compared to 46 percent of women, according to new ‘Giftology’ research by Titan Watches.

     

    The research also reveals a pronounced difference in ‘gift perplexity’ levels between age groups; a staggering two thirds of Indian 35-44 year-olds find selecting their partner’s gift the toughest choice of all, compared to just 32% of 18-24 year olds who appear far more comfortable with the process.

     

    When it comes to receiving gifts, however, Indians do overcome this particular confusion with ease; with 60% revealing that their spouses and partners still give them the best presents each season. They have a far better track record than Indians’ friends, who systematically buy their worst gifts for each other during the festive season; according to the research, 38% of Indians receive their worst gifts from their friends.

     

    Rajan Amba, Titan’s Global Marketing & Product Head, describes the Giftology research as an insightful look at the trends in gifting that the Indian customers will face this festive season.

     

    “Some of the findings will certainly strike a chord on both sides of the gifting process. While Indians find it hardest of all to select the right gift for those closest to them; in practice, the majority still rise to the challenge – 60% of respondents still cite their partner’s gift as the best of all. Giftology is a science which – like a good wine – gets better with age; while only 20% of 18-24 year olds find it easiest to buy gifts for their partner, that figure more than doubles (46%) amongst gift givers aged 55 or over,” said Mr Rajan highlighting another of the survey’s key findings; the fact that friends seem to receive the worst presents from each other.

     

    “Friends are consistently the worst gift buyers; it’s also notable that they are – however – rarely cited as being difficult to buy gifts for (just 9% consider them the hardest gifts to purchase). In light of this, it appears that Indian’s consider friends’ gifts a pretty straightforward purchase; perhaps they don’t dedicate as much care and attention to the selection as they could. The result; the least satisfying gifts all round,” Rajan asserted.

     

    “In short, the more care and attention we apply to the gift process – i.e. the higher the level of ‘gift perplexity’ – the better the result for both giver and recipient. Now, there is a valuable insight this festive season!”

     

  • Marketers have hit the rewind button. From Rolls-Royce and Bacardi to Louis Vuitton and Fuji, top brands are touting their roots to be on the ball this season.

    Brands rewind to move fast forward

    By John Sarkar

     

    Marketers have hit the rewind button. From Rolls-Royce and Bacardi to Louis Vuitton and Fuji, top brands are touting their roots to be on the ball this season.

     

    Take Louis Vuitton for instance. After flirting with fashion, the world’s most counterfeited brand has gone back to what it does best, make high-end luxury luggage. It is also pitching to its well-heeled Indian clients a new book, which is the first comprehensive taxonomy of its women’s handbags that date back to the turn of the 20th century.

     

    In the meanwhile, Indian bike maker Royal Enfield has launched the Continental GT, a modern take on its popular cafe racer from the ’60s. And following a disastrous first innings, Italian scooter maker Piaggio is riding back into reckoning in India on its new Vespa, whose classic lines hark back to the times when baby boomers took over the roads.

     

    “Top brands are flaunting their heritage to stand out from the crowd. New generation Indians are more connected and well travelled. They want to know what a brand stands for,” says V Sunil , executive creative director at Wieden+Kennedy India , the advertising agency behind the popular Royal Enfield Continental GT campaign . That’s what Triumph Motorcycles, the 111-year-old British brand known for its retro-modern bikes, will be counting on when it enters the premium end of the domestic motorcycle market in the next few days. Along with Royal Enfield, Norton and the now defunct BSA, Triumph enjoyed a loyal fan following in India before the Japanese came in with their cheaper and more efficient machines.

     

    To automobile connoisseurs , Rolls-Royce Motor Cars is best known for the ‘waftability’ of its cars. However, a couple of months ago in Mumbai, the British luxury carmaker introduced the Wraith, a powerful fastback inspired by its vintage grand tourers. “Wraith revives one of the most famous Rolls-Royce names first used for a production model in 1938,” Herfried Hasenoehrl, Rolls-Royce’s GM for emerging markets-Asia , told TOI. “The name expresses the character of the new car by alluding to a powerful force, something agile and potent.” Industry experts feel that this bold move will allow younger and more adventurous buyers in India to warm up to the iconic 109-year-old automobile marquee.

     

    Well, maybe. But brand guru Santosh Desai has a theory about the business of buying and selling nostalgia. “It’s fuelled by an overdose of digitisation ,” he says. “Technology has left Indian consumers very jaded. They crave for the human touch — the roughness, feel and texture of handmade products of the eras gone by. So now, if you want to experience the scarcity of an era, you have to fork out a premium.”

     

    This may have resonated within the ranks of Japanese companies too, hailed by many as the true torchbearers of digital technology . Four decades after launching its original mass produced superbike, Honda is reviving the lineage of the hugely popular CB750 with the retro-modern CB1100. And in a booming domestic market ruled by digital SLRs and point and shoots, Tokyo-based photography and imaging company Fujifilm is capturing the big picture with its slightly expensive X1 series of cameras, reminiscent of photography’s early days with metal-milled analog dials and leather clad bodies. “We were a little slow off the blocks to make the transition into digital technology. And the X1 series helped us overcome that lag,” says Rahul Pandit, executive VP, Fujifilm India. “It got us instant attention in India since it looks so retro and it showcased our rich heritage in film at the same time.”

     

    The trend has moved on to other sectors as well. While liquor brands like Belvedere Vodka, Grey Goose, Jim Beam and Bacardi are focusing on showcasing their traditions in new campaigns, a significant number of fashion brands are increasingly finding out new ways to connect with their roots.

     

    British designer label Burberry, best known in recent years for women’s handbags and fashion, witnessed a huge spike in sales this year by re-establishing itself as a menswear retailer. Similarly, fashion house Fendi is funding the restoration of the iconic Trevi Fountain in Rome to bolster its Italian connection. Says Pietro Beccari, chairman and CEO of Fendi: “This project allows us to once again reinforce our geographical and cultural Roman roots, which we are very proud of.”

     

    What’s next? Watch out for a qwerty tablet!

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish