Now, buy your favorite alien!

While this was the most spoken topic among the advertising and marketing fraternity for over 6 weeks during and after the IPL 2009, the concept still lingers on in our mind. I am referring to the Vodafone Zoozoo – an alien like creature that made the most of the recent Indian Premier League (IPL) 2009. IPL was the brainchild of serial entrepreneur and cricket fan Lalit Modi, who hit upon his goldmine idea based on the various leagues and clubs that play different games, mainly football and soccer in the west. Team Franchises are thrown open for bids and usually, the rich and famous buy them for increasing their popularity and wealth, while also increasing their Brand/firm presence. Team members are then chosen/ selected/ bought after committing several thousands of bucks by their respective franchisees. The first IPL held in 2008 was a runaway hit in India, while the second edition in 2009 was mired with controversies – due to the elections for choosing the new Parliament, and security reasons, the franchisees decided to move the show to South Africa as the former Government refused to promise fool-proof security for the events.

Since the IPL was played outside of India, the excitement levels among fans and viewers was much higher – the viewership also surged quite a bit compared to the previous year, thanks to higher penetration, bigger marketing budgets and adding new viewers. Various Indian brands paid large sums of money while fighting for screen-space and mind-space. Among them, Vodafone stood tall and popular. Vodafone entered India in 2005 after acquiring a major stake in the former “Hutchisson Essar” that was owned by the Ruias of the Essar Group. Since then, the former trade name “Hutch” was slowly replaced with “Vodafone” all across the country. The advertising campaigns showed a humble Pug – with their most famous tagline “Wherever you go, our network follows”. This campaign also had its share of controversies – from animal lovers to organizations that support the cause of cruelty to them, (have you ever heard of prevention of cruelty to humans, children of sex-workers, orphaned/ handicapped children, etc. !!??!!) the rich, the famous, the unheard of and the wannabes, all trying their best to gain scores on their popularity charts.

For the IPL, the creative teams at Vodafone and their agency Ogilvy wanted to send a different message with a basic question in mind – how to increase ARPUs or Average Revenue Per User. This is the fundamental measure of the telecom companies and with an existing price of Re. 1 per minute for calls made across the country, each player was trying newer ways to increase their revenues. VAS or value-added services is an important source for these companies and that is what Vodafone and Ogilvy decided to focus on. And thus was born the concept of Zoozoos – an alien like creature that has a big fat potato body and egg-shaped head with similar features as a human – that could walk, talk, sing and cry. Through this, they were trying to convey the same emotions as a human would. These low-cost production ads (that cost approx INR 3 Crores) had no celebrity endorsements – a variety of telecom operators have always used and during the same time, Airtel was using Madhavan and Vidya Balan while Idea was using Abhishek Bachhan. When the new Zoozoo ads hit the screen, it was refreshing – the young and the old took notice of what was being conveyed (mainly in the urban areas while their counterparts in the rural/semi-urban areas found it difficult to comprehend). There used to be times during the second week of the IPL when viewers were so glued to their television sets that they were actually waiting for the new Zoozoo ad!

While the campaign did extremely well, sources say that it did well in terms of collections too. A friend of mine who works for Vodafone conveyed that in the 8 weeks following the commencement of the new campaign, VAS incomes increased by over 150% in the top 4 circles that the operator is present. Quite an achievement.

While the faithful pug remains so, the Zoozoo was given special preference – that they would be used in the form of Merchandise and would be sold. Shoppers Stop, India’s largest Department Store chain has got the exclusive rights to sell the Zoozoo merchandise at its outlets. While the deal was announced a month ago, the merchandise have already started arriving at the stores and could also be purchased online. At prices starting INR 299, this is one sure-shot hit among shoppers – of all age groups. And I am sure this is going to attract newer footfalls into the stores! Usually, when a new campaign commences at Retail stores, footfalls increase by 30% on an average. Am not sure about this one, but am sure it would only do good in the near future, for Shoppers Stop and fellow retailers inside like Café Coffee Day!

So, rush to your nearest store to grab the merchandise – whether to wear to college or to work on a Saturday, or to the tennis academy or simply to stay put at home!

GMR, GVK and air travelers in India

It’s already over a week since I moved out of the Bengaluru International Airport and an “Airport Retail” perspective, but I am still somewhat connected to the Travel Retail business as Café Coffee Day operates across the key airports in India. Indian airports are joining the BIG league with Indian corporate houses actively engaging into airport development as private partners to the Indian Government’s initiative of privatizing the airports. Since the last nine years, five out of over 75 airports in India have been privatized – Cochin, Bangalore, Hyderabad, Delhi and Mumbai. These airports together handle over 70 million passengers (out of 100+ million air passengers) every year. The Indian aviation industry has been growing at a CAGR of over 15% over the past few years and this is expected to continue until 2020.

Out of the five airports, Delhi and Hyd. Airports are co-owned by the GMR Group and Mumbai and Bangalore are co-owned by the GVK Group. The GVK Group announced on 05 Nov. 2009 that it has picked up a 12% stake in BIAL, the company that operates the Bangalore Airport from one of its promoters, Unique Zurich Airport. Both the groups are large Industrial houses with varied interests across Infrastructure, Power, etc. Both the groups have their promoters and their families actively involved in the management of the in the business and the family name is projected as the face of these projects. Together, they are expected to invest over 40,000 Crores (USD 10 billion) over the next 15 years into Airport expansion and development.

The modernization (work-in-progress) at Delhi and Mumbai airports shows the efforts undertaken by both the groups amidst stiff resistance from various Unions of the Airports Authority of India (AAI), the erstwhile operator of these airports, public outcry for loss of land & livelihood and political & bureaucratic interference in decision making. However, the outcome is welcoming to see – new structures all around, reconstruction and new construction of airside facilities including the Runway and most importantly, the Terminal Building. From curbside parking management to commercial facilities inside the Terminal, from lounges to toilets, things seem to be very well progressed in all ways. The choice of commercial offering is quite interesting – an eclectic mix of Domestic, Indian and International Brands which seem to be well accepted by passengers.

The four airports would handle over 60% of the total air traffic in India and the two groups are the ones leading this initiative. While Hyderabad and Bangalore are Greenfield airports that commenced commercial operations in March and May 2008 respectively, Bangalore is expected to initiate an interim expansion in 2010 with the surge in air-traffic. While the single runway would remain, the terminal building is expected to be substantially increased to accommodate the growth for the next 3-4 years by when the new terminal and the second runway would be in place. Hyderabad, on the other hand will saturate its Terminal space in the next 5-7 years and thereon, will also have a second Terminal and Runway. Mumbai will have its new and swanky Terminal for Domestic operations by early 2010 while Delhi will have the much talked-about and hyped Terminal 3 by the middle of 2010, well in time for the upcoming Commonwealth Games.

So, what’s in store for air travelers? A lot! To begin with, Indianness. Indian consumers (even air passengers in a way) are quite different from their western counterparts and this is clearly visible in their consumption patterns. Where in the world would you find air passengers enjoying hot Idlis and Vadas, Rotis and Rice or shopping for Diamonds and Watches at 7am? Where would you find air passengers enjoying a chilled beer with dosas and paneer tikkas or shopping Denims and T-Shirts at 7pm? Point to note is that most of such food is cooked and served hot – this needs a larger kitchen area than in the west where the majority of the food that is served is cold and from the chillers! If this needs to be done at the terminal level, adequate care needs to be taken while designing and planning the same. This is just the tip of the ice-berg; there are many more – higher capacities of electric power (since most of Indian food is otherwise cooked with LPG), seating space with tables (since Indian food is usually served on plates and trays), etc. And most importantly, the local identity at the airports – something that is sometimes loud, but certainly present at various international airports such as Dubai and Singapore. And a lot more to look for!

An Indian powerhouse is formed, claimed The Moodie Report, the world’s most read travel retail website while announcing the news of GVK’s strategic alliance with Zurich Airport. The Indian and International media have been covering this extensively over the past 24 hours (I get atleast 2-3 alerts on Google every half an hour!). More than the coverage and the usual media-hype, it is the substance of the news that’s more important for passengers. Like any other fellow passenger and as a representative of the Concessionaire at all the leading airports, I am quite excited about the upcoming opportunities. And I stand as a proud Indian today, looking at where the Indian companies are taking Indian Aviation infrastructure to. Jai Ho!

Grab and Fly

Air Travel in India is picking up slowly, but steadily once again, and this is visible in the numbers reported by International and Indian-origin Airlines and Airports over the last two quarters. For a 12 month period ending Sep. 09, over 90 million people took to Indian skies - that's a mindboggling 250,000 people every day. This includes departing and arriving, domestic and international passengers (pax.). 75% of pax are domestic while the rest are international - and that's approx. 190,000 pax. In this, over 40% fly Low Cost Airlines; that's over 75,000 pax everyday.

Low Cost Airlines have been confused with Low/No frills airlines in India. Globally, No-Frill Airlines such as easyJet and Ryanair do not provide many services on ground and on air to pax. Their turnaround time (duration on ground at the airport between a landing and take-off) are minimal, between 40-50 minutes per location and the aircraft spends more time on air (hidden from the public eyes) rather than being seen on the tarmac, more as an advertising and brand-building activity, like the Legacy carriers. Legacy carriers or full service carriers operate on a hub-and-spoke model - they bring pax. from several cities and pass them on different flights to other cities; and are those which provide a host or services such as check-in & security check assistance by ground staff, lounges for pax. of various seating classes such as business, economy, etc. and F&B on ground (in case of flight delays) as well as on air.

Low cost carriers actually focus on "lower cost of operation" which means leaner staff on ground and on air. These airlines encourage pax. to check-in before they visit the Airport or to use the self service kiosks rather than the manned counters which are fewer in number and take more time. Ever since the launch of Air Deccan, the low-fare regime started in India. Although the airline followed most principles of a Low-Cost airline, it was also instrumental in bringing the "price-war" between the airlines. Suddenly, the big boys were offerring throw-away prices that the common man grabbed with ease and hapiness. One merger, one take-over followed and a few closures are in the offing. But even these airlines may pull off with the increasing domestic air traffic. So, Low-cost airlines and Low-fare airlines are not to be confused really.

Aircraft food is generally abhored by frequent travellers (by popular definition, these are pax. who undertake over 12 trips a year) and prefer to eat at the Airport Terminals or outside. These are also pax. who are considered to be well-traveled and a bit more evolved than their counterparts in understanding and appreciating the Airport F&B offerring such as variety and quality, not to mention the superior Customer Service (in comparison to what was available earlier). In many parts of the world, it's quite common to see Starbucks, McDonalds, Illy and many international brands at airports which provide the continued offerring to its patrons. However in India, this trend is quite new, probably a few years now. The first few organized F&B retailing outlets were commenced by India's largest chain, Cafe Coffee Day - with outlets across over 35 airports, this is the largest Travel Retailer in India at the moment. Mumbai CSIA, India's busiest airport where I was passing through today has over 11 touch points across various locations.  Organized retail footprint at Airports was pioneered by Bengaluru International Airport when it was under planning and construction stages between 2005-2008 where Cafe Coffee Day operates three outlets.

With over 75,000 pax. who fly Low cost airlines which do not provide (complimentary) F&B on board , that is already a huge market potential. Assume 30% of these pax. would consume at Airports and if each spends INR 100 per visit, the total turnover is approx. over INR 25 lakhs everyday! And among the rest, if 50% of them, ie., 25,000 pax  spend INR 40, that is over 10 lakhs. And such multiplication (which is not complex) is anyone's guess while using some common sense and a calculator. However, the BIG picture is the impending F&B opportunity at airports. Today, more and more passengers, irrespective of whether they fly Legacy carriers or Low-cost, are preferring to consume at the Airports. Bars and Restaurants are added attractions and it is quite common to see pax. arriving early to the Airport to have a quick bite of their favorite food or to have a drink - one for the runway! as I always say.

With more and more newer air passengers getting added everyday, this is one opportunity that cannot be missed. And Cafe Coffee Day would only continue to lead the way!