Buying Cars Online is Passe

After coming back home from the Voting Booth, I was sipping my 3^rd cup of coffee watching breakfast news on Tv. I showed my kids and wife, meanwhile two AVs of Tata Safari, the one which was produced in the late 1990s and the one produced this year. They were pretty impressed than I thought, honesty. Then I showed a Youtube Review of the vehicle. Though the reviewer spoke in Hindi, which kids do not understand exactly, he showed the features of the vehicle one after the other and having spent all their life in a single 4-W model, that is our beloved XUV500, they were mighty impressed with the newness that the Safari bought to experience. And mind you, all this even as we were watching a review of the model on a SmartTv. 

One day in 2012, my wife and I went around looking for an upgrade to our Hyundai Verna. Having shifted to Chennai from Bangalore and with both our parents around here, we thought a slightly larger vehicle (read: 7 seater) would be useful for long drives. We saw a few models but took test drive of just one, which was for a distance of 4 kms. After we got back in to our Verna, my wife quipped – either we buy the XUV500 or just continue with the Verna. Nothing else. My second daughter was 9 months old then. A week later, we were on our maiden trip to our Family Temple in a brand new XUV. After 66 months, sold the manual model and bought an automatic – everything else inside the cabin remaining the same but for the gear shift. 

During the lockdown period in 2020, I felt it made no sense to own the “White Elephant” anymore – a Ship is not built to be docked, after all. Thanks to a few good friends and fellow auto- enthusiasts, I refrained. Boy, I ain’t complaining. Have driven almost 18,000 kms in my XUV since Aug. 2020 when I kicked off my road trips, especially on the work front to meet my Colleagues, Distributors (of Levista Coffee) and to see first-hand the Retail Experience. Now that I am driving so much, I have a deep urge to move to another model, what with the same cabin, interiors and features in both models of XUV500 since 2012. 

I never imagined that a YouTube video would impress the secondary decision makers, rather – the Influencers – in the household while making a beloved purchase such as owning an automobile. Test Drives are an important touch-point in selling 4-W. In fact, one of the biggest reasons for success of Royal Enfield, where I worked from 2012 onwards and set-up 160 Dealerships pan-India was that the company allowed patrons and prospective customers to take the vehicle for a test ride. And alongside, offered experiential rides over weekends, special commemorative days, etc. This, worked well for the brand. When a user uses a product first hand – something that Apple first debuted in the Electronics space 2 decades back – the experience cannot be replaced by older means such as reading reviews or word of mouth from other users. 

Over the past few years, online shopping of Automobiles made some noise. In fact, I bought, rather booked my XUV500 in 2018 online for a token sum of Rs. 5,000 for which the Parent company gave me accessories worth the same value as a token of shopping online. Today, things have changed. It’s all about the experience. While family members may not give much heed to what’s beneath the hood, what matters most are the features, comfort and safety. My elder kid exclaimed when she noticed there were 6 USB ports in the new Tata Safari – something that’s perennially important for the Millennial Kids, perhaps. Wife was all excited about the Captain seats in the second row too, which gives great comfort, The very fact that a review (which is not at a showroom but in the living room) can entice potential customers, is in my humble opinion, a tip of the iceberg. The new “influencers” of buying behaviour want everything in their palmtops. Are companies listening? What’s the next big thing that could happen in this space? Virtual Reality, perhaps? Like driving inside the cockpit… Well, the day is not too far, I reckon. And of course, the charm of trials – can never be taken off ever.

Upwards & Northwards! Finally

On Thursday, Fitch Solutions, one of the world’s top rating agency estimated that India’s HHS – Household spending would grow 7.9% y-o-y in 2021 after 14% contraction in the year 2020 due to the Corona pandemic. In nominal terms, the HHS is estimated to be Rs. 125 lakh crores (whatever number of Zeroes, that is!), a 3.3% growth over 2019. Not bad at all, huh. Food & non-alcoholic drinks is expected to grow the highest among all other consumption categories and this, in my humble opinion is perhaps the biggest good news of the year! 

Here’s why I feel that this will propel the economy to a large extent.

India has an estimated 14 million kiranas and retail touch points – who sell anything from cigarettes, biscuits, tea, coffee, grocery all the way to other household items including consumer durables, fashion, footwear among others. This segment drives India’s consumption opportunity, a key reason why the Amazons, the Walmarts, the Wall street Investors all the way to the Chinese & Japanese billionaires and everyone in between are eyeing a small pie in the Great Indian Retail Story which is yet to unfold. The world has been witnessing an ugly battle in the public involving some of the most reputed businessmen and their companies, thanks to a hostile take over which has seen stiff resistance from the other. Meanwhile, Indians are jolly well shopping their home needs and personal requirements through gadgets – apps as well as a simple phone call to order their roti, kapda and makaan – quite literally. 

I started working in the retail Industry 24 years back scooping ice-cream and later with one of the pioneers of Grocery Retail, Foodworld Supermarkets two decades back. Even back then, most Indians in bigger cities had to travel not more than 2 kms to buy their food and grocery. Every locality and neighborhood had a kirana store who offered personalised and tailor-made solution for her / his customers. From topping the shopping bag with FMCG freebies (what we call as Loyalty points these days) to offering a chocolate to the kid (instant gratification in today’s terms) all the way to a speedy home delivery (some Start-Ups who never made a transaction level profit over 10 years are now Unicorns!) and so on. The Kirana offered credit at a time when a “Credit Card” was a western phenomenon and raised capital – through internal accruals and market offering, rather than the obnoxious Equity based Investments.

Cut to 2021, my excitement with the latest Fitch report is simple. Though the Kiranas have dwindled in real numbers – not because the Modern Retailers or E-Commerce companies replaced them – rather than many of them did not have second-gen successors to run their businesses, they have simply been replaced by “Convenience Stores” – family owned as well as Corporates who vie for the consumer’s spends. And daily shopping for Food & Grocery shall never go out of fashion in the India’s consumption story. As most Indian households are small and barely have refridgerators, and even if they do, no more than 165 – 200 litres that cannot hold over 2-3 days’ needs; the kitchens of India are big enough to accommodate one adult to stand and cook with a provision to carry 3-4 weeks dry grocery requirements. Daily use items like Milk, Biscuits and snacks are almost bought every other day, rather than the large packs of colas, juices and nachos which are more the western phenomenon. Small is Beautiful and India’s sachet revolution is a glaring example of how and what India consumes.

If you are unable to relate to most of the above, I can understand as yours and my house are perhaps a lot bigger than the majority of consumers in India, for you are reading this on a digital gadget which is a privilege for a few of us Indians. The majority still read physical newspapers, watch sops and news on TV sets and shop from their neighborhood stores as they walk back home after work or leisure. In fact, shopping is a form of entertainment in India, isn’t it, for we make-up and dress up for buying groceries or eat at a restaurant.

I have always reckoned that “Consumption is Growth” compared to “Consumption leads to growth”. The moment, we are consuming, there is a need to repurchase and the cycle continues. The Covid-19 pandemic has pushed us behind, but not by light years. The recovery across segments, from automobiles to entry level smart phones, consumer durables to even the more discretionary types, is a confidence boosting measure that things are back on track, slowly but surely.

As Indians, what we can do to boost our economy is to consume. And consume a tad more than the previous one. Be it our daily dose of coffee & tea to household needs or fashion, every rupee that we spend will go in to building back India, one step at a time. But where’s the money to spend, one may ask. I have eternally believed that India is one country where no Indian can sleep hungry – if they choose to work and earn their meal. Such is the opportunity in this country. While lakhs of people have been displaced of their daily jobs, we have seen a resurgence in our mental strengths, especially from the marginally placed and the lower strata of the society. One will find enough work in this country, if they choose to. And the entire ecosystem has to work together. Am I living and writing this from Utopia, No. Am I sure that we shall survive this crisis? Well, we have always created history with our resilience over the centuries and this pandemic is also one which shall pass by. 

Back to the Fitch estimates, Food and Grocery are the real propellers to the Economy’s consumption pattern. We earn our dough, spend at the neighborhood stores which employ people and provide them a livelihood; they in turn spend on their basic necessities and slowly but surely increase their non-discretionary spends and the cycle continues. Daravi in Mumbai has more set-top boxes than many urban clusters in India, remember. 

At Levista, where we sell Instant and Filter Coffee across Tamil Nadu and Karnataka, we have grown 50% in our sales over last year (and we have 1 more calendar month to finish). I added 70% more manpower this year over last and increased retail touch points by 3 times to 79,000 as of 1 Mar. 2021. And we still occupy less than 2% of the Rs. 2,200 Crores pa packaged Coffee market in India which excludes B2B / Restaurant & Café consumption business. We have just begun, I believe. With a 98% headroom to grow and such confidence building measures – our real growth as well as estimates like that of Fitch solutions, I guess we are headed upwards and northwards, even as we should remain grounded to reality with a eye and ear on the consumer who’s always sending us notes, thoughts and reactions. If only we listen… more!

 

Mall revival - Real or Imaginary?

I have been visiting Malls in Chennai and Bangalore ever since they were open for public after continued lockdowns since Mar. ’20 due to the ongoing Corona pandemic. Mall owners, Multiplexes, Retailers, Restaurants and perhaps every consumer-serving business has been quite badly hit all these months and globally, we have seen many of them go bankrupt or shut down their businesses, while a few are somehow staying afloat amidst all the chaos. In the early years of my career with India’s first seamless mall chain way back in 2005, Bangalore Central I realised how Indians shop and consume – food, clothing and entertainment go together. We are a country that meticulously plans for a movie outing with a date, family members or friends and eventually dress up to visit a Cinema Hall. Therefore, Multiplexes, ranging from 3 screens to 7 or even 8 have been a regular feature at most of the Malls across India and is credited for one of the key reasons for a Centre’s success.

With the first lockdown that began on 25 March, the entire Movie exhibition Industry collapsed at one shot leaving thousands of employees astray as well as Standalone theatres and multiplexes in the lurch. Social distancing being the key advocacy for avoiding contact with the dreaded Corona virus carriers, all public spaces were shut and the entertainment thirsty consumer cohorts turned to Over the Top or OTT platforms such as Netflix, Amazon Prime and the more desi- Zee5 or SonyLiv among a dozen other options. Many small and hitherto unknown, unheard movies made it to the small screen – with a screen size ranging from 5” mobile phones to 10-11” Tablets and iPads to the more popular 13-15” Laptops. In unison, many of us echoed that it would simply make no sense to visit theatres anymore, given that an outing with a family could cost as much as Rs. 1,500-2,000 including the movie tickets, pop-corn+Cola and a meal before or after the movie. 

At one stroke, all this changed. India produces and releases over 2,000 feature films annually across theatres. It took an average 7-10 weeks for the films to hit an OTT screen until early 2020. And atleast 2-3 months until they made it to the small screen through Satellite Tv. Now, they remain just historical facts and nothing more. Bollywood takes credit of atleast 1,000 movie releases annually while Tamil and Telugu produce around 300+ every year. All other Indian language films as well as a few English releases (including dubbed in to local languages) take the rest of the pie. No wonder, that the southern states have more number of theatres and multiplexes though standalone centers have reduced from 12,000+ two decades back to under 5,000 pre-Pandemic and right now, we don’t really know how many are even ready to open their doors full-fledged. While the Multiplex screens have been growing and even now, PVR and Inox, the two top exhibitors have assured to add more screens and ensure safety and hygiene of the visitors, the audience are trickling in slower than anticipated. 

In tamil language, Penguin feat. Keerthi Suresh was the first big outing on an OTT while Surya’s Soorarai Potru, an adaption of the biography of Capt. Gopinath, the erstwhile Founder of Air Deccan Airlines was the first big top hero film to release on Prime. Actor Vijay’s much anticipated Master will remain etched in history and his story to be the first big theatrical outing after the Government allowed full functioning of theatres, much to the chagrin of Doctors, activists and the general public who have been heaving a sigh of relief with lower incidences over the past 3 months in Tamil Nadu, especially with Chennai being the hotspot during the peak season of Apr. – Jun. ’20 when Corona incidences were the highest. The films is estimated to have collected over Rs. 230 crores from Box Office collections, although the calculation of such revenues have always been murky and secretive. 

Amidst all this, did Multiplexes and Malls benefit? Little, to my limited knowledge. The more matured mall rats and multiplex audience have preferred to stay away as I don’t see many takers for the safe viewing of cinemas, especially with so many people crowding at theatres. While Foodcourts are brimming, I saw / see very few patrons walking out of apparel branded stores walk out with shopping bags, despite the deep discounts which the Brands are offering. 

The biggest surprise I learnt recently was BookMyShow, the pioneer of online booking has planned to release movies on their Apps doubling up as an OTT platform! Whoa. Look what the Corona pandemic has done to us! Who would have ever thought that a ticket booking website and App would also host movies on demand on a pay per view model. Fantastic times that we live in, indeed. Whether BMS will succeed in this already crowded space is anyone’s guess. But my worry is how will retailers draw crowds to their stores, especially those in the Malls who’s bread and butter was the more affluent Multiplex audience. We are running short of patience, time and money in the bank. Mall Owners, Multiplexes and Retailers have to collectively take a decision seated on a round table, leaving aside their individual motives and egos. Dropping off Parking Fee for 4W could be a beginning. Or atleast reimburse the fee against shopping, so we draw more footfalls into the malls. Screening older films, yesteryear superhits and perhaps a nice set of Academy / Award winning films could be another option. But waiting for a day when customers would pour-over and just do “revenge-shopping” like the Chinese did - is perhaps a hope that we all want to live with, unless it remains a widely circulated article & not reality.

Wake up guys. We are short of time, money and patience. Repeat.