Lacing up a billion pairs of feet

The good old Sales analogy – A Salesman was sent to a village where no one wore shoes; he returned back saying there’s no business opportunity here. A few days later, another goes to the same village and screams with excitement that the whole village is an opportunity. After all, it’s a matter of perspective, isn’t it? When I got an opportunity to join Levista early this year, I was doing my interview-prep and stumbled at the fact that the packaged coffee market in India is approx. Rs.2,200 Cr.pa, of which over 80% comes from South of India and is largely dominated by two companies with their three brands. 

Having set-up 140 cafes for Café Coffee Day across India a decade back, especially at Airports, Malls and Edu. Institutions, I realised what an opportunity that the coffee industry in India was staring at. Add to that, the ever increasing exposure to “Café and Coffee culture” over the past 20 years, right from the TV sitcom “Friends” to so many Indian films eulogising a coffee shop as the go-to place, be it with friends or for a an elusive date. I preferred to be the second type of Salesman who believes that the entire country is a coffee opportunity rather than just the Southern States. Levista has grown in size and presence over the past six months, a healthy 2-digit growth (although not at the cost of increased Opex.) Call it “Due to Corona or Despite Corona” and we still occupy less than 2-3% of the total market opportunity.

Two similar industries which have always caught my attention are footwear and time wear. And the top 2 Brands that resonate with us with the mere mention of these categories are Bata and Titan. 

What started off as a JV with the Government of TN in the 90s has now become a globally acclaimed brand that is Titan Watches. On the other hand, a hitherto unknown Czech who traversed across India in the 20^th Century saw Indians were walking around without basic footwear essentials and felt there was a great need to lace them up, just like the suited-booted British who showed their imperialism with the way they dressed their bodies & shoes. Thomas Bata set-up “T&A Bata Shoe Company” at Zlin, Czechoslovakia along with siblings Anna and Antonio in 1897 and later set-up an Indian unit at Kolkata. Over the years, especially after Independence, Indians have leaned towards the Brand for two reasons – that it was “very Indian” in nature. And because of their durability, affordability and consistency. Globally, Bata is sold over 70 countries and sells more than 180 million pairs of footwear each year. The Indian footwear market is estimated to be around USD 11 Billion and has been growing well.

It is for an another article how Bata penetrated in to the Tier 3/4 markets of India and looked beyond the city centres and CBDs over the last 2 decades. Having said that, the Retail Brand grew mostly through a robust distribution system over the past 40 years, essentially targeting Multi-brand footwear stores owned by local traders initially and later creating their own flagship stores, essentially Franchised, with bright lighting, spaced out interiors and a wide range. In fact, the belief that continues to be with most ardent fans and customers of Bata is that they would mostly never run out of stock for a model or a size or a colour. Shows the brains behind assortment and range planning – and all this without the so called “deep tech”, “AI-led Merchandising” nor “Machine Learning techniques” for better stocking. No Pricing gimmicks, no EOSS, No high-decibel Marketing campaigns. Focus on what matters the most – the 4Ps and remain consistent. And that’s all is the success mantra, after all.

The sales guys at every Bata store recognised their customers either by face or name and most importantly knew the kind of footwear the users in a locality wore – formal, semi-formal, slippers or sandals. Add to that, the advent of Back-To-school Campaign that was introduced a decade or so back meant that the store was a “celebration point” for kids ahead of the new academic year. The adage “Catch them young, Watch them grow” cannot be more appropriate for any other brand than Bata, save for a few chocolate / candy brands.

And steering all this is Sandeep Kataria who has been recently named as Global CEO for the fledgling footwear company. With 40% of the total Global Turnover coming from the Indian Subcontinent and a few adjoining South Asian Countries, I am quite sure Sandeep is surely going to make a dent in applying best practices learned from India. Sandeep joins an elite list of CXOs including Sanjeev Mohanty of Levis and Shailesh Chaturvedi of Tommy Hilfiger who hold similar international profiles, thanks to their extensive experience in the Indian market. It’s so nice to see great Indian talents getting recognised worldwide for their contributions. As I always say, the Indian resurgence (we are the oldest civilisation, you see!) has just begun. I am sure, we will find many 100s of Indian professionals donning top Retail roles globally. As it is, a number of Indians hold remarkable positions in many foreign countries across Retail Chains and Consumer brands. The number is growing and faster thatnwe expect. 

Revenge travelling is here to stay

I returned back home on 17th Oct. 2020 after a two week business trip across Karnataka. With this, I have completed 9,400 kms of travel by road since 10 Aug. 2020 when I stepped out of home for the first time after a 150-day self-imposed exile, thanks to multiple lockdowns due to the Covid-19 Virus outbreak. The rubber I have burned is mostly self-driven and partially chauffer driven. But for a short trip to visit some of my favourite temples in September, all other trips have been on work. I have met already 80% of my 140-member sales team at Levista Coffee across TN & KA these last two months and as I write this, my Samsonite is gleefully smiling at me for yet another trip that begins Tuesday and thereafter. 

Revenge Travel, as the term has claimed obnoxity in the recent past is here to stay, I guess. If trends are to be believed (and seen personally!), I guess it is so. To begin with, some hard numbers issued by the Oil Industry in India indicate the same. A 1.65% & 1.5% increase in Diesel and Petrol consumption compared to last year, same period. A very small single percentage number of growth but the digits make it look more attractive. For the record, India consumes 3x Diesel to Petrol, noticeably because most of the goods movement in India is by trucks and they are almost 100% Diesel-driven. Due to the surge in work related travel to scores of us and a lack of public transportation, even taxis (mostly diesel consuming ones) are back in demand while a small portion of personal vehicles (like mine) use diesel as well. 

Sale of Petrol grew to 982,000 tons in the first half of October, up from 967,000 tons in the same period in 2019 and 968,000 tons in the first fortnight of Sep. 2020 while Diesel sales rose to 2.65 million tons in the first fortnight of October from 2.43 million tons a year back and 2.13 million tons in the first half of Sep. 2020. With the Navarathri / Dassera / Pujo festivities lined up in the second fortnight of October and a subdued yet enthusiastic Deepavali in the anvil, it seems that fuel consumption is going to continue to rise. 

Another noticeable point is the upward trend in Fastag usages, from Rs. 1,800 Cr. in Feb. 2020 to approx. Rs. 1,700 Cr in Aug. 2020. And this, even as I see fewer vehicles in the dedicated Fastag lanes compared to the “cash lanes” across several Toll Plazas where I have travelled the last two and half months. One obvious negative trend is the dwindling numbers at highway restaurants, cafés and pit-stops. From the nondescript coffee kiosks dotted along the highways to the more organised eating joints, there is a significant drop in numbers, save for a select few which are in high demand due to scarcity of outlets in the vicinity. 

Interestingly, I saw a number of vehicles parked aside the Highways and people eating off plates, perhaps with home-cooked food – a trend which was the “only” way before the driving-down trends began around a decade back. The otherwise famous cafés which witness a huge surge in visitors riding their prized motorcycles or cavalcades of cars with bunches of friends and families is sorely missed, quip restaurant managers and owners.

Hotels that provide lodging are also seeing a growth in occupancy levels albeit still less than 50% of pre-Covid levels which used to hover around 65% on an average but for weekends where select properties were lucky with a full house. I still wonder if the entire room is fully sanitized, linens washed off after every guest departs – not just an expensive affair but also laborious, one reason why I have been cautious about where I retire for the night during my travels. And the F&B areas of these hotels are no different with social distancing of tables and limited numbers of Chairs per table to avoid crowding. Most restaurants avoid Buffet – which has been proven to be one of the fastest ways to spread the dreaded virus, especially with a number of people sharing crockery and cutlery.

As clichéd as it sounds, “Revenge Travel” is here to stay. Only difference is that most of the Tourism business will be Domestic and the Indian Hospitality Industry cannot ask for more.

Let’s rebuild the Economy – Ourselves

After a self imposed exile at home in the garb of WFH for over 150 days, I finally stepped out of home and moved to Bangalore last month to join my “real office”. I also travelled to Kushal Nagar in Coorg where our company’s Headquarters and Plant are located for a review with my Management. All through my two weeks at Bangalore, I was pleasantly surprised and motivated how we are ourselves building back lost time, money and economy. For instance, we had full attendance at office and also ensured all of us wear face masks while seated. Every alternate chair in the Meeting room is left empty (so fewer persons and therefore the meetings end early too!). Usage of hand sanitisers, and most importantly washing hands frequently is encouraged to ensure this is rather a “habit formation” in the long run. Cleanliness is Godliness, someone said long ago and remains relevant all along. 

I travelled across two major parts of Tamil Nadu last week, to Coimbatore and Madurai to meet my team members, Distributors as well as for market visits. Same protocol, another precinct. Nothing changed. The hotels have accepted the new norm, so have Guests. Food is served outside the room as per WHO protocol and the guest must take it inside their rooms themselves. Buffet is off the menu and breakfast is served in the room. Works for all of us plus the added advantage of “NIL wastage” at the buffet counter. Limited and minimal contacts with other people around works to everyone’s favour after all. 

This week, my wife and I decided to travel by road to visit a few of our favourite temples to seek the blessings of our beloved gods. We departed on Tuesday morning even as the TN Govt. opened up the doors of all religious places in the state. We were not just surprised but also impressed with the steps taken by the Government and the penultimate cooperation by devotees. We witnessed this first hand not just at one but across some of the oldest and perhaps, otherwise most populous temples. For Ex., the Srirangam temple, the world’s largest temple complex witnesses at least 30,000 visitors on a regular day. However, now is a different story with less than 1% of that number of visitors being allowed everyday. Still, the devotees maintained strict social distancing and followed norms, while at the entry inside, temperature check has been made mandatory. Well, that’s not accurate, quip many. But then, do we have a choice of shutting down everything for some more time to come? 

We travelled around 1,100 kms over 5 days and stopped by at least a dozen restaurants. Almost everywhere, customers and patrons seem to be following self-discipline which is the key to combat this virus which apparently is here to stay for some more time to come. 

What was pleasant to see was that even in the smallest of Tier 3 villages, locals understand the reason to wear a mask and the reasoning not to touch others, walk in groups or sneeze in public. The awareness created all along by the Media and the Governments is impressive although there is a surge in unruly motoring skills in city roads as well as on Highways – especially 3-4 persons on a 2-Wheeler and most of them not wearing Helmets which goes unchecked by the authorities. Well, we gain a few brownies and lose some ourselves. Sad part of humankind.

Ultimately, to bring India back to it’s foot is the duty for each of her citizens and beyond a point, I believe the Government can do very little beyond disbursing loans and doling out subsidies. While the Central and State Governments are doing their best despite so much negativity around, I personally believe it is up to each one of us to pick up the broken, leftover pieces and push the economy upwards. If not anything, this is just another form of patriotism and duty to the nation. Needless to say, we need to ensure safety precautions for ourselves as well as to our surroundings. And for me, I filled up Diesel full tank today even as I entered my home garage, ready for the next drive. I pledge to do my bit. I have Miles to go, after all.