Akanksha Nagar, Financial Express

September 25, 2023

Adding to the fizz in the energy drink market, NourishCo, a division of Tata Consumer Products (TCP), has unveiled Say Never — a caffeine-based energy drink priced at Rs 10 for a 200 ml cup — in two variants of red (berries) and blue (tropical flavours). In its initial phase of launch, the brand will be available largely through general trade outlets in Karnataka and some key markets of the north, including Delhi, NCR, Uttar Pradesh and Bihar. Vikram Grover, MD, NourishCo Beverages, TCP, says, “With Say Never we are celebrating the heroes who carve their own path.”

As a functional beverage, the energy drinks segment has grown by leaps and bounds in recent years to stand at Rs 3,500 crore in 2022. Experts reckon the market will touch Rs 10,000 crore by 2027. Red Bull is the category leader with a 61% market share of the market.

PepsiCo’s debut of Sting a few years ago at an inviting Rs 50 for 250 ml (as opposed to Red Bull’s Rs 125 for 250 ml can) had shaken up the category. With a 7% market share Sting has surpassed PepsiCo’s older products like Mountain Dew to become the company’s fastest-growing brand. Charged by Thums Up kept up the buzz for Coca-Cola during the 2023 edition of the Indian Premier League on Star Sports. Grover says Say Never will stand out for two reasons — the attractive price point and the cup delivery format, which the company has used with Gluco+. “The rapid growth in this energy segment in the recent past has come on the back of price disruption, and we feel that we can take that disruption forward,” he adds.

As energy drinks still operate in a niche segment with a premium play, an affordable price point can be a game-changer, say experts. “Affordability is a significant driver in India, especially for pre-teens, teens and college students,” says Devangshu Dutta, CEO, Third Eyesight. For many years energy drinks were treated as a niche premium opportunity, but the availability of lower price options has opened up the mass market as demonstrated by PepsiCo’s Sting in PET bottles with a much lower price point.

While the cola giants have an obvious advantage in terms of shelf space accessibility, given the market’s trajectory even smaller players stand a good chance to create a space for themselves. “Clarity in positioning, techniques to make the brand stand out, and ensuring availability with strong distribution and replenishment is imperative to get ahead,” Dutta suggests.

TCP plays in the energy space with Tata Gluco+, a glucose-based energy drink targeting a young consumer set; for Say Never the target is the youth between the ages of 18 and 35.

Besides pricing, what will be make or break is marketing muscle and a differentiated appeal, says Samit Sinha, managing partner, Alchemist Brand Consulting. “Say Never can position itself as a party-drink — akin to how Red Bull is equated with active lifestyles. There are enough opportunities to create nuanced differences in attributes, functional benefits and most of all, emotional benefits.”

NourishCo contributes 4% to the TCP overall business and in Q1 of FY23, its recorded a strong revenue growth of 60%. TCP’s flagship drink Tata Gluco+ registered a growth of 61% in the same period.

(Published in Financial Express)

Viveat Susan Pinto, Financial Express

April 21, 2023

Retailers of Apple products in Mumbai and Delhi, which account for around 20-21% of the brand’s annual sales in the country, fear the launch of stores by the US giant within these cities may dent their business.

In particular, retailers in the vicinity of these outlets, at Bandra-Kurla Complex (BKC) in Mumbai and Saket in Delhi, say consumers will prefer to go to these company-owned stores rather than make it to their outlets to purchase Apple products.

“That is a visible danger for those Apple retailers who are located near these outlets,” a senior executive at Unicorn Infosolutions, an Apple premium reseller in Delhi and Mumbai, said. Unicorn has 37 outlets in the west and north of India and is looking to its increase its footprint to 75 stores in the next three years.

“You have to keep in mind that the base of consumers for Apple is growing, both in Mumbai and Delhi as well as other cities. It will not be feasible for all the consumers to make it to these outlets. Yes, some high-end consumers may choose to shop at these Apple stores in the two cities, but for those staying away from these stores, it will be difficult to make it to these outlets,” the Unicorn executive said, declining to be quoted.

Nilesh Gupta, managing director of Vijay Sales, an electronics retailer, which has stores in the west and north of India, had reiterated a similar point on Tuesday (April 18), the day the Apple BKC store was launched in Mumbai. He said that he saw the store launches in Mumbai and Delhi as an opportunity for brand-building and further growth in sales.

“Apple is launching just two stores in India, one in Mumbai and the other in Delhi, for now. Even if they launch more outlets, not everyone will be able to make it to these stores, given the size of India and the aspirations of people wanting to own an Apple. The word-of-mouth and excitement going around following the launch will positively impact all of us who stock and sell Apple products in the country. I see more consumers wanting to buy Apple products in the future,” Gupta said.

While Apple has been in India for more than 25 years, it has had no direct retail presence in the country until now. An Apple online store in India was launched around three years ago. In other words, say experts, the Cupertino-based tech giant has depended largely on a network of online and offline retailers, including premium resellers, multi-brand operators and e-commerce channels, for sales in India.

“And Apple will want to ensure that its retail partners are not impacted because of its direct retail foray into India,” says Devangshu Dutta, founder and chief executive officer, Third Eyesight, a Gurugram-based retail consultancy.

“The Apple premium resellers, for instance, may choose to upgrade their retail experience at their outlets to ensure that there is no loss of business, especially in Mumbai and Delhi,” Dutta said.

Apart from Unicorn, some of the other Apple premium resellers in India include Maple in Mumbai and Ample Technologies, which runs the Imagine brand of stores in cities such as Bengaluru and Chennai.

Both the Apple stores in Mumbai and Delhi are high on experience, visitors to these outlets have said, coming at a time when the brand, amongst the most valuable in the world, has clocked a record revenue in India.

A Bloomberg report this week said that Apple had reported a turnover of $6 billion in India in FY23, up from $4.1 billion in FY22.

The Apple craze has drawn huge crowds both to the Mumbai and Delhi stores this week. The retail push will come as the company looks to expand manufacturing in India, experts said.

While Apple has been manufacturing older iPhone models in India since 2017, it began assembling the most recent smartphone models in 2022, with the iPhone 14.

According to the International Data Corporation (IDC), Apple’s iPhone shipments in India stood at 6.7 million units in 2022 against 4.8 million in 2021 and 2.7 million in 2020.

Apple also captured 25% of the ‘Made in India’ smartphone shipments in terms of value in 2022, compared to 12% in 2021, according to Counterpoint Research.

Among cities, Mumbai accounted for 10% of iPhone sales in India, trailing only Delhi, which accounted for 11% of sales, Counterpoint Research said.

(Published in Financial Express)

Akanksha Nagar, Financial Express
September 5, 2022

Can you give a brand a second shot at life?

Reliance Retail Ventures certainly thinks so. It has acquired Campa-Cola for an estimated `22 crore from Delhi-based Pure Drinks Group on the assumption that it will not only be able to revive the five-decade-old brand but can also use it to springboard into the dog-eat-dog soft drink market in India.

It will not be a cakewalk surely. The ones who were fans of the brand—which was launched in the 70s—have moved on, and younger customers have little or no association with the brand.

Samit Sinha, managing partner, Alchemist Brand Consulting, believes that Reliance must have been very keen on getting into the soft drinks category as a part of its overall strategy of retail expansion. In any case, it hasn’t had to shell out a bomb for the brand so it is a less audacious gambit than starting from scratch. There is one other factor that might work in its favour—which is the formula, the taste of which had near widespread acceptance in its heyday.

Sandeep Goyal, managing director, Rediffusion Brand Solutions, who is handling a similar resurrection of Garden Vareli sarees, says giving an old brand like Campa-Cola a new life will be far from easy—the Campa-Cola generation is now in their sixties and therefore there is very little monetisable value in the nostalgia.

Launch versus resurrect

From the looks of it, Campa-Cola will have to fight sip for sip, bottle for bottle.

Rohit Ohri, chairman and CEO, FCB Group India, who had managed the Pepsi account for more than a decade, says it will be difficult for a new brand to find space in a market dominated by multinationals like Pepsi and Coke. While the residual equity can help get the foothold, the real challenge would be to woo a younger consumer set.

Naresh Gupta, co-founder and CSO, Bang In The Middle, concurs: “When you try to resurrect a brand, you do it knowing that the brand isn’t doing well or has been out of circulation. That is big baggage for the brand to wipe out. Often the residual awareness and following are limited to the audience that is less likely to be your core audience today.”

There is also the fact that young people in the metros are moving away from colas, preferring healthier drinks or niche artisanal products instead. At the same time, soft drink is an impulse category and needs a large dose of salience to fly off the shelf.

Gupta says Reliance can try and build on the Indian-ness that Campa-Cola exudes. His guess is the old brand will be used as a calling card in trade and there would be a host of new launches that build upon it. “Campa-Cola may fuel a lot more fresh fizzy drinks launch from Reliance,” he adds.

That said, just the sheer time an old brand has spent on the shop-shelves would give Campa-Cola an edge over any new brand that its current owner might want to launch. An old brand can appear to be proven, experienced and secure, while a new brand could be seen as untested, raw, and risky. An old brand may have had a positive relationship with the consumer but may have been dormant due to strategic or operational reasons. In such a case, reviving the brand is clearly a good idea, says Devangshu Dutta, chief executive, Third Eyesight.

Reliance could have launched a new brand but if the existing brand has residual awareness or connection, it could be the pivot around which other brand properties can be built. Here, the new owner also has the benefit of having a wide retail network. As on March 31, 2022, Reliance Retail operated 15,196 stores across 7,000-plus cities with a retail area of over 41.6 million sq ft. This, if nothing else, will give Campa-Cola a start any new brand will die for.

(Published in Financial Express)

Remember the year 2000? After Y2K passed safely, that year some optimistic analysts predicted that India’s modern retail chains would reach 20 per cent market share by 2015. Two years after that supposed watershed, another firm declared that modern retail will be at around that level in 2020 – but wait! – only in the top 9 cities in the country. Don’t hold your breath: India surprises; constantly. As many have noted, “predictions are tough, especially about the future!” What we can do is reflect on some of this year’s developments that could play out over the coming year.

In many minds 2019 may be the Year of the Recession, plagued by discounting, but that demand slowdown has brewing for some time now. However, there’s another under-appreciated factor that has been playing out: while small, independent retailers can flex their business investments with variations in demand, modern retail chains need to spread the business throughout the year in order to meet fixed expenses and to manage margins more consistently.

To reduce dependence on festive demand, retailers like Big Bazaar and Reliance have been inventing shopping events like Sabse Sasta Din (Cheapest Day), Sabse Sachi Sale (Most Authentic Sale), Republic Day / 3-Day sale, Independence Day shopping and more for the last few years. In ecommerce, there’s the Amazon’s Freedom Sale, Prime Day, and Great India Festival, and Flipkart’s Big Billion Day Sale. This year retailers and brands went overboard with Black Friday sale, a shopping-event concept from the 1950s in the USA linked to a harvest celebration marked by European colonisers of North America. (The fact that Black Friday has a totally different connotation in India since the terrorist bombings in Bombay in 1993 seems to have completely escaped the attention of brands, retailers and advertising agencies.) Be that as it may, we can only expect more such invented and imported events to pepper the retail calendar, to drive footfall and sales. The consumer has been successfully converted to a value-seeking man-eater fed on a diet of deals and discounts. With no big-bang economic stimuli domestically and a sputtering global economy, we should just get used to the idea of not fireworks but slow-burning oil lamps and sprinklings of flowers and colour through the year. Retailers will just have to work that much harder to keep the lamps from sputtering.

Ecommerce companies have been in operating for 20 years now, but the Indian consumer still mostly prefers a hands-on experience. The lack of trust is a huge factor, built on the back of inconsistency of products and services. The one segment that has been receiving a lot of love, attention and money this year (and will grow in 2020) is food and grocery, since it is the largest chunk of the consumption basket. Beyond the incumbents – Grofers, Big Basket, MilkBasket and the likes – now Walmart-Flipkart and Amazon are going hard at it, and Reliance has also jumped in. Remember, though, that selling groceries online is as old as the first dot-com boom in India. E-grocers still struggle to create a habit among their customers that would give them regular and remunerative transactions, and they also need to tackle supply-side challenges. Average transactions remain small, demand remains fragmented, and supply chain issues continue to be troublesome. Most e-grocers are ending up depending on a relatively narrow band of consumers in a handful of cities.  The generation that is comfortable with an ever-present screen is not yet large enough to tilt the scales towards non-store shopping and convenience isn’t the biggest driver for the rest, so, for a while it’ll remain a bumpy, painful, unprofitable road.

Where we will see rapid pick-up is social commerce, both in terms of referral networks as well as using social networks to create niche entrepreneurial businesses – 2020 should be a good year for social commerce, including a mix of online platforms, social media apps as well as offline community markets. However, western or East Asia models won’t be replicated as the Indian market is significantly lower in average incomes, and way more fragmented.

As a closing thought, I’ll mention a sector that I’ve been involved with (for far too long): fashion. In the last 8-10 decades, globally fashion has become an industry living off artificially-generated expiry dates. A challenge that I have extended to many in the industry, and this year publicly at a conference: if consumption falls to half in the next five years, and you still have to run a profitable business (obviously!), how would you do it? Plenty of clues lie in India – we epitomise the future consumers; frugal, value-seeking, wanting the latest and the best but not fearful about missing out the newest design, because it will just be there a few weeks later at a discount. If you can crack that customer base and turn a profit, you would be well set for the next decade or so.

(Published as a year-end perspective in the Financial Express.)

Aggregator models and hyperlocal delivery, in theory, have some significant advantages over existing business models.

Unlike an inventory-based model, aggregation is asset-light, allowing rapid building of critical mass. A start-up can tap into existing infrastructure, as a bridge between existing retailers and the consumer. By tapping into fleeting consumption opportunities, the aggregator can actually drive new demand to the retailer in the short term.

A hyperlocal delivery business can concentrate on understanding the nuances of a customer group in a small geographic area and spend its management and financial resources to develop a viable presence more intensively.

However, both business models are typically constrained for margins, especially in categories such as food and grocery. As volume builds up, it’s feasible for the aggregator to transition at least part if not the entire business to an inventory-based model for improved fulfilment and better margins. By doing so the aggregator would, therefore, transition itself to being the retailer.

Customer acquisition has become very expensive over the last couple of years, with marketplaces and online retailers having driven up advertising costs – on top of that, customer stickiness is very low, which means that the platform has to spend similar amounts of money to re-acquire a large chunk of customers for each transaction.

The aggregator model also needs intensive recruitment of supply-side relationships. A key metric for an aggregator’s success is the number of local merchants it can mobilise quickly. After the initial intensive recruitment the merchants need to be equipped to use the platform optimally and also need to be able to handle the demand generated.

Most importantly, the acquisitions on both sides – merchants and customers – need to move in step as they are mutually-reinforcing. If done well, this can provide a higher stickiness with the consumer, which is a significant success outcome.

For all the attention paid to the entry and expansion of multinational retailers and nationwide ecommerce growth, retail remains predominantly a local activity. The differences among customers based on where they live or are located currently and the immediacy of their needs continue to drive diversity of shopping habits and the unpredictability of demand. Services and information based products may be delivered remotely, but with physical products local retailers do still have a better chance of servicing the consumer.

What has been missing on the part of local vendors is the ability to use web technologies to provide access to their customers at a time and in a way that is convenient for the customers. Also, importantly, their visibility and the ability to attract customer footfall has been negatively affected by ecommerce in the last 2 years. With penetration of mobile internet across a variety of income segments, conditions are today far more conducive for highly localised and aggregation-oriented services. So a hyperlocal platform that focusses on creating better visibility for small businesses, and connecting them with customers who have a need for their products and services, is an opportunity that is begging to be addressed.

It is likely that each locality will end up having two strong players: a market leader and a follower. For a hyperlocal to fit into either role, it is critical to rapidly create viability in each location it targets, and – in order to build overall scale and continued attractiveness for investors – quickly move on to replicate the model in another location, and then another. They can become potential acquisition targets for larger ecommerce companies, which could acquire to not only take out potential competition but also to imbibe the learnings and capabilities needed to deal with demand microcosms.

High stake bets are being placed on this table – and some being lost with business closures – but the game is far from being played out yet.