The Indian Entrepreneur Rising

In the past few months have witnessed a lot of corporate employees quit their 9-5 jobs (if such a time actually exists) to start their own ventures. Few years ago one would rarely hear about employees turning entrepreneurs but these days it’s the buzz word.

Few of these who quit were in the top management who ran the rat race and suddenly gave up all that to enter into areas which are entirely different from what they did professionally. Some of them got into business areas which required high investment, some have to do a lot of travelling, few worked out of their home and some needed highly skilled people to run the ventures.

One of the lot started a gymnasium. A general manager who worked with an MNC handling business worth millions transforms himself from suits and ties to sweat shirts and track pants. While fitness had always been his area of interest his sales experience added value to his new assignment. He took the risk of investing in millions to start one While some of it might be his aving, most of the investment should be funded.Similarly a couple who were into marketing got into baking full time, while the lady herself bakes her husband markets the brand.

Apart from food, service is another sector which is gaining a lot of limelight. One of these corporate employees started services firm. He is the one point contact for doing one’s carpentry work, plumbing, painting, hiring drivers, shifting house and lots more. He states earning orders is not a major concern as there are plenty. The major issue he faces is shortage of relevant skilled people to complete the order. Hence he is not able to scale up..

Another friend decided to be a full time consultant after quitting the corporate world. She is Infact providing her skills to small entrepreneurs to market themselves and scale up.

Another important change witnessed is that many men quit their full time to join their spouse’s venture. One employee quit his high paying finance job to join his wife’s chocolate business yet another joined his wife’s play school and another joined her design firm and the list can go on.

Each of these individual have had their own reason to turn entrepreneur from being one’s own boss to doing something they are really passionate about. The reason varies but the circumstances remain the same. There is a new found confidence in the people. They are willing to take up the challenge. This is driving the need for a supportive eco system. The growth of an economy will be highly dependent on the entrepreneurial activity. Hence this spirit of entrepreneurship needs to be encouraged.

During a visit to friend’s home gave the feeling that the entrepreneur has risen. The couple who were corporate employees and who themselves are children of government employees want their child (who is a gifted painter) to have the entrepreneurial skills. They are going all out to build in the entrepreneurial spirit and encouraging her to do a lot of paintings, exhibit it ,sell it, book orders etc just to learn the art of selling

While there is new found confidence ,a supportive environment is a necessity with reduced red tapism and favoritism, better tax and legal structures, The initiatives of the government have provided the much needed support in building this new found confidence among the corporate employees. ‘Start up India’ provides the much needed funding for the entrepreneurs. Another being ‘Skill India’ whose main objective is to create multi-disciplinary opportunities for the Indian youth.

While the entrepreneur has risen it needs to seen as to how the environment continues to encourage and sustain such a spirit.

Let’s hope and pray that for their tribe to increase.

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Retail banking for the unbanked

On a ride on a Ola cab had a casual discussion with the driver. The discussion that day led me to realize how one company can bring about a huge change- a change which can help a vast majority of people who still do not have a bank account. While the Prime Minister Pradhan Mantri Jan Dhan Yojana is a great initiative in this direction, there is a lot of effort being done by various corporate who have done their bit

The Ola driver explained the business model. He explained about his journey with Ola and how the payment term and profitability has changed over the period. He said he needs to open a bank account which is linked with Ola and then based on rides done the amount is either debited from his account if most of the passengers pay by cash or credited if payments are done through Ola money. I asked him if he had a bank account before joining Ola for which he replied no. Now that is the cascading effect in a entrepreneurship model!!! Each entrepreneur has multiple effects on the economy at large

Joining Ola allowed him to join the mainstream banking services. His access to the banking services would help him in streamlining his savings and free him from the clutches of the money lenders.

Now just imagine the number of the cabs & auto linked with Ola or Uber across the country. While some might already have a bank account most of them would not have one. The other benefit of this would be that the income of these drivers would be tracked (while most of them would not like their income be tracked and taxed, it’s a fact that ambitious driver monthly income would be in 6 digits-yet all tax free). So the whole economy is benefitted.

The most important benefit in this would be for individuals who pay atrocious interest on the borrowed money.. Individuals who do not have access to the banking system borrow money from money lenders on an interest rates which is unimaginable..E.g. a vegetable vendor borrows Rs 1000 in the morning to buys the vegetables for business and repays Rs 1100 in the evening post the sales. Which is a whopping 365% interest pa.!!!.Can any bank (private or nationalized) dare to collect such an interest rate??. As the payment is cleared everyday paying a small sum will not actually affect the vendor hence he is not conscious of the interest rate. This was the thought behind the famous pigmy collection scheme started by Syndicate Bank.

In the pigmy deposit scheme a bank personnel would collect as low as even Rs 5 a day from the shopkeepers’ vendors etc from his place without he having to come to the bank every day. while a vendor could pool in Rs 5 every day. He could not pool Rs 1825 at once in a year. This daily saving deposit scheme helped the daily wage earners, small time vendors etc to save for the rainy day or for bigger capital requirements. These pigmy deposit holders could even borrow a loan with the pigmy deposit as a security and then pay it on a daily basis. This was a very large untapped community with the bankers and who had fallen prey to the money lenders for borrowings and chit funds for deposits. The pigmy scheme tapped it

While this scheme did help a lot of people enter the banking sector today’s entrepreneurs such as Ola/ Uber (taxi services) urbanclap, housejoy, bro4u (hyper local services) are making their contribution in this direction.

In the retail banking revolution this time it is the effort from a different industry which is contributing to the retail banking sector.

 

 

 

 

Make In India-The Retail Way

Owner of one of the biggest bakery chains was ruing about the lack of innovation in the bakery industry. While every child swears by the black forest cake which is of European origin no attempt is made to develop a world class recipe of the fruits grown in one’s own backyard. He was giving an example of jack fruit, a nutritious fruit with unique flavor indigenous to India. He said hundreds of varieties of this fruit existed but with each passing generation due to lack of knowledge and commercial viability lots of varieties have become extinct. Some products like jackfruit chips, papads and curries are made by the unorganized sector but there is no organized player in this category. This has led to lack of innovation, scalability and branding for jack fruit. While a ice cream maker has attempted to make jack fruit ice cream and is successful at it there is still a lot which can be done with this tasty yet versatile fruit he said.

The speaker on his part has attempted to make a start. The brand now sells jack fruit sandwiches, pizzas, and breads and plans to start with jackfruits puffs. This truly is the Make in India. What the speaker was referring that day is an issue wherein lots of products indigenous to India have lost in competition with their global counterparts due to lack of big players in the category. Harish Bhat of the Tata Group in his column in a a business daily was referring to two such products.

In his first column he referred to tender coconut. He refers to his experience world over with this fruit, a native of India He says he tasted the fruit in various form as a drink, a tasty jelly etc. The consumption of this drink has increased world over due to its health benefits. Even I had tasted this product in two innovative ways. One as a drink with lime juice. A person in small lane does it in limited quantity and is sold out by 11 a.m. in the morning. (The store opens only at 10.00). When we went there only one glass was available and 7 of us had to share it!! Yet another form was as an ice cream. Of course by the same brand which made the jackfruit ice cream. Infact through the tender coconut ice cream the brand gained fame and success. Even today it remains his most popular product. Before the brand opened various branches people would carry the ice cream in special thermo packing inside a flight. While the ice cream costs Rs 150 the packaging costs them Rs 250. Yet the tender coconut ice cream was worth it. Can this sort of a brand loyalty be beaten??

In another article he refers to God’s own chips-the banana chips. He states though this product is tasty and cannot be easily crushed as in potato chips yet the humble banana chips has never tasted the success enjoyed by the potato chips with Pringles. Even a non native chips the tortilla chips made of corn has achieved higher success with brands like cornitos available in India. The major issue for this is the absence of an organized player in this category.

The above three are just examples of the potential & possibility which the indigenous fruits and vegetable can provide. The best brands which can take up the challenge are the retail stalwarts. Both the offline and online retailers with their business turnover provide an easy platform for such products. They bring about the necessary visibility and the scale to take the products forward thereby giving them a first mover advantage in an untapped category. This one bold step by any retailer will do to the supply chain of the fruits and vegetable what no FDI can achieve. This one step by the retailer will add to the Make in India in the true form.

Any takers? Any other products which has lost in competition due to such issues??

 

 

 

 

Retail Loves Cash. The Sheer Luxury of Crispy Notes

Dining out is one of the little pleasures enjoyed by the city folks. After having enjoyed a sumptuous dinner in a fine dining restaurant with your family the bill arrives. You proudly give your card. The waiter takes the card along with the bill. After some time he arrives. You assume he returns to help you punch in the pin for your card. But to your horror he returns stating he could not swipe the card. You then give him another card and the story continues. Finally he states there is some problem with the machine and only cash can be accepted. First time since ages you open your wallet to check for cash. You find that you are short of cash to pay the bill. (You wonder why we ordered that dessert- it was anyways not worth the price, and then I could have paid the bill). You ask the waiter if there is an ATM nearby. In the meantime you feel very embarrassed in the restaurant as you wonder if the people around would wonder if you really could not afford the meal you just had. Your family wonders if they would have to stay back if the bill was not paid. With all sorts of thoughts you rush to the nearest ATM. Luckily for you the ATM works and has cash! You draw sufficient cash, Infact much more than the restaurant bill with the fear that you may have to face a similar situation again. You pay the bill. Give your feedback to the restaurant manager stating you felt embarrassed for no fault of yours. He apologizes for the situation. And then you move on.

Sounds familiar???Yes for many of us. We have faced such situations several times and each time we take an oath that we will carry enough to avoid such situations but end up in this situation often. Why??? For the sheer convenience factor. The cash is generally spent in buying the smaller stuff and to which we are accustomed to e.g. buying fruits and vegetable, buying the top up items at the local kirana store etc. For the larger expenses we tend to use our card. But the question remains- will you ever visit the same restaurant again where the card did not work??? A vast majority will not. Dining is an experience and if any Moment Of Truth gives a bad experience even if at the last minute with the card not being accepted it leaves a very bitter taste in the mouth which one would avoid in the future..

Could the restaurant have handled this situation better?? Definitely yes. For in this situation the customer definitely had no intention of not paying the bill. It was just that the restaurant could not support his payment mode. The restaurant could have had multiple swiping machines with all the permutations and combinations so that it would have at least one machine working at any point in time. The restaurant could have checked at the time of opening if the swiping machine works. The customer could have been informed in advance before the food was ordered about the swiping machine not working. This would have save him of the embarrassment later. Infact a little step forward by the restaurant to help the customer in the situation than merely placing the obligation on the customer to pay by cash would have gone a long way in building a relationship with the customer. He would have been glad about the restaurant service in a situation beyond their control.

Finally to sum it up in the words of a friend. After he borrowed money from his wife, chauffeur etc he was still sort of cash to pay the bill. The Owner of the restaurant actually told him he could pay the balance during his next visit!! Now that’s a catch. Did my friend visit the restaurant again? Of course he did that too with his family for he not only had to pay the previous amount but also he because he felt the restaurant trusted him and he needs to reciprocate it. But this time he went with a lot of cash in his wallet.

Customer Loyalty-A Myth?

Just the other day a friend was complaining about the pain in carrying large number of loyalty cards in addition to the credit/debit card. Each retailer has a unique card which needs to be presented while billing either for adding of points/ availing discounts. Hence its gets mandatory for a customer to keep the cards in the wallet. The situation of a large number of loyalty card defeats the very purpose of loyalty. It clearly indicates that the customer is not loyal to any retailer instead shops with multiple retailers.

Now is the happening time for retail customers. She/ he is being wooed by the retailers both offline/ online. She gets the best of the discounts, offer, services, loyalty points and the list goes on. All this in the name of loyalty.

The customer gets sugar free for the next 12 months, points added on every purchase which can be redeemed later, additional offers for the loyal customer. Some retailers have gone a step ahead and sold cards with a onetime payment which will enable them to shop for the next few months without actually having to pay cash and the customer get an additional shopping amount on paying cash in advance. An innovative idea to ensure customer shops with the retailer every month. Few banks have also jumped the bandwagon and introduced credit cards in collaboration with the retailers which will ensure loyalty for both the retailer & the bank.

While the cost of getting a new customer is higher than retaining a existing one, do these customers actually remain loyal to the retailers. As per specific sources hardly 10-12% of the customers’ visit a retailer month on month .What is that makes a customer loyal to a retailer? It definitely cannot be offers alone.

Customer service, best prices, good shopping experience, availability of the entire needs at one point does add to loyalty. The single most important factor especially in the Indian context would be TRUST. Trust that I am being sold the best quality products, the trust that I am being charged reasonably, trust that my needs are met etc.

A customer was robbed off his mobile phone by a delivery boy on the pretext of asking for water. The loss of the phone was much higher than saving a few rupees at the new discount website. Thus he went back to his retailer of 40 stores for he trusts him.

A whole office stopped ordering afternoon home cooked food as one afternoon stale food was supplied. Hence the trust was broken. They bought back the old caterer who left the office canteen due to profitability concerns. Hence pricing was worked and he restated his canteen.

While the retailers have worked on many aspects to ensure loyalty the trust factor needs to be really worked upon to ensure loyal customers- the dream of every retailer.

 

 

Has Retail Forgotten The Basics??

I remember during one of the shopping spree we spent a few hours shopping for saris, dresses etc. in traditional textile store. During this period overheard a middle aged man telling his wife that going forward she needs to shop only in outlets which have a good seating arrangement as he cannot stand for hours till she finishes shopping. While this might not be a top of the mind factor for the lady while shopping as she considers the range, pricing, discounts etc before deciding the shopping destination the seating arrangement is a priority for the man. I remember the olden days when outlets would either have a seating arrangement spread out on the floor or have stool for the convenience of the shoppers and the companion.

It is not uncommon to see many people in mall crowded near the seating arrangement wherever available in the mall. As most of the outlets in mall do not offer any seating arrangement to the companion or the one who accompanies the person who has to do the shopping. This leads to discontentment to the shopper as well as the companion. While an hour of standing is difficult for any individual, not shopping together defeats the very purpose of shopping. This is mostly the case with aged parents and children.

The inconvenience caused to parents or children distracts the shopping experience of the shopper. Also it is observed the amount of money spent in the outlet is directly proportional to the amount of fully concentrated time spent in the outlet. A cranky kid will definitely distract the mother thereby reducing the time spent. Thus the retailer will get only lesser share of her wallet. This has lead to some retailers having separate kids area where the children can play under supervision while the adults can read books, magazines etc.

Apart from this the other factor missing is the attitude to help in a retail outlet. A friend actually acted as if lost in the retail outlet. He stood in the main aisle for nearly 10 minutes. Though many of the store assistant passed through him no one even bothered to ask if he requires any help. The case would have been entirely different if he were in a normal mom & pop store. He would have the owner himself rushing to help the confused customer.

Thus the friend says retail service is like going on a date where one dresses, behaves etc at his or her best to impress the other to spend a life together.

The retail outlet needs to behave the same way to ensure lifetime royalty of the customer

Any listeners or takers????

Share your experiences with passionateaboutretail@gmail.com