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January 24, 2022
Written By Devika Singh
The entry of Jubilant FoodWorks will intensify competition in the fried chicken segment, where KFC so far has maintained its stronghold.
Popeyes, founded in 1972 in New Orleans, Louisiana, has over 3,400 restaurants in over 25 countries around the world. Popeyes (Wikimedia Commons)
Jubilant FoodWorks, the franchisee for Domino’s Pizza, will launch the iconic US-based fried chicken brand Popeyes, known for spicy New Orleans-style fried chicken and chicken sandwiches, in India on January 19 with the unveiling of the first outlet in Bengaluru.
“Popeyes was founded in 1972 and has been one of America’s most popular and fastest-growing chicken brands. Popeyes aims to delight Indian guests with the bold and delicious flavours of its Louisiana-style chicken,” the company said in a filing to stock exchanges.
“The success of the brand lies in its traditional and unique technique of hand breading, battering, and marinating its fresh chicken for 12 hours in bold Cajun seasonings,” the company added.
Popeyes runs over 3,400 restaurants in 25 countries.
With the entry of Jubilant FoodWorks, the competition is set to intensify in the fried chicken segment, where KFC has maintained leadership in the country so far.
“KFC has enjoyed a free run in the fried chicken market. There are some local players in this segment but no large QSR (quick service restaurant) player had a presence in it until now. With Popeyes as a competitor, now Jubilant FoodWorks is stepping into that opportunity,” said Devangshu Dutta, chief executive at consulting firm Third Eyesight.
While launching its initial public offering (IPO) last year, Devyani International, the largest franchisee of Yum! Brands (which owns KFC), had stressed the advantage it has over other QSRs in the country.
“We have no competition for KFC in India,” Ravi Kant Jaipuria, chairman, Devyani International, had said at the time. Devyani International runs 284 KFC India stores across 107 cities and the brand contributes more than half of its revenues. Sapphire Foods, which too launched its IPO last year, is another major franchise for KFC in India.
Both the companies already compete with Jubilant FoodWorks in the pizza segment as they also operate Yum! Brands-owned Pizza Hut in India. Jubilant FoodWorks with Domino’s Pizza, however, has clear leadership in the pizza market. Sample this: Pizza Hut currently has 500 stores in India, of which 317 are run by Devyani International; Jubilant FoodWorks, on the other hand, already has 1,335 outlets of Domino’s Pizza in India.
Now with the launch of Popeyes, Jubilant FoodWorks, it seems, wants a chunk of the fried chicken pie too.
Westlife Development, which holds the master franchise for McDonald’s in southern and western India, also has set its sight on the fried chicken segment in India. In an interview with Moneycontrol in September last year, Smita Jatia, managing director of Westlife Development, shared an ambitious plan to become a market leader in the segment. The company has already introduced fried chicken in its 125 stores in South India and plans to soon launch the food item in the western region too.
Clearly, the fried chicken market is certainly headed for interesting times as several new QSR players vie for a share of it. According to experts, the segment also offers the next avenue for growth for QSR players. “While fried chicken was the first to take off in Southeast Asia, in India, pizza and burgers found takers given the preference towards wheat-based cuisine in some parts of the country,” said Rajat Tuli, partner at global management consulting firm Kearney.
“However, as Indians become more experimental with food and trying out different cuisines, the fried chicken segment offers the next arena for growth to QSR companies,” he added.
Tuli also believes that the segment has enough space for a couple of players. “The QSR space is poised for over 20 percent growth in the next five-six years and hence there is enough headroom for multiple players to grow in it,” he said.
‘Veg options and no MSG’
The Popeyes India menu will feature the signature Cajun-flavoured Chicken Sandwich and Popeyes signature Chicken in Classic and Spicy flavours. The Indian menu will also feature an array of vegetarian options and will also have rice bowls and wraps. The entire India menu has no flavour enhancer monosodium glutamate (MSG), and the chicken is antibiotic-free, said Jubilant FoodWorks.
In a statement, Shyam S. Bhartia, chairman, and Hari S. Bhartia, co-chairman, Jubilant FoodWorks, said, “We are excited to introduce the Popeyes Louisiana Kitchen brand to chicken-loving Indian consumers. We are confident that Popeyes will not only delight guests but also strategically complement our portfolio and fortify JFL’s leadership in the QSR domain.”
Popeyes will start with its flagship store in Bengaluru’s Koramangala on January 19, followed by stores in New BEL Road and Kammanahalli soon thereafter. The brand will have its own app (Android and iOS) and mobile website.
To ensure a smooth and seamless delivery experience, Jubilant FoodWorks has built its in-house delivery fleet with e-bikes to enable zero-emission delivery. The company is also taking precautions given the pandemic situation.
“Safety protocols like daily temperature screening for all employees and frequent sanitisation of the restaurant are being implemented and frequent sanitisation of bikes will be conducted. All delivery riders will be compulsorily wearing face masks and gloves while following the frequent hand sanitisation protocol,” it added.
Source: moneycontrol
admin
December 23, 2021
Devika Singh, Moneycontrol
December 23, 2021
Male grooming products startup The Man Company, known for its online-first strategy, is looking at offline expansion for its next leg of growth. The company, which operates 28 exclusive brand outlets in the country, plans to launch 60-70 more stores by the end of this fiscal to gain presence across at least 100 locations.
“A lot of growth will come from the offline channel for the next one year at least, especially in Tier II and III cities where launching exclusive stores is a good way to introduce the brand to the consumer as shopping malls are weekend destinations there,” co-founder Hitesh Dhingra told Moneycontrol.
The company, backed by fast-moving consumer goods (FMCG) major Emami which holds a 48.49 percent stake in it, is also looking at introducing its products in more multi-brand outlets. The Man Company is present in 1,200 multi-brand outlets which include lifestyle stores such as Shoppers Stop, Central and Lifestyle as well as hypermarkets, supermarkets and pharmacies. The company plans to be in 2,500 multi-brand outlets by the end of financial year 2022-23.
It currently draws about 70 percent of its sales from online channels including its own direct-to-consumer (D2C) platform and online marketplaces and 30 percent from offline channels. The startup’s strategy is focused on expanding its base in Tier II cities and beyond, which account for 50-55 percent of its sales even on online marketplaces.
“Out of our 28 exclusive brand outlets, only five to six are in top 10 cities and the rest in Tier II and smaller towns. For the new store openings also, we are going to adopt a similar strategy and only 10 percent of the new outlets will be in large cities,” said Dhingra.
The offline way
Several D2C brands have been eyeing the physical retail channel as they try to scale up and tap a wider set of consumers. Brands in the women’s beauty and personal care segment such as Mamaearth, Sugar Cosmetics and Plum Goodness are expanding their presence in the offline retail format. Plum, for instance, is looking to launch 50 exclusive brand outlets in the next two years.
Male grooming startups, too, are following a similar trajectory. For instance, Bombay Shaving Company and Baeardo are launching their products in more and more offline stores.
Devangshu Dutta, chief executive of retail consultancy Third Eyesight, said it makes sense for digitally-native companies that have achieved some brand recognition to launch in offline format for the next phase of growth. Brands in the 1990s for example, he said, who wanted to establish an identity, entered new formats or channels besides the existing ones. Similarly, digitally-native brands need not restrict themselves to online platforms alone, he added.
But he pointed out that these brands will have to address challenges such as ensuring availability of their products in offline channels. “In the online segment, companies can cater to customers with limited stocks. However, in the offline channel, they need to ensure availability of products across stores,” he said.
New categories
Apart from new retail categories, The Man Company has plans to enter categories such as sexual wellness and personal appliances. It has tied up with a marketplace for the launch of personal appliances such as beard trimmers and shavers and the category will be launched exclusively on the platform. The sexual wellness products, too, will be introduced on its D2C platform and later to other marketplaces and offline stores.
“We always launch a product on our platform to test it and get consumer feedback and, based on the response, we introduce the product to the wider market,” said Dhingra.
Launched in 2015, The Man Company caters to the men’s grooming segment and claims to have developed more than 65 stock keeping units. According to Dhingra, the company which competes with Beardo, Bombay Shaving Company and Ustraa will double its sales to Rs 100 crore by the end of this financial year.
Male grooming startups have of late attracted attention from FMCG companies. Marico last year completed the acquisition of Ahmedabad-based Beardo by buying an additional 55 percent stake in the company. It had acquired an initial 45 percent stake in 2019. British consumer goods giant Reckitt Benckiser Group invested Rs 45 crore in Bombay Shaving in February 2021. LetsShave and Ustraa are backed by Wipro Consumer Care.
According to industry estimates, the male grooming market in India was valued at Rs 15,806 crore in 2019 and is expected to cross Rs 36,402 crore by 2025, growing at a compound annual rate of 15-14 percent. Though growth was hit by the pandemic, experts are still bullish about the segment.
(Published in Moneycontrol)
admin
November 1, 2021
Written By Vaishnavi Gupta
D2C brands are taking the traditional retail route to scale up
Analysts say that the move to offline retail makes sense for digital-first brands in categories where experiencing the product is an important driver for purchase
While brands across categories made a beeline for e-commerce during the pandemic, physical retail earned prominence among direct-to-consumer (D2C) brands. Melorra, Plum, Pee Safe and Libas, among others, have been building their offline presence over the past year.
The total retail market in India is estimated to be worth Rs 63 lakh crore, of which 95% buying happens through offline formats, according to Devangshu Dutta, founder, Third Eyesight.
Having started as an online-only brand in 2013, Pee Safe launched its first exclusive store in India in February, 2021. The personal hygiene brand currently operates a store each in Gurugram, Bengaluru and Ahmedabad; and plans to launch 50 offline stores in the next 12 months. “There is a strong demand for personal hygiene and wellness products in the offline market. Hence, opening exclusive outlets is a crucial element of our growth strategy,” says Srijana Bagaria, co-founder and director, Pee Safe. These exclusive brand outlets (EBOs) will be launched through the franchise-owned and franchise-operated (FOFO) model.
Online ethnic wear brand Libas, meanwhile, unveiled two brick-and-mortar stores in New Delhi in September, 2021. The brand has an ambitious target of 200 more stores by 2025 in malls and high streets across metro and tier II cities. A click-and-collect facility will be operational soon, says Sidhant Keshwani, managing director, Libas. “We are aiming for our offline market share to be 25% in the coming two years,” he adds.
The brand offers a range of wedding and occasion wear, as well as ready-to-stitch fabrics exclusively in its offline stores. Soon, it also plans to foray into the kidswear and menswear categories, as well as home décor.
Beauty brand Plum, which has been retailing online since 2014, launched its first store in Mumbai in October, 2021. Plum’s founder and CEO, Shankar Prasad, says the goal is to take the store count to 50 by 2023, and for EBOs to contribute “10-20% of our total sales in two-three years”.
Jewellery brand Melorra extended its presence offline back in December, 2020. “We have been growing 200% year-on-year; we expect to post even stronger numbers this year with the addition of offline stores. We are looking to touch $1 billion in revenue in five years,” says the company’s founder and CEO, Saroja Yeramilli.
A good step?
Analysts say that the move to offline retail makes sense for digital-first brands in categories where experiencing the product is an important driver for purchase. “D2C players have so far done a great job of owning the consumer journey which is largely online. They now see that for the next wave of growth and penetration, they need good representation in a larger set of touchpoints,” says Rachit Mathur, partner and MD, BCG.
However, online is likely to remain the primary revenue stream for these digital-first brands. “Brands such as Lenskart, Nykaa and FirstCry have done a great job in driving strong retail presence and viable productivity, but continue to have a higher bias of online sales,” Mathur notes.
D2C brands could perhaps try a mix of formats for an offline foray, from EBOs to a presence in departmental stores, or even small SIS (shop-in-shop) counters in shopping centres. But brands would need to be cognisant of the fact that consumers behave differently depending on the shopping environment they are in. Hence, the interface, service offering, and even the product mix may have to be tweaked. “Simply bringing in technology into an offline environment just because you are an online-first brand may do nothing to enhance the consumer experience, and may even detract from it,” Dutta says.
Source: financialexpress
Devangshu Dutta
April 7, 2020
Oil shocks, financial market crashes, localised wars and even medical emergencies like SARS pale when compared to the speed and the scale of the mayhem created by SARS-CoV-2. In recent decades the world has become far more interconnected through travel and trade, so the viral disease – medical and economic – now spreads faster than ever. Airlines carrying business and leisure-travellers have also quickly carried the virus. Businesses benefitting from lower costs and global scale are today infected deeply due to the concentration of manufacturing and trade.
A common defensive action worldwide is the lock-down of cities to slow community transmission (something that, ironically, the World Health Organization was denying as late as mid-January). The Indian government implemented a full-scale 3-week national lockdown from March 25. The suddenness of this decision took most businesses by surprise, but quick action to ensure physical distancing was critical.
Clearly consumer businesses are hit hard. If we stay home, many “needs” disappear; among them entertainment, eating out, and buying products related to socializing. Even grocery shopping drops; when you’re not strolling through the supermarket, the attention is focussed on “needs”, not “wants”. A travel ban means no sales at airport and railway kiosks, but also no commute to the airport and station which, in turn means that the businesses that support taxi drivers’ daily needs are hit.
Responses vary, but cash is king! US retailers have wrangled aid and tax breaks of potentially hundreds of billions of dollars, as part of a US$2 trillion stimulus. A British retailer is filing for administration to avoid threats of legal action, and has asked landlords for a 5-month retail holiday. Several western apparel retailers are cancelling orders, even with plaintive appeals from supplier countries such as Bangladesh and India. In India, large corporate retailers are negotiating rental waivers for the lockdown period or longer. Many retailers are bloated with excess inventory and, with lost weeks of sales, have started cancelling orders with their suppliers citing “force majeure”. Marketing spends have been hit. (As an aside, will “viral marketing” ever be the same?)
On the upside are interesting collaborations and shifts emerging. In the USA, Jo-Ann Stores is supplying fabric and materials to be made up into masks and hospital gowns at retailer Nieman Marcus’ alteration facilities. LVMH is converting its French cosmetics factories into hand sanitizer production units for hospitals, and American distilleries are giving away their alcohol-based solutions. In India, hospitality groups are providing quarantine facilities at their empty hotels. Zomato and Swiggy are partnering to deliver orders booked by both online and offline retailers, who are also partnering between themselves, in an unprecedented wave of coopetition. Ecommerce and home delivery models are getting a totally unexpected boost due to quarantine conditions.
Life-after-lockdown won’t go back to “normal”. People will remain concerned about physical exposure and are unlikely to want to spend long periods of time in crowds, so entertainment venues and restaurants will suffer for several weeks or months even after restrictions are lifted, as will malls and large-format stores where families can spend long periods of time.
The second major concern will be income-insecurity for a large portion of the consuming population. The frequency and value of discretionary purchases – offline and online – will remain subdued for months including entertainment, eating-out and ordering-in, fashion, home and lifestyle products, electronics and durables.
The saving grace is that for a large portion of India, the Dusshera-Deepavali season and weddings provide a huge boost, and that could still float some boats in the second half of this year. Health and wellness related products and services would also benefit, at least in the short term. So 2020 may not be a complete washout.
So, what now?
Retailers and suppliers both need to start seriously questioning whether they are valuable to their customer or a replaceable commodity, and crystallise the value proposition: what is it that the customer values, and why? Business expansion, rationalised in 2009-10, had also started going haywire recently. It is again time to focus on product line viability and store productivity, and be clear-minded about the units to be retained.
Someone once said, never let a good crisis be wasted.
This is a historical turning point. It should be a time of reflection, reinvention, rejuvenation. It would be a shame if we fail to use it to create new life-patterns, social constructs, business models and economic paradigms.
(This article was published in the Financial Express under the headline “As Consumer businesses take a hard hit, time for retailers to reflect and reinvent”.
Devangshu Dutta
December 17, 2019
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.)
