Business Expansion – Dutch Uncles

Chowman Filling the Gap in Kolkata’s Dining Space

Vaishali Das — Mon, 05 Jul 2021 10:35:04 +0000

Chinese cuisine has always been one of the most comforting and go-to food choices for people across the globe. From top of the line cafes to street side stalls, Chinese food is all over. The authenticity of Chinese cuisine lies in its ingredients and therefore it is only being served in some fine-dine restaurants.

As a result, most of the crowd is deprived from getting the actual taste of this cuisine. This is where the Kolkata-based food startup Chowman comes into picture. This startup is the brainchild of an avid traveler, musician and a big time foodie, Debaditya Chaudhury, who aims to bring the high-end dining experiences to the masses.

Expansion of Chowman During the Pandemic

A small startup was established in 2010 with a mere idea of bringing the culture of Bengal, that is, their love for food and music, into one place and providing the experience of fine dining at a reasonable price. Chowman became the talk of the town when it recently launched a cloud kitchen in Bengaluru.

Its decision to open up a cloud kitchen amidst pandemic and targeting the working professionals became a profitable business expansion move. In the COVID era, people are more skeptical about going out to dine in. Perceiving the consumer behaviour, Chowman focused on home delivery and takeout services.

The startup also plans to open up 4 more outlets in Bangalore by the end of 2021. While the food and beverage industry struggled to stay afloat, startups like Chowman focused on two key areas:

Quality of food
Fast delivery services

Chowman has prioritized on gaining loyal customers with its affordable pricing and high quality dining experience. Even after the lockdown restrictions have been lifted, the startup focuses more towards home deliveries.

The revenue model of Chowman is based on low-profit margins with a standardized pricing across all the 15 outlets in Kolkata.

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Chowman’s USP lies in its way of democratizing fine dining and bringing the five-star quality experience at an affordable price.

How Music Shaped Chowman’s Menu?

Debaditya Chaudhury, being a part of a band – Lakkhichhara, travelled around the world, tasting various cuisines. His Bengali foodie heart made him try authentic Chinese cuisine. That is when he realized that this particular cuisine has not been given its due credit in India.

By establishing Chowman, Chaudhury blended his musical experience with Bengalis’ love for Chinese cuisine together under one niche.

How Chowman is Different From the Others in The Market?

Chowman serves mainstream Chinese dishes like Chili Chicken and Hakka Chow. These are the nostalgic Kolkata-Chinese dishes. Along with these, it also serves some exquisite dishes like dimsums, minced pork in oyster sauce, etc.

What makes them different from others is:

Ambience
Authenticity

They import most of their sauces and cutleries from Hong Kong and Thailand.

Starting a business in a saturated market like Kolkata, which is already crowded with Chinese restaurants in every corner of the city was a challenge. However, Chowman’s USP lies in its way of democratizing fine dining and bringing the five-star quality experience at an affordable price.

What’s in it for Food Startups?

Chowman left a mark in the F&B industry by understanding the business market and targeting the right consumer with the right strategy:

It brought in the fine-dine experience minus the fancy protocols making it more comfortable for general masses.
Tapping the home delivery sector by partnering with Swiggy and Zomato at the time of pandemic was a spot-on strategy. This has resulted in the highest number of fleets with around 150 bikers only in Kolkata.

Food and restaurant businesses should research, analyse and know the market discreetly, perceive consumers’ minds and based on that, respond with a sure-shot strategy.

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10 Uncommon Marketing Strategies That’ll Kickstart Your Startup

Shalmoli Sarkar — Sat, 17 Apr 2021 06:35:05 +0000

The road to beginning a new venture is full of ups and downs. For any new startup the biggest challenge is to quickly increase reach and attract new users. It is indeed difficult for startups to increase the user base with a shoestring budget. Unlike established brands that use expensive marketing strategies such as TV commercials on prime times, startups under budget constraints should look forward to uncommon marketing strategies to gain quick attention.

Top Uncommon Marketing Strategies

Holding a challenge around the product

‘We should sell the solutions for the problem, but not the product’ is an old trick in marketing. Too much marketing content on a product, might cause and fatigue to the viewers and will fail to garner attention. Instead, create challenges to let people realise that with your product the challenge might seem easy or there will be no challenge at all.

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Budget constraints should not deter startups from attempting marketing strategies that are uncommon.

Reach out to the specific audience

Emerging businesses before launching marketing content should first determine the ideal target audience- its tastes, preferences, character traits, etc. For example Bewakoof.com – an online fashion retail startup focuses on creating memes, comedy, puns, etc. to attract its millennial audience.

Collaboration with other brands

Collaborating with a known brand can bring attention to your startup. For instance, Uber, a ride hailing app, had collaborated with Spotify a music streaming app. Both the brands collaborated since they shared similar goals and cater to the same target audience. The collaboration transformed mundane long travelling journeys in cabs into a fun one with Spotify. The customers were given the option of connecting with Spotify and becoming a DJ by playing their choices of songs. Collaboration is a great technique that helps in widening the customer base and brand reach.

Influencer Marketing

Leveraging the already existing fan base of an influencer, startups can increase the user base. Startups can send their products to the influencer to video content for reviews , product demonstration, etc. Influencer marketing improves brand awareness and effectively reaches the target audience.

Involving in social causes

Using your product to involve in a social cause attracts attention to the brand. By using the product users should be able to contribute to society. For instance- Aditya Birla Health Insurance has launched an initiative ‘Jump for Health’ where for every 10,000 jumps made, it will donate a prosthetic leg to the needy. In this way, they are promoting the message to remain healthy by jumping 10,000 times as well as extending support to the society.

Creating Viral Video

Recently, viral marketing has been grabbing eyeballs. The recent viral advertisement from Cred which shows Rahul Dravid losing his calm in a traffic jam, has garnered over 3 million views in less than a day on social media platforms. Cred has taken the advantage of viral marketing by creating a viral explainer video of the product, where it shows how timely payment of credit cards gives rewards and keeps good financial behaviour. To achieve viral status, there needs to be something humorous about your video at the same time that should help people know about your product.

Becoming a Problem Solver

People should look up to your startup as a problem solver other than offering solutions that your product already offers. For instance NUA – a female wellness brand that offers a complete range of sanitary pads for all degrees of flow – organises open forums, discussions with gynaecologists to talk about important women health issues such as PCOD, changes in women after maternity, etc.

Holding a contest or Quiz

When we hold contests, it stimulates the competitive spirit to emerge as winners in humans. Therefore, this spirit drives engagement to participate and win something that will be valuable to the startup. For instance, Wakefit- digital first mattress brand organised a sleep internship programme where the participants need to sleep for 9 hours continuously for 100 days , where the winner gets a cash prize of Rs 10 lakhs.

Free samples

Offering free samples with a product purchase lets customers know about the various product lines that your company offers. This strategy is extensively followed by Mamaearth. With every purchase of its products it sends a few other product samples for trials and collects people’s feedback.

Referral Marketing

People like to use products based on recommendations and advice. It helps in developing a huge user base for the product or service and fosters credibility of the product or service as the current users promote the product to their friends and family.

What is in it for startups?

Startups should implement these uncommon marketing strategies to drive engagement and create a two-way communication with the target audience. Low marketing budget should not deter the startups from creating marketing campaigns that can the company to quickly attract users, customers, or subscribers.

The secret is to leave old school marketing strategies and go for uncommon but highly creative approaches.

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Who are the Greatest Entrepreneurs Ever and Why?

Aakash Sharma — Fri, 16 Apr 2021 12:35:04 +0000

Being an entrepreneur and entrepreneurship are more than just the activities of setting up a business and taking on financial risks in the hope of profit. It is the creation or export of value through business activities. In this light, entrepreneurship is viewed as change, generally entailing risk beyond what is typically confronted in starting a business, including other implications than simply financial ones. Those who have gone up and beyond the conventions have made an indelible mark in the history of business.

From the Gilded Age to the dot-com boom and today’s technological expansion, here we list each unique and outstanding entrepreneur ever and why they are considered so.

John D. Rockefeller

John D. Rockefeller is considered the richest man in recorded human history. Rockefeller attained this feat through horizontal and vertical integration and capacity increment in the 20th-century American oil industry.

Rockefeller’s mark in the business world is so immense that his legacy continues to exist even today through companies like Exxon Mobil and natural gas liquids company ConocoPhillips.

Andrew Carnegie

Andrew Carnegie’s humble beginnings, as a Scottish immigrant in a poor town in Pittsburgh to running steel factories in the US, is one of the ages-old tales of rags to riches. His mills led the technological revolution of the era. Carnegie employed the best minds in business and combined the innovative process with the long-term goal of acquiring industry equipment in any market crisis.

Andrew Carnegie’s legacy – which is solid and moral – differs from his contemporaries. He pioneered philanthropy through his vast wealth and gave away most of his fortune to the cause while calling upon other wealthy moguls to do the same.

Thomas Edison

Thomas Edison was undoubtedly one of the most innovative creators and inventors of late 19th and early 20th centuries. Along with science, his business intelligence and entrepreneurial skills further enlarge his legacy as a pioneer of unmatchable entrepreneurship.

Edison was the inventor of what is now known as the research and development “R&D” technique. He was one of General Electric‘s (GE) patrons and created many technologically advanced companies, including Edison Electric and Con Edison.

Henry Ford

While Henry Ford did not develop the automobile, he certainly is the most associated person with cars. This is because Ford’s unique business model, the Ford Assembly Line, changed the automobile history. Henry Ford promoted the automotive industry for many years, and his company continues to supply great cars for the masses well into the 21st century.

Ford put his entrepreneurial skills to the fore and unleashed the power of mass production with his large factories that produced the first-ever car for the masses- the Ford Model T. Ford’s progressive labour policies and his constant drive to make each vehicle better, faster and cheaper made sure that the world would think of Ford when they shopped for a car.

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A greatest entrepreneur ever is made by not just their innovative products and services but by their vision of delivering uniqueness and value.

Coco Chanel

Coco Chanel completely changed women’s clothes and dressing culture in the 20th century. She is credited for the birth of the Little Black Dress (LBD), a fashion statement that is still popular today and is likely to last for many years to come.

Inspired by Catholicism, Coco Chanel wanted to create something simple and practical for women’s fashion. One skill that allowed her to be a thriving businesswoman was her creativity. Chanel thought outside the box when it came to style, especially when she conceived the signature ‘little black dress’. She always found new ways to achieve flawless results and reinvented the fashion industry singlehandedly.

Walt Disney

Walt Disney began his career as an animator for an advertising agency. He began directing his animated shorts in his studio garage in the 1920s when the agency eschewed his idea of a cartoon character- Mickey Mouse. Disney created ‘Mickey Mouse’, taking inspiration from a mouse in his office. And the rest is history. The character became a commercial success which allowed Disney to build an animation conglomerate that featured animators, musicians and performers.

By banking on his unique ideas and mixing new ways of doing business, Disney turned Mickey Mouse into a range of theme parks, movie entertainment venues and businesses. After his death, the growth of Disney and Mickey Mouse continued and today, The Walt Disney Company is the largest mass media company in the world.

Bill Gates

Bill Gates is often described as “rich, competitive and smart”. And these adjectives definitely fit his persona as an innovator and entrepreneur. His entrepreneurial instincts and innovative approach have made him one of the most successful and influential ‘financial’ people globally.

Gates not only won the so-called race for making mass operating systems (OS) and Internet browsers at the end of the 20th century, but he also won the financial race of forming the most valuable technology company.

With Microsoft, Gates has benefited and influenced an entire generation of entrepreneurs, and his name is written in the history as an entrepreneur in golden words.

Elon Musk

Elon Musk is an outstanding example of the entrepreneurial spirit due to his ability to overcome disappointment. From the Tesla brand’s mechanical breakdown in the initial stages to rocket crashes that nearly bankrupted SpaceX, he has faced many blows throughout his journey. Musk has set an impeccable example for aspiring entrepreneurs with his constant commitment, vision, adventure, and personal growth. It is these qualities only that have made him the second richest person in the world in 2021.

Mark Zuckerberg

Mark Zuckerberg had a clear understanding of the vision in his mind before starting his world-changing venture – Facebook. He was focused on what changes his business idea would convey to the world. He is an entrepreneur of the modern age. His development of Facebook has helped social media become a crucial tool in current business tradition for marketing and publicity to promotional deals.

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Beauty, Health and Wellness in Tier 2 and Tier 3 Cities

Aakash Sharma — Mon, 12 Apr 2021 02:35:04 +0000

In recent years, consumer perception and acceptance towards fitness and beauty products have increased overwhelmingly and changed the face of the beauty, health and wellness industry. The industry and its products and services have moved beyond the constraints of ultra modular city life. With an increase in the workforce’s disposable income, rapid urbanisation and a desire for a better lifestyle, a higher demand for wellness and beauty services has been witnessed from the middle class in the second and third-tier cities.

With the advent of innovative technologies and new services in the field, the first signs of digital bottlenecks have appeared in the health, beauty and wellness segment. Traditional players are playing critical roles through new technologies extending their valuable services, such as artificial intelligence (AI), machine learning, and data analysis. These are increasing businesses’ products and services, customer loyalty and expansion plans across India.

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With more people from Tier-2 and Tier-3 towns using the internet, the prevailing online wellness industry is close to an entire digital makeover.

Impact of COVID-19 on the Development of Beauty, Health and Fitness Industry in Tier 2 And 3 Cities

Any crisis, particularly a public crisis, expects leaders to perform with knowledge, compassion and decisiveness. In the ongoing pandemic, the health and wellness sector has played an essential role in ensuring that reliable safety and health information is available to the public in real-time. The collaboration between the public and private health sectors to raise public awareness and enable informed participation for consumers has also opened new avenues for businesses to utilise them for future tech-based growth.

Leveraging Technology to Draw the Industry Closer to the Market

With the onset of a new decade in 2021, the beauty, health and wellness industry is seeing a generation of intelligent and digitally savvy consumers for whom they can provide technology-based health solutions. The use of technology is not foreign to health products and services. The industry already uses technology to develop product strategies, integrate online and offline channels, obtain more customer information and personalise healthy food and services.

Companies are using digital ways like AI integration, e-commerce adoption and other formats to develop sustainable models using innovative equipment and resources. Many established and start-ups in the industry are acquiring and producing high-quality products to power their supply chains. This includes using innovation to evaluate the consumer’s lifestyle, practices, and how food safety features improve life quality.

India’s Tier 2 and 3 Cities are Contributing Significantly to Healthcare and Wellness Industry

Various economic and financial factors such as high income, online shopping style and easy access to smartphones have improved access to preventive medical, beauty and wellness facilities in Tier 2 and Tier 3 Indian cities. With more people from Tier-2 and Tier-3 towns reaching the internet, the prevailing online wellness industry is close to an entire digital makeover. The digital system working together with new and established businesses in real-time is expected to bring new and unique products for consumers in the smaller cities. A growing awareness of the benefits of good health habits is enabling people to avoid unhealthy environments and choose foods rich in nutrients, nutrients and vitamins, effectively boosting the demands that businesses need to cash in on.

Industrial Development in Non-metro Cities

As the market has stabilised in major Indian cities, companies have started targeting Tier 2 and Tier 3 cities for expansion plans. In September 2017, wellness and beauty company Anytime Fitness announced additional projects and funding of approximately $1.4 million for starting its operations in Ludhiana, Dehradun, Jamshedpur and Srinagar.

As people’s income increases over time, they spend more money on wellness, beauty, and grooming. Start-ups and small businesses can take advantage of this spike in demand by offering exclusive services in tier 2 and 3 cities. This significant boost has been witnessed in the hair salon segment in recent years.

Lakmé already has 25% of its salons in tier-3 cities, and it plans to launch two outlets each week to have a pan-India presence. Some of its upcoming salons are designed in Imphal (Manipur), Trivandrum (Kerala), Kadavanthra (Kerala) and Raichur (Karnataka). In October 2018, it opened its 400th salon in Gariahat, Kolkata. Jawed Habib Hair & Beauty Limited aims to expand to the taluka (sub-district) level by converting existing salons in villages and operating at their original names added next to the brand name. VLCC has over 220 wellness and beauty centres, out of which nearly 40% are in tier-2 and tier-3 cities.

Bridging the Gap of Skilled Professionals

Discovering and retaining talent is the most significant difficulty facing beauty and wellness businesses today. There is a shortage of high-quality educational schools with accredited training processes. Vocational training courses usually provide theoretical knowledge and limited experience. There are no government voluntary organisations or training centres to improve the Beauty, Health and Wellness skills. As a result, the only means for the companies to develop the right skills for their employees is through in-house training.

Although, the training and upskilling processes have started to change in recent years. The government has inaugurated several measures to improve technical skills and competencies for the sector. Big players like VLCC and Jawed Habib are also investing significant sums in improving their training and practice to build a strong presence in tier 2 and 3 cities, thereby expanding the market to the remotest parts of Indian states.

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Top International Investors Looking to Partner with Retail Start-Ups

Aakash Sharma — Fri, 02 Apr 2021 00:35:04 +0000

Due to the coronavirus pandemic, offline retailing was severely affected in 2020, leading to increased e-commerce, online grocery retail sales and birth of numerous retail start-ups in India. JioMart, BigBasket and Grofers, along with giants Amazon and Flipkart, emerged as the top players in increasing the number of sellers on their platform. These companies saw an increase in the average number of orders and app downloads during the lockdowns and quarantine periods that lasted well over seven months.

Growth of Online Retail Start-ups will continue

Many venture capitalists in India and worldwide estimate that internet usage has surpassed all records. India has over 500 million daily internet users. This has opened new avenues for newly created companies and start-ups to grow substantially.

As a result of innovation in new retailers, social enterprises and warehouses, the retail sector is pegged to expand. In e-commerce, there will be a significant increase in the direct-to-consumer or D2C segment in 2021. These upward trends have also increased investor’s appetite, as is evident in music accessory start-up boAT, which has raised over $100 million in 2021 alone.

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Retail start-ups are set to grow as a result of innovation in new retailers, social enterprises and warehouses, specially in the D2C segment.

Tech Retail Start-ups – Shoopy is making waves

In the first round of funding, retail start-up Shoopy raised $250,000 from Campanile Investments and Delhi-based investment firm Redcliffe Capital. Shoopy uses existing resources to accelerate a business’ growth. Shoopy is a multilingual application that allows local marketers and business owners to connect easily. It effectively manages invoices, inventory levels and other aspects of the business. Shoppy competes with e-commerce giants to help small and medium-sized enterprises (SMEs, MSMEs) develop digital infrastructure.

Top Investors Looking to Invest and Partner up with Retail Start-ups this year

Venture Catalysts – A catalyst for entrepreneurship

Venture Catalysts is an integrated incubator for start-ups. Its purpose is to provide a combination of funding, consult and networking for retail start-ups and new businesses. Catalyst’s portfolio is represented in 25 cities in India and four other countries including UAE, Hong Kong, UK and Singapore.

Angel Investment Network- Increasing partnership opportunities

Angel Investment Network is a leading angel investment firm that actively brings together renowned investors for different sector start-ups, including information technology, pharmaceuticals and retail. It also has a history of supporting large-scale industries such as e-sports and gaming, tourism and construction.

Stanford Angels and Merchants- Climbing the global entrepreneurship wall

Stanford Angels and Entrepreneurs (SAE) is a wide-ranging investment firm with extensive experience, knowledge and business skills. The organization provides opportunities for potential collaboration with the Stanford community in Silicon Valley. Its commitment to developing a business start-up ecosystem in India is a crucial driving force for funding start-ups. SAE provides an excellent partnership platform to find and expand a network of aspiring entrepreneurs and investors.

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Keventers: Ending the Quest for the Best

DU Desk — Tue, 30 Mar 2021 04:35:04 +0000

Gone are the days where you sat in an ice-cream shop and enjoyed a nice cold, simple milkshake. The very thought of milkshakes bringing about a feeling of nostalgia and flings one back into the past to simpler times. Entre Keventers, a name that nowadays is synonymous with milkshakes and nostalgia the world-over. What began as a simple dairy factory in the Chanakyapuri area of Delhi in 1925, has now exploded onto the international and national markets as an industry disruptor in the food and beverage sector. Keventers holds a timeless feel to its brand and is one of India’s oldest standing names in the industry. Edward Keventer could have never imagined the scale of the business’s success all those years ago and he would be proud to see how far it has come.

A Brief History of Keventers: Almost a Century in the Making

The Legacy of Keventers dates all the way back to the early 1900s, even before the first dairy manufacturing unit which would become the eponymous brand was established. In 1899 Danish dairy entrepreneur Edward Keventer came to India and began setting up dairy manufacturing units across Delhi, Aligarh, Calcutta and Darjeeling in the early 1920s. Keep in mind that it was a far cry from the classic milkshakes we know today.

Come 1925 is when things started to really take shape with the dairy unit that was established in Chanakyapuri area of Delhi which was a privately labelled dairy products company. After that, the popularity of the brand shot through the roof and remained as such even through the change in ownership after Edward Keventer passed and his nephew Werner Keventer took over the business.

By the 1940s the Keventers brand had risen through the ranks and become a prominent dairy manufacturer in India despite the turbulent times and the chaos surrounding the fight for India’s independence. After Independence the company once again changed hands and was bought by Ram Krishna Dalmia of the Dalmia Group in 1960, marking a new era in the brand’s journey.

Under new ownership, the company pivoted and underwent an aggressive revamp that still stayed true to its roots. The plant was refitted with a more modernised structure (modern at the time that is) and was making use of the latest machinery for milk bottling and pasteurising. These efforts made Keventers famous for its milk and ghee products and even led to the expansion of the manufacturing of ice-creams. By the 1970s the brand was at its peak and was popularly termed as ‘Keventer’s Shake’. The demand was so high in fact that Keventers had 48 distributors and stockists, this distribution network was on par with that of the demand for fresh milk products.

This forced the company to invest in the production of less perishable products that could achieve wider distribution to keep up with the demand. As a result, even the Indian army began using Keventers’ milk powder and condensed milk.

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As it is with every business the landscape around it is constantly changing and so too does the feasibility of operations, Keventers managed to ride out that change and came back stronger than ever.

A Bump in the Road

As it is with every business, there are bound to be setbacks and this came in the form of time and change for Keventers. As New Delhi changed with time so did the area of Chanakyapuri where the factory was located. It morphed into a residential area from the industrial locality that it once was and with that Keventers was no longer able to operate the factory there leading to its doors closing.

Fast-forward decades later to 2015 and Keventers was being pulled from beyond the brink by the Grandson of Ram Krishna Dalmia, Agastya Dalmia. Though the initial relaunch was a failure, he persisted and tried again, this time with the aid of Aman Arora and hospitality consultant Sohrab Sitaram who now sits as the CEO of the company.

Pivoting and Revamping: An Innovative Business Strategy

The Challenges Keventers Faced Starting out the Gate

One of the biggest challenges that the company had to overcome in the wake of this pivot was trying to bring their image back to life, in the sense that, since the company closed its doors up until it was relaunched the activity in the market was practically non-existent and people needed reminding. While the brand was very well known amongst the Gen-X, the challenge lay in bringing out that brand presence and recall value amongst the Gen-Y demographic as well.

The second issue that they faced was tracking down the original recipe to bring back the originality and authenticity. Though Keventers managed to track down the original recipe, the challenge of boosting brand recognition remained; the solution was franchising.

Franchising Keventers: A Big Step in the Right Direction

The franchising model was adopted to spread the brand presence across the country while simultaneously carving out a niche category for itself in the milkshake business. What made this franchising model so successful was that it operated under the premise of outsourcing the selling rights to major market players and gave them permission to open outlets across a specific city.

This garnered so much success that the master franchising plan was expanded to foreign countries like (Nairobi) Kenya, the United States, Nepal, UAE (United Arab Emirates) and even Oman. Now the company proudly holds footing in over 70 cities across four countries. With over 200 outlets under its brand by the year 2019 and looking to expand to 100 more outlets in Nepal and West Asia, the brand was thriving.

Refining the Product for the Modern Customer

The Franchising aside Keventers revamped the old classic milkshake and added some modern twists to it. The first change was to the packaging itself. In order to maintain authenticity and that nostalgia factor in a modern world, they moved back to the old ways of selling milkshakes in classy glass bottles rather than the PVC cups used prior. This change came with a sleek logo and it is reusable for the modern environment-conscious crowd. This had the side-effect of turning the bottles into somewhat of a collector’s item.

Coming to the contents within the bottle, the meat of the story, or milkshake, in this case, Keventers introduced flavours. To be more specific, it introduced a wide range of flavours from Butterscotch, Chocolate and Strawberry, of the original old-school recipe to chocolate mint Oreo, Banoffee and even KitKat for the younger generation (A something-for-everyone approach).

Handling Financials in a Smart Way

In its initial stages of the relaunch the company started small by not investing much in expansion but as demand and popularity grew so did the need for a Franchise model. By April of 2016, the brand started selling master franchise rights and this was a smart way to expand without having to invest too much money from the company’s side.

According to a TEDx Report, in just over three years since the relaunch in 2015, the company was clocking in with a turnover of almost Rs 100 crores in 2018. With a buy-in amount of Rs 25 to 30 lakhs for the franchising outlets, around 50 per cent of the company’s revenue comes from this, while the rest comes from percentages of monthly sales and brand royalties.

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Re-entering a market after years of inactivity brings with it some major challenges. Keventers recognised this obstacle and made some wise decisions that lent themselves to making the brand a front-runner.

Keventers’ Re-entry: Taking the Market by Storm

With all its revamping and re-launch efforts Keventers was entering the competitive market after a long time. It also entered the arena around the time when fast-foods and similar beverage/milkshake-type businesses were entering the market. One of its biggest competitors to date also made its debut around the same time in 2017. Fair to say that it was a very saturated marketplace to make a comeback in.

Keventers persisted nonetheless and it succeeded for two reasons, it was one of a kind with its unique and classic bottle packaging and the fact that it is a brand nearly a century in the making. This sense of timelessness that the other players did not have put Keventers in a league of its own, which made re-entry easier.

Another factor to consider was that Keventers was positioned at a slightly more premium brand and price than the competition across Tier one, two and three cities. These two factors carved out a decently-sized lane for the brand despite the heavy competition from players like the aforementioned Frozen Bottle and Amul.

The Marketing strategies and tactics aside one thing that makes Keventers stand out in the industry is the clientele it caters to. As mentioned before this particularly concerns the Gen-X and Gen-Y demographic, where the brand has a line into the older audience who come back for the pure nostalgia of the milkshake while the newer audience comes for the ‘hype factor’ and the classy, modern packaging which lends a sense of aged authenticity to the product and franchise.

Keventers: Surviving Through the Decades

Not many businesses in the food and beverage industry or any industry for that matter can claim that they have been around so long that they have seen the Independence of India. It is a rare and distinguishing mark for a brand to have been so intertwined with the history of the country and its economy, yet here we are.

As to the question of how this brand has survived all these decades and still managed to beat out a lot of the modern players, the answer is quite simple- time and experience. There is something to be said about having the time to see the market change and morph over time, it gives a unique insight into the patterns and trends. One such recent trend that Keventers jumped on was that of the pandemic by bringing safety regulations and safe practices to its franchise model with safety seals on all their bottles, temperature checks, in-store handwash stations, no contact preparation for their ice-creams and taking it a step further by making sure that even delivery personnel were following safety protocols.

There is also the factor of the genius moves imparted by the owners and CEO of the company to consider.

Shorab Sitaram, the current CEO and the man behind the relaunch of the company is the reason for the level to which the business has scaled up, both nationally and internationally. Having worked with big names such as Laid Back Waters, Tabula Rasa, Chi Asian Cookhouse and Chatter House, he was the ideal person for the job and was brought on in the nick of time by the owners Agastya and Aman.

His proactive and aggressive strategies such as the revamping of packaging, better demographic targeting and introduction of new and exciting flavours for a new audience helped put the Keventers name back on the map. The first outlet of the revamp hit the market in Select Citywalk in Saket as the flagship of the campaign and the rest is history.

With plans to expand to Switzerland and London, it looks as if there is nothing holding this brand back, which says a lot considering it was on the brink of fading into obscurity just a few years back. In essence, it showcases the company’s ability to adapt and change with the times by staying on top of the latest happenings in the industry, a holistic approach if you will.

It is this kind of growth and smart business decisions that puts on full display the potential for growth that the Indian economy can facilitate. As they say, where there is a will, there is a way.

For more inspiring stories do read our Inspire section.

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What is Business Expansion: Analysis of Different Sectors

Roopali Kotwal — Tue, 23 Feb 2021 10:35:05 +0000

The pandemic-stricken year has altered the state of small, micro and medium business enterprises. Entrepreneurs have strained themselves to ensure that their businesses are able to survive the lockdown and they are able to pull through the trials of the economic disaster it caused. While some start-ups struggled to pull through, some had recorded a historic success amidst the global crisis. Many industry sectors in India continued to grow as enterprises manifested strategic business expansion plans and continued to multiply their growth.

How to Define Business Expansion?

The terms ‘Growth’ and ‘Expansion’ are used interchangeably. However, in business terms, there is a minute difference. Expansion is an act of becoming bigger (greater in size, number and amount). In the context of ‘business’, it is a stage where the business reaches that point of growth where it pursues additional options to generate more profit.

Business Expansion refers to enlarging the scale of a company. It is an upward trend in a business cycle which means an increase in production and employment. When there is an increase in the level of economic activity and of goods and services available is Economic Expansion.

Factors Which Lead to Business Expansion

Expansion may be caused by factors external to the economy such as weather conditions or technical change or by factors internal to the economy such as fiscal policies, monetary policies, the availability of credit, interest rates, regulatory policies or other impacts on producer incentives. Global conditions also influence the levels of economic activity in various countries.

Expansion can be done by adding one or more new locations, adding sales employees, adding franchisees, increasing marketing, offering new products/services in the market or acquiring another line of business. When the real Gross Domestic Product (GDP) is increasing it leads to expansion (Real GDP does not include ‘Inflation’ i.e. GDP increase without inflation, is called the real GDP). There are two ways in which a company undergoes business expansion:

Internal Expansion

The internal expansion means a company enlarges its scale through opening branches, developing new products or new businesses.

Integration

Integration means when a company enlarges its scale by taking over or merging with other companies.

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In the context of ‘business’, expansion is a stage where the business reaches that point of growth where it pursues additional options to generate more profit.

Expansion in India’s Retail Industry

In early 1990s, industry reforms led to the liberalisation of policies and changed the face of ‘Kirana stores’ (also known as ‘mom & pop’ stores) or multi-purpose departmental stores located in the residential areas which supplied utility items, into single and multi-brand retail stores. Indigenous companies like Bombay Dyeing and Raymonds introduced the textile retail chains. The Government also established Mother Diary and Super Bazaars due to a remarkable growth in the retail sector.

India’s retail industry is one of the most dynamic and fast paced industries. Departmental stores, Hypermarket, Supermarkets/Convenience stores, Specialty stores, Cash & Carry and Fashion retail are all examples of the growing retail sector in India. For instance, Pantaloons, Shoppers’ Stop and Lifestyle, all have set up their chain of outlets across the country. Post Globalisation and liberalization of Indian economy, modern retails took off. India became an attractive destination for foreign players. Subsequently, international brands like Mc Donald’s, Adidas, Nike made entry into India. Reliance, Tata, Aditya Birla and Mahindra also entered in the sector. Amazon, Flipkart, Snapdeal and Metro also entered in the Business to Customer (B2C) retail sector and the change in Foreign Direct Policies (FDI) gave a way to international premium brands like Gucci, Walmart, Armani, etc. to enter the Indian market.

This sector has been growing really fast due to various factors like Urbanisation, Digitisation, increase in purchasing power and rapid change in lifestyle of consumers. ‘Dual Income’ families are on the rise and these consumers have less time for shopping and more disposable income. The sector has matured over the years from being a fragmented unorganised to an organised sector and the opening of retails stores in Tier II and Tier III cities with a strong presence in Tier I cities.

Reliance Retail Limited is first among the top and biggest retail companies in India which is engaged in the business of Fashion and Lifestyle, Consumer Electronic, Grocery, Petro Retail and Connectivity. Other examples of popular retail stores in India include Future retail, D-Mart, Pantaloons (Aditya Birla Retail Group), Westside, Star Bazaar and Fashion Yatra by Trent limited and Shoppers’ stop.

The COVID-19 has slowed down the economy. According to Retails Association of India (RAI), fashion, electronics and grocery store retailers are hopeful of achieving about 85 percent of pre-pandemic level in the business in next six months.

Analysing India’s FinTech Industry

Few start-ups which picked up the pace in Indian economy are in financial services. Financial Technology popularly known as FinTech is a new industry and has boomed exponentially from the last couple of years and has become a crucial part of the global economy. As the FinTech industry consists of companies which use technology to offer financial services in an efficient manner, it has various segments such as Digital Payments, Alternative Lending, Investment Technology, Insurance Technology, BankTech and RegTech (a technology solution for improved automation of regulatory compliance). It has transformed the Indian market with its various segments and made the services available at ease.

According to Accenture, investments in Financial technology ventures in India increased from$1.9 billion to $3.7 billion in 2019. Thus, making India the world’s third largest FinTech market.

As per India Fintech Report 2020, India is home to more than 2100 fintech startups/companies where Bengaluru and Mumbai represent around 42 per cent of the startup headquarters. Despite the huge disruption due to Covid-19, FinTech companies are growing exponentially. Some of the top FinTech companies are Paytm, Razorpay, Phone Pe, MobiKwik, PayU, PolicyBazaar, LendingKart, MoneyTap, PineLabs, Khatabook, Instamajo and ETMoney.

Understanding Business Expansion in E-Commerce Industry

The history of e-commerce is twined together with the history of Internet. India is going through a digital revolution and over 50 per cent of the country’s population has access to the internet. More than 500 million Indians use smart phones with internet giving a huge user base to the e-commerce industry in Tier II and Tier III cities as well. As per report from Statista, In April 2017, Amazon was the leading online marketplace in the country with more than US $ 500 million in the sale. Flipkart and Myntra were the prominent players in the local market. As per the survey conducted by the team, in May 2020 regarding the permission of e-commerce platforms to deliver goods in India after lockdown due to coronavirus, majority of the respondents voted in favour.
Digitisation of the economy and internet availability at a price which is affordable by all sections of society are the few of many reasons which has added to the growth and expansion of this sector.

In fact, if you observe around, after relaxation of the lockdown, many e-commerce companies like Myntra and Amazon India restarted their deliveries with caution due to coronavirus.

As per India Brand Equity Foundation (IBEF), E-commerce has a direct impact on micro, small and medium enterprise (MSME) in India, by providing means of financing, technology and training and has a favourable cascading effect on other industries. Indian E-commerce industry has been following an upward trend of growth and is expected to become the second largest E-commerce market in the world by 2034. Technology-enabled innovations like digital payments, hyper-local logistics, analytics driven customer engagement and digital advertisements will likely support the sector.

IBEF also quoted that the growth in e-commerce will also boost employment, increase revenues from export, increase tax collection by ex-chequers and provide better products and services to customers in the long term. Rise in smartphone usage is expected to rise 84% to reach 859 million by 2022.

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Investments in Financial technology ventures in India increased from $1.9 billion to $3.7 billion in 2019 making India the world’s third largest FinTech market.

Exponential Growth of EdTech Industry in India

The Indian government has replaced a 34-year-old National Education Policy (NEP) on education in 2020. NEP 2020, approved by the Union cabinet, has made sweeping reforms in school and higher education. Internationalisation of Education and setting up of the National Research Foundation is among the special features of this new policy.

India has about 500 million people in the age group of 5-24 years which is the world’s largest population in this bracket in terms of market size. This provides a great opportunity for the education sector. Over a period of time, there has been a shift in the sector and many e-learning startups have emerged. The mode of online learning has increased especially during Covid-19. India has become the second largest market for e-learning after the US. As per data released by the Department for Promotion of Industry and Internal Trade (DPIIT), the total amount of Foreign Direct Investment inflow into the education sector in India stood at US$ 3.29 billion from April 2000 to June 2020.

As per IBEF data, the Ed tech market received investments worth ~US$ 1.5 billion. Also, the education and training sector has witnessed some other major investments and developments in recent years. For instance, on November 6, 2020, Tata Technologies Ltd. entered into a Memorandum of Agreement (MoA) with Karnataka government for 10 years with an investment of Rs. 4,636.50 crores (US$ 631.90 million) to upgrade and modernize 150 government Industrial Training Institutes in the state to provide standard training for Industry 4.0.

We all have seen a shift in the education from an offline to online mode and EdTech (Education with Technology) companies which already disrupted the Indian education system have been a pillar in these stressful times. The education sector in India is growing swiftly as big private firms are collaborating with the government to develop the sector.

EdTech is the fastest growing industry worldwide. India has the potential to be the biggest online education consumer market in a few years. EdTech companies like Byju’s, Edukart, CueMath, Culturealley, Dost Education, Merit Nation, Unacademy, Upgrad, Vedantu, Brainly, Gradeup, WhiteHat Education Technology are some of the growing start-ups to look out for.

How is the Healthcare Industry in India Expanding?

Healthcare has taken the centre stage now. In recent years, the industry has grown exponentially due to the increase in the investment and expenditure from public as well as private investors.

The Indian government’s focus on providing better facilities in the health sector implemented ‘Ayushman Bharat’ National Health Protection Mission’ in August 2018. It aims at reforming the healthcare system by bringing more transparency, standardization, and innovation. Boston Consulting Group (BCG) and FICCI have stated that the economic value of the benefits covered under the mission are estimated at R.1.5 trillion over the next decade. The government of India also launched other schemes like “Mission Indradhanush” with an aim to improve the coverage of immunization in the country.

The healthcare sector is one of the earliest yet slow adopters of technology and digital innovation. However, a surprising turn in the industry was experienced as the lockdown was induced the sector instantly turned into a connected community of patients and doctors. During COVID-19, the digital turn in the healthcare sector resulted in an unimaginable expansion of the industry. Many digital solutions emerged as innovation led to customer satisfaction.

Telehealth has become one of the safest methods for patient care. According to the reports, the global telehealth market is expected to grow at a CAGR of 25.2% from USD 61.40 billion in 2019 to USD 559.52 billion by 2027. Use of Artificial Intelligence has redefined the doctor and patient interaction. Voice AI (Voice-driven Artificial Intelligence) serves a smart solution. It analyses medical jargon which results in improved patient care and automates the process of writing prescriptions, ensuring speed and accuracy in the process.

Startup Ecosystem in India: Evolving and Expanding

Today, Start-ups are becoming very popular in India. With the introduction of technology in various sectors a lot of start-up companies are shining and are generating employment. Knowledge-driven fields accelerate the growth and add value to the economy.

The evolution of the start-up ecosystem has been disrupting every sector from Information Technology to E-commerce, hyper delivery network to B2B model, Education, Financial services and Agriculture especially with technology and they are big contributors to India’s economic activity.

Tech entrepreneurship is the future. The ecosystem of start-ups will play a big role in fulfilling the dream and ambition of India to be a $5 trillion-dollar economy.

The post What is Business Expansion: Analysis of Different Sectors appeared first on Dutch Uncles.

How will New Channels in the Ecommerce Space Expand the Sector?

Preeti Verma — Sat, 20 Feb 2021 10:35:04 +0000

A few years back, thinking of starting a business of own was considered a risky affair. Quitting a 9-to-5, double digit salaried job and starting a business of own was surely considered as one of the ‘stupid’ decisions in once career. But then things changed after the grand success of these modern-day mavericks like Jeff Bezos, Travis Kalanick, Sachin Bansal, Binny Bansal, Jack Ma, Bhavish Aggarwal, Ritesh Agarwal and many more to name. Surely if they would have thought in the same manner and hesitated on the decision to expand business, then the current scenario would have been different. They have already created a milestone in the startup ecosystem. Thank god, they did things other way round!

Taking a clue from their success, the word entrepreneur is thrown around a lot now a days. With many people seeing it as a means to enjoy a whole new level of professional, financial and personal freedom. Having the ability do what you love, when you want and on your own terms is certainly attractive, especially when you could potentially build it into a sizeable income.

With favourable government policies and other supported factors, India has become a hotbed for most of the e-commerce startups. Even biggies like Jeff Bezos consider that India has the mettle to take this e-commerce game to a grand level. In his last India’s visit, he predicted that the 21st century is going to belong to the world’s largest democracy- India. The country is one of the largest and rapidly growing markets for online shopping. Even though Amazon has been leading in the game, Indian companies, especially pure e-commerce players, are holding their ground and fighting to expand business in this fast-growth market.

The Indian internet and e-commerce landscape already counts hundreds of millions of users but it is still far to take the lead. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. The people are accessing the internet and are shopping online for a growing array of goods and services. As of August 2020, the number of internet connections in the country significantly surged to 760 million, mostly driven by the ‘Digital India’ programme. Out of the total internet connections, 61 per cent connections were in urban areas, of which 97 per cent connections were wireless.

Even though India is still a low-income country, the people are swiftly getting used to e-commerce and its convenience. E-commerce has transformed the way business is done in India. The Indian e-commerce market is expected to grow to $200 billion by 2026 from $38.5 billion as of 2017. Since the Indian market is still technologically under the development, there is much room for entrepreneurs to expand business.

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A total of 40 companies that are located outside India have at least one founder having an Indian origin.

However, competition is already very aggressive, as many local and global players are fighting to grab a slice of this fastest developing market. With the historic success in the United States and other developed countries, Amazon has been able to lead the way in India too. But local players, especially Flipkart, which was acquired by Walmart in 2018, have managed to expand business and become tough competitors in this promising market. With the size of the Indian market, many other local companies are still reaching a large audience even though they only take a small share of the market. Most of them are pure e-commerce players who have made it by dominating a specific category of products, such as BookMyShow and IndiaMart.

The 2020 Unicorns List

In 2013, when Cowboy Ventures Founder, Aileen Lee coined the term unicorn to refer to technology startups with valuations over $1 billion, there were 39 unicorns in the United States and India had none. But now India is home to many unicorns.

Last year, India created 11 new unicorns, surpassing the $1 billion club in valuation. This list includes Zerodha, Unacademy, Postman, Pine Labs, FirstCry, Nykaa, Razorpay, Car24, Zenoti, Dailyhunt, and Glance. Zerodha became the fastest startup to expand business and achieve the Unicorn status. The fintech company took 10 years to cross the $1 billion valuation. The Vijay Shekhar Sharma-founded Paytm alone claims nearly 22 per cent of the total valuation share of these unicorns. Globally ranked 13th in the list, Paytm is the most valued Indian start-up.

Along with being the highest valued Indian unicorn, fintech company Paytm is also the highest gainer in the Indian unicorn category. Over a year’s period, the company has managed to increase its valuation by a whooping $6 billion. Similarly, there are 61 global Unicorn companies, which have Indian origin founders. Interestingly, a total of 40 companies that are located outside India have at least one founder having an Indian origin.

The top 10 ecommerce sites in India are Amazon India with an audience reach of 89 per cent. Flipkart captures the second position with 242.62 million monthly visitors. On the other hand, Alibaba and Snapdeal have 175.95 million globally and 56.41 million monthly presence, respectively. Myntra has 48.03 million monthly visitors and IndiaMart has 47.23 million monthly visitors. Similarly, BookMyShow, Nykaa, FirstCry, Img have 43.25 million, 20.84 million, 16.94 million and 14.62 million monthly visitors, respectively. Electronics and apparel make up nearly 70 per cent of the e-commerce market, when evaluated against transaction value. Other upcoming categories, where entrepreneurs are expected to expand business, are baby products, furnishing, personal care, food and groceries.

The Road Ahead

The e-commerce industry has been directly impacting micro, small and medium enterprises in India by providing means of financing, technology and training to expand business. It has proved a favourable cascading effect on other industries as well. The Indian e-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second largest e-commerce market in the world by 2034.

Technology-enabled innovations like digital payments, hyper-local logistics, analytics driven customer engagement and digital advertisements will support the growth in the sector. The growth in the e-commerce sector will also boost employment, increase revenues from export, increase tax collection by ex-chequers, and provide better products and services to customers in the long-term. Rise in smartphone usage is also expected to rise by 84 per cent to reach 859 million by 2022.

In order to tap onto the large market, the e-commerce industry has also seen an increase in innovation across platforms, and ancillary segments such as logistics. The market has become conducive grounds for testing various business models such as inventory, social networks, aggregator, and e-commerce marketplace model, among many others.

E-retail market is expected to continue its strong growth momentum. It registered a compounded annual growth rate (CAGR) of over 35 per cent to reach Rs 1.8 trillion or $25.75 billion in the last financial year. Over the next five years, the Indian e-retail industry is projected to exceed 300-350 million shoppers, propelling the online gross merchandise value (GMV) to $100-120 billion by 2025.

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The market has become conducive grounds for testing various business models such as inventory, social networks, aggregator, and e-commerce marketplace model, among many others.

Government Initiatives to Support Entrepreneurs to Expand Business

Since 2014, the government has announced a slew of initiatives, namely Digital India, Make in India, Start-up India, Skill India and Innovation Fund. The timely and effective implementation of such programmes will support the growth of e-commerce in the country and help business owners in this sector to expand business. In a bid to systematise the onboarding process of retailers on e-commerce platforms, the Department for Promotion of Industry and Internal Trade is reportedly planning to utilise the Open Network for Digital Commerce to set protocols for cataloguing, vendor discovery and price discovery. The department aims to provide equal opportunities to all marketplace players to make optimum use of the e-commerce ecosystem in the larger interest of the country and its citizen.

Simultaneously, in order to increase the participation of foreign players in e-commerce, the government also hiked the limit of foreign direct investment (FDI) in e-commerce marketplace model to up to 100 per cent in the B2B models. On the same side, the government made robust investment in rolling out fiber network for 5G that will help in boosting the e-commerce sector in India. Under the Digital India movement, the Centre launched various initiatives like Umang, Start-up India Portal, Bharat Interface for Money (BHIM) etc. to boost digitisation.

The Fintech Collaboration

The fintech landscape will also see the emergence of innovations that will facilitate holistic financial services over a single mobile interface for the users across the world. The new-age fintech platforms are already offering consolidated fintech solutions to users, enabling them to carry out a range of operations such as spending, lending, investing, fund transfer, etc. Assisted e-commerce on existing B2B2C platforms is another feature that new-age fintech will provide to Indian users in the post-lockdown, post-pandemic future. A B2B2C ecommerce platform gives a company the chance to defend and grow market share directly with the end users, rather than depending on the distributors to market to them at the point of purchase.

Emerging of Hyperlocal Players

The Covid-19 crisis brought a window of opportunity and also the need to do something new. In the new times of lockdown, social distancing and self-quarantine, these hyperlocal players are impacted our lives in a better way. They have played a vital role during these testing times by ensuring that products and services reach our doorstep even though we could not step out. Expansion of delivery points through the digitisation of mom-and-pop stores will be a decisive expansion tactic this year, including building a newer portfolio of services. Along with the entry of traditional players into this ecosystem, consolidation is also expected to surge.

Education Startups to Expand Business Globally

With the rise of Edtech’s such as Byju’s and Unacademy, it is believed that this segment will open new vistas by expanding its footprint and adoption across the ecosystem. It also got a shot in the arm with the online classes due to the coronavirus pandemic. Currently, India has more than 3,500 EdTech startups, and is growing bigger and meeting its aspirational needs. The segment is cutting across K-12, coding, B2B (schools, universities), test preparation, upskilling, reskilling has seen significant traction and robust growth. Companies are using deep learning insights and applying technologies such as including artificial intelligence, virtual reality, augmented reality, behavioural analytics, to improve product and monetisation in early stages, deliver content through the human-centric design process, and gamify to increase engagement and enhance the experience. The segment will grow this year as well and may develop an omnichannel approach to scale up. It is also expected that through merger and acquisitions and consolidation, it will continue to expand both locally and globally.

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Razorpay Plans for Expansion in 2021

Aakash Sharma — Tue, 16 Feb 2021 12:35:04 +0000

Razorpay, the Bengaluru based fintech unicorn, has tripled its payment volume in the past 12 months, thanks to thousands of small and medium-sized businesses, mainly from Tier 2 and 3 cities, which chose the payment gateway for the first time. The company now intends to invest heavily in strengthening its fraud and security analytics infrastructure and creating supra-local solutions to provide a seamless and secure payment experience.

Following rapid business growth in 2020, Razorpay is now creating jobs for over 650 employees to meet SMEs’ ever-changing payment and banking needs. The main goal of the fintech giant will be to expand the engineering, product, customer experience, sales and marketing teams at different levels.

Razorpay’s Focus on Easing the Lives of Small Businesses

With the growing adoption of digital payments during COVID-19 and the thousands of businesses connecting to the internet for the first time, Razorpay captured the opportunity for innovation in business payments. Its expansion and recruitment plans are motivated by more investment in product development, customer experience, and new additions to the existing product line to meet SMEs and MSMEs’ changing payment and banking needs.

Razorpay’s Expansion of its Team and Operations

The company believes that new team members will join its workforce with new ideas, unstoppable enthusiasm and a relentless passion for keeping the fintech startup at the front and continuing to put customer experience and convenience above all else.

Razorpay currently employs 1,300 employees. Last year, the company hired over 550 employees and also created interoperable growth opportunities for its employees. While employees will continue to work remotely for the coming months, of the 650 new positions for new employees, 350 will expand the engineering and product teams. The rest will be in the areas of customer experience, sales and marketing.

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Following rapid business growth in 2020, Razorpay is now creating jobs for over 650 employees to meet SMEs' ever-changing payment and banking needs.

Taking Advantage of Changing Trends – Razorpay Is Setting an Example

In 2020, when digital shopping and online browsing of stores became commonplace, many conventional companies were afraid of losing their entire business. Most businesses struggled with providing essential services to customers through online mode as they shifted to the digital way for the first time. These obstacles primarily included billing, invoicing, checkouts, etc.

And Razorpay came to the rescue of millions of such businesses as it provided digital access to businesses across the country for payment gateways and checkout systems. The company witnessed a 54% growth in its digital transaction volume. Razorpay did not only cater to SMEs and SMBs, but in the last six months, it has also gained the payments contracts for mega-businesses such as Facebook, Ola, Zomato and Swiggy.

It is expected that the growth and expansion trajectory of this fintech unicorn is set to go on a higher course because most businesses are set to go online, sooner or later. And when they do, Razorpay will be there to ease their payments and transactions.

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Fast-Track Your Franchise Network to Embrace Growth

Avijit Dutta — Tue, 02 Feb 2021 10:35:02 +0000

Are you a business owner looking to scale your business through franchising? Are you a newbie franchisor concerned about your franchisee network delivering sub-par results in accelerating growth? Well, take heart, this article will throw some light for you to course-correct and fast-track your franchisee network in a four-step action plan.

Franchising business models have worked wonders for many brands across the world when it came to rapid scaling and achieving accelerated growth. In India, well-known brands, such as McDonalds, Subway, DTDC, Inxpress, Lenskart, The British Institute, Sanjeevani and Thomas Cook to name a few, have gained significant success in growth, especially in building visibility and establishing territorial market development.

A caveat: Prima facie franchising looks easy; however, it requires a careful strategy, intelligent tactics and flawless execution to achieve growth on a fast-track.

Before we delve into ‘fast-tracking’ let us cover some foundational ground and key concepts associated with ‘franchising’.

Franchise Model: The Basics

A franchise model works well for businesses that have tasted significant early success in establishing the brand by offering real value for customers in a given market. Once a business has grown past this stage the entrepreneur might explore franchising as a growth multiplier.

In a franchise business model, there are two sides, a franchisor and a franchisee. The franchisor is the business which owns the brand, the product and/or the business format. A franchisee is an individual who takes the rights over using the brand, product and/or the business format of the franchisor in a select location within a defined territory.

In this transaction, the franchisee pays the franchisor an initial royalty (ranging from a couple of lakhs to a few crores) as well as a share of the revenue from operating the business periodically. On the other hand, the franchisor shares the right to using the brand, trademark, products, business knowledge, processes as well as training and marketing assistance. However, marketing support might as well cost an additional 1-3% of revenue generated from the unit depending on the agreement.

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A franchise model works well for businesses that have tasted significant early success in establishing the brand by offering real value for customers in a given market.

Fast-track franchising to fast-track growth

Step1: Evaluate Your Business: Qualify your product and business model for franchising model

This is especially true for businesses adapting franchising for the first time. Please consider the following prompts to evaluate whether your product and/or business model suit the franchising model.

1. Have you achieved significant early success (e.g., revenue, customer base) with your product or service at least in a local market?

2. Can you establish with verifiable data that your customers recognise your brand as valuable?

3. Are you clear on what you want to franchise? Is it a product, a service, or a business format?

4. Have you standardised your product or service experience creating an identifiable, idiosyncratic experience for your customers?

5. Are your business operations & processes such as sourcing, packaging, after-sales, hiring, training & development etc standardised for repeatability and optimised for efficiency?

If your answers to any of the above is a weak ‘no’, rather not an emphatic ‘yes’ then you have more grounds to cover before you should consider franchising. A business which can be franchised requires a strong foothold in the five areas mentioned above.

Step2: Educate Yourself: Understand popular franchising business models

It’s time to take a deep dive into the underlying business models of various franchising models.

Let’s imagine we are a company owning a brand B, selling product P through our store S. We have some early success in a few locations in our town. People love our product and we are making a decent profit thanks to our efforts in standardising and optimizing our key processes. Now we want to accelerate growth. We now examine the options in front of us.

If we want to own and operate our new stores we have put in the investment into leasing or buying the stores as well as bear the cost of operating the store which includes inventory, salary, maintenance etc. In such a case the resource asks for expansion and therefore the financial risk is entirely on us. Is there an alternative, we may ask? Is there a way to fuel growth without requiring a lot of investment on our part?

Say, our business advisor recommended that we consider franchising. He also pointed out that there are three options we can explore.

Let’s take a dip into those with two key questions in mind: a) who owns the stores? and b) who operates the stores? We plot the ownership on the horizontal axis and operations on the vertical axis and the following 2X2 emerges.

FOFO Model

If the store is owned (or leased) and operated by the franchisee we have a FOFO model. This model is suitable if we have completely standardised and optimised our products and business processes ensuring predictable product quality and customer experience. Also, the reliance on the franchisee to maintain quality and process compliance is paramount because of limited controls on operations and direct contact with the end customer. It follows that we need a strong franchisee audit and compliance process to minimise our risk of reputation. The investment risk is borne by the franchisee. As a franchisor, we still have to do marketing for the store and the cost may be shared with the franchisee.

COFO Model

In this model, the company owns (or leases) the store but the operation is managed by the franchisee. Therefore, the risk of investment into the store is borne by the company. The requirement of product quality and process compliance still lies with the company.

FOCO Model

Finally, we have the FOCO model wherein the franchisee invests into the store real estate but the operations are performed by the company. In such a model the exposure of the franchisee is limited only to the investment part with no access to the operations of the store. It allows the company to have complete control over the quality of offerings. Many international service brands such as Thomas Cook use this model to expand to new countries and territories.

Few more models

A franchisee might take franchise for one single unit to begin with. This kind of franchising is called a single unit franchise. Once the first unit is successful, the same franchisee might take a second and third unit and thus becomes a multi-unit franchise. It might as well be for multiple locations within a city, multiple cities, even countries depending on the nature and market potential of the business.

All these various models are based on a) risk appetite, b) access to capital and c) confidence in deliberating control. Depending on the stage & maturity of the business the company chooses an appropriate one.

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A franchisee might take franchise for one single unit to begin with. This kind of franchising is called a single unit franchise. Once the first unit is successful, the same franchisee might take a second and third unit and thus becomes a multi-unit franchise.

Step3: Build Your Story: Create a strong narrative for ‘why’ your business requires franchising.

There may be several reasons why you might want to explore franchising. Here are a few key ones.

Access funds for growth

Growing a business requires resources. We may use funds raised through equity, a business loan or a network of franchise investors. Deploying equity or debt funds in expansion may not be the best route if we do not have assured flow of capital through successive equity rounds. We might as well decide to fund growth by a combination of equity capital and franchise investments reducing the ask to raise more funds through equity. This might be a cheaper way to fund growth.

Rapid scaling and territorial acquisition

Franchising allows for rapid scaling to multiple locations. The local entrepreneur who is taking your franchise knows the local market better than you do. Moreover, a franchisee will also do the heavy lifting (e.g., daily operations) for you for a particular market freeing up your bandwidth for focussing on product development and marketing.

Reduce risk

A franchise model is essentially a mechanism to share and/or transfer financial and market risk to participants. This way risk is decentralized and fragmented. Performance of one unit may not affect others. You can always close/shift a non-performing unit to other potential location without attracting a full share of the cost of failure.

Build a lean organisation & reduce cost

Franchising essentially means a transfer of risk through outsourcing a major chunk of ground operation through a mutual risk-reward structure. Because in most common franchising model’s unit operation is managed by the franchisee you don’t have to engage your resources in hiring and managing employees. This means you can create a lean organisational structure saving you costs and management bandwidth.

Two stories: Two categorically different whys

We need to build up one story that you tell yourself defining “your whys” as a franchisor, another for a potential franchisee defining “their whys”. Remember we all want to believe in a story. If we do this right, the acquisition of franchisees becomes easier.

Step 4: Design a replicable system: Ensure appropriate structural change in the organisation to fit rapid scaling, make it modular

In step 1 we had a list of qualifiers for suitability to the franchising model. Here we discuss organisational structure & operational procedures that facilitate deploying a franchising model.

Standardise brand identity, product, pricing & processes

If we scale a system that is not standardised, we end up with unpredictable business outcomes. Therefore, before we initiate franchising, we must standardise the brand identity, designs, brand communication, product offerings, pricing, and all the key processes from sourcing, inventory management, manufacturing, packaging, distribution etc.

Standardise quality management

Clearly define acceptable variations for all consumer-facing process outcomes along with OKRs. Then deploy an independent quality audit & compliance team empowered to ensure the desired customer experience. If we fail in this aspect, we become vulnerable to reputation risk. It is also prudent to have a central Online Reputation Management (ORM) measure in place.

Document key aspects of running a franchised unit

Have a brand manual defining brand identity, and communication, dos and don’ts for a franchisee. Have an Ops manual to elaborate on the key processes we have mapped for ensuring expected quality.

Onboarding, training, & development

Deploying a well-defined onboarding process with clearly defined KPIs and OKRs will set the right expectations from the get-go. This should include assistance on hiring and periodic training for employees of the franchisee. By being orderly we obviate possibilities of failure of a unit besides delivering a consistent customer experience across units.

Design an organisation clearly defining Centralised and De-centralised functions

To run a successful franchise network, we have to have some centralised functions such as branding, design, marketing, sourcing and distribution, product, customer relationship management, and quality assurance under the direct control of the company. Other functions like store operations, local BTL marketing, unit payroll etc could be decentralised and delegated to the franchisee. However, for every outsourced and decentralised process, we must have clearly defined OKRs and monitor those appropriately.

Have a financial model and strategy blueprint for each unit

A financial model must be defined with parameters for investments, fixed and variable costs, local market size, existing competitions etc. to evaluate the viability of the opportunity in the selected territory. It should define expected cash flows over years, payback period, overall profitability in medium to long term.

A strategy blueprint is overall planning from launch to exit (if desired) for the franchisee. It addresses key questions related to the launch, demand generation, and fulfilment.

Final thought

If we closely observe successful franchising businesses across the world, we will see that careful planning, a well-defined strategic blueprint and effective execution are common themes.

In this article, we have laid down four phases of franchising journey from the franchisor’s perspective. We start with evaluating our business for fitment to the franchising model. Then, we educate ourselves with all relevant franchising models to design an appropriate model for our business realities. Next, we build a story each for the franchisor and a potential franchisee. Finally, we design a replicable system for fast and reliable scaling.

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