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Who says Kabir Mulchandani doesn't believe in brand loyalty? The man who made Akai the Nirma of consumer electronics market-before dumping it in favour of other brands-is back in action for a piece of the cyber-pie. Recently, Mulchandani and his three friends-Subodh Maskara, 34; Sandeep Toshniwal, and Anand Kandoi, both 26-launched a youth portal called uthplanet.com. Conceived as a virtual youth community, the portal intends to turn the concept of youth into a brand. Explains Maskara: ''The whole idea is to build a brand, a community that identifies with it, and a business around it.'' The portal has 11 youth-related channels-raffles, games, style, records, vault, studios, asylum, alert, bids, chat, and spend-and will reward surfers for engaging in interactive activities. For instance, the movie channel allows visitors to choose the appropriate scene from a set of options, and those who vote for the correct sequence are awarded 'yenom' points, with one yenom being equal to Re 1. Says Mulchandani: ''We are using the portal to extend our business.'' Uthplanet's business model relies on three groups of revenue streams. The first group includes advertising on the portal, database sales, e-commerce (youth-branded merchandise), and referrals (registered users will be given incentives to register in another site, which in turn will pay Uthplanet). The second revenue-stream involves going off-line with the uthplanet brand. Adds Maskara: ''Since we have a brand, and we have a community, we will give this brand to others or extend it ourselves.'' The third group would comprise the yenom, the portal currency. The idea: once enough people have it, it could be used as a currency. Says Maskara: ''All three are strong business streams. We don't know which one will be bigger. But any one can take the business revenue-positive in 12-18 months.'' The four friends are chipping in with a seed capital of Rs 47 crore, with Rs 2 crore earmarked for launch publicity. Kabir and Co. may have found a new niche in cyberspace, but their success will depend on Uthplanet delivering real cash and not virtual yenoms. -Ranju Sarkar C O N V E N I
E N C E F O O D S Barely two months after Hindustan Lever Ltd.'s (HLL) pre-cooked rotis first tested waters in Mumbai, the fast-moving consumer goods giant is reportedly gearing up to take it national. Last year, the Pune-based Tasty Bite Eatables clawed out of the red, and a not-so-small reason was the brisk business that its pre-cooked Bengal lentils and Bombay potatoes did. And Dabur Foods is planning to expand its Hommade brand of Indian food products. The message is clear: be it pre-cooked rotis or ready-to-roll samosas, the ethnic foods market in India is set to explode. Agrees Amit Burman, 30, Director, Dabur Foods: ''Even as Indians experiment with different cuisines, they are queuing up outside the desi Sagar Ratnas and Udupis.'' Players like MTR in Tamil Nadu and Rajkot-based Patira Foods, and Amul, with its foray in Mishti Dahi, are beginning to cater to not just the local palate, but an audience outside. And bigger and organised marketers like HLL are closing in. HLL's current portfolio of ethnic foods includes rotis and the extremely critical acquisition of Best Foods International gives it strategic advantage of tapping the famed Tarla Dalal (TD) recipes. Others, like Frito Lays (India) and Tasty Bites, which is now majority-owned by the US-based Preferred Brands International, plan to ethnicise their offerings. ''At HLL, convenience food launches will be made only after taking into account the ethnic tastebuds,'' says an HLL spokesperson. Frito Lay's 'Kur-Kure' has been developed for the Indian market. Similarly, HLL's sauce has been given a tamarind flavour. And Tasty Bites is expanding its range of Indian foods to include Agra peas and Jaipur vegetables. Says Ravi Nigam, 40, President, Tasty Bites: ''There is a growing tribe of Indians that orders food or eats out. These customers seek reasonably-priced, nutritious food.'' Categorisation in ethnic foods is unclear, although three categories are available: ready-to-eat foods; accompaniments, mixes and powders; and salty snacks and sweets. Marketers, however, agree that the segment over-all could fetch as much as Rs 10,000 crore annually. Of this, salty snacks alone account for Rs 2,500 crore. ''Constant R&D has led to superior flavours and seasoning without upsetting the value-for-money equation,'' says Vijay Sardana, 33, Former Secretary, Confederation of Indian Food Trade and Industry. Clearly, in India, the way to the market's heart is through the native palate. -Shamni Pande P H A R M A C E U T
I C A L S The first-half of 2000 has been eventful for two of India's best pharma companies: industry major Ranbaxy, and the Hyderabad-based Dr. Reddy's Laboratories (DRL). Ranbaxy has filed an investigational new drug application (IND) with the Drug Controller of India to start phase-one of clinical trials for a new asthma molecule, RBX 4638. And DRL's anti-diabetic molecule DRF 2593, licensed to Danish drug giant, Novo Nordisk, entered phase-two of clinical trials. Both bode well for the Indian industry's fortunes. On the one hand, development of successful molecules symbolises the coming of age of research and development in the Indian pharma industry. On the other, it gives innovative companies global credibility and a source of competence they will need to survive when they no longer are able to reverse-engineer-successful drugs launched by foreign companies. Neither of the companies may have the ability today to carry out these expensive clinical trials on their own. But they have proved beyond doubt that they are capable of world-class R&D, and that they have a huge cost-advantage over their foreign rivals. Says A. Venkateswarlu, 59, president, Dr. Reddy's Research Foundation: ''If the phase-three of clinical trials is also successful, then a new drug application is likely.'' Ranbaxy's RBX 4638 has already completed its pre-clinical trials. The company is planning a foreign alliance to develop and commercialise the product. If the drug goes into commercial production, Ranbaxy will stand a good chance of getting a slice of the projected $19-billion global market for asthma drugs. Besides, it will also prove to be a huge shot in the arm for the Indian drug industry. -E. Kumar Sharma E -
D U C A T I O N It's a market in its infancy, but infotech education for kids promises to be a booming business. Already, there are several new institutes targeting children. Some of the better-known players in the market include Planet IQ, Boston Cyber Kids, Future Kids, it Kids, and Fourth R. Even old vanguards like NIIT and Aptech are stretching their courses to fit in children. Says Krishna Sai, 32, managing director, Fourth R: ''This is an emerging opportunity in the New Economy.'' At stake is a non-formal education market estimated to be worth Rs 10,000 crore, and growing at a phenomenal rate. Most of these institutes offer yearly programmes at a cost of Rs 6,000 to Rs 8,000. A typical kid's it syllabus comprises of subjects like Mathematics, Science, Social Science and interactive learning through CD-ROMs. Since kids tend to stay on with such courses for 4-5 years, the revenue stream for the companies also tends to be more stable. Agrees V. Suresh Kumar, 40, director, it Kids: ''We have a 90 per cent re-enrolment rate.'' Except for a few 'pilot centres', these institutes work via franchisees. They are given a licence for a period of 3-5 years, and are charged a royalty on gross revenue of 15-20 per cent. Most franchisees feel that though there is a market, it will take some time to grow. Says Devendra Umrao, 34, Director, Automatic Services (a franchisee of Fourth R): ''The business will be profitable in the long run.'' With almost every parent dreaming of a software future for her child, making money in this business should be kids' play, right? -Aparna Ramalingam N E T
VS T E L E P H O N E Dead without the Net? Not quite. There are things wondrous you can do with the plain old telephone services (pots). Sample: 7.53 a.m: Over-slept. And woke up hungry as hell. Skipping dinner last night was a bad idea. Head for the shower after dialling the number of the local Udupi joint and ordering a sumptuous breakfast. 8.14 a.m: Can't make the connection yet, but suddenly realise, in the middle of biting into a succulent vada, that the electricity bill needs to be paid today. Call the neighbourhood man friday who advertises, through nasty little pull-outs that drop from the morning paper when you pick it up, that he is prepared to do anything from paying bills to booking train-tickets, and ask him to do the needful. 8.23 a.m: Blast! Something is wrong with the car. Call the car company's centralised emergency cell and they promise to send someone over in 30 minutes. Can't wait that long, so leave the keys and some money with the watchman and call for one of those new radio cabs. 11.37 a.m: End of day's first (boring) meeting. While checking voice-mail on extension come across one from girlfriend reminding me about the evening movie date. 11.40 a.m: Efforts to find tele-booking number of cinema fail. Call a directory service to get the number and then dial the cinema. Phew! Minor crisis averted. 1.15 p.m: Hungry as hell. Order a pizza over the telephone. 3.30 p.m: Trying desperately to reach a driver. Need him for the evening. He doesn't have a telephone. Wish I were in Chennai or Bangalore where a company offers you the luxury of calling their number and leaving messages for people without phones. They'll send a courier with the message within the hour. Labour comes cheap in India. 6.30 p.m: Have just winged back home from the office to pick up the car. Realise that I am out of cereal, milk, and the like. No problems. Just call the local grocer. 7.15 p.m: Girlfriend breaks date. Telephone looks inviting. Should I call an escort service? -Telephone Junkie R E T A I L Imagine a retail store sprawled over 100,000 sq. ft, stocked with products ranging from garden tools to confectionery, and all these priced 10-15 per cent lower than your neighbourhood retail outlet. Called 'Cash-and-Carry' stores or hypermarkets, these are super-large stores that leverage their size to buy and sell products cheaper. ksa Technopak, India, the Delhi-based arm of the US retail consultancy, estimates that by 2005, hypermarkets in India could account for Rs 1,000 crore of the organised retail's total sales of Rs 30,000 crore. The Goenkas-owned RPG Group plans to invest Rs 3,000 crore in setting up 100 hypermarkers over the next five years. What makes these markets an attractive retail model for India? There are several reasons. In a price-sensitive Indian market, these markets are ideally suited to provide the right mix of superior shopping experience and price economy. Since, typically, hypermarkets are located away from the city centre, their land cost (rentals) is lower. Also, hypermarkets have better shopping ambience, and allow customers to touch and feel the products. Since hypermarkets buy directly from the producers and in huge quantities, they are able to give standing discounts on most products. According to KSA Technopak, there could be two ways of positioning hypermarkets in India. One, to set up shop in a middle-income pocket such as Thane or Gurgaon. Two, provide substantial discounts over the conventional marketplace. For a retailer like RPG, hypermarkets make a lot of sense. Explains Pradipta Mahapatra, 50, Chief Executive (retail), RPG: ''Hypermarkets will add to the power of bulk purchase, allowing us to give discounts.'' If Mahapatra proves right, then all the hype about hypermarkets may be worth it after all. -Rakhi Mazumdar |
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