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The gold rush online

How do you explain the spree of private equity funding in e-commerce start-ups? Is this another bubble waiting to burst?

K.P. Sundar Moorthi, Hyderabad

Sundar, I really hope this is not another bubble. We have had too many ventures going bust in our faces in the past. We don’t want another.

I do believe ‘fund-Darwinism’ will come into play here. Only the fittest will survive. Yes, in the bargain, categories will look like the dotcom bubble categories did, but that is the reality of transition in any space funded by PE funds. To overcome all this, PE funds need to believe in research at the consumer end before making key investment decisions. Gone are the days of gut-feel decision-making. It is time to make key investment decisions based on consumer research.

I see this new trend of consumer research taking off. Let me give you a statistic. Between 2002 and 2009 my company received an average of six requests for consumer-end probes and research annually from PE funds wanting to invest. In 2010 we had a total of 17, in 2011 the number grew to 21 and in 2012, as of the first quarter, we are already doing work for nine PEs keen to understand consumer behaiour before making an investment decision!

This means PE funds are getting more and more rational in their investment decisions. Rational at the consumer end of affairs. They look today at more than exciting elevator pitches and gushy PowerPoint presentations of idea-evangelists.

Quick-serve restaurants (QSR) like mine are in a constant struggle for consumer traffic. What’s the best thing to do there?

Sonal P. Singh, New Delhi

Sonal, It’s all in the menu. Remember, a QSR is all about food first. Don’t get carried away by an international brand name, service, ambience, advertising and all that jazz.

India is tougher still. India is a young market, and young markets are change-oriented. There is a higher degree of flavour and offering-fatigue in younger markets. QSRs in India cannot be standard menu-oriented anymore. This results in consumer boredom. The strategy of constant menu churn is one that is relevant for a market like India. QSRs need to think different when it comes to standard and standardised international menus. Change can be in the form of taste, packaging, shape of product and more. Menu change works wonders, adds zing to the offerings, creates a talking point and, most importantly, stops making your QSR look like a ration-shop QSR.

What is the excitement about Islamic branding today? Must my company embrace it as well? I am in FMCG exports.

Rohit P. Ganavelu, Mumbai

Rohit, marketers are today looking at newer and newer ways of reaching out to their existing and potential brand user groups. They are seeking high-end goals in markets where the lowest common denominator appeals have dried out or are showing signs of drying up. Such high-end goals are typically being sought more in hyper-developed and developed markets, rather than in emerging markets.

Marketers today want to appeal to issues such as ‘green’ and ‘inclusive’ in a big way. The idea is to embrace every cause that is relevant to the well-being of the consumer at large. Marketers, therefore, want to be inclusive in every manner.

Economic inclusiveness movements are typically followed by socially inclusive movements and these are then followed by religiously inclusive movements. Islamic branding is a part of this effort.

Islamic branding is really not only about the halal branding movement. There is much more to it than food. Islam is a way of life. To that extent, Islamic branding is all about using brands as good deeds. What starts with halal foods can move on to halal practice in every industry, be it the pharmaceutical industry, entertainment or the cosmetics industry even.

Islamic branding can embrace broader pastures that cover business practice even. Islamic business models look at how a business has been funded. Islamic banking is a very old practice and its tenets find acceptance in good Islamic business models.

In short, Islamic branding is an idea whose time has come. Hyper-developed and developed markets will embrace it in their business models and marketing plans.

Over a period of time, expect a unique Islamic branding mark to emerge, a mark that will tell you the entire story of the brand, its generics, its contents, its business practice and more.

Islamic branding is, therefore, more in the DNA of a brand, rather than only in Halal certification marks. It’s a good practice. Embrace it.

How does being on the board of directors of a company help an individual? Is it a career-enhancing move?

Shilpi Dutta, Kolkata

Shilpi, I have personally not found being on the various boards that I sit on career-enhancing in any way. It does not add to my career, but it sure does add to my personal exposure.

I am dealing with issues at the apex point of different organisations. One day I could be dealing with an issue in core technology and on another I could be dealing with media and entertainment or on the core issues facing a durables company. This exposure is value-add.

Further, most boards boast of a high level of experience and exposure, with around 10 directors who have perspectives that can be mind-opening in many ways. This is learning and exposure. Very valuable on the whole.

SOURCE:Business Line

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