Phoenix Market City in Mumbai

Amazing !

Yes, it is probably the biggest such retail development in the country.

The Phoenix Market City in Kurla West region of Mumbai is a huge mall, which we (family and me) visited today (Saturday). I could not believe my eyes !

Such a huge mall in the middle of the greater city of Mumbai, very close to the financial centre at BKC (Bandra Kurla Complex). How come this came up almost unannounced ?

Please see “Phoenix Market City”

Simply outstanding in terms of construction and space. For example, the parking space was so huge I could not believe I was in India. Similarly, the atrium concept was new and constructed in a huge manner – so big, that there was hardly any crowd to be seen !
We went in around 4:30 PM on a Saturday evening, and my guess is that the number of visitors inside the huge mall was a miniscule portion of what would have been expected on a weekend day.

I think the place would become very popular in the coming weeks and months, and it would easily attract some 50,000 visitors over the weekends…….it is going to be a great place. Apart from the regular brands one gets to see in upmarket malls, this mall also had some unusual brands represented in its vast expanse of space.

We walked around quite a bit and we were impressed. The “Crocs” shop for advanced footwear was impressive, but the prices were not. We were looking for anti-slip footwear, and the cost was upwards of USD 50, which I think is unaffordable for most people in India, even for the affluent. We saw some pretty good anti-slip footwear next door at the friendly Bata showroom and so picked up the necessary footwear at prices of some USD 8 and USD 5 for couple of pairs for my wife and son.

Yes, the Indian shopping crowd today is enamoured of high-end brands, but it will soon enough discover that the prices are way too high for its satisfaction.

I am recommending that you visit Phoenix Market City in the near future to get impressed. It is a great place to visit. Shops are still getting built, but the place is ready for action and ready for visitors. They have to simply make some attractive shows to draw the young and the mighty to spend at the mall.

Cheers

Vijay Srinivasan
17th March 2012
Mumbai

A Comparison with Michigan

I met one of my classmates from old times yesterday.

We spent sometime discussing the current economic situation in India and what is happening in the U.S. My friend runs a specialized software company in Michigan, U.S.A.

It was very surprising when he pointed out that he pays a real estate rental cost of just USD 1,600 per month for some 6,000 Sq Ft of decent office space in the U.S. That works out to something like INR 15 per Sq Ft per month, which is an incredibly low figure, compared to anywhere between INR 60 and INR 125 in Mumbai or Chennai. Even if I take a figure of INR 25 for the Michigan real estate, India is more than twice that figure for comparable buildings with good facilities.

My friend did say that while the costs in the U.S. are going up by some 2 to 3% per annum (I thought it would be higher), the reason for the big difference is that the Indian costs have risen rapidly over the past few years. I know for sure that high quality real estate for office buildings in Mumbai cost around INR 200 or more per Sq Ft per month. So things do seem to be out of control in terms of costing in India.

The reasons could be manifold, but it is really the matter of supply and demand. Demand for high quality real estate in India has far outstripped the supply for quite a long time now, though the supply is catching up. But costs should have come down by now. Though the market is really “soft” now, the costs are not coming down. This shows the artificial nature of real estate market in India.

I was further surprised when my friend said that he hardly purchases anything in India these days, despite the fact that the USD is ruling high at more than INR 52 per dollar. I asked him why, as I thought it would be the most appropriate time for non-resident Indians to spend their dollars in India.

But he said that even a simple good quality office shirt costs something like USD 40 in India (from Zodiac), whereas he can get a decent one in the U.S. for somewhere between USD 10 to 15. Even a better quality shirt in the U.S. costs half of what unsuspecting folks pay in a “poor” country like India.

He felt that prices of most items in shopping malls in India are ridiculously high, and he would not spend his money here but rather reserve the same for spending in the U.S.

That is not encouraging for India.

We should look at the U.S. for buying our textiles (!) but we can do nothing about real estate !!

Wishing You all a Merry Christmas (we are approaching 25th December in just about an hour from now in India),

Cheers,

Vijay Srinivasan
24th December 2011
Mumbai

Nokia Nowhere

I have written about cell phones in the past.

Today’s experience proved that what I had stated earlier about the downfall of Nokia is correct.

My daughter wanted a new (smart) phone.

She came up with only two choices: HTC and Samsung. She was also specific about her preference for a mid-range Android phone. So there you go – no Nokia, no Symbian, no iPhone. She felt an open operating system is better and probably she was influenced by my HTC Desire HD phone. She did not want too big a phone, so the choices narrowed down to just two variants – the HTC Salsa and the Samsung Ace, both of which are priced around INR 14 to 15K (USD 300 to 320). She analyzed the models and came up with the pros and cons of these two phones. She also considered the HTC Wildfire and Wildfire S.

Once the brand and the exact model were chosen, the actual buying process started. After examining the online and offline options, the offline option of actually visiting a shop/mall to buy the phone was selected for the purpose of getting the feel of a brand new phone and check to see if it really works well as promised. Couple of shops were visited, but the above models were not available.

After locating the models at the Mobile Store, I went to purchase the same. All Mobile Stores are unique in their design – they are all small in size, say less than 600 Sq Ft or so, there are not many display models, there are only limited accessories. The phone brands are organized according to their popularity, I guess.

Previously, I have seen Nokia prominently. Nokia was the best-selling cell phone brand in India for, may be, a decade or more. Nokia has its own shops in malls, and has a good display position in electronic chain stores, no doubt. But Nokia’s influence has constantly dropped over the past couple of years, its market share also has dropped. Nokia has been under severe attack at the lower end by Micromax, Karbonn and the likes. It has also been under a brutal attack at the higher end – in smartphones, where it has ceded place to HTC and Samsung.

So, I was not surprised to note that Nokia was nowhere to be seen prominently in the Mobile Store. Almost all display phones were from Blackberry, Samsung or LG, and some other emerging brands. Obviously, the store will only promote brands which have a mass appeal, and Nokia seems to have lost that appeal which it enjoyed for a fairly long time.

I bought the HTC Salsa, a well-designed phone from HTC – simple and elegant. My daughter was very happy in getting this phone. We have to see the performance though, but given my experience with HTC phones over the last 3 years, I am confident that the new phone will hold its ground. HTC seems to be constantly innovating, and its phones are now widely getting acceptance around the world. It is becoming a popular smartphone brand in India.

So, my conclusion – forget Nokia. It has fallen out of favour, and has not been keeping in touch with the fast-changing consumer tastes.

Welcome to the new world of smartphones. My recommendation is the same as that of my daughter’s : go for Samsung or HTC. Both seem to have mastered the art of making innovative Android phones with sleek touch interface and advanced features. Check these out for your next cell phone purchase !

Cheers,

Vijay Srinivasan
22nd August 2011
(Today is a public holiday in Mumbai !)
Mumbai

Technical Decision-Making

It was a real struggle and a big pain.

It took less than 48 hours to make up the mind, though.

I am referring to the decision I took today to purchase a digital camera ! Ha Ha !! Though it is neither the first (it was the fourth in 7 years), nor is it going to be the last (given that the capex required is becoming smaller all the time) camera, the point is that once a decision is made to buy a new camera, it comes on to my head to make up which one to buy.

Boy, there are hundreds of decent cameras, but only few good ones which would meet the technical specs and deliver the committed performance ! My specs were rather brief – I wanted minimum 12 MegaPixels, 5X Optical Zoom, 3-inch display, Full HD Video recording (preferably 1080P, 30 fps) and HDMI output.

A quick shortlist of available brands/models generated only a really short list, and I was rather disappointed. The list comprised of (1) Sony Cyber-shot DSC W570 and W370 ; (2) Fujifilm Finepix JZ300/310 ; and, (3) Nikon Coolpix S3100 and S8100. I rejected Canon as for similar specs they were priced 20 to 30% higher, implying that they are spending too much money on marketing. Fuji was 20% less priced than Nikon, and Sony was some 10% higher than Nikon.

But the difficult part is the actual “user” trial – one has to find enough time, after having spent a fair amount of time online to investigate and evaluate the various options. Word-of-Mouth does not work here, as this is really a personal choice – what appears good for one’s eyes might be lousy for another’s.

I could not obviously spend time in the shopping mall, and briefly contemplated on placing an online order on one of the well-known web shops, such Flipkart or Infibeam. But I abandoned the idea since I would not be able to feel the product till it actually arrives at home (and I would have fully paid for it at the time of ordering online), and then it would have taken atleast a week to actually arrive (actually indeterminate at the time of ordering). One has to chase these folks by making phone calls.

So, I decided to take a walk into couple of big electronic shops in the nearby mall (near to my home). And, voila, I got what I wanted in less than 10 minutes. All the models mentioned above were available for examination and user testing, and it was easy for me to settle on the Nikon S8100 due to its crystal-clear display quality and zoom, apart from its decent pricing. It also met all my technical criteria. The closest to Nikon was Sony at the higher side of the price spectrum, and Fuji at the lower side of the same spectrum. I wanted standard SDHC/SDXC memory cards, and so Sony was out (it uses Memory Stick Pro Duo, Sony’s own standard), and further I already had a 3-year old Sony digital camera.

So, I decided to try the Nikon for the first time. Let us see how this works out, but it is clear that one has to set out with a set of technical criteria based on requirements, and one also has to find time for some user testing. I concluded that e-Commerce will not work unless we have already done both the above steps and then I don’t see the reason why I should wait for another week when I can get the same item in the store immediately. May be the online ordering would have saved some INR 300 to 500, but that is not worth the wait !

Cheers,

Vijay Srinivasan
12th June 2011
Mumbai

The Retail Mess

For involved and knowledgeable shoppers, shopping in India is comparable to shopping in Hong Kong in the mid- and late nineties. You may wonder what is the connection here and why is that so.

Well those days, in Hong Kong, the retail sales person makes a judgement call on the shopper – whether the shopper is serious, he has money, he is willing to spend his money, his level of interest, his eye movement, etc., and then makes a decision whether to focus on that specific shopper or give him the go by. They did that job so well that almost all the time they were able to complete a deal when their selection of the serious shopper was correct. I have not done any research on this topic, but I have shopped many a time and so have had the pleasure of observing the manner in which business is done in a mall outlet or in a specialized, branded shop. The way the retail sales person handles the client is a classic example of segmentation, the identification process of targeting select customers successfully to land a deal. Certain segments are fine, but many segments are not. During those days, tourists from Mainland China were not as important as those from Taiwan, Singapore or Japan.

Given those experiences from Hong Kong, and some from Singapore, it was apparent to me that in India the select high-niche shops identify their clients the moment they see one. Window shoppers are totally ignored. Serious clients are identified mostly correctly and guided into the sales activity. But this does not mean that retailers in India have perfected the art of engaging with consumers, like what has happened in Hong Kong or Singapore. It is okay to make mistakes in the sales process, that would be acceptable. However, the mistakes need to be corrected immediately and the shopper need to feel his importance and the impact of the knowledge of the sales person in his decision-making process. Otherwise, the shopper would feel slighted and ignored.

Retail education in India is still at its infancy given the underdeveloped nature of the market with less than 6% penetration by organized retailers into what is some USD 400B retail market last year. So, it is only but natural when one feels that many a time the sales person lacks knowledge on what is being sold, and the engagement style requires to be upgraded.

Today, I saw example of this behaviour at an established retail outlet in a big mall. The sales person was fine, though he struggled a bit with some data, but I appreciated his involvement in the process and the hunger he had for closing the deal (I was buying some pants). But when I went to the cashiers’ counter, the cashier did not focus on me (there were multiple cashiers) – he was talking to the guy on his right as well as to his left – and ignored the billing procedure. Before I could give my membership card and other information, he just generated the bill. Then when I asked him why he did that without taking the necessary data from me, he asked me to go to the customer service section to enter the data.

I left without buying anything.

It is important to feel good even when buying a pant. After all, it is our money and we cannot be forced to part with it even for a good brand at an established/reputed name, even if we need the item. The retail process cannot be driven with a madness of not even focusing on proper billing. Why should I complete the process ? I did not. It is funny that in retail business no one in the shop cares about actually closing the “deal”, unlike in enterprise business. My opinion of that chain fell sharply for no fault of the brand.

Well, well, long way to go, but we will get there some day.

Cheers,

Vijay Srinivasan
3rd April 2011
Mumbai

Inflation’s Pinch

I thought that inflation has come down significantly by reading The Economic Times.

It has definitely come down, no doubt, from high two digits to high single digit as of now in India. One evidence that is quoted in the newspapers is the price of onion which is currently at less than INR 10 per Kg. It was ruling at more than INR 60 just 3 months ago.

But today my wife sent me for some fruits shopping, which I dutifully executed. I noticed that super markets now adopt “dynamic pricing”, they must have totally automated the pricing mechanism via connectivity to the wholesale market I guess. The prices keep changing almost every day. I took note of the price fluctuations in the super market prices of apples, pears, grapes, and pomegranates. Big difference between what I saw a few days ago and today’s prices.

The economic linkages between wholesale production, distribution, market manipulations and retail pricing were clearly in play, and I think this is the way the consumer market is going to work in India. When it comes to many items of daily consumption, it can safely be stated that the demand is inelastic to price variations. This proved to be incorrect only in the case of onions. But otherwise the consumption does not fall with changes in prices as people need to eat and survive. They can alter individual consumption quantities and redirect their “constant” budget towards other items of consumption which are not that much varying in price, but overall demand does not suffer in any major manner.

Given the above analysis, it was clear that many people who are shopping in an upscale super market continue their shopping habits irrespective of price variations – they might crib a bit and raise discussion points while having a drink with friends and relatives, but that’s about it. Life goes on, and this gives ample opportunity for a highly automated and market-linked system to vary prices of such inelastic items and derive maximum profits on any given day. I am sure Walmart does it, and now I am almost sure that the leading super markets in India are doing it.

So, inflation is going to pinch continuously. Get ready for another year when prices are going to be affected not only by supply constraints but also by market operators.

Welcome to Inflation combined with Growth – that’s India folks !

Cheers,

Vijay Srinivasan
26th March 2011
Mumbai

Bread Talk

My wife shopped for some breads at Bread Talk last evening.

It has been a long while since I stepped into a Bread Talk outlet. I have known Bread Talk for the past many years, since Bread Talk originated in Singapore when we were living there. In a short time, Bread Talk became one of the leading brands in Singapore with wide acceptability.

I first saw Bread Talk in India the Inorbit Mall at Malad West in Mumbai, and I was quite surprised to see their outlet in 2006 itself. That proved that Singapore entrepreneurs were serious about the fast-growing Indian marketplace for innovative products, and I was pleased having come back to India only in 2006 from Singapore.

We patronized Bread Talk for quite some time, as the kids were also happy with their stuff, the fresh muffins and the cheese cake were excellent.

So, I was happy to see a Bread Talk outlet in Powai on our way back from an event, and stopped the car. We did purchase a few things, but I was in for a sticker shock. The cheese cake which was some INR 180 (to my knowledge) was now INR 280 ! A simple muffin was INR 80 as against INR 45 some time ago. And so on and on.

Now this may be a bit of a high end bread shopping, but nevertheless it shows how India has been affected by food inflation. The positive point is that Bread Talk has managed to upkeep its quality all these days, I don’t know how they accomplished it. Generally I have seen a deterioration in either product or service quality when a foreign brand is involved, as the Indian market is very challenging and rather widespread to achieve evenness in quality all across.

Well, inflation is here to stay for all of us, and this seems to be the case all over the world, though onion prices in India have crashed to a low of late. Price manipulation by vested interests seems to be the order of the day.

Well done Bread Talk, we enjoyed their stuff yesterday, and their products are highly recommended.

Cheers,

Vijay Srinivasan
27th February 2011
Mumbai

Cycle Buying Behaviour

When my son wanted a new cycle, necessitated by his height which made the current cycle unusable (for quite some time I should say), we decided to do some investigation on the web.

It was interesting to see that, in India today, you could virtually buy anything online. I am not sure how many people do buy things online, I have not seen the statistics. But I discovered that Indian online buying experience has gotten better. So far, I have only bought movie tickets for the family, flight tickets (regularly), make payments to service providers, and order movie rentals.

I presume that online buying gets better if we are already pre-equipped with suitable knowledge. For example, I do not really see the need to go to a mobile phone shop to buy a phone – the item is so well known and described in such detail, that once you have decided the make and model, it is comparison-shopping on the web to determine the best deal and then place the order. More or less the item should arrive as expected. I am trying to do that exactly that now (buying a new phone).

In the case of the cycle, while it was not difficult to identify the model and features, etc., the determining factor was the “buyer behaviour”. In this case the actual user was my son, and he wanted “immediate gratification” once I have approved his purchase with grant of funds. He was against the online buying since he was well aware that any such thing ordered online was going to take a minimum of 4 to 5 days to arrive at home. So, he was always pushing for going to Hyper City’s cycle shop and buy the “damn” thing !

So, I had no choice, though I had good recommendations from my research on the web.

We went to Hyper City, and what did we see ? A decent lineup of cycles, no doubt, but only two makes – Raleigh from South Africa, and Hyper City’s own in-house brand called “Maxit”. I asked the salesman about BSA SLR, and other makes, but he said they do not carry other brands. That was a disappointment in terms of product comparison-shopping. Now, the determining factor is the comparison between just two brands and whether my son liked one of these brands. I tried to dissuade my son from making an instantaneous decision, by suggesting if we could go to another shop called Firefox down the road. But he was not willing to listen and even came up with his reason that Firefox bikes do not last long as per feedback from his friends !

Well, you can’t tackle such practical inputs. So, I focused on the decision-making between the two Hyper City brands. The price gap was significant – the Maxit geared 26″ cycle was some INR 3,999 as compared to INR 6,999 for a similar-featured Raleigh cycle. While I was tempted to try out the Raleigh, my son decided on the Maxit after the serious test drives that he did within the shop riding the bikes ! He also compared the geared cycle with the normal gear-less cycle, and then decided in favour of the geared one since he felt that there would be a need to navigate ups and downs in our apartment complex !

I do not understand why they sell cycles without basic accessories such as bells and (whistles !). So, we needed to pick up those accessories from the Raleigh lineup. I thought this was a good sales strategy on the part of the Hyper City management. You can pick up their house brand, but the add-ons come from the expensive Raleigh brand ! Good for them !!

It was a good learning experience, buying what I would have termed an high-involvement purchase though not a very expensive item. Since the product is going to be used almost everyday, the decision-making was rather involved and entailed a real product usage experience. I agreed that it would not be appropriate for online purchase.

Happy buying experience to you folks during this happy new year season !

Cheers,

Vijay Srinivasan
8th January 2011
Mumbai

Retail Behaviour

I might have commented about our peoples’ behaviour at Shopping Malls and Supermarkets in the past.

It is really funny to stand back and enjoy their idiosyncrasies while shopping. Today I was picking up a few things at a Supermarket located in a nice shopping mall. When I came to the billing counter(s), I chose one randomly as usual, as all the queues were more or less equally long, with people pushing their trolleys and some having just a basket. Unconsciously, the mind selects a queue where there will be some kind of “trouble”.

I joined a queue where the lady before me had nothing in her hand, so I was wondering what would she be buying ? Is she having some clarifications to ask at the billing counter – unlikely, as the product sales people are spread all over the supermarket who would have been in a better position to clarify things without the need to queue up in the first place.

After I joined the queue, she gave me a glance, and then said something to a man in the “next” queue. Was I surprised ? Never, not in India.

It turned out that the husband, wife and their son have taken different queues in the hope of getting out faster, whoever reaches the billing man faster will start billing with the trolley being dragged and pushed in from some other counter ! This is what I call “Virtual Billing Fantasy”.

That is exactly what happened here. The husband saw that the queue in which I was standing started moving, so he obeyed his wife’s diktat to move the trolley ahead of me and join his wife. The Indian mind is just amazing – it tries to constantly optimize, and seek faster ways of overtaking others in general. If one can get out of the supermarket 5 minutes earlier than what would have happened, that is considered an achievement, and the wife smiles at her husband for helping to achieve something unique.

It is indeed unique behaviour. A pattern which can be witnessed all around the supermarkets in India, I guess. This is really a family affair and family collaboration to shop faster and get on with life, to heck with others.

Not only that, after the husband brought the trolley and joined the queue, his wife left the queue ! She told him that she would shop for a couple of more items and return before he could finish the billing, no need to hurry dear !!

Well, this is a phenomenon unique to Indians, and in fact, it should be a behavioural pattern in emerging countries hungry to make a mark for themselves in the world stage. No point in being circumspect and hold on in a rather diplomatic manner with all the niceties that go with it, trying to please everyone. Take care of yourself in the fastest manner, let others do the same if they are smart enough !

Sometimes, I relish these observational opportunities when I go shopping, or when I see peoples’ behaviour in public places such as offices, banks, malls, theatres, coffee shops, restaurants, etc., Being oblivious to others’ presence appears to be a gift which the refined folks do not have the pleasure of enjoying !

Welcome to Retail Shopping Explosion !

Cheers,

Vijay Srinivasan
5th December 2010
Mumbai

Buying a New Laptop

What an experience !

At the end of it, I still have not bought a simple new laptop !!

The experience started off like this – my daughter wanted a new, fast laptop because she found that the very old laptop at home (5 years old) was struggling to open even a simple Microsoft Word document. My own second laptop is more than 6 years old and I use it only for browsing and posting my blog posts – it is virtually unusable for any other application.

So, I started looking to buy a new, fast laptop. Obviously, the first source is google search on laptop prices and reviews (India). Tons of info’ from various sites and lots of confusion. I thought I was reasonably technology-savvy, but found that the plethora of info’ overwhelmed my senses completely. For instance, I was challenged to select a CPU (processor), and I was flummoxed to choose between the Intel Dual Core and the latest i3/i5-kind of processors. I was also forced to look at the AMD processor options, which produced more confusion. I wanted to select something reasonably priced, and did not wish to pay for something not yet proven but comes with a lot of marketing hype.

Then, I went to Dell site.

Dell has been the saviour for many-a-shopper who is confused about computer shopping since it provides a simple way to select a system and configure it. I always used to wonder why other manufacturers are not doing this – of course, they want to sell only thro’ their dealers and not help the end customer in a direct, simplified manner. Dell was hugely successful in the direct selling model for many years – except that in the last few years they yielded their PC leadership to HP due to HP’s aggressive and savvy marketing I guess.

After browsing thro’ various models at Dell site, I configured couple of laptops which I liked. But the prices troubled me – how come laptops cost more than INR 40,000 when they keep claiming that computer prices keep falling and are now in the affordable range of USD 500 at the maximum for normal usage ? I looked at U.S. web sites and found decently configured systems at USD 350 !

My conclusion was that India is not getting access to those kinds of systems, except if one tries to build his/her own laptop ! Amazon.com does not seem to be a workable proposition !!

After thorough brain-washing, I decided to take a look at the laptops in the Tata Croma and E-Zone shops in a nearby mall – I thought that if we are going to anyway buy a new laptop, it is better to “feel” the same. Spent 30 minutes at each shop (Croma was better) and saw how particular brands were getting pushed – HP and Toshiba were actively being pushed at Croma, while Acer and Lenovo at E-Zone. Acer was prominent in both shops of course, given their continuing ambition to become the world’s top PC brand.

Well, then I got back home and did a bit more research and finally slept with a confused mind – what I thought should be a quick decision made within an hour at the most has taken a full day and not decided upon as yet.

Now, I decided to place the order via the Dell site because it is the easiest to process what one wants – may not be the best brand though. For other brands like Sony, one got to go somewhere in the city to their own shop – no time ! Why can’t life be made simpler to order virtually anything on the net ? When will sites like Amazon India come into being when we don’t have to grapple with import issues ?

Well, the experience of buying a simple laptop for everyday use could not have been more complex !

Cheers,

Vijay Srinivasan
18th Sep 2010
Mumbai