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A great entrepreneur has to balance 'fair' with 'shrewd' - Aditya Pittie - The Sunday Indian
 
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Aditya Pittie

A great entrepreneur has to balance 'fair' with 'shrewd'

 

Aditya Pittie shares rare insights on the Pittie Group’s growth and the group’s iconic relationship with Patanjali as their exclusive distributions in modern retail
ADITYA PITTIE | Issue Dated: November 5, 2016, New Delhi
Tags : Krishna Kumar Pittie | Patanjali products | Baba Ramdev | FMCG | YogurtBay | Reliance Retail |
 

Your father Krishna Kumar Pittie took over the reigns of the business when he was barely 19 and still in college. How difficult was it for him to manage things at such a tender age? When and why did the family move from Rajkot to Mumbai?

In 1980, my father took the helm of the family concern in Rajkot and resolved to handle the family business by himself. For a patriarch, passing the controls of his business to the next generation can be tricky, but my grandfather gave him the independence to take day-to-day decisions of the business. Reflecting the familial and social conditioning that Marwari families seem adept at when preparing future generations for business, my father believed in the potential of undertaking business activities in those days, branching out by purchasing bauxite mines in Gujarat. What worked to his advantage was his speed in rectifying mistakes, which he refers to as ‘the beauty of youthfulness’. In 1982, he decided to leave Rajkot and shift base to Mumbai with the family to handle the family’s silver retailing business called Shri Vallabh Pittie & Co. (named after his grandfather Shri Vallabh Pittie and his father).

Later, in 1989, he began marketing steel manufactured by Essar Steel, where he was the sole distributor in western India for the company, and at one point of time, he was selling nearly 40,000 tonnes of steel per month. The same year, he decided to get separated from the family business and float his own company. And so the Pittie Group of companies was founded, with a small office at South Bombay’s posh business district, Nariman Point, where he began with just four employees.

It is said that Marwari families learn all the tricks of the business on the dinner table. What are the most valuable lessons you have learnt from your father and grandfather?

As a young boy, while growing up, I was privy to several business conversations, from expansion of companies to selling of businesses. I have seen the family endure several challenges and setbacks along with enjoying success. I think if I had to summarise the lessons that I have learnt over dinner table conversations, it would be that a great entrepreneur is one who is able to find the perfect balance between being the right amount of “shrewd” and “fair”. In the cutthroat world we operate in, being shrewd is essential to survival and being fair is essential to growth.

A seven-day yoga camp and a meeting with Baba Ramdev changed the course of things for the Pittie group. You ventured into TV by acquiring Sanskar TV – and also a monthly spiritual magazine Sanskar Patrika. Recently, you launched two new channels, Shubh TV and Shubh Cinema. Tell us more about these ventures.

We took up the opportunity to acquire India’s leading spiritual TV channel, Sanskar TV, in 2010. We ran the channel for almost seven to eight years, where the business grew four-fold. We then got a good opportunity to sell it, so we decided to exit the business. But since the genre was close to the family’s heart, we reentered the business with Shubh TV. I think there is scope for niche content in India and we wanted to cater to that need within the realm of Indianness. Soon, we ventured to launch Shubh Patrika, a spiritual magazine under the Shubh brand that aims to highlight the values of Indian culture and to bring to light the perception of faith for every human who reads it. We are also launching two other channels Shubh Music and Shubh Cinema.

We are trying to position Shubh TV as a go-to destination for people who want to watch premium Bhajan content or spiritual musical content. We have also set up a state-of-the-art studio, where we are inviting singers across the country to come and record for us; we are also encouraging budding singers and monetising them through our arm Shubh Music. We have also launched ShubhTV.com, which is India’s first spiritual OTT platform, on Android and iOS.

The Pittie group is also the sole distributor of Patanjali products for modern retail and e-commerce. When Patanjali first tried to push its consumer goods into retail outlets in 2010, it faced a lot of resistance with most retail outlets unwilling to keep them. How has your journey been and how did you change this mindset of retailers and crack modern retail? Today, Big Retail like Reliance Retail and DMart are dedicating standalone places for Patanjali products!

We started Patanjali’s modern trade around three years ago, when Patanjali was on a Rs. 1,000 crore annual turnover rate. We started with a pilot through Reliance Retail in five stores. Today, we are present across modern retail with every retailer, except Future Group as it has a direct tie-up with Patanjali.

One of the major challenges that we faced was with Swamiji’s (Baba Ramdev’s) policy of Patanjali products never being sold on a discount. It is sold on MRP pan-India, which is unheard in FMCG. All the supermarkets have a clear philosophy that they will always be below MRP. For me to convince them to sell Patanjali on MRP was a difficult task. But all retailers were extremely supportive. We have converted this into an advantage. For instance, today, if you enter DMart, they write in bold letters that Patanjali products are sold only on MRP. People think it’s only a price-based phenomenon when it comes to acceptance of these products but I don’t think Indian consumers are so price sensitive. It’s a combination of low price, good quality and the concept of Swadeshi. I believe more and more consumers will convert to Patanjali, and once you convert one product’s consumption to Patanjali, the probability of converting all your products gets even higher. They have a large assortment and soon they will be entering newer categories as well, including baby-care, to drive growth.

Patanjali doesn’t react or plan based on what other FMCG companies do. They are clear that they will do what is best for the Indian consumer, regardless of what others are doing. Patanjali is working on a very strong strategy for exports; it’s part of the agenda for this year. The demand is there and the company is forming a strategy on how to service that demand.

According to a report by IIFL Institutional Equities, “Patanjali is injurious to listed FMCG health”. Your views on the growing popularity of the brand.

The reason for Patanjali’s success is its unique business model of a single brand, a wide spread of categories, exclusive store network and a close association of a personality. Patanjali has created a large dedicated customer base through a combination of focus on Ayurvedic ingredients and attractive pricing. Hence, they are showing outstanding growth in a mature and slow market, where the customer is more evolved and has an inclination for healthy and natural products, which has eventually triggered the demand for Patanjali products. This is the first time in grocery retail that standalone spaces are being given to one entire umbrella brand clubbed together. For a brand to have this kind of consumer attraction in such a short span is remarkable.

The Pittie group is into real estate, media, entertainment, e-commerce and also quick service restaurants. Where do you see the maximum growth this year?

For me, doing business means keeping my spirits high in the midst of stress. It was the desire to broaden the visibility and spread the business risks that pushed us to create diverse interests, including real estate, media, entertainment, e-commerce and also quick service restaurants. In established markets, demand is fragmented as customers ask for greater variation and more types of after-sales service. Today, we are encompassing vastly different stages of development, where we have immense growth potential for the group.

Real estate has always been our core business and will continue to be our largest business for the near future. With the markets going through a slow phase, our expansion has been slow in recent years; but we believe that now the time is right to make acquisitions in the real estate development space. We have a clear strategy for our media business under the Shubh brand and that is now on its course. We have just acquired our next license for Shubh Cinema. We believe that broadcasting and over-the-internet delivery of content is a lucrative business in the long term. With YogurtBay, we intend to enter the value-added dairy segment competing with premium ice creams by providing yogurt ice cream tubs at supermarkets. The first batch will hit the market this month.

It will also be an exciting year for Shubhkart, our online marketplace for spiritual products, and this year will shape its future. As no other brand even exists in this category, Shubhkart will aim to fill that gap with its high quality products

With distribution, alongside the continuing growth of Patanjali, the modern retail contribution will also grow exponentially. Our aim is to improve availability of Patanjali across the country in all modern retail stores of all formats.

We are aiming to achieve at least
Rs. 1000 crores this year in turnover out of all our businesses combined.

Your brand YogurtBay is one of the most popular frozen yogurt chains across various cities giving serious competition to many big MNCs in this space.

We are the majority stake holders in YogurtBay. While we started with one store, we have 12 stores across India now, with four franchise stores and the remaining being company-owned. In India, the QSR industry faces stiff competition, especially in dessert category items like yoghurt. With just ice cream products, one can’t compete with brands like Amul. That’s one reason we are shifting from the store-sales to the FMCG retail model in this business, and soon enough, our yogurt brands will be available in supermarket shelves, albeit with a new branding. There are three low priced yet premium flavours that are being promoted – Mango Masti, Blueberry Blast and Super Strawberry.

As an entrepreneur, what have been your most important lessons?

To be able to overcome the fear of failure, take risks against all odds, to minimise and hedge those risks as much as possible, to start small but have the ability to scale, to be humble but confident, to listen well but also have the conviction in what you believe, and most importantly, to empower, encourage and motivate the employees to grow your business to newer heights.

Your e-commerce venture Shubhkart is devoted to spiritual products. Tell us more about this and where do you see this venture heading in the future?

Shu bhkart showcases more than a hundred thousand products from over 150 merchants across the nation. One of the key challenges is the online reach to consumers in this category, who are not inclined to purchase using the net. But we believe that as time progresses, this too will change and the target consumer for Shubhkart will start shopping online and predominantly at Shubhkart. The website is garnering more eyeballs and hits. We are additionally innovating newer services – for example one in which, based on the individual’s date of birth and list of issues being faced, the website will suggest the spiritual items that may be considered for purchase.

This category does not have a particular brand recall, and minimal brand competition per se. This, combined with the fact that we have considerable networking with supermarkets, were the reasons that we have taken Shubhkart to modern retail. One example of this is Reliance Retail, where we have managed to create a pooja section in ten stores. This is expected to expand to 20 Reliance Retail stores and to other supermarkets as well in due course. We are extremely bullish about this business, focussing most importantly on packaging too. The Shubhkart range of agarbattis is something to watch out for. But of course, India is a big nation, and we necessarily will have to consider regional spiritual differences and approaches as we go to various parts of the country. You can understand our aggression in this segment with the fact that we plan to be featured in more than 1000 supermarkets by the the end of this financial year.

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Issue Dated: Feb 5, 2017