Lemon Tree partners Al Waleed Real Estate for Dubai hotel foray

Lemon Tree Hotels, one of India's leading hospitality firm in the mid-priced hotel accommodation segment, in partnership with Dubai's Al Waleed Real Estate LLC has entered the Middle East hospitality market. Through its management subsidiary Carnation Hotels, the BSE-listed hospitality chain has debuted in the international market with the launch of its first Lemon Tree Hotel in the United Arab Emirates (UAE).

According to Rattan Keswani, deputy managing director – Lemon Tree Hotels and director – Carnation Hotels, said, the UAE market holds immense business potential for the hotel chain and their's is the first branded mid-scale hotel in the area. "We have a locational advantage, with the hotel strategically situated close to famous destinations like Burj Al Arab, Kite beach and the Mall of Emirates, and are equidistant from Business Bay and JLT, the two major business districts of Dubai. Such is our proximity to the Burj Al Arab, that our guests can enjoy unhindered views of the iconic building from the pool deck, and even some of the rooms," said Keswani adding that the hotel company is hoping to have many more hotels in the region in the future.

Owned by Al Waleed Real Estate LLC, the hotels is located on Al Wasl Road and is within a kilometre from Sheikh Zayed Road and Jumeirah Open Beach. Featuring 114 guest rooms, the property boasts of a multi-cuisine restaurant, Lemon Tree Café, with al fresco extension, a conference room, a swimming pool, a well-equipped fitness center among other facilities.

The addition of this hotel, Keswani said, opens a new location for the brand, thereby increasing its appeal to existing and potential customers. "We are confident that our partnership will enjoy mutually beneficial results within a reasonable stabilisation period after the launch. The UAE and Gulf Cooperation Council (GCC) is a resilient market in the long term and we could foresee the need for a recognised mid-market hotel in the branded space," he said.
 

Ideal for business and leisure travellers, the hotel is a short 20-minute drive from Dubai International Airport and close to Dubai Internet City, Dubai Media City, Barsha Heights, and Knowledge Park. It is also well connected by road and air to the other Emirates, including Abu Dhabi, Ajman, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Pan India RevPAR of premium hotels to remain stressed in fiscal 2020

The revenue per available room (RevPAR) outlook, for hotels across India in the premium category, will continue to remain stressed in fiscal 2020 (FY20). As per a senior ICRA Research executive, this is mainly owing to subdued demand environment in the country. While individual hotels have initiated price hikes, their ability to sell at higher rates will primarily depend on their capability to manage daily demand and occupancy.



Vinutaa Sriraman, assistant vice president - large corporate ratings, ICRA Ltd, said, “While demand has recovered marginally during October to November 2019 period, overall revenues for FY20 are likely to be flat at about 0% to 3%. The margin outlook for FY20 is also expected to be largely flat. ICRA also does not expect the larger hotel companies to embark on debt funded capital expenditure (capex) programme given the experience of the recent past.”

In terms of city wise performance, majority of the key markets witnessed a decline in RevPAR in the first half of FY20. In fact, Bengaluru was the only key market that witnessed improvement in RevPAR. With negligible premium category hotel room supply additions over the past several quarters, Mumbai has continued its position as a city with the highest occupancy of over 70%. However, the south Mumbai market has performed better compared to north Mumbai.

While the up-cycle would be delayed, Sriraman said, the healthy demand expected over the medium term is likely to facilitate improvement in average room rates (ARRs) and occupancy. “Among major markets, Mumbai continues to post high occupancies, as fresh hotel room additions have been slow over the last four years. Being a gateway city, Mumbai’s healthy demand prospects would drive RevPARs over the medium term,” she said during an analyst call.

In the National Capital Region (NCR), Delhi has about 63% of the NCR inventory while the remaining is spread across Noida, Gurugram and Faridabad. While Delhi can support higher ARRs, Gurugram, which has been struggling over the last few years owing to the Delhi International Airport Ltd (DIAL) Aero City supply, is showing signs of improvement. The micro market of Noida is likely to witness muted growth in occupancies and ARRs over the medium term due to anticipated increase in supply in FY21, FY23 and FY24.

“Monthly occupancies were growing for about 48 months on a year-on-year basis. However, occupancy in the first half of fiscal 2020 (H1 FY20) declined following the increase in airfare post the shutdown of Jet Airways. Adding to the woes were muted corporate performance, weak consumer sentiment and slowdown in foreign tourist arrivals (FTAs) and domestic travel due to extended election period in the first quarter of FY20.



Pan India average occupancy declined by 1% to approximately 63% in H1 of FY20 compared to 64% in the same period of fiscal 2019. Market wise, Mumbai, National Capital Region (NCR), Pune, Kolkata and Goa witnessed some moderation in occupancy in this period. ARRs, which largely remained flat for nearly three years up to the third quarter of fiscal 2016, started witnessing some traction beginning fourth quarter of FY16. The traction continued for the whole of FY17, FY18 and FY19.

“When demand slowdown impacted ARR in the first quarter of FY20, rates recovered marginally in the second quarter. As per ICRA estimates, ARR across India stood at Rs 5,400 for the first half of fiscal 2020 compared to Rs 5,500 in the same period last year. Current ARRs are lower by 30-35% from the peak levels witnessed in H1 of FY19. Corporate request for proposal (RFP) rates have been negotiated about 4% to 5% higher for the cycle starting January 2020. However, effective pass through of the same will depend on demand pick up,” said Sriraman.

The ARR movement is city specific. While most cities have witnessed a decline in ARR for H1FY20, cities like Mumbai and Bengaluru have reported growth. Impacted by lower occupancy and ARR, revenue per available room (RevPAR) declined by about 3% to 4% to close at about Rs 3,400 in the first half of the current fiscal. While the RevPAR was higher by Rs 500 than the all-time low of recorded in FY14 and FY15, it was still 30% lower than the peak in H1FY2009. Having said that, it was still equal to the peak RevPAR witnessed in FY11.

In NCR, there was a marked variation in performance across micro markets. With a large part of the business travel into Delhi being government related businesses, there was a decline in both ARR and occupancy in Delhi. On the other hand, Gurugram showed positive traction in both ARR and occupancy with inflow of corporate guests despite the auto sector slowdown. “The second quarter of fiscal 2020 will witness some pick up in government related travel in the Delhi region. Overall, pan India ARR and occupancy remained under pressure in H1 of FY20,” she said.

Demand drivers and their performance
Demand for the hospitality industry is multi-pronged and depends on foreign tourist arrivals, domestic leisure and business travel and MICE or meetings, incentives, conventions and exhibitions segment. Domestic guests account about 75% of the total demand while FTAs account for the balance. Business travellers account for about 60% to 65% of the demand, while leisure travellers account for the balance 35% to 40%. The ratio varies depending on the destination.

“The calendar year (CY) 2018 was a strong second year of international tourist arrival growth in continuation with a 7% growth witnessed in CY2017. This was higher than the 4% yearly average of CY2005 to 2016. For H1 CY19 the growth slowed to 4% due to economic headwinds and the already high base,” said Sriraman.

While Asia Pacific witnessed a 6% FTA growth during H1 of CY19, growth in arrivals into India stood at 3% and was lower than the Asia Pacific or global international tourist arrival (ITA) growth. Foreign tourist arrival, in year-to-date October CY2019 has been impacted by global trade wars and the economic slowdown.

The Pulwama attack in February 2019, the Indian general elections during April and May 2019, the second bout of Nipah virus in Kerala in June 2019, diversion of traffic to the Cricket World Cup in UK in May to July 2019, the Kashmir crisis and ensuing travel advisories in August 2019, Thomas Cook UK shut down in September 2019 and extended monsoon have further worsened the situation. In December 2019, USA and UK have issued reason travel advisory for women visiting India, which could further impact arrivals in the country. Bangladesh, USA and UK were the top three FTA source markets for India in October 2019.

The e-tourist visa (e-tv) scheme
Tourist arrivals, under the e-tv scheme, accounted for about 25.1% of the overall FTAs in India in year-to-date (YTD) October CY2019. The e-tv scheme, which started in November 2014, with about 43 countries has since been expanded to include over 165 countries. During YTD October CY19, travellers under the e-tv scheme grew at a healthy 20.9% on y-o-y basis, also lower than the 44.7% witnessed in YTD October CY2018. This is due to high base effect and slowing FTA growth.

Foreign exchange earnings (FEE)
FEE grew by about 2% in USD terms during YTD October CY2019 as against a 7.5% y-o-y growth, during YTD October CY2018. In Indian Rupee (INR) terms, the FEE growth was higher at about 6.1%. However, this was also lower than 11.3% for YTD October CY2018. Per traveller USD spend, witnessed a 1.2% decline, while in INR terms, it was higher by about 2.7% for YTD October CY2019.

Domestic passenger trafficIt grew by a modest 2.9% during YTD September CY2019 compared to a strong 21% y-o-y growth for the corresponding previous year. On year growth in domestic passenger traffic was in double digit every month since September 2014 until December 2018. April 2019, was the first month of decline since June 2013.

“Increase in airfares following the grounding of Jet Airways aircrafts in January 2019 and eventual shut down in April 2019, slowdown in domestic travel due to an extended election period of six to seven weeks, Nipah vitus alert for the second time and Kerala, muted corporate performance and consequent cut on discretionary travel spends, lower consumer confidence as indicated by the RBI current situation index, extended and excess rainfall in several cities like Mumbai and Goa, and water shortage in cities like Chennai have also impacted domestic travel,” she said.

Corporate performance
With second quarter FY2020, revenue growth entering a negative territory in almost four years, the uncertain business environment and cost-cutting initiative could have a bearing on travel related spends in the near term.

Supply dynamics
The supply growth pipeline in the Indian premium hotel segment is expected to be about 4.5% compounded annual growth rate (CAGR) during FY19 to FY24. With the pickup in supply announcements over the last few months, the incremental supply pipeline for FY20 to FY24 is now in line with the addition during FY14 to FY19. However, the growth rate is lower given the higher base.

According to ICRA research, total inventory to be commercialised over the next five years has increased from about 98,900 rooms in November 2018 to about 1,08,000 rooms in December 2019. This is an increase of about 9% in the last one year. Incremental supply is largely focused on Bengaluru, Mumbai and NCR, and is likely to be opened in FY23 and FY24.

“Part of the incremental supply is because of up-scaling and re-branding of midscale hotels into premium category rooms. Over the FY20 to FY24 period, about 3% to 4% of the incremental supply in the pipeline, is from brownfield expansion. A sizable part of the supply pipeline in FY20 and FY21, in the top eight cities tracked by ICRA are owned by real estate players. The supply pipeline in Goa and Kolkata are expected to come in FY20 and FY21 while incremental supply in Hyderabad, Mumbai and Bengaluru is spread over the years,” said Sriraman adding that large real estate developers like Prestige, Bhartiya City, Oberoi Realty and DB Group are aggressive on the hospitality sector.

Red flags
These have intensified currently. Demand weakness and supply uptake will continue to weigh-in, in the near-term performance and demand will be contingent on the overall economic revival.


(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Secure digital banking and payments system is a long road ahead

A recent video that went viral on WhatsApp about how a person was tricked into downloading a third-party mobile application and digitally robbed of every penny in her bank account was disturbing to say the least.

Earlier this week, the driver of an Ola cab I was travelling in, narrated an incident that happened with him over a week ago. A customer paid him the cab fare of Rs 1,500 using the Paytm mobile application. However, the money vanished from his bank account after the payment was being done!

"No one has a clue what and how did it happen," he told me followed by asking if I'm going to be paying with Ola Money, Paytm or cash. The cab driver has lodged a complaint and is now hoping the issue to get resolved soon. "They are saying, it will take 40 days to figure out where has my money gone," he told me seemingly worried about the possibilities of the money coming back into his bank account.

These are not one-off incidents wherein someone was robbed of her/his hard earned money. A Google search on digital payments frauds/ scams will throw up numerous results of instances wherein people have been deceived and have eventually lost money from their bank accounts in some manner or the other. Apparently, there are instances wherein users have also lost money while transacting with Google Pay or G Pay.

What's more surprising is the fact that such frauds/ scams are far from dying away. A recent report by the Reserve Bank of India (RBI) said that the country's banking system detected frauds worth Rs 71,500 crore in the financial year 2018-19. I am sure, the number will be significantly higher in 2019-20 when the Indian central bank comes up with its report next year.

New tricks are being used at frequent intervals and the common Indian citizen who is anyway struggling to make ends meet is faced with the challenge of keeping her/his money safe in a bank account, a digital wallet or mobile payment applications that keep harping about their safety features while playing ignorant to the vulnerabilities.

At the receiving end always is the user of such applications who places faith in the ability (or inability) of companies running the digital payment systems. The burden is always passed on to the user who has to be vigilant all the time.

While regulators and the administration have issued communications creating awareness about such frauds and scams across various digital modes of transaction, it's not enough to arrest the problem. Even the so-called intelligent minds in the information technology space working with banking and financial institutions and digital payments companies aren't able to find ways to address this issue.

I recollect a discussion, earlier this year, with a senior executive heading the start-ups initiative at one of the top global IT companies operating in India. Their portfolio of 'unicorns in the making' comprised ventures instituted by IITians as well as IT industry experts with extensive experience in the financial technology space.

However, none were really working on offering a solution to this pressing issue about payments frauds/ scams. And mind you, the problem is not something that's master-minded by a tech wizard. These are very common people sitting in some remote location of rural India, using basic ways and means for phishing and skimming while going untracked.

What's really holding back tech companies from using their prowess in finding an effective solution to this problem? Is it so difficult to design systems and processes that ensure safety and security of savings in bank accounts and modes of digital payments used by citizens?

People want to graduate towards a cashless society but with no respite from frauds and scams, they are finding solace in the convenience of cash for everyday transactions.

What seemed to be an opportunity, post demonetisation, to promote digital transactions and payments in the country is slowly losing its sheen. Adding to the challenge are vulnerabilities in the system that’s shattering the common Indian citizen’s confidence every passing day. This makes me wonder, does a secure digital banking and payments system really exist or it's just a myth.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Our focus will be to make people feel and experience 'The Mantis': Ranjita Ravi, Orxa Energies

The Mantis, India's first EV performance bike

A version of this interview first appeared in The Free Press Journal edition on Friday, December 06, 2019.

After operating in stealth mode since a couple of years now, Bengaluru-based start-up Orxa Energies has unveiled the first look of India’s first electric performance bike, ‘The Mantis’ that can do 200 kilometers in a single charge, can attain a top speed of 140 kilometers per hour (kmph) and boasts of a battery swapping feature. Ranjita Ravi, co-founder, Orxa Energies, in conversation with Ashish K Tiwari, speaks about the business of the company bootstrapped in 2015, experience at Airbus BizLab, electric vehicle (EV) segment, lithium ion battery technology and more. Edited excerpts...

The bike being unveiled is a finished product or you plan to refine it further for the commercial launch later next year?
This is a product unveil, something that’s very close to what’s it going to be in the final production version. There could be some refinements closer to the commercial launch. Small technical things like maybe increase the battery capacity a bit more. We’ll have to see how that happens.

Your company has been working on some developments for Airbus. What exactly are you doing for them?
We were a part of the Airbus BizLab, an accelerator programme by the European multinational aerospace corporation. They have four Airbus BizLab locations worldwide and Bengaluru is one of them. Essentially, what we wanted to work with them was in the battery space. So aspects like development, electronics and things like that around the whole battery technology. This was back in back in 2017-18. There are a few ongoing projects we are still working on for them but I’m not at liberty to discuss about these projects.

This idea about a performance bike in the electronic vehicle (EV) segment happened before the Airbus BizLab development or after?
Actually the company was started keeping the EV performance motorcycle in mind. I think there are quite a lot of synergies that our team has with aerospace majors like Airbus. That’s what led to us teaming up and firming this alignment. If you think of a performance motorcycle and aerospace application, their exigencies are very similar.
There is very less space available, it has to be of a very high performance and be very light-weight. So volume availability is less, there are strict weight restrictions and it has to deliver a great performance. That’s how we began working with Airbus BizLab.
We have other aerospace clients as well and are working with them on a very research and development (R&D) stage on a few pilots. Basically, our battery technology is very light despite being rugged and gives a very good performance. So there is a strong alignment between our product and the demand scenario in this segment.

Is the battery technology your primary business or EV performance bike?
The motorcycle is primary business. We started doing our own battery packs because there were no battery packs that could meet our requirements for the EV performance bike. In the initial stages, we thought off-the-shelf battery packs could be used to power our performance bikes but that was not the case. That’s when we started work on developing our own battery technology. The requirements for the two industries are similar and my co-founder and chief technology officer had extensive experience in this industry we saw the application immediately. That’s how developing the battery technology came into play for us. It’s already a separate business vertical for us.

The lithium battery space is getting very crowded with too many players homegrown and international joint ventures (JVs) claiming all sorts of things.
Competition is good and we think good technology will stay while bad technology will die a natural death. It’s also very important because the level of technology and R&D is newly developed. Right now, I think India has that once in a generation opportunity in this space. People keep talking about how we lost out on a whole lot of things in the past.
If you look at the entire EV ecosystem though, I think we have a great chance to the take lead. The EV space in India is not going to develop the way it did in Europe or for that matter any other nation where EV related developments have already progressed to a certain level. We need India-specific technology and there are a lot of people working on it at present and that’s very good. NITI Aayog estimates the battery pack industry to be about $9 billion by 2025 and that’s just for automobile category. So, the market potential is huge and a lot of people in India need to make a lot of noise about their achievements in the EV technology space.
People in India should be working on various EV technologies because it’s too early for standardisation. There should be different lithium ion and related chemistries, people working on various types of battery packs whether it is charging, swapping and so on. I think a lot of noise needs to be made until 2025 post which efforts will have to be made to figure out a business model around what works best for India. Thereafter it will be a completely new phase of growth for India in the EV technology space.

Do you have intellectual property (IP) rights on the battery technology?
We have multiple proprietary IPs in each of our battery packs. The battery management systems and controller systems are our own. The engineering and design for the battery pack is all in-house. The product is rugged, strong and does not require active cooling and still delivers in terms of performance. Some of the IPs have been filed already and others in the filing stage.

Tell us about the unique aspects about the bike and the battery pack.
Everything from the wheel to the handle bars for the bike has done by our team of engineers and designers. A lot of work has been done around its frame. Electric vehicles have to be lighter, faster and stronger. We are working on a frame architecture that’s very unique to us in such a way that it’s not only a design functional element but is also very different from what some of the other people are attempting to do in the market. The design helps in a big way to facilitate battery swapping while giving the bike attractive look and making it strong. Our battery pack has a capacity of nine kilowatt hours (kwh) and there are six modules giving the bike a 200 km range in a single charge.

A lot of engineering has gone into how the battery swap works and how we are going to fit a 9kwh battery in it. The very fact that we have such a large capacity battery pack gives us the advantage that these will last longer compared to the 3-4kwh options available in the market at present. The battery capacity not only gives a huge range per ride but the life cycle as well. We are still doing a lot of aggressive life-cycle testing in-house, a lot of R&D using multiple cells is on, extensive data collection and mining is underway.
All this exercise will be useful once we get into the commercial launch and offer customers products that are backed by qualitative and quantitative data points.
We started customer pilots of our battery packs mid-2018 and the response has been phenomenal. One customer put the battery pack in a plastic basket under his commercial vehicle and did a 50-60 km run without any issues. Another customer in north India used the battery pack in his passenger two-wheeler driving in 50 degree Celsius weather conditions.
Our battery packs are on passive cooling which is another unique feature in addition to the rugged ‘Made for India’ design. The customer pilots were done across two- and three-wheelers, commercial vehicles, aerospace systems. So 2018-19 has been a year of testing and pilots and 2020 is when EVs will actually pick up and run.

Have you also used aerospace materials for the structural design of the bike and the battery packs?
Yes, the entire chassis has been made using aerospace grade material. Some of the aerodynamics is also based on aerospace learnings that we got while at Airbus BizLab. Also, my CTO and co-founder, both have extensive simulation and R&D experience. So all of that have been put to good use in putting together the bike and the battery packs.

Could you share insights on the connectivity features in the bike?
The Mantis will have a coloured dashboard, a companion mobile application to see ride analytics and things like that. The app network will also be able to tell you about the battery swap station network that will come up eventually. In fact, just the battery pack will give the rider approximately 150 data points. So one can do a lot of data analytics, over the air updates and a host of other things. Having said that, we are against over the gadgetisation practice that’s happening in the market.
I think motorcycles should stay true to its spirit. Motorcycling is about the freedom and pleasure of riding, and the vehicle should not be restricting the rider from getting that performance on the road. If you are going to be distracted because your app is telling you one thing and the network is telling you something else, it will be very distracting for the rider. The bike will have all the essential features that’s just right for the motorcycle and the rider.
While we can do a whole lot of things and we will do it when the time is right but that’s not what The Mantis is primarily about. Anybody who is an amateur or a professional rider can just pick up The Mantis and drive. The Mantis has been designed by a team of bikers and it should be as natural for you to ride as any other motorcycle.

What’s your pricing strategy for The Mantis? And who are the target buyers?
The final price will be decided closer to the commercial launch. Some market studies have been done wherein 150 people rode The Mantis in mid-November. Prior to that, we’d done a ride with about 200 people. A lot of consumer studies have been done in between as well. These covered aspects like who will want to ride The Mantis, why would they ride it, how much would they be comfortable paying for it and things like that.
In this category, we are estimating the pricing to be anywhere between Rs 3 Lakh & Rs 4 lakh and we’d like to keep it within that range. The consumers will largely be those looking to own a performance bike. It’s not a mass market vehicle hence the positioning will be premium as well. We will largely use the online channel and other customer experience programmes reach the target audience. Digital is a very good tool for start-ups to scale up. Videos really work well for the automotive segment and help build a lot of excitement for various on the ground activities being planned. Over the next six months there will be a lot of customer engagement activities that will be done to get The Mantis into people’s hands and let them feel and experience the bike.

This pricing will require financing tie-ups as well. Have you already got vehicle financing companies on board?
Yes, we are working on the financing options. Getting the product in the customer’s hands is very important. As per our market study, riders in the performance bikes category are willing to pay between Rs 12 lakh and Rs 15 lakh for a motorcycle. And they spend over Rs 5 lakh more on accessorising the vehicle. For them having The Mantis as a city option is not very inconvenient.

How big is your team at Orxa Energies?
We are just a 15-member team and most of our engineers and designers are in the 23 to 30 year age bracket. Me and my co-founder are the oldest in the 30 plus age group. One of our designers builds custom motorcycles. We have a mechanical engineer who builds go karts. Our electronics engineer is a semi-professional biker and does robotics on the side. The team is our strongest asset and having such a lean team gives them the opportunity to do a lot of work. Our designers are thinking about engineering work and manufacturability of the design, something that’s quite unique in the value chain and it’s very hard to find designers who can actually do that. This is also the reason we able to do a lot of things in-house. The team also work s very closely with vendor partners to ensure the casting and related things are done to specifications and in the best manner possible.

Have you got any external funding for the bike and battery pack business?
We have raised money from an angel investor and an institutional investor in the last couple of years. We don’t make our investment numbers public as it tends to distract from the actual work that’s happening and the value the company is adding.

The commercial launch happens sometime in mid-2020. How are you going about producing the bikes?
We are already working with quite a few vendor partners for the components for the bike and the structure for the battery packs. However, the final assembly, quality check, etc. will be done by us. In fact, we are already doing the battery assembly in-house. We have a fair idea of the ecosystem, how and where will everything get manufactured as well as partners who will work with us in the process. Currently, we have a small assembly facility because we were only doing pilots however we will now set up a large one wherein the bikes as well as the battery packs can be assembled.

Will you have variants of the bike or will it be just different colour options?
We are still exploring that and will see how it pans out. The idea is to have a few variants of The Mantis post the commercial launch. What’s on display currently is one variant in different colours. But the idea is to have different variants eventually followed by other models from the Orxa stable. The new bike models will be more based on the performance and styling aspects.

Are you considering setting up own distribution and after-sales infrastructure?
Initially, we will pursue the online and below the line (BTL) approach. However, for our other products we may consider having a sales and distribution set up at a later stage. We are working on preventive maintenance and things like that. However, electric vehicles have very low maintenance as the belt and the wheels are the only moving parts. There is no engine, you don’t need coolant, oil, you’d probably need to get breaks and electronics checked once in a while. So we are working on an after-sales model. It’s in the works and details will be shared at the time of the commercial launch.

Could you also give us a sense of the market size for this product?
We are very ambitious and bullish about how the EV segment will operate overall. The category of performance motorcycles market in India that we are looking at, has been growing 30% year-on-year since the last four years. These comprise bikes with engine capacity of 200cc and above. It’s a very aspirational product and falls in the discretionary spending category. That’s also the reason there is very little impact of slowdown in this category.

Between the bike and battery packs, which one will be a larger business vertical for the company?
Both are equally important as one cannot exist without the other. In fact, if you consider any EV, batteries are 60% of the entire cost of the vehicle. So battery is very critical and more so for us to have it in-house. Generally speaking, battery packs is a problem that needs to be solved for a lot of people. Our battery packs are small, modular and can be swapped; it’s a solution that’s interesting for many people. Our battery pack can be charged at home in three-and-a-half hours and that gives the bike rider a 200 km range per ride. Also, the battery pack has huge capacity at 9kwh so it will not have to be charged very often and that’s a huge advantage.  We are collecting usage data from our customers and will be able to freeze on what sort of warranties can be offered. Generally, lithium ion batteries for automotive use can last for five to eight years, depending on the usage.

What are your plans on taking the performance bikes to international markets?
India is a very tough market to crack and companies like General Electric (GE) have said this multiple times. They had a baby warmer unit used in neonatal care. GE had to rebuild the unit in India at one-tenth of what it was priced globally. Like I said earlier for our battery packs, we couldn't just pick a battery pack off-the-shelf from any of the large global makers as well as those in India. It doesn't work that way. And that's why we had to design a battery pack that’ll run in 50 degree Celsius. Our aerospace battery packs have been tested at 65 degrees Celsius.
We do drop test for our battery packs in our office to see what study the impact after it falls from a one meter height. So there are many other things that we do to ensure the product quality and performance in extreme conditions. The product has been built to cater to the Indian conditions at a price point that suitable for the Indian market. Having achieved all this, I think we will be better equipped to take these products to a lot of international markets. We aren’t exporting the battery packs yet but that’s is part of the plan eventually.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Pro racers testing The Mantis on racing tracks in November 2019.

FMCG sales from eCommerce in India to touch $4 billion by 2022: Nielsen E-Trak Index

Sales of fast moving consumer goods (FMCG) from the eCommerce channel, which presently contributes 2% to the current FMCG market, is set to grow at a compounded annual growth rate (CAGR) of 44% to $4 billion by 2022, says an E-Trak Index launched recently by Nielsen India. The new introduced index has been created using aggregated ePOS (electronic point of sale) data from cooperating eCommerce players and data science backed estimation for non-cooperating eCommerce players in India.

Prasun Basu, South Asia Zone President, Nielsen Global Connect, said, “In this rapidly evolving world of commerce, India’s FMCG industry is now making its presence felt in the eComm channel - appealing to consumers’ need for convenience, and in sync with increasing smartphone and internet penetration. The E-Trak index is aimed at giving a truly complete picture of the changing marketplace. The index will measure FMCG consumer offtake in the eComm space while marrying this with trends seen in modern and traditional trade to get a read on omni-channel in the country,” he said.

Courtesy: Nielsen E-Trak Index

The E-Trak Index is a unique measurement solution that tracks the FMCG eComm industry in India. As per a company statement, the index adds a crucial element to the retail measurement services that Nielsen provides by adding a view of the FMCG eComm space for all India metros. The data comprises monthly read for total FMCG, super-categories, category level for about 20 categories and for 11 categories at a top manufacturer level. Manufacturers and marketers get data, information and insights that can be further used to hone their eComm channel sales strategy to help shape a smarter market.

“While the foundation is taking shape, eComm’s dynamic nature has made it a disruptor in the marketplace,” said Sharang Pant, head-retail measurement services and retailer vertical - South Asia, Nielsen Global Connect. eComm has seen a transformative journey and is now a $1.2 billion industry growing from 0.5% contribution in 2016 to a 2% contribution in 2019. It is now slated to be 5% in 2022.

According to Pant, this is in half the time that brick and mortar retail took to evolve. “That said, these channels are not cannibalising each other and all continue to grow with eComm outpacing modern trade and traditional trade. The view that Nielsen presents on understanding channel, category and consumer trends will directly help players understand the right strategy in terms of assortment, pricing and positioning to win with the evolving consumer,” he said.

Given the significance of the channel from both a current as well as future perspective, Nielsen has built a unique state of the art hybrid model for estimating this dynamic and growing channel. “The methodology involves leveraging data from key collaborating etailers in the FMCG space. We then use crowd sourced data coupled with machine learning techniques from a panel of 200K+ consumers to estimate the eCcommerce sales for FMCG products,” said Nitya Bhalla, head - data science - South Asia, Nielsen Global Connect.

Courtesy: Nielsen E-Trak Index

Insights from the E-Trak Index reveal that metros are leading the eComm FMCG race with a 6% contribution from the channel to total FMCG sales. Amongst these, foods is the biggest contributor with 44% followed byt personal care (40%) and household care (13%). Narrowing in on the value contribution of eComm to metro sales categories with the channel, diapers contribute 26% to the sales; followed by skin creams (12%) and shampoo (10%).
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Alterations, Myntra's new customer acquisition strategy to boost online shopping for apparels

Getting the right size apparels across various online shopping websites has been a big challenge. It is also one of the key reasons why online apparel shopping hasn't picked up in India the way it should have.

Attempting to address this issue is Flipkart Group's online fashion and lifestyle destination Myntra with its value-added service called ‘Alterations’. The best part though is that customers will get to avail this service at no extra cost.

In a pioneering move, Myntra has partnered with tailors whereby online shoppers who have purchased apparels on Myntra will have the option of availing alteration services at their doorstep. The eCommerce firm is of the view that this feature will make online shopping more convenient for its customers while also enhancing its customer base. The strategy will encourage offline only customers to shop online and allow partner tailors to earn additional income by growing their business.

According to Amar Nagaram, head – Myntra Jabong, launching alteration services on Myntra replicates a key offline phenomenon that further bridges the gap between online and offline shopping experiences for customers. "It is aimed at making online shopping more convenient while reducing returns due to size and fit issues. We are committed to strengthening the small and medium businesses within our ecosystem.

"This service provides us an opportunity to work with tailors across the country and provide them an opportunity to augment their income while also enhancing their business and customer interaction skills through training. We have introduced this service in four cities ahead of our 'End of Reason Sale' and will extend this to 80% of our customer base over the next one year," he said in a statement.

To start with, the alteration service will be available in cities like Delhi, Mumbai, Bengaluru and Kolkata, offering length alterations for jeans and trousers for men. In the next phase, the service will extend to size alterations for women including products such as kurtas and kurtis. The etailer has so far tied up with 200 tailors, located in zones that have a large number of Myntra customers in the four cities. Online shoppers will be able to opt for alteration service once the product is delivered to them.

"The tailors will pick up the product from the customer’s residence after taking necessary measurements and deliver them to the customer, within 24 hours to 48 hours. The alteration service is being offered at no extra cost to customers." Myntra said in a statement.

Tailors with a tailoring shop at a convenient location and necessary equipment will be eligible to associate with Myntra to offer this value-added service. However, tailors need to also have the required expertise to execute the alterations as per predefined standards. On its part, Myntra’s on-ground team will train tailors on using the platform to cater to requests from the neighbourhood and the necessary customer engagement skills.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Thomas Cook India acquires rights to Thomas Cook brand for India, Sri Lanka and Mauritius markets

Thomas Cook (India) has acquired the rights to use the Thomas Cook brand in India, Sri Lanka and Mauritius markets. The deal involves a one-time payment of approximately Rs 13.9 crore (GBP1.5 million).

Madhavan Menon, CMD, TCIL

An agreement to this effect has been signed with AlixPartners, Thomas Cook UK’s (TCUK) appointed special managers. The agreement ensures that Thomas Cook (India) can now use the brand in perpetuity on a royalty-free basis. This move by TCIL also prevents possible new entrants into these markets, using the Thomas Cook brand name.

Madhavan Menon, chairman and managing director, Thomas Cook (India) Ltd (TCIL), said, "We have been able to sign an agreement to acquire the rights to the iconic Thomas Cook brand. It is one of the most respected names in the travel services space and one that we at Thomas Cook India have operated uninterrupted for 138 years now."

An integrated travel and travel-related financial services company, it has been operating under the Thomas Cook banner in India since 1881. In 2012 when TCIL were acquired by Fairfax Financial Holdings of Canada, it had entered into a Brand Licence Agreement with the erstwhile Thomas Cook Group of the UK to pay an annual brand licence fee of Rs 2 crore until 2024 for exclusive use of the brand in India, Sri Lanka and Mauritius markets until 2024. The brand license agreement also gave TCIL the right of first refusal to acquire the brand in the event of the Thomas Cook UK Group going into liquidation before 2024.

"So when this opportunity of complete ownership of the brand name came up, we had to grab it," said Menon.

Among the largest travel service provider networks headquartered in the Asia-Pacific region, Thomas Cook India Group's operations is spread across 29 countries and five continents. With a combined revenue in excess of Rs 6,718.7 crore for the financial year ended March 31, 2019, it currently employs over 9,700 people across its offices.

In addition to Thomas Cook, the Thomas Cook India Group operates leading B2C and B2B travel brands including SOTC, TCI, SITA, Asian Trails, Allied T Pro (ATP), Australian Tours Management (ATM), Desert Adventures, Luxe Asia, Kuoni Hong Kong, TC Travel, Private Safaris East & South Africa, Sterling Holidays and Digiphoto Entertainment Imaging (DEI), with strategic investments in Ithaka by Travel Junkie Solutions.

Thomas Cook India Group, according to a company statement, continues to remain financially strong with cash and bank deposits balances of Rs 1,088.3 crore as of September 30, 2019. On a standalone basis Thomas Cook India is debt free and the group generates an average annual free cash flow of around Rs 200 crore.

"Our teams will continue to build the Thomas Cook business across India, Sri Lanka and Mauritius, and grow sustainable value for all our stakeholders in the years ahead,” TCIL said in a statement.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Taiwan's Ahamani inks JV with Renon India for lithium batteries

Taiwanese electric vehicle (EV) giant Ahamani EV Tech has inked a joint venture (JV) with Renon India to manufacture battery packs for India as well as international automobile markets. The two companies will jointly investment $3.7 million to build customised battery packs.

A battery factory in Surat, Gujarat is being developed with an initial capacity of 200 megawatt hour (Mwh) per annum. Over the next few years this capacity will be expanded further to 1GWh.

According to T C Kung, chief executive officer, Ahamani, their company has been developing battery packs since two decades for various EV applications. "We see this as a right time to position our heavy-duty battery packs for the Indian market. Indian automobile market is evolving very fast and opening up doors for more innovation and reliable products and we are highly committed to prime minister Narendra Modi’s 'Make in India' program,” said Kung.

This JV with Gujarat-based Renon India will produce higher lifecycle battery packs targeting automakers who are aggressively expanding the EV market. As consumer needs for EVs evolve automakers are working to address energy and climate change related issues that has created huge demand for lithium batteries.

Vineet Mittal, director, Renon India, said, this is their group company's third venture in sustainable business. “We see two and three wheelers to be the first ones to transform to electric and this creates a lot of opportunity for us,” he said.

The initial offerings of the company would include LFP (Lithium Ferrous Phosphate) and NMC battery packs for two- and three-wheeler EVs, which will be customised as per the industry requirements, said Ankit Kumar, director and chief of strategy, Ahamani.

Apart from offering advanced technology, the joint venture will also look to tackle numerous battery-related challenges including cost, energy density, lifecycle, charging time and safety, thereby ensuring stable supply capacity as well as effective recycling structures.

(The writer is an Independent Business Journalist and can be reached at ashishktiwari.1976@gmail.com)

Jungle Ventures picks stake in BookMyShow's Southeast Asia business

Singapore-based Jungle Ventures has picked up a stake in BookMyShow SEA, which is owned and operated by Bigtree Entertainment Singapore Pte Ltd (BESPL). While investment details were not disclosed, BookMyShow said, it is their first ever external funding for the Southeast Asia business.

David Gowdey

David Gowdey, managing partner, Jungle Ventures, said, "Entertainment experiences, particularly live events, are witnessing a strong growth in SEA and with a world-class team helming its SEA business, BookMyShow will help people find, buy and enjoy events across the region. The platform is poised to become the largest entertainment destination in the region and Jungle Ventures is excited to be a part of this story."

Post this deal, BookMyShow SEA wil shift its headquarters to Singapore for further expansion. The money raised will be deployed to strengthen its technology operations as well as enhancing capabilities to meet increasing demand for entertainment in the Southeast Asian region.

Kenneth Tan, chief executive officer – South East Asia, BookMyShow, said, onboarding Jungle Ventures will help enhance foothold in Southeast Asia and provide entertainment experiences to the audiences in this region.

"The out-of-home entertainment ecosystem in Southeast Asia has immense growth potential and this partnership is a testament to our vision. BookMyShow is at the forefront of the global entertainment landscape and technological innovation and along with an experienced investor in Jungle Ventures by our side, we aim to strengthen our capabilities to bring newer avenues of experiences, all executed at par with global standards,” he said.

BookMyShow entered Indonesia in mid-2016 expanding operations to other countries in the region including Singapore and Malaysia this year. The company has been focussing on creating and building the movies and live entertainment ecosystem across the region.

It also entered into a partnership with Southeast Asia’s leading super app, Grab, in 2019 to advance Grab’s ‘Super App’ strategy through the ticketing tile within the latter’s mobile app. The partnership has been a key driver in BookMyShow SEA’s localisation strategy to entrench itself deeply in the region’s entertainment ecosystem.

The company's Southeast Asia business works with partners to execute live event performances across music, sport and comedy as also distribute movies across the region. The company has played an important role in enabling shows and performances of marquee internationally acclaimed artists and events in the region.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Taco Bell hits half-century in India, targets 600 outlets by 2029

Taco Bell is now 50 outlets strong in the Indian market with its latest opening in Bengaluru's Mantri Square Mall. Owned by Yum Brands Inc, the Mexican-inspired restaurant brand had entered into a collaboration with Burman Hospitality Pvt Ltd (BHPL) as its master franchise partner earlier in May 2019.

Prior to this arrangement, the Taco Bell outlets were being operated using a mix of company-owned company-operated (CoCo) stores as well as those being run by Burman Hospitality. Going forward, the overall plan is to open 600 restaurants in India by 2029.

According to Gaurav Burman, director, BHPL, the partnership with Taco Bell International for India was instituted in 2015. "Over the last four years, we have built a team of over 1,300 employees who have all worked to innovate the offering, the food and the ambience. We have now hit the milestone of 50 restaurants and will continue to work towards bringing our offerings to the four corners of India and strive to open 600 restaurants by 2029. This basically implies, we are now launching a new restaurant every 10 days,” he said.

The association with Burman Hospitality, as per Taco Bell APAC, is aimed at making India its largest market outside the United States. Currently, Taco Bell operates in 11 cities including Delhi NCR, Mumbai, Kolkata, Chennai, Chandigarh, Coimbatore and Mysore, among others.

Ankush Tuli, managing director, Taco Bell APAC, said, “We are extremely excited about this milestone as this achievement embodies the love and appreciation that our fans have shown us over the years. We are grateful to have Burman Hospitality as our partners in India who have been instrumental in bringing Taco Bell’s unique social experience of food to life in India and we look forward to celebrating many more such milestones in partnership with them.”

The Taco Bell experience offers made-to-order and customisable tacos and burritos and other specialities with bold flavours, quality ingredients, breakthrough value, and best in class customer service. The extensive menu offers signature vegetarian and non-vegetarian dishes such as the Naked Chicken Taco, 7 Layer Burrito, Chickstar Wrap, and Cheese Quesadilla, as well as desserts such as the iconic Chocodilla.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Zivame bucks the slowdown trend with 60% revenue growth

Amisha Jain, CEO, Zivame

The intimate wear category appears to be getting a lot of traction in the market, at a time when Indian consumers are said to be shying away from spending on innerwear products.

Earlier in October, most leading brands including Dollar, Rupa and Lux Cozi among others had reported sluggish sales citing a downward trend in the market since past few quarters. However, that doesn’t seem to be the case with the intimate wear brand Zivame that’s bucking the trend.

In fact, according to the company’s financial results for fiscal 2018-19, it has witnessed 60% growth on year in net revenues at Rs 138 crore. The company’s revenues for 2017-18 had grown 56.4% at Rs 94.2 crore as compared to Rs 60.25 crore in fiscal 2016-17.

As per a statement by Actoserba Active Wholesale Pvt Ltd (owning company of Zivame), the company had a phenomenal year despite 18% decrease in marketing spends as compared to FY 2017-18. While total expenses increased marginally by 1% the company also managed to reduce losses from operations by 44% year-on-year wherein losses in FY18-19 stood at Rs 18 crore as compared to Rs 32 crore in FY17-18.

According to Amisha Jain, chief executive officer, Zivame, the company has strengthened its position across categories and deepened presence in the markets. “With tech, data and innovation at the heart of everything we do, we are set up for exponential growth over the next few years, said Jain adding that the brand is poised to grow over 75% in the next few years.

Selling 14 products every minute on a daily basis, the company is targeting an annual run rate of Rs 340 crore for fiscal 2019-20. Approximately 65% of gross sales in 2018-19 was contributed by its mobile application as compared as compared to 50% in 2017-18.

Future plans of the company include aggressive retail expansion taking the overall  store count to over 100 in the next 20-24 months. “We will also deepen presence in Tier-I towns and focus in key Tier-II and Tier-III markets. While enhancing consumer experience will be priority, we will also improve efficiencies in supply chain and operations,” said the company.

Zivame, which claims to be the largest business to consumer (b2c) brand, is also enhancing its focus on the omni-channel strategy, to ensure customers have a consistent brand experience.

“This is across channels right from Fitcode in the online portal to personalised fit sessions in the retail stores to recommend the right fit and style to consumers. We also ensure uniform prices, styles and sizes across channels and offer easy payment and delivery options,” the company said in a statement adding that it also unveiled a new brand identity earlier this year with the tagline 'Love Yourself Inside Out'.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Muted demand delays tourist season in Goa

This is an EXCLUSIVE story. Do not reproduce or use in any manner whatsoever without the writer's permission.

Business for hospitality and tourism industry players in Goa is unlikely to reach the heights this peak season. In fact, the overall market scenario that was expected to improve in November and December months is yet to pick up steam. While some industry players are of the view that green shoots of revival are beginning to show up, a few others feel business is already down by 30%, if not more.

Rattan Keswani, deputy managing director, Lemon Tree Hotels and director, Carnation Hotels, said, the situation in Goa is not as robust as it should have been. “Demand is a bit muted than it normally is at this time of the year but we are seeing green shoots of revival,” he said adding that hotels being operated and managed by Lemon Tree in Goa are witnessing inflow of domestic travellers.

Chapora Beach (Picture Courtesy -- https://goa-tourism.org.in/chapora-beach-goa)

A sought after beach destination by international and domestic tourists alike, Goa has had a tough 2019 so far. While off-season months were full of challenges including those arising as a result of Jet Airways shutting down operations, the business season that would have typically compensated for the loss of revenues, isn’t looking any better either.

Santosh Iyer, vice-president - sales and marketing, GlobeTrott Leisure and Events, said, the market scenario in Goa is very subdued. “The economic slowdown, both in India and international markets, has only made it more challenging for the hospitality and tourism sector players. Compared to last year, business has taken a considerable hit and is down between 20% and 30% already. We are hoping situation to improve and business to pick up towards the last week of December,” he said.

A key reason for this scenario in Goa is the fact that tourist inflow via chartered fights from the European markets has stopped completely after the collapse of 178-year-old British tour operator Thomas Cook UK Plc. This significantly impacted business as a large percentage of these holidayers, estimated to be over 35,000, are unlikely to make it to Goa.

The industry was hoping for some respite after Goa chief minister Pramod Sawant’s assurance in September about the possibilities of direct flights by Air India from London to Goa, before the season begins. However, it’s already third week of November and nothing has happened on that front yet. This basically puts an end to the possibility of a large majority of European travellers coming to Goa this season.

Aloo Gomes Pereira, chief operating officer - Charters & Goa, Trail Blazer Tours India Pvt Ltd, chartered flights from Russia and other Commonwealth of Independent States (CIS) countries are still coming but the numbers are nothing to write home about. “Tourists from Ukraine will start coming in from December, so we’ll have to see how that pans out for the tourism industry in Goa,” said Pereira adding that the beach destination will see scanty international traffic this season.

According to a top hotelier, a lot of hotels in their competitive set were dependent on CIS charters and the numbers this time around are far less. “All hotels banking on charter contracts are having a tough time. Those with a right mix and not having too many charter contracts are protected,” said the hotelier adding that room rates continue to be under pressure.

Hotels were also hoping for better room revenues after goods and services tax (GST) rate cuts were announced on room tariffs. For rooms priced at Rs 7,500 and above, the GST rate was reduced to 18% from 28% earlier. Hotels selling rooms priced between Rs 1,000 and Rs 7,500 would have to levy 12% GST and hotels charging less than Rs 1,000 for their guestrooms have no GST.

“Room rates were hiked in October in the hope of a good business season. However, sensing the ground reality, majority of the hotel operators have re-priced their guestrooms and are now focusing on boosting occupancy levels. It’s all about optimising the total room inventory now,” said a top executive from one of the hotel chains operating in Goa.

While foreign arrivals into Goa was and continues to be a challenge, industry players were anticipating that demand and supply gap would be taken care of by domestic tourists. Unfortunately, the shutting down of Jet Airways earlier this year has already impacted domestic tourist arrivals into Goa. While it’s starting to creep back the numbers are not as expected.

“It’s too early as it’s the first month after Dussehra and Diwali. Normally numbers start to translate now and build up in December, and then carry on in January, February and March. Occupancy wise I don’t think there is too much trouble but total revenue wise I think there is a bit of a shortfall,” said another hotel chain operator.

What’s also ailing Goa’s tourism industry is the deteriorating infrastructure in the state. Road conditions have gone from bad to worse making travelling within the state a very painful exercise.

“The current government is all about false promises and irresponsible statements. Nothing really is happening on the ground. It’s such a horrible experience just travelling from the airport to the hotel. Why would tourists come to Goa if the administration isn’t bothered about providing basic infrastructure facilities even,” said a local tour operator.

Caught in a situation, the hospitality and tourism industry players are left with no option but to find ways and deal with the challenging situation at hand on their own. And with increasing stress in the Indian economy getting pronounced every passing day, it will have to be seen if domestic travellers will have a role to play in bailing out Goa this tourist season.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

This 23-year-old electronics engineer’s innovation looks to minimise road accident deaths

Prateek Kumar, Founder and Director, Vida Salvateur International Pvt Ltd

This feature first appeared in www.YourStory.com on Sunday, November 3, 2019.

When Prateek Kumar suffered a road accident while doing his BTech at the Delhi College of Engineering (DCE), it turned out to be a major turning point in his life. That experience in November 2016 not only changed the way he approached life, giving him a larger impetus to observe safety, but also gave him a purpose – to make a device that would ensure timely help in cases of road accidents.

“We all know someone who has lost a family member in a road accident because help did not arrive in time. It’s quite unfortunate and the sad reality that we are living in. This needs to change. I wanted to contribute towards bringing this change through my extensive experience in building solutions based on Internet of Things (IoT) and software, from conceptualising to production,” says Prateek.

Convalescing after the accident, Prateek set his mind on building a device that would be capable of sensing the intensity of an accident, sending out relevant information to the nearest hospital or other healthcare service provider, and also intimating the victim’s family members – all within seconds or minutes of the accident occurring.

The germ of an idea that the 23-year-old entrepreneur alighted on was a smart helmet integrating a chip or device, with the technology being retrofitted into existing headgear.

“I looked up sources online and came across some sporty helmets in the European markets featuring a GoPro camera and other gizmos; those didn’t align with what I had in mind and were quite expensive too. I wanted to make a cost effective smart circuit/ chip / device that can either be embedded or retrofitted in the helmet. More importantly, the technology solution had to be thought of keeping in mind the Indian road/ driving conditions. Then, in 2017, along with some friends, I began working on finding a viable offering for the Indian market. As it called for significant investments, I also wrote a software program and sold it to my college to raise money for this project,” recounts Prateek.

In February 2017, the team also received some funding from the Spark-up Idea Fund hosted by iCreate, the technology business incubation centre of the Gujarat government.

“Students and innovators at various engineering colleges across India can apply for the Spark-up Fund directly via https://icreate.org.in/spark_up. The entries are opened at regular intervals and details regarding participation are posted on the website. Applications submitted by various participants are scrutinised and shortlisted by a group of experts. This is followed by a few interview rounds over Skype or a telephone call. Winning entries are then offered up to Rs 50,000 in funding to enable students/ innovators take their respective projects to the next level of development,” said Prateek.

After graduating in 2018, Kumar registered his venture, Vida Salvateur International Pvt Ltd (VSIPL), under the government’s Startup India scheme.

The company’s name literally translates to life-saving in Spanish and or French -- Vida is Spanish for ‘life’ and Salvateur is French for ‘saving’ / ‘life-saving’). 

The smart helmet and the chip/device will be marketed under the brand Motobuddy. In fact, VSIPL is in the process of registering the trademark/ copyright for the brand and its handcrafted logo design.

So far, approximately Rs 25 lakh has been invested in the business, including a grant of Rs 10 lakh received in July last year under the Nidhi Prayas scheme of the Department of Science & Technology, Government of India via IKP Eden, Bengaluru, which is India’s first hardware product incubator.

“Every year, two batches are rolled out for this scheme. One can directly apply to incubators that are listed under this programme. The funding offered is a huge support for innovators wanting to start their entrepreneurial journey,” he said.

When Prateek and his friends started developing the smart helmet’, the circuit designed to power the device was so large that it covered an entire helmet. Streamlining the device to an optimal size and making it aesthetically appealing was critical to ensure the headgear would be marketable.

After two years of hard work and numerous iterations, Prateek was successful in reducing the bulky circuit to a coin-sized chip.

Over the last two years, the company has worked extensively to fine-tune the innovation to accurately detect and send out alerts on an accident.

“It was quite a challenge to reduce the circuit to its present size. A lot of prototyping with the right set of manufacturers and components went into making this happen,” says Prateek.

The startup currently has 18 members handling various operational functions. The core team comprises Prateek who brings extensive experience in software development, Drones and IoT solutions to the table. Holding the chief technology officer (CTO) position in the company is Dr. Manoj Saxena, a gold medallist from DCE, masters from IISc and, a PhD from IIT Delhi and Stanford University. Armed with an MBA from INSEAD, Venugopal Gupta is associated with the company as a business advisor and mentor. The author of Business Parables, Gupta is currently the director at Toilet Board Corporation in Europe.
Vida Salvateur is now looking to raise a fresh round of funding of about Rs 1 crore to go into production.

How the device works

Motobuddy’s technology can be paired with a mobile handset via bluetooth. A mobile application has been developed already for this purpose and will be made available for downloads on Google Play Store and iOS App Store at the time of commercial launch. The user can then populate emergency contact numbers and personal health-related details such as allergies, specific medical conditions, and any existing ailments after registering on the app.

The basic reason for integrating the device in helmets is to motivate users to remember their headgear on every ride, Prateek explains. The device also emits a red light using LEDs, thereby enhancing the visibility of the rider on the road.

MotoBuddy Smart Helmet

In case of an accident, the IoT-enabled device detects it but doesn’t send out an alert for 30 seconds. During this brief period, if the accident isn’t serious, the rider can cancel the automated activation process. If the alerts aren’t cancelled, the device sends out a message to the nearest hospital with details of the accident, its intensity, and location. Based on this intelligence, the hospital will be able to send emergency services, either an advanced one or a basic ambulance, to the accident spot.

Motobuddy is working on developing a network of hospitals in Noida, in other parts of Delhi- NCR, and eventually across the country. The company is also in the process of onboarding emergency ambulance service providers into its system, says Prateek, adding, “In case the nearest hospital is not in our system, our executives monitoring the system will call and inform a hospital about the incident. If the hospital doesn’t act within a set period of time, the system will send another message to alert the next-nearest hospital.”

The device simultaneously sends out a message to the rider’s family and friends entered as emergency contacts, with all relevant information about the accident.

The way ahead

The team has conducted on-road trials over the past month, with 25 of the chips tested on the road already. The data from these rides and simulated accidents has been fed into the system and analysed, and the devices have been tweaked according to the findings.

”For instance, the motorcycle / scooter rider could experience a big jolt by running into a pothole or on irregularly shaped speed breakers. Such incidences could be misread by an ordinary sensor as an accident. To tackle this situation, special sensors have been designed to accurately identify accidents from incidences of jolts and bumps. Similarly, there are a few other things that are very unique to the smart chip/ device. I can’t share more details at this stage though,” he said.

The startup has applied for patents for the chip and the smart helmet about 18 months ago, and is likely to get them by the end of this year. These patents are India-specific as getting global patents would be a cost-intensive exercise, Prateek points out, adding, “However, once the additional funding comes in and the smart chip gets good traction in the market, we plan to apply for global patents and secure the intellectual property too.”

The company initially plans to roll out the smart chip priced at Rs 1,200, while the retrofitted helmet priced at Rs 2,500 will be introduced at a later stage. The company also plans to offer an AI-driven engine that will provide advanced driving analytics (ADAs), including driving speed and behavior, and location tracking.

An annual subscription-based service, ADA will be offered to Motobuddy users at a very nominal cost, which will be disclosed at the time of launching the product in the market. Future plans of VSIPL include tying up with general insurance companies and bundling a health and or a personal accident insurance policy to be sold along with the device/ smart helmet. This is being done mainly to facilitate cashless claims at various hospitals in the network. Taking the Motobuddy product and service offerings international also forms a part of the company’s business expansion plans.  

“We have streamlined everything that’s required to commercially produce the chip and the smart helmet. We should be able to hit the market within three months from receiving the funding,” he said.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)