Bharat Entrepreneurs

Virgin has launched its Virgin Mobile brand in India targeting the Indian youth, in a franchisee agreement with Tata Tele services. Virgin will launch its service in 50 cities, expanding to more than 1000 cities by the end of the year. Virgin Mobile estimates that there are about 22 crore plus youth mobile subscribers in India. Virgin the newest player in Indian Industry has rattled the competitors and surprised the consumers with a simple yet revolutionary idea. The idea is Virgin will give its customers 10 paise for every minute of incoming call they receive.

 Virgin’s CEO Richard Branson looks very confident that Virgin Brand can penetrate deeper into the Indian market and can create new waves in Indian mobile market especially targeting the Indian youth. Virgin has partnered with Tata Telecom services in India keeping its rates for out going calls in line with those of competitors. But the point of interest and discussion is about the incoming scheme, which gives the customer, 10 paise per minute. That means if you chat with your girl friend for 30 minutes then you will get 3 Rs for that incoming call duration of 30 minutes.

Virgin is now concentrating on CDMA services and also trying to expand its market by moving into GSM and post paid, where Virgin will get an older age group as well. Virgin is now mainly trying to create a Brand recall as it is the latest entrant into an already over crowded market. Though it is trying to move into GSM, it may be a difficult task for Virgin as recently 9 more companies like Unitech developers, Datacom, Syam Telecom etc., got the license to enter the completely filled GSM Networking. Virgin feels it is essential to move into GSM, as now a days customers prefer GSM to CDMA.The reason behind this is basing on the companies’ offers a customer can choose the required service from selected operator through GSM only. Besides these discussions Virgin has a flaw. That is the service scheme is across service providers and not just from Virgin to Virgin. So the incentive to acquire a Virgin number will be low. The main income source for a mobile is out going, but here in this case the complete concentration is on incoming calls. This will, therefore not reflect on the out going calls made on Virgin.

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Dheeraj Gupta, an MBA in Finance from Symbiosis, Pune once went to meet his friend in London who owned a franchisee of Burger King (2nd largest hamburger fast food chain after McDonald’s). This triggered the idea of an Indianized version of burger. His first venture was Manali Foods, selling Indian sweets abroad. Unfortunately, it ran out of money shortly after its launch due to low margins and short shelf life of the product. After going through various criticism and pain he started Chaat Factory near Malad Station, Mumbai in 2001. With the support of his wife, also an MBA and 4 other employee, he started selling Vada Pao. Mumbai’s most selling snack caught people’s attention with cheap, health and hygienic version of street food. Chaat factory started showing positive results on day one. He then renamed it to Jumbo King. What started from one outlet has now entered into franchise model and boasts of 40 outlets in Mumbai, Surat, Ahmedabad, Baroda, Pune. Its target customers are mainly railways comuters.

Mantra
Rs. 6 vadao pao! Along with some innovative menu which Mumbaikar’s found tempting. How about “diet” vada pao? It also has supportive products (lassi, soft drinks etc.) to add to its sales and revenue.

Growth
Jumbo King holds 20% of market in Mumbai itself. With 40,000 customers every day, Dheeraj Gupta (Managing Director, Jumbo King Foods Pvt. Ltd.) says that the company earns about Rs 18 Crore as against Rs 6 Lakhs in the first year of its operations.

Future
If projections are to be believed then by 2008-2009 it will have an annual turnover of Rs 60 Crore. A highly ecstatic Dheeraj Gupta believes that there is a possibility of 5000 outlets in 8-9 Years. Moving beyond India, he expects this business to generate billion dollars with a capacity of 12-15,000 outlets all over the world.

Innovation. Hunger. Branding -> Dheeraj McDonald

What else can I say… i’m lovin’ it

Reference

• nenonline: Top start-ups of the week
• TiE Entrepreneurial Summit 2006

Popularity: 16%