Prod­uct In­no­va­tion is the Key to Wow! Momo’s Suc­cess

– Sagar Daryani, Co-founder & CEO, Wow! Momo

Images Retail - - CONTENTS - – By Surabhi Khosla

Wow! Momo, which be­gan with an ini­tial in­vest­ment of a pal­try sum of ₹3,000, is 155 out­lets strong to­day. The com­pany opened its first store in Kolkata eight years ago and has since ex­panded at a rapid pace across the length and breadth of the coun­try…

QSR chain, Wow! Momo has found the recipe for suc­cess. The startup, which be­gan with an ini­tial in­vest­ment of a pal­try sum of ₹3,000, is 155 out­lets strong to­day. The com­pany opened its first store in Kolkata eight years ago and has since ex­panded rapidly across the length and breadth of the coun­try. It’s now ex­pand­ing its reach to Tier II cities.

In an ex­clu­sive in­ter­view with IM­AGES Re­tail Bu­reau on the side­lines of the In­dia Food Fo­rum 2018, Sagar Daryani, Co-founder & CEO, Wow! Momo talks about his ex­pan­sion plans, cat­e­gory ex­pan­sion strate­gies, and his global dreams.

Tell us about Wow! Momo. How did you con­cep­tu­alise the brand?

We are the coun­try’s largest momo chain. We have 155 out­lets across 10 cities and we are pro­duc­ing 2 lakh mo­mos a day. We are a proper startup! We’ve come up the hard way be­cause a decade ago, there was no talk of star­tups. When we be­gan eight years ago, we had just ₹3000 and to­day we are at ₹300 crore an­nu­ally. Our first few stores were funded by our cus­tomers. Now, we are on the verge of a mas­sive growth. What has made us ‘wow’ is that we’ve re­ally played with mo­mos. Ear­lier we only had chicken and veg­e­tar­ian mo­mos.

We’ve in­tro­duced pan-fried mo­mos, chicken mo­mos, burger mo­mos, baked mo­mos, tandoori mo­mos and now we’re com­ing up with a pizze­ria momo and a momo roll soon, so I think prod­uct in­no­va­tion has been our key to suc­cess

How did you come up with name Wow! Momo?

When peo­ple ate the mo­mos we made, we wanted them to say “wow!”, and we en­sured that our mo­mos were good enough and that our prod­uct qual­ity brought the cus­tomer back to us. And you know what they say – one good cus­tomer brings in 10 more cus­tomers.

The Wow! Momo store in South City Mall store was a game changer for your brand…

So, it goes like this. Spencer’s in Kolkata gave us space for a shop-in-shop store –19 feet of space. From here we started do­ing num­bers like ₹6-7 lakh a month. We de­cided to use the money to open an out­let at South City Mall, the best mall in Kolkata at that point in time (now it’s gone in for ren­o­va­tion to be­come even bet­ter, I’ve heard). Our out­let in this mall was what made us a brand. Peo­ple would come here for movies and would want a quick bite. It be­came a game changer in the sense

that we used the money we saved from here to open two more stores, we saved money from those stores to open four more and so on.

By 2020, we hope to hit the 350-400 mark in terms of out­lets.

Are you go­ing to take the momo global?

We’re cer­tainly think­ing of it We’re ex­plor­ing places in the Mid­dle East, we’re ex­plor­ing ar­eas in Bangladesh. So, if not now, in the near fu­ture, cer­tainly yes.

What about the in­te­ri­ors of In­dia? Are you ex­plor­ing those too?

We’ve al­ready en­tered Tier II cities. The first one we’ve en­tered is Bhubaneswar, one of the most hap­pen­ing cities of East In­dia and we’re do­ing phe­nom­e­nally well here. Bhubaneswar, Puri and Cut­tack have be­come a full seg­ment for us. We have one sin­gle kitchen cater­ing to all these three cities.

Other cities that we are ex­plor­ing are Luc­know and Kanpur. I think Tier II is where the juice is. I don’t think it’s tough at all to ex­pand into smaller cities. They’re all de­vel­op­ing now with the ad­vent of the In­ter­net and e-com­merce. Raw ma­te­ri­als are eas­ily avail­able for busi­nesses to flour­ish and lo­gis­tics have re­ally im­proved. So, if I don’t get some­thing in a Tier II city, I can eas­ily ship it from a Tier I city. I think this is the right time to en­ter Tier II cities, be­cause the en­tire ecosys­tem is ready.

Is there a pric­ing strat­egy that you are look­ing that now that you are en­ter­ing Tier II cities?

In­dia is a coun­try where peo­ple have money, they want to spend it, but they want good prod­ucts in re­turn. Their as­pi­ra­tions are high, but un­for­tu­nately, the avail­abil­ity fac­tor is miss­ing. When we opened in Bhubaneswar, we had a km long queue of peo­ple wait­ing to eat our mo­mos. So, the as­pi­ra­tion lev­els are high, they have the money – you just have to give them the right re­tail stores, or the right food for­mats and they are happy to spend.

How of­ten do you churn your menu?

For us, tak­ing out stuff from the menu is as im­por­tant as adding more stuff, be­cause if you keep on adding, it be­comes a very wide menu and peo­ple get con­fused. We try and add two new momo vari­ants every year and re­move a cou­ple. The idea is to give the con­sumer some­thing dif­fer­ent every now and then. For ex­am­ple, last mango sea­son, we had mango mo­mos.

Are you think­ing of cat­e­gory ex­pan­sion?

Most cer­tainly. This sum­mer we are launch­ing a bev­er­age called Wow! Thun­der. We’re play­ing with foun­tain drinks to cre­ate mock­tails. So, think­ing out of the box is very im­por­tant for us. Food and bev­er­age to­gether is a great com­bi­na­tion for us to work on since it just adds to the EBIDTA mar­gins.

What are your rev­enue tar­gets by 2020?

By 2020, we’re hop­ing to hit a rev­enue turnover of

₹300 crore per an­num, in the range of 16 – 17 per­cent EBIDTA mar­gin. In 2015, we had raised a fund­ing of ₹100 crore from the In­dian An­gel Net­work and then in 2017, we raised an­other Se­ries A+ fund­ing from Light­house Funds of ₹44 crore. We have not di­luted much, and we will be go­ing in for more rounds of fund­ing in the fu­ture too, but you know, eq­uity is more ex­pen­sive than debt, so we will try and avoid eq­uity. We have in­ter­nal ac­cru­als, so fund­ing will def­i­nitely be in the fu­ture as we grow. It’s part and par­cel of the game as you grow. How­ever, I hon­estly think that our cus­tomers are our lead in­vestors.

How much of these funds do you spend on dig­i­tal mar­ket­ing?

We have a mar­ket­ing bud­get of 4-5 per­cent, and mostly through so­cial me­dia. We do spend a lot on Face­book, Twit­ter and In­sta­gram mar­ket­ing, but we do it dif­fer­ently to at­tract con­sumers. We use

our so­cial me­dia to make our con­sumers our brand am­bas­sadors. Hon­estly, the best form of mar­ket­ing for us is to open new stores, out­lets and kiosks and be more and more vis­i­ble.

What other tech­nol­ogy are you us­ing in your out­lets?

We are build­ing a new ERP sys­tem with the help of an agency for Wow! Momo, which will con­nect the point of pro­duc­tion to the point of sale. For a grow­ing con­cern like ours, tak­ing care of the bot­tom line is very im­por­tant and for this, num­ber crunch­ing and data is very im­por­tant. Con­nect­ing point of pro­duc­tion to the point of sale makes our pro­jec­tion bet­ter, it will lead to re­duced food costs, re­duced wastage as well as ex­ten­sion of prof­its. When you are grow­ing your man­age­ment in­for­ma­tion sys­tem re­ports should be so crisp that they should en­able you take de­ci­sions on the ground, on time, and rein­vent your­self again and again – one of the main rea­sons why we are in­vest­ing in this tech­nol­ogy.

Are you on track for an IPO in the next 5 years?

An IPO is still five to seven years away for us, but the chal­lenge is not an IPO, it’s in do­ing a block­buster IPO. We are on the verge of be­ing Ipo-ready, but we are not quite there yet. It will take a few more years. The tar­get is to make sure that we don’t let our con­sumers and in­vestors down, and that we give them an epic IPO.

Let’s shift gears a bit and talk about the Eastern food re­tail mar­ket. What’s your view of it?

I per­son­ally feel that Kolkata, which is the heart of East In­dia, is the food cap­i­tal of the coun­try. Peo­ple there un­der­stand the taste as well as prod­uct qual­ity bet­ter. An­other thing is that peo­ple don’t shy away from spend­ing on food and clothes. Most QSR chains in east are the high­est in the coun­try. I feel the re­gion was ex­plored a bit late, but the fact that it was ex­plored late is an ad­van­tage. A lot of juice lies here. The north, south and the west are all dis­cov­ered, and every brand wants to come east and try and get mileage and trac­tion and rev­enues from here.

What are the big­gest bot­tle­necks in the East In­dian re­tail in­dus­try at large as per you?

Peo­ple have a per­cep­tion that what works in the whole coun­try, works late in the East, so ev­ery­thing comes here a lit­tle later than the rest of In­dia. Take for ex­am­ple fash­ion – a fash­ion store in other parts of the coun­try would have a more up­dated col­lec­tion than in the east. In­dian brands have re­alised that this is a prob­lem and are now mak­ing sure that fresh stocks and de­signs are avail­able in the east as soon as they are in other parts of the na­tion. This will get bet­ter only through word of mouth in the re­tail com­mu­nity and peo­ple like us who are the torch­bear­ers of re­tail in the east have to make sure both na­tional and in­ter­na­tional brands and in­vestors know that the east has the power to pay and buy.

What is the fu­ture of QSRS in the East?

East is a mar­ket which loves to eat so the fu­ture is phe­nom­e­nal. We see so many brands com­ing up in this re­gion, rais­ing funds

– all of this de­vel­op­ment is very promis­ing and very in­spir­ing. With the en­tire Horeca in­dus­try grow­ing at 40 per­cent, East In­dia is the place to be now since all other re­gions are tapped.

How has GST af­fected your busi­ness? What do you hope the gov­ern­ment will do for you and other star­tups in the re­gion?

If we talk about the food sec­tor, then we have been very badly hit with the ‘no GST’ in­put. For a busi­ness like ours which is in grow­ing at a rapid pace, the GST in­put was around 7 per­cent, so it makes a prof­itable busi­ness like mine a breakeven busi­ness since we don’t in­crease prices. So, now the gov­ern­ment has re­duced the GST and if we in­crease the price, it won’t be con­sumer ben­e­fit­ting, and that makes us suf­fer­ers. The minute we in­crease prices, the at­trac­tion of sales will come down to an ex­tent. I per­son­ally feel that the GST needs a relook. I think a 5 per­cent tax and no in­put is be­ing a bit harsh on the en­tre­pre­neur. You know when you are grow­ing, you want the gov­ern­ment to be more sup­port­ive.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.