Warid launches Mobile Paisa

Warid Mobile PaisaWarid Telecom launched its mobile financial services on December 31, 2013, under the brand name Mobile Paisa. Partnering with Bank Alfalah, Warid is the last telecom company in Pakistan to add branchless banking services to its portfolio. The first service, Easypaisa, was introduced by Telenor and Tameer Microfinance Bank in 2009.

The branchless banking industry has grown steadily since, with players such as UBL, Mobilink, Zong, HBL and Ufone successively entering the market. Driving the momentum is a regulatory environment conducive to innovative models capable of providing access to banking services to Pakistan’s unbanked segment. The State Bank of Pakistan (SBP) estimates that this segment consists of about 50 to 60 million people, i.e. those who have mobile phones but no bank accounts, also known as the ‘bankable population’.

In June 2011, the SBP made an amendment to the branchless banking regulations and introduced a Level 0 category for branchless banking accounts, making it the most basic type of account with low ‘know your customer’ (KYC) requirements and low transaction limits. Further SBP amendments also provided more flexibility to agents in opening accounts and conducting transactions.

As the last telecom company to enter this competitive market, Warid sees a huge, untapped market. According to Usman Tariq, Senior Manager – Product Marketing Mobile Financial Services, Warid, “Branchless banking has become a very effective means of attracting low-cost deposits and providing banking services post regular office timings to customers.”

In his opinion, branchless banking activity will pick up pace in the coming years, and according to the SBP’s Branchless Banking Newsletter (July-September 2013), there were almost 52 million branchless banking transactions worth Rs 224 billion during that period. Warid is now looking at further penetrating the market by partnering with one of the top commercial banks (sister concern, Bank Alfalah) via a state-of-the-art branchless banking platform, the latest version of Fundamo, powered by Monet.

Mobile Paisa is currently offering OTC services such as money transfer and utility bill payment services to Warid customers across Pakistan. It follows the one-to-one model of branchless banking with Bank Alfalah as the partner financial institution and branchless banking license holder, and Warid as the telecom providing agent network.

For greater financial inclusion, Warid is also using the one-to-many model. The company has recently entered into an agreement with HBL and is in the process of finalising agreements with other banks. Similar to what 1Link did for ATM card users, this system will provide more options and flexibility to customers, while increasing the volume of Mobile Paisa transactions.

According to Tariq, although OTC transactions are the dominant product (accounting for an 81% share in the overall number of branchless banking transactions between July-September 2013), Warid intends to move beyond these services. Mobile Wallet is in the development pipeline and will be launched in April 2014.

Mobile Wallet will be a good step forward for branchless banking in terms of reaching out to the unbanked segment. Tariq explains that Mobile Wallet works like an actual bank account, providing ease in executing financial transactions like bill payment, money transfer and airtime top ups, without depending on an agent network. It is more convenient for customers to use these services through their cell phones instead of looking for an agent’s shop. In addition, Mobile Wallet will be 30% more cost effective due to lower charges on money transfer services (minus agent commission).

Although most other players in the market offer mobile accounts, Tariq says Warid will expand the range of services offered via the Wallet. In addition to money transfer and bill payments, the company will offer services such as salary disbursement, retail payment, ticketing and donations. He says this will link Mobile Paisa to the daily life of customers. For example, as with a credit card, users will be able to make payments at selected outlets with Wallet money. Tariq further adds that companies are eager to take advantage of the salary disbursement option especially for blue collar workers, while white collar workers will be interested in options such as ticketing and retail payments.

Warid employs both shared and exclusive agents, adding to an existing overall network of more than 110,000 agents (SBP Branchless Banking Newsletter, July-September 2013). In addition, an aggressive plan is in place to increase the number of agents by 300% in 2014 in order to be competitive in the market. According to Tariq, taking agents onboard is a challenge as the retail industry is largely undocumented, especially in rural areas where most transactions are made in cash. Keeping this and the market commission structure in mind, Warid is offering higher commissions than the industry average. The company has also launched a campaign offering double commission to agents who achieve their monthly targets as an additional incentive and it is also focusing on creating best practices. On the agent’s side, this means more efficient back end systems and processes; on the customer’s side, this means user friendly interface and technology and quick turnaround times in resolving issues.

Talking about the marketing aspect of Mobile Paisa, Tariq says, “Our communication is emotion-based because we know what it means to support your loved ones in an hour of need. Mobile Paisa liberates people from the restriction of having to pay bills within designated hours only, as well as from the long wait in transferring money over long distances. While everyone else talks only about convenience, we go a step further and talk about the hard work that every Pakistani puts in his daily life so that the wheel of the economy can continue to turn; hence our tagline ‘Chalta rahay Pakistan’.”

The brand name Mobile Paisa was identified three years ago as covering the full ecosystem of branchless banking: all financial services available to users on their mobile, instead of focusing on only one service or benefit such as time saving, Tariq adds.

So far Warid has engaged in BTL marketing only, mainly through in-shop branding and signboards. A 360 degree marketing campaign is to be rolled out simultaneously with the launch of Mobile Wallet, expected in April 2014.

The addition of the Mobile Wallet with its promised range of services and improved customer experience is likely to give Warid a differentiated platform in an expanding branchless banking market, where innovation is essential for survival.

First published in the March-April 2014 issue.

A blessing for milk consumers?

MabrookThe launch of a chain of milk shops called Mabrook sees Engro Foods venturing into the loose or fresh milk (khula dood) segment.

Mabrook is a test market project that will be piloted in Karachi only in the first year. The first retail outlet was launched in mid-November last year in Federal B Area, followed by others in December. Two to three shops will be launched every other week until Engro reaches its first year target of 30 shops.

According to Salman Goheer, Director Fresh Dairy Business, Engro Foods, the company entered the milk market in 2006, gaining market leadership in the UHT segment in 2009, and since 2012 it has enjoyed a market share of over 50% with brands like Olper’s and Tarang now household names. The next logical move, says Goheer, was to tap into the bigger chunk of the pie, which is the loose milk segment. Pakistan is among the top five milk producing countries in the world with an annual production of between 34 to 35 billion litres of tradable milk (the official figure keeps changing); Engro Foods’ internal estimate is at approximately 20 billion litres. The segment accounts for 92% of the tradable milk produced while packaged and powdered milk have an eight percent share, although the latter segment has been growing steadily since 2003.

To ensure continued and rapid expansion in the milk category, Engro has now decided to place itself at the front end of the value chain. Mabrook’s target consumer group is mainly the middle income segment and Engro will be matching the current prices for milk and yoghurt (Rs 78 per litre and Rs 110 per kilogramme, respectively).

Given that in Karachi, 90% of the loose milk is sold through shops, Engro has set up a franchise-based business model to operate the Mabrook shops. The company has identified 16 of its 30 franchisees and aims to reach its target in the next five to six months. Mabrook shops will be located in Gulberg, Gulshan-e-Iqbal, JamshedTown, North Nazimabad and Saddar although the exact locations are still under evaluation for visibility and easy access.

The criteria for selecting franchisees include reputation, financial strength and market history. Engro will handle the back end of the operation to ensure the smooth delivery of the milk to the shops and to this end has created its own milk procurement infrastructure; the milk is collected from areas within a 100 kilometre radius of Karachi and the processing plant is based in Korangi.

Goheer expects the company to face multiple challenges in this new venture, which is why Engro is test marketing the concept. Among the challenges are managing a one-day shelf life product, and ensuring consistent quality and hygiene inside the shops.

The venture will require Engro to invest over a billion rupees in 2014; so far the company has invested approximately Rs 200 million in infrastructure alone. Investment will also go towards establishing strong systems and training people to ensure that hygiene protocols and standards are followed by the franchisees. The design and layout of the Mabrook shops has been geared to guarantee that the product does not attract high bacteria counts as the day progresses.

Apart from the internal challenges of quality, shop design and implementation, Goheer says the biggest external challenge is the law and order situation in Karachi. For example, if the city shuts down for five days, Engro will have to figure out how to store the milk safely.

To ensure continued and rapid expansion in the milk category, Engro has now decided to place itself at the front end of the value chain.

The venture is not expected to affect Engro’s share in the packaged UHT segment as it caters mainly to SEC A+ (and to some extent SEC A) consumers and the company does not anticipate any overlap between the two segments. On the other hand, there is a lot of competition in the loose milk category with countless unbranded milk shops operating in Karachi, although the conditions there tend towards the unhygienic, and adulteration is common.

Goheer says, “Engro now has an efficient knowledge base in terms of milk. We will be able to deliver a good and consistent quality product in a very hygienic way to our customers, and this is how we will move against our competitors. Engro is deeply rooted in Pakistan, with a 50-year history, so the name helps a lot in attracting people to work with us and in reaching out to customers. We have sufficient experience with operational controls and will use it to keep a quality check on the Mabrook franchisees.”

In terms of the marketing strategy, the focus will be on ground activities and these are scheduled to start in the next couple of months. The name Mabrook is derived from the Arabic words barkat (abundance, auspicious) and mubarak (blessed) and has been endorsed by consumer research.

After the one year test marketing period in Karachi, Engro hopes to expand to other parts of Pakistan. Goheeer predicts that “we will rapidly expand next year. This year will be a learning platform and we will move forward according to our experience in the market. We are creating a new channel and once it proves successful, I am sure other companies will follow, which will be good for the consumer and the industry.”

First published in the January-February 2014 issue.

Brushes with History: An Autobiography

Published in Books & Authors (Daily Dawn) on May 25, 2008
Original Link
By Krishna Kumar Birla
Penguin Books, India
ISBN 0670081299
665pp. Indian Rs650

To be a billionaire, one needs to be endowed with widely-acclaimed and extraordinary entrepreneurial skills. But a billionaire like Krishna Kumar Birla is not only raved about because he is a member of one of India’s leading business families, or because of the numerous industries he has successfully established, but also for his prolific involvement in the complex world of politics, in the welfare of society in general and in the advancement of education as well as culture. There are innumerable activities and organisations that can be associated with the man himself, such as the Hindustan Times, Birla Institute of Technology and Science, K. K. Birla Foundation and so on.

In a transparent account of different spheres and periods of his life, K. K. Birla provides a glimpse of his personal and professional life and of Indian politics and history, the way he saw them shape. As Sonia Gandhi, in her Foreword to the book, aptly points out: ‘Very few people have the range of experience that Dr Birla has. His life encompasses many eras and many areas. There cannot be many industrialists who can write about the growth of Indian business through the 20th century. And there cannot be many other people with as great an acquaintance and friendship with the most important figures of post-Independence India. In that sense, he has truly been a witness to history.’

The Birlas are not only industrialists; they have also been playing the role of nation-builders for their country. This is especially true of K. K. Birla who is the son of the revered Ghanshyam Das Birla. Krishna Kumar has represented the Congress Party for three terms at the Rajya Sabha and has been involved in politics since an early age, due to his father’s great admiration for Mahatma Gandhi and relations with other top leaders of the pre-Independence era.

He is the chairman of the Zuari-Chambal Group of Companies (comprising of over 40 companies) but his book is far from the story of how he earned enviable successes in the corporate world despite the fact that he had inherited very little from his father in terms of wealth. His real inheritance was the passion for public life, for eminent personalities and for the general good of his countrymen.

A major portion of the book is dedicated to his close association and interaction with Indira Gandhi. Even though Birla comes across as a great admirer of hers as a politician and as a person, he does not hesitate to offer criticism where required: ‘Had Indira-ji withdrawn the emergency order after, say three months or so, and gone for general elections, she would have won the elections hands down. Indira-ji would have gone down in history as a lady of strong personality and the best prime minister India ever had.’

Birla’s tone is formal and analysis of people as well as situations, objective. The language is simple to understand. He does not comment much on himself and leaves the readers to draw conclusions themselves. He comes across as religious, loyal, hardworking and along with this, profoundly interested in world affairs and philanthropy. He also shows immense respect for his father as well as other members of the Birla family.

Brushes with History has been divided into K. K. Birla’s early years, his memories of Indira Gandhi, his later life, glimpses of some other areas of his life and lastly, his correspondence with various important people he was close to. The book should have been concise to make it more engaging for general readers. At some places, thoughts or events have been repeated, which could have been edited. However, through the book one discovers interesting aspects of the lives of various politicians such as the Gandhis, Jayaprakash, Morarji, Narasimha Rao, Atal Behari Vajpayee, Manmohan Singh and so on. — AYESHA HODA