AgTalk | Indian consumer value conscious not price sensitive: MERU's Pahwa

We live in an age where in most metros and top cities, people are always on the run, irrespective of day and night. Understandably, traveling, which is now a core aspect of these people’s lives has evolved over the years. Gone are the days when you worried about traveling to the airport for a 3.00 am flight. Today, a call takes care of your concerns, quite literally.

Meru Cabs, a radio taxi service was launched in Mumbai with an aim to revolutionize the taxi system in India. Launched in association with India Value Fund, Meru Cab has pioneered the concept of GPS/GPRS enabled radio cabs in Mumbai, Delhi, Hyderabad, Bangalore, Jaipur, Chennai and Ahmedabad.

Siddhartha Pahwa who brings with him 15 years of experience in Supply Chain, Operations and Finance management has led the brand reach newer heights. Before joining Meru family, Pahwa was the President - Supply Chain & Generics at Abbott Healthcare Pvt Ltd.

Adgully caught up with Siddhartha Pahwa Chief Executive Officer, to understand MERU's journey and plans ahead.

Adgully (AG): When you started MERU, it looked more like an idea but then it evolved as a concept. What made you take the plunge into this business?

Siddhartha Pahwa (SP): MERU was started with an aim to make every journey comfortable and evolve the radio-taxi industry. Since its launch, it has been an upward journey in terms of revenue and growth. Meru has continued to receive a phenomenal response from the customers and is consistently distinguishing itself as a provider of superior quality transport.

AG: Shed some light on some of the initial challenges you faced in the business?
SP:
There were 3 big challenges: firstly to convince consumers to stop using the regular black and yellow cabs and use a radio taxi. Secondly, to train and educate drivers and transforming them to well-mannered chauffeurs and thirdly getting cars in the roads.

AG: Give us an overview of the radio-taxi industry. How has the industry evolved from when you started to now?
SP: Every year the Ministry of Transport comes out with a hand book which highlights the number of taxis running in India. As per the latest reports in India there are 1.6 million taxis out if which 80 percent are operating at any given point of time hence assuming that they roughly register around 40000 INR business per month, therefore we are talking about a 88000 Crore (30 Billion dollar) industry. Apparently out of which only 5 percent is organised and 95 percent is un-organised. We have less than 100000 taxis which operate under a brand or an organisation rest all are either black and yellow or cool cabs or un-organised service taxis. Therefore, MERU saw a big opportunity in  this space. As competed to other industries like FMCG (10 billion ) Pharmaceuticals ( 12 Billion) etc Radio-Taxi industry ( 13 Billion) is the biggest among all and we expect this industry to grow in the coming years.

AG: You mentioned that Radio-taxi industry is a 13 Billion dollar industry. What market share does MERU hold in the same?
SP:
In the organised sector we hold about 55% market share.

AG: Launched in Mumbai, MERU now operates in 11 cities. Which have been the key markets for MERU and which are the other marketing you look to target at?
SP:
During the initial stages we operated only in 4 cities with an aim to position our product right. And once we understood the positioning and consumer response we started expanding our business to various other cities...Markets like Chennai and Kolkata if put together constitutes to around 20 to 25% of our revenue. We see growth and opportunities in not only metros but in smaller cities sad well. The acceptance rate in cities like Jaipur, Ahmedabad, Surat, Baroda etc has been really positive. With such a positive response we plan to cover at least 20 cities.

AG: How do you draw parallels or comparisons between the India radio-taxi industry viz a viz your global counterparts?
SP:
International market is quite bullish and is very well organised.

AG: Tell us about the new app. What is the rationale behind taking this step?
SP:
Our current analysis show us that more than 20% of our bookings are being channelled through the App. Hence with an objective to increase App downloads across all leading OS, we thought of coming up with an app and offer our patrons a chance to win the Nokia Lumia 630.

AG: What kind of partnerships does MERU look at?
SP: Though I will not be able to name all; however, like for the app we partnered with Nokia and Citrus, depending upon the need and demand we will keep partnering with other brands too. The talks are on and since we have a robust customer base we keep optimising partnership opportunities.

AG: The Indian consumer is price sensitive. So how do you cater to the top and bottom end of your customer base?
SP:
I feel Indian consumer is not price sensitive but value conscious. We at MERU keep in the mind that understanding and try and deliver the best value service.

AG: There was a phase when MERU lost its share. How would you want to explain that? How do you cope up?
SP:
I believe every organisation some or the other day faces such a phase of twist and turns but I feel that the quality of the management team of the company makes the real difference. Same at MERU we tried understanding our mistakes and worked upon the solutions to overcome our mistakes.

Pahwa has expertise in improving supply chain efficiencies & effectiveness through process implementation. Prior to this he worked as a Finance Director with Unilever (Bangkok) & Supply Chain Manager with Hindustan Unilever Limited. Academically, he is a Chartered Accountant from ICAI and Cost Accountant from CWAI.

Recognised by ‘The Limca Book of Records’ as the largest fleet taxi operator in the country, Meru Cabs has completed more than 35 million trips across India. Meru Cabs has been voted as India’s Most Preferred Cab Service Provider by TripAdvisor Travelers’ Choice 2013 & 2014 and won various other esteemed awards like, Times Travel Award 2011, IT User Award 2008, 2009 & 2010. | By Aanchal Kohli | Twitter: @aanchalkohli

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