"The vision is simple: to lead Pakistan’s digital revolution"

As Wateen rebrands its visual identity, Marylou Andrew talks to Sohaib Sheikh, Head of Marketing, Wateen Telecom about what this will mean for the company, its customers and Pakistan’s larger broadband market.

MARYLOU ANDREW: Why did Wateen decide to rebrand?

SOHAIB SHEIKH: When I joined Wateen about a year and a half ago, the foremost concern was that there were lots of negative associations with the brand, and customers had a lot of issues with us. The brand did not fulfill its promises and the tagline – We Connect – was very functional. Research also suggested that customers were not aware of Wateen’s entire product portfolio; we were perceived as a company that just sells internet and our customers did not really know how we are enabling Pakistan’s digital needs. We felt that this was a challenge that could be translated into a huge opportunity.

MLA: What do you want to communicate to customers?

SS: If you look at Wateen’s product line, we have data, voice telephony, multimedia (five in- house channels on a cable TV network) and enterprise solutions (LDI, optic fibre, Vsat, etc.). This makes us the largest ICT company in Pakistan and these products enable healthcare, media, telecom, banking and financial services. If you talk about ATM connectivity, we connect more than 60-70% of ATMs in Pakistan. On the WiMax side, we launched in 22 cities four years ago and it was one of the largest WiMax rollouts in the world. The technology was new then but now we need to improve on our service delivery and manage people’s expectations. We also need to take these portfolios and tell our customers what we have. 

MLA: How are you planning to do this because you can’t achieve this with a few press ads?

SS: It starts with organisational change; the rebranding doesn’t mean only a change in visual identity, it also means a change in how we approach our business. We have new management, a new CEO (Naeem Zamindar) and new people on the board. Our focus is on creating a new Wateen, which is innovative, responsive and responsible. The rebranding meant that we had to move on from past mistakes; the vision is simple: to lead Pakistan’s digital revolution. Within the organisation we have a new customer care head and we also have a chief transformation officer (CTO). Most organisations have a HR head but our CTO is trying to transform the entire organisational mindset and make it more customer centric. When we talk about rebranding we are talking about going back to the market with new brand promises; we are focusing on Karachi, Lahore, Islamabad, Faisalabad, Sialkot, Multan and Gujranwala, and beefing up our network there because 75% of our users are currently in the metros. We are retraining our staff to be more efficient and effective when it comes to solving customer problems. We also plan to improve our operations at the franchise level.

MLA: Was the rebranding also necessary because new broadband brands have entered the market and it is that much more competitive?

SS: I always believe that competition makes the market grow and it leads to improved levels of service. It was a combination of factors that led to the rebranding: the service issues, the competition and the new management with its transformative vision.

MLA: What has happened in cosmetic terms?

SS: We have transformed from functional to emotional. We have revamped our corporate ID symbols and icons to announce that the new Wateen is different from before. Our main objective is to introduce Wateen as more than a WiMax operator and to promote it as a Pakistani organisation which truly believes in making a difference for people. There may be some teething problems, but we will take them in our stride and build a sustainable organisation. We have recently hired Adétudé as our new creative communications agency and Creative Chaos as our digital partner.

MLA: What is the state of Pakistan’s broadband market and what is Wateen’s current position?

SS: The regulatory procedures have ensured that we have a level playing field and entry to market is friendly to foreign investors. The industry is still in the infancy stage; there are only 1.4 million broadband connections (wired and wireless included) and 3.5 million dial-up connections. Wateen holds 20% of the market share. If you talk about PC penetration, it is 15% (overall Pakistan). There are still plenty of underserved areas and we are bidding for those as well under the government initiative of Universal Services Fund. We have already done a lot of work in Sargodha, Abbotabad and Sialkot by giving free internet labs to educational institutions and teaching people how to use the internet. In Sargodha we started our campaign with 256MB but we were surprised to find that the demand there was for one MB, so there is obviously a lot of potential.

MLA: What advantage does Wateen have over the new brands (Wit-tribe and Qubee) and PTCL?

SS: None of the new players have voice telephony. Wateen is the only WiMax operator that offers this service and the rates for international calls are very competitive. As far as PTCL is concerned, it undoubtedly has a favourable appeal to Pakistani consumers because we all grew up with it. Since PTCL used to have the biggest market share, the increased competition meant that its numbers would decrease, forcing it to become more lean and efficient. However, because it is a semi-government organisation, those changes are not easy to make. So for us the industry benchmark was clearly a red ocean and we want to look for bluer waters and set a new trend in the ICT industry.

MLA: Will future broadband growth be PC-based or will it come from mobile devices?

SS: All the devices will show growth. It is common for laptops to be WiFi enabled now but they will be WiMax enabled in the future. Samsung is already launching a WiMax enabled tab shortly. We have heard of 3G coming in but that involves the PTA. This will grow the market further; 3G will have its own share and we will have ours; it will not cannibalise our share. 

First published in the November-December 2011 issue of Aurora.

It takes two to ‘Comfort’

By Anam Hakeem

Unilever Pakistan recently launched its fabric conditioner, Comfort, adding a new component to the laundry category.

Globally, the fabric conditioner category is the fastest growing after detergents. In recent years success in this category has been focused on South East Asia as owing to economic growth and rising incomes, developing markets have huge potential in terms of growth for the fabric conditioner category.

The dynamics of the fabric conditioner market are closely tied to those of detergents and according to Madiha Sheikh, Assistant Brand Manager, Comfort at Unilever Pakistan, the fabric conditioner category is best taken forward with laundry synergies. In a country like Pakistan, where five to 10% of households have been converting from laundry bars to detergents year-on-year and detergent penetration is about 99%, this was the right time to introduce a new laundry sub-category.

“A fabric conditioner can easily ride on the back of the detergents category, which has matured,” says Sheikh.

According to Sheikh, research has indicated that Pakistani consumers have a latent need for fabric conditioner.

“The general public doesn’t just want stain removal and effective cleaning from a laundry detergent. They want their clothes to smell great and look bright.”

Comfort is targeted at consumers who use detergents (as opposed to those who use detergents and washing bars in conjunction). However, as there is also a Rs 10 sachet SKU (in addition to the 200 and 400 ml bottles), there is a chance that it may be picked up by other consumers as well. Sheikh says the brand wants to focus on housewives who purchase good quality detergent.

Comfort’s SKUs are different from those of Softlan, a brand manufactured by Colgate-Palmolive, and the only other significant player in the fabric conditioner category in Pakistan. Softlan also has a Rs 10 sachet but its larger SKUs include 500 ml and one-litre bottles. There is also a significant price difference between Comfort and Softlan. The 500 ml bottle of Softlan sells for Rs 100, whereas a 200 ml bottle of Comfort retails for Rs 110.

Regarding the differences in price and SKUs, Sheikh clarifies that Unilever wanted to offer smaller bottles of Comfort to induce trial.

The higher price point is because Comfort is a concentrate while other brands are available in diluted form. Sheikh says that as a matter of global policy, Unilever is moving towards concentrates because “the Comfort concentrate gives a much better result, a ‘wow’ in the first use, which is needed to hook consumers. Furthermore, using a concentrate also helps drive Unilever’s sustainability agenda, as it requires less water, smaller packaging and thereby creates a more efficient use of resources.”

Unilever also faces competition from its own imported version of Comfort and a few other foreign brands that enter through the grey channel. Sheikh says that they will have to live with the fact that grey imports of their own brands will be part of the equation. The challenge that lies ahead for team Comfort is market development of a product category that is in its infancy. Unilever is aware of the challenge and is ready to invest, explains Sheikh.

“The ambition is to alter the laundry routine of Pakistani consumers by making them aware that detergents alone will not give superior results.”

Making the required breakthrough will require both time and money. Prior to Comfort’s launch, the majority of the small percentage of Pakistani consumers who were aware of fabric conditioners had either never used Comfort or were using it only for towels and baby clothes. As for the wider public, fabric conditioners are still not considered as essential to their laundry routine.

To overcome these issues, Comfort has based its selling proposition on the benefits of using laundry products, thus the tagline ‘Shine and fragrance that no detergent can deliver alone’ (although this is the same selling proposition that most detergents use). Comfort’s positioning is the premise that a conditioner will do what a detergent cannot do alone.

Sheikh is aware that for the habit change to occur, consumers need to be educated on a sustained basis, saying that fab-con education is a two-step process. Firstly, consumers need to understand why they should use it (the RTB or reason to believe). Secondly, they need to be told how to use it.

If the law of the mind (one of the infamous 22 immutable laws of branding), which says ‘it is better to be first in the mind rather than first in the marketplace’ is to be believed, Comfort may well reap the benefits of being the first to advertise fabric conditioners, (even though it was the second to launch in the category after Softlan). The development of the fabric conditioner category will also bring incremental growth to the detergents category and will benefit competing brands as well.

First published in the November-December 2011 issue of Aurora.

Desktop Thinking

After many years, Pakistan went to AdAsia with good representation. With 79 people on board it was the second largest delegation after India’s imposing 763. The congress lasted three days and laid out a programme that was pretty average on content. AdAsia has been going for a long time. The first congress was held in Japan in 1958, under the unimaginative title of ‘The First Asian Advertising Conference’. Renamed the Asian Advertising Congress in 1960, AdAsia became a regional advertising force in 1978 with the establishment of the Asian Federation of Advertising Associations (AFAA), under the chairmanship of Antonio De Joya. It was then that Pakistan stepped onto the AdAsia scene. Led by Javed Jabbar, then MD of MNJ Communications, Pakistan’s first delegation went to Manila in 1978. The next year, Javed Jabbar organised an advertising congress in Pakistan for Pakistani advertising practitioners. Then in 1989, Pakistan held its first (and only) AdAsia in Lahore, which turned out to be hugely successful and was considered to be among the best by many regional delegates at the time. Fast track to 2011 and the world of communications is unrecognisable, begging the question of whether the AdAsia format needs to change in order to deliver more value? The objectives of such congresses are twofold. Impart learnings and identify trends, and to provide a networking platform for delegates and speakers.

As far the networking is concerned such congresses still deliver. The problem presents itself with the content. In today’s world, access to top quality content is possible via a host of websites. Therefore the task of sustaining a top level programme over three days becomes problematic and congresses such as AdAsia need to address this issue and develop alternative formats.

Content apart, attending AdAsia is a great opportunity for delegates to eat, drink and sleep advertising. In such circumstances, ideas bubble and new energy and enthusiasm is infused into what sometimes can seem to be just a job. Which is why it is so essential that our younger professionals attend such events; to be able to exchange ideas with their international counterparts and measure up their work with that of others. They may be able to access the best content from their laptops, communicate with their peers over social media networks, but nothing beats the face to face encounter. So it was disappointing to see that bar a couple of agencies, Pakistan’s advertising agencies sent only their CEO or equivalent. This reluctance to invest in people is short sighted and one hopes that some of these agencies heard Kelly Clark, Worldwide CEO, Maxus, when he said that part of the challenge of retaining people is to not only show them the results of their work quickly, but to equip them with smartphones and iPads, even at entry level. The Advertising Association of Pakistan (AAP) needs to widen agency representation so that it covers both the creative and business end as well as deepen it so that younger people are included.

Congresses are also a great opportunity for clients to immerse themselves in the world of brands and advertising, and to have it confirmed by agencies other than their own, that whatever it is they are being advised to do by their agency, is indeed the way forward. Pakistan’s delegation consisted of 17 clients, which is not a bad start, however, it is important that the AAP look into this, especially on the local company front.

Finally, it was disappointing that there was not a single speaker from Pakistan. This is again something the AAP must address, and a welcome change would be to have speakers from the younger generation. The advertising industry’s capital is its people, especially its younger people and the AAP must make it part of its broader mandate to change a mindset whereby attending and speaking at international congresses is the remit of senior people only.

However, well done to the AAP for putting together a solid delegation. The new AAP President, Imran Syed, CEO, Adcom, is tasked to take forward the work of the outgoing (and first) president, Shahnoor Ahmed. The list is long, and one hopes that one of the tasks will include working towards a larger delegation for Vietnam 2013 – with more agencies, more clients, more media and above all more young people.

First published in the November-December 2011 issue of Aurora.

Highlights from the November-December 2011 issue of Aurora

Engines of growth in 2012 – The brands that will drive the economy next year.

Talking heads –Agency heads and corporate leaders pick their engines of growth for 2012.

Growth in a slow economy – Interview with Ehsan A. Malik, Chairman & CEO, Unilever Pakistan.

Everyone is for sale – Interview with Imran Awan, CEO, Awan Brandcom.

The lure of Afghanistan – Karim Rammal, President, Unicorn Consulting, on the business opportunity that is Afghanistan.

Solid in success – Ali A. Rizvi, COO, Interflow Communications, in profile.

The technology revolution to come – Interview with Khalid Alvi, GM – Near East, Nokia International.

Making the structural sexy – Interview with Asad Umer, President, Engro Corp.

A man of principles – Shabeeh Ikram, GM Pakistan & Afghanistan, Johnson & Johnson, in profile.

From cash to digital – Amer Pasha, Country Manager, Pakistan & Afghanistan, Visa International, on the power of mobile financial services.

The next big thing – Interview with Ali Mumtaz, CCO, IAL Saatchi & Saatchi.

Cannes and Katrina – Adnan Syed, CCO, Adcom, presents his wish list for 2012.

Doing the ‘write’ thing – Kiran Murad, ECD, Lowe & Rauf, in profile.

Levels of complication – Interview with Rizwan Merchant, CEO, OMD.

 

Everyone’s guilty pleasure – Mathira Mohammed, TV host, in profile.

Dancing to his own beat – Hasan Rizvi, dancer, choreographer and event manager, in profile

The apple of our eye – Faraz Maqsood Hamidi on Steve Jobs.

Aspirations of beauty

By Marylou Andrew

The 2008 recession fuelled a lot of talk about the ‘Lipstick Effect’ – the theory that women will buy an expensive lipstick even in hard times because of the ‘feel good’ factor – but this doesn’t indicate that the beauty industry escaped the downturn unscathed. Beauty has traditionally been seen as a ‘recession-proof’ sector, but 2008 proved otherwise and beauty and personal care (BPC) sales plummeted worldwide.

According to Oru Mohiuddin, Beauty and Personal Care Industry Analyst at Euromonitor, consumers, especially those in mature markets, began to streamline and prioritise their beauty purchases, sticking mainly to products which they deemed absolutely necessary. However, as rebounds go, the beauty industry has done a quick one. Euromonitor’s Post Recession Industry Trends Report shows that BPC saw five percent growth in 2010 with mass market products accounting for much of the recovery. Globally a $382 billion business, beauty is now being pegged as one of the fastest growing categories in the world.

Much of the reason for this is that when the recession hit, most large beauty companies decided to focus less on price and more on innovation and marketing, introducing new products and formats as well as novel ways of engaging with customers.

Another major post recession trend that companies have been quick to capitalise on is the shift in demand from West to East; while the growth of beauty has been slowing down or stagnating in many Western markets, the developing world, and Asia in particular, are showing extreme partiality to beauty products.

In response, most, if not all, major beauty brands are working hard to build a strong presence in emerging markets, and specifically in Asia. This presence is not only about putting a brand on the shelf; R&D and product development is localised because companies have realised that products developed for Western markets will not always work in Asia. While China is the frontrunner in the demand for beauty products, several other Asian markets – including Pakistan – are also being eyed with great interest based on their growing middle class and large population.

Pakistani beauty

Pakistan’s beauty care market is vast and diverse. Opinions about its value share vary, mainly because beauty means different things to different people. Some say the category includes everything above bar soap, while others believe that everything from bar soap and personal hygiene products to hair care, skin care, fragrances, oral care and colour cosmetics are part of the beauty business.

The reason for this confusion arises from the fact that for decades Pakistan’s beauty market has been dominated by FMCG companies such as Proctor & Gamble, Reckitt Benckiser, Unilever Pakistan (and others) which manufacture and market all manner of products from shampoos to oral care products to fairness creams, in addition to their other businesses of insecticide, tea, washing powder, etc. These FMCGs have concentrated more on providing products for every aspect of their consumers’ daily lives, rather than focusing on beauty. Additionally, even when international ‘pure beauty’ brands have been made available in Pakistan in the past (Estée Lauder, L’Oréal, etc.), they were imported either through licensed distributors or grey channels, and were therefore not marketed at all. Local beauty companies form a third tier of players in the beauty business and their production and marketing efforts have been mediocre at best.

However, Pakistan’s beauty market has changed significantly in the last three years alone and is still undergoing a serious overhaul as a result of several key game changers:

1. Increased media exposure and changes in lifestyle and mindset

The full impact of the liberalisation of the Pakistani media on different product categories is slowly revealing itself, and beauty is emerging as a clear winner. Apart from the fact that the plethora of TV channels, newspapers and magazines have made consumers more aware of the range of beauty products out there, the need for personal grooming has been brought into sharp focus. The burgeoning media has created a lot of jobs, many of which are filled by women. Beauty experts say that as more women enter the workforce and earn their own living, they feel less guilty about spending money on beauty products. Additionally, as the usage of beauty products grows, beauty becomes less of a fashion statement and more of a lifestyle. Urban Pakistan (home to 65 million people) is slowly but securely latching on to this trend.

2. Influx of international beauty brands

As of result of their strategy to establish a presence in emerging markets, international beauty companies are now understanding the value of setting up an office in Pakistan with local marketing, distribution and sales. One of the key developments in this area is L’Oréal Pakistan’s entry into the market two years ago (see page 6). As the first ‘pure beauty’ brand in Pakistan, L’Oréal is slowly changing the rules of the beauty business.

3. Existing key players have stepped up their efforts

As international players take a greater interest in the Pakistani beauty market, the existing key players are feeling the heat and reacting accordingly. The dominant FMCG players are focusing specifically on ‘pure beauty’ product launches, especially shampoo, hair colour and facial creams. Big companies like Johnson & Johnson which for years only marketed its Clean & Clear cleansing and moisturising range in Pakistan has recently introduced its Neutrogena brand in a bid to capture a more sophisticated audience. Even local players such as Olivia and Bio Nikhar are stepping up their marketing efforts with stronger advertising campaigns featuring film stars and celebrities.

4. New local brands are emerging

As beauty products become more coveted by consumers, local industrialists (most of whom have little or no background in manufacturing beauty products) are launching beauty brands (mostly in the skin whitening segment) targeting smaller pockets of people in specific cities, towns and villages. These new brands are promising consumers all manner of amazing results and are managing to command premium prices.

As a result of these factors, beauty has now become one of the fastest growing businesses in Pakistan. According to L’Oréal Pakistan, the local beauty market (everything above bar soap) is currently worth Rs 35 billion (just over $400 million). Although the number is not very significant in comparison to the value of the global beauty market, it is very interesting to note that when Aurora last did a cover story on beauty and personal care (September 2005), the market was valued at $100 million. This in effect means that the market has grown over 300% in the last six years.

The sprawling nature of the beauty business and its fast paced development can make it difficult to ascertain precisely which categories are driving growth in Pakistan. In order to explore this issue in a more manageable way, the beauty market must first be further subdivided into two categories: hair care and skin care.

Hair to grow

Euromonitor predicts that the global hair care market (shampoo, conditioner, hair styling and colouring products) will grow by about two percent by 2015. The low growth figure indicates that hair care is already a well established market globally but the potential for growth still exists.

In Pakistan, shampoo – the largest sub-category in hair care – is currently valued at Rs 17.4 billion ($180-200 million) and has a 99% penetration, which means that most consumers have tried a shampoo at least once and are aware of its existence.

This makes sense because shampoo manufacturers, and especially multinationals such as P&G (manufacturers of Head & Shoulders, Herbal Essences, Pantene and Pert) and Unilever (manufacturers of Clear and Sunsilk), have consistently hammered the importance of shampoo via advertising making it – according to the Aurora Fact File – one of the top 10 advertising categories on TV for the last 10 years. The Fact File also shows that for the last three fiscal years shampoo has been the second largest advertising category on TV, bested only by the telcos. Another reason for significant growth in the shampoo market is the ‘sachetisation’ of the product, making shampoo popular with rural consumers as well.

Although shampoo growth is slowing down, potential exists on two fronts. The rural market, where per capita usage of shampoo is still low, presents a big growth opportunity. In the urban marketplace, potential exists in terms of brands which cater to specific problems such as dandruff, wavy hair, oily scalps, etc.; as well as those created for specific groups of people, including men and women who cover their hair regularly.

The other hair care sub-category which presents a significant opportunity in the urban market is hair colouring products. Five years ago the Pakistani market had very few brands to speak of, with Revlon and the local Kala Kola being the most prominent. Now the market is flooded with hair colour brands, including three from L’Oréal alone (Garnier, Casting and Excellence Crème) in addition to Koleston (from P&G), Keune, Wella and several other local brands. Additionally, several ‘professional’ hair colour brands are being marketed specifically to beauty salons.

Mozzam Ali Khan, GM Consumer Products Division, L’Oréal Pakistan says that while launching and marketing a shampoo is relatively easy in Pakistan, the hair colour market is where the real challenge and opportunity will lie in the future.

Skin will be the star

Although hair care is set for growth, global beauty analysts are much more excited about skin care, predicting that it will be the ‘star category’ all the way until 2015. Euromonitor’s Mohiuddin says that 23% of all beauty sales in 2009 came from the skin care category. Asia is a critical component in the success of skin care and Euromonitor’s statistics show that the region alone made up 41% of total skin care value sales in 2009, which in monetary terms is a whopping $33 billion. Except for Japan, which as a result of the recent earthquake and ensuing economic troubles is showing a decline in sales, every other Asian country posted healthy growth in skin care last year.

According to Enshe Ahmed Manto, Assistant Brand Manager, Ponds at Unilever Pakistan, the local skin care market is currently valued at Rs 8.5 billion and grew 30% in the last year alone.

Skin care consists of two major sub-categories: body care and facial care.

For decades, body care has been dominated by bar soap, however the growth of bar soap is slowing down; liquid cleansers (body scrubs, washes and gels) on the other hand still form a fairly insignificant part of the market, but are growing at an annual rate of 13-15%. However, it is the facial care sub-category that is accounting for 90% of all growth and activity in the local skin care market.

Shabeeh Ikram, General Manager Pakistan & Afghanistan, Johnson & Johnson (Group of Consumer Companies) explains that globally, facial care demand has developed in three stages: basic facial care, specialised products for specific problems and feel-good products.

The majority of Pakistani consumers are still at the basic facial care stage; bar soaps dominate in the cleansing arena but once again liquid cleansing (gels and face wash) is gaining popularity. In terms of moisturising, skin creams have 99% penetration in Pakistan, although the average per person usage of cream is once a month.

Ikram explains that moisturising is not a very popular concept in Pakistan because of naturally oily skins and intensely hot weather conditions. Instead this space is solidly occupied by the fairness segment which by some estimates has a value share of Rs 2.6 billion and is by far the most popular beauty segment across Pakistan, based in large part on the belief that fair is beautiful.

Manto makes a very revealing statement when she says that while the fairness proposition is most relevant to the lower SECs of the population, it is not irrelevant to any segment of the population. Apart from Fair & Lovely (FAL) – the market leader in this segment – there are a host of locally manufactured fairness creams including Bio Nikhar, Olivia, Stillman’s, Tibet Snow and others catering mainly to the lower SECs.

However, because whitening is not irrelevant to anyone, even established brands which mainly target SEC A and B are offering a fairness proposition: Garnier Light, L’Oréal White Perfect, Neutrogena Fine Fairness and Ponds White Beauty. Some of these products offer solutions for troubled skin or promise a more evenly balanced skin tone but the ultimate objective (whether stated in the advertising or not) is the same: fairness and flawlessness.

While fairness is a major seller in Pakistan, the presence of brands such as L’Oréal White Perfect and Neutrogena Fine Fairness is also evidence that part of the population is now moving away from generic fairness towards the next stage in the skin care hierarchy of needs and demanding products for specific needs.

One particularly interesting category in this regard is that of anti-ageing products (day and night creams, under eye gels, etc.). Manto says that just as fairness is most relevant among the lower SECs, anti-ageing is popular with the higher SECs. However, she is quick to put a caveat on this popularity, clarifying that because most anti-ageing products are priced at a premium, they will not constitute a significant share of the market in the future.

Two other categories of ‘specific needs’ products may become important in Pakistan in the future: medicated skin care and organic products made from natural ingredients. The former category received a major boost when GSK launched Stiefel (the leading brand of dermatological products in the world) in Pakistan recently, while the latter category is already populated with foreign and local brands.

Challenges and opportunities

As things heat up in the Pakistani beauty market, several challenges will have to be dealt with so that local and foreign players can fully capitalise on its potential.

Price is one of these challenges; regardless of where beauty products are manufactured, prices have increased significantly over the last few years because commodities such as palm oil (a key component in beauty products) have become more expensive in the post recession period. Manto believes that convincing consumers to pay more for beauty products through value driven propositions is going to be the most important factor in driving future growth.

Musharaf Hai, Managing Director, L’Oréal Pakistan says that beauty is about belief, not price. Therefore in her opinion, if consumers truly believe that a particular product or brand can deliver what it promises, they will do everything in their power to be able to afford the brand.

While there is truth in both points of view, the fact that many international brands are looking at ways of making their product more affordable is a clear indicator that Pakistani consumers are price sensitive and this issue will have to be dealt with in order to expand the usage of beauty products.

Another area of concern for international and local brands is that of counterfeits and grey market imports. Counterfeiting, a rampant problem in Pakistan, involves small local concerns making copies of well known brands and selling them to consumers at very low prices. Manto says the problem is widespread and requires a consistent push to educate consumers with cues on how to tell the genuine product from the fake one.

Ikram puts much of the blame for the counterfeit menace squarely at the consumer’s door saying, “Why don’t consumers ask questions when they are buying our products at less than three times the price?”

As far as grey imports are concerned, Ikram believes they present an even greater threat in terms of the long term growth of the beauty market because they are priced so much lower than products brought in through legal channels. In such a situation, says Ikram, it doesn’t make sense for a company to bring in the same brand at a higher price because the two cannot possibly compete.

In spite of the challenges, the beauty opportunity is tremendous. While hair care will play a key role in driving demand, there is no doubt that the mega bucks will be made in the skin care market. Of the many skin care categories that will lead growth, face care is the most laden with potential, followed by hand and foot care products (think Nivea and Vaseline) and men’s grooming.

Regardless of the categories, there is one key takeaway: while the beauty market of the past was based on generic offerings, the future will be characterised by specific products for specific needs. The days of globalisation and generalisation are over, welcome to the era of personalised beauty.

First published in the September-October 2011 issue of Aurora.

Box - Setting the bar on beauty

When L’Oréal – the world’s largest cosmetics and beauty company – first started exploring the possibility of establishing its presence in the Pakistani market in 2008, it didn’t take the tried and tested route of market research and studies.

“Instead we walked the streets,” says Musharaf Hai, Managing Director, L’Oréal Pakistan, “and saw consumers who were youthful, elegant and well groomed. This convinced us that we had to do business in Pakistan and we realised we were already late.”

Based on these findings, L’Oréal Pakistan, a wholly owned subsidiary of L’Oréal, officially started operations in April 2009. The launch was a sea change in the Pakistani beauty market as L’Oréal Pakistan is the first ‘pure beauty’ company in the country.

In Hai’s words, “The core of L’Oréal is beauty; we don’t do any other business.”

This single minded focus helped L’Oréal Pakistan realise right off the bat that it couldn’t do business with all Pakistanis; instead it has decided to target the 65 million people living in the urban areas as the core market for its various products. L’Oréal’s offerings are based on two divisions – the Consumer Products Division (CPD) and the Professionnel Division.

Hai believes that L’Oréal can create tremendous opportunities in CPD based on the fact that while there are lots of products at the top and bottom ends of the market, there is very little in between.

“We are developing the masstige sector which falls between mass and luxury.”

Although the consumer products division has a large portfolio consisting of skin and hair care products, Mozzam Ali Khan, General Manager, CPD, says that hair colour is strategic to L’Oréal’s business in Pakistan because that was the first product to be launched here. The company has two high end hair colour brands (Casting and Excellence Crème) but in line with its objective of creating a strong masstige segment, L’Oréal has been heavily promoting Garnier Colour Naturals, which is essentially more affordable hair colour but still benefits from what Hai says is L’Oréal’s “technology driven approach to beauty.”

Along with hair colour, L’Oréal is also focusing on skin care (no surprise considering the growth potential in the skin care market) and has a range of products for people of every age and skin type dealing with common skin problems, offering fairness and anti-ageing solutions.

“I can tell you with confidence,” says Hai, “that there are few other brands which offer this kind of deep segmentation.”

In terms of L’Oréal Pakistan’s Professionnel Division, Hai says that when the company started to market its high end salon products two years ago, most beauty professionals had never heard of them.

“Today we have over 250 salons where you will find our products and many salons are giving preference to professionals who have worked with L’Oréal products before.”

In spite of these developments, Hai understands that L’Oréal is a late comer to Pakistan and therefore has a lot of ground to cover. In response, the company has employed a three-pronged approach of engaging with the market: the bulk of the marketing effort is focused on direct interaction between L’Oréal’s in-store ‘beauty advisors’ and consumers; the company interacts with retailers through trade seminars where L’Oréal technicians talk about the key features of the different brands; and finally there is consumer education through print and digital media which drives home the fact that L’Oréal brands are superior to others because of the company’s focus on technology.

Hai says that even with all this activity, L’Oréal Pakistan is only laying down the foundations now of what will help to set the bar on beauty in the next 10-15 years. Growth, she predicts, will come from hair colour, high end skin care and fragrances, age management products and men’s grooming, all of which are areas where L’Oréal Pakistan intends to build a strong presence in the future. – MLA

Beauty and the East

Olivier Auroy on why Western companies need to learn the language of Eastern beauty.

As the financial crisis continues to test the Western world, big beauty brands are investing more in the emerging markets of the East. Beauty companies such as Beiersdorf, L’Oréal, Nivea and P&G are setting their eyes on the promising BRIC (Brazil, Russia, India and China) market and its Asian neighbours.

We cannot blame them. The research company Euromonitor revealed that by 2014 BRIC will account for over half of the anticipated $43 billion growth in the global beauty industry. India’s cosmetic market is growing at an annual rate of 15-20%, which is as fast as the US and European markets. In India and China this is largely due to the emergence of a wealthier middle class and the rise of a young urban elite population.

A decade ago, farmers made up over 60% of China’s total population; today, this figure is around 30%. The exponential growth of cities like Shanghai has forced brands to adapt to these markets. Recently, Estée Lauder opened a research centre in Shanghai to create products tailored to the needs of Chinese and Asian skin types. The French cosmetics company, L’Occitane, is also moving fast and has opened 60 new stores within a year in the BRIC countries.

The success of beauty brands in the East is bolstered by the fact that consumers tend to spend more willingly on brands they trust. However, this is not enough. Well known brands advertising on main street billboards will not do the trick. The message from India and China is clear: “Don’t sell us what you think is good enough, give us what we need, give us the best.”

In the Kingdom of Beauty, the princesses have changed. The faces of beauty now come from the East. On the red carpet of the Cannes Film Festival, stars from the Orient such as Aishwarya Rai, Freida Pinto, Gong Li or Zhang Zilin are redefining the paradigms of international glamour. Coming from a different culture, proudly representing the women of their country, they are showing beauty brands a different approach to beauty and personal care. In a recent interview, Meesha Shafi, the ambassador for L’Oréal in Pakistan, said that for her beauty was defined by “grace and dignity”.

Her comment, reminded me of my past branding assignment for Pakistan International Airlines’ (PIA) business class experience, where we questioned the apparent ‘sadness’ of the air hostesses.

A senior PIA marketing executive told me: “In Pakistan, beauty does not smile.” I guess that in Brazil, the definition of beauty would be different as well.

This presents an important challenge for international cosmetics companies. How can you convince local consumers that your brands suit their needs? Why would they trust you more than local products?

L’Oréal’s success story in India offers a good example of how brands should approach emerging markets. When L’Oréal’s Professional Products Division decided to enter India in the late 90s, the hairdressing industry was not well developed. There was little education and training. Hairdressers only used domestic brands or prohibitively expensive foreign ones. In response, L’Oréal invested massively in hairdressing education and training. Today, L’Oréal has a presence in the top 100 cities of India and Indian consumers buy its products to take the salon experience home.

What do these stories tell us? They prove that cosmetics brands need to do their fieldwork and translate this into a more customised approach. Beauty products can no longer be marketed on the basis of catchy slogans or flashy in-store promotions. Brands must engage with consumers on a higher level of intimacy. Consumers of beauty products want to get closer to the brands through a relationship that is being defined by new channels of communication. We could summarise this by saying that consumers want to explore online and experience in-store and emerging markets are no exception.

Recent events in the Arab world have shown the power of social media. I always like to remind people that in a country like Afghanistan there are over 200,000 people on Facebook. For such countries the web is a window to the outside world and an opportunity to be exposed to new ideas and products. Cosmetics brands have understood that the web is emerging as one of the most important touch points in the customer journey. The mission of these companies is to create an interactive beauty care experience, using both real and virtual platforms, and the more innovative the brands are, the greater their point of differentiation from their direct competition.

Mobile phone applications, for example, are becoming extremely important. L’Oréal has released an ‘instant beauty’ app which allows consumers to scan the barcodes of brands and access reviews and tips on how to use products as well as any type of makeup advice. Try-before-you-buy apps are an essential part of the beauty care customer’s journey. Many studies have shown that consumers use the web extensively to check and explore; going on YouTube has become a reflex, like flipping though a dictionary or calling a friend for advice. Consumers inquire, evaluate, and investigate, before testing and experiencing. This is where the in-store experience becomes extremely important.

The new generation of consumers is more ‘touchy-feely’. They need to interact. This is even more relevant in emerging countries where there is a strong retail presence. In the UAE, shopping malls are more than points of sale; they drive the lifestyle. Therefore, going to the shop and trying the product is a must. Beauty care spaces in major department stores such as Harvey Nichols and Debenhams continue to be successful, despite the crisis. Visiting those spaces and trying the products are the main pastimes of most residents and tourists.

All brands offer their consumers more opportunities to try and ‘live’ the brand; the times of ‘watch but don’t touch’ are over. Recently, in Pakistan, L’Oréal Paris announced a new series of interactive expert mall experiences. In cities like Karachi or Lahore, visitors could enjoy personalised skin consultations or benefit from makeover services by expert cosmetologists. For L’Oréal and its brand Revitalift, this type of approach offers a special ‘rendezvous’, a chance to meet consumers and get their attention. As for consumers, these interactions leave them feeling unique and pampered.

The biggest cosmetics brands in the world have understood that consumers in emerging markets want dialogue and customisation. Every skin type is different and the philosophy of beauty has nothing to do with Western models. That’s a fact. But brands have a role to play in educating and training this new generation of consumers. Learn who you are, understand what you need. The canons of beauty have evolved. But something has not changed: revealing one’s beauty is an art. In that quest, cosmetics brands are the masters. As Confucius said: “Everything has beauty, but not everyone sees it.”

Olivier Auroy is Managing Director, Fitch Middle East. olivier.auroy@gsfitch.com

First published in the September-October 2011 issue of Aurora.

Session 3 – Marketing to Women Consumers in Asia; & Session 4 – Pursuit of Big Ideas in the Age of Now

Omar Jamil, CEO Latitude blogs for Aurora from New Delhi

Session 3 – Marketing to Women Consumers in Asia

Yeonhee Kim, Senior Partner and Director & Head Retail Practice, Asia BCG

Abheek Singhi, Partner & Director, BCG India

An interesting session – looking at how (and indeed even if) marketers should target women consumers. However, after the previous two sessions (and given that this session is just before lunch), it was probably not the best idea to lead with so many graphs and stats. I have to confess, I’ve kind of tuned out with Abheek’s presentation. Awaiting Yeonhee’s – and hopefully the discussion will be interesting.

Ah, ok here’s something interesting – ten mistakes men make when marketing to women. Some good pointers here (makes me think of the Mel Gibson movie ‘What Women Want’) – basic point: men don’t listen (I think a lot of women will agree).

Another nice insight: the ‘make it pink’ phenomenon. While women may love the colour pink, they also know there are millions of other colours. So broaden your palette. I think this could be applied further.

However, Abheek’s presentation not focused on Asian women. Yeonhee is going to tackle this. Yeonhee starts by outlining some of the key aspirations of Asian women. Asian women’s characteristics different from other cultures. Asian women optimistic in general. Asian women tend to be less in control of household spending compared to Western women (more depending on spouses). 

Ok…. Yawn…! So far this session has not talked about *how* to market to Asian women – rather it’s giving findings about women – women in Asia (in different countries) interested in various products (women in China prefer shampoo, women in India prefer something else etc etc). 

And that’s that. Off to lunch now…

Session 4 – Pursuit of Big Ideas in the Age of Now

Robert Senior, Chairman, Saatchi & Saatchi Worldwide Creative Board

General sense of optimism; although Robert thinks the title of the session is a bit ridiculous (as, he says, were many of the session titles). We live in the now. The now is a real point. 

Today’s generations are creative – this is the generation of ‘screen-agers’. We have a revolution going on. The language of advertising is changing. It used to be all about ‘new’ – in today’s, ‘new’ is disposable – been displaced with ‘now’. These are moments of the people – and people demand action.

And this – action – is the main theme of Robert’s presentation.

Used to be about catching attention, now it’s about interacting; used to be about informing, now it’s about inspiring; from interruption to interaction; from Return on Investment to Return on Involvement; used to be about local, now it’s global; pumping markets to creating movements.

Three killer questions: do I want to see it again? Do I want to share it? (If they don’t share it, don’t air it) Do I want to improve it? 

Now is about instant following. Shows the T-Mobile flashmob ad as example…… and halfway through the sound drops out…. Come on!

T-Mobile most viewed branded YouTube channel. 

VUCA – Volatile. Uncertain. Complex. Ambiguous. We live in a VUCA world.

“Fear is toxic – if we let fear into our worlds, the game is up.”

“The creative mind isn’t immune from fear, but doesn’t deal with fear. The creative mind takes problems, loves problems, and tries to find solutions. There’s something very exciting for creatives in this VUCA world. VUCA through the creative lens is vibrant. Opportunities are endless.”

Volatile becomes vibrant, uncertain becomes unreal, complex becomes crazy, ambiguous becomes astounding.

“The time of the lone wolf is over.” – quote from a lovely Native American poem – “We are the ones we’ve been waiting for.”

Great quote: “Our ideas can be the prism of our hope.” Capture the moment – rules are just there for guidance. Ideas are powerful – we smuggle strategies in via ideas. 

But what is a ‘big idea’?

Robert totally disses the entire language of the ‘big idea’ – aren’t all ideas supposed to be big. I am riveted! “Ideas are never born big; every idea in that first meeting are brittle, they’re tiny – anyone can kill an idea. The real thing is to see the value in an idea and to build it from a very vulnerable thing into a cannonball.”

If you have to hunt down a big idea at inception, then go into a forest, find a deer with big eyes and kill it – that is a Big-Eyed Deer. Awesome!

So how do you nurture a tiny idea into a big idea? Speed. Agility. Perpetual BETA.  

Marketers have an obligation to have ideas that move people.

I think this was my FAVOURITE presentation in the entire conference. Perfect mix of information, content (great ads) and truly inspirational – an excellent follow-up from the Swami’s morning session.

Take home for me: dream and dream BIG!

Closing Valedictory Keynote

Indra Nooyi, Chairman & CEO, PepsiCo 

Must confess at this point I am rather all-conferenced-out. I wasn’t wildly excited by the Coke presentation – but am holding onto my opinions until Indra starts… although the looooong Pepsi ad at the beginning is not inspiring my confidence.

Talk is basically presenting the picture of where the world stands today, vis-à-vis the recent and not so recent past. It’s interesting, but not so much as to capture me attention.

Main message: the way to tackle uncertainty is through creativity. In an uncertain world, brands provide continuity and connectivity. But do big advertising ideas still have the impact they used to? Are they cutting through the clutter? Indra does not have an answer… she wonders if agencies and the industry have moved with the times… Have marketers changed enough, re-written the rules? While the content of the Indra’s speech is sound, it’s not extremely engaging. Although now that she's finished and has started a discussion with the CEO of Omnicom – much, much better!

Ok finished now, so I’m going wrap up here with some final thoughts of an overview:

Round-up

So…. All in all, the conference was good – not great, but good. I think the speakers, while all from fantastic backgrounds, to me, mostly lacked the charisma needed to capture the attention of such a large crowd. The best sessions were the ones on the Asian Creative, the Google guy, the Twitter session, Contagious, Twitter, Swami and Robert Senior – most of today's sessions were good – I forgot to mention Duncan Goose's presentation which was also quite interesting and engaging (I think the problem is it was followed by the Marketing to Asian Women session – yaaaaawn!!!! - and then lunch. Not to mention, post lunch we saw Robert Senior who was simply fabulous – worthy of a standing O).

There could have been more interactivity – I think that might have countered the problem of being 'talked at' - which is how most of the presentations felt. Panel discussions are always good – but many of the presentations were simply speeches or presentations – and you need to be a damn charismatic speaker to engage an audience of 1200 people! Personally, I feel that such conferences are better served by having 2-3 keynotes during the day (morning, afternoon, evening), with several break-out sessions in between. This not only allows the delegates to pick and choose the discussions most relevant to them, by their very nature, they are more interactive and engaging – plus delegates get to share knowledge and findings, so the learnings are more robust. With all the social media discussions, it makes sense to follow a 'social' format in my opinion! There could also have been more speakers on digital – there was nothing on online video (one of the fastest growing mediums in advertising globally), nothing on targeted advertising – I would have loved to hear how time-shifting TV viewing habits are affecting television advertising – the list is long and I could go on forever!

I think the conference organisers could have perhaps planned a few things better: first off, seating… secondly, technology. I could not get a working WiFi connection in the main hall, and barely got a connection in the second hall – and that blocked most websites, including Google, so I couldn’t do any background research.  As a result, I ended up using my iPhone’s Personal Hotspot (yay iPhone!) to file these blog posts and connect online.

I also felt that the entire affair could have been a lot ‘grander’. We’re in Delhi – a city steeped in history and culture – and yet so far, we have not been beyond the gardens of two hotels. Could the conference organisers not arrange some more historic venues for the evening entertainment? For instance, if this same conference were held in Lahore, I could imagine evenings of entertainment at the Lahore Fort, Kamran’s Baradari, the Asif Jah Haveli, the Haveli Baroodkhana – Hell, even Cucoo’s Café. It’s unfortunate the only parts of Delhi the delegates got to see as part of the conference were the lobby and garden of the Taj Palace, and garden at the Hotel Ashok.

Don’t get me wrong – it was all very nicely set up, elegant, clean etc etc… I just felt that given the city of Delhi, I expected more.

The grand finale evening is yet to come – it’s being held at The Kingdom of Dreams in Gurgaon. I’ll post a blog if the evening proves worth it – which I’m certain that it will. But if not, this is it from me. 

Keep watching this space!

Opening session – Global Ethos: Managing Unpredictability Across Circumstances of Life & Business; Session 2 – Conscious Capitalism

Omar Jamil, CEO Latitude blogs for Aurora from New Delhi


Day 3 – Opening session – Global Ethos: Managing Unpredictability Across Circumstances of Life & Business

So here it goes folks – the third and final day of AdAsia 2011. The day kicked off with an inspirational talk by Swami Sukhbodhananda, Founder Chairman, Prasanna Trust.

The talk is what one would expect from a spiritual leader – much talk of how consumerism is destroying the world. Swami Ji has the crowd engaged – and this is one of the few talks over the past three days that has most of the audience and attendees listening. 

Don’t use plastic bags, be conscious of the planet, a species a month destroyed a month.

“He is not the most who gives the best; he is the best who gives the most.”

Reading a multitude will not give you wisdom, rather opening your heart to receiving the information around you. 

Swami Ji says we are more open to solving problems – instead we should be more open to receiving problems. This will open up our creativity; by opening us up to the divine.

Best quote: “This is a spiritual organism – you should understand that.”

No conflict between spiritualism and materialism.

Next best quote: “Treat every religion as a science; science is not something to be believed, it is something to be experimented [with].”

Khalid Rauf, Lowe & Rauf, told me that this session was the best session over the entire three day conference – it seems that most people I’ve spoken to share this view.

Off for a tea break…

Session 2 – Conscious Capitalism

Anna Bernasek, Writer, Journalist & Speaker

Duncan Goose, Founder, Managing Director, Global Ethics Ltd

Moderator: Santosh Desai, MD & CEO, Future Brands Ltd

Santosh makes an introduction, sets the stage for the conversation and then passes to Anna. 

The Integrity Option. Anna presenting Bank of America credit card case study – bank lost US$8 million – big disaster. BoA learnt from the mistakes of the first run and then re-worked the model. The final result: Visa card.

What’s remarkable about this story is that it introduced the concept of the credit card – a relationship based completely on trust. Bank is trusting in the integrity of the customer – and that is the fundamental concept that Anna wants to focus on. This is the the most fundamental relationship in markets today.

“When you have a relationship of trust remarkable things happen.” This concept forms the bedrock of the market economy. “Integrity is an asset and has an economic payoff.”

More integrity = More transactions = More wealth. This, says Anna, is the basic equation. “It’s like lifting the lid of the market economy and seeing the nuts and bolts of what really creates wealth.”

So, Anna asks, how important is integrity to your company? How much time, she asks, in the past 24 hours have you actually thought about your integrity and your company’s integrity. Companies do a number of things with their integrity – some companies exploit this trust (e.g. Bernie Madoff), they understand how it works, but are only concerned about how they can monetise it. Thankfully, she says, there are other companies which truly understand the importance of integrity and work towards building it further. Toyota is one such company that has worked on building relationships and integrity.

The DNA of integrity: Disclosure, Norms, Accountability

Disclosure means brings things out in the open. Things hidden are a red flag to bad behaviour. Norms – every market requires rules. These have to be simple – complicated means a red flag for cheating. Accountability means providing people with the perception that if they do something wrong they’ll have consequences. This doesn’t mean going for people to “nab” them (*ahem*), but rather creating a framework where actions have consequences and people know that if they do something wrong, they get caught.

Duncan starts off by immediately recommending Anna’s book. He then gives a brief background of his career and life: ex-WPP, advertising – read a book that inspired him, bought a bike, put it in a plane to Canada, planning to ride around for a few months – set off on an odyssey across Canada – from East Coast to West Coast – journey carried on through to America, on to Mexico, South America. But rather than stop there, flew to Australia, rode through to Indonesia, on to India, Pakistan, the Middle East, and back to the UK via Europe.

Quite a remarkable two-year journey and experience – included earthquakes, hurricanes, kidnapping, being shot at. Gave Duncan a unique perspective on the world and how it works. On his return to the UK, Duncan decided to start something different – merge advertising background with something more humane – of course ultimately driven by profit (the desire to give everything away). 

Duncan set up Global Ethics. Powerful words, hard to live up to. 

To succeed, need to capture a new generation of consumer – consumers who are as ready to give as to receive. Global Ethics idea: connect things you buy every day to life changing impacts elsewhere in the world – ‘like for like’ – focused on commodity items. Started with bottled water – One Water (official water for Live Aid).

Discovered that when they started using social media, it became very interesting. 237,000+ fans on Facebook – didn’t spend a penny doing it – got those numbers in two weeks. Was so impressive that the Facebook PRs contacted them. Reason for success was that they were simply telling stories – compelling stories that engaged people and attracted them.

(Check out www.onedifference.org).

Is there not a contradiction if building integrity towards generating profit? Anna thinks not. How do you move from being a ‘regular’ company to one that actively practices integrity. Anna: by thinking long-term – how can I create wealth over the long-term, build long-term relationships. Doing the right thing is very much in our benefit. As Duncan says, this is not a marketing campaign, this is a complete strategy, imbedding and implementing from the top down.

This was quite an interesting session – and flowed quite well from the Swami’s morning session. 

“Five years from now if anyone in the industry sees themselves as being in the telecom industry, their future will be bleak; we will be embracing more than traditional telecom services.”

Marylou Andrew interviews Lars Christian Iuel, VP/CMO, Telenor.

MARYLOU ANDREW: Having acquired 95 million customers, is the telecom market reaching saturation level and if so, how will brands evolve?

LARS CHRISTIAN IUEL: I don’t think the market is saturated; it is becoming more mature. Brands have been very focused on price and on awareness, but they will have to evolve because anyone can match price. To make a sustainable difference you have to connect emotionally with your customers and support that with functional attributes. Price, quality of network and customer service are not sustainable differentiators.

MLA: How will the evolution of brands impact the way they are marketed and advertised?

LCI: I don’t think there will be any more price-based communication. We will not be able to deliver the same message to everyone; there will be more targeted communication based on micro segmentation and the behaviour and attitude of the customers. There will be less focus on awareness activities and a lot more on direct communication, be it in-shop or one-on-one and it will be much more emotional and value-based. Our products will become more than telecom brands. Five years from now if anyone in the industry sees themselves as being in the telecom industry, their future will be bleak; we will be embracing more than traditional telecom services.

MLA: Will ‘voice’ continue to be the major revenue earner? What other areas will you derive ARPU from in the next few years?

LCI: Over 90% of the revenue is coming from voice and SMS and even five years from now this is what will be paying our bills; after that we will see growth in other areas. In Kenya, 50% of the adult population only uses services such as mobile accounts and mobile commerce. Other African countries have leapfrogged straight into mobile internet. This is where the growth will come from.

MLA: How has the telecom companies’ investment in broadband and WiMax affected their core business and what is the potential here?

LCI: Mobile internet is a generic term for all kinds of technological solutions and the mobile handset is the best terminal to start with because the penetration is very good geographically. The existing GSM-based technology is already good enough and we believe it should be based on a mobile handset.

MLA: What practical measures need to be taken to realise the potential of mobile commerce in Pakistan?

LCI: This service has huge potential because only 12% of the population has access to, or use, financial services. The SBP is very proactive in promoting mobile commerce. With the high penetration of mobile handsets and SIM cards in Pakistan, we are equipped with all the resources, be it to pay bills, transfer money, seek information or have cash in a mobile account. The most expensive part of running a bank is the branch network. Today every branch in Pakistan has 20,000 customers which makes things very inefficient because there are long queues, etc. With easypaisa we already have 150,000 outlets and this makes the footprint for us and for our customers much wider and less costly. Since we launched easypaisa we have had more than a million transactions worth over three billion rupees, so we see potential for ourselves, for Pakistan and the Pakistani people.

MLA: There are widespread rumours of a possible merger. Does the telecom industry need a merger and if it does happen, how will it impact brands?

LCI: Pakistan is one of the most competitive telecom markets in the world, with the lowest prices and margins. However, with so many operators, this will not be sustainable in the long run, therefore consolidation will be healthy from both the operator’s and the customer’s point of view; maintaining the quality we have today requires having margins to both defend and sustain continuous investment.

From the interview ‘Whose Line is it Anyway?’ – first published in the July-August 2010 issue of Aurora.