South India is not one large swathe of places and people to be painted in the same brush stroke. In this Month In Focus, we spotlight some of the nuances of markets and marketing in the South.
Direct-to-consumer (D2C) meat and seafood brand Licious became India’s first unicorn in its space and raised over $390 million across four funding rounds during FY22. Founded in Bengaluru, the startup capital of India, half of its business comes from the South markets. The company plans to build it further through its ready-to-cook innovations, immersive meat buying experience online and even by opening offline stores.
In an exclusive interaction with Storyboard18, Santosh Hegde, VP marketing, Licious, talks about its evolving target consumer base, more women buying meat online and why customers in South India can be unforgiving when it comes to recreation of their local delicacies.
Tell us what led to the creation of Licious? What was the need gap in the market?
Licious was born in 2015 when the co-founders (Abhay Hanjura and Vivek Gupta) tried to provide the same experience and pleasure in meat purchase to consumers that they get while consuming meat. So for instance, in the category of seafood particularly, imagine a consumer who's from the coastal part of Karnataka, currently residing in Delhi. And they feel like eating their favourite Mackerel or Pomfret but they might not know the best place to buy the meat from. I think Licious went out to solve that particular pain point as well. So overall, it has always been about fulfilling the meat lovers desire and not having them go through any constraints or inconvenience.
How has your TG evolved over the years? What are their expectations from the brand and their preferences?
From a demographic standpoint, our TG happens to be in the 35 to 45 years of age group, residing largely in metros and mostly professionals. In terms of psychographics we classify customers into two parts - there are meat eaters and meat lovers. Meat lovers are people who really understand their meat. They prefer more than one variety of it. They take a lot of effort in choosing the right kind of meat for the kind of dishes they're cooking. And they take a particular interest in doing that the consumption also tends to be higher than the average.
We have seen a lot of interesting changes in the consumer profile over the seven years of our existence itself. The first one is that we've seen the age of our core consumer get younger. Our own analysis has told us that typically meat purchase was restricted to the chief wage earner of the family, the man of the household would go out to the market and buy it. But because we've made it so accessible now that anyone in the household who has a smartphone and an app can order it, you've seen the average age of the TG come down by a few years.
What has also augmented this is the fact that the ready-to-cook part of our portfolio has brought more young consumers to our platform.
The last most interesting part is the inclusion of women into the fold. Typically, meat buying has been a very masculine arena because of the nature of the markets and the kind of inconveniences that consumers had to go through. It has been a purchase category where males are predominantly the purchases, but that is now shifting towards women. Again, it has to do with the fact that we've made the whole purchase experience seamless and easy from the convenience of one's home.
How strong has been your presence in the South markets? Which cities are key growth drivers in the South?
Licious, as a company, started from Bangalore and it continues to be our biggest market. Now in terms of a clear split in business, actually 50 percent of our business comes from the South markets and the other 50 percent comes from what I would call as Hindi Speaking Markets (HSM). I'm including West also as part of it. We've split the markets in the South while we are present in a lot of cities; the key cities for us include the three big metros in terms of consumption trends. The South is not one market and I think it's an important point to be called out. The region has five states and each of these states has a distinctive identity, language and consumption patterns. Bengaluru, Hyderabad and Chennai are also cosmopolitan. A lot of people from other parts of the country come and work here and that lends a beautiful cosmopolitan feel to the city so that dimension is also at play here. On the other hand, there is also a lot of local relevance that's extremely important when you talk about these markets.
What kind of local relevance?
Just to give an example in Andhra Pradesh, there are three social cultural regions - there is Telangana which became a separate state of course, there is coastal Andhra (which is Vizag etc) and then there is the region called Rayalaseema which is Anantapur, Kurnool etc. Now, while all of these regions speak Telugu, their food habits, the kinds of dishes that are cooked, the level of spice that's used in the cuisines; they're all distinctive. So, there are actually three different identities now at play so that's what it means to play in the Southern markets that with a few kilometres of travel, everything changes and hence you have to adapt to it.
Santosh Hegde, VP Marketing, Licious
In terms of the categories that are consumed, the one difference between Southern states and the North is the importance that is placed on fish. As a category, fish and seafood tends to be a major category in the Southern markets largely because of the long coastline that runs across the state. There is also a lot of emphasis on local cuisine. There is little scope to go wrong and the consumer is unforgiving when it comes to replicating dishes of the region. And this is especially true in the context of the ready-to-cook category, but we try to create ranges specific to states and specific to local cuisines. That's why it's important to get it absolutely right, which means sourcing local ingredients, sourcing local meat and getting it absolutely perfect.
How have you changed the branding and advertising strategy for the brand?
For the first five years of our seven-year journey, Licious was present in about eight cities, which then expanded to 14 and in the last 12 months, we've now expanded to 27 cities across the country. In the first five years of our existence, the emphasis was largely on digital marketing and performance-led marketing. Of course, the brand is something that the organisation is always continuing to build and is very core to what we do, but in terms of our media deployments and advertising focus, it has largely been on digital marketing specific to the big metros that we play in right which are Mumbai, Hyderabad, Chennai, Bengaluru etc.
As we expanded, we also expanded our branding and advertising play. For the first time last year we came into mainstream media, bought print and TV. This year, we plan to take it up a notch and expand even more because of the fact that we are present in a lot more cities than last year. Our focus was largely in the Hindi speaking markets but that has again changed because now we have a stronger regional play.
In fact, in the month of October this year, we concluded a big campaign with actor Parambrata Chattopadhyay in West Bengal, which was focussed around the whole Pujo range, which is again, a marker of our clear intent to have a strong regional play. And now we are looking at the Southern market very seriously as well.
What are your ambitions for your plant-based meat category?
Plant based meat is an interesting launch and obviously has taken a lot of people by surprise. The way we've positioned on “Crave”, which is a plant based meat offering, is that there are days in a week when a lot of meat eaters refrain from consuming meat and Crave is meant to cater to that particular consumer segment so that anyone who has a craving for something like meat should not miss out for whatever reason. Now there are plans to scale it up to all the cities.
What’s your target for the next two years?
There is, of course, a geographical expansion target where we want to get to even more cities. We are also launching a lot of offline stores across cities such as Delhi, Bangalore and Noida. The offline channel is an important channel for us to get people who are not comfortable with the idea of ordering meat online to come and interact as well as transact with us in the physical space. Our offline stores will also become an experience centre for the existing consumers of Licious. In terms of our offerings, we are consistently building ready-to-cook and ready to eat portfolios. We've added 40 products in the last 18 months itself. We're also experimenting with new formats like ready-to-cook biryani, burger patty, etc.