The Real Life MBA – ELCO Paani Puri Centre – The Man Who Sold His Paani Puri

A mass migration was witnessed in human history in 1947. The partition of India saw many wealthy merchants from Pakistan being displaced to India through the Gulf of Kutch. Overnight, these merchants were left with nothing but their aspirations, a will to survive and to make a difference. One such family that crossed borders was the Bhagnani family. After coming to Bombay, the Bhagnani family gave birth to a son, Mr Mohandas Bhagnani, who would change the way middle class Mumbai consumed it’s street-side chat.

Back in 1975, Bandra West had a famous market called ELCO. It was the first air-conditioned market which was frequented by NRI customers and the elite crowd a lot. There were also vendors who sold their goods from hand carts or ‘thelas’ as they are known. This was the birth of ELCO Paani Puri Centre which was on a hand cart.

 

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Initially it started out on one cart. What made Mr Bhagnani popular was his paani puri recipe. It is because he used the best Sindhi puris and figured out how to make the spices linger in the customer’s mouth. And in those days, he used bottled water! His main focus was on selling hygienic food even though it was on a cart. As the business increased, one cart became two carts. 15-20 years ago, he bought a shop in the same area. Later on, he took up the upper floors and converted them into a restaurant model.

What’s in the name?

“We didn’t choose the name for the business, it’s a name chosen by the customers”, says Mr Anil Bhagnani, Mr Mohandas Bhangnani’s son. This is because his father started selling on a cart outside ELCO market and became so popular by the name ‘ELCO paani puri wala’, he ultimately became more famous than the market itself. That’s why they registered their business under the same name. This is also why the minimum footfall on any given day is 1000 customers.

 

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ELCO Paani Puri Centre has a branch in Dubai that was started 2 years ago. They also provide outdoor catering services as well, across the country. They won an award from Times of India for the best catering service in the country in the ‘chaat’ category. Mr Anil plans of opening franchisees across India as well to expand the business.

It’s all about the product

He has tried his best to maintain the quality all throughout. “We still continue to buy the raw materials from our old suppliers because of the trust and loyalty we have with them”. But why are customers still coming to ELCO when there are so many other players in the market? “We have loyal customers coming to ELCO since years. They know that the quality they used to get 30-40 years ago, they will still get the same quality. Of course, we have to increase our costs because of inflation – what we used to do 30-40 years ago, it’s not possible to do today”.

ELCO’s marketing and advertising strategy

In today’s age with the internet being prevalent the most, they employ social media marketing. They use Facebook, Instagram, bulk email and SMS marketing. They have agencies taking care of that portion of marketing for them.

For their bulk email marketing, they inform customers about the different varieties of food they have to offer according to the festival or season. For example, the mango season just passed by so they made their customers aware of their mango kulfi, mango milkshakes, aamras etc. They do the same if they want to introduce new food items. This is how they make the customers aware of their food items.

 

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They advertise similarly through SMS marketing. But does he think SMS marketing is effective in today? “See now every other person is carrying a mobile, from a layman to an executive. Once you get the SMS you will open to check it. So it is effective. But any kind of social media marketing is more effective.” But he places his bet on bulk email marketing because the first thing any person will do is check their mails.

Chefs and Employees of ELCO

There are different categories of staff – utility staff, chefs and waiters. They recruit their utility, service and counter staff by advertising in different newspapers.

With regards to the kitchen staff, they have chefs and commis chefs. A quick Google search on a commis chef will tell you- ‘As a commis chef you’re on the first rung of the ladder to become a great chef’. It is a continuous training process where both are learning. If a chef leaves, the commis chef will take over or vice versa.

 

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But what about the secret recipe? What if the chef who leaves, runs away with their secret? Mr Anil explained that they have their own mixture of spices. And every category of food is different and has different chefs running the show, so the chef is limited only to a particular category of food. For example, a chef who specialises in making pav bhaji would not know ElCO’s recipe of ragda patties.

Seasonal Business

The business gets affected in the rains, like most other businesses. Their business concept is selling street food. So people all the more get scared to eat street food during the rains. People would decrease their street food consumption, so how has he managed to tackle this problem? “That’s where ELCO has made a difference. The customers know that ELCO is the most hygienic place. They know that even though ELCO will charge more, the quality and standard of food will be maintained. That’s how we stand apart from others”.

ELCO’s Pricing Strategy

So is ELCO’s pricing strategy at the premium level as well? “It’s not premium. If you include taxes, we don’t charge you separately for it. There is VAT, service tax, Swacch Bharat Tax – now I cannot tell you to buy a paani puri and pay me taxes over it. We include all the prices in the final bill. But if you go out to eat on the road stall, they don’t charge you these taxes. If you calculate, around 20% of the price is taxes. So at the end of the day if we are charging you Rs 70, you are paying Rs 55 bucks. It is almost what others are charging”.

 

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What he says makes sense if you consider the various costs (variable and fixed) attached to running a full-fledged restaurant. And if you include overhead costs as well, the price drops down to most road side paani puri vendors.

It’s the brand not the location

“See ELCO is a very well-known place. Even the film stars have come here and have had paani puri. So it is very well known that ELCO is a premium place to have chaat”, says Mr Anil. So we feel that it is not the location but the brand that ELCO paani puri has created that attracts the customers and makes them famous.

ELCO’s view on Competition

“There are many competitors. But this food is such that we have our own class of customers who want good quality and hygienic food. So here we don’t see any competition at this standard”, he said. But is that all you need to get a customer in today’s world? “No. In today’s market you need everything – hygiene standards, good quality and good ambience. If you want Mysore masala dosa, you would probably go to an udipi restaurant and for some other type of food, somewhere near the station. But if you want to enjoy street food with good ambience and hygiene, you will think of ELCO”.

 

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ELCO’s customers

Paani puri, dahi batata puri, dahi raj kachori, chole bhature, ragda patties and pav bhaji are their signature dishes. They also have the south Indian cuisine like dosas and idlis as well. But why do they have south Indian food also? Shouldn’t they stick to their USP i.e. chaat food? “We look to capture the entire family market. If adults or oldies come, they want to have chatpata tangy food. If ladies come, they want more spicy and tangy food. But if kids come, they want sandwiches or pizzas or dosas. If a diet conscious person comes in they will have idli or a diet bhel or something like that. We try and look after the entire family. If two adults and two kids come, they should enjoy the food and we have to be able to provide them with that.” So his target audience is the family crowd.

But who frequents ELCO more? Kids, adults, men or women? “More women I would say because this is complete acidic food which ELCO is known for. And women love the chatpata food”.

ELCO’s message for you

“Anything requires hard struggle. Nothing is achievable in a day. You have to maintain your standards. We have never followed the money – we have always followed the fame. If you follow the fame, money will follow you. We believe that when a customer wants street food, ELCO should be the first name that comes to his/her mind. It’s all about word-of-mouth publicity. If your customers are happy, they will go and spread out your brand to others”.

Learnings:

1- Only if your product or service is of the best quality, you can ensure you’ll have a successful business.

2- If you want to remain in business, ensure that you maintain the quality of your product over the years.

3- ELCO identified a red flag in the customers mind – hygiene and rainy season. It won the customers trust by ensuring high standards of hygiene. So identify your customers pain point and fix it.

4- It’s important to have a USP in your product/service but also identify areas around it and serve your customers in those areas as well. ELCO’s USP is street food but they also have South Indian food to cater to the customers’ needs.

5- There are many forms of marketing and advertising but word-of-mouth still works the best.

 

 

As told to Edgar Stephens

Team InsideIIM

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