Ahmedabad: E-City Entertainment (India) Pvt Ltd (E-City) was incorporated in 1999 with a view to redefine the entertainment and leisure landscape in India. The vision is to be the best out-of-home entertainment provider. E-City is now planning to set up a nationwide chain of 14 integrated family entertainment centres (FECs) called Fun Republic across 12 cities in India by the end of 2004.
Prakash Mirpuri heads marketing and corporate communications at E-City and has been in the leisure industry since 1994. Mirpuris domain also includes what is now emerging as a serious, alternative revenue stream, namely corporate partnerships.
In his earlier assignments in the Essel group he has handled the launch of Water Kingdom, Asias largest and Indias first theme water park, and has handled marketing and communications for EsselWorld, Water Kingdom and Fun Kingdom, Jaipur.
He spoke to Anjali Bajpai recently. Excerpts:
What is E-City all about?
E-City was started in 1999 to change the rules of entertainment and to offer the best out-of-home entertainment. With this view in mind, E-City has decided to set up FECs called Fun Republic across the country. The first Fun Republic has been in operation in Ahmedabad since 27 July 2001.
What was the exact thinking and objectives that went into the launch of E-City?
Before starting on this particular venture, we found that most entertainment options in India were quite scattered. If a cinema was in one part of the town, a good restaurant was at a different location, while a good shopping complex was still further away. Thus we felt that there existed a need for bringing all the options under one roof.
What are your reasons for choosing Ahmedabad for the first Fun Republic?
We began work on our Mumbai and Ahmedabad properties almost simultaneously. Things just moved a little faster in Ahmedabad. Once we saw the momentum it was taking, we just pushed harder and put it on the ground.
How many more FECs are you planning in India? When would they be operational?
After Ahmedabad, the next property to open would be in Andheri West. After that Chandigarh will open, and then next year, in quick succession, at least three more properties will open. The other cities where we plan to open FECs are New Delhi, Bangalore, Lucknow, Hyderabad, Chennai, Vadodara, Pune and Jaipur. All these FECs will be operational by the end of 2004.
What are your plans for Mumbai? Where would the location be?
We are set to redefine entertainment in Mumbai starting October 2002. Fun Republic in Mumbai promises to be an enticement for all fun-loving people. Whether it is having a small drink, planned shopping or impulse shopping, we would provide it all. We will have cinema, food and beverages and shopping, all under one roof. With four movie screens, restaurants and a music store and a bookshop, those visiting Fun Republic wont need to go elsewhere. Then, of course, well have a pub-cum-discotheque, too. In Mumbai, the first Fun Republic will open on the new link road at Andheri West. Later, we plan to add one more FEC in the central side in Chembur. The Andheri FEC will be around 120,000 sq ft Ahmedabad is around 150,000 sq ft. We promise a rich, fulfilling and rewarding experience for those who visit Fun Republic.
Could you elaborate on the various features of your facility at Ahmedabad?
Fun Republic Ahmedabad is, in one short sentence, a massive place where you can have the best time of you life. Spread over 2,50,000 sq ft, there are six cinema halls with a combined capacity of 1,700 seats. There is also a huge departmental store called Hours. Here you get stuff like jewellery, clothes, branded fashion accessories and footwear, apart from a whole lot of other things. Besides this, we also have a bookstore, Bookbay, as well as a music store, Sonic State. We have a four-lane bowling alley called Bingo, which features Indias first glow-track lane. There are two restaurants Starz, which serves vegetarian ASEAN food, while the other restaurant Chutneez is the spicy, tangy restaurant.
You plan to provide complete entertainment under one roof. Typically how much money would be required to ideally spend at an FEC? On an average, how much would the family have to shell out? Is there an entry fee?
As of now there are no plans to have an entry fee. In Ahmedabad weve had 30,000 visitors on typical Sundays. It becomes more a sort of cool and comfortable hangout for youth and families alike. For a family of four it could start with an amount as low as Rs 80 if they decide to only gulp some cola each. And regarding the upper side, there is no limit. We find that a vast majority of people appreciate various entertainment options being integrated under one roof and we are bullish about that. But sooner or later virtually everyone will appreciate entertaining themselves and shopping under one roof.
What is the investment required to set up an FEC? How much would you be investing in Mumbai FEC? Where is the money coming from?
The investments are quite high. In Ahmedabad we have pumped in around Rs 400 million. In Mumbai it would be more or less on the same lines. The funding comes from promoters and financial institutions in a ratio of approximately 2:1.
How many movie screens will Fun Republic have in Mumbai? How many movies would be screened?
In Mumbai we will have four screens. Our brand positioning is Smart Fun. When a customer visits Fun Republic, not only does s/he land up saving time but also s/he lands up getting more value for money by benefiting from the various gifts and freebies and special offers which s/he would get on purchases and consumption at Fun Republic. Our concept of value for the customer is not only from the viewpoint of saving money through discounts but also through cross promotions. The corporate marketing team and the brand managers work closely to bring innovative promotional efforts aimed at maximising customer satisfaction while keeping the brand and the venue alive in the consumer mindscape. We have tied up with www.mysap.com for ERP solutions. At Fun Republic Ahmedabad, we have what we consider to be one of the most lucrative CRM programmes today. Our loyalty programmes will extend to people in different cities, too. For example, our privileged customers of Ahmedabad can get and enjoy privileges when they visit the FEC in Mumbai.
What are your average revenues in Ahmedabad? Has the communal disturbance in Gujarat affected the Fun Republic at Gandhinagar?
Till the riots broke out we did not have to pump in any money, as operationally the FEC was self-sufficient. We estimate that we have lost business to the tune of Rs 1.5 crore as a result of the events at that time. In terms of turnover, we are looking at a figure between Rs 250 million and Rs 300 million annually in Ahmedabad.
Do you have any seasonal months like vacation time?
We have not really experienced any seasonality in Ahmedabad. What we see is a difference during weekdays where we see around 4,000 to 7,000 people and weekends it climbs to 15,000 to 20,000.
What would be your unique selling point (USP)? Do you think families will continue to come for a long time? Initially the hype created could bring in lots of crowds. See what happened to, say, Shoppers Stop or Pyramid.
We have conducted extensive research and found that majority of the people prefer a centre with integrated facilities. So our USP is that we offer facilities, which are integrated and offer fun in a smart way. No one has really integrated the diverse plethora of entertainment options under one roof and topped that up with Smart Fun. We will create relevance for the customer to keep returning. We will tie up with various firms to provide non-stop entertainment for our customers. We would look at doing something exciting with relevant brands and categories like, say, ITC, Bacardi and Smirnoff. The customers will come and may probably experiment and go elsewhere next. We believe that Fun Republic is indeed one such entertainment brand that promises to have almost universal appeal across markets.
You currently have a website which is Ahmedabad-specific. Will you have the same website for all your cities or will you develop separate ones for each?
Yes. Fun Republic has entered cyberspace and can be reached on www.fun-republic.com. The website has general entertainment content on movies, music and television. Interactive games and contests also find place on the site, with links for services like web-casting, voice and video mail, dating and chat. Fun Republic also has multilingual entertainment on its website. Presently the site is in Hindi, Tamil, Telugu and Malayalam languages, which are powered by www.webdunia.com. As it reaches out to a broader market, we will enhance our web presence to include presence in other regional languages as well. The web also throws open a host of opportunities for our alliances, the customers and us.
Who are your competitors? What is the upper edge you would have over say IMAX?
We actually feel there is no real competition because no one has really integrated the diverse plethora of entertainment options under one roof and topped that up with Smart Fun. There have been attempts in pockets. More than competition I would say the consumer is getting more and more choices. As far as IMAX is concerned, it is a totally different format. We have been traditionally perceived as a multiplex. In fact, we offer much more. Take the case of Ahmedabad. Only one-third of the floor space is dedicated to the cinema multiplex portion. The rest is occupied by a basket of diverse activities. As far as IMAX is concerned, we have a tie-up with them and we would probably set up the first 3D IMAX in Bangalore.
What about tourism? Any plans to tap local and international markets?
The domestic tourist market itself is an important force to reckon with. We will work towards encouraging inbound tourists to visit every Fun Republic in the city and come and shop at one go and entertain themselves in a relaxed atmosphere. For international tourists, we will develop various schemes as we go along.
What does the government dole out as incentives for FECs?
So far seven states have come out with entertainment tax emption schemes to encourage such projects. The central government in the latest budget has promised 50-per cent exemption for such projects, provided they are completed by 2005 (except in the four metropolitan cities). The biggest support, of course, would be timely clearances. The industry nowadays does not ask for concessions and incentives. What they need is things get cleared fast and governments work in partnership with business organisations. When business is new, the industry requires a holistic approach to the laws. With no precedent, it becomes difficult. If governments apply the strictest interpretation to the laws, it becomes difficult for the industry to take off. The government has also been moving with a positive approach, and this is encouraging.
What kind of alliances have you already entered into? What are the alliances you are looking at?
For Mumbai we are still zeroing in on relevant partners. I will not be able to comment till the deals are finalised. Of course, the very obvious categories that have an excellent potential are cola beverages, cellular companies, confectionery, airlines, hotel properties, insurance, to name a few.
Do you see these FECs and multiplexes increasing revenues for the film industry? If so, by how much?
Yes. It will change the dynamics of the industry. The movie gets a much longer run and this benefits everyone in the value chain. E-City has also ventured into film distribution and there are exciting things looming on this horizon, too.
You have conducted training programmes in customer appreciation in retail and entertainment. What has been the response? Do you plan to have similar programmes in Mumbai, too? How many have you absorbed in your company?
Certainly. Such programmes not only add value to prospective employees but also are an effective means to get the right kind of people. In Ahmedabad we absorbed over 90 per cent of the people who underwent this programme.
This retail industry is set to grow to be of $1600 billion by 2005. How much of this do you plan to gather?
The size of the retail industry in India is currently between $160 billion and $180 billion. Of this, organised retailing comprises only $2 billion. The market is expected to grow at about 28 per cent per annum. We expect to make a significant impact on the emerging organised retail scene.
Lastly, what are going to be the key attributes in the success of your chain of FECs?
In short, if the customer wants it, it will be there for him at the Fun Republic. We will be catering to the entertainment and shopping needs of every community that we operate in. Virtually every social need of the resident will be catered to, while the look and feel of the place, ambience, service, experience and the value proposition of every FEC will be uniform across India. There will be no major change in the features except perhaps for the food operators, where the thrust will be on catering to the tastes and needs of the local clientele.