Lunch with BS - Anil Moolchandani

Playing a new card

At a cocktail party a year ago, I heard Anil Moolchandani making an unusual confession. "When I was small-time," he told a group of businessmen, "I had lots of money. Now I am big but I seem to have much less."

Businessmen don't usually make such frank admissions in public. But Moolchandani, chairman, Archies, doesn't play by the same rules as other captains of industry. He cheerfully admits that as the new Millennium dawned, his greetings cards-cum-gifts company was unexpectedly pushed to the wall by the Internet revolution.

But he's unfazed by red ink and balance sheet blues or, indeed, anything else. "Nobody knows what God has in store for us," he says as we settle down for lunch at the Teahouse of the August Moon in Delhi's Taj Palace Hotel.

The red ink has been mopped up, he explains. The popularity of e-cards soared and then fell. SMS greetings are still popular but old-fashioned cards printed on paper have staged a comeback. Also, the company has downsized dramatically and now has 630 employees compared to over 900 at the turn of the century.

We are almost the only ones in the Teahouse on a warm Saturday afternoon. Moolchandani surveys the cavernous restaurant and comments on how Delhi's new stand-alone eateries are giving the five-stars a run for their money.

He has always been fond of the Taj Palace because back in the 1980s, when he held an exhibition in the hotel, it had attracted thousands and that gave him a huge push along the road to fortune. Since he seems to be familiar with the restaurant's menu, I follow his lead and also order a minced coriander chicken soup.

Moolchandani isn't one to disguise his humble beginnings as a businessman. In fact, quite the opposite "" he almost wears it on his sleeve. He's eager to drive home the point that he rose the hard way. He started out in his father's saree shop in Delhi's bustling Kamla Nagar, the haunt of Delhi University students. As he hunted for ways to grow, he went into trading in a variety of commodities. Finally, he hit the jackpot in a most unusual way "" by printing songbooks with lyrics from Abba's hit songs. This was 1979, when the Swedish group's catchy numbers were still top-of-the-pops around the world.

What were the qualities that catapulted him from one with a single-branch saree shop to owning a chain with outlets in 180 cities? He ponders this googly only for a moment and says: "My eyes. And my ears."

"I always listen to people," he says. "They may talk s**t most of the time. But if you listen carefully, you'll hear something you didn't know." He extends this principle in different ways. A posse of Archies managers travels with him for all international fairs. "Eight or nine of us go together. In the evenings we meet and discuss what we've seen. And we all notice different things," he says.

In between mouthfuls of soup, we munch on the crispy fried chilly chicken that has also arrived. Moolchandani has pulled his company back from the brink and now he has ambitious plans for the future. As malls sprout all over the country, he's sizing up the good ones and getting ready for a spurt of growth.

The company plans to open 35 managed outlets in 2005, and another 50 in 2006. The blistering pace will be kept up in 2007 with another 25. Moolchandani reckons that if the company opens shop in the right malls, it will be a once-in-a-lifetime opportunity.

Retailing is a tough game and he admits that selling greeting cards or gifts is more difficult than selling essential commodities like vegetables and soap. He travels abroad every other month, scouring foreign markets for cards and gifts that can be sold in Archies outlets.

The choices are based on instinct and gut-feel. "Only 5 per cent of the things that are sold abroad can be sold in India. But that means there's still room to bring that other 95 per cent," he says optimistically.

How tough is the greetings cards and gifts business? Moolchandani admits that his 23-year-old son often grumbles that the business is too complicated for him. Nevertheless, the son is right now on a buying expedition in China and getting more deeply involved in the behind-the-store-front operations.

But Moolchandani's son is probably right about the business being complicated. There aren't really any challengers in the field except ITC, which views greetings cards as a sort of vertical integration from its paper business. Moolchandani vehemently insists that competition is necessary in the field.

Other members of the Moolchandani family are doing their bit to keep sales moving at Archies. His brother is the financial controller and keeps a tight grip on the purse strings. Moolchandani's wife runs a shop and his sister-in-law runs two others.

In other ways, too, he insists that Archies has been a happy ship, even if it has been through a rough downsizing. "For about 85 per cent of my employees, this is their first job. That means they have stayed on with us," he says.

For the main course, we've ordered vegetable rice accompanied by shredded chicken with green pepper in oyster sauce (clearly, no worries about avian flu here). Moolchandani goes on to explain how Archies has undertaken a strategic shift in recent years. It's making a transition from being primarily a greetings card company to one that offers gifts for all occasions.

The trick, according to him, is to offer exclusive gifts that smaller competitors can't match. The company has pulled off exclusive deals with seven companies around the world and he's counting on this to give the chain an edge.

The move to gifts has partly been triggered by the ups and downs that the greeting card industry has gone through in recent years. For Archies, the old Millennium went out in a blaze of glory as everybody rushed to send each other cards on the once-in-a-1,000-years occasion. But trouble was around the corner.

In 2000, people went online and, suddenly, even old grandmothers were becoming tech savvy and sending e-cards. Archies also started its own site, archiesonline.com, which was highly rated but a financial disaster. Says Moolchandani: "We wanted to see eyeballs and there were millions; but there was no money. We were paying for each card and still people were complaining."

That was followed by the craze for sending SMS messages but even that has, apparently, slowed down and people are now back to old-fashioned paper cards.

Moolchandani reckons audiences in India have matured and they are now smart and know their minds. Archies is probably responsible for the sudden emergence of Valentine's and Friendship Day in India. But it stumbled when it, taking a cue from the Jain community, tried to introduce Forgiveness Day. Says Moolchandani: "Somehow it didn't catch on. If people don't like it they will reject it."

Even though he's frequently globetrotting, Moolchandani leads a rigidly ordered life when he's back in Delhi. He gets up early, reads the newspapers followed by a game of tennis. From the tennis courts, he heads to office where he stays till about eight in the evening. He's in bed soon afterwards. "I used to socialise but realised that I didn't really need to. However, about three or four times a year, there are things I want to go for."

Whatever happens, he's philosophical and does not demand too much from life. At the age of 22, he reckons a good day was measured, "if we got a seat in a bus". Today, after lunch he glides away in a black Mercedes. Does that make for a lot of great days?