More than a McJob

LUNCH WITH BS - Vikram Bakshi, Managing Director, McDonald's India

Vikram Bakshi, MD, McDonald''s India

A friend recently remarked that when you drive across the broad super-smooth Noida toll bridge highway, you could be in any part of the world.

To which I must add a qualification: roll down the window, take a deep breath and, well, it's not tough to figure you are somewhere in the border country between Delhi and Uttar Pradesh.

With my windows rolled up, I'm cruising down the highway to Noida, the fast-developing Delhi suburb, for a luncheon with Vikram Bakshi, managing director, McDonald's India.

Bakshi first suggested that that we meet under the Golden Arches but instead, we are lunching at the Noida outlet of Chor Bizarre, famed for its Kashmiri cuisine.

Bakshi, for those who haven't been following the action in the squeaky-clean McDonald's kitchen, is a key player who masterminded the chain's smooth take-off in India. McDonald's has a complex structure in India.

Bakshi is the master franchisee in northern India and works in tandem with a second franchisee who is spreading the McDonald's culture in western India.

Bakshi is also a McDonald's "evangelist" who can talk endlessly about the rigid systems that guide every move behind the counter. He once gave me a guided tour of the McDonald's kitchen and insisted on showing a counter-girl how to mop correctly to ensure that the floors stay glittering and clean.

Today, he's a few minutes late and I'm already trying out a peppery but cooling concoction when he arrives. Bakshi belongs to the new breed of Indian businessmen who came of age in the 1990s and realised that a vista of new opportunities was opening up before them. "There is so much to do in this country that in any developed country would take you years and years," he says.

Seeking to make McDonald's into a favourite Indian eatery has, in itself, been a gargantuan effort in more ways. What does a burger chain serve to customers in a country where a large chunk of the population doesn't eat beef? And what does it serve in a country where a sizeable percentage of the people are vegetarians?

The dilemma is underlined today because it's a non-meat day for Bakshi and he's hunting for vegetarian items on the menu. Appams and stew (in a Kashmiri restaurant?) sound good but the south Indian cook has gone awol. Eventually, he opts for a mixed vegetable dish.

Continuing on McDonald's, Bakshi talks about how the chain had to alter its systems from top to bottom to cater to vegetarianism and other Indian dietary preferences. The equipment used for vegetarian cooking is completely segregated and the staff who put together the vegetarian meals wear dark green outfits.

Then, an entirely new menu had to be developed with hotselling items like the alu tikki burger. The folks back in Oak Brook, Illinois, paled at the unmeaty innovations but, wisely, didn't interfere. Says Bakshi: "It has been their biggest experiment. About 70 per cent of the product range doesn't exist anywhere else."

Amazingly, the alterations on the menu have clicked beyond everyone's wildest expectations. Initially, customers were shy and almost scared of walking in. Finally, Bakshi's team figured that a tantalising bait (in marketing terms, a "penetrative" price strategy) was needed to persuade Mr Singh in the street that McDonald's wasn't an overpriced foreign chain. So, they slashed the price of an ice cream cone to Rs 7.

The result was instantaneous. Till then, they had sold an average of 9,000 ice creams a month. That soared to 110,000 in the first month. "That was literally our cost price after sales tax and so on. But the fact is the consumer opened the door and looked inside," Bakshi says.

The next step was to develop a familiar-sounding product that customers would bite into in a big way. That's when the alu tikki burger was born. The results are unquestionable. In terms of the sheer numbers who walk through the door, McDonald's India is in the chain's top 10 worldwide. Of course, Indians spend only about Rs 100 on average at the chain, which is one of the world's lowest.

Bakshi is quite different from an earlier generation of Indian businessmen who earned their spurs during the licence-permit Raj era. Unlike them, he's always agonising about ways to bring customers back to the counter. "He will continue to come back to us because we offered him value for money from day one," he says returning to a favourite theme.

Bakshi dabbled in a variety of businesses before becoming a restaurateur. He has been involved in trading activities around the world and has interests in real estate. But McDonald's has taken over a large part of his life.

Nevertheless, he does have substantial interests away from the Golden Arches, which are poised to leap sharply in the coming months. He's starting an international-style highway halt on the Delhi-Chandigarh highway that is scheduled to open soon. It will offer a range of cuisine - including, of course, McDonald's "" shops, utilities and car servicing facilities.

At another level, he's developing a 5,00,000 sq ft mall in east Delhi that should open by the year-end. Bakshi reckons that east Delhi's middle-class customers need a utilitarian mall. Like many others nowadays, he's betting heavily that the retail trade will take off swiftly in this country. "Five years ago I kept telling people retail is happening and nobody listened. So I finally thought, why am I screaming from the rooftops, and went on to do it myself."

I had, in fact, wondered why Bakshi had chosen Chor Bizarre in Noida for our rendezvous. The reason became obvious even before I sat down for lunch. Bakshi owns the building, which has a McDonald's and Chor Bizarre on the ground floor.

The upper stories are service apartments mostly meant for foreigners who come to work in Noida's thriving factories, call centres and television studios. The service apartments come with a small cooking area and plugpoints for Internet access.

Also, there's a bar that serves fairly cheap drinks, and a 24-hour convenience store on the ground floor that stocks everything a western visitor might need. The service apartments are, of course, priced attractively. Says Bakshi: "It has to be value for money. I am not talking about five-star culture."

Bakshi has ambitious plans to open more service apartments but he's moving cautiously. He's waiting for more feedback from guests and then he'll iron out the wrinkles and open more such apartments in places like Gurgaon. In fact, that's essentially his style of doing business. He isn't moving at breakneck speed to open new McDonald's outlets even though scores of new malls are desperately wooing him with offers.

Is he diversifying in too many different directions? On the contrary. Bakshi insists he is highly focused and intends to stay that way. He has zeroed in on two fields in which he hopes to expand exponentially: retail and hospitality. "The spending customer wants the best deal for his money in hand. I have to stay focused and make formats that meet the needs of the people."

Bakshi says he has put together a talented team to supervise his new ventures. But he admits that learning about corporate cultures has been tough. "I used to do everything myself. There was a lot of pain involved in understanding how corporate culture works. Understanding their frustrations and being able to explain "" selling my way and not forcing my way."

On the customer front, too, it has been a constant learning experience. Bakshi and his team discovered early that Indian customers were usually shy. "The Indian consumer is not a very open customer. He is reticent and won't go and talk to anybody," he says.

Our plates have long been cleared away. In the interests of calorie-consciousness, we share a plate of gulab jamuns. We've also been around the service apartments and the McDonald's next door that is almost full at three in the afternoon.

Many youngsters lounging about with their burgers and cokes are from the call centres scattered around Noida. "The younger generation is different from us," he says, "they don't mind spending." He's building a business empire on that premise so he had better be right.