Panipuri/Golgappa – A spicy research

Introduction :

Panipuri is the most common street food in India and a dish which is very much Indian .Its origin is most commonly traced to the magadh region in the state of Uttar Pradesh and is referred by different names in different regions e.g. Pani k patashe in haryana  , Fulki in Central India , Golgappa in Delhi etc . However the most common name is Panipuri which I shall be using here on.

 It is a very high selling item with nominal costs and high returns . A deeper insight into the business model of selling this very common eatable showcases the immense economic potential which lies in it . Its not just a cheap product available by the roadside which can be deduced from the fact that it has penetrated the market in almost all the segments from the Weekly markets to posh malls . It has evolved with time and managed to keep up with consumer sentiments through a variety of external factors like hygiene,presentation , customized ingredients  . There is a clear cut strategy in place which I could observe , a strategy that works perfectly and bridges the gap between consumer expectations and satisfaction effectively. The product is omnipresent and caters to all sections of society. The pricing varies by vast amounts according to the locations and regions but still the model works perfectly fine .

 I am a die hard panipuri fan and the first thing that I did on my first recce of Chennai was to look for a decent panipuri wala . I had very minimalistic expectations since I know that Panipuri or Golgappa  is not very much famous in this part of India . But my visit to Marina beach had paid off and I found dozens of  them ready to satiate my taste buds .  I have had panipuri almost in all the prominent parts of the country . So I made it very clear in my mind that this was the topic I wanted to explore to find out how this dish  has survived over decades and still remains the hot favourite when it comes to street food.

Product Overview :

The most prominent factor about this dish is that people are ready to compromise on the hygiene and literally stand in queues  to get their share . It’s the most affordable item in the chat lineup and is delivered fresh to the customer . It is highly customizable as per the customer’s needs  like the sweet one’s for kids , filling type , amount of spice . The delivery time is quite less and at an average 5-6 customers are handled simultaneously. an average plate has 6 pieces in it . There are toppings available as per the consumer preferences like onions ,boondi or sev as its commonly called . This is what makes this product so popular , a customer can get his own personalized taste . A perfect example of how customization and personalization of products can satisfy the consumers.Over the time customer expectations like use of mineral water , disposable plates/spoons have added to the cost inputs which  in turn has led to increase in prices . Nevertheless the demand has never gone down and its attributed to the unique feature about this product , its taste . The effect is such that the mere reference to panipuri tantalizes the taste buds and increases the craving. This is also a case where the display of product itself is more than enough to attract customers.

Marketing/Advertisement strategy:

Usually the trend is to have a name for the shop , this leaves a clear print on the minds of the customers and they associate the taste with the shop (Illustration 2) . This is for the shops/vendors which are well settled in one place . The recent upsurge in the demand for quality spots in upmarket areas across all the cities has forced these carts/joints towards mobility . Now these shops are localized and spread over all the corners rather than being at a single location (Illustration 3) . The owner very cleverly places his carts where people have to wait like signal crossings . They keep increasing their reach by placing more and more stalls in adjoining areas . There is no dearth for labor which comes mainly from North India . It’s a very classical example of business expansion and entering new markets. All the carts/stalls follow a very simple rule to maximize sales . The spherical panipuri’s are showcased in a manner that people don’t need additional signboards to recognize and comprehend (Illustration 1 & 3). So the advertisement cost inputs are almost nil . The water that is used for filling is also a very important highlight  ,it is generally stored in a vessel and a dark color cloth is kept over it . This indicates to the customers clearly that the water is cold and is stored hygienically . The panipuri wala has gone a step further and keeps up with the customer expectations. A very minute observation reveals this , for instance they now use plastic gloves and even give hand tissues. This product has penetrated the mall culture also and despite predictions of losing its share to other sophisticated eatables available there it still remains a hot selling item. People are ready to pay as much as 3 times more than what they regularly pay outside(Almost 30 rupees per plate). The trick and the strategy is the same , the focus is always on showcasing the panipuri’s right in front of customers . Most of the times even done by hanging packets which are clearly visible from a distance . The consumption patterns are driven by a bandwagon effect which is quite evident from the critical positioning of these shops . The strategy is same for each area like a busy road outside or an open area near a large store with clear visibility in a mall.

Illustration 1 :Panipuri's Displayed

Illustration 2 : A typical Stall with a name

Illustration 3 :A common example of a nook joint

Types of Panipuri shop Formats :

1. Nook Joints
2. Carts with only panipuri
3. Carts with all types of chats
4. Brick & mortar chaat shops

 

Local research :

I did my research in 3 different parts of Chennai which allowed me to clearly differentiate between the consumption patterns of this product.

Scene 1 : Bustling area with very high customer influx – Marina Beach , Chennai

Shop at the Beach

I was able to find a decent panipuri stall in Chennai at Marina beach . The place is always bustling with activity in the evenings and there is stiff competition amongst all the shops . The stalls are in general overloaded and showcase a deeper variety . Showcasing matters a lot where each shop has its unique item or dish displayed prominently . Still panipuri is the main feature since other dishes like bhelpuri , aloo chat are prepared by mixing several ingredients and hence cannot be kept for display all the time . They are made as and when customer orders come .Panipuri on the other hand is hung in packets or is beautifully stacked. The pricing was aggressive and at 6 pieces for 20 rupees , it was far more costlier . But the additional cost is not a dampener provided the overall buzz at a place like the beach. Here again as I mentioned before , the dish is customized and has its own local effect . People preferred having green peas masala in larger proportions as compared to other parts in the country . The shopkeepers in majority were ladies and managed to speak decent Hindi. They used bright fluorescent lights to highlight their shops. I observed one very important factor about the customer inflow towards these joints . The shops or carts which were near the stalls selling stuffs like toys , handicrafts etc were selling more as compared to shops which were a little away . The main reason was that customers were getting enough time to inspect the shop and explore the options available . The panipuri stall is also a feeder to other businesses like the cotton candy & ice cream vendors placed themselves close to the shops with more influx of customers. It was kind of an unsaid pact or MoU where customer base was shared across businesses .  It was a win win situation for both the stall owners.

Scene 2 :   A well known mall/shopping area   - Express Avenue Mall , Royalpettah , Chennai

Chat Shop in Mall

I even visited a very famous chain of chaat food which is known by the name Gangotri , situated in Express Avenue mall . This chain has a very good reputation here in Chennai. Panipuri here is overpriced because of the brand repute and there is extensive focus on the hygiene factor . It  is targeted for an altogether different segment where people go by the brand and not by taste. The menu is more diversified and you can find many dishes . A plate of panipuri costs around 40 rupees for 5 pieces which is by far the costliest I have seen till now in Chennai . But as I have stated before  , people are willing to pay as it is the only option for street food and also because of the level of sophistication that they maintain for a product like this . An eatable that is best relished at a road side joint is being served at your table with tissues and spoons. I inquired people around there and they agreed with no doubt that they were paying for the ambiance and not the taste . I learnt a very important lesson here that the ambiance and neatness can compel a customer to pay more . The Indian customer mindset is changing now like never before and this is being leveraged by these types of businesses . The advertisement trend is same but the methods are changing  . The color schemes and lighting was highlighting the menu . There were high resolution images of the dishes that were enough to lure customers from a distance. I talked to the employees at the shop and they told me that the frequency of customers for chats/panipuri is more after 5 PM up till 8PM . So they plan out and prepare these dishes by keeping this time bracket in mind. For rest of the time ,heavy dishes are pushed forward. So a proper strategy was being followed for maximizing sales since panipuri preparations are perishable by nature . The panipuri’s tend to become soft in the air conditioned environment if kept in open for long time , the water loses its taste and the masala becomes redundant .

Scene 3 :  Major tourist attraction place but a small town overall – Mahabalipuram , Chennai

Panipuri Cart in Mahabalipuram

I have focused more on this part as the place was near and I also  came to know about some really interesting facts and intricacies .

In mahabalipuram I found nearly 3 of them and to my surprise they were all manned by people who were hindi speaking .As expected the pricing was on the lower side at 8 pieces in 1 plate for 10 rupees . The sales volumes for masala puri were almost equal to that of panipuri. Upon further investigation I came to know that they were the only one’s selling panipuri and the locals were not much aware about this . Mahabalipuram being a tourist place has a different pool of floating clientele . I observed that panipuri was targeted at lower income groups  . People who are generally conscious about hygiene do not prefer to have this dish out here  . Add to that the notoriously bad quality of readily available potable water in this area. The business is more concentrated on volumes than quality . I talked to the owner of the shop , Mr Rajendra who hailed from the state of U.P . Further talks revealed that it was not his shop and he had a ‘malik’ . This was supposedly 1 of the 5 stalls that his malik had in mahabalipuram , three of them being big and two smaller one’s . These smaller one’s were placed at the correct time in strategic locations near the beach or in the evening close to the bus stops . Apparently there were 6 people employed in all on an average salary of around 3000 - 5000 per month .  This fact made me more interested and I could come across some really interesting figures .

Main Cart

The small cart

Total cost inputs per day per cart : 2000-2200

Average Cost per Plate : 10/- (Same rates for panipuri & masalapuri)

Average Number of Customers per day per cart :  300

Total Revenue per day per cart : 3000

Net Profits earned at the end of the day per cart : 800-1000 (approx)

So through 5 carts He is able to have a daily net profit of almost 4000 rupees per day . This translates to 1,20,000 rupees per month(approx) .  This figure is completely mind boggling because we are talking  about a very simple panipuri wala in a small town . The detailed insight into this business really baffled me and I could really experience the power of marketing and the art of doing business .

Learning’s : 

1.       The 4 P’s of marketing Price , Place , product and promotion in a different context . 

2.       I discovered that one more factor can also play a very vital role which is timing . The correct timing of positioning your product in the right place at optimum price and better promotion can maximize the profits by leaps and bounds , just like the person in mahabalipuram was doing by placing his shop near to the beach by evening and then by late evening towards the bus stops and other shops. 

3.       Ambiance plays a very vital role in product selection and customer satisfaction. 

4.       When it comes to eatables , presentation can surpass the taste sometimes. But over time to retain customers ,focus should be on taste hence an optimum balance is required between taste and presentation. 

5.       In today’s competitive world  , market footprint has to be increased so that the profits average out  . A single location will not necessarily give out all the profits.