Youth Inc.

Party time!

There's a growing business that feeds on the eat-drink- make-merry philosophy of today’s youth

Ask Mitali Roy to name her favourite hang-out place and she immediately pipes up, “HRC!” Really? Hard Rock Café, where the bill usually comes to about ₹1,800 per person — how many times has she been there? “Never,” says the 21-year-old Mumbaikar sheepishly then immediately defends herself. “But if I could, that’s where I would go every weekend.” That, in a nutshell, is how India’s young spend their evenings and weekends — they crowd in with their friends into places where the bill doesn’t tempt them to sell a kidney or call for an overdraft on their allowance but, really, they’re wishing they were somewhere a lot more trendy.

The dude who penned “the best things in life are free” possibly didn’t get much pocket money growing up. Aspiration and wanting to be ‘cool’ define today’s youth. Ironically, ‘cool’ is not a state of mind, it is the urge to relish the trendiest of hangouts, where the swish-set go. These trendy places vary from city to city but mostly include clubs, pubs or restaurants. So, for every Aer or China House in Mumbai, you have the F-Bar or Blu-O in New Delhi or Crimson Chakra and Pasha in Chennai. Why only the metros, even their brethren in Tier-1 and Tier-2 towns are not behind. There is as great an urge in Jaipur to taste what’s on offer at Barbeque Nation as in Bhagalpur, Bihar, to test the menu at Royal Darbar. On the other side, those catering to the swish-set have tied themselves up in knots trying to get their business model right. Those in Mumbai not only have to deal with the high mortality in the business but with the moral police as well. But even if the latter pipes down, getting the youth to fork out big bucks over a sustained period of time is a tough task. 

Which is not to say youngsters don’t spend on ‘hanging out’ — a euphemism for shooting the breeze, chugging a few, checking out the girls, eyeing the guys and generally having a kickass time. Retail consultancy Technopak estimates that 16- to 23-year-olds in the top 50 cities spend over ₹21,000 crore on eating out and entertainment every year. Depending on the city, the average monthly spend on outings is ₹1,000-1,500, but that’s expected to grow as these joints go out of their way to keep their clients in good spirits.

The natural hang-out space for teens and young adults is the canteen in college or at the office. However oily the samosa, that’s where they’ll gather because it’s cheap and that’s where the rest of the gang gravitates. Recently, there have been a couple of additions to this small list of cheap and friendly places: the food court at malls and coffee cafés that have mushroomed at almost every corner. Come early evening or the weekend and you’ll find it hard to get a seat at most of the 1,200-odd Café Coffee Days across India. Groups of young adults nurse their cappuccino for hours as they update their Facebook status. The bill isn’t too high, the staff doesn’t urge to leave and it has been accepted as ‘cool’.

Mouthful of sky

Cool is a transient feeling when it comes to hangouts. Few stay ‘in’ and for those that drop out, the reasons vary. Zara failed in Bengaluru despite being popular because it was on Hosur Road and couldn’t sustain the crowd that heads to posher neighbourhoods like Indiranagar or Koramangala. Also, as Pinakiranjan Mishra, partner and national leader, retail and consumer products, Ernst & Young, says, “young zones” keep changing as development switches to other parts of the city. For example: Belapur in Navi Mumbai is catching on and hangout joints, in Powai are failing.

But this hasn’t stopped Bhuvan Narang from trying. Every evening, the 24-year-old is busy figuring out what else can he do to keep his cash-counter buzzing. Amidst loud electronic music and gyrating girls, the owner of The Little Door (TLD), a popular Mumbai-based watering hole says, “I wanted to start an old-fashioned English bar, not just a club or a pub.” Narang has an exotic Mediterranean menu, “along with drinking games like beer pong and jug chug”. By offering free drinks on Sundays to winners of these tournaments, he gets the college crowd to flock the block.It is not only Narang who wants to get the most out of the high-spending youth market. Even global chains like Thank Goodness it’s Friday's (TGIF) were drawn in by this high-margin segment. The going so far for the chain in India, though, has been nothing to be thankful about. “There are several misconceptions when foreign brands come to India, one of them being the market size and spending power. While there is a willingness to spend, customers are spoilt for choice,” insists Mishra.

When it waltzed into India in 1996, TGIF was priced in the “casual plus” category. The average meal cost ₹700 then, which isn’t cheap even now. TGIF persisted, but MD Rohan Jetley realised that the solution lay in increasing footfalls while walking a tightrope on fixed costs. “There was a time when you could get into a TGIF by reservation only; we stopped that to encourage impulse visits,” says Jetley. To mitigate the risk of being branded a niche player, and take advantage of long-leases, it opened outlets in malls. This customised catchment play is paying off. “At Palladium in Mumbai, our pricing, our décor and even the music changes compared with the one at Saket in New Delhi,” says Jetley. The footfall has increased to 700 a day with average ticket size dropping to ₹500.

Stone cold

Another high-priced hangout trying to pump it up is Hard Rock Café (HRC). The brand opened to a lot of fanfare and raked in heavy footfall but competition from Blue Frog (in Delhi and Mumbai) changed the game. To counter it, the California-based chain increased the number of live performances, paid through its nose for international artists and introduced happy hours. The live performances were switched from weekends to Wednesday to fill in dull weekdays and increase footfall. However, unlike TGIF, HRC is sticking to purchasing/renting real estate. “We like our properties to be landmarks that serve as ‘in your face’ promotion” says Jai Singh, co-founder, JSM Corp, the franchisee for HRC in India.

Café Morrison, which claims to be HRC’s predecessor in India, too, ruled the roost of music-based pubs in Delhi for many years. But rising fixed costs have been a bane. To cope, it has adjusted its model to bring in bands and lower the price of alcohol. “Our beers cost ₹99 and we get in a new band every week,” says Siddharth Talwar, founder. These bands get friends to the pub while they perform, helping nudge the ticket size higher. Talwar, however, just about breaks even. He agrees that he missed the boat by not shifting from his four-storied South Extension plot to a mall. Morrison does plan to spread to other places through the franchise model but until investors come in, the battle will only get tougher — something the café has in common with HRC. And with over 30% of the gross revenues spent on rentals there is an urgent need to evolve.

Different beat 

Then there are “home-cafés” like Chaipatty, which have become a ‘cool’ place to hang out by hosting events that appeal to the youth. Having got a good response post its founding in January 2010, founder Chirag Yadav is now trying to scale it up across cities. When he started his bare-bones operation, the idea was to attract bachelors and young professionals nostalgic for their college days. “It feels like going back to your college days,” says Yadav, "and bartending or photography classes on the weekend keeps them interested." Low rentals and a skeletal staff meant kullad chai and pakodas have ended up as bestsellers at this boutique café. The footfall that is currently at an average of 350 per day, goes up to 600 on weekends and could double by end-FY13. Yadav plans to add three more outlets every four months across Bengaluru. All this will, however, be on a partnered model (40% held by Yadav). This concept of “home cafés” is catching on in Chennai, where Chaipatty is going next, and Pune. The basic model, says Yadav, will stay the same: four to five people manning the outlet and higher footfall from weekend-based activities.

A ‘cool’ hangout, then, is not necessarily about how much you can splurge; if that had been the case, TGIF and HRC would have been swarming every noon and night. It is about stickiness, buzz and how much one identifies with that place. That is why the college canteen will be an evergreen ‘cool’ hangout. Chaipatty in leafy Bengaluru in its own way is redefining what a ‘cool’ hangout place is. No pretensions and easy on the pocket.