Saturday, July 30, 2005

The cool, cool business

In recent times, the electronics market in Nepal has expanded vastly. So much so that what once used to be considered as luxurious products like air conditioners have also witnessed a boom, particularly over the last two years.
A greater momentum in the business environment following market liberalisation introduced post-1991, rise in spending capacity of Nepali consumers and availability of easy finance and instalment schemes have attributed to this market phenomenon.
“Two years ago, our clients were only big hotels and projects. But now the market has expanded and domestic use of air conditioners is slowly growing,” says Navin Bansali, MD of Air Tech Industries that sells McQuay brands of air conditioners in Nepal. “Even today, 80 per cent of our client base comes from projects, private offices and hotels,” he concedes.
Market watchers also attribute the increase in the sale of air conditioners to the erratic monsoon patterns, increasing heat and reduction in electricity consumption by air conditioners by over 65 per cent due to enhanced technology.
Besides, the fact that air conditioners make a home more comfortable, often cutting down pollution level inside the house, the role of air conditioners as a status symbol can not altogether be ignored.
“Use of air conditioners in homes is an increasing trend,” says Bijay Kumar Chaudhary, chairman of Himal refrigeration & Electrical Industires that sells Himal, the first indigenous brand and Fuji Air, Blue Star and Daikin brands of air conditioners in Nepal.
“The market for air conditioners is upbeat. Unlike TV and refrigerators, personal use of air conditioners is not yet very encouraging,” says Anil Sharma of Ashoka Electronics. “But it is catching up slowly,” he adds.
Bansali agrees that air conditioner is no more a mere symbol of luxury but an accessory to comfort. It can also be asserted from the fact that top global brands are opening their shops in Nepal. They are shifting their attention to the emerging Nepali market and a new, wider range of clientele.
One can find a wide range of air conditioners in the market today at a price range of Rs 32,000, to 85,000, for an air conditioner with one tonne capacity, which is mostly used for domestic purposes.
“Japanese brands are expensive. But there is a choice for consumers as the market is flooded with Chinese, Malaysian, and a local brand too,” says Purushottam Kafle of Triveni Group that sells Panasonic brands of air conditioners.
On one hand, the entry of top brands like Samsung and LG into Nepali market has opened a new vista for consumers. On the other hand, sellers are facing cutthroat competition with a finite market and huge choice of products.
“The growth will come from grabbing market shares from competitors,” says Sharma.
To be a successful brand, manufacturers should make a consumer feel pampered and unique, because post-1990 liberal-economy has made a Nepali consumer star of the show. Today’s consumers cannot be fooled. As more products become easily available in the market, the pressure increases on the brands to offer something truly special to its consumers.
“If I am going to spend my hard earned money on something like an air conditioner, I want guarantee that I get proper after sales services and prompt client service” says Mahesh Pandit, a consumer (in Anam Nagar. Kathmandu).
“Our strength is our quality,” says Bhansali. “We offer our consumers a brand that has a global reputation.”
“We offer prompt after sales service,” boosts Chaudhary. “Besides, every brand is unique in its own way, as successful companies today spend millions on consumer research. We are aware of the growing trends of consumer-oriented economy,” he adds.
“Few years back it was considered a luxury, but recently consumers perception of air conditioners have changed. Now it is a completely affordable luxury, due to the wide range of brands and low pricing,” says Chaudhary.

Thursday, June 30, 2005

RNAC enters 47 eventful years

Royal Nepal Airlines Corporation (RNAC), the national flag carrier, is completing 47 eventful years on July 1, 2005.
Following the adoption of liberal market policies by the government in the aviation sector, the airlines is facing a tough competition for its survival as private, international airlines are making strong forays into Kathmandu.
The corporation has been serving domestic and international segments despite facing numerous handicaps in terms of logistics. Despite such odds, RNAC has till recently was the only prop of the aviation sector in Nepal, making significant contributions to the national economy. However, the development of the airlines also depends on the growth of the national economy.
Over four decades of unstinted service, the airline has experienced triumphs and tragedies, upheavals and successes, according to RNAC.
Nepal's aviation history started with a single RNAC DC-3 aircraft from Gaucharan in 1958, literally a cow-grazing field then. Initially, RNAC started its service with limited flights to Patna, Kolkata and Delhi in the international sector and to Simara, Pokhara and Biratnagar in the domestic sector by which period it had three DC-3s.
Commenting over the completion of 46 years, Rabindra Man Singha, first ticket seller of RNAC, who is also the former president of Nepal Association of Travel Agents (NATA) says, "RNAC is a national pride for Nepal which started airlines service in the country. It is surviving today even with a few aircraft." When I sold the first ticket of RNAC on the Simara route from Everest Travel Service, we were very optimistic about airlines' future progress, Singh said. Despite the slow progress, it is surviving and there are more challenges in front of it following the declaration of the open sky policy. Singh said 46 years ago, tickets to Simara would cost Rs 25 from Kathmandu, which now stands at Rs 1,120.
Asked about the performance of RNAC in recent years, he replied, "Government's intervention stopped the growth of the airlines."
With the rising number of national and international airlines joining the aviation field, RNAC has tough days ahead. It will be absolutely necessary for it to have an effective mechanism in place to cope up with the new challenges, opined Singh. "Not only that private sector people who are on the board of directors of RNAC, have failed to come up strong reforms for the national flag carrier," he complained.
Operating with DC-3s, the airlines went for an international route in 1960s and quickly moved on to the Turboprop F-27.
“The commissioning of the sturdy Twin Otter and Pilatus Porter aircraft into RNAC fleet in 1970 brought a swift and easy way of reaching many remote and rugged regions of the Kingdom. By early 1970s, the airline had introduced Hawker Siddley HS 748 turboprops and entered the jet age with Boeing 727s in 1972, after the Kathmandu runway had been extended for medium-sized jet operation. Later, Boeing 727s were gradually phased out with Boeing 757s.
Ambika Shrestha, former director of RNAC board, talking to The Himalayan Times commented that RNAC could not quite become a proper 'business' unit, which has hampered its growth. Bureaucracy does not help achieve fast growth in this competitive market, said Shrestha, who is also the former president of NATA. RNAC's current scenario hurts me, she said.
“Other national and international carriers have already made their base in Kathmandu and doing good business. But RNAC, being a national carrier has not been up to the mark despite its tremendous potential,” she said.
Currently RNAC operates on 10 international routes such as Bangalore, Bangkok, Delhi, Dubai, Hong Kong, Kuala Lumpur, Mumbai, Osaka, Shanghai and Singapore in South East/Far East Asia and Dubai in the Middle East. In the domestic sector, it connects more than 30 destinations from Kathmandu and from its regional hubs in Pokhara and Nepalgunj.

The road taken• 1958 — One DC-3
• 1960 — Onto international route with
Turboprop F-27
• 1970 — Twin Otter and Pilatus Porter aircraft
• Early 1970s — Hawker Siddley HS 748 turboprops
• 1972 — Boeing 727s
• Boeing 727s phased out with Boeing 757s