How QSR startup Wow! Momo innovated amidst the lockdown to survive the COVID-19 crisis
As the coronavirus pandemic brought the world to a standstill, the founders ofFoods, which operates quick-service restaurant (QSR) brands Wow! Momo and Wow! China, say that they started to worry about the effect it would have on their business as Food and Beverages (F&B) segment became one of the worst-hit.
Sagar Daryani. Co-founder, Wow! Momo Foods
Speaking at a one-day online conference 'SmashUp! 2020', Sagar Daryani, CEO and Co-founder of Wow! Momo, said that to survive the pandemic, the brand launched Wow! Momo Foods, a grocery arm Wow! Momo Essential Services, in April 2020. The company has partnered with brands such as ITC, Nestle, Emami, and P&G to deliver essentials across categories such as vegetables, fruits, dairy, FMCG products, sanitary, wellness items etc. The company also tied up withto get listed on their Grocery platform.
“Adverse times as an entrepreneur also gives you a chance to relook, reignite, be resilient, innovate, and experiment to try things differently. And that's what defines entrepreneurship,” said Sagar.
On the pandemic and how it has affected businesses across industries, Sagar said that the moment calls to fight to survive and not follow your dreams. Sagar said that he believes, when times are good, you should run, but when times are bad you should just walk and when times are really bad, you should make sure you don't stop moving. “You have to live today to fight tomorrow,” he quipped.
Sagar said that’s what made Wow! Momo to launch a service delivering essentials during coronavirus. He told that as soon as the lockdown was imposed, he realised that home delivery of essentials was taking around 48 hours, while the mechanisms of food delivery were much faster. So as a young startup, Sagar said, “We leveraged our entrepreneurial spirit. Within two weeks, we launched this new business line (Wow! Momo Essential Services) in April.”
According to the co-founder, this helped the company to stay afloat and make a revenue of Rs 2 crore in April, which is almost one-ninth of the annual revenue it generates. The brand’s revenue touched Rs 120 crore in FY19, and close to Rs 200 crore in FY20.
He said the service is helping Wow! Momo to get back their cash flows, and in June, it expects to clock close to Rs 5 crore or more revenue, and added that the company has not laid off any of its team members. Wow! Momo currently has about 2007 employees in the company.
“That's what we did differently. We are being more resilient, and experimental, and giving more security to our people because we are a people company and it's the team that has made us what we are today,” Sagar said.
The new normal
Speaking about the new normal in the virtual session, Sagar pointed out that just the way frisking at malls and other places became normal after 9/11 terrorist attacks in the US or the 26/11 attacks in India, after this pandemic, surveillance around health and hygiene will become the new normal.
Painting a picture, he said that every customer and every staff will continue to have multiple temperature checks, a proper sanitisation process will be followed, and norms like frequent hand washes etc, will become normal. Pertaining to Wow! Momo, Sagar said that the company's delivery business is their normal business, as “people are afraid to come out.”
Wow! Momo co-founders (L-R) Binod Homagai, Sagar Daryani, and Shah Miftaur Rahman
For Wow! Momo, out of its 345 retail outlets, close to 190-200 are operational. Earlier, the delivery business would convert to 27 percent of its total revenue but now it is close to 90 percent. “We have to keep maintaining it by not only following general sanitisation norms, but also by ensuring that the process is utmost hygienic, and the packaging is in such a way that the food does not get contaminated,” he added.
"With the current restrictions under Unlock 1.0, restaurants are not allowed to operate with their full capacity. So, the new normal is going to make a 100-seater restaurant, a 50-seater restaurant,” said Sagar.
“It is all about conserving cash. None of us wants to make profits for the next few months. It is about how much you can reduce your losses to the least,” he elaborated.
Even in terms of menus, Sagar said that the food business owners might innovate menus to offer recipes with less preparation time and cater to more customers within the current restrictions, norms, and the lean model.
For Wow! Momo, Sagar told that while the essential service is a short-term business line for the company, it is working on a newer offering which will be Wow! Momo Select, where its retail outlet will sell selective essential items, and the company may also look at task-running services.
“It is about utilising real estate space, manpower to get an additional income. In the future, F&B is going to be a lot about collaboration, and we may see a lot of mergers or acquisitions in the space and will see more hybrid formats,” he added. However, this year, delivery will be normal, he added.
The full-day online conference 'SmashUp! 2020' was organised by TiE Delhi-NCR – a chapter of the global not-for-profit TiE. The speakers discussed the insights and trends around the theme ‘Opportunities for Indian startups to build global brands', and also spoke about being #VocalforLocal.