Airtel, Jio Plan HUL Tie-Up For New Consumer Connect
Indian telecom giants Bharti Airtel and Reliance Jio are in talks with Hindustan Unilever(HUL) for tie-ups to offer localised discounts on the latter’s home and personal care brands through neighbourhood stores, three persons familiar with the matter, said.
Once finalised, the initiative could be a game changer for the two rival telcos as well as the consumer conglomerate. The telcos will expand beyond time-bound tariff plan oriented content tie-ups to find expand customer base and push them towards higher tariff plans to boost average revenue per customer (ARPU). At the same time, telemapping consumers will give HUL cloud-based analytics for better insight into consumer behavior.
“Both the telcos are in discussions with HUL and this will be the next stage of attracting subscribers,” said a person aware of the development. “This will also benefit HUL, which has been rooting to develop customer insights via cloud-based analytics.”
According to persons aware of the new strategy adopted by the FMCG firm and the two operators, the business model chalked out so far will be like this – an Airtel or Jio customer will get higher discount vouchers of HUL products on the mobile app if he/she moves up the tariff plan. These vouchers will be used only in kirana stores and this in turn will help the consumer company to track the kind of products its customers are buying.
Tying discounts to tariff plans will work for both partners. Another person aware of the plan said that among the scenarios being discussed is a discount voucher of Rs 250, of goods priced above a certain threshold, for a subscriber on the Rs 499 plan, but the levels haven’t been finalised. “The discounts will be borne by the consumer firm, since the telco is offering its customer base,” the person added.
For Bharti Airtel, tapping into the consumer goods space and tying up with kirana stores is a fresh initiative to boost customer stickiness and ARPUs, having mainly focussed on entertainment and sports related content so far. It will then take on Jio head on in terms of connecting to retail consumers.
Mukesh Ambani-led Jio has been tying up with kirana stores using point of sale (PoS) terminal, the PoS machine — or card swipe terminal. The company has been talking to other FMCG brands as well for possible tie-ups.
While Airtel declined to comment, Jio did not respond to ET’s queries.
“There is an opportunity to enhance shopper experience in traditional trade environment and raise the game for small retailers with the help of technology solutions. In this endeavour, we are happy to partner with like-minded corporations,” an HUL spokesperson said in an emailed statement to ET.
“We believe Bharti will need to think beyond content, else segmentation may lose novelty over time, and one of the ways could be offering shopping vouchers from brands to kirana stores,” said Rajiv Sharma, co-head of research at SBICap Securities in a July 16 report named “From “content to kirana”
Sharma added that Airtel’s strategy of tying up with Amazon and Netflix has its limitations as the two can pull out any time after the free offer period ends. Typically, Airtel offers Netflix free for three months and Amazon Prime for a year for subscribers to plans above a minimum level.
“In our view, both Jio and Bharti are attempting to get a foot in the door in the kirana segment and are likely to attempt discount coupons on the lines of Zomato Gold. With kirana shops in no hurry to move to digitisation, telcos may tie up with FMCG brands and rollout Jio Gold/ Bharti Gold programs and accelerate the kirana digitisation process (leveraging their captive telco subscriber base),” the report added.
Bharti Airtel had 321.89 million customers while Jio had 314.80 million as of April end, according to telecom regulator’s data.
HUL has been investing to spot digital trends and drive agility at a time when disruptive technologies are challenging businesses.
“The partnership with Reliance Jio is one such initiative to digitise the traditional trade through deployment of POS terminals at retail outlets,” said a spokesperson for HUL.―Business Telegraph
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