Muthoot Pappachan Group eyes East, Northeast markets for growth

Muthoot Pappachan Group is casting a wider net in a bid to establish itself as a national brand. Sanjeev Shukla, Chief Marketing Officer, Muthoot Pappachan Group, not to be confused with Muthoot Finance, said the brand is limited by its penetration and is trying to remedy the situation by eyeing the East, including Northeast, markets for growth.

“We and basically any of the companies in this industry are limited by their own ability to reach out to the people. As you go deeper, the investment increases. This can be attributed to a lot of reasons such as accessibility and getting the right kind of staff to serve those people because most people want to work in bigger cities. We need to get the right kind of technology and infrastructure. Therefore, the investment, both in terms of time and money, is much higher. As a result, there is a lot of untapped potential in this country, the Northeast being one such market,” said Shukla.

From a chit fund and gold loan company, the brand has today morphed into an organisation that offers a gamut of financial services. From focusing on old traditional needs, the brand now wants to focus on the needs of the emerging young population within their audience group and is increasing its spend on digital marketing and technology.

“Digital transformation is one of our stated visions for the company. We are investing a lot when it comes to technology. What is happening now-a-days is that brands are not directly researching the customer, they are researching the customers through their social behaviours. This helps brands to understand the needs and desires of a person, which are not expressed directly or explicitly but through his/her interactions with friends and family on digital platforms,” said Shukla.

A recent survey said financial services in India are spending about 40% of their marketing monies on digital but Shukla believes the number maybe not be true for Non-Banking Financial Companies (NBFCs).

“We spend about 3-4% of our marketing budgets on digital which we think is enough,” said Shukla.

He said the brand will increase its marketing spends and the volume of its spend on digital can be expected to go up in the coming months.

Media reports said loans from NBFCs accounted for about 40% of all new corporate loans from banks in FY18. On the future of NBFCs, Shukla said, “NBFCs have been growing exceptionally well and at a great rate. There aren’t many sectors that have been growing at the same rate. But that ratio is not going to change very fast. The banking space is very large and the kinds of loans we give are much smaller. There is also an unorganised sector comprising local moneylenders and pawnbrokers and that needs to move so that people can come of those traps.”

NBFCs like Muthoot primarily speak to the lower strata of the society, what Shukla likes to call the unbanked population. He also cedes to the point that they will lose a few of their customers as they become more economically stable.

“We ideally make our customers bank worthy, both in terms of the mindset and in terms of their socio-economic status. But this also means that there is another set from the bottom that comes to us,” said Shukla.

Shukla feels Muthoot Finance is their biggest competition from a marketing perspective simply because of the shared name.

“From a marketing perspective, it is a challenge because we have similar names and we dabble in the same business. It is an interesting challenge to ensure that if we spend Rs 100 on marketing, some of it doesn’t go to them. I am sure they face a similar challenge,” said Shukla.

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