ANALYSING CUSTOMER NEEDS & PERSPECTIVE - … · · 2014-11-01Bank of Baroda DHFL Gruh Finance ......
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Transcript of ANALYSING CUSTOMER NEEDS & PERSPECTIVE - … · · 2014-11-01Bank of Baroda DHFL Gruh Finance ......
900 Homes Constructed & Delivered………
Headquartered in Western India, Foliage is a leading professional real estate
solutions provider focusing on the affordable housing/Low Income Housing (LIH)
segment in Gujarat, India. We are 5 years old (young we would like to call
ourselves) now in LIH segment (started LIH in 2009). Foliage has a sound track
record of delivering three affordable housing projects in industrial belts in
Ahmedabad (Vatva, Bavla & Gerathpur) and another project in Ankleshwar near
Surat.
Foliage executes and develops real estate projects with the help of associate
companies by handling all the needs of a real estate development right from
concept, design, and construction to planning and marketing.
Affordable housing units offered by Foliage cost Rs 6,00,000 to Rs 12,00,000/-
per unit and will target households in the income group of Rs 15,000 – Rs 25,000
per month.
Foliage’s Event Calendar for LIH:
YEAR EVENTS
2008 Tie up with Monitor Group for advisory support
to address low income segment
2009 Launched the First ever Low income housing
project at Vatva, Ahmedabad called Navjivan
Flats.
2010 Increased focus on LIH segment by launching
2nd project named Navjivan Park at Bavla, On
the outskirts of Ahmedabad.
2012 Further increased our boundaries and started
two landmark projects Navjivan Vihar and
Navjiavn Homes at Gerathpur, Ahmedabad and
Ankleshwar, Near Surat respectively. Also we
started in-house construction.
2013 Handed over successful possessions for first
two projects
2014 Started handing over possession of Geratpur &
financial closing of first 2 projects.
OUR PROJECTS:
FINISHED PROJECTS:
1st
Project at Vatva named
Navjivan Flats
464 units located at fast
growing area of Ahmedabad
Price Band of 2, 81,000/- to
7, 00,000/-
2nd
Project at Bavla named
Navjivan Park
221 units spread over 1.42
acres of land
Price Band of 6, 82,000/- to
11, 56,000/-
PROJECTS UNDER CONSTRUCTION:
3rd
Project at Gerathpur
named Navjivan Vihar
A project of 391 units with
completion of phase 1
Price band of 4, 98,000/- to
9, 73,000/-
4th
Project in South Guj Region
-Navjivan Homes at
Ankleshwar
Located at Asia’s largest –GIDC Ankleshwar
A project of 305 units
Price band of 3, 97,000/- to
12, 00,000/-
COMPETITIVE ADVANTAGE:
1. Customer Satisfaction
Moving into new house has given our low-income customers a sense of up
gradation, a feeling of belonging, pride of ownership and importantly a surge in
aspirations. They are tailors, auto-rickshaw drivers, and factory workers etc…who are highly satisfied after owning a house.
Mr. AmrutravPatare
Navjivan Flats
Unit type: 1RK
Approx. Price-Rs. 3, 14,000
“My Dream Home, My Navjivan”
Mr. Ravi Gupta
Navjivan Vihar
Unit type: 1BHK
Approx. Price-Rs. 9, 73,840
Profession- Provision store-keeper
“I am happy to get my own house with
all facilities and good neighbourhood.”
Mrs. Pinky Khatri
Navjivan Vihar
Unit Type- 1BHK
Approx. Price- Rs. 5, 68,400/-
“In Navjivan we feel tension free. Our lifestyle has changed. After all
it’s our own house.”
Mr. Sanjay Joshi
Navjivan Flats
Unit type: 1RK
Approx. Price- Rs. 2, 80,999/-
“We feel Navjivan is more special than reality, home more special than
what we had imagined.”
”
Mr. Kishor Mali
Navjivan Homes-Ankleshwar
Unit Type- Shop
Approx. Price- Rs.18, 99,999/-
Working at Cloth Shop
“Navjivan Homes has given more than expected and was able to get a shop at
good rate here.”
Mr GaurangPithadiya
Navjivan Vihar
Unit Type- 1BHK
Approx. Price- Rs. 7, 60,200/-
Looking back over the past five years, the progress of the LIH market has been
encouraging and the stories we hear from low-income customers about their new
houses (and the impact on their lives) are heart-warming.
Social Impact on the customers:
Majority of our customers are from the income group (less than INR 25,000
per month) and they are in real need of houses.
One of the positive outcomes of these projects has been creation of quality
rental stock for the low-income customer.
Small formats (like 1 RKs) and small homes (compact 1 BHKs/2BHKs)
increase the affordability for low-income customers.
Earlier Housing and now: Most owners lived earlier in rented houses and
are first-time home buyers, thus getting a house of their own is an
experience of pride for them.
Mr. Devendra Tank
Navjivan Homes-Ankleshwar
Unit Type- 1RK
Approx. Price- Rs. 4, 22,900/-
Working as Receptionist at Hotel
“I could not buy a house as my income was low…but with Navjivan I could buy my own house at affordable prices.”
Mr. Vinubhai Patel
Navjivan Homes-Ankleshwar
Unit Type- 1RK
Approx. Price- Rs. 4, 10,000/-
Works at Car Auto Garage
“I have got my own house at affordable rate with all facilities. My dream turned into
reality.”
Typically skilled workers, petty traders, clerks/supervisors, and self-
employed are the mixed group of customers who are interested in buying
affordable houses.
Most customers use savings to make the down payment but almost 25% of
them borrow informally as well; many customers depend on the developer’s recommendation in selecting a source for the loan.
Customer are satisfied with following facilities:
a) Improved living conditions – open spaces in and around the site, natural light and good ventilation and attached toilets and bathrooms
b) Good neighbourhood – ‘gated complex’ gave a sense of security to most owners and also meant a secure environment for their children to play.
Quality of neighbours(and hence good environment for their children to grow up in) was also appreciated by the customers
c) Larger unit sizes – for most customers, the new home was larger or had lesser number of occupants and hence a larger per capita living space
for them
d) Improved utilities – 24/7 water supply in the new house was a big
improvement over the previous housing of these customers
Customers are reliant on public transportation; therefore, ensuring nearby
markets, schools, hospitals, and public transportation is necessary and so
we execute the project in such locations where all facilities are available.
Low-income housing finance has enabled customers to build an important
asset that will reduce their expenses in the longer term and can shield
them from financial shocks or emergencies in future.
The delay in delivery (and hence possession) can impact customers on
numerous fronts – finances, planning for children’s education and other unforeseen circumstances.
Customers are aware of construction progress-linked payments, loan
terms like EMI amounts, fixed/floating rate, pre-EMI, and pre-payment
procedure and conditions. We educate them well before hand so that there
is no confusion further.
48%
52%
Type of Job versus No. of
Bookings
Formal
Informal
Types of customers with their work profile:
Large numbers of customers are having private jobs. The below mix
reflects the employment profile of our first project Navjivan Flats.
52% of our customers are coming from informal sector of job which
means those who are not highly educated and are having low
incomes fall under this group.
36
193
58
88
63
2
7
3
0 50 100 150 200 250
Gover e…
Private Job
Investor
Businessman
Housewife
Farmer
Professional
Retired…
Customer Occupation
Navjivan Flats
Number of bookings
Mostly the customers are coming from lower level management
works which generally comprises of petty traders or who are into
private jobs but not getting very high salary and prefer low income
housing.
Customer’s preferences with respect to loan and financial
companies:
CLP versus Down payment: Majority of customers prefers CLP i.e.
Construction Linked Plan in which payment is done by the customer as and
when the construction gets over.
2%
46% 52%
Managemet level at which customers work
Upper Level Middle Level Lower Level
29%
71%
Payment Plan opted by Customer
Down Payment
CLP
Average Unit Price: Customers generally prefer units with price ranging
from 4 to 6 lakh as large number of customers fall under this category.
Approx. INR 5, 07,176 is the avg. unit price.
Loan amount and loan % sanctioned: Contrary to expectations,
customers are comfortably paying their EMIs, and undergoing the loan
process has significantly improved financial awareness and understanding of
terms.Average loan amount which customers have taken is INR 4,21, 326 an
average loan % sanctioned till date is 78%.
Source of Housing Finance: Majority of customers get loans from
housing finance companies with HFDC the top provider followed by specialist
HFCs catering to the informal sector.
119
198
84
19
0
50
100
150
200
250
2-4 lakh 4-6 lakh 6-8 lakh 8 lakh and
above
Avg Unit Price
Bookings
6% 4%
8%
21%
30%
2%
9%
1%
8%
4% 7%
Sources of Housing Finance
Cooperative banks
Bank of Baroda
DHFL
Gruh Finance
HDFC
MAS Finance
MHFC
Muthoot Housing Finance
2. SALES MILESTONES:
In the first project of LHI “Navjivan Flats” we met our sales target in a span of just six months. We had launched our project in Oct 2009 but then
formally we launched in June 2010 and in the very first month of launch we sold more than 45% of the total units. Thereafter we were able to meet our sales targets and thus we have almost sold all of the units barring a few.
In 2011-2012 of 221 units 53 % units were sold which increased to 219
units in 2012-2013 i.e. 99%.
In 2012-2013 we sold close to 220 units (56%) in Navjivan Vihar
(Geratpur) and within next year i.e. 2013-2014 we sold 314 units out of 391 (80%). This project has been a remarkable milestone in our business. We did ground breaking on 11th April 2012 and in 2 years we are giving
possessions to customers.
3. “Leadership Approach: OUR BEST PRACTICES:”
Integration of ERP system, Standard Operating Procedures and project
management document, forms the technological backbone of the company
resulting in streamlined internal control processes;
ERP: Integration of myriad processes like Finance, Engineering, Payroll, CRM,
Marketing and HR by which company is able to save cost and time. It helps in
making real time information available to management to take strategic
decisions. Foliage is investing approximately Rs. 7.2 lakhs per annum in the
ERP software.
SOPs: Developed standard operating procedures which help to tackle critical
situations as well as to adopt standardization in managerial practices. It is
divided into four parts:
a) Checklists b) Forms c) Reference Files and d) MIS Report Formats
Robust Project Management Document: Project management software is
utilized by the company to prepare the process flow and to identify the critical
tasks as well as milestones during the project wherein time line and costs are
given to map each and every task.
Decentralization: Decision making process is decentralized which helps to
solve issues quickly. Right from departmental head to SBU heads &
managerial staff everyone possesses accountability for their own decisions
within the framework of SoPs.
Robust Procurement Process- With increasingly complex supply chains and
globalized operations, enterprises need robust procurement processes in
place, to achieve the right balance between standardization and flexibility,
and to ensure better compliance, control and monitoring. At Foliage, we
typically follow a four-pronged approach towards procurement process design
to develop best-in-class processes by assessing the process, redesigning it,
implementing and continuous improvement.
Quality Control Process- Slowly and gradually we realized that setting up
quality standard and COQ- cost of quality analysis at every phase is must.
Hence we have developed such techniques to check the quality at various
stage of construction and meet the customer requirements.
3. Project Execution Strategy
3 stage land screening, streamlined construction processes supported by a
strong technological backbone and facilitating home loans through leading
financiers summarize Foliage’s sound project execution strategy.
4. Revenue Collection
With redefined sales strategy to increase the proportion of number of loan
customers and in redefining construction process, ERP systems and provisions
to mitigate collection risk, we have achieved a competitive edge in this area.
Sales strategy & revenue Collection
1 Internal customer assessment based on discussion & KYC form filling
2 Classification of customers to identify potential loan customers
3 Assistance from sales staff in obtaining home loans
Calling bank representatives to meet customers at sales office Providing bank contacts to customers
4 Requirement of pre-sanction letter from loan customers before booking
5 Booking of non-loan custoter taking into account their total family income/other sources of financing
5. Multiple Partnerships with reputed Institutions
Foliage has developed linkages with financiers to facilitate easy customer
funding and strategic alliances with reputed institutions (e.g. The Monitor
group) to develop low cost housing solution.
Partnership with Monitor Delliote – A global management consulting firm
with expertise in market based LIH housing.
Establishing linkages with leading financiers for approved project funding
(e.g. SBI, Cosmos Bank, HDFC Bank, IDBI Bank, ICICI Bank, PNB, Central
Bank of India, Bank of India, MHFC, DHFL and MAS Financial Services)
6. LEADERSHIP TEAM: committed to catalyze social change
Mr. Nehal Shah, Promoter and Director (Corporate Services)
An MBA graduate from Philadelphia University, US
Mr. Nehal Shah has served as the AIESEC Association’s national VP and has been on the AIESEC Ahmedabad alumni advisory board
He is instrumental in helping the company to meet its financial,
operational and revenue goals
Mr. Nirav Shah, Chief Strategist (Corporate Operations)
A graduate from Akron University, Ohio, in construction management
He serves as the consulting strategist in Foliage and looks over firm’s ingenious designs
Managerial Hierarchy
3
4
7
16
Top Level Management
Middle Level Management
Support Staff
WAY AHEAD -
While the basic necessities of life – food, clothing, and shelter – are increasingly
becoming a luxury and unaffordable, luxury items such as televisions, mobile
phones, refrigerators, etc. are become affordable! While we are often amazed at
the progress our country has made when we see an auto rickshaw driver with a
mobile phone, we fail to notice that he is still living in a slum-like dwelling.
Thus the sheer size of the opportunity in low income housing - estimated at about
21 million un-served urban households (who can afford housing in the Rs. 3 lakh
to Rs. 10 lakh band) and a market worth Rs. 1.1million crore – will ensure that
the already rapid growth seen to date continues. The commercial impact of
building these houses, and the social impact of providing these homes through
affordable loans, has the potential to change India’s socio-economic landscape in
the years to come.
While the concept of affordable housing seems to be a simple solution to current
housing woes, its execution remains complicated due to the unclear policy
framework. Development of large-scale affordable housing is the greatest
necessity of urban India today and in order to make it successful, there should be
establishment of a single window clearance system, formulation of innovative
micro mortgage lending models and tax subsidies.
Not only this, it would require “will” from all the stakeholders by slightly adjusting their interest towards a wider social cause.
Thank you
Bhavi Dwivedi
(Finance Officer)
+91 9228001160