 Ladies and gentlemen, without any further ado, allow me to introduce our next session, a fireside chat on improving your mobile app experiences by putting the customers at the heart of the product. Excited to have Mr. Vipul Chawla, President of Pizza Hut International, Yum Brand and Mr. Naval Ahuja, co-founder exchange for media for this. Mr. Chawla has 28 years of experience leading 45% of the company throughout the world. His last 15 years have spanned global roles based out of the UK, Singapore, USA, covering packaged consumer goods and global brands, which are market leaders in their categories across personal care, home care and food and restaurant retail. Mr. Chawla, we're cool to have you here and Mr. Ahuja, the flaws all yours. Thank you so much, Pallavi. Thank you Mr. Chawla for joining us. It's good to see you. I remember last year or the year before, it was 2019, you were at our mobile marketing event where we met a lot of your, you know, alumni, if I can call it from Hindustan Unilever. It's good to see you and I hope the pandemic is behind us very soon and we are able to again meet in person. With that, let me come to, you know, the sort of discussion at hand today. Before I get into mobile and how the mobile ecosystem has significantly impacted what brands are doing today, let me ask you a few questions, larger questions about what's happening in the business space, how companies like yours have, you know, adapted to the pandemic, what's happened in the last few years. You are in an industry, last 10 years, you've been part of this company and this industry. You are an industry which in some ways has seen a significant business uptake because of the pandemic. Right. And technology today has changed or impacted touch businesses at so-called multiple points. You know, food tech as we call it is a term which was coined much before the pandemic. Food was one of the businesses which technology started impacted much before the pandemic. But obviously things have, you know, really taken off during the pandemic. Tell us a few things, a few interesting things that have happened in the last 18 months with Pizza Hut, with Yum Brands because of the pandemic and also because of the continuing change that technology was ushering in. So first of all, good morning, good evening, now it is wonderful to see you again. I wish we were doing this in person. I had so much fun the last time I was there, meeting you and Dr. Bhattra and so many good friends. So thank you for having me. I was listening in a few minutes ago and before I start, I'm just continuously struck by the quality of talent and the level of innovation going on in my home country where the heart still is. So just congratulations to everybody who's always called for the tremendous progress that the country is making. And of course, you know, well wishes for safety and good health. It's been a very challenging last 12, 18 months in India, you know, many of us have experienced it personally, but just prayers and wishes for good health. Specifically to your question, yes, I think, you know, the pandemic has in many ways we think obviously been had devastating for so many of us, including our frontline staff, but has also validated many trends that we already saw coming, one of which of course was the use of digital in the way in which we interact with our brands. A simple example I can talk about is, you know, the one the division I work on, which is Pizza Hut. In January of last year, Pizza Hut International had about 20% of its total business online. And imagine that you have about half your business globally, which is dying in restaurants and half, which is let's say delivery and carry out. But so it was a fifth of it was online. As of last month, 55% of our total businesses online. And so, you know, we have seen a tremendous shift and this is a global shift that our countries in the world like the UK and Japan, where 80% of our businesses online, Singapore is 70%, China 65, 70% Australia 75%. And so that is a very significant shift. And therefore you start thinking of your brand in the way in which it interacts with your customers as a digital first brand. And imagine just 18, 24 months ago, we would still be thinking of it as a restaurant brand where people come in and you see them and so on and so forth. Now imagine using that framework and trying to apply it to the digital ecosystem requires quite a shift. And I will talk briefly in a couple of minutes on how and why that happened, but we've seen that seismic shift in the last, you know, 70 months. But before I talk about that, I want to talk about people and culture. I think the reason why we were able to, you know, emerge stronger and that's the thing we use was that we start with our people. We look after our people, they look after our customers, the business takes care of itself. It's really as simple as that. And therefore making sure that we had safe and hygienic practices in our, you know, assets across the world, where we were masked well before anyone asked us to we were, you know, doing temperature checks. In fact, in countries like China, we were actually putting the temperature of the team that has prepared the product on the invoice so that the customer could see that look, you know, people are saying, so we had, we did a number of things. And the thing is that the customer experience will never exceed that of a team member. So if the team member is operating in a safe and hygienic environment and feels that, you know, you can be trusted, the customer will believe that the brand is trusted. It's not surprising that in countries like India, the Britsahar brand is number one on trust, years and years on a trot, 10 years on a trot and become even stronger in the last 12 to 18 months, despite the pandemic. So there are a bunch of things that have happened, obviously in the digital ecosystem, but it starts with people and culture. And that's how we believe we've been able to pivot in the last 18 months. And we think we're actually emerging stronger as a brand. I don't know if I answered your question and if you want to dig a little deeper on any of the areas. Yeah, I mean, it's amazing how some of the companies like you mentioned 20 months back, you were looking at yourself, a lot of management energy would be spent on, you know, focusing on how to improve the dining experience. And certainly here you are not even looking at, you know, dining. Dining will of course come back, but you know, that's kind of taken a back seat because of the pandemic. Tell us, people, you've been leading, you've been part of this company for a while and you've been leading Pizza Hut now first in APAC and now across many countries in the world. As a leader, as a CEO, what is the key change in, you know, how the pandemic has changed the role of a leader and a CEO? And the pandemic has also impacted, you know, after all, CEOs are also humans. And it also impacts you as a, at a personal level, your colleagues, your family members, your friends, extended family. But if you look at what's happened to the, you know, corner office, how do you see the role of the corner office changing as we come out of this pandemic? That's a great question. You know, first of all, just the physical corner office became the home office. For example, I'm taking this call from my home office. So, and that is a, while it may sound like a lighthearted comment, but the sheer act of, you know, every morning getting up and driving to work or taking a flight, you know, I mean, prior to the pandemic, I was traveling 170 days a year. It was just natural for me to rock up at the airport and head out to our country and come back a week later. That just stopped. So I think just the way in which we worked has changed quite significantly. And I think some of these changes are lasting. Now, some obviously will come back, travel will restart at some time, offices are restarting hybrid ways of working. But the first thing that I think it taught us, all of us as leaders, you know, you know, huge leadership roles only on the call are doing huge roles is just the sheer level of flexibility in the way in which we look at conventional models of working and therefore the future of work, the hybrid model of working is something which we may have even debated a few years ago, but we're now taking that as a given. And one of the things I'd like to put to you is that even when we return back to 100% normalcy, which maybe you can take a guess six months, a year, two years away, whatever it might be, changes like the hybrid way of working are probably now permanent. I think there's no longer an expectation that everybody's going to come to office five days a week. I think that has just changed. And therefore the concept of hybrid working and remote working, I think is upon us. Now, am I saying we're all going to shut up physical officers? No, we're not. Companies like Twitter have already announced that they will, but you know, that's different. So I think that level of empathy and understanding that we can work in a somewhat different tone and manner is very clear. And that's upon us. And I think that's something all of us as leaders have learned. I'm sure you've looked at it, we've looked at it. We'd also assume that we need to be physically in the same space for us to collaborate, right? And therefore, offices were built as collaboration spaces. And we're now realizing that that can be done remotely. And frankly, what it doesn't allow us to do is to collaborate remotely with a lot more different cultures, which is very powerful. If you can work through the time zones. And I think there's a virtue in that. And the benefit of that is it can be more inclusive. I'll give you a simple example. We hold an annual marketing conference in Dallas once a year. We're about 400, 400 people, 300 people fly in from across the world, spend a week talking about their marketing plans and what they're learning. That's the usual way we've done it for 25 years. That's the only way it's called the MPM, the marketing planning meeting. Obviously, we couldn't fly people around last year. So the first time we did it online. We did a forum like this, where 1500 people dialed in. Firstly, we were surprised that 1500 people actually dialed into a 4D meeting, right? Which is, now obviously we have to put in the timings. We had to all get up in Dallas at like 4 in the morning and do it from 5 to 11, because then the rest of the work would part switch, so some of us had to just change that clock a little bit, but find that works. But the benefit of that was it became a far more federal meeting. Meaning, in the past, you had 400 really senior executives who could fly to Dallas and spend a week and spend, you know, $25,000 each, traveling up and down in hotels and flights. Now you could have 1500 people dialing in from all over the world. And when I did a back check with my colleagues across the world, there's so many young executives who said we would have had to grow to a much more senior level in the organization for us to be able to participate in meetings like this. Now we can, sitting out in outer Mongolia and Ulaan Batar or in Auckland or in Singapore or Mumbai and Delhi or whatever it is, participate in this meeting in the same level that anybody else does, which I think is, I want to use that as one simple example of one of the benefits of how COVID, and unfortunately all the circumstances have given us the mind space to think far more liberally in the way in which we approach work and in the way in which we approach interaction. Look at this meeting. I would have loved to fly to Mumbai for this or Delhi or wherever you were gonna do it, but here we are again. We can debate how effective this is, I will find out, but it certainly does not stop us from having the interaction. We would never thought about it or doing it like this three or four years ago. Yeah, I think the hybrid model is also for good or bad here to stay. And dare I say, I think on balance, it'll be good overall for companies, for people to interact with each other. And a very important point you made, how technology, how this hybrid system makes things very democratic, allows opportunity for participation and allows opportunity for more learning, hence allows participation opportunity for getting into the thick of things. So a democratic ecosystem in an organization on the balance is good. Let me come to some of the interesting things that we've seen during the pandemic and how the nature of the business has changed. And again, Yum Pizza Hut is a great example of a brand which was so focused on dining experiences, now adapting itself entirely to technology. In India, I was reading some reports, it said you double your sales in the quarter before the last. And I presume, I could not find specific numbers, I presume a large part of those sales came from online deliveries because restaurants were shut, they were curfews in large parts of the country at that time, this is the April, June quarter we are talking. Brands that have been built over decades with very clear specific purpose in mind. And you've been a marketer all your life, you worked on defining purpose for brands. What happens to that purpose that you so laboriously worked to craft in the customer's mind all these years and suddenly pandemic happens, the ground beneath your feet suddenly shifts. What happens to the purpose of the brand? Where does that go away? That's great, what a great question that is. And again, many of us have been forced to reflect on this. Again, in the way we look at our business models, you're on the same stage, but let me talk briefly about how we looked at it in Pizza Hut and the journey we're on, and the journey is by no means complete. In the middle of that journey, and we suppose, but what are we doing at Pizza Hut? We're saying, we love pizza and we want to share it with the world. So everything we do, we do for the love of pizza. We want to make great pizzas, we want to have great experiences, we want to make sure we have great local tastes and adaptations, we want to give it to you on time, and we want to make that evening or that afternoon or that interaction really special, whether you do it at a restaurant in our stores or whether we do it delivered to your home or wherever you are, okay? So everything that we do, we do for the love of pizza. Our restaurant designs, you'll see that on our pizza boxes. We love pizza, I want to share it with the world, right? One of the things that we had to change was that the perception of the brand was that we are a restaurant. So if you want to access Pizza Hut, you have to go to a restaurant. You have to go there with your family or your kids or for that first date or for after that, you know, good exam result or whatever it is, and you go there and you get ushered to your seat and you get served a great experience of food and all the other stuff. But we realized that more and more customers were experiencing our product off-premise and therefore we started this campaign a couple of years ago around now that's delivering, which is to say that we deliver pizza to you wherever you may be and we started that campaign in the UK three or four years ago and we're rolling up across the world. Obviously, enabling the digital system which has made the digital sign of our business so huge. But specifically talking about purpose, we also asked ourselves that is there a purpose we can associate with our brand which is just a little bigger? than pizzas and food. And some of the events that happened in the US last year around inequality, which came to a head like the Florida incident and so on. And we were seeing that inequality in some ways became a more, far more heightened issue during the last 18 to 24 months because some people had access and some people did not. So we asked ourselves, what could our purpose for Pizza Hut be? And we came back with the idea that at Pizza Hut we will serve an equal slice to everyone. So the simplest articulation of our purpose is that we will serve an equal slice to everyone. So when you cut a pizza, everybody gets an equal slice regardless of how senior you are, how much money you make, how big you are, how we can get an equal slice. You may have two of them, okay, equal slice. But the articulation and expression of that is for example, in the UK, we are now giving access to underprivileged franchises of color and giving their resources to enter our brand and become franchise partners through the Hatch partnership. We're doing the same in Canada for underrepresented minorities, blacks, Hispanics and others, people of color. In Sri Lanka, which is an example I'm really excited about, our brilliant team there has opened a number of stores where the entire team member is differently able. So they are speech and hearing impaired. So imagine you walk into a store where every team member is speech and hearing impaired and you're getting service there, you're getting full service. Now interestingly in Sri Lanka, those stores are the stores with the best operating metrics in the country. We have the same, we have now similar stores in Delhi. So an equal slice for everyone is now spreading itself across many parts of the world because we are giving people of different capabilities, different financial access, different physical access, access to our brand so that they can help support that brand and grow it. And every time we open a store, we give employment to 30, 40 people. So on an average, we open 5, 600 stores a year. So we give employment to 30,000 people additional every year over and above the 250,000 that we have already. So we're doing a bunch of things around, we love pizza, I want to share it with the world and an equal slice for everyone. And that's how we're building our purpose as we go forward. Brilliant, I mean that's a fantastic example. I saw your latest campaign in India, talks about delivery Dil Khulke, if I've got it right. It's about sharing love, happiness with everybody and Pizza Hut being at the forefront of sharing food and sharing it in an open-hearted manner. And that's a fantastic positioning for a campaign. Let me talk about a larger question and ask you as the CEO of a large corporation. Things in the boardroom move at a very fast pace. CEOs and shareholders, board members focus a lot on quarterly results. So how do you keep your eye on that purpose because when you have to deliver results every three months and focus a lot on tactical stuff, what happens to that purpose that you've built assiduously over years? How do you find the balance? If there is a CMO in your company, what would you tell that young CMO how to find that balance because board members, shareholders are an impatient lot everywhere. The marketers role, what he's been taught in business school is to build a brand over many years. How does a young marketer today find that balance because there is humongous amounts of cacophony around you. You have social media, we've seen so many examples in the recent past where a campaign that has been worked upon by the agency and the brand team for months is suddenly pulled out because of backfire on social media. What does a young CMO do in such an environment? It's a great question. I started my career in marketing and I wonder if I could do it again because things have changed so much and I often look at our young marketers, including Neha in India who was doing such a brilliant job at Pizza Hut and just applaud the speed and agility with which they handle multiple tasks. But going back to, I think you had several facets to your question. The one facet was how do you balance the short term with the long term? Exactly, results versus building the brand. And we have a simple marketing protocol which many of us travel around the world and teach, which is called SOBO, which is sales overnight and brand overtime. And one of the things we teach our new marketers is that we have to do both. We have to look at sales overnight because we are after all in the food business. Some of it's a pizza. You got to get that pizza to that person in 30 or 40 minutes otherwise they're going to go off and eat something else or they're going to be hungry, which is even worse. So sales overnight and brand overtime and you have to do both. Now the sales overnight typically happens through appropriate access through strong operating metrics and making sure that if a customer engages with the brand then we are able to service that request in real time. So if you take the entire process of make big cutback, it should happen in like 40 minutes in the store and by the time we promise the customer we should get the pizza out in 30, 35 minutes or whatever the promise was. That's sales overnight. A lot of it is based on operating metrics. Brand overtime on the other hand is built on purpose. The purpose that I talked about, everything that we do for the love of pizzas which means great taste, means great innovation, appropriate localization and so on and so forth. Specifically, however, and I will say this without hesitation, when it comes to so-called balancing short-term financial results, we're not confused at all. We start with our people. We look after our people, they look after our customers, the business takes care of itself. It's as simple as that. And frankly, then the short-term rolls into the long term. If you do that quarter after quarter, frankly one quarter ends and another quarter begins and you will keep growing the business as strongly and as you can because we remember this one quarter gets over and another quarter starts, right? So that's just one continuum that's happening all the time. So keep doing the right things. But from a framework standpoint, we teach Sobo, which is sales overnight and brand overtime. And we believe that helps our marketers stay appropriately focused on the near term and the long term because you can't build a brand overtime unless you're getting sold sales overnight. Equally, if you do silly tactical things for sales overnight, you will not build the brand over time. So you got to do both. Fantastic, yes. Keep an eye on the long-term, but work short-term and the other way around. Both is true. Let me come to the topic at hand today. We are discussing how mobile as a device has helped change the consumer reach out, has helped change, reorganize companies, reorganize help companies reorganize their business. Tell us legacy sort of companies. And when I use the term legacy in a very broad manner, companies that are not technology first, companies that are not native to technology have had to learn technology ground up, right? You were an in-dining experience company. You were a pizza delivery company. And now you're a technology-driven food company or you're headed in that direction. What are the learnings that you had which have been very challenging for your team because the senior management has come from, for example, you worked in Hindustan, newly-leaver for many years, right? 20 years before you came to Pizza Hut and Yum Brands, you worked at HUL. HUL being the leading FMCG company of the country was not a, things were not as technology-driven back in the day in the 1980s, 1990s. So there is no business that is not unaffected by technology. So when you look at brick-and-mortar businesses, so to say, and now look at how technology is completely changing that business, what are the things that companies like yours have had to unlearn and then relearn? That's a great question. And I'll start first with the insight and then we'll talk specifically around it on the actions that we have taken. For years, brands, builders and marketers have told ourselves that we've got to make the experience better. We have to make the product better, right? The better, so you have a product test where you have, if you're launching a soap, it's got a better perfume or more lather. If you're launching a shampoo, you've got that entire feel. And I'm talking about categories that I've run in Hindustan, New York, where laundry detergent, I ran surf for some time, it removes more stains. So we remove more stains than anyone else. So we have better than anybody else and so on and so forth, right? So, the thing is, most marketers and brand builders thought that better is what takes us forward. What we learned in the last five to 10 years was that customers across the world with the emergence of technology favor ease, right? So we have to make the product better, right? So we have to make the product better, right? With the emergence of technology, favor ease over better. And therefore, easy beats better. Let me give you an example. I'll go outside the category and then come back into the category. Today, if I don't know the name of the taxi driver who's coming to pick me up, if I don't know the number of the car plate, if I don't know how far away that person is, I get frustrated, right? Not long ago, I was okay to go down and hail a yellow taxi, a Fiat or whatever it was in Bombay and that was fine, that was fine too. But that's unacceptable as an experience. I need to have it on my app. I need to know the name of the driver. I need to know how far away that person is. I need to know the car plate number and so on and so forth. I even need to know estimated cost, right? We take this for granted. That's happened because a bunch of technologies collided with each other and you've got Uber and Lyft and Ola and one of our apps, that's what you have. So the first big thing is that easy now beats better. Customers' favor is over necessarily better and complex. And then if you bring that back into our category, the reason why we have this pivot towards digital and technology was because today, our largest store in the world is this. This is 55% of our business, right? This is our biggest store. This is our most democratic store. It's our most federal store. This hopefully should look feel and the same whether it is in Japan. Don't buy, you're not French on this one. Exactly. So therefore, this is a very significant change. And if I now talk briefly to the subject at hand, which is let's say ordering through mobile devices and apps, this has now become the business that we have. I'm just looking at some of our numbers. Firstly, half our business is online, but of that in places like Malaysia, 60% is on the app. Canada, 25% is on the app. India, 55% is on the app. This is our fastest growing store in the world. And the reason why that is happening is because it gives customers ease and gives customers access. When our customers download an app, they're already more engaged with your brand than others. And we know that the app conversion rates are two to three times higher than even our web experience. So even within that space, app, mobile, web, there is very clearly a hierarchy, where that hierarchy is driven by the underlying premise of ease. It is easier to access the brand through this than to opening your computer and logging in and so on and so forth. Today I do a lot of my banking on this. I haven't gone to a bank branch. I can't remember when I last went to a bank branch. I can't remember last I opened my login on my computer. I do all of it here. This has now become normal for me. It's become normal for many of us. And therefore food is no different. Food is just so part of our lives unless we make it all of this part of our framework, our customers will not enjoy accessing the brand. But the premise is easy. That's the big seismic shift that's happened, I think, in brands and marketing in the last five, 10 years. Yes, and the opportunity to collect first-party data, you don't have a sales woman filling forms or taking mobile numbers. Now you have a mobile app where all the data is available. And the opportunity of what you can do with that first-party data, right? How do you reach out, like you're saying, the conversions are two, three times when it comes to the mobile app. Customers keep coming back. And if I can presume also doing sampling, I saw you launched this momomia pizza in India. Tell us how it's doing. It's doing very well. I was in India a month and a half ago, so I had the fortune of tasting this product. It is fantastic. Firstly, momos are just so popular. And then if you put a momo on a pizza, it's just amazing. It's basically what is called a stuffed crust pizza, but the crust or the stuffing outside is basically the momo. So it's a fun snacky kind of product which also allows you to interact with it. So I believe the first set of launch results are truly spectacular. So if you haven't tried it yet, you should. And if you still- I'm looking forward to trying it. Let me know and I will organize and deliver. There are many things I cannot do but there are some things I can do. And I can certainly- It's only an app away. Thank you, Mr. Chawla. Thank you for an engaging, insightful, and fun conversation. I'm told I can go on with this for another hour, but I'm told there are other speakers waiting, so we'll have to end it here. Thank you so much. And I look forward to meeting you when you're in India next. And I hope the pandemic is behind us very soon. And we can host you at our next event, in not a very distant future. With that, back to you, Pallavi. Thank you so much. Thanks for having me and well wishes to all of you. Good health, safety, and I look forward to seeing you again. Thanks for having me. Thank you.