 Hello and welcome to Exchange for Media. With me today is one of the tallest leaders from Indian advertising and marketing industry and he's made us proud by managing APAC for his company. Please welcome Mr. Ashish Basin, CEO APAC Chairman India Densu Ages Network. Sir, thank you so much for finding time for doing this for us. My pleasure Nazia, good to meet you again. Hope all is well with you. Thank you sir. I wish you the same. Sir, as we were just discussing before this started that this has been a very difficult year for most of us. The second wave was very deadly in a lot of ways. So how much has it impacted Densu here in India and in the entire APAC region and when I talk of impact, I also talk of the overall sentiment. It's just not business. The two months we were all very disturbed emotionally and mentally also. So with all of those things, how did you cope as a company and what was the impact? Look, I mean there is no doubt that the pandemic has impacted not just us but everybody quite significantly and if I look at it from the India point of view, I think we were in general as a country relatively unprepared or underprepared for the second wave particularly and that has impacted everyone in a big way because there was a feeling of helplessness for thankfully now things seem to be a little better. We're still probably not out of the woods completely but at least things are a lot better than whatever. But at that time, if you remember at the peak, it was almost a matter of survival. I mean people were falling ill, hundreds of people were falling ill all around you, your near and dear ones of people who you knew, the employees near and dear ones, they were falling ill. And it just felt very helpless because you didn't have enough oxygen or you wouldn't have beds were in shortage or medicines were in shortage and you didn't know what to do. And I think that was a terrible, terrible phase for a period of about four to six weeks. Thereafter as the peak passed and it started slowing, it started cases started coming down. I think some semblance of stability come in and today of course we're in a lot better position and much better position and with vaccination also taking up. I'm hopeful that we should not have this but it's significantly impacted. As far as business is concerned, for me, I'm just now on sync for an India point of view, I'll tell you about the region in a while. As far as business is concerned, actually it was, I would say a little less impact than I feared the worst but it was a little less impact. I think there were a few reasons for it. One is that IPL was on till about the third week of April. So April was, it had started beginning towards the second half but at least it wasn't that bad. May was not great as expected because one by one markets were going into lockdown so some clients, their dealerships were closed etc but not as severe as it was in the first week which was a much longer and a much more total kind of a lockdown. Now the opening up has started and I think gradually things will get better and I always say this gradually. I'm not a believer of that one day there'll be a switch and there'll be whatever there's V shape recovery and everything will be fine and so on but I think generally the direction is right. Things are starting to improve and I think every week, every month hopefully will be better than the previous month. We're also in the midst of monsoons and so far the news on monsoons is good. We always underestimate the impact of monsoons on the Indian economy. Still a large part of our economy if not agrarian is dependent upon agrarian. Even industry is dependent upon rural demand in many ways because we have saturation, near saturation in many categories in urban areas. So the signs on monsoons look good and my own sense is that if we have a good monsoon and if we don't have a third wave or a fourth wave or whatever and a vaccination goes well then by the time we get to the festive season we should be out of the woods and things should be back to normal but it'll be a gradual climb back and not a switch on and off kind of a scenario. As far as rest of the region is concerned different countries are at different stages. Some like China went in first, bought out after that and then didn't really get that impacted by the second wave etc. Others like Taiwan is a great example. They have a very big operation. Almost one year it was hardly impacted. People were working from office on most times. There were no lockdowns etc and they didn't really have even the first wave, forget about the second wave but off late a few weeks ago even Taiwan has started getting impacted. Vietnam is another such market. So I think different markets are in different states but by and large economy wise less impacted this time because I think there is hope that at least the vaccine is there and the vaccination process is on and people have learned to hope better with it. Some like Australia for example the number of cases are pretty low but still often on Melbourne keeps going into lockdowns etc. So we've got to learn to live with a little bit of a yo-yo kind of an on-off waves type of a world until things fully settle down and until vaccination globally comes to a certain level. So I would say it's a mixed map. 2020 was clearly a very bad year for most of the agencies. So even Densu when your results came in they weren't that good. Most of the figures were in negative and there was this announcement that you are the organization will restructure a lot of things. There would be some four operating plans and six global agency plans. There were talks of consolidations. You can tell us more about it and how did it happen in India? 2020 was not a great year for anyone including for us. Obviously business was lower in 2020 than it was in 2019 and it did have its impact. However what we did do at the company was that we underwent a transformation program that did involve restructuring and we landed up into a scenario where we had almost 160 brands globally. Now that's not a sustainable scenario in that sense you know and there are opportunities to drive efficiencies. I'm a big believer of one P&L, one Densu. Ultimately what does a client want? They want that you should be able to address all their marketing communication services needs in as simple a manner as possible in the fastest, most efficient, most productive way and if we can give that all in under one umbrella which I think where I think Densu has a significant advantage over any of our competitors both globally and more so in India because by nature we are integrated. If you can do that I think that's the best position to be in and if you're in that position you don't need 160 brands. You do need some brands and we've decided that those are going to be six global brands and there will be some local brands also in that but so that was one of the areas of transformation. So just like how we advise our clients you know for digital transformation or for transforming their organizations I think it's most important that agencies also look inwards and transform themselves so that you're future ready and I think that's the exercise which we announced and embarked upon and bulk of it I think it's in most of the parts of the world are is already done and it is underway and it's progressing very well at the moment. And in India? Well in India also we are in the process of consolidation, restructuring etc. So for one you know we now have three service lines, three clear service lines there's creative media and there's CXM so that wherever possible we're able to combine the researches, combine the resources etc. Avoid duplication where you need to be able to give a more holistic solution to the client. We've already announced for example the media service line leadership, we've announced there's going to be CO to look at our operations which is particular here in the case of India with Divya in the case of media. Likewise there'll be a creative service line lead, there'll be a CXM service line lead and so on and so forth. So the whole new way of working which Google has adopted, India's I would say pretty much on par or almost at the forefront of it because we're very much a part of the global drive on that so definitely in India also that's progressing well. And there were also talks of you know cost savings which was also announced officially that the entire group is aiming to achieve, there was a number you know it was given in the end that we are going to permanently lower our cost base and did this also include you know reducing your headcounts and I think it's given in that report and it is announced if we look at number of legal entities, number of brands, specialized. So they're going to cut 6,000 staff but I don't know what the number is globally frankly I won't know that but there was a like you rightly said there was a restructuring program that was announced and that was carried out and in some places was still in process but it was a transformation program so while there would be some areas maybe with staff was extra but there were other areas particularly in the transformation areas where you needed to hire a lot more people. So we underwent a significant transformation program and now are coming out of that much stronger I would think where we are and the best sign of that is that after a long time we're now showing growth so that to me is the best the only test in the market is that are you growing and it's happy to see that at least so far I mean you know in today we are in that scenario you cannot predict what's going to happen even two months three months later because of the COVID circumstances but so far things are looking much much better and growth is back which I think is a good sign for the industry and good sign for the industry as well. And where is that bulk of growth coming from? I think more is it from cost savings and the transformation and other things or it is also coming from new business? Growth never comes from cost saving okay maybe able to improve your margins by cost saving growth comes by getting more business that business may either be organic or inorganic or whatever you may be able to have better extraction from that business etc but my focus always is to grow the business even hit by a pandemic you know the once in a hundred year kind of a scenario it dropped down the overall revenues that the businesses had in most markets in fact I would say in almost all markets it dropped the revenues down obviously the cost base has to be adjusted to the new revenue level the drop revenue level but you're never going to be able to grow back by cutting the cost you have to get your cost in line with the new revenue there's no doubt about that and that's a very important exercise to take but in my view if you have to go out of that get out back to where it was you're going to grow so when I say growth I mean business growth revenue growth that's not going to come ever from cost cutting in that sense so my focus is that what are the other services you can provide to a client can we give a more integrated offering to a client and therefore charge a premium for that offering or are there any parts of the offering which currently the client might be using me for let's say only creative can I also offer media services to them we are for example leaders in digital in CXM and tech and all of that can be and every client needs that can be also offered those services to them so that's where growth comes in and I think that's that's where our growth is coming in for my case you handled the entire APAC region you have already touched on that I would want to understand in detail which of the markets have been most resilient and if you have to measure India on that resilient scale where do we stand and which market can we take inspiration from you know which has similar kind of situations and in terms of resilience I would say markets like Taiwan markets like Vietnam were relatively least impacted by COVID they even Singapore to an extent they managed their COVID situation the number of cases or the number of the amount of disruption better than most other markets did so I think they stood out but then like again like I said some of them are now having their almost like their first wave forget about the second wave in terms of the market that actually got hit the most and earliest was China if you remember this we had an office and we have an office in Wuhan which is quite a large office big offices in Shanghai in Beijing and so on and so forth and even before the Chinese New Year last year somewhere around February things were already coming to a grinding halt and the number of cases so they were hit first even before the rest of the world hadn't yet realized even being India hadn't yet realized the scale and enormity of it so but but while they were hit first they also actually bounced back much earlier than others and I think that's a good example so if you look at the GDP of China for the first three or four months of this calendar year it's actually grown by mid teams I think 17-18 percent or something like that is the figure so what a tremendous they were hit last year and the growth has already started coming and I think that's the that's what India as a country should also aim for there is no doubt that our economy got hit last year and therefore every aspect of the economy got hit but I think as things improve as vaccinations improve as the health situation improves our focus now has to be that how does the economy quickly bounce back and growth starts coming in and like I said I feel that process will be gradual and I feel it's around the festive season that you'll see it coming from our industry perspective that you will see it coming you know more to itself this feeling of despair that a lot of Indians have experienced in the last two months and you know still the consumer sentiment all those things that you people talk about you know it has somewhere been heard do you think this will also impact festive season in the long run or by then most of the people would have come out of it? I hope it doesn't impact for two three reasons one is we are a very resilient nation Indians you know we can take a lot we can absorb a lot and then get on with it maybe it's a part of our feeling of karma or 5000 years of culture or what I don't know the reason I'm not the expert on that but we're quite resilient as a nation when hardships come we all come together when we get out of it and we you know move forward on that so I do feel that we will get there because look everything there are a lot of things which are in our favor we have a large young population which is moving very fast our economy even in the worst case scenario if you listen to the most negative of the projections you know different people are giving it's still showing a high single digit growth at least some are saying double digit but most most of the estimates are coming of the economy between 8 to 12% or so so I don't know where it'll finally land but if you're going to grow at 8-10% in that then growth is going to come back we have I'm very optimistic about India for medium term or long term look there are 1.3-1.4 billion of us we have a huge market within ourselves with huge cost advantages we have an amazing talent pool you know when I was in school now many many years ago people always thought that population is our biggest problem it was one of the biggest problem you know and that they view out of population control measures who are being announced and today the world has turned on its head our biggest asset is our manforce our people our human force right so and that's what is giving us a domestic market to capture there are industries I mean look at the number of IT related startups that are relatively new when I say relatively you last two three four years may who are today commanding unicorn plus valuations right so we have the brain power we have the management capability there are 60 large global companies over a billion dollars which are run by Indians globally right so we've got a very bright workforce we have very intelligent people we've got a natural advantage in some industries at least like IT and I would hope even advertising one day because we've got very very good talent in that area so we've got a lot going for us we're also ages on our side we're relatively a younger population than the others so I see no reason why in the medium term or in the long run our growth will not be good equally as a nation we can shoot ourselves in the foot also so unless we have some political upheavals or communal upheavals or things that are unpredictable at this point in time I'm quite optimistic that the next 10 years India will do very very well and there are a lot of indicators to that you look at electricity consumption the way it's been going up you look at various surrogate factors when you study the macro economy you can see that we are poised for a good 10 years I think Ashish sir coming back to advertising and marketing industry I mean correct me if I'm wrong there was last 2020 in 2020 a lot of pictures were postponed you know because there was so much uncertainty many brands did not want to go for a new agency or they did not they weren't sure that you know if this is the right time to call the pitch and is it true I mean that's what I've learned a lot of pictures were held back last year if pictures won't happen then how do you get new how do you add new businesses I don't mind globally or in India globally they eventually started but in India particularly a lot of people at the moment if I look at Asia Pacific at the moment I think it's the busiest pitch season I've ever seen in the last maybe 10 years I guess I can tell you this you mean you mean a few months I'm talking of 2020 2020 the 2020 obviously in the middle of a pandemic pitching was still happening but obviously it was subdued right because the whole world was in the throes of a pandemic so the chances of that were but if you look at now let's say last three four months which is the which is the best measure that you get the most latest measure some of the largest FMCG companies globally are underpitched some of the big you know companies are underpitched some of the software companies are underpitched it's just some of the biggest pitches if you total it up that number will be will run into hundreds of billions of dollars on that and every agency group will tell you because globally it's the same few agencies that in you know that largely participate in these and I'm not only talking about media I'm also talking about creative they'll all tell you that I mean it's almost like you don't have bandwidth to pitch kind of a scenario so there's a pitch palooza I would say which is on as we speak some have already happened some are happening some are about to happen etc so it's a from a pitching point of view it's probably the busiest season in a long long time for a busy busiest three four months that the industry has seen in a long long time there's good news for the industry well e4m always knows all the pitches before they happen you should know it before I do no I mean maybe the last year was like so slow that I stopped giving track of them so I mean I knew about L'Oreal and we had reported some of them I'm not taking any specific name I'm just saying that globally there are lots of pitches and some are local pitches some are regional pitches and many are global pitches some are in the creative only area some are in the media only area some are combined pitches so there's a lot of activity you know in every adversity lies an opportunity so what according to you is the opportunity for advertisers in media in this post pandemic world I think the biggest opportunity is that we probably live through the worst and therefore you know there's always some amount of fat and wastage in any system that builds up over the period of time take one example of travel all of us were traveling 15 20 days a month we thought that there was no other way of working other than getting on to a flight to go for a 2 hour meeting and to you know spend a night in a hotel and then come back the next day with all and we thought that was the only way like for work I had never worked from home before this had happened ever ever in my life never not even one day right on that now we've realized that 18 90 percent yes there are some things that you still need everybody to come together but 18 90 percent of the work can happen pretty efficiently on video calls like we're doing one or or through other means of communication and therefore it may not be that necessary to some of some business travel may still be necessary but it may not be necessary to the extent that we were taking on earlier office space for example most companies at least the larger companies will give flexibility for quite some time to come to their staff right people are reluctant they've also got used to a certain type of a like state so the back to work is going to be a process it's again not going to be a switch that one fine morning you say okay now back to nine to six and every hundred percent people come in and log in at nine o'clock sign the muster and so on it's not gonna happen so office space real estate space how do you so there is a huge amount of I would say I wouldn't say wastage but I would say efficiencies that have come into the system and that money that you have saved can be put into transformation areas for example e-commerce for example digital in all of this and this is luckily the reason particularly in India where we were relatively less impacted and actually have done quite well in this period is because all this while we were saying digital is where you've got to be digital is where you've got to be ahead and the one part of the business which was least impacted of course everything was impacted but which was least impacted was actually digital and being digitally ahead helped us is helping us in a time like this so those some of those monies that you were spending on airfare or hotels or whatever can now be put into hiding better talent can be put into you know digitally transforming yourself if you haven't already done it etc etc and I think that's that's a big class the other bit I think is that after this pandemic geography is history it doesn't matter whether you're sitting in Mudafernagar or Mumbai if there is good talent which is available or Melbourne if there is good talent which is available you should now be able to attract them from anywhere because you know if you're going to be working virtually or you'll have the option of working flexibly then where you're located doesn't matter as much lesser I wouldn't say it doesn't matter in some instances it will matter but it matters lesser and lesser so it opens up a complete new talent pool a catchment area which I think is very very important for us because the single biggest problem that faces our industry and not just in India everywhere I think is people because as an industry we've been experts in poaching from one another somebody is there I pay 110 I get it somebody else pays 120 he takes so playing musical chairs with the same talent we've concentrated much less in growing the pool of talent that is available to us and the fact is if I look 33 years ago when I joined advertising today advertising agencies used to be day one companies and I am in the back right after a period of time we weren't even able to be day five company and therefore we stopped going to IM's then we started going to second-run MBA schools then we started going to only maybe good colleges and not and slowly why was that because there were so many other hundreds of other options that came up as liberalization happened as more industries came in which were much better paying the remediation and advertising was no way a match for a McKinsey or a city bank in those days or you know etc so you couldn't you couldn't keep pace with that when we joined advertising for example somebody came out from IIM one person went to Lintas one person went to Leavers same bad same everything there was 10 years later the situation was very different 30 years later it is completely different right so I feel the quality of talent going out from the industry is better than the quality of talent coming in so one of the biggest challenges and opportunities therefore for us is to get in great talent and to make sure that the talent we have is properly looked after retained incentivized is bright enough and I feel this flexibility in working future way of working etc will be steps in that direction and we can at least you know use it for some some correction in that side and collectively as an industry we've got to grow the talent pool in advertising as an industry rather than only concentrating you know coaching from from one another. Sir before we conclude I mean I would just want to understand that were there some kind of initiatives that ensue as a company took for employees who were suffering from COVID or you know or their families so it is small about you know because this is resilient story you know what were the things that we as a society did for each other if you can share some examples. I was completely overwhelmed by the kind of response that forget us as a company as individual employees were getting in that first of all our global company I mean globally for India specifically for India when we were in this thing our global company ran a donation voluntary donation campaign through you know through an NGO in Britain so to get oxygen concentrators if you remember at that time oxygen was the biggest problem not only did the company donate a lot of money but individuals donated a lot of money to help India not their colleagues in India but to help India and I think that was brilliant when you have you know 50-60,000 people sort of helping in that you really feel good and you feel a part of that on that way. In India I think Anand and his team really really did so there were two three kinds of efforts right one is a very organized structured kind of a practical effort so for example insurance covers to be increased in case somebody has a sad unfortunate instance of somebody passing away make sure that the insurance or through other ways you're covering a few years of salary to that person but the family is less hit right then there were practical issues to be for example tied up with several hotel chains you know people don't have place to quarantine it's easy because not everybody is staying in very large homes where you can take a separate home separate bathroom etc or if you're fearful somebody in your family has got it how do you prevent from you know what do you do etc many of our staff stay as paying guests or you know shared a accommodation etc on that so we tied up with hotel chains that are I mean as a corporate deal or whatever so in case somebody has a problem you could do that various I mean oxygen which was a big focus so we have a division called Indeed which is our CSR division work with government authorities in Haryana which is for Gurgaon and several government state governments Maharashtra government etc to see work with some of our clients to see how that could be fulfilled we had a doctor on on call wellness programs and and it's a continuing effort on that but to me the most heartening thing was that individuals leaders in different team leaders leaders in different locations because everybody was as helpless as anyone else they took it upon themselves my team's mother needs this medicine immediately everywhere you know the news is spread in that network and everybody's running here and there to try to arrange that because it was a survival issue in that stage nobody is bothering about who's paying where's the money coming from and I think that spirit to me was was like a silver lining in a otherwise very dark cloud and while 100 activities are going on were going on particularly touched by the world doing this for India and for Indian individuals doing it you know for their colleagues and their colleagues relatives and so on and I think to me that shows that that makes me so proud you know of of India as my country and so as my company and all the people in it so to me I think that was that was one good thing thank you so much for talking to us it's always pleasure to you know have any conversation with you and it's so much to learn from you so thank you again and wish you all the best stay safe thank you