MUMBAI: Catch them young. That's the mantra for Tata PowerBSE -0.30 % Company (TPC) and Reliance Infrastructure (R-Infra), the private power distribution companies in Mumbai, which are targeting children to establish their brands in the city.
Mumbai has the unique distinction of having two power distribution companies (Discoms) competing for users in the city's suburbs. Around five years back, TPC made an aggressive entry into Mumbai suburban retail electricity business, which was until then dominated by R-Infra, leading to cut-throat competition between the two.
"The Electricity Act seeks to introduce more competition in the sector so that consumers benefit. Going ahead, the tariff offered by different distributors may become similar; then the differentiating factor would be the services provided by the companies," said VP Raja, former chairman, Maharashtra Electricity Regulatory Commission.
TPC's consumer base has expanded to 3.5 lakh from around 25,000 in 2009, driven primarily by consumers who were lured by cheaper tariffs on offer. R-Infra has 28 lakh customers - but around 22 lakh are lowend consumers, whose lower tariffs are subsidised by other customers, making it difficult for the company to match Tata Power's tariffs.
The bitter fight between the two forced the state's power regulator to ban households using more than 300 units a month from changing over, until October-end. This deadline may be extended, but the companies recognise that they need to build their brand to beat the competition to protect the "cash cow" — the electricity distribution business, which ensures regular cash flows, at a time when the power generation business is facing roadblocks.
Around the time TPC started expanding its distribution business in Mumbai suburbs, both companies launched energy conservation programmes through schools. This Corporate Social Responsibility (CSR) activity doubles up as a branding exercise.
"Indians have so far never cared about who supplies power to them, simply because they had no choice. But now that there are options available, companies need to establish their brand and win consumers' loyalty," said brand consultant Harish Bijoor, founder of Harish Bijoor Consults Inc.
TPC started 'Club Enerji' in 12 schools, which has now reached 400 schools across India, with over 250 in Mumbai. R-Infra's 'Young Energy Savers' programme has now reached 200 schools in Mumbai. They educate children about conservation and sustainability, organise activities, and encourage their young "ambassadors" to spread awareness in their neighbourhood.
"Electricity is not a branded commodity. But competition in the market and choice available to consumers have made companies undertake various consumer-friendly activities that increases their brand equity," a spokesperson from Reliance Infrastructure said. Tata Power seemed reluctant to call its initiative a branding exercise. "Our aim is to sensitise people in Mumbai about energy conservation.
These children help us educate people how conservation can lead to actual savings in bills," a Tata Power spokesperson said.