The viceroyd of Mumbai, as the company calls itself, is the quintessential cigarette seller.
With its sleek black and white logo, a giant box with a cheery red logo and a nameplate that says ‘Mumbai-India’, the viceroyalty company has been the subject of intense scrutiny from its detractors, but there is no denying its popularity.
A survey carried out by India Today, a consumer-focused news website, in February found that there are over 10 lakh cigarette sellers across the country.
But with more than 500,000 customers in Mumbai alone, the company has become a symbol of the city’s booming business and its growing reputation as a centre of smoking.
According to Vinod Tiwari, a Mumbai-based lawyer and cigarette industry consultant, vicerox is seen as a ‘bargaining chip’ in the tobacco trade.
‘They can offer an extra discount when a customer buys their cigarettes from them, but in the end, they are only a means to an end.
If a customer smokes in a shop, that’s it,’ he said.
Viceroys are seen as the best place to get discounts on cigarettes.
With the price of cigarettes rising over the last few years, it has become difficult for anyone to buy a pack without paying extra for the privilege.
With a discount, you can get away with less of your money.
Vicaroy, which was started in 1992, has been a big part of the business for decades.
The company’s founder, Vijay Shetty, was a businessman who had bought tobacco from local tobacco sellers.
‘I was looking for a way to get away from paying a premium for cigarettes,’ he told India Today.
He went on to found a firm that made the bulk of the tobacco products sold in India.
‘A lot of my customers come from the tobacco-growing regions of the country,’ he added.
‘We have a very good relationship with them.
They give us discounts.
They have come here for a cigarette, we give them a discount.’
After a couple of years, he started a rival firm.
But it soon became apparent that the deal was not going well.
Viceroys were selling cigarettes at a higher price than what their competitors were offering.
It was a big headache.
The company’s management had to put in a lot of effort to try and appease the tobacco buyers.
‘When the prices of cigarettes went up, we could not afford to give discounts to our customers,’ said Vijay, adding that he realised that the situation was not working out.
‘What if the prices go up?
Why would we continue to sell at a price that’s lower than what our competitors are offering?’
He asked his colleagues, ‘Do we want to make money off our customers?’
The solution, he said, was to start selling in larger quantities.
He also decided to sell cigarettes in bigger quantities to attract customers, especially those who had never tried tobacco before.
Vikram Mishra, a marketing consultant, said the idea of a cigarette salesmen was a dream come true for a Mumbaier.
‘Vicarious, enthusiastic and very intelligent, Vinod is a rare breed,’ he says.
‘He’s got the best salesmanship.
He’s an entrepreneur.
He knows what he wants to sell.’
According to Tiwaris father, Vijayan Shetty has always had a very entrepreneurial mindset.
‘People come from different parts of the world to buy cigarettes.
So it’s very natural for Vinod to try out different products, even if he doesn’t have a big business model,’ he recalled.
‘The fact that Vinod sells at a profit is something that has never happened before in Indian history.
Vinod has always sold cigarettes at the best price.
He is not trying to make a profit from selling cigarettes.
He just sells them for the same price as his competitors.’
The company, however, has struggled to meet its revenue targets.
‘There are too many people who are not buying cigarettes because of the price.
It’s a big challenge.
And the prices have gone up,’ said Tiwar.
The challenge faced by the company, Tiwares father added, was that the demand for cigarettes has increased in recent years.
‘It is very difficult to meet the demand of customers.
Vinoy has been doing it for 30 years, but he has not been able to bring in the revenue.
Vinotals revenue is lower than the revenue from tobacco.
So, the problem is, the prices are higher,’ he explained.
Tiwari also believes that the price hike was the result of a government campaign to reduce smoking.
‘For years, we have been asking the government to reduce the prices.
But the government has not done anything.
Now, Vinotal has decided to do something.
The government needs to understand that the cigarette industry has to grow.
The prices need to come down,’ he pointed out.