Smaaash will grow from 22 stores to 50 stores in next 6 months: CEO Shirish Kotmire | INTERVIEW

Gaming and entertainment center operator Smaaash, after having to shut down its business during the first Covid wave, has come back stronger than ever and will grow from its current 22 stores to 50 centres in the next 6 months. “Our expansion strategies are a mix of metros and smaller cities. We will grow from 22 stores to 50 stores in the next 6 months. These are across our traditional Smaaash format as well as shooting range formats. And it costs us approximately Rs 8-15 crore per center currently, which we are trying to reduce going forward,” Shirish Kotmire, CEO, Smaaash, told Tanya Krishna of FinancialExpress.com.

With its 2.0 version, Smaaash has stepped away from its traditional kids oriented offering to a business that caters to the needs of young adults and working professionals. Shirish talked about the company’s transformation, its strategies to bounce back from the Covid impact, the relevance and acceptance of concepts like Smaaash with Indian consumers, among other things. Here are the excerpts from the interview:

What is really the 2.0 version of Smaaash? How have you transformed the brand during the Covid?

Smaaash is an experience-led brand and the pandemic induced by Covid was a very big dampener for us and it had a huge impact on our brand – both from the gaming center as well as F&B side of the business. So we really had to go back to the drawing board and look at what is it that can attract our consumers back to Smaaash, during Covid. We restrategised a lot of things, including use of plastic covering for headsets in the VR games, innovating on the kind of assortment as well as on the price, etc. We basically deal with four of the basic human emotions – thrill, competitiveness, skills and redemption and post Covid, we started focusing on games which require less physical contact.We upped our entire game and started leveraging these four human emotions more aggressively. We also increased the redemption rate from a customer’s 50 per cent chance of winning gifts to a 70 per cent chance for winning. We lowered the entire qualification criteria for winning that gift.

How is the brand performing currently (in terms of revenue generation, growth rate, etc.)? What are your targets for growth by the end of this year?

We re-started operations at Smaaash, after the second wave, in September 2021 and while it did not pick up immediately, December was a watershed month for us since people really started to cover out during then. In terms of numbers, we did about Rs 12-13 crore worth of turnover in that month. However, with the surge in cases, we had low numbers during January, wherein we witnessed only about 8 per cent of what we did the previous month. February was when we started recovering again and March registered a 50 per cent growth over February. We did approximately about Rs 20 crore in March.

Typical behaviour post relaxations in Covid related restrictions had people looking for places to hangout, etc. Since we present a very unique offering which is gaming plus F&B concept, it attracted a lot of attention from people. We expect to grow by 15-20 per cent on a month-on-month basis and reach a run rate of about Rs 25-30 crores by the end of this September.

What is the overall percentage of games at Smaaash that uses virtual reality?

Our standard tender is of 10,000- 12,000 sqft area and we have around 40-5- games at a typical centre. Overally, we have about seven or eight games which are based on virtual reality, which is about 15 per cent of the total games but these contribute to about 20-22 per cent of the overall revenue. From our new assortment of games, we are expecting a revenue contribution of at least 30 per cent and these new games will also bring back our old or regular customers.

What are your expansion plans, going forward?

We are present in about 17 cities right now, in 22 centres. Our expansion strategies are a mix of metros and smaller cities. In metros, we are expanding with three centres in Bengaluru, about seven centres in Delhi-NCR (three of them are in Noida, two in Delhi and two more in Gurugram). We are also opening a few centres all across Punjab and in UP, we are expanding in Lucknow and Kanpur. We will grow from 22 stores to 50 stores in the next 6 months. These are across our traditional Smaaash format as well as shooting range formats.

What kind of investment are you planning to make for these expansion plans or even bringing in new innovations at Smaaash?

The kind of investment that typically goes into every centre varies between Rs 8-15 crore and most of this investment goes into readying the centre and sourcing the games. We are trying to reduce that by having our in-house innovation and game development facilities. We have expanded from one R&D centre to four R&D centre where newer games are being readied. We are facing a few difficulties since the last two to four months due to the semiconductor shortage and since we mostly depend on imports.

In any case, we intend to keep the investment at the same level for this but are trying a few cost cutting measures around the capex that goes into the store, and this will not be compromising on the experience part of the centres. Further, we are also planning on bringing in at least three to four new games every month and most of these games will be concept games dependent on technology. Our investment in R&D will also increase because that’s the differentiation that we have over others.