Wednesday, November 30, 2005

Real estate ads, trees and Bangalore

Bangalore is going through a property boom as are many parts of the country. The hope, as usual, is that the rise will continue for ever. Bangalore, for its part, is trying its level best to crash home prices and send industry packing with ever worsening infrastructure, but to no avail.

Anyway, thats not the point. Because of this property boom, one gets to see of lot of ads in the newspapers about upcoming projects. This is how the typical ad of a building looks like. A nice building surrounded by "acres" of greenery. Streets with trees, plants on the footpaths and surrounding plots with lush flora. Take a closer look and you will find few trees, if any, within the compound itself. Why? With land prices going northwards, the area occupied by a tree is worth lakhs of profit either as a building or parking space or converted into landscape with some dwarfish plants and pesky grass.

Bangalore is one of those funny cities with greenery in company campuses, parks, along (some) roads (paths) and in the military areas. Buildings and apartment complexes have few trees if any. Townhouses or houses built on plots have no trees (the ones who have a house and trees in their own plot are extremely rich or stupid depending on which way you look at it). These, incidentally, are the very people who organise morchas on roads to prevent trees that obstruct traffic from being cut down.

Monday, November 28, 2005

Business mags online strategies

While on Businessworld, a thought on the various strategies used by business magazines with respect to their websites. Businessworld has a website which has free registration (if you are from India) or a paid subscription (if you are from abroad). BWorld has a section called web exclusives. BusinessIndia, I am not sure has any presence on the web. BusinessToday on the other hand has a some sort of a snooty presence on the web accessible to subscribers only.

If I were the magazine owner (or editor), I would have a presence on the web part of which is free content (for example, the current issue or some part of the current issue). I would also have some sections accessible only to my (print and net) subscribers or on payment (archives qualifies as a good example). Meaning, I would use the free content to generate more print sales and subscriptions on the web. I would also rather have print exclusives with more analysis than web exclusives. A shorter version and dynamic content could be purely on the web. I am pretty sure with BRICS, there is a demand for India specific business analysis. Perhaps letting everyone access case studies (the market for it is the MBA students market, which will stick with the magazine once they are hooked) is a good idea, perhaps letting them contribute is a better idea.

In my analysis, BW seems to have got it somewhat right, but it can be tweaked some more. BI, I am not sure if it has any presence, but its print edition is more volume and less analysis. BT offers the web only to subscribers, which I think limits its subscriber base and takes it off the radar for most. Globally, I like the Businessweek website, thats the path I would like these mags to take.

1 rupee tickets?

What I last wrote on Deccan set me thinking. That Deccan airways, though popular because of its cut throat fares, does not really serve the populace it intends to serve (those who think flying is unaffordable etc. etc.). Its 1 rupee and 500 rupee tickets are usually hunted down by bargain hunters (for techies in Bangalore it is almost a hobby) and many trips are made because "paanch sau ka ticket mil gaya" and not because anybody really wants to fly. Deccan typically announces cheap tickets by way of newspaper ads and on those days the website is as crowded as a Kumbh Mela (thats the physical equivalent when the website begins to crawl). The 1 rupee and the 500 rupee tickets disappear in minutes from the time it is opened for booking.

Should Deccan tweak its system, to ensure that the tickets go to make flying truly affordable for those who need it (I mean Senior citizens, disabled, perhaps someone who needs to travel on an emergency) ? or should it just continue the way it does currently? Is there any reason for it to do so?

Can I have my Web 2.0 please?

Wheres my share of the fad? A new word is being used, Web 2.0. This week (or is that last weeks - cover story is on the Slide of the Rupee) Businessworld has a story on how the major Indian portals are planning to cash in on the high valuations to raise capital from the market.

The article begins thus "Web 2.0 is showing its first traces in India and the Indian Internet companies are buckling up for it. Over the next year or two, four of them, Indiatimes, Naukri, Rediff and Sify are likely to go for IPO's and list in India."

Well, they have every right to go and list themselves but this has got nothing to do with Web 2.0. Web 2.0 is a definition that has no real shape or form yet and if one goes with what is "agreed upon", none of these portals qualify. They are as Web 2.0 as our Maruti is a Mercedes. Perhaps the magazine takes Web 2.0 as a mere resurgence of the web (and companies and stocks, a la Baidu in China). In which case too, these portals fail since there are barely any web portals listed in India.

Thursday, November 24, 2005

24 hour pharmacy

Ever gone to a 24 hour pharmacy shop? At an odd hour like 4 am? By 24 hour pharma shops, I dont mean the kinds that are attached to a hospital, but the stand alone ones. Ideally, since it is night and access to a doctor could be difficult, the person who takes the night shift has to be the best staffer since very often patients approach them with vague requests. This may not be the best strategy, since it is the doctors who have to be consulted, but this is the situation a night duty staffer in a 24 hour pharma shop usually faces. But, obviously, the most experienced staffer in such a shop is the one who is a veteran, hence he does not have to "take" the night shift, so it is the rookie who gets posted many a time!

Much like the forward short leg at cricket which is inevitably (atleast in the Indian test team until recently) manned by rookies, while in theory it has to be the best fielder at that position.

Wednesday, November 23, 2005

BPO jobs are going

We love to do this dont we? Just when the BPO industry in India gets going, there are our bunch of devils advocates. (I am from that part of Indias population that thinks that call centers are great opportunities and not slavedoms).

The latest trends that emerge are that, wages in the service industry in India are going up fast, hence industry may shift out. The other is that talen in India is becoming scarcer. And where are those jobs going? Philipines and some other "big" countries.

The first argument first. Wages. Have wages ever remained in any industry for more than a few years. More so, have wages ever remained constant in any industry in a booming phase? Add inflation. Add the fact that companies are making profits. Which direction would wages go?

The trick to labour cost is not a direct function of wages, but an increase in productivity. It is like trying to convert your income of thousands into crores by saving 10 rupees. Unless your income increases, your savings will never increase, scrimp as you may. It wil help, but only just.

Similarly, labour cost. Experienced people come at a cost. A pretty high cost. The top technical architects, solution designers cost pretty much the same in India and the US. We score because we employ freshers where the US employs experienced people. So, when wages are going up,
what do our companies do? They broaden the base. Substitute more freshers where they could use experienced people. How? By tweaking processes. But processes can help only to a limited extent. Can you make a coconut tree climber into a pilot only by handing him a book on processes? No. A certain level of skill is required. (When does knowledge become skill? Training and practice but thats another story.) So to cut costs, companies hire freshers and put them through a rigorous training and increase their productivity. Is this simple? Take my word for it, it is not. So, say our pundits, work is going to Philipines.

At last count, Philipines had less than 1/10th ( 87,857,473) of our population (India: 1,080,264,388). Even if we assume all of them are fresh engineers (okay, so this is a long shot) or people willing to take up call center jobs, they are still some way away. (Read the above riff on productivity and processes). Yes, some jobs will go to Philipines and other nations, but they wont go away entirely unless we do something really bad. Bangalore is trying its real best to send the entire industry out of the city and if it succeeds in driving industry away, may be we can all go to Philipines.

Tuesday, November 22, 2005

Retail FDI and the false arguments

There are many well known arguments all of which are against bringing retail FDI into India. The most heard ones are that it will destroy the kirana (should they really be saved- more on that later), it will destroy the social fabric of india, sourcing from China will wreck indian industry and it will reduce the availability of jobs. Jobs. It is a myth that kiranas provide jobs. Apart from self employment for perhaps a family or two, kiranas by their very nature employ family memers or child labour or underpaid labour imported from villages. Organised retail, on the other hand will provide more in- shop jobs. Walk into any big store and you will know what I mean.

Yes, retail FDI will cause a fair amount of unemployment, but that will mostly be for the middlemen who would have been eliminated because of direct sourcing. This is especially true for farmers. The sooner the farmer gets into the mode of talking to the ultimate buyer, the better it is for the industry. The sooner we bring some semblance of process to the farming sector, the better it is for us.

It will not kill the kiranas, maim them yes. It will surely reduce the quantum of business going to the kiranas, but the cause is not the entry of big stores. The cause of it would be changes in the buying patterns. People would buy more and at less frequency. Between these big ticket visits, the kiranas would fill the gaps. And then again, unless you are really close to a big store, where would you go to shop?

The kirana. The big thing about organised retail (foreign or Indian) is the fact that it will eliminate the profits made by the kirana (and some of which is passed onto the customer) by way of tax evasion. It will open up newer sources of taxation too- the rich farmers (and there are many/all of them) who dont pay a rupee as tax.

Monday, November 21, 2005

Kingfisher vs Jet

I had the chance to travel on Kingfisher airlines, one airline which has taken a contrarian stand from the current lowest cost strategy. Kingfisher has positioned itself as a value carrier, which means it, in theory matches the service level of Jet (easily the best in India) while not being as pricey as Jet. At the same time, it is not as cheap as Deccan.

I liked their flight for quite a few reasons and it was not because of their in flight entertainment or air hostesses. They are courteous, punctual and good to their passengers. But importantly they have brought back a small joy in flying. This is a novelty not for regular travellers though, but is a good thing for the one off traveller. A small pouch (smart idea in these days of mobile phones) with earphones, pens engraved with Kingfisher (What else?) is presented to each traveller. A neat brand building strategy, especially considering repeat travellers would pass it on to someone. The food is good too, as good as Jet once used to be (I would rate Jets food as slightly below par these days).

Deccan needs to improve

Air Deccan has to get out of the image of the cheap service. Cheap tickets should not mean poor service or low punctuality, something that will cost Deccan in terms of repeat purchases.

Deccan would do well to remember that many of its travellers are not necessarily the segment it is targeting. Deccans avowed aim is to make it easy for anybody to fly, but right now it is attracting people who can fly other airlnes, but who are looking for a bargain. If it loses such people, they will be move to Kingfisher and perhaps Spice.

For reaching out to the real common man, Deccan has to make its service better for better word of mouth goodwill (there isnt much of it these days) and expand the reach of its ticketing outlets. Its quite painful to spend a hour or two in the airport for a flight of an hour especially considering that airports are far away from many townships in India, unlike railway stations. And some airports in India (notably Bangalore), due to space constraints, even the lone coffee vending machine has been removed in the boarding area, so if you are caught there after security check and your Air Deccan flight is delayed, just fast!

Sunday, November 20, 2005

Infy, Wipro, TCS as venture capitalists?

I am not sure if I have heard of this one in India or if something of this sort is starting off (Nirmalabs is not really the same thing). There were rumbles of such an incubation facility within one of Indias big IT firms, but not sure how far it has gone. The top tier IT companies with their cash and their expertise can easily kick start a whole new series of businesses and ideas in India.

The time is ripe for Infy, Wipro and TCS to shed their "We only operate in services" image and reality by using some of their cash, expertise and perhaps even infrastructure to incubate some new ideas either conceived by their own employees or tie ups with IITs and IIScs (TCS does some of this already). That will ensure that India does not remain relegated to the role of service provider for ever.

Friday, November 18, 2005

What is it about reading blogs?

From not knowing what they were (blogs), to reading blogs to getting hooked onto them to creating ones own, it has been a while.

Emergic was the first blog I began to read sometime in May 2004 or thereabouts. The person who introduced me to blogs, Manoj, said it was a good source of information among other things. What it was I never quite got it before I hit Emergic. From emergic, during one of the blogsurfing tours, one of my early stops was Seth godins blog. That seth godins blog is nothing short of remarkable is something I neednt say and it got me clicking here and there collecting links, adding them to favorites so much so that one point, I had almost a 100 blogs to read.
Businesspundit, The carnival of the capitalists were among the ones that I never missed. How can I miss the amazing blog on Creating passionate users!

The best part of a blog of someone like Seth and Tom Peters; is that these are direct thoughts, more often than not written by them directly, and not added with vishesh tippani of some arbit editor! The other is that blogs are where information circulates (as an idea) until it finds its way in a book (Freakonomics and The Long Tail being the prime examples).

Slowly, I shifted from reading newspapers to reading blogs. Blogs like Seths make (force?dare?) you think, question and come up with answers and slowly incorporate it as a part of daily life. I am not into personal blogs, but thats because of a personal (dis)like.

Finally, I like a bit of analysis, some humour, forgotten quotes, history, new perspectives, something new that I havent heard of, something that forces me to think or somebody who points to any of the above! Every morning, I go through my bloglines list to find any or all of this!More power to the morning cuppa with blogs!

Wednesday, November 16, 2005

Toy design


The above images are the images of a toy phone and a real phone. Needless to say which is which. The toy is amazing to the point of being nearly real in terms of its behaviour (its actually better) and that it has immense learning value. I am pretty impressed, but my child is not. If its not the behaviour that distinguishes it, apart from the bright colours of the toy, then what is? Even very small children seem to know which is a toy and which is real. The child knows exactly which phone is a toy (which he does not want) and which phone is the real one (which is the one he wants). I am not sure if this is entirely because of the way it looks or behaves (design), he perhaps observes that none of the adults use his phone to talk, so he wants the phone which everybody uses. There are two remote controls in our house but he wants one which is the one "in use" or perhaps "in vogue".

The other point is, are toys made bright and colourful and attractive so as to attract the child towards it or attract parents towards it? No prize for guessing if toys were grey and white and looked like the ceiling, how any buyers they would attract. Children do get attracted to bright colours (and I have seen that), but I guess they are also fairly smart to realise that these things are toys and what the adults use is the real thing!

UPA CMP is new Class XII lesson

reports the Indian express

...this was done to ‘‘explain to the students what a manifesto of a coalition looked like.’’ However, the opposition coalition’s manifesto finds no such mention.

The new syllabus has also a lot of notable omissions. While the previous one had mentioned Kargil war, the new one has not....

Great! Lets have some lessons on Laloo Yadav (why stop there?), eulogies of some corrupt ministers and paeans to some family loyalists! With visionaries like these ru(i)nning our education...

Tuesday, November 15, 2005

TCS, SBI JV

Reports Hindu Businessline:


...Tata Consultancy Services and State Bank of India have formed a joint venture company C-EDGE Technologies Ltd that will offer technology and consulting services to the banking, financial services and insurance industry (BFSI).

The 51:49 partnership between TCS and SBI, targeting the BFSI sector is a surprise of sorts. TCS is associated with SBI as vendor for rolling out a core banking solution for the latter. Also, TCS last fiscal had nearly 35 per cent of its revenues coming from the BFSI vertical...

Read the whole report here.

ICICI is already into IT. SBI is following suit with help from TCS into a new company. There are many examples. Mahindra diversified into IT a while back. So did ITC and L&T. Wish SBI had got onto the bus earlier than now!

Malls and prices

Are malls driving up prices? I had taken the example of readymade garments in a post a week back and the more I think of it, the more it seems likely.

A perfectly simple glass of orange juice would cost atleast 25 rupees when it shouldnt be worth more than, say 10. But it is the corn available in those small ice cream cups that takes the cake. 25 bucks for corn? The corn with your regular street vendor would cost you perhaps 5 bucks at the most!

But then, smartly dressed people, perceptions of hygiene come at a price dont they?

Monday, November 14, 2005

Outsourcing 101

Take the example of a house in a village a hundred years ago. They did everything by themselves. They grew their own food, most of their vegetables, fruits. Water for their farms came from their own well. Many even had their own ponds for a bath. They made their own snacks, pickles and to a large extent were self sufficient.

A hundred years later, very little is being done at home. Home means just the core functions. A basic family unit, their incomes, their outflows and their fun. Everything else is outsourced. Cleaning the home, washing the clothes, cooking and a whole bunch of other stuff are outsourced to either machines or humans or businesses. Pickles, papad, sweets and other items which were hitherto made in the house are now purchased from a shop or sourced from someplace else.

Those who oppose outsourcing sitting here in India ought to think of this perhaps.

English, modified

Ever heard of ghaaslet and paana? They are corruptions of (I presume) gaslight and spanner (this one I am pretty sure of) and mean kerosene and spanner. Ghaaslet is Marathi and paana is perhaps hindi (workshop language)

These are not the only such words and there are probably many others. Rockel (again kerosene in Marathi) is perhaps a corruption of Rock oil, but I wouldnt know. God Tel is literally sweet oil (meaning edible oil in Marathi) and I realised the connection on seeing sweet oil written on the side of a Goods tanker train.

Know any more such corruptions (and not official words) in any language?

Saturday, November 12, 2005

Unions in BPO?

So, the BPOs are set to be unionized. If our left parties have their way that is. What is the function of a union? It is to safeguard workers rights. Unions are the product of the industrial revolution when "evil capitalists exploited poor workers". Is it the same today? I leave you to guess. Heres my take on this subject.

Unions reduce productivity. There may be exceptions, but as a rule unions reduce producvitity. In an auto company I briefly worked for, unions had a target of producing x vehicles per shift when they could have easily produced 5x vehicles. But there was an agreement in force because of which they had a target of x vehicles. They came in on time, made the x vehicles in no time and duly took a nap till the shift ended. (Also Bajajs story in their new Chakan plant is only too well known to be commented upon.) Imagine if BPO associates stopped taking beyond 10 calls per person per day. There are stories of good unions, but they are mostly unions which are run by the workers, without any political affiliation. The moment there is a political affiliation, the business loses its edge, one way or other.

Unions breed corruption. There are a few ring leaders who can be bought at the right price (visit any movie of the 70s with the angry young man and you will know what I mean). Now the BPOs are as egalitarian as they can get. You need not speak a certain language or be born in a certain place to hold your job. Your performance is the only criteria for your entry into the job, holding your position, career growth and exit.

And there can be many other reasons on why unions are damaging to the growth of industry. Stories of industries which died out or were driven out due to unionism abound, much more than stories of "evil empires" built on the "blood" of workers.

Truth is, unions are passe. Collective bargaining, the whole idea behind unions is mostly collective blackmailing. Today with job mobility and international companies by the dozen, employees are free to choose and it is the employer who loses if his employees are not a satisfied lot. If the company policy is "not good", word spreads around very very fast and attrition is there for everybody to see. Salaries are low or the work environment doesnt measure up, the grapevine has it all. In the real world when workers were illiterate and ignorant of their rights a union would ideally work toward safeguarding workers rights (rights on the job, safety) and improving the lot of the workers. The number of unions which have had a positive effect can be counted on the fingers. Today, BPO associates are educated, nay, well qualified, amazingly networked and pretty sharp. They are fully aware of their rights (and responsibilities). They perform and keep their job. Else they can be fired. Companies pay them well and keep them happy. Else the company loses out. Where does one need a union here?

Wednesday, November 09, 2005

Newspaper clippings nostalgia

When I was a little boy, one of my favourite hobbies was to collect paper clippings of interesting things. It ranged from new technology to future directions to science to automobiles. I started collecting clippings from the time I was about 8 years old and it continued till about the time I was out of school (matriculation). It then reduced in frequency and continued for a few years after that.

This bunch of my paper clippings occupies a small amount of space at my parents house. Every visit there and I take a few minutes out to see my collection. I have never felt like throwing it out, since it is really more than just a paper cutting collection. It represents the working of my minds in those days. It shows the evolution of my thoughts and of the hopes I had in those days.

An article from Mid-day sometime in the 80s screams "Flying trains by the 90s" for Mumbai - aha, nothing has changed even 15 years after the 90s began.
Yet another one in 1985 from the now defunct Evening news of India says "Star wars will rage". Hmm, so they do.

Between assorted pictures of Navy frigates and fighter aircraft, lies my whole paper clipping collections. I remember, as a schoolboy I could spend hours poring through it.

This time around, with my few minutes around it, I realised how the internet has made paper clippings obsolete...

Dollar store

At the Vashi Center One, a mall, is a store that calls itself the Dollar Store. Modelled on the likes of the Dollar Stores across the US, this place prides itself on selling items in the range of 49 to 99.

Inside are cheap imports - not just from China, but also from US, Europe and perhaps even the Middle East. Thats not what I like about this store. What I like it is places like these signal the end of cheap snob value. No visitor from abroad can pass off some cheap brand as a gift.

That the store is packed with bargain hunters (some import surplus Lego toys were available for 99 bucks) is testimony to their success.

The average Mumbaikar has a way of using dollar in his day to day world. 5 rupee coins are known as 5 rupya dollar!...and now its the Dollar store.

Tuesday, November 08, 2005

Irritating decoration


This irritating decoration can be found outside shops.
Shops which sell utensils, electronic goods, sweets (as above) and even shops which sell potato chips.
The idea is borrowed from the traditional Indian decoration for a pandal and gives the appearance of there being some special offer.
But there aint no special offer.

All marketers are liars, anybody?

For 70 rupees...


This car is worth 70 rupees. Thats the MRP (maximum retail price) on the package. It includes transportation costs (all the way from China), distribution costs and anything else you want to factor in. At this price, it earns the distributor, the end seller and even the manufacturer a profit. I wonder what its cost price would be if each of these entities have to make even a semblance of a profit.

The car is no ordinary push pull car nor is it a clockwork thingie. It car is a remote controlled car (see the control box in the background), the kind, atleast for me, of which is out of reach due to budget constraints. A branded car like this will not come for less than a 1000 rupees. Sure, this thing is not a handcrafted model Ferrari, and is quite tacky in fit and finish and finesse, but it is a remote controlled car, no frills.

70 rupees! For 70 rupees, one can barely get a kilo of apples. I can get a little over a litre of petrol. 70 rupees is a little under 2 dollars and I dont even want to go into what 2 dollars can get you.

Thats Chinese manufacturing for you.

Monday, November 07, 2005

Mobile service providers and banks

Indian mobile phone service providers are pushing the bar on innovative schemes. Theres the small recharge of 10 rupees (1 USD = 45 INR approx). Very recently such a small recharge could have been labelled unserviceable. Another service provider has a lower entry fee. Tata Indicom has come up with a 2 years incoming free without recharge. Advertised with a tagline - Insaan phone leta hai tarakki karne ke liye (Humans buy a phone to progress in life), it is a perfect pitch for a vegetable vendor (Incidentally, the protagonists in the ad are vegetable vendors or small businessmen), though I am not sure how many vegetable vendors would own television sets. Whichever way, these pitches are aimed at the right set of people. Profits at the bottom of the pyramid. I especially like Tata Indicoms pitch, because it locks the customer for 2 years in which time if he moves up in life, Tata Indicom will be with him. Customer development?

Coming to another much touted success segment, Indias private banking group. Indias private banks are models in the exact opposite sense. Citing high service costs and overheads and technology costs they have kept banking (especially banking technology like ATMs) away from the lower strata of society. (Most nationalised banks are a few steps better. Minimum balance is Rs. 100 for an account without a cheque book.)

Unless I am horribly wrong, there isnt any private banker who has tried to service the group which needs savings and benefits more than anybody else. In the age of micro payments and self help groups, where are the banks? Is a zero balance account that difficult to service? Micro savings and micro withdrawals are possible, but never tried. Why? Because our service is expensive.

Our banking sector can penetrate the population as much as the mobile service providers. This seems to be true the world over (with exceptions perhaps in Africa and Bangladesh), with banking being restricted to a financial elite. Where is the innovation?

Saturday, November 05, 2005

Banks, technology and advertising

Of late in magazines, billboards one can see a spate of ads on new "technology". New technology mostly relates to SMS banking, a service in which you can get your balances et al by sending SMSes. Alternatively, it is a service that alerts you when cheques are cleared, cheques deposited on behalf of the bank. Some banks offer a service called an ATM locator service. So, if you are in the middle of nowhere, send an SMS and get a list of ATMs near that location. Then there are ads proclaiming online services and the like.

My question is, do these ads work? Are they necessary in the first place? Are they reaching the target audience?

Most people in the olden days (read 60s, 70s, 80s) chose a bank based on the proximity of the branch to either their office or home. Other than that, they also opened an account with the bank which was most convenient at the place where they had to send remittances. So, most of the people in our building had an account with Sangli Bank (even though we had no clue about its standing as a bank). A great section of the populace opens their bank accounts only with this reason.The added attraction is that some banks offered locker facilities and hence it was important that this branch was nearby so that one did not have to commute too much with valuables.

Today, its been ages since I ever visited the branch of my bank, but since I have a salary account at XYZ bank, I have an account there. This is the second biggest reason (IMHO - no data) for people to open new accounts. Related similar reasons for businessmen - proximity to their own offices, clients, special foreign/LC services, flexibility, good managers (service) and so on.

Point being, if Corporation bank (assuming it is a small bank that wants to take on the ICICIs) advertises it that has a new mobile service, well, I dont care nor does the average Ramu on the street. This advertising is not going to draw more account opening enquiries. It may increase awareness to a certain extent, but only to a limited extent.

The way for banks to win new customers is by getting more corporates to open salary accounts with them or by getting new businesses to work with them or by capturing the populace near their branches, ATMs and so on. Advertising their new technology prowess is best done through direct communications with their customers, Point of contacts (ATMs, drop boxes and the like) and so on. Any other advertising is a waste of good money, money that should be used to improve services. Money that should be used to remove unnecessary charges from the monthly statement. Money that should spread the word of mouth goodness of the bank.

Friday, November 04, 2005

Of malls and retailers

Chennais high streets may be gaining in terms of footfalls as Kaps notes, but elsewhere in Mumbai Dadar, once the high street of Mumbais middle class, is slowly being relegated to the background of the festival shopping network (There was a good article in TOI a few days back, but I couldnt locate it online). With malls every nook and cranny, people no longer need to go to these streets to get their shopping done. One can lament about the decline of these stores, but I believe that this is partly their own undoing.

Linking road in Bombay and to a lesser extent Commercial street in Bangalore are two examples. Both these places offer things that are, quite simply put, difficult to find in a standard mall. Linking road and Comm street offer a fair amount of variety that is definitely more than a standard mall.

There is no surprise in a mall. There is a mandatory Pantaloons or a Shoppers and then there is a Mc Donalds or Pizza Hut and a food court. There is a grocery shop and then there are a few other shops. The malls in India are rapidly resembling malls in the US, where apart from the mall architecture, there is no real difference in the outlets in any mall give or take a few.

This is where the streets can score over the malls and streets like Linking road and Commercial street do. So, what about a place like Dadar? Dadar may or may not be the right example, but Dadar here is the euphemism I use for any of the non branded stores. When I go to a non branded store, I look for lower prices. Prices at these places need to be lower than the price at the average mall or department store.

My experience with these places has been that the prices here are usually lower by about 20 odd percent, but quality is lower by about 50%. Design and elegance is still lower. So, the average shirt in a non branded store these days could cost about 600 odd rupees, but if I pay about 800 rupees, I can get a good branded shirt in the nearby mall. This shirt which costs 600 rupees will look sad in front of (say) an Indigo Nation shirt in terms of fit and finish and worse in terms of design. A part of the factor is, I believe, smaller retailers (and perhaps smaller brands, just by virtue of being a brand) in their quest for higher margins from a slightly lower footfall have hiked up their prices to just below branded prices, but have not kept pace with the quality. Many customers would rather have the security of good quality when they buy than a lower price without any guarantee.

Unless the smaller retailers pull up their socks and deliver innovative stuff like the Linking Road chaps, it is the end of the road for them, sooner or later and its only a question of time.

Thursday, November 03, 2005

Diwali observations

The Chinese have taken over Diwali well and truly. Houses all over Mumbai have Chinese lights in their balconies ( a very Bombay thing to hang glittering lights in balconies during Diwali). Dirt cheap and almost use and throw (you wont meet anyone who has had these lights for 3 years). They are cheap LEDs, I think and in any case quite unlike the bulbs we owned in our house for 15 odd years when each Diwali meant a few trips to the electrician apart from some of our own pottering with testers and wires.

Visit any mithaiwaala and you will see a range of items. Many of them have stopped making samosas, dhoklas for the diwali festivities. Why would they. These are items with low margin. When they can sell Kaju Katli for 500 bucks a kilo, who will spend time making Dhoklas which sell for less than 100 a kilo!

Take a look at any mithai shop and you cant miss the ubiquitous display out in the front. Exquisitely wrapped dry fruits in colourful cellophane paper, silver and gold cardboard boxes with transparent displays are put up in front of the shop. This year, apart from these boxes, is the rapid proliferation of Haldirams (mostly) and a few others. Haldirams has seized the opportunity to launch festival packs of its sweets and namkeens more than anybody else and it too finds a place on the display of most of the shops and making the most of the instinct to pick up something that is tried and tested, yet different.

Wednesday, November 02, 2005

More ATMs or less

SBI has the largest number of ATMS in the country (I am not sure if this includes the ATMs owned by their other State Banks (the State Bank of Mysore, Bikaner, Travancore etc.). What better way to do it than through an unpredictable advertisement.ICICI was perhaps the largest until recently. But is this the best way to go?

Many of the smaller banks have formed networks by allowing inter accessibility to each others ATMS. Some banks charge the customers, while some others give inter accessibility free. Anybody who has been at an ICICI or Citi ATMs will swear by the queues it has on most days. Since these banks have their own network which is pretty big, they do perceive a gain by offering inter accesibility. On the contrary linking up offers the benefit of less queues in general. I can choose to withdraw from the ATM near my house (a UTI bank ATM which appears abandoned except for a lone security guard) thanks to my bank which allows me to use networks of other banks.

Two contrary strategies each with their flaws and advantages. IMHO as it has always been, the way to the future is collaboration and we will get to see more of it than banks building their own ATM networks. On a seemingly related note, why did we never see a bank branch that serviced more than one bank?

Is your plate heaped?


A couple of days back, I had some Bhelpuri from a roadside vendor. He served his stuff in a smallish plate, but filled it with heaps of Bhel. The customers who were around were quite a delighted lot that the plate is filled with heaps of Bhel, failing to notice the fact that the plate was a smallish plate. The optical illusion of a filled plate (even if its small) creates an amazing effect of plenty.





Likewise, check out the accompanying visual of coffee tumblers, a species uniquely South Indian with the twirled edge. Tumblers are available in many sizes as you can see. The average south Indian home has coffee tumblers available in a few sizes (these are from my home), but go to a hotel or a cycle coffee wallah and the tumbler size mysteriously reduces to the size of a thimble (almost). But, and here is the trick, the vendor serves an overflowing cup of coffee.

Like the previous example the effect of a heaped plate or an overflowing cup can have great visual effect and leaves the buyer thinking, thats a good bargain! So, when you are serving customers, is your plate heaped?