Creation of a brand

I happened to reading about Gulshan Kumar and the story behind the T-series brand. The T-series brand took the nation by storm a few years back, when it turned the film music industry on its head. T-series realized that between the monopoly of the HMVs and Music India and a loophole in the Indian copyright law was a market with a huge potential. This has been documented in many places and studied in business schools. But T-series did not stop at recording known songs recorded by unknown voices and selling it for cheap. It went into the business of film production, producing religious film albums. It even got into tape production and the like setting up its manufacturing plants.

These thoughts came back to me while I was at a local footwear shop. Unlike an urban footwear store, this one had a thousand labelled cartons, each of which was a "brand". There was Bata, too, Indias ubiquitious brand, but jostling for space were Vismaya, Doctor, Flute and what not. For the customer who is only looking for price differentiation, in, say, a rubber slipper, his sales spiel was "Bata will cost you x while this will cost you only y", x being greater than y. In a commodity like rubber slippers, which is relatively easy to duplicate, Vismaya or Flute can hit Bata. But if Bata revamps its designs every few months making it difficult for imitators or changes its raw material or finishing grade that is difficult to be imitated, it will win hands down. For Flute to succeed, it has to think like T-series if it has to revolutionize the market and go beyond just imitating.

Cargo cult science

Link from Seth Godin on Richard Feynmans "Cargo Cult science".

Reminds me of Navi Mumbai some years back. Navi Mumbai was supposed to be a magnet for those who wanted to be in Bombay and Belapur was supposed to be its CBD. Except that for atleast 10-15 years, it was anything a Central Business District. It was a forgotten piece of landscape, with empty streets and buildings with a haunted look about them. In form, it was the Central Business District, but in reality, it was nothing. But later on, the government did a few right things and Navi Mumbai is bustling.

And then again, Pakistan is trying its best to build a Bangalore out there.

The full piece of the Cargo Cult science is here.

Real estate - tricks

The Indian real estate boom is an oft discussed topic on this blog, 1, 2, though not as much as the stock market boom. In any market scenario pyramid schemes, front running are pretty serious offences. In the real estate market, they are not.

What exactly is front running? In the mutual fund scenario it is a person with authority and/or knowledge of the fund, buying stocks in his personal account ahead of the mutual fund buying it.

What exactly is a pyramid scheme? It means many things in many contexts. One of them is about one person getting more and more people enrolled into a particular business in exchange for money.

What is the similarity of a stock market tip with a pyramid scheme or front running? It is that, by the time you get a tip, you are at the fag end of the price rise. By then operators, people in the know, FAR (Friends, associates, relatives) have all entered and made their money. So, when the retail investor, gets a tip and buys, it is really very close to the precipice at the end of which the price simply falls.

When a real estate project is launched with an advertisement in the papers, it is time for the investors to make their killings and exit. They would already have been sold the plots/apartments at a "pre-launch" price and at launch, they exit with a comfortable return. Before this, a closer set of investors who would invested their capital in the acquisition of the property would have exited - at the pre launch itself.

Now, at launch, a set of investors leap in, thinking they have got a good deal. At this point, the price has already taken into account all future developments in the area/locality and the price is "full" with little scope for an up movement. In a rising market, there is scope for further up movement since there is a gap between demand and supply - or in certain cases, there is too much money floating around. The market has been rising continuously for the last 4 odd years now with prices almost doubling in the last 2 years and rising about 10 times in the last 5. How long it will continue is anybodys guess.

When all these apartments hit the market post launch, somewhere there is going to be a shock. So, in the face of a global asset value increase, perhaps it makes sense to wait. Wait until all those 2 and 3 house owners put their assets out for sale. Wait until, demand picks up in other areas while the areas which have full price escalation cool off. For those who believe "real estate never falls", take a look at 1996 for a recent memory.

Battery and clockwork

Many years ago, in the days of "Doordarshan", there used to be an ad for Novino batteries which would end with an Oriental looking girl looking for a place to insert batteries in a baby, "Oh Novino". Then, in India most toys we got were clockwork or spring driven, so the situation depicted seemed quite laughable. When I was a kid, I dont remember having any battery powered toy.

Thanks to the Chinese invasion (and some Indian ingenuity) most toys today are battery operated toys. When I saw my 1 year old turn over a clockwork toy which was not running as he intended it to, and say "battery?". I was reminded of how prevalent batteries have become and how the situation outlined in that Novino ad is true in India today.

Best Garage - My TVS

I had compared Indias IT services to a fictitious garage, "Best Garage" in a post a while back. I happened to read about My TVS recently - I thought it was a new service, but I now realised that it has been in existence for a short while.

My TVS was slated to be a place where one can get cars of all makes serviced with emergency road assistance. They were also slated to help buyers with used cars.

I could not get the link to the recent piece where I read about this, but it is an interesting business model since there is no single chain of "garages" or "automobile workshops". Whats interesting is that it has not come from a manufacturer of cars, but from a group known for its automobile accessories. It is also interesting because in my analogy, I had compared Indias IT services companies to a service of this sort in the automobile industry. I did not know then that a similar service existed in the automobile industry in India. Any idea how they are doing?

One more travel portal

Disclaimer: This one is a "type aloud" post and these thoughts come to me even as I read this Hindu Businessline piece on a new travel portal launch on the other tab. I have never used a travel site in India except to read about places.

The site mentioned in the piece above is Xplorz. Recently I read that cleartrip, travelguru and Yatra were also funded. Theres Traveljini, Indiatimes travel, makemytrip. Outlook traveller is a pretty good site too. My question. How big is this space really?

Reason being, in India or travelling within India, my experience is that you dont get any bigger discounts than what the airline offers you at their site (book in advance, pay less) or a travel agent offers off his system. Yes, these sites are good for comparing, perhaps better than visiting each airlines website, but little beyond that. The other thing is that, India, even now, does not have too many airlines or routes. It surely is a good place to look for deals if one is travelling abroad.

You would get deals on hotels, but hotels are best booked the old fashioned way. Talk. Ask. I have found nice places quite off the beaten track this way which dont appear on websites.

As I trawled trying to link my thoughts, I found this (linked above too) which is about the online travel "boom" in India.

...For the most part, Indian travel web sites have catered to bringing the South Asian Diaspora home. The sites did little to rescue travelers from long lines for tickets inside India’s thronged train stations and airports. Nor did they provide much information about towns off the tourist circuit.

That is true. So, if you looking to travel within India, except the biggies (and you can forget discounts), theres very little online. In this piece it says that soon to be launched portal Yatra promises to cater to the unknown destinations - that would be nice. The piece refers to Belur - in the unknown category - which afaik is very well known, but we will know how good the site is when it launches.

...The numbers support the flurry of investment. The Internet user base in India grew 54 percent during the last year: there were 38.5 million users expected between 2005 and 2006. That’s up from 25 million in the year before.

I am not sure that there is a direct linkage between internet usage and online travel (not just booking air and rail tickets - and those sites are not too bad). Internet user base includes teenagers who chat in cybercafes, internet usage through companies, colleges and for keeping in touch with kith and kin abroad. A small percentage is net savvy - I mean, the kind who would use the internet for booking tickets - smaller still is those who use such sites for booking an entire trip. There is no doubt that this is a space to be exploited here, but it will take some doing, considering how fragmented the market is at present.

...According to the Internet & Mobile Association of India, the total e-commerce market in India will touch $262 million in 2005 and 2006, growing more than 100 percent by 2007 to $500 million.

Falling broadband prices—as low as $5 per month—coupled with the availability of $200 PCs, content in regional Indian languages, and a jump in VoIP are factors contributing to the growing Internet user base.

The biggest websites in terms of revenue in India are Airdeccan and Indian railways. And, while broadband prices are falling, we are still some distance away in terms of user penetration. Heres an analysis of 2004 and heres a more recent one.

All the best for a take off in the online travel segment. A lot of convenience/convergence will happen if they take off succesfully or we could see some sites crash land too in the near future.

Indias industrial renaissance?

Link thanks to Abi

From NYTimes, this piece talks about how

As global manufacturers seek new places to plant their flags, India is seeing early stirrings of an industrial renaissance.

India has cultivated an image as a center for outsourcing, creating a new economy of call centers and software campuses that has lifted the relatively privileged. And even though workers here have for years stitched clothing and apparel, a widespread manufacturing base has been elusive, and factories have long been conspicuous for their relative absence here.

So the new murmurings of manufacturing could have a profound effect for a vast number of India's poor people, as well as for the international sourcing of goods from cars to bras.

The piece as usual brims with optimism, but in reality, we are some way off, as the piece itself says:

In 2005, India's exports were worth about $8 billion a month, against China's $63 billion. Thats 8 times.

Yet, all is not lost. With focus on SEZs, we may yet get some more manufacturing into the country, but for that our labour laws will have to be changed. For a government thats more obsessed with making peace with tails of dogs that will never straighten and in creating ever divisive quotas within the country when it is not indulging in vote bank politics, this may be too much to ask. Until infrastructure is straightened out, labour laws eased, our industrial renaissance is a castle in the air. Except for the brave few who set up industries in our country, we are not going to see action on the scale of China. Forget competing with them, we are nowhere in the picture as of now. Our high end skills are touted, with some justification, but without infrastructure (thats the third time I say this within this post) the road to nowhere will be the only road under construction.

Ideas men of India

The world of business education and thinking has been largely American terrain over the last hundred years. American thinkers — from Frederick Taylor with his stopwatch at the beginning of the 20th century to the modern generation of gurus — have monopolised business wisdom. Now change is in the air. A new generation of thinkers is emerging from India.

Link from Vijay Govindarajans blog - himself one of the ideas men named in the article in the London times.

Predictive text and education?

Each time I fiddle with the keypad of my mobile to write an SMS, it strikes me about the simplicity of the whole thing. The mobile keypad with its 1 (abc), 2 (def) and so on is as simple as it can get. Perhaps it can be simpler, but consider that you can use it for both number and text entry. What is more interesting is the predictive text.

So, if I were trying to write the piece of above text, all I do is keep pressing the related buttons and the word usually shows up. For example, for word, I press 9673 and I get word (wore, yore being the options). Similarly, if I want to type, I (4) will (9455-wilk being the other option) be (23 - a few options) late (5283 - laud and lave among the usable options) - the whole process is so simple. Perhaps a predictive keypad/reader with some modifications would be a boon to the those who are barely literate - especially adults - considering our day to day voculabulary and what we read is quite low.

Hawkers and their wares

I was walking near about the Bangalore railway station area a few days back. As usual it was crowded with a lot of hawkers near the bus stand. There is a significant difference between what they sold a few years back to what they sell these days. I had observed a similar difference in the Bombay local train hawkers and to a smaller extent on long distance trains as well.

Earlier they used to sell plastic items, small steel items, curios and stuff like that - mostly made locally. Today it is mobile phone covers, electronic earphones, headsets, small use and throw electronic thingamajigs that beep when you get a call on the mobile and suchlike - and most of these are not of local make.

Wonder who supplies these items? At what cost? What must be production cost of these items if they can make their way to India through multiple agents and finally be sold by a hawker who earns his living out of it?

Now, automatic phone calls

If calls from tele marketing executives werent enough, Indian phone companies (atleast some of them, Airtel for instance) have come up with another annoying experience. An automatic call. It starts with an innoccous ring and as you say Hello, it breaks into a tune in your ears. Following which, a voice (usually female) says, you can disconnect this call at any time and then offers some promo (some needless 15% off on something you dont want). As if telemarketing executives werent bad enough. I think from here it is only a short hop to the cellphone.

As it is promotional SMSes are spamming our cellphones, imagine spam calls.

Why do companies make the same biscuits?

There are two big biscuit brands in India. Britannia and Parle. Both their product lines are notoriously similar to each other. They have a Marie, a Bourbon, a Glucose, a Salty, a Sweet-Salty, a Butter biscuit and so on. I am not sure who is the leader and who is the follower in each of these categories. There are innovative ideas in each biscuit makers basket (the Nutrichoice series for Britannia, Hide n seek series for Parle), which seems to slowly find its way into the others. Parle now has a "Digestive" Marie and Britania has a Choco-nut cookie.

It seems to be like the Cola market where every maker has a brown cola, a clear one, an orange flavour and mineral water.

What is even more baffling is the fact that new entrants like Priya Gold or ITC Sunfeast, are mimicking nearly the same product profile. On the whole ITC seems to be more innovative, atleast watching Bangalore where Priya does not seem to have made too much inroads on supermarket shelves. ITC has an Orange marie, a Chilli salted biscuit apart from the usual suspects above.

I think I have an answer as to why apart from the existing players, even new entrants do not really want to diverge beyond the "formula" of a "portfolio" of biscuit flavours. The perception is perhaps the market is so commoditised that a customer usually will choose one salted (or glucose) biscuit over another if his favoured brand is not available. It also helps in Kiranas where the grocer can comfortably tell "that is not available, try this one" and like the cola market, really, anything will do. But is this the only answer? Is the only way to make big inroads into the biscuit market by mimicking the portfolio of the successful players? There are niche brands that think different though!

The other boom in Bangalore

Disclaimer: This post is based mostly on my observations. I have not found data on the web to substantiate it.

Everybody knows about this boom - which I call the other boom in Bangalore. And I am not talking about real estate. The first boom, as we all know is in the IT/ITES/BPO sector which is talked about, has a section for it, another section against it and what not. But this one is about the boom that started much before the IT boom in Bangalore. Yet, it is small - not perhaps in terms of the business that it generates, but in terms of its overall impact on the people who work for it. I am talking about the garment industry boom in Bangalore.

Each day on the outskirts of Bangalore, on almost all sides, but concentrated on the Hosur side of Bangalore (and well into TN) one can see hordes of young ladies (and a few men) make their way in crowded public transport or in the back of trucks or in almost broken down mini vans. They work long hours, sit in front of well lit sewing machines in crowded factory like environs and just work work and work from morning till late evening. Sewing is a primary qualification, though I am not aware if there is any trainig imparted to these women. They need very little educational qualifications apart from sewing and perhaps opearting a few other machines.

There is a big section of the organized sector in this industry, notably, Arvind, Gokaldas exports, but theres also a bigger section of unorganized garment makers here - the ones which qualify as sweatshops.

Garment exports out of Bangalore is an old story, much older than the IT boom, yet the lot of these workers never seems to improve. They work in dingy buildings, they dont have campuses and they dont have creches for their babies. Most of them have no transport to take them to their places of work, though some of them do have ramshackle vans that transport them like cattle and cabbage. Their workspaces, unlike cubicles (yes) are tiny. They start as a worker, some of them end up as supervisors, but most of them seem to quit before they have families because of the working hours. Precious little seems to be done for their development. The workforce being relatively uneducated, it perhaps goes unnoticed. Like I said earlier, it is possible that they might be organized into SHGs and so on, but that is something I dont know.

If the IT industry followed this pattern, we would still have ony bodyshoppers, instead of a business created around IT services as a model. (Many people do not believe IT services is a model, but a later post will deal with that.)

I believe and this is wholly my conclusion, that garment sweatshops, as sweatshops are wont to be, do not share any of their profit with the workers. Also, like the IT industry which is doing well the world over, most of these sweatshops live off (presumably for) government export subsidies and benefits. Many of them can be found arguing for duty cuts, tax breaks and suchlike so that they can make more profits. It is their view, of course, that these duty cuts and export subsidies are to make them more competitive in the international market. But truth is that most of these sweatshops havent moved beyond sweatshops. The textile industry is a ruthless industry, with stringent quality conditions and virtually no space for goof ups or any slackness especially when you supply to international brands. (Having played a small role in an organized textile sector a while back, I know this much - plus having a friend who was in the quality department of a biggie in textiles once upon a time helps).

The industry, bar a few, has never risen beyond the obvious sweatshop mentality. Most of them have shied away from investing in their workforce or looking beyond their nose.
The IT industry is a shining example of how we have tweaked resources to get the best possible advantage. The garment boom is about how we missed that bus.

Now, online season tickets

From the IRCTC website, (only for Mumbai suburban travellers though):

IRCTC is launching a great new service for the convenience of Mumbai suburban season ticket passengers. Now a registered user of www.irctc.co.in can book his/her Mumbai suburban season ticket through Internet .

Clearly, someone who manages the online site is trying to maximise the online reach of the railways. Already the printed ticket (e-ticket) option is extended to most trains and now season tickets can be booked via the net.

In the physical side of the railways, we need someone who transforms the railways into a staid 50kmph thing to something more convenient and faster in tune with the times.

Phenomenal advertisement

It cant get better than this for an ad for helmets. Mythology has it that, Ganesha lost his head in a battle with Shiva. Shiva placated an upset Parvati, who had created him, by granting a boon "replace his head with the head of the first animal you meet in the forest" - which happened to be an elephant and thus was born a favourite god (ask any Mumbaikar about Ganesh Chathurthi) - Ganesha.

Note: Let me know if there is a link/credit to this ad someplace and I will add it.

Coffee times

Coffee, something that Bangalore and most of Southern India starts its day with. Yes, you can argue that there are those who start their day with tea, but I refer to many Sagars and other fast food restaurants that serve coffee to the millions who throng there.

Between 3 to 5 rupees, one can get some tremendous coffee. Chennai is probably the only place where one can get similar quality coffee (and I mean, the filtered, South Indian coffee). No fancy schmancy Italian brewing machine, no instant coffee, no pour-in-a-packet-into-boiling-water contraption can match this filter coffee.

As you walk in and hand over your coupon (most of these places are self service), he picks up a tumbler davarah combination. With a deft twist of his expert hand, the coffee operator (!) lets a big droplet of the decoction fall into the barely thimble sized tumbler. Then, he stirs the milk pot which has fresh boiling milk (often mixed with sugar), with a big ladle and lets about half a foot of milk into the decoction laden cup. The coffee hangs over the tumbler ever so precariously as you balance it and carry it to your table and enjoy it with hot vada or whatever.

The Cafe coffee day on the other hand sells ambience more than coffee. For about three times (or more) the price of a regular cuppa (and double the quantity), CCD (and Barista et al) also serve coffee. The Latte, Cappuchino and other variations are sold, apart from the ambience and snacks (not value for money, IMHO). Overall CCD coffee is pretty good, no complaints about quality but as a total satisfaction experience, I am a partial to the Sagar variety of coffee and the snacks on offer. Plus the fact that Sagars charge me for the function and not the gloss.

As my costing professor used to say, "When you buy Lux (soap), remember that you are paying for Madhuri Dixits advertising expense also apart from the cost of the soap."

Marc Faber interview

From Rediff.com, Marc Faber (of the Gloom Boom and Doom report fame) says, Long bull run = Big bubble. Click to read the whole piece, but here are a few excerpts

Today in real terms, in the western world, people have relatively low incomes and asset values are high measured by the Dow Jones or by housing prices.

One could argue that in the long run most things will appreciate in value, but the problem is that most companies live only 30 years and then they die. In other words, they go bankrupt.So when people talk about stocks going up in the long run, one would have to constantly re-balance one's portfolio.

I suppose the longer a bull market lasts, the more likely it is that it will end in a colossal bubble because if you consider that there are in this room several asset classes: real estate, stocks, bonds, commodities, etc.

I am sceptical about analysts that specialise in one sector because they have vested interest that that sector remains popular and actually attracts a lot of money. It is the same as a fund manager -- he cannot turn and tell his investor I don't think you should invest in India if he is an Indian fund because if his investors leave his fund, then he has no business left.

The gold price has gone up in dollar terms and that could continue for quite some time. I think eventually the world will be very apprehensive to hold dollars and will rush into assets.

Read the full piece, you wont be dissappointed.

Mithun and an eye for investment

What would you do, if you had tons of money and the wish to produce a film? Who would you cast as your hero? Heroine? What would your story be?

How about a Bengali film starring Mithun Chakaborty? How about a story with Mithunda in the lead as a person who takes on the corrupt political establishment and wins? And I am talking 2006, not the 70s or 80s when Mithun was a big star.

Depends on your objective. If you want to double (or whatever) your money, you would look at Srikant Mohta. MLA Phatakeshto, is the movie in question. If you were an investor, you would be very happy to know the business it has generated.

The film — MLA Phatakeshto — is a super hit, grossing Rs 3 crore in three weeks. Its producer and distributor, Shrikant Mohta of Shree Venkatesh Films, believes that by the time it bows out of the theatres, it will have collected Rs 8-9 crore, quite unprecedented for a Bengali film.

The classic case of doubling your money on penny stocks (Bhojpuri film boom), while the blue chips (Bollywood) get their 20-30% return on a huge outlay.

Taxman to gun for affluent

Two recent articles on tax caught my attention. One was this, in Financial Express, titled "Taxman guns for affluent India" and the other was a piece in TOI that the number of Income Tax payers has fallen from 2.5 crore to 2 crore (couldnt find anything online on it though).

The solution is to widen the tax base, not try to extract more out of those already squeezed to the hilt. There are millions of businesses (you really need not look very far - your friendly neighbourhood doctor, lawyer, medical shop, grocery, hotel) that accept only cash, do not give out bills and grossly under report income. If this can help get these evaders under the tax net, I am all for such an assessment. In all probability it will catch the honest few who have reported something, like the usual punctuality dilemma.

Today the only people who pay Income tax tax in India, pretty much, are the salaried class. It is this class that subsidises every thing under the sun. It is also this class that pays the 12.24 service tax, the VAT and every new cess that is introduced. While, many businesses say, sorry for cards and accept only cash and stay out of the tax net. Get them first.

Wireless watches?

Titan ties up with Innoviti, as reported in The Hindu Businessline.

The tie-up between Titan and Innoviti Embedded Solutions will see the launch of special kind of watches that give out information on stock market, business, and general news.

"Watches, unlike mobile phones, are non-intrusive. Hence, we thought giving out information through watches was a much better way to communicate," Innoviti's CEO, Mr Rajeev Agrawal, told Business Line.

This is an interesting development and it will be interesting to see how they fare in the market. For one, the technology is being brought from within India. Second is that with the arrival of mobile phones, very few look at watches as gadgets. Watches are more like an accessory, like perhaps a bracelet or something. That it tells the time is only incidental. So, this thinking is contrarian. Will it take off? Wait and watch!

Chinese math and Indian middle class

Businesspundit has a post titled "Please stop with your Chinese math"

...The presenter went on and on about how huge the market was for his product, and how they "only needed to get 3% of the market to..." Oh no. Not again. An entrepreneur friend of mine sitting next to me turns and says "nice Chinese math." I nod. "Why didn't someone warn him?" I say...

Its not just entrepreneurs who fall into this trap. Back in 1991, when India slowly opened its doors to the world, there was a queue of companies who wanted to come in. At that time, India was supposed to be home to the middle class, the class which was almost a billion strong and if "we crack even 10% of this market" was a common saying. Today, of course, we know better that the Indian middle class is anything but middle. It can be rich, lower middle, well to do but they are all aspiring.

Many companies floundered using this math. Businesspundit puts it nicely

Market numbers are important, and so is breakeven analysis. Present these numbers as part of your plan, but don't act like the low percentages mean they will be easy to reach.

Many companies have learnt it the hard way that the Indian consumer cannot be caught via Chinese Math!

New Force in the truck industry

For long ruled by Tata Motors and Ashok Leyland and some nondescript competition in the LCV, MCV space the commercial trucks in India are finally seeing some action. Theres a new entrant in the shape of MAN-Force - a JV to produce trucks in India. True, Volvo India is there too, but they are, yet, a marginal player - they havent yet made the impact they have made in buses.

MAN is a big player in trucks. I have no special admiration for Force motors, producers as they are of the lousiest vehicles on Indian roads - the three wheeler which can carry 6 persons and more and choke up the highways. Of course they are not the only one, but they are a big player in the three wheeler transport space. The JV with MAN is a step in the right direction, though I wonder why it took MAN so long since the Force motors website says this JV has been in existence since 2004.

Would love to see MAN trucks on Indian roads. Now there will be some real competition for Tata and Ashok Leyland.

What better ad?

...for a tyre/puncture repair service?

The new sign on the highways

I have written more than once on Indias national highways, the Golden Quadrilateral and similar upgradation programmes. Recently, I drove on the Bangalore Mysore highway, which really is nothing more than a 4 lane road with dividers. Why this is big is because just a few months back it was a two lane road without dividers. There is no access control, which means, technically, you can find yourself behind two bullock carts or tractors trying to overtake each other (like I did) blocking the two available lanes. Trucks or buses can hog the fast lane at a sedate 30 kmph. You can also find a bullock cart, tractor hurtling at you in the opposite direction. People can sleepwalk across the road in a manner that will put absent minded professors to shame. Pity the state of Indias highways. Also, the road is not entirely 4 laned yet. The towns and villages are still to be covered and it doesnt look like that will happen in the near future. My take on this, why not lift the road above these towns and villages? It will be cheaper than land acquisition and more beneficial. Why not fence the rest of the parts of the road between towns? Thats a rant for the future and while I can blog about this for the rest of my life, there really is a lot to be done.

But, look out for a new sign on Indias highways. 24 hour petrol pumps from Reliance. It is almost like a new sign for trust. In a place like Coorg, the petrol pump was open at 6 am on May day, quick service, toilets with water, instant billing, automated filling - all the stuff which is otherwise difficult to find.

Reaching out to the real India

Beyond the gloss and malls of urban India and the beyond the salaried class and organized sector is a big opportunity for those who try. But it is no ordinary consumer group. One has to tread carefully, innovate and reach out in order to gain their business. Businesses in India are finally trying to reach out to rural India and the unorganized sector. They are training their guns in a bid to reach customers beyond urban India and the organized sector. ITC, HLL were probably the first movers in this arena. Then we saw the mobile phone service providers go all out in a bid to attract rural India/bottom of the pyramid and now we are seeing innovative methods from other companies to reach out. Here are some more developments.

ICICI bank is moving to adopt the kiosk model to get in touch with rural customers.

The bank has decided to set up at least one touchpoint within every 3-5 kilometres of rural and semi-urban areas. The touchpoint could be in the form of branches at the district level, franchisees at the block level and kiosks at the village level. The bank is planning to start at least 50 branches and have at least 8-10 franchisees for every branch and an equal number of kiosks against one franchisee.

The channel is designed in a hub and spoke structure with full service bank branches being the hubs and rural internet kiosks acting as the spokes. Kiosks are owned and operated by rural entrepreneurs, thus ensuring a high level of customer interaction.

The other one is a UTI pension plan for the unorganized sector.

UTI MF has tied up with the Shree Mahila Sewa Sahakari Bank Ltd (SEWA Bank) and 25,000 members of the institution have joined the pension scheme.

Expressing happiness at the bold decision taken by members of SEWA, Mr Chidambaram took a dig at government servants, saying that while the common women of Gujarat had reposed faith in the market by trusting their earnings with UTI Mutual Fund, bureaucrats have been insisting that their defined contribution pension accruals should be invested only in Government securities.

Looks like the preferred route to enter rural areas, like in Project Yeshasvini, is through SHGs and micro finance groups.

Following SEWA Bank, at least 30 micro finance institutions have committed to enrol their members in the scheme.

From Economic Times on the same scheme,

For a minimum contribution of Rs 50, women working with SEWA (Self Employed Women’s Association) are being offered a pension plan, under which they can contribute throughout their life to a pension account and start drawing a pension when they retire.

UTI has shown that not only is it possible to bring the unorganised sector into the pension fold but also make it commercially viable,” says Gautam Bhardwaj, director, Invest India Economic Foundation. SEWA Bank is getting an intermediary fee (typically is 2-3%), which they normally get.

There is a pot of gold at the bottom of the pyramid. More power for such initiatives. Hopefully more such initiatives will see the rural population seek jobs beyond agriculture and into ICICI kiosks, ITC Sanchalaks and so on.

(Cross posted on The Indian Economy Blog)

The online demand d(r)aft

ICICIs online avatar has a new service known as online demand draft service. I was looking for one recently and on clicking the button, I got the shock of my life.

After filling the requisite details , it said, I would get the demand draft within 8 (yes, eight) working days. Duh! Eight days for a demand draft. I would withdraw the service if I cant promise the same within 2 working days including time for courier. If Indian Railways can do it, why cant ICICI?

Home Stays and tourism

My recent visit to Coorg, which has been mentioned a lot on this blog, like my other trips set off a chain of thought. Coorg, as many know is a land of sprawling estates and coffee plantations. One need not stay in hotels which are essentially about the same rooms and shoddy service and paneer butter masala. An option thats catching on a big way is the home stay. It has been around in various forms and especially in a place like Coorg, there are quite a few well known estates. (A google search throws a lot more options). Heres one, heres another but many of them prefer to go only by word of mouth marketing since, as they say, you never know who can come in as a tourist. The beauty of the home stay is that one gets to interact with local people who live there. You can also taste authentic local food or view the estate activities such as coffee picking etc.

As Rashmi writes, these places let you relive your "native place" - something very few people have these days. Such holidays will become popular, if they arent already. You may have to pay to let your kid learn what you learnt for free like breaking the outer shell of a coconut, making pickles, mango jelly and the like. Summer camps for kids are available in this flavour.

Home stay, also known as bed and breakfast is prevalent in Kerala (each time I visit this website it seems to be updated - which is really good - now it has French and Dutch versions too) too with the government incentivising (check out the incentive section) them to protect ancient architectures and lifestyles. It is also popular in Hampi where the tourist influx is not high (thankfully). It does quite a few things. Instead of a big budget hotel that turns localites into bearers and waiters, the home stay makes the locals earn the spoils of tourism. That ensures that they have a stake in maintaining the heritage, greenery and customs of the place.

Carnival of the Capitalists

Am back from a trip to Coorg, and just in time for The Carnival of the Capitalists, the webs premier carnival on, what else, business and everything that relates to it in some way.

Welcome to interim thoughts..., a blog on business in India. This is perhaps the first time that the carnival is being hosted out of India. Bookmark it for future visits to know the business environment in India with a global perspective plus some thoughts on design, culture and economics with a streetside eye. After the plug, lets plunge into the Carnival right away.

It is nice getting to put the carnival together. I have grouped the posts into a set of sub headings depending on the topic they deal with.

So grab a cuppa coffee and sit back for the best in business reading this past week on the web. I have included some tidbits on India subtitled Info in some of the sections. Let me know if I missed anything or pause to leave a comment!


People, Careers, Leadership

Professor Piderit puts forward a case for reinventing jobs and careers in this post which is a collection of three links and her thoughts on the same.

At China manufacturing digest is a post on how US and China are dealing with immigrant issues alongwith other market factors.

Here's a contrarian leadership post over at Slow leadership.

Over at Project management digest is a post on The Basic way to motivate and tips on the same.

Can we learn anything from jerks who succeed at the workplace? Execupundit seems to think so.

At the Careerintensity blog, is a post on "Success Magnet Qualities"


Risk, Finance. Insurance and Investment

Henry Stern, LUTCF presents a nice read on GM subsidising Viagra and how it contributes to the bottomline of GM and its cars. Nobody needs it more than GM itself. This is really unbelievable.

A second part to Why Finance is like Baseball at View from a height is a good read. Dont miss the first one too.

The Radical libertarian introduces Reverse Insurance. I did not even know it existed.

Let others pay for your gas. Invest in gas companies and laugh all the way to the bank seems to be the underlying message at Anes Home.

Whats the distinction between singles and home runs? Here's an investment primer at The Real Returns.

Small Business Buzz talks about Personal Savings in Decline. Is this a trend the world over?

Is limiting the downside always a good idea? Before you say yes, read this here at Bizinformer.

Do you know how to calculate your personal rate of return? Check out how, at AllFinancialMatters.

Mighty bargain hunter tells us the correct way to get business ideas from biz opportunity magazines.

A rundown of upcoming economic indicators and US Treasury auctions for the week at Financial options.

There is an old market saw about how the leaders from one bull market are not the leaders in the next bull market. Read it at The Big Picture.

Watch out for companies that do their 401(k) match in their own stock over at Ask Uncle Bill.

Slightly offbeat, but this one is about receiving money from parents during college and beyond. Should they really pay to sustain your lifestyle? In India, they always do; very few work and study at the same time.

Info: The Indian stockmarket is on a roll and how.

Shareholders and Company policy

Now that Microsoft and Dell are value stocks, what are the implications asks Daniel Mark Harrison.

Professor Bainbridge responds to "Increase shareholder Power" here.

Info: Heres an old post of mine on CSR in India.

Greens and Sustainable energy

An interview with Peter Kinder, the president of Boston-based KLD Research and Analytics where he looks at the forces driving CSR at Sox First.

While on greening of corporations, here is an excerpt from an interview with H.Lee Scott, Walmart CEO.

Just what are the tax breaks on Hybrids? Read on at Blueprint for Financial prosperity.

Unlike some other pundits, James Hamilton of Econbrowser sees a number of good ideas in the President's new energy proposals and actions announced last week.

Big Oil wont miss the bus for alternative energy sources, writes the American Sage. I hope nobody misses this opportunity for the sake of the earth!

Info: India has a long history in sustainable living, but newer lifestyle changes are taking us closer to the Western model.

Gas prices

Why short term proposals to alleviate the cost of gas will do nothing at Jackdied.com

The proposed $100 government rebate for the cost of gasoline is no better than weatherstripping the peephole of one's front door from Gongol.

A fearless freemarket solution for reduction of gas prices.

Lots on gas prices. Heres a round up of the same.

Info: In India, the gas prices (petrol, diesel as we call gas) subsidy is a long story. Diesel is subsidised for the use of trucks and the transport sector but we have luxury diesel cars now which use subsidised fuel. LPG cylinders for the home sector are subsidiesed. Our oil companies are bleeding using taxpayers money, but there is no shape of any reform on the horizon.

Money and Millionaires

At Free Money Finance is a post on new facts on the number of millionaires in the US and some tips on how you can become one of them! Simple Enough.


Politics

Where were all the politicians when god was distributing logic? Canvassing for votes, I think. At Soccer Dad is a post on the necessity of logic rationing.


Productivity and Work culture

Heres a post at Freelance pro on Notebook hacks to organize your life.

Over at the Six Sigma blog, a post on the best Six sigma black belt project at Delphi.

Can strategy be an alternative to work culture of a firm?

Heres a great thought from Evelyn Rodriguez, in the business world everyone believes that the grass is always greener somewhere, anywhere, else but the task they're doing.

Open Source

At Open Source Business is a post on a forum to share open source experiences and another one on Education and free open software.

Wiki way to business is a post that tracks how busineses are learning to harness Wiki.


Entrepreneurship

Greg of The Retail Store blog chronicles his own home based business - an internet home business to be precise. Almost makes you want to take the plunge.

Jeff Cornwall at The Entrepreneurial Mind on how failure is a prerequisite to success.

Marketing, Branding, Customer service, Shopping

Jack Yoest experiences the panda cam at Washington DC Zoo and uses it as a metaphor for branding.

Viral marketing goes old school is the title of this post at Blog businessworld.

Jim Logan says, Customers do not care about your business and I think he is quite right in this assessement.

Marketing in Niches, sitting pretty talks about a new niche. Read about it here.

Under fire for using bureaucracy to avoid settlements, the warranty department circulates to senior management testimonials from satisfied customers.

Is there a cost in not answering the phone? Read about it at fivecentnickel.com

Average revenue per user (ARPU) is a common busines performance metric. Average revenue per user relation (ARPUR) incorporates social networking information. This one from Douglas Galbi.


Last but not the least, Miscellaneous:

Global watch has a post on how airlines are fighting the battle of the low cost airlines, perhaps in a slightly wrong way.

SLV, the first Silver ETF makes it debut. Read aboout it at My first million at 33.

Workers Bees on how blogs are still not very well known even in high tech circles. Shows how much ground is yet to be covered.

Adrian Savage says, Procrastination may be good. I will try this one later. Meanwhile, Hooters opens in china and why golf is bad for the boardroom.

Happy reading, until the next CotC here.

Update: Minor edits and some information added on India in some of the sections to give an idea of the state of business in India.