Thursday, September 27, 2007

SWITCH to India!

The big story today is how Indian IT services is playing a role in the world of IT services. From Hindu Businessline and Business Standard.

Technology research firm Gartner Inc said the top six Indian IT services firm, collectively referred to as SWITCH companies (TCS, Infosys, Wipro, Cognizant, Satyam and HCL Technologies), accounted for 1.9 per cent of the total $672 billion IT services market in 2006, compared with 0.5 per cent of the $554 billion mart in 2001.

Now, of course, there is a positive and negative aspect to this. The negative, we all know. Positive being that the market share of Indian companies has gone up by about 4 times and the biggest player in this segment, IBM has about 7.2 percent marketshare. So, theres a lot of room for growth for this set of companies either individually or globally.

Gartner itself thinks that If the Indian IT service providers continue to grow at the current pace, at least two companies will be a part of the top ten companies globally by 2010

There is a big story here and you are seeing it all around you. The glass is half full or half empty depending on how you see it.

So, what is the way to grow? One, obvious way is to grow organically as many of these companies have been doing. But even organically, there are many strategies – some of which could involve higher risk like picking up a start up which has a potential for a product and then try and develop it (TCS recent partnership with Cassat). Or you could pick up slightly different businesses and augment your skillsets (Wipro here). Or you could buy a similar company elsewhere. (Infosys acquiring Expert Australia).

There is no one way, but only one direction, that of growth. To use a well repeated parable to illustrate the situation:

Every morning in Africa, a gazelle wakes up. It knows that it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows that it must out run the slowest gazelle or it will starve.

It does not matter whether you are a lion or gazelle.When the sun comes up you had better be running.

Free home delivery


...is a standard feature of almost Kirana store. The bigger guys also do it, if you purchase a minimum amount worth of goods.

Now, I read this piece on how US retailers are letting consumers shop online and pick up goods at the store.

I see this as a model in India (partially in place and partly as an opportunity) with the added twist of free delivery. If these small stores (indeed it could work better for the large ones - Reliance, please note) offered web gateways for you to order and they could deliver it to your doorstep when you are back from work. As it is, they do free home delivery, this could make that service much more useful...

Right now, they use phones and they use it very well. Especially mobile phones. Many vegetable vendors (see picture, slightly grainy) will deliver at your home, as will kirana shops - just order over phone.

Wednesday, September 26, 2007

On Corruption

India might have moved up in the corruption index (I mean, improved), but on the ground does it mean anything? Take the case of IT city Bangalore. The so called most wired city with the largest software exports is still as corrupt as it can get at the basic level. Here is my experience over the last few years.

Lets start with the RTO. A board there says, "Please do not approach touts". And the office is upto it. You do not have to approach a tout at all to get your work done. They will approach you first. If you speak Kannada there is some chance that you will get your work done without touts but otherwise, you can say goodbye to anything that needs to be done - and surely not in a single visit. About 12 visits can get you to the right officer and thats your starting point for the 13th visit.

Or the Registrars office. Look at the gold inside and you will be too bedazzled to say anything else. Even gold idols will pale with the jewellery you will see inside the office. If they are not corrupt, then they have to be alchemists converting red tape to gold. They refuse to acknowledge your existence and if you manage to coerce them, Gavaskars scoring rate will look like Jayasuriyas, until of course, money changes hands. From then on, you are god to them. Sir is used as a punctuation, chairs appear out of the woorwork, cameras begin to work magically. Work happens so fast, Yuvrajs half century will pale in comparison.

Or the electricity office. If you call up the office they will tell you the name of the person you can contact in order to get your electricity meter transferred. And that person has a smart way of operating - he even has a rate card. You want to come directly, sure. Only dont expect anything anytime soon.

BTW, in no place is money asked directly and in all probability if you give it directly, it will not be accepted. But the place is designed in such a way that things dont move at all without the services of an "agent".

Tuesday, September 25, 2007

Make hay

while IT shines. There are numerous businesses which are flourishing in India thanks to IT doing well (will write about it sometime). Heres one more: A third finishing school has opened in Bangalore to prep students who want to make it to IT. Third? I did not know that there were two others. Some excerpts:

The school is aimed at keeping candidates industry-ready. In India, only 25 percent of management graduates secure jobs. Many are unsuccessful as they are not industry-ready... A lot of oratory skills are required to get through the interviews and the finishing school will aim at bridging that gap... Also one has to take into account that there are 4,00,000 engineers graduating every year, out of which only one in every four is employable in the IT sector. The IT finishing schools will solve this problem and ensure that at least three out of the four graduates each year is employable. Firstly, cracking an interview is not all about "oratory skills"; otherwise harikatha exponents would have entered companies and perhaps Johnny Lever too. Technical skills, well, if you did not study while you were enrolled for 4 years in college, fat chance you will become a programming wizard (even kindergarten level) after you attend a finishing school.

Man, when will we stop? First there are classes that help you make the cut in various exams - to get into an MBA for instance. Now, this "class" will help you make the cut to various jobs.

What next? A coaching class for jobs? Only 1 in 50 people get promoted each year, I see a gap there...

Monday, September 24, 2007

Retail kiosks

Read this piece on the Future groups plan. They have come up with the idea of a retail kiosk - which is being used now.

This is the new out-of-store format that Kishore Biyani's Future Group has come up with. The kiosk, which houses a computer terminal, offers access to information about 10,000 products for the consumer to choose from. He can place the order, pay by credit card or cash, and his purchases are shipped to his residence in maximum of 10 days. Simple, isn't it?

Simple yes, smart too, but selling this will be a toughie is my opinion. And, the railways/Air Deccan have been doing it by having places other than regular airports and railway stations to book tickets (think about it, it is very similar).

I am sure they will come out with smart ideas around it as it evolves and this is a smart way to kick start low overhead online shopping (which today in India is mostly about air and rail tickets) in a broadband/computers starved nation. If it is too popular, then, customers wont like to stand in line in front of a kiosk waiting for their turn for something that will be delivered 10 odd days later. Also, online shopping is not something we take to very well - since the level of trust with the merchandiser and transport and delivery mechanism (breakage, pilferage) is not very high - books are fine, but not electronics and clothes.

And then it will be easier to link it onto ATMs and banks will be only too happy to play ball - but they have to do something about the queues. Should be fun.

Currency rising

Todays Mint (and after my Bombay visit, I realized how this newspaper has carved out a nice niche in the financial newspapers market - hopefully more on that some other time or perhaps Amit will be a better person to ask) has a feature on which big companies will be the most affected by the currency rise.

Predictably the IT companies are top on the list with their high dependence on dollars. Alarm bells are being rung needlessly all over the place. What the rupee rise means for IT companies is very simple - it means reduced margins. (And similar bells are ringing, in, Europe, because the dollar is falling vis-a-vis the Euro.)

Their existing margins are fat and varies from 40% to 20% and sometimes even more than that. So, in its place, with an appreciating rupee and higher salaries, all it means is a reduction in margins - to the level of many other industries. So, in the short run it means slightly lower multiples on stock prices (and hence the reduction in value of ESOPs) and a nice cost cutting theme all around for the companies, but little else.

It can serve as an impetus to move into more value added services, it also means diversifying the basket of currencies (and labour markets). It could mean lower spending on "perks", more variable salaries (a currency component, anyone :-)), tighter bench management - but ultimately if you want to save more, you have to earn more, not necessarily spend less and that, is the obvious key. Also remember, it is not just the rise of the rupee - it really is about the fall of the dollar - not necessarily the Euro (so, there are a few shades of grey there)

My question is, Chinas currency is sort of artificially pegged to the dollar - so effectively, the dollar fall does not mean anything to them? So, what happens to the IT companies who have opened the branches there? Can Chinas currency be used to hedge some of the risk? This, really is the smaller question, but the larger question is, what next?

Sunday, September 23, 2007

Retail Jobs

When was the last time you saw a vacancy note like this, calling for HSC as a qualification? Other than the badly printed two-tone notices calling for railway recruitment and the like? Jobs are being created, even as some people crib about them being taken away. That, by the way, is reality. Jobs come and go, the way people make their living changes. This sign spotted at a Navi Mumbai branch of a retail store a few days back.

Indian retail is growing at 30% per annum and there is a lot of space there. Show me one vegetable vendor or kirana who created as many jobs.

Friday, September 21, 2007

Get onto to Orkut/Facebook

Ever seen an ad that says so for any social network? Especially those that are big in India - Orkut for instance and Facebook, which seems to be catching up. Ever seen an ad from them? Big Adda.com has started advertising on Bangalores radio. The spread of social networking sites has very little to do with high decibel advertising. Especially with existing social networking sites which are quite dominant, how do you get people to switch?

Related, on Zapaks advertising campaign, Web 2.0, Social networking
Suggested reading, Network effect.

Tuesday, September 18, 2007

Navi Mumbai notes

If you get to live and work in Navi Mumbai, you can have a quality of life better than in most Indian cities. Shocking? Tough to believe? But this is my experience over the last few days (and seeing how the city has evolved since the time we shifted to the new suburb from the city more than 10 years back).

When we shifted here, this city was just about shaking off its ghost city tab. CBD Belapur, with CBD standing for Central Business District was more Completely Blank and Deserted. Today it has a five star hotel and quite a few businesses - it is not really CBD, but it does have its share.

Then, the train crawled to reach Navi Mumbai, bus services were non existent. Our own apartment complex was in the middle of nowhere and there were times when we had to carry the gas cylinder to our house since nobody was very happy to deliver it. The only things worth writing home about were educational institutions. Land was cheap and these institutions wanted it in plenty - most of them were blessed by politicians of various hues (Ramrao Adik, DY Patil and so on). The educational institutions and of course, Reliance were the only things here, unless you counted Patni.

Today, it is a nice ecosystem. The wholesale market has shifted here and with it, some parts of the trading community - after a longish resistance. The local bus service is decent, far better than Bangalore, if you ask me. Roads are wide, which is what happens when you build an entire city on marshland, the land is (was) available for free, when CIDCO started off. Railway stations with their attached complexes, they are an old story, are good and nearly completely occupied. The city had plans for a railway line of its own, in cold storage now, though budgets could justify it soon. Reliance, of course, is a very happy patron of this city. Travel to the main city is still not easy as it can be - perhaps introducing Volvo buses would be a great idea BEST. The auto rickshaw guys are not yet as professional as in the old city; the toll to enter the city and levied on the railway tickets is a pain, but the city is still a nice place to live in - minus the big city congestion. Yet, there are two views, as my co-blogger would say...

I hope to post more about the rise of Navi Mumbai soon...

Saturday, September 15, 2007

Cyber city sinks

This has not been such big news anywhere, but Bangalore over the last few days has sunk, literally. The city received about 200 mm of rain (Mumbai received some 900 mm during the super downpour) over these three odd days and guess what.

Traffic stopped, Lakes (already shrunk due to encroachment) burst (meaning, they came onto the parts that were originally lakes), roads flooded (due to non existent drains), houses collapsed, electricity supply stopped and then some. Read here. (will try to get a better link, but parts of this article are hilarious - especially the section where it says people got out of vehicles and started moving in coracles).

What Silicon valley - all the valleys of Bangalore are encroached with houses, concrete buildings over drains, so the water cannot go anywhere.

Unrelated, but a rant nonetheless: Swalpa Adjust maadi, while some sons of the soil wreak havoc on the state. Sometimes I wonder if there is any difference between Karnataka and Bihar.

Ayush Model

Recently been to Ayush - the brand and chain managed by Hindustan Unilever (HUL) (of course a franchisee form). Its an interesting venture between Arya Vaidaya Pharmacy (AVP) and HUL. While HUL lends its marketing muscle AVP lends - what I believe more important - the ayurveda muscle (and perhaps the authenticity tag).

There is space for something like Ayush as the corporatization of therapy and beauty centers as shown by both Lakme and Marico-Kaya. Ayush could be a success if more centres of opened and there was consistent quality. The therpaists coming out of AVP have something which probably no other therapists can replicate.

But what I am not quite sure is why would AVP need HUL. Ayurveda knowledge is something you cannot gain easily - yes you can keep hiring all the best people - but to achieve what AVP or Arya Vidya Shala of Kottakkal has achieved is something niche and probably not replicable nor would HUL want to do the same.

AVP can on relative terms gain marketing knowledge especially with its huge brand recall down south should it of course care to spend a more dough for marketing.

AVP can always do without HUL and Ayush not quite sure if it will ever work the other way.

Friday, September 14, 2007

Compare and contrast

Bangalores traffic situation vis a vis Bombays traffic situation.

Bangalore: Rules and Signals are not obeyed - whether there are traffic lights or whether they are manned. There are no rules in Bangalore.
Bombay: Signals are generally obeyed, manned obeyed even better. Rules, well, far better obeyed here than any where in India.

Bangalore: Broke a rule? Argue with cop (or worse, some low level functionaries without any authority to fine) and get away with it. In any case he wont fine you.
Bombay: Be prepared to either be fined (he has the fine printer hung on his neck) or pay a bribe. Either way, a loss to rule breaker and a loss of time.

Bangalore: The sight of a cop makes you feel sorry.
Bombay: The sight of a cop makes you feel wary.

Bangalore: Intersections have small podiums for cops fitted with loudspeakers - so cops can be more humane. Over the horns and general din, guess who listens to what is blaring out from the loudspeakers, except the cows is anybodys guess.
Bombay: Small podiums removed for better mobility of the cop. Loudspeaker? What is that?

Bangalore: Getting caught is a rarity. Heard the cops whistle? Ignore and run.
Bombay: Watch out for the cops whistle. Check if it is for you; if it is better stop. If you dont stop, you will either be followed by another cop or you will be caught at the next intersection.

Bangalore traffic is messy and pathetic. Part of it is due to the cops. They barely fine anybody who jumps a signal. The department is short staffed, so they use "temps", who have no authority and are ignored with impunity. The traffic is so bad that stopping one motorist for a fine means another hundred will create chaos.

Solution: 100 Bombay cops on an "onsite" assignment (followed by training for Bangalore cops) at key intersections will do the trick for Bangalore in 3 months. The department will make enough money for a 100 police bikes as a bonus.

As you might have guessed, I am in Mumbai for a short while...

Thursday, September 13, 2007

The words nearshoring

Indian IT companies are opening centers all over the world. Is it reverse outsourcing or is it just a matter of exporting the model wherever it is possible? To me, it appears more like nearshoring where the company gets closer to the client timezone, culture and potentially at a lower cost too. Either way, the point is that Indian IT companies are opening centers around the world. Which is a good thing. Is it because Indias cost advantage is going away? I think the article has got this part wrong (or the title wrong, because in the end, they have included some of the other aspects).

Nearshoring as a concept is a smart thing to do. It is kind of funny that offshoring happened first rather than nearshoring for Indian companies(at the scale that it is), but in any case it is good to see Indian companies do this - the global biggies are at it already. (See the comment on this post). Nearshoring is not in vogue because India suddenly became more expensive, there is more to it.

Some transactions are time bound, so a 24 hour turnaround (which is kind of the norm for any multi-time zone delivery model) may not be sufficient enough. Plus, there is culture (we have English call centers. Is it easy to create Spanish/French call centers - perhaps it is better done in Mexico or places in Europe.) barriers that need to be overcome. Also visa barriers, ability to fly people in and out are all considerations that become easier with nearshoring.

Also, Indian IT companies have perfected the art (and science) of getting college educated people to do IT tasks (of various degrees of skills). So, that as a model can be used in various parts of the world, not just India - and the biggies already did it - global delivery as a strategy.

On a related note, Satyam is investing in Malaysia; I would not be very convinced about Malaysia as a location and if it provides a significant advantage over India. In their own words, " Although the hiring costs in Malaysia are still higher than "India and China by 50 to 60 percent, other considerations such as the strong support from the Malaysian government make the country "attractive", even though the "initial salary costs will look higher". "Despite the higher costs, the cost of putting up a center, the cost of running it, and the first world efficiency…make it an attractive destination," Aggarwal noted.

In any case, reverse outsourcing, so to day is happening. Indian IT is hiring a lot of people abroad and even acquiring a few companies abroad. The IT industry in India is doing well and if that helps in acquiring companies and hiring people abroad, why not?

Wednesday, September 12, 2007

Italy and design

Everywhere I see in Bangalore there are furniture shops and shops that offer modular kitchens. Many a time, their names are Italian - or they sound Italian. I found a few recently; Snaidero, Roca, Donna Rossi (are they Italian names in the first place?) kitchen line and then some. As far as I know Faber is the best selling in India in the organized segment - the unorganized segment is perhaps too large and too fragmented to be counted. What are the Indian brands doing - I know Godrej came up with a line not so long ago. Why does everyone think that an Italian brand knows how to design an Indian kitchen? Why is that not being used as a branding opportunity for an Indian brand?

If you look around in India, pretty much nothing with an Italian name has sold well. Not Fiat, not Ferrari (and thats not because of the name - obviously). If anything the name that sells best is Japanese (or sounds like Japanese).

So, why do these furniture makers have Italian sounding names? I dont know. Do you?

Tuesday, September 11, 2007

Telecommuting, the next frontier

As the IT industry grows, talent shortage looms (I don't believe this etc.), traffic makes life miserable, there is a rising sun on the horizon. Telecommuting, the one stop shop for all ills including employee retention, satisfaction and the works.

Telecommuting, as an option, is not something you see in India out of IT. Even within IT, it is available as an option only to certain sections of the workforce and then again, it is not as prevalent as it is in the US. There is a lot of scope for working from home as a concept, but it hasn't still caught on.

One simple reason is that, for telecommuting as a concept, you need a disciplined workforce who can make the distinction between staying at home and working and staying at home itself. Telecommuting does not mean that you loaf around - it means that you are available for the 8 odd hours over phone, IM or mail. You are expected to attend critical things that may come up during the workday. It also means that you cannot have crying babies as you take that teleconference meeting from home. We do not make that distinction very well. For us those boundaries are, really, quite fuzzy. Which is one of the first hurdles that has to be crossed. Many companies do give that option and it is a welcome relief if you get to avoid that commute even partly.

What also prevents companies from going the whole hog (and really, this is a secondary issue) is that broadband connectivity needs to improve by leaps and bounds.

So, as we wait for telecommuting to pick up, companies are using other innovative methods. Some of it involves satellite offices at various points or having multiple offices across the city and allowing employees to work out of any office a few days a week with one day of reporting to HQ. Expect more of this in future as telecommuting becomes an option to reduce real estate costs, transport costs et al.

The 100cc battle

Its a battle that's being fought long and hard. On the one side is Hero Honda that makes a pile of money through its 100cc bikes. On the other side is Bajaj which has, very smartly, after a few bruises decided to literally, "change the game."

The point in contention is whether 100 cc bikes will have a market. They do, as of today and they have for a few years now. And Hero Honda with its entry level CD 100 (whatever) and Splendor (again with a few suffixes) is sitting pretty there. Bajaj has been shouting from the rooftop for a while now that the 100cc market has gone, but Hero Honda has refused to bite and the market, well, it is taking its own time.

Bajaj has upped the ante now by launching a 125 cc bike that gives more mileage than the existing 100 cc bikes and is cheaper. It sure is an interesting battle out there. When it started off Hero Honda was the newcomer and Bajaj was the fuddy-duddy. Bajaj, in the last few years has changed itself so much that it makes Hero Honda appear fuddy-duddy. The jury is still out as to whether the 100cc market will go or stay. In any case that is not really Bajas point; Bajaj wants to wrestle the share of the largest segment of the Indian bike industry. What better way than to 'change the game'?

Sunday, September 09, 2007

Kerala model?

What Kerala model? There has some discussion on this (link via Varnam and Churumuri) on an NYT piece Titled, Jobs abroad support model state (btw, brilliant article) in India. This is but an open secret to anybody who has any knowledge of this state. It is so obvious that migrants apart (both within and without the country), tourism supports the state. And it is not just jobs abroad, it is the entire democracy (non communist states) in India that support the so called communist state. There is nothing communist about Kerala except strikes and lack of development and the names of the parties that compete in the elections. Otherwise they are as capitalist as they get. They routinely indulge in the same "niceties" that other parties indulge in - namely corruption, nepotism and land grabbing et al.

Name a job in Kerala. Can't think of any? No, you are not wrong. For a while in the 80s, you could get jobs in state owned enterprises and once the economy opened up, nobody, almost nobody set up shop in Kerala despite 100% literacy and a high percent of educated labour force - perfect for IT services and BPOs. Why? Troublesome local politics that ends up in a strike every few days. Now a few brave IT companies have started to create some jobs there. Let us see how much they succeed here. But everybody in the state is educated. Is that due to the communists? You have the answer.

Kerala’s culture of human investment is at least two centuries years old and owes early debts to the missionaries and maharajahs who emphasized schools.

Life expectancy, again, is it due to the "great communist" policy?

But Kerala’s life expectancy is nearly 74 years — 11 years longer than the Indian average and approaching the American average of 77 years. Its literacy rate, 91 percent, compares to an Indian average of 65 percent, and an American rate the
United Nations estimates at 99 percent. Those enviable outcomes, its supporters stress, are a result of policy choices: Kerala spends 36 percent more on education than the average Indian state and 46 percent more on health.

Ask around and you will see that many of the Keralites you and I know do not go to either government schools or to government hospitals. There is enough private investment in this sector in the state. Yes, it is true that on an average healthcare and education is more accessible in Kerala than in many hinterlands, but that alone doesn't account for longevity does it? It has to be coupled with awareness and perhaps education. So, it is not the state policy that resulted in this "miracle".

Amartya Sen, a future Nobel laureate in economics, wrote widely on Kerala, arguing (in a book with Jean Dreze) that its “outstanding social achievements” were of “far-reaching significance” in other countries. In a book on three places that inspire global hope, Bill McKibben, an American, wrote that “Kerala demonstrates that a low-level economy can create a decent life” and shows that “sharing works.”

As you drive into Kerala or land anywhere one thing will strike you. The enormous ads of jewellery shops. Can you buy tons of gold with "low level economy?". The local jewellery business is the biggest in the country. Why dont we see jewellery stores in West Bengal another communist stronghold? Think of lack of jobs there too, think of high levels of state spending on education there too.

Now look at the Malayalee enclaves all over the world. What? Theres one near where you live too? (Think Bombay, Chennai, Bangalore - almost anywhere). Yes, there has to be. Half the working population slogs elsewhere sending money back to their hometowns. I know this because my dad used to do this as would his friends. There is no such thing as a Kerala model - if there is, it is a model you don't want to emulate.

Heres TVR Shenoy from a few years back on the same topic.
Shadow warrior, as usual does a hatchet job.

Horizontal, vertical

Many years back, when cameras were a status symbol, we acquired one of the Hot-Shot cameras, in vogue at that point in time. It had to be loaded with the 24 exposure film cartridges that kind of looked like the old telephone receivers. Now, every now and then we got more than 24 exposures out of it, sometimes, upto to 30. That made us very happy, customer delight if you will.

However, I was amused that every film roll can give such variations in the number of exposures - I am sure that the manufacturing process was quite evolved. It was never less than 24, it was always more. Nonetheless, I never got the answer either, that sophisticated Japanese manufacturers cannot get the film length right and it is usually more than 24 - talk of Customer Delight.

Then, one fine day, it dawned. Vertical shots use lesser film. By the time you finish 24 exposures, you end up getting up a little extra. It was never about the film length at all. Not sure what the practical application of this post is, in an age of digital cameras...

Wednesday, September 05, 2007

New Insights on Poverty and Life

around the world, again by Hans Gosling. Dont miss it - worth every minute. This talk is a follow up to the previous one that I had posted last week.



That data is available on the web too. Here it is where it is available at Google, since Google acquired the Trendalyzer software that Hans uses to present in the talk. Go, play with the data here, there are dropdowns on the x as well as the y-axis and makes for some interesting analysis.

(Cross posted on The Indian Economy Blog)

Mumbai's latest fad - Paver blocks

Mumbai has a new fad - its paver blocks on road. Ideally a paver block should look something like this. But in Mumbai (unfortunately I don't have a pic yet) it will most definitely not be like this.

Paver blocks are now used in roads instead of the famed tar roads or concrete roads - though not sure why. I guess thats not the problem, the problem lies in how they are placed on roads and on which roads.

Roads which are quite good (again on a relative basis) are dug up and paver blocks are placed (for eg. road just outisde Mantralya in Mumbai). These roads were quite good in the first place so not sure why it was dug up and replaced.

Yes it looks neater because of the mix and match color combination but the blocks don't cover the entire road stretch. Most are tar based and then there is patch of paver blocks. The "connect "between the tar roads and paver blocks is the most troublesome - like the joints on flyovers.

Its almost like climbing a bridge at the "connect" with huge traffic jams due to this "disconnect". The paver blocks by themselves are shabbily laid which again results in pot holes, where the removal of one single block results more blocks getting loose and hence a even larger pothole than normal.

Mumbai roads have their own share of experimentation and almost nothing works. No prizes for guessing why.

Tuesday, September 04, 2007

The thin line

There is a thin line between a great marketing idea and carrying it too far.

Here is an example. SaReGaMa had launched(not very new) series of unremixed songs of some of the great Hindi film music artists. That they have turned their old songs chest into the most profitable business is a different story altogether. Like bhelpuri and its variations, they keep stuffing different combinations using the same ingredients and each time, it is a hit.

So, this particular one was sponsored by Strepsils - so much so that the CD in question is called Strepsils - Pure voices or some such. It has the Strepsils on the cover and in various other places. Fair enough. Till this point it is a great idea. The connect between Strepsils and pure voices is unmistakable. Now just before and after the CD, they have a plug for Strepsils (Congrats Mr. Dealmaker). Yuck. You cant even get it to forward tracks, they have not left a gap between the first song and this ad. It is now as kitschy as listening to Vividh Bharti with all those ads.

Thats it. No more stupid Strepsils remix or any other co-branded songs from SaReGaMa ever.

Car sales update

Some time back, I had predicted that the Logan could find the going tough.

Heres the sales report for August 2007. The SX4 (plus old Esteem etc.) sold some 4839 units, while the warhorse Honda sold 4879 units (with the City selling about 3095 odd units).

And Logan sold about 2252 units this month. The A2 segment, Indias favourite sold about 41,736 - and thats just Maruti models. Count the Santro and the Indica, the figure will be still higher.

You can argue that it is early days yet for the Logan and the SX4 is a new launch and a thousand other things, but fact is that it is early days for the SX4 too as much as it is for Logan, while the Honda City is going strong despite being in the market for a couple of years, so it can work either way. You can also argue that it has limited reach thanks to fewer dealerships as of now, but again, low sales in the initial days are not exactly great advertisement for any car.

Here is some real analysis though...

The trick is to create the low cost option without marketing and touting it is a low cost option. Nokia 1100 is a case in point, with the "Designed for India" tag. The moment you go out and say, "Designed for low cost", thats it. The customer who buys it needs to feel good about it. Thats where I suspect that Logans pedigree comes in the way.

Exit tax?

The Acorn has a nice take on the Exit tax proposed by the "Hardly Required Department" Ministry. My first reaction when I read about it in the papers, was, duh !?

Who is to say that people contribute only while staying in India or employed to an Indian company? Indeed many people who are here do not contribute (the concerned ministry and other politicians included) and many people who are outside contribute to India - and I don't mean just people who happen to be Indians.

So, there should be an exit bonus as well - people who we are glad to see go. For these people, we will give them an exit bonus in return for a promise (and other enforceable conditions) that they will never return.

Coming back to the exit tax. Imagine someone went out of India, worked at, say Pepsico (ohhh - that evil MNC) and then came back as an expat and created thousands of jobs in India? Indeed many private companies have done so over the past few years. What if, the person went abroad to do a post graduation, came back a few years later and set up a firm that employed a few people? What if the person went abroad and came back to work for an Indian company?

If it were not for some brain drain that keeps happening, people would never realize that we have any brain, after seeing the drain our politicians keep creating for us. But, read Nitins post.

Saturday, September 01, 2007

Bajaj to pay workers to stay at home

Why? The plant is no longer profitable. Perhaps this is the ideal world, where the evil capitalist owner pays the poor workers, even if they do not work, but no, some people find fault with that also.

Bajaj had spoken of the plant’s unimpressive performance at the company’s annual general meeting in July. He said that the 2,200 workers in the plant produced 50,000 vehicles while Bajaj’s new plant at Pantnagar was producing one million vehicles with just 500 workmen. Bajaj told shareholders at the AGM that he was in favour of shutting down the facility but that existing labour laws made it impossible for the company to do so.

These are our existing labour laws.