The Indian economy has been stress tested for the past year and a half, and we are now exhaling a collective but cautious sigh of relief. Yes, the economy has slowed down but we are still hanging in there at a 6.5+% growth, which is much better than what it was in 2000-2003. Also there do not appear to be any major cracks in the edifice of the global economic powerhouse that we are in the process of building. One must admit though that there is some merit to the often made argument that we have not been hit any less than everyone else, since the percentage decline in our GDP growth has been as severe as the economies in the world which have contracted. Hence, our slowdown is equivalent to their recession. However, we have had no collapse of institutions, and what’s more, consumer demand is up and about, […]
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Business Standard - September 18, 2010
The assumption that a big-name bank with a set of smaller local partners, yoked together by technology, will automatically win over the local money lenders or the informal financial sector needs to be challenged. “Biometrics” and ATMs are not consumer value propositions, they are the supply side story. The local pawn broker who is usurious is also culturally sensitive. He knows that the mangalsutra mortgaged to him needs to appear on the bride’s neck at the time of a wedding and that is part of his idea of customer service. He will wait behind the venue, both to hand it over and take it back. A friend whose family is in the business tells the story of how it offered the service of making artificial jewellery in exactly the same pattern as the items mortgaged by customers – a winning proposition for both sides. Similarly, in urban slums people talk […]
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Business Standard - August 21, 2010
When cinema theatres catch fire and it is known that they violated safety norms and yet received municipal approvals, who is the non-executive chairman of the approvals-granting body that has not been taken to task? So why is it considered acceptable to go after the non-executive chairman of a corporate entity where a really disastrous malfunction occurred the likes of which we have just discussed? Is it because the corporate world is seen to be more deliberately callous, more wilfully destructive, more malafide in its intentions than every other sector of society? Yes of course the legal system must do its job and the wheels of law are turning in the cases file against the non-executive chairman of Union Carbide at the time when the Bhopal tragedy occurred.( Interestingly, no proceedings seem to have been instituted against the rest of the non-executive board at that time. Who are they, and […]
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He makes the case that that the large number of poor people that exist in the world actually represent an enormous and lucrative potential market, which businesses can profitably address, if they think innovatively about their business models and business economics. The message of “profit from the poor” has caused a storm of protest in certain development sector circles, leading to debates about whether the poor should be thought of as mere consumers or also as producers. The answer of course is that thinking of the poor as consumers does not preclude them from being thought of as producers. Some micro finance institutions see themselves as operating on both sides of the “poor as producer, or poor as consumer” equation. Their financial and business assistance enables the poor to be economically productive. And as they get economically productive, they can afford to pay for other things that they need, provided […]
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Economic Times - September 14, 2009
We know of a person who got a call selling him life insurance from a company from whom he already has a policy. He asked whether the caller knew that he was already a customer, and she said she had no idea. She was presumably following the process laid out for her – get a bunch of cell numbers in this manner and call them and proceed using this script. Viewed from the customer’s side, he was really hassled. These were the folks who were supposed to pay lots of money immediately to his wife, if he died suddenly. And they didn’t even know he existed. The company’s response to this was to say “in a cold calling customer acquisition process, it isn’t really possible to control this duplication”. Anything more, like for example feeding the number and name into a computer and getting a call – don’t call verdict […]
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