Ramamritham rules

Alas, Ramamritham is alive , well and strong and he rules upon all that he surveys (pun intended).  The Indian Government will announce today in parliament that it would open up the retail sector to foreign investment. No doubt the Left will organise some bandhs, yell at 10,000 decibels in the Lok Sabha, and then this law will be passed while the opposition will walk out en masse.

Ostensibly, this is economic reform. Its a pathetic, 15cms of reform after a decade of nothing happening, but we'll reserve that criticism for another day. What has got my goat is Ramamritham's dirty footprint all across this move.

Firstly foreign investment of 100% will be allowed in Single Brand Retail, but only 51% in multi brand retail. Therefore a Marks & Spencer store can be 100% foreign owned, but Carrefour can't. Even though they may both sell precisely the same things (M&S does sell a lot of food). Pray why ??

Secondly Ramamritham has excelled himself in drafting a series of conditions for allowing  even this. Look at some of them

• The minimum investment is $100 m. Where he got this figure is unclear. Why not $82.5 m? But at least we can live with this
• 50% of this $100 m has to be invested in "back end". Then our venerable hero has gone on to clarify that land, rentals and front end stores will not count as back end. No doubt detailed rules on what is back and what is front will be framed. (here is conclusive proof at last that Ramamritham doesn't know his front side from his back side) Lobbyists will work very hard to get IT systems included in back end. But R will qualify that Microsoft Office will not count as back end. Many months of fruitful work and litigation awaits.
• 30% has to be sourced by these companies from small scale (completely irrelevant if the product is rubbish and the consumer does not want it) No doubt a front small scale company will be set up who will buy the stuff from a big company and then sell it to the retailer to fulfill this quota. R being very smart will then draft rules to stop this. The retailer being equally smart will get a small scale company to buy from a small scale company to buy from a big company ....... and so on.
• Stores can be set up only in cities with 1 million population. Lobbyists will work to reduce this number to half a million. They will then lobby that last year Gummidipoondi crossed 1 million population and that R should not wait for another 10 years for the next census but instead pass an interim order allowing the store to be opened there.

How can we get this into Ramamritham's thick skull that we don't want him deciding what is good or bad for us as consumers.  Or for the small Indian retailer who he is trying to protect with such quixotic rules. The Indian retailer needs no protection. He is quite a formidable force. Its by no means certain that small retailers will vanish just because Walmart came in - in India the economics of the retail industry, especially the relative high cost of real estate,  is such that this is very unlikely.

In any case, how about letting the consumer choose. Rajalakshmi will vote with her feet and purse. She will buy where something is cheaper, better and where she likes to go. She deserves that freedom. Ramamritham should be booted from blocking the way.

PS : For those new to this space, Ramaritham is the mythical, fictional bureaucrat who takes orgasmic pleasure in framing complex, unnecessary and useless rules in order to make lives miserable for ordinary members of the homo sapiens species.

Read More

Why this kolaveri di

The title of the post is simply to substantiate to Gils , Zeno and other  experts that I am "tuned in" ! In case you are still flummoxed, then that is clear proof that you simply aren't up to date with the "in thing" !! Why this kolaveri di is a completely nonsensical song that for reasons totally baffling has become a massive rage and has gone viral in the last four days. Since world success these days is measured in terms of number of views in YouTube (1.8 million in 4 days and rising by the minute) and insane numbers of Tweets,  Facebook mentions and likes ; it can be conclusively established as a massive hit. I am reliably told that it is competing with another equally baffling entity called Lady Gaga for global leadership.

The song is in "Tanglish" - the curious mixture of Tamil and English which is widely spoken in Madras. It is from a forthcoming movie called 3 (zero marks for creativity in naming a movie). The lyrics are complete nonsense and there is virtually no reason why it should appeal to anybody. And yet it is a hit in four days. WHY ????

This is the mystery of success in consumer marketing. No amount of consumer insight or market research will tell you why something will succeed while a similar thing bombs. The consumer continues to be an indescribable mystery. Many pundits will write treatises on why it succeeded, but after the event. Only a rare genius such as Steve Jobs, could confidently predict success, and get it right. That's why he is so highly feted.

Can anybody tell me why Justin Bieber's Baby should have more than half a billion views on YouTube (the kid can't sing for Gods sake).  And why Charlie Bit my Finger was long reining as the top watched video of all time and even now is a respectable 6th with some 400 million views. Or for that matter, why a yucky tasting syrup, developed as a patented quack medicine for  morphine addiction, dyspepsia and impotence should become the largest consumed drink in the world for 100 years.

Who can fathom the mind of Rajalakshmi, Wang Xiao or Jane Doe ?

Read More

The awfulness of Benetton

Benetton, the clothing company, has been struggling of late. So they've gone back to  their horrible old formula to promote their brand - make shocking advertisements.

Their campaign is called "UNhate" - whatever that means. These are some of their abominations.

The last one elicited an irritated objection from the Vatican for the depiction of the Holy Father in this manner and that too for a commercial purpose. Benetton has reportedly withdrawn this ad.

Benetton is known for outrageous advertising in the past. I won't dignify their earlier indecencies with  reproducing those photographs. They have included a man dying of AIDS, a new born with its umbilical cord still connected to the mother, a soldier holding a human bone, and the like.

Sure, there is clutter in advertising and you need to break through it. But there must be a sense of decency in business, just as the same as in all walks of life.  Anything that is legally OK, is not OK. Making money by shocking people seems to be an awful way to earn a living.

But in a capitalist system, the consumer has the final say. If enough people are offended by such tactics, they simply will not buy the product. Benetton's sales are some € 2 bn, not too far from where they were a decade ago. Zara, a competitor, which does not advertise, sells € 12 bn. But alas, Benetton routinely wins advertising awards for "innovative" advertising.

Being a committed capitalist, I never thought I would utter the following words, but now I do - I heartily wish that Benetton would go bust. Moral bankruptcy is a prelude to financial bankruptcy.

Read More

Three cheers for Shiv

Running a marathon is usually a huge superhuman effort; Right ? Well, lots of people run marathons every year, but for the non professionals, it is usually a major milestone. They train very hard for it, suffer through the race, but ultimately make it.  It's an achievement to be very proud of.

What then do you say of the ultra marathoners ?? The marathon, as you may know is 42 kms and a bit. Anything more than this is an ultra marathon. What can you say about the guys and gals who run 50km, 75km and , yes, 100 km ?? They are not professionals. They are ordinary guys and gals like you and me. They hold a day job and run only for pleasure. Men, women of all ages.  This isn't for money - there is no money. This isn't for fame - did any of you hear about the Bangalore Ultra before this post ? This is simply for achievement.

This post is a tribute to my good friend, and long ago classmate, Shiv, who ran the 75km race in the Bangalore Ultra Marathon yesterday. Yes; seventy five kilometres. And finished in 11hrs plus.  He won the Seniors category in the 75km race. The Bangalore Ultra is run on a cross country trail - not on flat roads. The trail is full of stones, moon craters and the like. Even walking on it seemed a challenging task to me. These guys run an ultra marathon on it. I was there all day to cheer him and the other runners on and treated to an incredibly rewarding experience.

Shiv and the others set off at 5 AM in the morning, when it was still dark and he finished after 4 PM. He is 50+. He's always been a great sportsman, but this is something altogether on a different plane. To run 75 kms , a distance he has never done before.  Wow ! For sheer guts , courage and achievement, this must rank at the very top. Shiv - you are an absolute hero. Just the thought of 75kms is scary to me ! You run it as if it was just another day at the office. Super Wow !

Watching him and the others is a peep inside a fascinating world. Each runner is completely dedicated to running. They train like crazy. They bear much pain. They run for a sense of personal accomplishment. Its all about setting a personal goal - maybe distance, maybe timing - and achieving it.Winning is secondary. They cheer everybody. There is an enormous sense of comradeship. The guy who finishes 3 hours behind the winner is cheered as  lustily, with the winner usually taking the lead in cheering the loudest. Everybody helps everybody else. Everybody is a winner. They represent some of the best qualities of amateur sport.

Isn't this how life itself should be ?

Read More

A letter to a certain Chief Minister in India

Dear Madam,

We are concerned about the state of your vocal chords, after your recent exertions of that organ protesting against the nth rise in the price of petrol that the Indian government announced a few days ago. While we are well aware of your superhuman powers in that sphere of activity, I am nevertheless concerned enough to give you some advice on the amelioration of  stress on your voice box. I am not one of your subjects, not living in your state at the moment, but have lived there in the past and therefore have a certain affinity.

What has aroused your ire is the increase in price of petrol by Rs 1.80 per litre a few days ago. You have accused the Central government of total insensitivity to the plight of the common man and have threatened to withdraw your support to the government. With inflation running so high in India, you are justly concerned with adding fuel to the fire, if you'll pardon the pun.I totally agree with your sentiments, but my ire is not necessarily directed only against the Central government.

I understand if I have to fill up my tank in your state, I have to pay Rs 73.15 per litre. That being a fairly substantial price, I decided to do some calculation on who gets what I am paying. Here's my amateur attempt.

I pay Rs 32.00 per litre to His Excellency King Abdullah bin Abdul-Aziz Al Saud of Saudi Arabia to keep him and his descendants  in cosseted luxury for the next 7000 years (otherwise called price of crude oil)

I pay Rs 7.00 to Mr R. S Butola , Chairman of Indian Oil Corporation, for him to stay solvent , pun intended,  (otherwise called refining charges)

I pay Rs 5.00 to Santa Singh , lorry driver  (otherwise called transport charges). I don't begrudge paying him this in return for all the Sardarji jokes that he has, very kindly, contributed.

I pay Rs 14.35 to the Hon'ble Pranab Mukherjee, Finance Minister of India (otherwise called Excise duty). To be fair to Pranabda, he has been trying to reduce this, having abolished customs duty that he used to levy before.

I then pay some Rs 15 to you ( under the name of sales tax).

You want to charge me some 26%+ rate of state sales tax. Don't you find it usurious ? Pranabda has been crying to states to remove the ad valorem rate of duty on petrol and make it a specific rate, as he has done on the Central VAT. You refuse to do this. Therefore when the central government increased the price of petrol by Rs 1.80, you gleefully contributed another 50 paise of increase. And with a straight face, you are giving significant exercise to your vocal chords.

You may now see the general direction of how you can prevent the onset of acute laryngitis.

I have only one argument in your defence. Your counterpart in the state I live in, is  worse than you (30%). But then, he has wisely chosen to give his vocal chords a rest !

Yours sincerely

Romesh (spelling in deference to your tastes)

Read More

Without Comment

Brilliant article in the Financial Times today. Dripping with sarcasm and wit. Alas its a bit technical and you'll enjoy it immensely if you have a bit of background in finance, but even otherwise its a good read. 

For those not in touch with American politics or high finance -

John Corzine is a former head of Goldman Sachs. He was deposed by Henk Paulson.  Corzine then became a Senator from New Jersey and then Governor. He got defeated in the election in 2010, by Chris Christie who is the current Governor of New Jersey. After his defeat in the election, Corzine became Chairman of MF Global which has just declared Chapter 11 bankruptcy.

Read More