9 days. That’s all it takes, to make you realize how much void you have in your life. People in India die to run away from dirty pot holes, screaming horns, cow dung on the roads and things like that. But believe me, 6 months after staying abroad, all of that is music to my ears.
Maybe we’re born messy, I don’t know, but I like the hustle and bustle. Sterilized environments sort of make you numb, and in many a ways incapable. Here all you have is control - temperature control, climate control, driving control, attire control, attitude control, control over what you say, and eventually control over what you think.
People call it being civilized, but honestly is there any civility in hiding your curse under your nose? Is there any civility in being so politically correct in whatever that you say and do? True, a developed nation teaches you discipline, and a lot of it. Be it discipline when driving cars, while standing in a queue… whatever; but at one point, that discipline aggravates into control and that’s not good.
Yes, in terms of process flow, developed nations are better and easier. It’s easier to buy property for instance in a developed nation. For a country like India, there are innumerable processes, and each take their own sweet time. But what’s necessary to understand is that our minds have been attuned to this ‘process-less’ system, since birth. We have been living in a world where even getting a cooking gas connection is a challenge. And that’s the very reason why we can strive in any given circumstances.
It was during my trip back that I realized how insanely complex it is to manage a democracy like India. In a place like Dubai, which is maybe twice the size of Ahmedabad city, it’s so easy to drive growth. Had Mr. Narendra Modi been asked to handle a state only twice the size of Ahmedabad city, he would have done wonders, and that too with relative ease. But sadly that’s not the case. He has to handle a state with about 20,000 cities and villages.
In a place like Dubai, a lot of micro-management is possible. The citizen is accessible. There is more money, and fewer responsibilities to put money into. The case is inverse in a country like India. And yet we strive. And yet we post 8-9% growth for a considerable period.
People say that 95% of retailing in India is unorganized. And for all I feel, there’s a fair chance that it will remain so, especially in a rural setting for a pretty long time. A lot of industries in India still remain unorganized. Industrialists, and economists feel that its not appropriate. What most people don’t realize, is that its these unorganized supply chains that have oiled the economy of India since independence.
It’s the roadside vendor, the small kirana shop outside your house, the ‘kaam-wali bai’ who comes to do the household chores everyday, the milkman… it is these people that oil the economy. Their contribution might be miniscule, but together, they give a lot to drive growth.
And this is what fascinates me about India. It is the minuteness of entities from where the enormity comes out. Challenges in large conglomerates are crap. There are really few challenges, but a lot of brains thinking who can solve the problem. But there’s no one to help in the Small Scale industries sector. There are the real challenges. SSI’s face problems day in and day out, simply because there are a lot of SSI’s and not enough trained manpower to run them.
And lastly, I’ve realized, that India is a Knowledge economy, while Dubai is very much still a trader economy. As a trader economy it might have huge financial resources, but not a lot of brains. As a knowledge economy, we have a lot of brains, but not enough resources to tap them.
In conclusion, all I would say is that it is after staying abroad that I’ve truly realized the potential of the Indian economy.
When MNCs started deciding to come to India for setting up business, I thought, “hey! They should have come a lot earlier”… but after staying away, I really don’t blame them. As a nation our PR skills are downright pathetic, and maybe that’s the reason why no one ever paid heed to us. It was the sound of money that made them overlook whatever image they had formed about India and came running to us.
If democracy were a norm of this world, we could have been a world power long back.
Showing posts with label rural. Show all posts
Showing posts with label rural. Show all posts
Project Shakti and ITC e-choupal
During my graduation I did a rural market survey on FMCG products and stuff like that. It was more like a formality to be completed, but since my group was one excited lot, we went to somewhere close to a thousand different households and asked about their lifestyle and got questionnaires filled. It was like a weeklong trip to the insides of small villages where the population is not more than 2000.
In the process of getting questionnaires filled and going from one household to another, I became extremely interested in the rural markets, and the consumer behavior of these people. We used to travel in an SUV that we’d hired for a week. And the very fact that people used to start peeking out of their households when they saw an SUV coming gave us the feeling that their life was so rigidly and extremely simple, that even a car filled with 6 students is enough to generate curiosity amongst the village people.
Many thought that we were there to sell something, and before we opened our mouths they used to tell us, “nahi nahi… kuch nahi chahiye” and rushed to close their front doors. But we had to knock back and tell them that we are here to ask a few questions and not sell anything. And a response to that would usually be a question like… are you from the population survey? After getting all these issues sorted out, we would get down to making them answer the questions in the questionnaires.
And most often than not, if the questionnaire was being answered by the mother or father, they used to call their children to respond to the questions, especially for soaps and shampoos. This again was pretty fascinating since the toddlers popped brand names like crazy. They precisely knew which actress endorsed which brand and how it smelled and all that. Usually the mom would end up saying that she sometimes let the children handle which soap to buy and which shampoo to buy. Sure they had their preferences, but kids were the biggest lot who were open to trying new brands.
So the scene was something like, the elderly male usually remained aloof from all this decision making. Give him a Lifebuoy anyday and he’ll be happy. The elder female made decisions with regards to washing soaps and salt (in fact most women didn’t buy branded salt since they had this myth that since branded salt was whiter than the normal one, it had more harmful chemicals), and many a times, the kids made decisions on which soap to buy.
In fact at some houses there were 2 different soaps being used. The locally made soap was used by the elders and branded ones by the kids. But in all cases, kids were much more receptive to brands, and much better risk-takers than the rest.
Now, moving away from the questionnaire part, we went back and started hunting for previous research to support our research. In the process we came across ‘Project Shakti’ and ‘e-choupal’, two concepts headed by 2 of the biggest consumable marketers of
But what was even more surprising was that out of all the districts that we went to in the ahmedabad vicinity, no-where did we find an instance of either Project Shakti or ITC’s e-choupal. Maybe because of the fact that we had taken convenience sampling. But I also remember that we used to take permission from every village’s Sarpanch before we went ahead and did our survey. And none of the Sarpanch’s also talked about these 2 initiatives while briefing us.
When I went for my post grad @ SP Jain Dubai |
I worked out some costings, and found that even though the installation cost for an e-choupal was considerably high, the returns it gave were able to recover the costs of the installation in just a year’s time. Just a year’s harvesting was all that was required to recover the costs. At that rate, I felt essentially ITC’s e-choupal should be running in full gear and must be getting implemented at various places simultaneously. But I never heard news about its progress. While it’s a pure success in the case studies, it really doesn’t seem to be the case in reality. I couldn’t confirm it completely. But even the supply chain professors who came to teach said that the situation has become more like ‘all fart and no shit’… which only leads us to the point that companies are probably not willing to commit to large amounts of money to an initiative like e-choupal. The technology and the infrastructure might be available, but trust between the corporations and BoP people still doesn’t seem to have been established to make e-choupal a success.
Same applies for Project Shakti. Unilever made a smart move to position Project Shakti as a CSR kinda initiative from the very beginning. So even if the project bombed, it wouldn’t be called as a failure. And the project did bomb. Thus, Project Shakti does still remain very much a CSR initiative.
Sad no?!
Crop Forecasting - 2
A few posts back I had written about how value is eroded at all levels in the agriculture industry for the simple reason that nobody's aware how much crop production's gonna happen in the country in any given season. The value chain of ITC e-choupal occurs after the crop is harvested and sold in the market. But the point still remains who will tell how much production has actually happened in the country? Be it for a particular crop or for all the crops taken together, no one has the faintest idea about this. An interesting thing that CII does is that it holds national level conferences and calls all big traders in the agricultural business and asks their expert opinion about the crop production. Though it might seem cocky but it works to an extent.
HLL however, goes through a completely different channel. It does its own crop forecasting. Basically, HLL's many FMCG products especially soap are also dependent upon agriculture. For the simple reason that soap manufacturing requires oil, and oil comes from oil seeds. About 40% of the revenue of soaps is spent in buying oil and oil seeds. So when HLL spends 40% of its revenue on a single line of agricultural produce, one can imagine that it's no small deal. Also, crop forecasting gives HLL better insights into what should be its purchasing pattern, when should it buy, when would the stock arrive, how much would it be necessary to stock, will there be a shortage or excess supply of oil seeds etc etc.
So during harvest time, a team of HLL's investigators go around the country in a car, talking to the farmers who's got farms along the roadside, and take first hand info about the crops in that vicinity. They stop by every 5-10 miles and ask the farmer which crop is he growing and what his expected output per hectare is.
In fact the entire crop forecasting by HLL happens in 3 phases. Phase one occurs in July, during the start of the sowing season. The main objective is to gain an idea about the type of crops being grown in the region. Phase two happens in September during the middle of the crop season to ascertain how the crop is growing and also to know about the adequacy of rainfall and the effects of insects/pests if any. And finally when the harvesting has just started, the Phase three of investigation happens and that's when HLL can forecast with enough clarity the total crop production in the country.
The entire process takes about 65 man days to complete one round of investigation, and usually 4-5 investigators are given a route to survey which makes it possible to complete one entire round within a fortnight.
This is how India's largest FMCG manufacturer is ahead of the game, from the very start!
Crop Forecasting!
Alright! Now for starters, despite the IT boom (and bust) and the retail boom and stock market boom and other booms that you may think of, the fact still remains that India is an agrarian economy, that is a large part of its income (still) comes from agricultural produce.
So logically farmers should perhaps form the richest cluster in the Indian 'wealth' pyramid no? Well logically yes, but factually that's not the case. One farmer commits suicide in India every 8 hours. Gruesome as it may sound, but a large part of the fault can be attributed to the farmers, who out of sheer lack of information sow anything that are either safe bets like cash crops, or sow something that gave them the highest revenue the last year.
Now when every farmer starts thinking in the same direction, the law of demand & supply comes into the picture. The supply of a particular crop goes up and the prices comes down. The farmers as it is are exploited at the mandi's even during boom time, so when the market is running low, one can hardly expect anything good for the farmer in terms of his returns for his produce. So low prices, low income, and inability to pay off debt puts the farmer in a stressful situation.
Now, let's take the other side of the spectrum; that is the companies who buy the produce. Let's take the example of a 'ready to eat' vegetable mix. Now for a 'ready to eat' packet, the MRP is fixed, the margins to the wholesaler, the retailer, the distribution costs are more or less fixed. So there's little leeway that the manufacturer can work upon as far as the entire chain is concerned. What he can do is he can get the best input price to maximise his margins.
To get the best price for his inputs he needs to know well in advance as to what the output of that crop would be nationwide. Now estimates of any crop production can be either got from the official estimates that the government is supposed to give, or the trade estimates that the traders give over a period of time. Trade estimates work like stock markets do; based on the aggregation of trader's opinions who might be bullish or bearish as per their whims and fancies. Official estimates have a drawback as far as time is concerned. The Central Statistical Organisation, a government body releases the final estimate of the total crop production after 6 months of the harvest and when 70% of the crop produce has already passed the farmer's hands. Such type of data is hardly useful in purchase decisions for any organisation. So if we come back to our 'ready to eat' mix, the crop production estimates from CSO are of no use, and we'll have to do the purchasing without any proper data. In short, we'll never come to know what would be the best price we can get for any produce, and it all would depend on the mandi that a company would go to.
So essentially in crop forecasting, time is of the essence, rather than accuracy or depth of coverage. Sadly people just don't seem to be getting it! There's loss of value at every stage; the farmer loses because he was dumb enough to sow what every other farmer did, the government loses because it releases an estimate value which anyone would hardly use, the companies lose because they don't get to have the best possible price for the raw materials.
Sad isn't it?
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