Wednesday, November 21, 2012

Packaging as a service

Last Wednesday I was at the ASSOCHAM Packaging Summit 2012 giving a talk on the new opportunities for the packaging industry.

Very wisely (as I would discover at the event), at the outset, I decided to eschew the usual Packaging related topics. i.e. innovation, new trends, numbers, stats etc.

Instead, I talked about how the Packaging Industry could look beyond the traditional confines of rigid, flexible packaging etc. and look at their business as a service.

If you rewind a little over a hundred years or so, you will see the example of Levi's. Levi's made his fortune during the original California gold rush supplying riveted jeans.

And then fast-forward a hundred years from there, you have Bill Gates, who made his fortune by providing tools for the information age. As you would have guessed from the title, the analogy I drew was that in any gold rush, people who provide infrastructure (Amazon/Microsoft Cloud anyone?) are the ones most likely to walk away with the prize,

Which brought me to my core message to the audience. Packaging as a service.

This may seem a preposterous thought. How or why will this work/not work in India? My answer to that is a service by Exide, called Exide Bat-Mobile. A pure play commodity business with dozens of competitors. Enter: Bat Mobile. This service is a battery helpline.

When your car refuses to start, these guys will reach you in 30 mins. Check your battery. Jump start your car to get you home. No matter the make of your car or the battery.

Free of charge with no obligation to purchase anything. However, if  (and only if) you want, they will also home deliver a new battery to you.

You are saying this is a consumer business and therefore it works! Here is another example.


If you think about UPS as a business, what is the first thing that comes to mind? The transport goods.

Here is another business line, you may not know about. UPS also is (was?) the first tier warranty provider to HP printers and Toshiba Laptops.

In any recall that involves a recall to service center, the time to pick up and return is a fraction of the time to repair and turn around the device. So UPS tells its customers: Give it to us. you are going to have to outsource it anyway, why not outsource it to us.

Voila! a B2B commodity service is a value added service with better margins.

Heard about readymix concrete? Cement is a commodity. Now sold as a service.

Look at the scenario in India. Dozens of companies scrambling to participate in the online retail revolution. all of them are not going to survive. Yet all of them are going to need packaging as an essential part of what they do.

Nice margin business with very little risk. Hardly anyone blames packaging as a problem area.

The Medium is the message - Are we the same?

Recently Hitachi unveiled what it claimed was million year storage media. essentially binary encoding micro-etched into a quartz crystal which is readable by a microscope.

There are a couple of problems, the crystal in itself will need to be protected for a million years, and a microscope protected (or invented again).

A truly million (or even a billion) year storage would be a living organism in itself. It propagates itself. DNA is the carrier as well as the information being transmitted.

The more you think about it, the more logical it seems that this is a good solution. The sum of knowledge encoded in our genes and developments in the environment triggering further revelation (insight/genius or whatever).

Which makes you wonder, if, (Paraphrasing Marshall McLuhan) we ourselves are the message.

Saturday, September 8, 2012

A Conspiracy of Silence

I have been following twitter pretty actively over the last few weeks. The right wing Internet Hindutva brigade believes that mainstream media (read: all media critical of Narendra Modi) is intent on preventing Modi from becoming the PM.

If that were really the agenda. They would just stop talking about him. Totally blackball him. No criticism, no praise. No mention of Gujarat in any comparison.

Nada, zip, zero, zilch, nichts, niente, nulla, ni gota, niets, niks, rien, cero. nothing at al

Now there is an idea. 

One of the other beliefs of the aforesaid brigade is that INC controls all media. If true (very very unlikely), the Congress needs need to trigger this and their job is done.

A conspiracy of silence.

Saturday, August 25, 2012

Why FlipKart will make the cut

Did you read today's article in TOI on Flipkart's funding round by Samidha? Amazed? shaking your head? Wondering about that story in Forbes?

While I can't comment on the valuation with any authority. It seems rich to me, maybe investors see value being created over time. I can comment on why Flipkart has made it as a brand. not because of the huge media spends, but an altogether different reason.

Here is why Flipkart will survive the current race amongst the ecommerce startups (including the newly arrived "German Brigade").

But first, two instances I want to illustrate, why.

  •  Madhu Menon, who I follow on Twitter, a few weeks ago, made a comment (prompted by my recommendation of Homeshop18), which was on the lines of the following (I am paraphrasing).
For the difference of only Rs. 200 extra, I would much rather go with Flipkart for the mixer-grinder than another provider.
This is not an isolated incident, I have read many such tweets, especially those that value speed of delivery over better prices.

  • Earlier today, I was at Department of Management Studies at IITD, where I was giving a short talk on branding of e-commerce. During the talk I asked a direct question to the student body.
"How many of you buy a book on FlipKart, knowing full well that it may be available cheaper elsewhere on the web." about 10% of the student body nodded the affirmative (some very vigourously).

Two different types of customers and a similar reaction in a section of them. The point of these obeservations is, a statement I made in a previous post about watches:

"The first and only reason for a brand to exist is to create a positive preference towards your brand which allows you to extract better margins over the garden variety of the same product. That’s it. Nothing else."
Make the connection?

Is it all smooth sailing then?

Not quite. While there is this premium people are willing to pay for being associated with a brand. You could call this premium the price of trust. That trust could easily be broken by not keeping to the original promise. Which was "lower prices".

Increasingly Flipkart is no longer the price leader in the primary category it operates in i.e.: Books. In electronics (where margins are thin as it is), you may actually get a better deal from a physical store (imagine the irony). I got a great deal from Croma in Delhi on a new Panasonic plasma TV that I bought October: an eye-popping 63% off the MRP (admittedly, it was a group buy of 25 TV's but even then, quite a deal).

And let's not forget the impending launch of The global giant is by all acounts on the verge of announcing their launch in India.

Walmart and Amazon are, what they are, because they live to that promise of providing the best value every day. Flipkart just needs to stick to the knitting.

Tuesday, June 26, 2012

Transparency Portals - An invitation to Identity theft

Pleased as punch
So, you read with glee the number of cylinders your minister was using. He should not be using so many subsidised cylinders? Fine

Guess what? Your name, address and number of cylinders and when you ordered them is there too.

Privacy Disaster
This portal is a disaster from a privacy perspective. The idea was very poorly thought through. Imagine an e-commerce company just dumping customer data on the web, amillion people would be baying for blood.

One of the Gas companies has embedded dealer ids in the URL query string itself. which allows for ralatively easy automated scraping. I could do a data scrape on ALLcustomers all over INDIA and filter for customers who use a certain number of cylinders. A perfect database to to do direct marketing.

Not scared yet?

Identity Theft

It is an even more perfect database to commit identity theft. All your basic identity/citizenship documents are predicated on your gas connection. Authentication to your bank. Gas bills are one of the easiest things to duplicate. Infact, you could get the details of the bill from the website itself.

It is just begging to be abused.

The government should instruct the gas marketing companies to take it down immediately and rethink the way they want to do this.

What Next?

Electricty bills? Since that is also subsidised. All Income tax payers? with PAN?

It's about time that the Government hire a CIO. These half assed e-governance initiatives are bound to trip up sooner than later.

Monday, March 26, 2012

Action Pack – Tablet computers for Execs

I got out of an especially grueling session of our weekly management committee meeting. A typical meeting for us is the board room table occupied by different business unit heads from different offices, each armed with a tablet or a laptop (and a couple with both).
Today, someone commented on the appearance of the ever popular iPad with yet another participant. And the few hold-outs (yours truly included), queried about utility and whether we could junk our laptops in favour of the iPad. After the gushing was over, the usual grumbles started. Great for consuming content, but not so great for creating it. You need to be hunched over to type at a decent speed (God help when the soon to arrive aches and pains from bad posture start). No Excel. No Outlook (I piped up).
Which is what set me thinking.
What is an ideal Tablet for Execs? The core functionality that you need a computing device for.
  • A device with a sufficiently large screen to read reports and presentation. (Rules out a phone. BB was a serious compromise and useless beyond looking at some really brief reports)
  • Connect to projectors to make presentations.
  • A device where you can type relatively long responses to a relatively large number of emails. (Unless you are a Head Honcho where email involves writing. FYI, yes, no etc. In which case your phone should be sufficient)
  • Something that runs Excel (and Outlook). (Yes, I know of the alternatives, but come on… Really?).
  • Legacy software. Though increasingly, these are being turned into web based interfaces (UPS still runs COBOL in their systems somewhere). In any case, as of today, with the exception of games and special purpose software like design tools (and Excel), hardly anything that can’t be done in the browser.
  • Has the form factor of a tablet (To match the oohs and aahs reserved for the iPad)
The last, goes fly in the face against the second (mainly for reasons of typing ergonomics).
So, logic dictates that
  • The device should look like a tablet.
  • Should have a no fuss connection to a blue-tooth (V4) keyboard and mouse and a display connection
  • A dock that doubles as a stand and charger (and maybe some USB ports)
  • Run Windows 8 (with Office 15)
  • Has an x86 core (for backwards compatibility). Sacrificing processor speed for better battery life.
No big deal. The market is already responding to this. Transformer Prime, Samsung dock to go with their Win8 tablet etc. Android ecosystem funded a lot of this early experimentation.
The Branding challenge
Microsoft (along with it’s hardware partners) should create a standard pack around these three items. i.e. Input devices, dock with ports and call it something. I propose that it be called the “Action Pack”. This needs to be positioned and sold separately (at a distinct, yet reasonable price as a value addition and utility multiplier)
The term needs to be infused with qualities signifying completeness, speed to get going etc.
Marketing needs to be focused around the following key benefits
  • Tablet form factor that can be converted into a full fledged laptop experience with the Action Pack
  • Office and millions of other Windows compatible software including legacy software.
So the conversation will modify into:
So you got a new tablet. Can you really replace the laptop with the this?
Yes. with the Action Pack I can do everything that I could on my laptop. But I left it in my office, because I don’t need it for this meeting and I have one at home as well.
Eagerly waiting.

Sunday, March 18, 2012

Curious case of the Chinese Tourbillon

What is the first thought that comes to your mind. when I say "I am wearing a Chinese Watch"? Not a Casio, Made in China watch, but a Chinese watch?

It's a fake? Copy of a Rolex. Omega Seamaster clone.
Well, yes. There are those, but there are also Chinese brands like Sea-Gull, Parnis and my personal favourite Tao International (primarily for great finish and sub $100 prices (including shipping)).
So the Chinese (watchmakers for now), like the Japanese, 40 years back are starting to make the slow long climb to respectability.
But first…
A flashback on respectability and watch technology
The Swiss watch industry (with notable exceptions like Patek Philippe) was chasing the volume market and like anyone going down that path was known for indulging in counterfeits. Copies of British marques like George Graham and Eardley Norton was common and for a while the American brand Walthams (Walthams became famous, because they brought precision mass manufacturing to the watchmaking business) was often copied. Not just the designs, but straight copy of brands. Sometimes they even created British sounding names or near enough names to get some respectability.
(admittedly, the above assertion is sourced from this Wikipedia article, so you can take it in that vein, but I have no reason to doubt this.)
Eventually (1870’s), the Swiss watch industry gave up on the mass market space and started working on their own brands and started to occupy the higher end piece of the pie. For a hundred years the Swiss watch industry ruled this piece. They laid foundations for major advances in timekeeping, but were also insular about using them in order to keep their primary offering alive e.g. the Tuning Fork and Quartz, both of which ironically were adopted by competitors to break their stranglehold. Till the 1960’s the Swiss had 90% of the world watch industry. All good so far. Then the Quartz revolution happened (Read this for more).
The arrival of quartz watches with unheard of accuracy nearly suffocated the Swiss watch industry. From 1600 watchmakers, the numbers fell to 600. Till, the Swiss industry, banks and government got together and granted themselves a near monopoly in the form of the Swatch Group (which included brands such as Omega and Tissot). The Swatch Group was a great comeback from the brink. Even more ironically, this comeback was built on the very technology that was dismissed by the Swiss i.e. Quartz.
Along with the consolidation represented by the Swatch Group, came also an even bigger consolidation in the form of ETA which became a monopoly in creating automatic movements for not only the Swatch group, but also other competitors. Essentially Swiss watchmakers bought the guts of a watch from ETA and cased them in unique designs. This is somewhat similar to buying the engine and drive train of a car from elsewhere and slapping a body on top of it. Some players also buy movements, refinish to their quality standards. Either tweaking for accuracy or additional features. But these are exceptions and not the norm.
Which brings us to branding and marketing
Let’s face it. Watches are useless. There is no place in modern life where you are not without access to time. Be it your phone, Wall Clock, Laptop etc. The marvel of the watch industry is that they have taken a product which should have gone the way of the teletype and created into an object of desire. Jewelry even, especially for men, who don’t have as many options in jewelry.
The Swiss Watch industry (largely) has successfully moved to the right space in the marketing lifecycle of a product. In fact, they have moved the image of an entire country into an ultra-premium segment. And yet, the imagery that Tag Heuer tries to sell you, i.e. of a watchmaker in his workshop is largely false. Somewhere in their history, they may have had that, but they don’t do things that way anymore.
In mid 2000’s, ETA/Swatch Group Chairman reputedly said, that he is seeing a decline in innovation in the watch business and and this was due to the monopoly of ETA (To me he seemed to be a little jealous of the ridiculous margins that Swiss watchmakers were enjoying on the back of his company). Citing this, ETA triggered an annual decline in component supplies to competitors. So, the larger watchmakers, who could afford it added in house movement production facilities. The smaller watchmakers who couldn’t afford it, started to look elsewhere.
Which brings us to China
Chinese sold nearly 700 million watches last year compared to only 30 million by the Swiss. The comparison is like chalk and cheese, because the corresponding comparison by value is $4 Billion to $22 Billion.
The last few years have had a huge jump in quality in Chinese made automatic movements. Companies like Sea-Gull have mastered the basics and are now progressing rapidly towards mastering fancier technologies like Tourbillons.
Tourbillons for the uninitiated are contraptions introduced inside watches to improve accuracy. While it is debatable, if they ever did improve the accuracy. Tourbillons are now more decorative than functional with a window on the watch face displaying the mechanism (Read more about Tourbillons here).
So much so, that automatic movements from China are showing up in global watch brands (including some Swiss brands). Other enterprising Chinese businesses have started buying out failing Swiss brands and using stock Chinese movements like those produced by Sea-Gull to produce something a watch which may carry an establishment mark as far back as the 1700’s. Yet other businesses have created German sounding names like Breytenbach and Burgmeister which use similar Chinese movements.
So much for brand and heritage (Essentially, Tag is doing the same, but with ETA movements instead of Chinese movements).
Which brings us to Chinese Watch Brands

You’ve heard of Sea-gull a few times now. Watch snobs (their snobbishness, being second only to audiophiles), have been raving about this and other Chinese watch brands for nearly 4 years. Fine. What’s the big deal.
Sea-gull US last year raised prices of their watches to the $300 range citing complaints by another distributor regarding under-pricing. Still, no big deal.
Till you realise that companies retailing watches using the very same movements are selling them for almost a third lesser than Sea-Gull. Tao International is 2/3rds lower.
As anyone who buys items in India knows, expecting warranty and service from a low end Chinese product is well… useless. The Chinese have to get their act together on service and they are golden.
Moral of the story
The first and only reason for a brand to exist is to create a positive preference towards your brand which allows you to extract better margins over the garden variety of the same product. That’s it. Nothing else.

Watch the aficionados on Internet forums. What are they raving about? Sea-Gull is making a conscious effort to increase prices is recognition of the fact that a select set sees value in the brand and is willing to pay for it.

If respectability, vintage, heritage is the criteria for a great brand. That is available for sale (the failing Swiss watch co’s).

This is being seen in all sorts of places like Model Railroads where failing brands are being snapped up by Hong Kong based Chinese business men et al. (As an aside: Cottage  Industry approach to any Industry will result in that Industry failing and brands being sold in all probability to Chinese businesses who can bring production scale. But that is a post for another day.)

But no, people are specifically looking for a Chinese brand and paying a premium for it.

Chinese brands are here and they are gunning for the very top of the luxury food chain. For something as useless as a watch.

Thursday, March 1, 2012

Amazon.x, Junglee and India

A lot has been said about Amazon's offering in India. Chiefly amongst them, why not a full fledged site.

I have a different question for you. What's the hurry?

First, the legal question is not clear. Till the regulations sort themselves out (and they will, retail giants are beating down the door to enter India).

Second, Amazon can serve the Indian market well from their existing properties in the US/UK/Germany and others and quite often it is cheaper than buying it India (performance and warranty issues aside)

I have had a good experience shipping books, toys, DVDs and electronics from across the seven seas from the US & UK. Germany is the latest in the lot. All without a hitch (Well, there were some unexpected delays a few times. But still).

Germany is important because the voltage range of the electronics is the same as ours AND the plug is the same unlike UK. More compatible electronics.

A thought for a product manager at Introduce an English language version of your site. can feed you traffic and sales.
A thought for a product manager at Introduce  international shipping for electronics
A thought for a product manager at the remaining Amazon.x. I hope you figured it out by now. :)

Thursday, January 26, 2012

Wikipedia and News

As the 63rd Republic Day celebrations wound down. I happened to be on the Wikipedia page on the topic (Wikipedia Republic Day (India)) and started fixing some presentation issues regarding the references used.

I noticed something. News articles seem to have been sourced from Wikipedia. No big deal, blame it on a lazy journalist etc.

Here is where it started getting stranger. The wikipedia article started referencing the story that was sourced from wikipedia. In effect it was self referencing itself.

In this particular case, it was the list of Chief Guests at the Republic day parade. The older reference were links to MEA etc. which progressively started changing into references to news stories done in the recent past.

So, is wikipedia shaping the way we are being fed news? Sure, that is clearly the case.
Further, is wikipedia reinforcing the biases and errors that may have been crept in (as is expected in a crowdsourced article)?

Time for a cold shower

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