"What can I know? What
ought I to do? What can I hope?"
—Immanuel Kant (German,
1724-1804)
Word for the day
Dulcinea (n)
A ladylove; sweetheart.
Malice towards none
The censor Board might have unwittingly
supported the petition seeking ban on Santa Banta jokes!
First random thought this morning
The debate over PM Modi's speech to joint sitting of US
parliament, suffers from over enthusiasm (BJP) on one side and avoidable
cynicism (Congress) on the other side. There are some in "It's
good....but...." (JDU) category also.
But one thing is certain - no one could accuse BJP of arranging a
"paid audience" to applaud the prime minister, like they did in case
of Madison square or Sydney event.
In serach of leadership - 2
In search for leadership, I visited all the sectors and concluded
that at an umbrella level it is the Indian consumer who will lead the economy
and therefore the market higher. But the leadership may not come from the
straight jacket consumption theme.
Soaring aspirations, deeper inclusion, affordability, rise in real
income, and better access to markets and products may drive the consumption.
I also see an exponential rise in the intensity of competition
amongst producers and retailers to gain market share. This shall keep (a) the
general price environment and (b) product profile favorable to the consumer.
Besides, it should improve the accessibility of the consumer materially.
In my therefore, the complex themes like -
(a) Building infrastructure
for consumers' access and services - like shopping malls, movie theaters;
supply chains & logistic services, mobile apps, etc.
(b) Enabling consumers
through technology and leverage - Micro lenders, retail oriented NBFCs &
banks, payment infrastructure, etc.
(c) Creating new markets
through product & packaging innovation; media publicity,
may do much better than the simple producers and retailers.
I believe that the share of large brands in Indian consumer basket
may increase substantially over next five years; of course at the expense of
unorganized and marginal cottage and MSME players. I am therefore not perturbed
by the entry of market disrupters like Patanjali in branded consumer product
space. On the contrary I feel that such players will help faster expansion of
markets and would be beneficial for all the established large players.
However, I feel till the time market fully consolidates and
evolves into a fully organized market, the participants may struggle to
generate returns that could be compared to their historical earnings.
I would therefore stick to my stated strategy of focusing on upper
middle class and aspirational consumption.
On product side, I would therefore like to focus on aspirational
products like lifestyle drugs, beer, premium liquor, household upgrade
(lighting, tiles, plywood), luxury housing, premium automobile, packaged food
(non-basic), etc.
On services side, I shall focus on direct consumable services
e.g., telecom, transportation & logistics, health, education, organized retailing,
entertainment, banking etc.
Implementation of GST would be an additional advantage for the
theme, but it is not a necessary condition to my mind.
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