If morning shows the day, the year 2000 will be one continuous party for the pin-striped pirates. Taking up where they had left off last year, predators continued their buying frenzy. Close on the heels of its Rs 350-crore deal to acquire DLF Cement, Gujarat Ambuja Cement purchased a strategic equity stake of 7.20 per cent in India's largest cement company, the Associated Cement Companies (acc), from the Tata Group for Rs 455 crore. Ratan Tata-whose group is pulling out of its 50:50 joint venture, Tata Lucent-could well sell his group's remaining 6.90 per cent holding too to Gujarat Ambuja. Soon afterwards, global cement-makers, Cemex of Mexico, Lafarge of France, and Holder Bank of the UK began the process of a bidding war for Zuari Industries' 1.70 million tonnes-per-annum plant which has been put on the block. Simultaneously, Holder Bank started circling Larsen & Toubro's cement unit, which the latter may spin off as an independent company.

Mahindra & Mahindra snapped up the Gujarat government's 51 per cent holding in Gujarat Tractors. Hindustan Lever all but sealed an acquisition of the State-owned bakery, Modern Foods-even as its global parent, Unilever, bought the tea company Rossell Industries from the Y.K. Modi Group for Rs 175 crore. Ingersoll-Rand said it will sell its gas-compressor business-following its global parent's decision to get out of this area-to Dresser-Rand for Rs 65 crore. And Thomas Cook evinced interest in buying Sita World Travel.

Alongside companies, brands became commodities for buying and selling. The Aditya Birla Group's Indian Rayon bought the Louis Phillippe, Van Heusen, and San Frisco readymades brands from Madura Coats for Rs 236 crore. And potential buyers began eyeing Dabur's fruit juice brand, Real, even as the company said it would withdraw the Samara brand of cosmetics following the collapse of its joint-venture with the Swedish cosmetics major, Antonio Pujj.

The pace of strategic acquisitions grew too. Allianz, Europe's leading financial services group, finalised a deal to pick up a 20 per cent equity stake in Global Trust Bank at a price of Rs 150 per share. The International Finance Corporation said it will buy 20 per cent of Sundaram Home Finance. The US-based Chase Capital Partners declared its intention to invest $40 million (Rs 17-20 crore) in Digitalht.com, the Hindustan Times Group's Net portal. And a global consortium comprising, inter alia, Credit Suisse First Boston and BancAmerica Equity Partners purchased a 25 per cent equity stake in DAQ Software.

The first automobile show of the year, Auto Expo 2000, marked the interest of car-makers in the premium luxury segment. Even as Fiat and Ford Motor Co. launched stripped-down versions of the Siena and the Ikon to compete with gm's Corsa, TELCO, Daewoo Motors, and Skoda unveiled prototypes of their cars for the Rs 10 lakh-plus segment: the Magna, the Nubira, and the Octavia, respectively.

However, the creation of the first global media giant through AOL's merger with Time-Warner, and Bill Gates' decision to step down as CEO of Microsoft created only ripples in corporate India. And as the Sensex threatened to hit 6,500, all eyes-and crossed fingers-began the vigil for Budget 2000.

-Dilip Maitra

MARKETPLACE 2000
Child of fortune

Want to meet your new customer this year? Bend down. There they are, deeply engaged in activities like watching TV, going to school, watching TV, watching TV, doing homework, watching TV, hanging out with friends, watching TV. The youngest of these customers is 5, about to start school, but already aware of brands, especially those of cars, casualwear, and snackfoods.

Accounting for 1 out every 4 Indians, they are second in number only to the 15-34 segment of the spenders-1 out of every 3. But the latter are a much more amorphous mass compared to these members of Generation 2000. Says Sandip Chaudhuri, 38, General Manager, Ammirati Puris Lintas: ''Children in this category will emerge as a significant customer segment this year-not only on the basis of consumption but also as influencers in the decision-making process of their parents and elders.'' Particularly if your company's products include soft drinks, soaps, or music. To reach them, marketers will have to make increasing use of satellite TV, along with the Net.

If age-groups aren't your preferred form of segmentation-maybe your brand cuts across age-then the sections of customers that you should watch out for this year are geographically- or culturally-localised groups. Says Rajan Saxena, 50, Director, IIM-Indore: ''Attitudes-not lifestyle-will define the customer this year. Adds Kaushik Sikdar, 35, Vice-President, Pathfinders: ''The growth of such customer segments will force companies to market their brands, even national ones, using local cultural values.'' The year 2000 will prove, as the saying goes, that she's a tough customer.

-Rakhi Mazumdar

ECONOMY  2000
It'll Grow on you

India's new century is y2k ready, but plenty of y1k problems remain. And unless the Indian economy tackles these fundamental problems, growth-rates will remain well below potential. Consider, for instance, the performance of the agriculture sector, which accounts for more than a quarter of our Gross Domestic Product (GDP). Despite a run of 11 consecutive normal monsoons, agricultural growth in the past decade has been highly volatile, ranging from a bumper 9.4 per cent in 1996-97 to a low of-1 per cent the following year. Blame the volatility in agricultural growth-rates to the uneven spread of the monsoons and an inadequate irrigation network. With no noticeable improvement in water management, agricultural growth will continue to bounce around its trend rate of between 2 and 3 per cent.

The gathering pace of industrial recovery should boost industrial growth-rates-but not much. Industrial growth is expected to touch 7.3 per cent by 2000-01-a slight jump from the 6.4 per cent rise notched up in the first 7 months of 1999-2000. Explains B.B. Bhattacharya, 53, Head (Development Planning Centre), Institute Of Economic Growth (IEG): ''Unless investment picks up, the recovery in the Indian economy will remain mild.'' With high real interest rates, a worsening fiscal situation, and large overcapacities in industrial markets worldwide, investment will not pick up soon. Worse, even if industrial recovery does gather steam, it is likely to collide with infrastructural constraints. Points out Pradeep Srivastava, 40, chief economist, NCAER: ''The patchy nature of the recovery so far has meant that infrastructural bottlenecks have not even been tested.''

Clearly, then, much of the growth push will have to come from the services sector-just as it did for most of the past decade. In the 1990s, services growth averaged 8 per cent, taking the share of the sector's contribution to GDP close to 50 per cent. Indeed, in post-industrial economies, it is the services sector that accounts for the bulk of the income generated. Two factors explain this increase. First, as incomes increase, people spend more on services. Entertainment and travel will consume ever-larger proportions of household budgets. Second, advances in technology will make possible the mass-production of personalised goods, with the services industry playing a crucial role in the value-added chain.

But what accounts for the spurt in service growth in an economy like India? ''The low cost of human capital,'' answers Surjit Bhalla, 51, director, Oxus Fund Management. ''Since real interest rates are prohibitively high, there has been a shift to industries using human capital more intensively.'' The most dramatic example: the software boom. Back-of-the-envelope estimates suggest that the software industry now contributes nearly 0.75 percentage points to GDP growth-rates.

Yet, unlike post-industrial economies, the services boom in India has not changed employment patterns. Agriculture continues to employ more than 60 per cent of the labour-force. Argues IEG's Bhattacharya: ''The services sector contributes the bulk of the income, but the agricultural sector still controls employment and, hence, voting power. The resultant political and economic mix slows down reforms.'' Without an acceleration of reforms, GDP growth-rates are not going to add up to more than 6 to 7 per cent. New Millennium, but same old economy.

-Rukmini Parthasarathy

INDUSTRYSCAPE  2000
Whaddya know ? New Business !

If the past century's economy was hammered, chiselled, and shaped in factories of mass production, tomorrow's will be wrought in the quiet cubicles of knowledge-workers. Driven by the might of computing, the third millennium's bellwether industry will, undoubtedly, be infotech. And it will spawn businesses that supply the software, hardware, and means of access. Traditional manufacturing industries-such as steel, cement, and textiles-will continue to exist. But they will no longer be the turbo-engines of growth. Says Chandra Srinivasan, 32, principal consultant, A.T. Kearney: ''Industries that leverage knowledge-based systems to create products and services will be tomorrow's success stories.''

Besides the ubiquitous infotech, the sectors that will find booming markets in 2000 include biotechnology, environment management, aerospace, and even lifestyle management. As Indians, finally, learn to stretch technology into every sphere, new tools to combat a range of problems will emerge. These will be used in fields like biotechnology to produce custom-made solutions like disease-resistant cattle and, who knows, perhaps humans!

The unbridled growth of population and the consequent pressure on resources will make environment management big business. Treating industrial wastes, recycling garbage, and cleaning up water and air are set to become lucrative and wide-ranging activities. With people rushing to create more economic wealth, services that help organise their personal lives will be in demand. Psychotherapy will, inevitably, find a market in India too. Says N. Srinivasa Raghavan, 52, a Chennai-based hr consultant: ''I wouldn't be surprised if the Indian economy goes on to mirror the US', and leads to the creation of several new services-led businesses.''

A recent survey by the American Bureau of Labor Statistics reveals that, until 2008, almost all the job growth in the US will be led by services-providers. That's a trend that could be mirrored in India. Thanks to technology, the manufacturing sector will retain its level of total output, but employment growth in it will shrink. Services related to business, healthcare, and societal upkeep will provide one out of every two non-farm jobs added to the economy over the next decade.

The fastest-growing occupations will, of course, be computer-related. Before the New Millennium's first decade is rung out, the number of computer-support specialists, computer engineers, and systems analysts will double. Clerical and blue-collar jobs may grow slower than the national average. And while general and specialised managers will continue to comprise a large chunk of the workforce, their numbers will swell at a much slower rate. Says A.T. Kearney's Srinivasan: ''The use of knowledge systems will enable innovative delivery of products and services, and to that extent traditional paradigms will change.'' Time to junk those blue overalls?

-R. Sridharan

E-COMMERCE  2000
Click here to Wait for the Boom ! 

If you thought e-commerce would arrive with a bang in y2k, think again. It just won't happen. Yet, that will not rob the year 2000 of its significance. For, if the programming delivers, this year will witness the laying of the foundation stone for e-commerce-encompassing Business-To-Business (b2b), and Business-To-Consumer (b2c) on the Net-in India.

By all indications, e-commerce is still in an embryonic stage in the country. Market research and consulting company IDC has downscaled its estimate of e-commerce revenues in 1999 from Rs 66 crore to Rs 40 crore. Compared to the estimated $500 billion (Rs 21,80,000 crore) worth of e-commerce revenues worldwide in 1999, India stands nowhere. What's more, IDC's survey of 866 Indian companies revealed that just 20 per cent of Net users were aware of e-commerce. And a minuscule 2 per cent of the respondents actually sold, and 4 per cent bought, on the Net. While IDC predicts a healthy average annual growth-rate of 239 per cent every year till 2004, it has still scaled down its prediction for the next couple of years. And a nasscom and McKinsey & Co. study estimates that Indian e-commerce will touch Rs 6,000 crore only in 2004.

True, most Indian companies are groping to establish a Web presence-leave alone transact business-on the Net. B2C e-commerce is still hampered by the low penetration of PCs in the country, compounded by worries over payment facilities and infrastructure costs. Despite this, the optimists argue, there are plenty of indications that e-commerce will take off. Fuelled by a price-war among ISPs, Net connectivity is rising, and the number of connections is expected to go up from 530,000 in March, 2000, to 1.30 million in March, 2001. Similarly, falling pc prices will help increase sales. Content in vernacular languages is growing. And plenty of hope is pinned on providing Net access through cable TV.

Most of these factors will begin unfolding in 2000 itself. So, b2c e-commerce will continue to overshadow b2b for now although this is expected to be reversed a few years down the line. IDC estimates that B2C will take a 79 per cent chunk of total e-revenues in 2000. That's because Indian companies have just about started establishing themselves on the Net. Expect to see changes in attitude this year as more companies jump on the bandwagon, starting by linking up in the supplier base. Vertical portals catering to specific industries will proliferate in 2000 as e-biz players use these as precursors to commodity and futures trading marketplaces on the Net.

A secure payment system, privacy of information, and cheaper infrastructure are necessary if b2b e-commerce has to take off. Here, 2000 will be a significant year. Not only is the Information Technology Bill, 1999, expected to be turned into law this year, the Reserve Bank of India's (RBI) report on standards for electronic funds-transfer will be released soon. As encryption is a big security issue for B2B commerce, the RBI is expected to soon allow measures like 2-way public and private keys, as well as token-based dynamic password-generation. But it may take a while before complex issues like taxation on the Net are tackled.

The challenge before b2c e-commerce is a physical one. Explains Chandra M. Sharan, 30, Senior Market Analyst, IDC India: ''e-Commerce is not a software issue. The real differentiator is how companies will manage logistics at the back end.'' That is crucial since customer expectations will be high, and glitches could kill repeat purchases. The lack of supporting infrastructure will separate the winners from the losers in a nascent market where customer penetration is abysmally low. While the it Bill and standards for electronic funds transfer will go a long way towards persuading customers to buy on-line, it will still be some time before consumers go shopping on the Net regularly. Books, CDs, and audio cassettes-products that do not require physical checking before purchase-will continue to dominate e-shopping in 2000.

So, whether they like it or not, Indian e-commerce Websites will have to continue to target on-line retailing at NRIs. Says Sharan: ''Domestic awareness-levels are not high. But an area with immediate potential are ventures targeted at providing 'painful services,' like booking railway or cinema tickets, or paying bills.'' Another potential area of growth that will emerge in 2000 is e-cash: on-line payment mechanisms. For e-India Inc., 2000 will be the watershed.

-Sunit Arora

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