Bonding with viewers: Goodbye cricket (for now)

Here are some numbers to establish what you already know-that World Cup 2006 has generated unprecedented interest from Indian television viewers and advertisers alike. According to ESPN star Sports, these matches have consistently generated TRPs (television rating points) of 3-4, pretty much at par with those of the ongoing West Indies-India cricket series. According to TAM Media Research, an agency that tracks television viewership, 4.4 million viewers watched the opening ceremony of the World Cup this time, against 2.1 million in 2002.

The pull of football has dealt a critical blow to general entertainment channels as well. According to TAM, viewership of sports channels (ESPN star Sports in particular) increased to 19 per cent on the opening day of the World Cup from 2 per cent the previous day; the corresponding viewership on Hindi and regional language entertainment channels dropped to 54 per cent and 27 per cent from 65 per cent and 33 per cent, respectively.

TAM analysis, however, shows that there was a 10 per cent decline in ad volumes this year compared to World Cup 2002. Also, the number of brands advertised last time was 22 against 18 this time. Says ESPN star Sports Managing Director R.C. Venkateish: "We wanted to provide an uninterrupted viewing experience to football fans and hence, have limited the number of ad spots." Interestingly, for the first time in India, football is commanding higher ad rates than cricket. A 10 second spot during the live coverage of a World Cup match costs Rs 80,000-1,00,000; a 10-second spot during the telecast of the India-West Indies series, only Rs 50,000-70,000. Says Sundar Raman, MD, Mindshare, a media buying agency: "Football delivers niche eyeballs compared to cricket which has become a mass sport."

-Archna Shukla

Customer First
Banks are launching newer products.

Banks have moved from the traditional plain vanilla stuff of 10-15 years ago and now offer an entire gamut of services," says Rahul Bhagat, Senior Vice President (Retail Banking), HDFC Bank. Banks nowadays routinely pay the utility bills of customers, offer mobile and internet banking services and even recharge customers' mobile phones. There are other services as well. For example, HDFC's NetSafe service allows customers to make safe purchases online without disclosing their credit card number. All they have to do is create a virtual card, with a limit fixed by themselves, from their account that is valid only for 24 hours.

Development Credit Bank (DCB) recently introduced M-power, a current account without any minimum balance requirement, several free benefits and a zero-balance savings account. The latter, offering a free 90-day trial "comes with a service guarantee which no other bank provides", says P.N. Vasudevan, Head, Consumer Banking Group, DCB. ICICI Bank has also launched two products that are "completely unique", claims V. Vaidyanathan, Head, Retail Banking, ICICI Bank. Its new ATM-FD provides the liquidity of an ATM card on a stand-alone fixed deposit account and 'Flexi-rd' allows customers to change the amount they deposit every month into their recurring deposit account.

Why are banks doing this? Says Bhagat: "Consumer banking is all about providing customers with convenience and choice." Vaidyanathan says this creates a "win-win situation for banks and consumers". Whatever the reason, banks are on a roll when it comes to pleasing their clients, and customers aren't complaining.

-Namita Johri

Q&A
"India Is A Very Attractive Market"

Huw Jenkins, chairman and CEO, UBS Investment Bank, is extremely bullish on India. That's not surprising considering that it is his bank's fastest growing market in revenue terms in the Asia-Pacific region. He spoke to BT's Krishna Gopalan about India's potential and how it has become a key market for UBS. Excerpts:

How does the mergers and acquisitions (M&A) scenario in India compare with the situation five years ago? What makes the market so attractive to UBS?

Then, the size of transactions and the confidence of management teams with respect to investing in, taking over and operating a foreign asset were remarkably different. Clearly, from the point of view of a global investment bank, I cannot now ask for a more interesting and exciting market to be involved in. The level of aspiration and confidence of Indian management teams, the amount of capital they are raising and investing in their businesses and the broad-based interest of international investors in getting exposure to India, makes it a very attractive market for an investment bank such as us.

What are the key challenges for you in India?

We have a good M&A business and also a good equities business (both primary and secondary). We need to recognise that we are probably going to see more activity in the mid-cap space. It's going to be a challenge for us to broaden our footprint. The opportunities in the fixed income capital markets are another big challenge for us. We would like to see developments on the bank branch licence front. One of the things you are seeing in the world at large is that credit markets are getting more liquid and are an alternative to equity markets. For us to have a business which is based only on equities and investment banking, without having debt, capital market, sales and trading capabilities, is not ideal. We would love to bring the breadth of our products to India. In most other markets, we have a reasonably broad-based presence in both the fixed income business and investment banking and equities business.

So, where does that leave India?

Asia-Pacific, I think, should include Australia and Japan. We are the leading investment bank in Australia and have a very strong business in Japan. Over the last two to three years, though, India has been the fastest growing market in revenue terms. From our point of view, India probably represents the best investment opportunity for us in the Asia-Pacific.

There are huge M&A deals taking place in other parts of the Asia-Pacific region. India is still not so big. Is that a cause of concern?

The biggest deal we worked on last year was when we advised Gillette on its sale to Procter & Gamble (that deal was worth $57 billion, or Rs 2,56,500 crore then). Clearly, it's very prestigious and significant to be involved in these large transactions, but the reality of life is that one gets to deal mostly with medium and large companies getting together and falling apart. The opportunities in India are very attractive. You may not see too many $10-billion (Rs 46,000 crore) deals, but there is a very good chance of several billion-dollar deals.

What are the key areas of concern in India?

Infrastructure is a key concern. Two, I think the challenge is to attract and retain the right talent. We want to create an environment where we can attract the best talent and that can get difficult in a bull market. For us, it is important that we are consistent and committed to our investment strategy to India.

Plunging Fortunes
These are a bad time to be a day trader.

Fear Factor: Will the Sensex rise today?

Sharekhan, angel broking and Motilal Oswal securities...the addresses are different, as are their individual décor. But the day traders-people who take positions on the market and square off before the close of the day's business-who sit behind these machines could actually be at any of these or dozens of other firms and no one would know the difference. There's another thread that binds them together these days-an all-pervading mood of depression. As the BSE Sensex began its downward spiral on May 10 (after touching a record high of 12,612 points on that day), its trend line reflected the sentiments of this tribe.

Expectedly, then, their feelings dipped to their nadir on June 14, when the Sensex closed below 9,000 for the first time this year. Pandemonium reigned that day. Everyone seemed to be on an ultra-short fuse. The Sensex ended the day at 8,929.44. Exclamations such as "khallas!" (finished) and "dhulayee!" (Mumbai slang for "we're ruined") were the themes of the hour.

Cut back to the present. Snehal Shah, who has been in the trade for two years, says he's down Rs 10 lakh. "The Rs 50-lakh I earned when the market was doing well has been wiped out," he says. Sandeep Vaswani, Manager of the Bandra branch of Angel Broking, says: "Several day traders have taken a heavy beating and have withdrawn. In retail trading, our business has gone down by approximately 40-50 per cent after the crash. The number of traders in my branch has decreased by about 20 per cent over the last month. Margins have been increased for traders in the futures markets." Viral Doshi, another day trader, believes it will take at least six months on average for traders to recoup the losses they have suffered over the last month.

A minority of this tribe, however, is trying to put the mayhem behind and move on. "If the opportunity presents itself, I will still buy," says Hitesh Sawhney, who escaped the bloodbath with only minor bruises, as "I am a disciplined trader, quick to book profits or losses". Others like Mayur Kamath are philosophical. "I've been trading for the past 10-12 years and it's been profitable overall," he rationalises.

The mood lifts somewhat on days the Sensex looks up. There are nervous smiles all around and renewed hope that the worst is over. But the underlying sentiment remains one of fear and uncertainty.

-Namita Johri

Call Of The Heartland

Well, what do you know? Designer jewellery company Gitanjali Gems, high-end cosmetics major L'Oreal and mobile phone maker Nokia are among a host of companies targeting the growing market outside the big cities.

Gitanjali Gems' D'damas range of diamond jewellery now mobilises 15 per cent of its sales from Tier-II and Tier-III towns such as Durgapur in West Bengal and Hubli in Karnataka. Says Mehul Choksi, the company's Managing Director: "We have a massive television campaign, and so, our brand reaches all markets. Consumers, irrespective of their location, are aware of, and aspire for, the brand." The company uses the franchisee model to sell branded jewellery in these towns as "local people have the best knowledge about local markets and the marketing strategies needed to crack them open."

Nokia, too, wants to sell its more expensive phones in these markets. "Our best selling models in rural markets are the Nokia 1100/1600 (both priced below Rs 3,000), but the Nokia 6600 (Rs 9,000), which has a camera and multi-media facilities, is attracting increasing numbers of buyers in rural areas," says a company spokesperson, who, however, declines to reveal areawise sales data.

Says brand marketing expert Harish Bijoor, CEO, Harish Bijoor Consults Inc.: "Every brand that is present in the urban market has to be present in rural India as well. The market is huge and disposable incomes are on the rise. The trend started with Bata, and today includes mobile phone, jewellery and cosmetic companies."

-Shivani Lath

Foreign Bodies
Students from the developed world now want to do internships at Indian IT companies.

Brand ambassadors: Drawn by Infosys' reputation

Here's more proof that India Inc. has arrived on the global business stage. This year, leading Indian it companies-the face of Indian business to most people in the Occident-have received as many as 15,000 applications from students across the globe to work in their India offices.

"Today, all major international companies have an India strategy; and young professionals in the West are only following this trend at the individual level," says S. Padmanabhan, Executive VP and Head (Global hr), Tata Consultancy Services (TCS), where 60 interns from across the globe are working. And not all of them are techies. "We had an intern from Brazil in our hr department in Mumbai. She subsequently joined our hr department in Brazil," he adds.

Infosys' global internship programme, InStep, received over 12,000 applications from the US, Canada, Mexico, France, Germany, South Korea and the Philippines for 125 positions. "The key attraction is that we place them (interns) on live projects in areas ranging from marketing to enterprise solutions to corporate planning," says Sanjay Purohit, Associate VP and Head (Corporate Planning), Infosys, which hires interns for between eight and 24 weeks. The screening procedures are stringent. Says Purohit: "We recruit only students with the highest cumulative grade point averages whose profiles suit the project in hand." The companies did not disclose how much they pay interns, except to say they get a monthly allowance to take care of all living costs.

Students are candid in their praise for Indian companies. Says Tim Hentzel, a student from Wharton Business School, who is working at Infosys' Bangalore campus: "Infosys has the same draw as Silicon Valley in the late 90s; it's a focal of point of technology, investment and innovation." Adds Reynaldo Roche, a student of Darden Graduate School of Business, University of Virginia, also an intern at Infosys: "The opportunity to work in India is very important for anyone who wants a global perspective, as India will be one of the world's top economies in the next five-10 years," he says.

How do Indian companies promote themselves at western campuses? Says Purohit: "InStep interns act as effective brand ambassadors, spreading awareness about the company at various campuses across the globe." The programme, he adds, is built on the philosophy that the interns will someday become Infoscions, customers or even investors. TCS feels much the same way. "Our internship programme enhances the diversity of our employees and the cultural mix of the corporation," says Padmanabhan.

"Students want to come to India for internships and work because they believe it can provide them with a wide array of experiences necessary in a globalised world," says Dezso Horvath, Dean of Schulich School of Business, York University, Toronto. The school is looking to set up a campus in India and is currently scouting for land and funding. Aiesec, the world's largest student organisation, helped 861 foreign students get internships in India in 2005. This year, in the first six months, its has already placed 313 foreign students in Indian companies. Abhinav Gupta, Communications Manager, Aiesec International, says: "It's a two-way process; students from other countries want to come to India because of the way it is profiled in the media. This suits Indian companies which are expanding their operations abroad." Ramona Sandu from Ovidius University, Constanza, Romania, who is doing a one-year internship at TCS' hr department in Mumbai, sums up the feelings of foreign students. "The faster you become a global citizen, the better for you," she says.

-Shivani Lath