I was reading an article the other day from Agora Financial about the $200 billion dollar opportunity represented by India's retail sector opening up. The article stated some straightforward facts- the steps leading to the relaxation of this critical sector, how ripe the pickings were when China opened up its retail market in 1992, how much bigger this opportunity is going to be, and so on. The article urged its readers to invest in local Indian companies that would be the beneficiaries of this boom- such as cement and steel companies that would help build the retail stores of Walmart and so on. You can access this here.
Add to that the news about skyrocketing real estate prices in Indian cities. As far back as I can remember the real estate prices have grown far more rapidly in India than in the US, with a few corrections- 2 in the last 15 years that I can remember. Yet these were not corrections of the order that we dread today in the US with long term ramifications that will deflate a bubble that has been years in the making. Sure enough the prices went back up soon enough. Today the market is white hot so that one fears which parts of it may be bubbles. Apartments for instance have risen in prices in most major cities that may not justify a good resale value. But land- with no attachments- is still a good long term bet, I would affirm.
In the smaller towns the suburban land prices have risen over 100 percent in 2 years. The growth seems to show no signs of abating, even with the sharp rise of the Rupee, a sign that the demand for land is fuelled not only from outside India but from within the domestic market as well. Plus, investor confidence in the market is high among non-residents too. Merril Lynch forecasted in 2005 that the organized realty sector in India will grow from $12 billion then to $90 billion in 2015. Already this sector is heating up with major foreign funds moving in. $10 billion of foreign investment is earmarked for this year already from these global funds, of which there are 35 operational in India and 20 more waiting in the wings this year.
So it may not be simply the manufacturing industry that will benefit from the retail boom (which is nothing short of an avalanche in itself). But instead of focusing on Walmart stocks or even the cement and steel companies, why not look at real estate funds? The big ticket acquisitions are on a roll. This article from the Financial Express gives an idea of the specific funds which are making the big deals in India.
Just how much real estate expansion could be attributed to retail? This Business Standard article says there’ll be 220 million square feet of organised retail space in India by 2010. Do the math! Another article here says India’s retail sector needs more than 500 million square feet of retail space, but all of the malls now being built or planned total less than 150 million square feet...
Wednesday, May 16, 2007
Tuesday, May 15, 2007
India's Technology Numbers- Can Companies Help?
For a decade India has been meeting the need for outsourced information technology work. The numbers have been incredible. The top five companies have all grown at compounded annual rates of over 40 in the past six years. TCS, Infosys, Wipro, Cognizant, HCL and Satyam are billion plus companies. The recent quarter's earnings were well on track with the 40 percent growth rate continuing. All this amid reports that the talent may be in short supply. Is this true?
The alarm bells have been ringing for a year now, first from NASSCOM, then from the analysts and now the press. How does this measure up against the realities that I see when I go to India, so many bright young people who would still rather be employed at the good salaries that IT companies turn out? Infosys' Gopalakrishnan had mentioned in the press a month ago that it is not the dearth of people but the dearth of quality people that is a problem.
So many strategies have been put forward. The top companies have been building up development centers outside of India, in China, Eastern Europe and Latin America, thus strengthening numbers for multilingual development and support. They have also been developing centers in smaller towns in India such as Chandigarh, Cochin and Vizag. Wipro has been investing in the US, in lower cost regions such as Idaho and Virginia, establishing connects with local universities. True to their nature, the companies have been thinking and acting fast. This is commendable.
I do have a pet gripe, though. Though the IT companies have generally been socially conscious (especially their founders), I am disappointed at the low level of grassroots development they are fostering to improve the quality of educated young people in India. The Azim Premji foundation and the Infosys Foundation are initiatives aimed at basic education. This is noble indeed and arises from the philanthropic proclivities of their top managements. I strongly believe, though, that these companies would do well to invest in improving education at the university level from which they could tap into the resource pools. Nothing compels charity as direct returns, and I am more than a little disheartened to see very little of such nexus between the IT industry and the local education system.
The alarm bells have been ringing for a year now, first from NASSCOM, then from the analysts and now the press. How does this measure up against the realities that I see when I go to India, so many bright young people who would still rather be employed at the good salaries that IT companies turn out? Infosys' Gopalakrishnan had mentioned in the press a month ago that it is not the dearth of people but the dearth of quality people that is a problem.
So many strategies have been put forward. The top companies have been building up development centers outside of India, in China, Eastern Europe and Latin America, thus strengthening numbers for multilingual development and support. They have also been developing centers in smaller towns in India such as Chandigarh, Cochin and Vizag. Wipro has been investing in the US, in lower cost regions such as Idaho and Virginia, establishing connects with local universities. True to their nature, the companies have been thinking and acting fast. This is commendable.
I do have a pet gripe, though. Though the IT companies have generally been socially conscious (especially their founders), I am disappointed at the low level of grassroots development they are fostering to improve the quality of educated young people in India. The Azim Premji foundation and the Infosys Foundation are initiatives aimed at basic education. This is noble indeed and arises from the philanthropic proclivities of their top managements. I strongly believe, though, that these companies would do well to invest in improving education at the university level from which they could tap into the resource pools. Nothing compels charity as direct returns, and I am more than a little disheartened to see very little of such nexus between the IT industry and the local education system.
Thursday, May 10, 2007
The Dream of the Big Tomato
He was a winsome lad of some thirty summers.
There. The first line has been posted and the blog is ready to be cranked up. This is my first post in this blog. I've attempted blogging before and each attempt has been quietly laid to rest after a while because its coverage was somehow limited to some facets of my personality or experiences that I've felt needed to be highlighted. Never again! This shall be a catch-all for the myriad of my experiences and the many hues of the colourful personality I am. Meaning book reviews, family bliss (or blitz), work, management, technology, the world of consulting and outsourcing and not least faith and worldview.
As I said, he (yours truly) was a lad of some thirty summers when he read the book 'Me, Myself and Bob' by Phil Vischer, the redoubtable polymath who breathed life into Bob, Larry, Junior and countless other talking vegetables in 1992. Yep, I'm talking about 'VeggieTales'.
For those who know VeggieTales and have been curious enough to do a Google search on it, Vischer's name should not be new. His innovations in Computer Generated Imagery (CGI) as an animator and use of this new form of animation in the early nineties to create talking vegetable characters telling Bible stories, singing songs and teaching life lessons to kids of all ages made his company 'Big Idea' a household name. The book chronicles his life, mostly focused on his years with Big Idea, its meteoric rise (growing 3300 percent in 4 years!) and its fall circa 2002-03, right down to the post-fall period giving us a glimpse into "what we have learned today".
This book warms the heart like very few, especially the accounts of personal hurt when employees leave the company or were laid off under extremely daunting circumstances and when Big Idea is sued to the point of being rendered penniless by lawsuits and subsequently sold. The lessons come later in the book after the narrative has progressed past the heartwrenching details of the lawsuit, layoffs, personal tolls in the form of stress-related illness and strained relationships with dearly loved employees. Most amazingly, Vischer recounts each incident that led to the fall of the company summarily in 2-3 pages and asking himself and the readers who could possibly be blamed for it all. He puts forward suggestions that the reader knows he will only withdraw shortly. Sure enough, the finger points to himself. This was a truly humble and humbling account and those who would see only pitfalls here (as I read a former employee's review- I doubt he/she had actually read through the entire book) should beware lest they be guilty of what Vischer isn't in this narrative- unforgiveness. If anyone had a reason to be bitter and look for someone else to blame, surely it was he. After all, highly experienced executives couldn't see the disaster about to befall Big Idea, much less this kid from Iowa who just had a big dream. No, he graciously excuses his employees and even empathizes with those fans and employees whose bitterness and anger he says portray their dream betrayed, just as his was.
Vischer sums up his lessons towards the end and these too are insights that entrepreneurs would do well to listen to. Not just entrepreneurs, but kids. Kids with dreams. These are not the words of a management guru who is paid to research, but those of a man who has been there and learned them in the fire. Amazingly again, this book ends with an about turn on dreams toward the waiting arms of God where one is content to just wait on Him and realize He is enough. When CS Lewis makes statements like 'Pain is God's megaphone to rouse a deaf world', we all attach meanings to it from our experiences. Hearing others' stories makes see that much more of truth. Suffice it to say that this book has an ending that makes sense. This is not like an Arundhati Roy or Sartre in the vein of 'I laughed so hard till I cried'. There is meaning and hope in the end. But that's your to find out. 'Nuff said, no more of this and no more giving the contents away. Get the book on Amazon, order it in your local library or see Phil's website for more information:
www.philvischer.com
Those of us from Chicagoland, Phil lives right here, in or near Wheaton, I think.
There. The first line has been posted and the blog is ready to be cranked up. This is my first post in this blog. I've attempted blogging before and each attempt has been quietly laid to rest after a while because its coverage was somehow limited to some facets of my personality or experiences that I've felt needed to be highlighted. Never again! This shall be a catch-all for the myriad of my experiences and the many hues of the colourful personality I am. Meaning book reviews, family bliss (or blitz), work, management, technology, the world of consulting and outsourcing and not least faith and worldview.
As I said, he (yours truly) was a lad of some thirty summers when he read the book 'Me, Myself and Bob' by Phil Vischer, the redoubtable polymath who breathed life into Bob, Larry, Junior and countless other talking vegetables in 1992. Yep, I'm talking about 'VeggieTales'.
For those who know VeggieTales and have been curious enough to do a Google search on it, Vischer's name should not be new. His innovations in Computer Generated Imagery (CGI) as an animator and use of this new form of animation in the early nineties to create talking vegetable characters telling Bible stories, singing songs and teaching life lessons to kids of all ages made his company 'Big Idea' a household name. The book chronicles his life, mostly focused on his years with Big Idea, its meteoric rise (growing 3300 percent in 4 years!) and its fall circa 2002-03, right down to the post-fall period giving us a glimpse into "what we have learned today".
This book warms the heart like very few, especially the accounts of personal hurt when employees leave the company or were laid off under extremely daunting circumstances and when Big Idea is sued to the point of being rendered penniless by lawsuits and subsequently sold. The lessons come later in the book after the narrative has progressed past the heartwrenching details of the lawsuit, layoffs, personal tolls in the form of stress-related illness and strained relationships with dearly loved employees. Most amazingly, Vischer recounts each incident that led to the fall of the company summarily in 2-3 pages and asking himself and the readers who could possibly be blamed for it all. He puts forward suggestions that the reader knows he will only withdraw shortly. Sure enough, the finger points to himself. This was a truly humble and humbling account and those who would see only pitfalls here (as I read a former employee's review- I doubt he/she had actually read through the entire book) should beware lest they be guilty of what Vischer isn't in this narrative- unforgiveness. If anyone had a reason to be bitter and look for someone else to blame, surely it was he. After all, highly experienced executives couldn't see the disaster about to befall Big Idea, much less this kid from Iowa who just had a big dream. No, he graciously excuses his employees and even empathizes with those fans and employees whose bitterness and anger he says portray their dream betrayed, just as his was.
Vischer sums up his lessons towards the end and these too are insights that entrepreneurs would do well to listen to. Not just entrepreneurs, but kids. Kids with dreams. These are not the words of a management guru who is paid to research, but those of a man who has been there and learned them in the fire. Amazingly again, this book ends with an about turn on dreams toward the waiting arms of God where one is content to just wait on Him and realize He is enough. When CS Lewis makes statements like 'Pain is God's megaphone to rouse a deaf world', we all attach meanings to it from our experiences. Hearing others' stories makes see that much more of truth. Suffice it to say that this book has an ending that makes sense. This is not like an Arundhati Roy or Sartre in the vein of 'I laughed so hard till I cried'. There is meaning and hope in the end. But that's your to find out. 'Nuff said, no more of this and no more giving the contents away. Get the book on Amazon, order it in your local library or see Phil's website for more information:
www.philvischer.com
Those of us from Chicagoland, Phil lives right here, in or near Wheaton, I think.
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