China has been flexing its muscles in international affairs for some time now. Hence, it was of little surprise that it did the same at the recently concluded G8 summit held at the earthquake ravaged Italian town of L’Aquila.
”We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies exchange rates and promote a diversified and rational international reserve currency system,” said Mr Dai Bingguo, the Chinese state councilor. He implied that the days of the US dollar, which has been the central currency of the international financial system since World War II, were nearing its end. The remark unsettled the leaders of the world’s biggest economies. “We don’t want to give the impression that big change is around the corner and the present arrangements will be destabilised”, said the British PM Gordon Brown.
Read more: Diversification of reserve currency on the cards?
Fresh N’ Good operates four retail stores in Chennai. They employ over 100 people, and use IT in most of their operations. But the software they use is non-customized, and they do not utilize over 80% of the application. They cannot afford a dedicated IT team yet. And with the rigorous expansion plans, they do not have the funds to reconfigure their IT systems at this juncture. At another spectrum, is Delhi based Su-Kam inverters. Su-Kam has been ramping up IT expenditure and spent over Rs 1 crore in the FY 2008. Using applications such as Power-Doc to remotely monitor their devices is the first step on a long list to accelerate them towards their potential.
The world of Small Medium Businesses (SMBs) has a similar introduction to IT. With more than 75 million companies around the world, the SMB market spends more than $800 billion each year on IT and telecommunications hardware, software and service. By end of 2008, that figure is expected to top $1.1 trillion. Further, the IT and communications spending growth among SMBs tends to outpace that of larger businesses—even during periods of economic downturn. The purchasing power of this group, coupled with its apparent resiliency to recession, provides tremendous opportunities for early movers to capture market share and generate significant revenues. SMBs in India are likely to spend $9.7 billion on information technology infrastructure in 2008, up 22 per cent over 2007, due to a boom in the overall economy and a rise in the number of small businesses (or companies with up to 99 staffs).
Read more: SMBs – An Opportune Thaw in the Ice for Indian IT
Saying that India is a land of contrasts, may sound like a commonly heard and overused cliché. Be that as it may, it is still quite pertinent in the many opportunities available to India’s “have’s” and “have-not’s”. Along with the educational and infrastructural facilities, the wide gap in the financial opportunities available to these two disparate segments can put one to shame. While the I-Bankers, on this side of the Hindu Kush talk of turning Mumbai into one of the financial hubs of the world, there is the majority of the rural & urban poor who are deprived of basic banking facilities. Studies suggest that a mammoth 40% of the population is denied access to any banking facility whatsoever, out of which the major chunk constitutes of rural poor. Can our country attain the much speculated economic-superpower status, with millions of its citizens remaining under-banked ? Its time, we take a closer look at this issue.
Read more: MicroFinance: Empowering those at the bottom of the pyramid
"The future lies with those companies who see the poor as their customers."- C. K. Prahalad
Gone are the days when a rural consumer went to a nearby city to buy any "branded products and services". In the present era, rural markets are critical for every marketer - be it for a branded shampoo or an automobile. Time was when marketers thought van campaigns, cinema commercials and a few wall paintings would suffice to entice rural folks under their folds. But the days have changed now.
Thanks to television!!! Today a customer in a rural area is quite literate about myriad products that are on offer in the market place. The rural markets have acquired significance, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities.
What The Long Tail theory shows is that as the world moves towards the digital era, economics sees a paradigm shift by making it profitable to have customized products, unlimited choice and thus revealing the true face of demand. Borrowing from the idea of Long Tail , I will apply it to the rural shelf-scape. The rural shelf is populated by what the Long Tail theory calls as the “Hits”, products that have made themselves profitable to be kept there. This is achieved either by the scale economies the product enjoys or the sales volume it generates or in most cases of rural shelf, value for money it gives.
Research shows the rural customer is aware of most of the products in the FMCG market. According to MART, a New Delhi-based research organization that offers rural solutions, rural India buys 46% of all soft drinks sold, 49% of motorcycles and 59% of cigarettes. This trend is not limited just to utilitarian products: 11% of rural women use lipstick. Hence demand does exist. From the supply side, every company now looks towards rural India for growth. Though intent and market power is enough from both sides of the market, an yawning gap exists in the rural shelf-scape.
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