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Showing posts from February, 2006

Is your social strategy in place?

Despite all the euphoria about economic growth, the obstacles in India’s path remain formidable. One of the most difficult issues to tackle would be the increasing level of economic disparities. So while there are 53000 households with annual incomes of more than 1 crore, 400 million go to bed hungry. These 400 million are below the poverty line which by definition means that they do not get enough to eat everyday. The simmering violence of a hungry stomach can be explosive. And a large alienated mass of people is a potential tinder box if they are mobilised. History has shown that such disparities are socially unsustainable.

When a large section of the society is disaffected then it tends to retaliate against people who it thinks are exploiting them or the society. The consequences of such conflicts are enormous and problems become intractable. We have seen that the population of NE and Kashmir have felt alienated(though for both economic and political reasons) and it has led …

Innovation and FMCG industry in India

Background

The Indian FMCG market has slowed down in growth for sometime. From a growth rate of excess of 12 percent in early 90’s, it has registered only 4.4 percent odd so in the last five years.
In the last five years , the GDP has grown by a CAGR of close to 6 percent at real prices. So FMCG business is not even growing at the pace of the domestic economy. One would have thought that in a country where penetration and consumption are still low by international standards, this industry catering to basic necessities would have registered higher growth. But in the last decade sectors like telecom and durables have grown spectacularly but not FMCG.

The reasons for the slow growth have been discussed and debated endlessly. Primarily a) The housing, telecom and durables sectors had a latent demand which ensured explosive growth. b) The easier and cheaper availability of credit supported this growth. c) The consumers started spending more on products of these sectors and had lesser …