Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Tuesday 14 July 2015

Defining E - Commerce



A report in Hindustan Times ( 15 July 2015 )  talks about a series of
 meetings expected to be held today between Commerce Minister and
different stake-holders , to define " e-Commerce "


I am reminded of the story of the 7 blind men , each trying to describe an
 elephant by touching different limbs of the animal


It was obvious they could not arrive at a commonly agreed upon description,
since their perceptions differed


Before trying to define " e-Commerce " , we must first define " Commerce "


In pre-historic times , persons produced whatever they needed to survive


Then they learned to " barter " things produced by each other


The only concepts were , " need " and " surplus "


That lead to introduction of a concept called " Value " , which manifested itself in the form of a stick , a weapon , a goat or a piece of animal skin , till it became , some sort of coin


When barter gave way to an exchange of some goods ( or service ) , for its perceived " Value " ( as measured in coins ) , it became " Commerce "


So , we can conclude that :


" E - Commerce " is nothing more than " Commerce " , where such exchange of values , take place electronically , as opposed to physically . It still remains Commerce , even when perceptions differ


Hence , regulations / controls / taxation etc that govern E-Commerce should , essentially remain the same as in case of Commerce


Ditto for FDI in e-Commerce


Mere elimination of an intermediary ( Distributor / Wholesaler / Dealer / Agent / Stockist etc ) , from the " Supply Chain " , itself cannot be the determining criteria


A few years back , when General Motors , tried to sell its cars to end-customers , directly from its own web site , thousands of its Brick-and-Mortar dealers protested and even threatened General Motors


GM had to back-out against the vested interests  !


But when Michael Dell started manufacturing computers in his garage , he took orders on his telephone and later , on his own web site.


 He never appointed any dealers . This model became a roaring success and heralded the beginning of E-Commerce era ( read , " Direct from Dell " )


Under present guidelines , I suppose , India would allow Dell to set up a wholly-owned , local manufacturing facility , with 100 % FDI


Now , if Dell starts selling those India-made computers , directly to end-consumers ,  from its own web site , would not that be E-Commerce  ?


An e-Commerce with 100 % FDI ?


And what about 100 % FDI by FoxConn ( Taiwan ) , wanting to set up 10 factories in India , to manufacture electronics goods , not only for Foreign giants like Apple / Samsung etc but also for local brands such as Micromax ?


Shall we insist that FoxConn cannot deliver such goods directly to Indian consumers , based on orders received on , not only web sites of Amazon / e-Bay but also on local web sites of Flipkart / SnapDeal etc  ?


It is unfortunate that we , in India , always look-up to the discoveries / inventions taking place in the West ( - and in Japan / South Korea etc )


Had we encouraged Prof Jhunjhunwala ( IIT - Madras ) , we could be today , delivering internet thru common electric outlet in every home , at speeds of 100 mb ! That would have Digitized India , 5 years ago !



When ISRO sent MOM ( Mars Orbiting Mission ) , it did not call it a " Space Ship "


As long as the concept of " Ship " defines our thought processes , we will continue to " Sail in a Sea " - never to traverse the " Space "  !


-------------------------------------------------------------------------------------

hemen  parekh

15 July , 2015

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Saturday 11 July 2015

FDI in India Post ?



As on 31-08-2009 , India Post had 1,55,015 post offices , making it the largest postal network in the World


Almost 90 % of these were in rural areas , each serving 7175 persons on average , totaling 111.2  Crores Indian citizens ! Entire population of India !


Till about a few years back , India Post delivered millions of letters and a few lakh parcels every day , to citizens living in farthest corners of India


And of course , millions of rural citizens also depended upon its Money Order delivery


But then came along private Courier Companies , bent upon obsolescing India Post !


So , head-honchos of India Post asked themselves :


"  What business are we in ? "


Answer came :

"  We are NOT into business of delivering postal articles / money-orders .
    We are into a business of ' Delivery '
    Period !  "


Central Government ( the Owner ) agreed

  
Today , India Post has redefined its " Mission " as :

" To provide mail parcel , money transfer , banking , insurance and retail services with speed and reliability "


India Post web site goes on to write :

"  If your Organization is interested to use the India Post network for the sale of your products and services , India Post can help your business grow through ' Retail Post '  "



I believe RBI is on the verge of enabling India Post to become a " Payment Bank
 "
That has got established banks worried  !


And wanting to avoid establishing their own delivery networks costing billions of dollars , Amazons / e-Bays / Alibabas / FlipKarts / SnapDeals of the World , want to leverage India Post's network for ' delivering ' products


That will make them " B2C " retailing e-Com ventures, - riding piggyback on India Post !


If in doubt , consider this :

In the past 12 months , India Post's revenue , delivering parcels to end-consumers like you and me , from e-Com ventures mentioned above , has gone up by a whopping 37 %  !


CAIT ( Confederation of All India Traders ) , must have taken notice of this , " New Kid on the Block " , called India Post  !


As I wrote yesterday , competition is cropping up from most unexpected quarters  !


And if Greek Government  is open to privatizing its postal network , who knows DIPP may soon recommend FDI in India Post - to add to the Central Government kitty , may be Rs 1,00,000 Crores !


Days of Central Government protecting every kind of business / industry are over . Above all , businesses in which Government , itself operates  today 


War of International Trade ( where India's share is a meager 1.7 % of World Exports ) , cannot be won by leaning on Government crutches !


It is time, Indian business / industries learn to stand-up to the World on their own legs  !


-----------------------------------------------------------------------------------

hemen  parekh
12  July, 2015
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Friday 10 July 2015

FDI in Retail ?

These days , a lot of heated debate is going on re FDI in " Retail "

There are many camps , viz:

>  Brick-and-Mortar Retail traders

>  E-Com Retail Traders

>  Wholesalers

>  FDI Investors / Overseas Manufacturers 

>  Single Brand vs Multi-Brand Formats

>  Payment Gateways

>  Central / State Governments

>  Tax Authorities

>  Bankers ...........etc


As far as I can see , the entire debate is centered around " Retailing of Physical Goods "

But how long before " Retailing of Services " too , enters the equation  ?

Or does anyone think that to be a far-fetched idea ?

Just wait for 2018 to arrive  !

Some 40 years back , marketing guru Ted Levitt wrote a seminal essay , aptly titled :

"  Marketing  Myopia "

The central observation Levitt made was :

"  Why do companies fail to ask : Ultimately what business are we in ? "

Among many example that he gave was the case of American Railroad companies

They believed themselves to be in " Railroad Business " - and failed to see that they were , really into the business of " Transporting People " !

So , along came the " Car Companies " and the " Air Lines Companies " which made " Railroad Companies " obsolete  !

Now , 40 years later , are " Car Companies " and the " Air Lines Companies " asking themselves : What business are we in ?

If the correct answer is : We are in the business of enabling people to meet and talk to other people :

then they would shift to Video-Conferencing / Holographic Projection business !

Or , if another answer is :

We are in the business of enabling a person sitting in hot Sahara desert to " Experience " the cool climate of Europe thru " Virtual Reality " ,

then they should be shifting to manufacture of future versions of Google Glass !

Levitt added :

"  If you don't make yourself obsolete , then someone else will "

And more and more , it is happening that , that someone is NOT even anyone from your current competitors !

Have physical goods retailers , considered that soon , retailing itself might become obsolete ?

And if that happens , the question of FDI in retailing too will disappear  !

A unknown guy sitting in a small cubicle in Estonia , will deliver to my grand daughter,  sitting in Mumbai , any physical consumer product , through the 3D printer , sitting on her kitchen platform  !

Or a Start-Up belonging to a bunch of 24+ something IIT guys would  set up :

" 3D Printing Kiosks " ( like the PCOs of a few years ago ) ,

in 1000 cities / towns of India , to deliver at your doorstep ( obviously using Drones ! ) , any Foreign Brand product , at a moment's notice  !

And a Central Government committed to Digital India , may even give them Rs 100 crores , by way of Venture Capital  !


For the quarreling parties of FDI , it is time to ask of themselves :


How can we stop being made irrelevant ?

How do we re-invent ourselves ?

How do we stop becoming obsolete  ?

How do we co-operate / collaborate to re-write the " Rules of the Retail Game " for the rest of the World  ?

-------------------------------------------------------------------------------------

hemen  parekh
11 July , 2015
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Thursday 9 July 2015

One Rank , N-One Pension ( ORNP )


Yesterday , Bombay Municipal Corporation workers pulled down a thatched roof over the cart of a roadside hawker Ramji , selling tea / biscuits / vada-pav  , on a footpath outside my house


Background  :


>   Footpath is for pedestrians to walk on ; not for Ramji to sell tea !

>   Ramji did not have a " Hawking License "

>   As of today , some 30,000 + hawkers are " licensed " to hawk

>   Under pressure from High Courts , BMC is in the process of taking a
     " Census " of all hawkers in Mumbai , in order to legalize another
     90,000  hawkers , to be accommodated in specified hawking zones

>   It is my belief that Mumbai has over 300,000 hawkers now and that
     this figure is growing by 10,000 every year

>   Citizens of most residential localities do not want " Hawking Zones "
     in their localities  !

>   But almost all citizens continue to patronize nearby hawkers , whether
     licensed or not and whether in prescribed " Hawking Zones " or not  !

>   Hawkers need to ply their trade where people live - and therefore need
     to live where people live - not 20 Km away !

>   Illegal / Un-licensed hawkers are the main source of " Hafta " for the
     local policemen

>   So that demolished shed , will come up once again tomorrow morning !

>   Most hawkers in any given locality are under the " protection " of local
     Corporators , who give " advance notice " of impending demolition  !
  
>   If India as a whole , needs to create 12 million jobs every year , then
     most likely , Mumbai , with its population of 16 million people , needs to
     create at least 300,000 jobs per year !

>   But " Manufacturing Establishments " are leaving Mumbai , since it has
     become a " High Wage Island " , rendering products manufactured here
     un-competitive . Hence no blue collar jobs in Mumbai anymore !

>  As far as " Service Sector " is concerned , it is fast giving up its " Across
    the Counter " service nature and morphing into internet / mobile app
    based " New E-Com Economy " , needing few new hires  !

>  Apparently , the only " Economic Sector " that is creating new jobs and is
    " Self Renewing " is that of the " Self Employed " hawkers in Mumbai !
    I suppose it is the same story , in all metros
    It is also the economic sector which needs no more than a few thousands
    of Rupees to create one job , as against a requirement of Rs 5 lakhs in
    MSME sector and Rs 5 Crores in large organized sector  !

>  And , retired hawkers do not ask for any pension , despite having one
    rank , for their entire working lives  !

I foresee a not too distant day , when all footpaths everywhere , are taken over by the hawkers ( where these are not already taken over , that is ! )

For providing livelihood to a section of society ( viz: hawkers ) , another section of the society ( viz: pedestrians ) will need to put up with some
inconvenience !

Unless some people ( who have jobs / incomes ) want their convenience to
take precedence over the livelihood of Ramji and don't care that his 2 children starve to death !

In any case , in India , every single day , some 4,383 children ( under age of 5 ) die of starvation .  Another 2 , won't change the " Statistics " much  !

But , if the already employed have a better solution , let them propose it !

-------------------------------------------------------------------------------------

hemen   parekh
10  July  2015
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Wednesday 8 July 2015

One Rank , One Pension ( OROP )



As against 14 lakh serving military personnel , there are some 25 lakh retired military persons , in India , today


They are demanding , " One Rank , One Pension "


In simple terms :


>  Col Mhatre retired in 1985 , with last drawn salary of Rs 10,000 pm


>  Col Chari retired in 2000 , with last drawn salary of Rs 50,000 pm , and


>  Col Patel retired in 2015 , with last drawn salary of Rs 100,000 pm


They all served for 30 years at the time of retirement


As per present Pension Rules, by way of pension :


>  Col Mhatre may be getting Rs 2000 pm


>  Col Chari may be getting Rs 10,000 pm


>  Col Patel may be getting Rs 20,000 pm


Under OROP , all of them would  today , get Rs 20,000 pm  !


And as salaries keep climbing , with each passing year , they will all keep getting the same amount as pension, as the latest retiree in the same rank , who has put in same length of service , at the time of retirement


A kind of " Indexation " , aimed at neutralizing the ever-rising " cost of living " which is same for all three retirees !


And , the argument goes :


" Why not ?


  Those who are serving , get their " cost of living " neutralized thru DA ( Dearness Allowance ) which automatically keeps rising every month , as CPI / WPI etc rise !


Why should early-retirees be made to suffer , for having been born earlier / served earlier ?  "


One cannot find fault with such an argument !


But if OROP is implemented , the Governments ( Central + States ) must get ready with answers to the following :


>   Will this lead to similar demands from millions of retired para-military forces and Police personnel , in all the States  ?


>  Could this lead to similar demands from all retired Civil Servants , at the Centre as well as , in the States ?


>  Can this demand find an " Echo " in all retired Municipal / Panchayat employees , all over India  ?


>  Will private sector retired employees make similar demands on Corporate Employers  ?


After all , no retiree ( of any kind ) , can escape the ravaging effects of ever - rising inflation ( cost of living )  ! Be rest assured , they will all be justified in making similar demands  !


This raises following further questions :


>  Will this set in motion , a Vicious Circle ?


>  Will this make India , a " High Cost Economy "  ?


Only time will tell


But one thing is crystal clear


Each succeeding generation will be required to bear the burden of ensuring that its preceding generation manages to live a life of dignity , which could well run into Rs lakhs of Crores  !


I cannot escape comparing this potential scenario with the present Greek Tragedy , where almost all citizens ( whether serving in Government or in private companies ) ,


>  Retire at the age of 50


>  For the rest of their lives , draw a pension equal to 90 % of their last drawn salary !


I am not against OROP


I am for creating awareness of the issues and for starting a National Debate


---------------------------------------------------------------------------

hemen  parekh

09  July,  2015

hcp@RecruitGuru.com

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Tuesday 7 July 2015

Median Salary ?





In a company , median salary is where half the number of employees are getting more and the other half are getting less than that salary number


Till a few years ago , all limited companies had to get the annual salary of their top management ( directors ) , approved by the Department of Company Affairs . And while approving , DCA applied some internal " guidelines " ( - who should earn how much, and no more  ! )


Companies learned to guess , as to what figure would pass the muster  !

 
I believe , nowadays , this is left for the shareholders to decide


A few years earlier , companies were required to publish in their Annual Reports , a section called " Employees Details "


In this section , they were required to publish full details ( Name / Birth Date Edu.  Qualification / Date of joining / Current Exp / Past Exp / current salary etc ) of all the employees drawing more than Rs 3000/- per month


In a few years time , in case of a few large companies , this section ran into hundreds of pages , as salaries kept rising

So the limit got progressively raised to Rs 6000/- pm and later to Rs 12,000/- pm , until one day this requirement got dropped


No doubt , this section was most sought-after by Headhunters / Bridegroom seekers , and avidly researched by all employees across the companies to find out where they stood in comparison with their colleagues  !


Then , in 1978 , came Bhoothlingam Committee report


It recommended ( which got accepted by DCA ) that the compensation differential between the lowest and the highest salary in a company should not exceed 10 times  !


But that committee never laid down any " Upper Limit " for the salaries of the lowest paid workers - which kept rising , month after month , since the DA ( Dearness Allowance ) was linked to Consumer Price Index  , which kept galloping !


On the other hand , Companies were not able to raise the annual salaries of their directors , because of ceiling imposed by DCA  !


As a result , this differential ( of no more than 10 times ) , kept shrinking  !


I remember having projected the annual growth rate of the salary of the lowest paid worker in L&T ( where I worked ) , to estimate that it would overtake the Chairman's salary , within a few years  !

Now contrast this with what Business Line ( 06 July , 2015 ) reported as follows 
:
-----------------------------------------------------------------------------------
Name of Top Honcho  ........ Ratio { Own Salary / Median Employee Salary }
------------------------------------------------------------------------------------
*  Y C Deveshwar.................................  439

*  Mukesh Ambani................................  205

*  Aditya Puri.......................................  117

*  Vishal Sikka......................................  116

*  Chanda Kochar...................................   97

*  Azim Premji.......................................   89

*  Sikha Sharma....................................    74

*  Deepak Parekh...................................    19

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------


I hope this " market determined " and " democratically arrived at " managerial remuneration will continue without outside intervention


What companies want to pay their lowest paid workers and their highest paid top honchos , should be left to their shareholders


But when it comes to the salaries of High Court / Supreme Court Judges or Government Secretaries , is it not a travesty of justice that , after 25 years of service ,  they get paid , less than the starting salary of some 24 + fresh graduate MBAs ?


In a company called , " India Inc. " , we , the citizens are the shareholders


It is high time we start rewarding our " Top Honchos " , commensurate with their responsibilities  !


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hemen  parekh

08  July  2015

www.B2BmessageBlaster.com

www.hemenparekh.in

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