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  • Why SIPs are Winning Over Indian Investors

    Reshma Radhakrishnan, a tech professional thriving in Bangalore, embraces life’s joys while keeping a keen eye on the future. Her secret weapon? Strategic SIP investments. “Discipline builds dreams,” she says, echoing the sentiments of countless young Indians across the middle and upper-middle-income groups who’ve turned to SIPs for secure wealth creation.

    SIPs, or Systematic Investment Plans, are revolutionizing investing by making mutual funds accessible and affordable. With small, regular contributions, individuals can build substantial wealth over time, capitalizing on the magic of compounding and rupee-cost averaging.

    Think of it like planting a seed – each SIP contribution adds to the soil, steadily nurturing your financial tree. Over the years, compounded returns blossom, multiplying your initial investment. Picture two scenarios: Person A starts investing at 40, contributing Rs. 1000 monthly; Person B starts at 20. After 20 years, A has Rs. 5.28 lakhs, while B has a staggering Rs. 26.56 lakhs – the power of early and consistent investing!

    SIPs offer a treasure trove of benefits:

    • Discipline Without Sacrifice: Regular contributions build financial habits, allowing you to save without compromising your lifestyle
    • Flexibility: Adjust your investment amount anytime to suit your changing needs
    • Convenience: Automate your SIPs for hands-free wealth-building
    • Reduced Risk: Spread your investments over time, minimizing the impact of market volatility

    And the proof is in the pudding! As of 2024, SIP contributions have crossed a remarkable Rs. 1 lakh crore, showcasing Indian investors’ growing confidence. October 2023 alone saw a record high of 7.3 crore SIP accounts and 34 lakh new SIPs. Even with market fluctuations, equity mutual funds through SIPs remain resilient, highlighting their long-term value.

    Industry experts like AMFI CEO NS Venkatesh and Motilal Oswal’s Akhil Chaturvedi see SIPs as the future of investing. They point to the untapped potential in small and mid-cap funds, where continued inflows are expected.

    New Sip Registrations in India From Financial Year 2019 to 2023, by Age Group
    New Sip Registrations in India From Financial Year 2019 to 2023, by Age Group

    Mutual Funds vs. Stocks: Finding Your SIP Sweet Spot
    Building Wealth Brick by Brick: The Rise of SIPs in India
    The Key Takeaway

    Mutual Funds vs. Stocks: Finding Your SIP Sweet Spot

    While both mutual funds and stocks offer SIP options, each caters to different risk appetites.

    Mutual funds, managed by professionals, spread your investment across diverse assets, offering a safer, smoother ride. Stocks, on the other hand, can deliver higher returns but come with higher risk, demanding deeper market knowledge.

    Ultimately, the choice between mutual funds and stocks depends on your individual goals and risk tolerance. New investors or those seeking a secure approach may find mutual funds ideal, while experienced investors comfortable with higher risk might consider stock SIPs.

    Building Wealth Brick by Brick: The Rise of SIPs in India

    Gone are the days of intimidating lump-sum investments and market timing woes. The magic of SIPs lies in their consistency and affordability. Starting with just Rs. 500 a month, anyone can join the investment party, regardless of income bracket. This democratization of finance empowers individuals to take control of their future, irrespective of their financial background.

    But SIPs offer more than just accessibility. They are a masterclass in discipline. The automated nature of these investments ensures regular contributions, even amidst market fluctuations. This eliminates emotional decision-making and instills a habit of saving for the long haul.

    Furthermore, SIPs leverage the power of rupee-cost averaging. By investing at different market levels, they help you buy more units when prices are low and fewer when they’re high, averaging out your overall cost and mitigating risk.

    But the real game-changer is compounding. Reinvesting your returns generates an exponential snowball effect, multiplying your wealth over time. Imagine starting at 20 and consistently investing Rs. 1,000 a month; by retirement, you could have a sizeable corpus, thanks to the magic of compounding.

    This growth mindset resonates with a culturally ingrained inclination towards savings and investments in India. Financial planning is no longer a chore but a gateway to a secure future. Experts like Mayank Bhatnagar, COO at FinEdge, emphasize the importance of seeking professional guidance to navigate the financial landscape and avoid emotional pitfalls.

    Finally, SIPs have the inherent flexibility to seamlessly evolve into Systematic Withdrawal Plans (SWP) during the retirement phase. This strategic transition empowers investors to enjoy a consistent and reliable stream of income derived from their accumulated SIP corpus. This financial maneuver ensures a steady cash flow post-retirement, providing individuals with the financial stability they need during this crucial life stage.

    The Key Takeaway

    SIPs are not just an investment tool; they’re a mindset shift. They are a testament to the power of discipline, consistency, and compounding in building a secure financial future. Indian investors are increasingly finding their financial haven in SIPs. By prioritizing discipline and long-term planning, SIPs empower individuals to navigate market fluctuations and secure their financial future. Whether you’re a seasoned professional like Reshma or just starting your journey, SIPs offer a powerful path to building a brighter tomorrow.

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  • Antitrust Fears Abort Adobe’s $20 Billion Bid for Figma

    In a unified declaration, Adobe and Figma disclosed the abandonment of their planned merger, attributing it to formidable obstacles encountered while seeking regulatory approvals from both the European Commission and the UK Competition and Markets Authority. This unexpected turn of events signifies the conclusion of a challenging fifteen-month regulatory review process for Adobe’s ambitious $20 billion bid to acquire Figma, a renowned design entity. The official termination of this acquisition, acknowledged by Figma’s Co-founder and CEO Dylan Field on December 18th, 2023, carries extensive implications for the design software landscape.

    The Once-Promising Partnership
    Regulatory Hurdles and Antitrust Concerns
    Data Highlights Market Dynamics
    Despite Disagreements, Companies Choose Independence
    Market Reaction and Future Prospects
    A Broader Implication for Tech Mergers
    The Road Ahead for Adobe and Figma
    The Future of Design Software: Collaboration or Consolidation?

    The Once-Promising Partnership

    Established in 2012 by Evan Wallace and Dylan Field, Figma stands out as a highly efficient collaborative design tool with an expandable developer ecosystem. Known for its user-friendly interface and an array of essential design tools for developers, Figma facilitates seamless collaboration for remote teams.

    The platform is versatile, running on any computer and enabling users to collaborate effortlessly across different operating systems, including PC, Mac, and Windows. Its browser-based interface resembles real-time collaboration in Google Docs, complete with clickable avatars that illuminate ongoing contributions by team members. This feature serves to prevent design discrepancies and ensures that teams stay synchronized both figuratively and literally.

    Figma witnessed a substantial surge in popularity during the Covid-19 pandemic, owing to the rise of remote and hybrid work models. Presently, the platform boasts over 4 million users worldwide. Prior to the acquisition bid, Figma successfully secured nearly $333 million in funding from various investors, including noteworthy names like Index Ventures, Founders Fund, Andreessen Horowitz, and Fuel Capital.

    In its last funding round, led by Durable Capital Partners, Figma achieved a valuation of $10 billion—a valuation notably lower than the $20 billion offered by Adobe in their acquisition proposal. Adobe’s pursuit of Figma can be attributed to a slowdown in the growth of its core business, compounded by the saturation of the market with new generations of design tools. Recognizing Figma as an up-and-coming player, Adobe aimed to tap into new avenues for growth through the acquisition.

    Notably, Adobe XD, Adobe’s existing design product, has struggled to match Figma’s popularity. Adobe’s comparatively limited investment in the development of Adobe XD, in contrast to their other tools, underscored the need for a strategic move. Figma’s collaborative design tools for UI/UX offer a more shareable experience, addressing a specific area where Adobe currently falls short. The proposed acquisition thus aimed to bridge this gap in Adobe’s product portfolio and leverage Figma’s success in the rapidly evolving landscape of design software.

    Regulatory Hurdles and Antitrust Concerns

    The honeymoon phase was abruptly cut short as regulators in the UK and EU raised red flags over concerns of market dominance and potential stifling of innovation. The prospect of Adobe, an industry giant, absorbing the nimble Figma sparked antitrust concerns, particularly regarding the impact on competition and consumer choice.

    Adobe is set to pay a termination fee amounting to $1 billion to Figma, a San Francisco-based company that has significantly expanded its workforce from 800 to 1300 employees over the past year. According to reports by Rauters, Figma anticipates a robust annual recurring revenue growth of 40%, reaching over $600 million this year. Notably, the company has maintained a positive cash flow, a key metric valued by potential IPO investors.

    The concerns raised by Britain’s Competition and Markets Authority (CMA) last month emphasized the potential harm to innovation in software widely utilized by the majority of UK digital designers. Parallel concerns were echoed by the European Union regarding the possible decrease in competition within the industry.

    The deal was bound to attract regulatory scrutiny given its substantial size and the consequential removal of one of Adobe’s major competitors from the market. Throughout the better part of 2023, the U.S. Department of Justice (DOJ) closely monitored the transaction but had not formally filed any lawsuit to impede its progress. Recent reports revealed that both Adobe and Figma engaged in discussions with the DOJ in a final attempt to prevent legal action before the weekend.

    Data Highlights Market Dynamics

    A study by the UK Competition and Markets Authority (CMA) shed light on Adobe’s dominant position, holding a staggering 70% share in the graphic design software market and an 85% share in the UX/UI design software market. Figma, with a 48% share in the latter, was perceived as a rising force that the CMA feared would be extinguished by the proposed merger.

    Despite Disagreements, Companies Choose Independence

    In response to the regulatory hurdles, Shantanu Narayen, CEO of Adobe, expressed the companies’ strong disagreement with the recent regulatory findings. However, he emphasized the decision to move forward independently, stating, “Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity.” Narayen added that both companies remain well positioned to capitalize on their substantial market opportunities and continue their mission to change the world through personalized digital experiences.

    Figma’s rapid ascent, especially among web and mobile app designers, posed a direct threat to Adobe’s established market presence. Regulators worried that the merger could eliminate Figma’s independent drive, leading to adverse consequences such as price hikes, reduced options for consumers, and a negative impact on the broader design ecosystem.

    Market Reaction and Future Prospects

    As Adobe shares experienced a marginal increase in response to the termination news, the market is now closely watching how both companies will navigate their paths independently. Adobe, a heavyweight in the creative suite domain, faces the challenge of evolving to meet the needs of the next generation of designers. On the other hand, Figma, a rising star in design software, must chart its course for continued growth under heightened regulatory scrutiny.

    A Broader Implication for Tech Mergers

    Beyond the specific companies involved, this saga reflects a global wariness towards mega-mergers, particularly in the tech sector where healthy competition fuels innovation. The Adobe-Figma case underscores the increasing role of regulators in safeguarding fair competition and consumer welfare in the dynamic realm of software.

    The Road Ahead for Adobe and Figma

    The termination of the acquisition deal leaves both Adobe and Figma at a crossroads. Adobe now faces the challenge of charting a new course to attract the next generation of designers, while Figma must navigate its continued independent growth under heightened scrutiny.

    Dylan Field emphasized the commitment to independence, stating, While we leave that future behind and continue on as an independent company, we are excited to find ways to partner for our users.

    Shantanu Narayen’s statement underscores Adobe’s commitment to its “massive market opportunity” and the overarching goal of transforming the world through personalized digital experiences. While the merger may have faltered, both companies express confidence in their ability to pursue their respective missions independently.

    The Future of Design Software: Collaboration or Consolidation?

    The demise of the Adobe-Figma deal raises questions about the future of design software. Will the industry witness increased collaboration between established players and nimble startups, or will consolidation remain the dominant narrative? Only time will reveal the trajectory of the design software landscape.

    The echoes of this abandoned acquisition will reverberate for years, serving as both a cautionary tale for future mergers and a rallying call for a diverse and dynamic design ecosystem where innovation can flourish. As the industry grapples with the aftermath, the design software landscape has been permanently altered, shaping the narrative of collaboration, competition, and consumer choice.

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  • Excellence in Every Sip, India’s Whiskies Stand Tall Globally

    India holds a dominant position in the global whisky market, representing nearly half of its share. Surpassing France, India has emerged as the largest consumer of Scotch whisky globally. Noteworthy is the fact that seven out of the top ten whisky brands globally, in terms of volume, originate from India, including well-known names like Officer’s Choice, Royal Stag, and McDowell’s, enjoying substantial popularity domestically. Alongside these, established international labels such as Glenlivet and Talisker compete for shelf space with local contenders like Indri, Amrut, and Radico Khaitan’s Rampur.

    Despite the prevalence of affordable molasses-based spirits referred to as “whisky” locally, the focus shifts to the remarkable growth and recognition of Indian single malts. These premium offerings, produced with local barley, distilled, and matured within the country, have made significant strides in the global market, garnering praise from a widening circle of whisky connoisseurs.

    Vinod Giri, Director General of the Confederation of Indian Alcoholic Beverage Companies, notes a significant shift wherein Indian malt whiskies now command nearly half of the market share for premium single malt whiskies in the country, poised to surpass competitors in the coming year. Globally renowned, Indian whiskies consistently receive acclaim as some of the world’s finest spirits, with malt whiskies being exported to over 60 countries within a relatively short timeframe.

    The evolution of Indian whiskies, often overlooked globally, has been noteworthy in recent decades. Initially overshadowed by Western counterparts, Indian whiskies have gained international recognition for their innovative approaches and exceptional craftsmanship. The roots of Indian whisky production trace back to the colonial era when British distillation techniques were introduced to the Indian subcontinent. Distilleries established in the mid-19th century, such as Mohan Meakin founded in 1855, played a pivotal role in shaping the trajectory of Indian whiskey.

    Indian six-rowed barley, offering a distinct flavor compared to Scottish two-rowed barley, and an accelerated maturation process in India’s warm climate, up to five times faster than in Scotland, contribute to the uniqueness of Indian whiskies. This results in a three-year-old whisky in India achieving a maturation effect equivalent to a Scotch whisky aged 9–15 years.

    India’s demand for hard liquor, with spirits and ready-to-drink beverages constituting 40% of the country’s alcoholic beverage market by volume, is driven by a growing economy. India, already the fifth-largest alcohol market globally, accounted for a third of the industry’s global growth in 2021-22. Premium drink consumption, including Scottish single malts, doubled between 2020 and 2022, and India has become the largest export market for Scotch, despite a hefty 150% import duty.

    Size of Whiskey Market in India From Financial Year 2015 to 2021, With an Estimate for 2025
    Size of Whiskey Market in India From Financial Year 2015 to 2021, With an Estimate for 2025

    This rising demand, coupled with import costs, has led to the emergence of Indian premium products. Pioneering distilleries, through experimentation with grains, aging techniques, and flavor profiles, are at the forefront, with the global whiskey community eagerly anticipating the next innovations from India. The surge in Indian premium whiskies spans all price categories, outpacing Scotch whiskies in growth rates.

    Data from the International Wine & Spirit Research indicate that 93% of all whisky traded in India falls into the “value” segment, leaving room for the development of higher-end segments. Jason Holway, a market analyst at IWSR, attributes this growth to strong consumption and growing premiumization in India, driven by higher middle-class disposable incomes, the lifting of pandemic restrictions, and improved quality, variety, and availability in retail.

    The introduction of the first Indian single malt, Amrut, in 2004 marked a significant turning point. Competitors like Paul John from Goa and Indri from Haryana have entered the scene, gaining international recognition and awards. Indian single malts, often priced higher than imported Scotch, are gaining traction globally.

    Three key factors propel this boom: India’s overall economic growth, the prosperity of the educated middle class, and the increasing social acceptance of alcohol. Additionally, a growing confidence in homegrown products aligns with India’s “self-reliance” policy, restricting imported liquor sales in certain outlets. Responding to escalating demand, distilleries like Paul John plan to expand production capacity, while global giants like Diageo have entered the Indian single malt market with Godawan. As the industry gears up for heightened competition, the future of Indian whiskies appears promising. Recognizing the significance of the Indian whisky market, Holway emphasizes its crucial role in the global well-being of the whisky category.

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  • Versace Marketing Strategy: A Journey of Innovation and Luxury

    Versace, a renowned international fashion design firm and a symbol of Italian luxury, was founded in Milan in 1978. Gianni Versace started with a clothing line dedicated to women’s wear. This line was characterized by the boldness that no other brand had dared to pursue. With a commitment to exquisite tailoring, ornate craftsmanship, and opulent materials, Versace truly represents the height of fashion and luxury.

    Versace’s heritage is deeply rooted in its use of Medusa as a symbol, representing robust and fearless designs that captivate a modern, global audience. With Medusa’s mythological power to make people fall in love and never turn back, the brand continues to solidify its place in contemporary culture. By embracing Medusa, Versace has created a timeless legacy, inspiring generations with its bold, daring approach to fashion. This has been proven with its global revenue of approximately 1.1 billion US dollars in the fiscal year ending April 1st, 2023, as per reports from Statista.

    During the 1980s and 1990s, the brand gained immense popularity by creating stunning outfits for some of the most prominent names in the American film industry. These included Lady Gaga, Elton John, and Jennifer Lopez.

    Versace – Target Audience
    Versace – Marketing Mix

    Versace – Marketing Strategies

    Versace- Marketing Campaigns

    Versace – Target Audience

    Versace, a prominent brand in the retail industry, is renowned for embodying glamour and sophistication. Its appeal transcends age groups and lifestyles, capturing the essence of the “Carpe Diems” aged 18-30 who embrace dynamic trends regularly. Additionally, Versace designs pieces tailored for millennials, particularly women aged from their early 20s to their mid-40s. Beyond these demographics, the brand’s primary target market comprises urban high-end consumers, celebrities, influencers, and passionate fashion enthusiasts.

    Versace Revenue From 2019 to 2023
    Versace Revenue From 2019 to 2023

    Versace – Marketing Mix

    The marketing mix of Versace refers to the 4Ps of Marketing- Product, Price, Place, and Promotion which encompasses the key elements that it uses to promote and sell products to its audience.

    Product

    Versace is a retailer of high-end goods and an exclusive collection as a whole. To preserve its entire brand image, the organization makes sure that unique styles and designs are provided. The product line includes articles for youngsters, adults, and men and women alike. It consists of high-end clothing, furnishings, accessories, and fragrances.

    Price

    Versace targets individuals with a taste for the finer things in life – those who appreciate innovation and luxury. It uses the premium pricing strategy, which means that the prices are set to be high from the point of initial release itself. This approach is justified by the exceptional quality and unique features offered, differentiating Versace from its competitors and reinforcing its commitment to delivering exclusive and premium experiences.

    Place

    Versace is a global brand that illuminates its presence in several countries. To effectively sustain its commercial footprint, Versace oversees sales operations through its dedicated retail, distribution, and sales departments.

    The company has several tie-ups that help it sell and market its products via its outlets. Meticulously crafted, Versace’s physical stores mirror the brand’s aesthetic, creating a lavish atmosphere for shoppers. The brand also extends its reach through an official website, offering distribution and purchasing services in countries where dedicated outlets may not be present.

    Promotion

    Versace doesn’t miss a single detail when it comes to capturing the essence of luxury. From their striking Medusa logo to the custom-designed extravagant pieces reserved for celebrities, every bold choice leaves a memorable mark on its audience. Moreover, Versace leverages social media platforms like YouTube, Instagram, and Facebook to actively promote and enhance its image in the digital landscape.

    Marketing Concepts of the Luxury Goods Industry
    Luxury marketing is centered around experience, pedigree, endorsements, and maintaining a perceived value.
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    Versace – Marketing Strategies

    In the highly competitive landscape of luxury fashion, Versace utilizes a diverse range of marketing strategies to uphold its iconic status and establish meaningful connections with its target audience.

    Positioning and Brand Identity

    Versace’s primary marketing approach is its consistent and cohesive brand identification. The company has concentrated on establishing itself as the epitome of elegance and excellence. This positioning stems from its commitment to producing exquisite products for the elite. Every detail of the Versace brand, from its logo to its product lines, exudes a sense of elegance and excellence that has become synonymous with the brand.

    Revolutionary Collection

    Pioneering in fashion, Versace has established its place as one of the globe’s most iconic brands. All of Gianni’s designs were inspired by his love of art and his desire to create fashion that was both beautiful and unique. These designs have been the brand’s hallmark since the very beginning and have maintained the core structure of bold, distinctive designs to make a statement. Continuing this legacy, Versace unveils new collections and limited-edition items, sparking desire among its audience. These collections are also presented in fashion shows, unveiling the groundbreaking talent and showcasing Versace’s ability to be a trendsetter.

    Celebrity Connections

    Versace has a long, splendid history of associating itself with iconic names like Lady Gaga, Beyonce, Madonna, and even the Princess of Wales. Even today, Versace continues to partner with contemporary celebrities and musicians like Dua Lipa, Gigi Hadid, and Justin Timberlake. It even collaborated with Cher to launch the “Cher X Versace For Pride” collection in 2022.  These partnerships not only maintain the brand’s relevance but also amplify its appeal to the upcoming generations, ensuring that Versace remains synonymous with celebrity allure across eras.

    Lady Gaga for Versace
    Lady Gaga for Versace

    Digital and Social Media Marketing

    With the current world turning more digital at every step, Versace has also developed its social media marketing strategy to remain at the top of its game and continue to reach a vast audience.

    First, let’s have a look at the official website of the brand. Versace’s website is a visually stunning showcase of the brand’s products, lifestyle, and history. It offers a wide range of pictures, videos, and articles that provide users with a comprehensive look into the brand.

    The company has also established a notable presence on Instagram, with over 30 million followers and 5.3 million on X. Versace uses these platforms to present its most recent collections, as well as behind-the-scenes looks at the idea and creation process and celebrity partnerships.

    In August of this year, Versace deleted all posts from its Instagram handle and declared that it will be releasing its fall collection on a new and fresh slate. Through its various social media tactics, Versace has managed to create a buzz and build a loyal fan base constantly.

    A Screenshot from the Versace Website
    A Screenshot from the Versace Website

    Events and Sponsorships

    Versace supports and takes part in several high-profile events, such as art exhibitions, film festivals, and award ceremonies. Its principal attractions are its fashion shows, which are renowned occasions on the fashion calendar. Exclusive events are also held by the brand to introduce new products or to mark the opening of a new flagship store in any global location.

    Corporate Social Responsibility

    Versace has incorporated sustainability into its key development strategies over the last ten years. They have improved their purchasing practices to be more ethical and ecologically conscious while also minimizing waste production, water use, and carbon footprint. 

    The brand has initiated campaigns to raise awareness and money for significant causes, worked on charitable initiatives, and supported several nonprofit organizations. By creating an overall favorable impact, this strategy has enabled them to connect with socially conscious customers.

    Versace- Marketing Campaigns

    The “Fendi x Versace” Campaign

    The collaboration between Fendi and Versace became a highly anticipated and talked-about event. This partnership of the two most influential fashion giants created a collection that brilliantly showcased the dynamic fusion of Versace’s bold glamour and Fendi’s refined craftsmanship, resulting in an iconic and groundbreaking fashion collaboration.

    The “Versus Versace” Campaign

    In the “Versus Versace” campaign, there was a notable shift toward targeting a younger and more diverse audience. This strategic move involved featuring a fresh generation of models and influencers, effectively revitalizing the brand’s image. While embracing modernity, the campaign remained true to Versace’s fundamental values of daring design and individuality.

    Versus Versace Fall Winter 2018 Advertising Campaign

    Versace’s Super-Family Campaign

    Versace’s Super-Family campaign placed a spotlight on the tight-knit community established by Gianni Versace around his brand. This campaign not only featured iconic 90’s supermodels such as Cindy Crawford, Naomi Campbell, and Claudia Schiffer but also introduced emerging talents like Kaia Gerber and Gigi Hadid, alongside Donatella Versace’s influential presence. The campaign celebrated a multigenerational representation of the Versace legacy, showcasing continuity and evolution within the brand’s storied history.

    Conclusion

    Versace’s brilliant marketing strategies have propelled it to the forefront of elegance in the fashion industry. With its zeal for constant innovation, it has established a permanent position despite the existence of dynamic trends. Versace’s journey over the past four decades highlights its commitment to its roots while also evolving to stay relevant in the current generation.

    FAQs

    When was Versace founded?

    Versace, a symbol of Italian luxury, was founded in Milan in 1978. Gianni Versace started with a clothing line dedicated to women’s wear.

    What is the pricing strategy of Versace?

    Versace targets individuals who appreciate innovation and luxury. It uses the premium pricing strategy, which means that the prices are set to be high from the point of initial release itself.

    What is the target audience of Versace?

    Versace targets customers aged 18-30 who embrace dynamic trends regularly. It designs pieces tailored for millennials, particularly women aged from their early 20s to their mid-40s. The brand’s primary target market also comprises urban high-end consumers, celebrities, influencers, and passionate fashion enthusiasts.

  • Decoding Deepfakes: The Urgent Need for Public and Corporate Awareness

    Seeing may be believing, but not so in the cyberworld.

    If you think deepfake is an issue that affects only celebrities like Alia Bhatt and Rashmika Mandanna, it’s time for a rethink. Deepfake is being used to target commoners as well. 

    Deepfake is a human impersonation of voice, images, or videos carried out through artificial intelligence. Already, several cases have surfaced where common citizens have been duped using fake videos and phone calls.

    Take the instance of an ex-Coal India executive in Kerela who was cheated off 40,000 INR when his ‘deepfake’ ex-colleague requested money over a WhatsApp video call. Similarly, a senior citizen was being extorted money by using the face and voice of a retired UP police officer. 

    Not just common citizens, around 91% of US companies found deepfake to be a rising threat. A survey carried out by global cyber security solutions firm Regula found almost 37% of companies worldwide were affected by deepfake voice frauds, while 29% fell victim to deepfake videos.

    Saurabh Lal, President of Customer Engagement and Cyber Research, CYFIRMA, feels this is just “the tip of an iceberg,” and there is a lot more going on in the cyber world as far as stolen identities are concerned.

    StartupTalky takes a deep dive into the deepfake issue and sees if any probable solutions are in sight.

    New Age Ammunition
    Mitigating Deepfake
    Digital Laws

    New Age Ammunition

    The rising number of internet users in India has meant a proportional rise in cyber crimes in India.

    Data released by the National Crimes Records Bureau earlier this week showed a 24% rise in cyber crimes in India in 2022 over the previous year.

    Bangalore-based digital threat-identifying company Cloudsek shares some astounding statistics: Between July 2023 and September 2023, 40,000 people were duped to the tune of 37 lakh INR, which flowed into the accounts of cybercriminals.

    Cyber crimes have assumed various forms, with hacking and defacing Indian websites becoming common practices, in addition to leaking sensitive data.

    Last year, in a reply to the Rajya Sabha, Minister of Information and Technology Rajeev Chandrasekhar said five servers and approximately 1.3 terabytes of data were affected when hackers infiltrated the All India Institute of Medical Sciences a year ago.

    “It’s a very globally connected economy. We Indians are very well poised in terms of the young population, the population that is connected, the population that is internet savvy, English literate, and the IT back office of the world. We are the largest pharmaceutical manufacturer in the world. In such a scenario, various forces are trying to derail us,” said Lal from Cyfirma.

    Earlier this year, in June, a group of Indonesian hackers were said to have defaced several Indian websites. Israeli cyber security firm Radware’s H1 2023 Threat Report claimed that hacktivist campaigns against India have been on the rise in the first half of 2023.

    It’s not surprising then that Coudsek names India as the most targeted country by hacktivists or hacker activists.

    Deepfake is soon becoming another potent weapon in the arsenal of cybercriminals and one that cannot be taken lightly. 

    Number of Cyber Crimes Reported Across India From 2012 to 2022
    Number of Cyber Crimes Reported Across India From 2012 to 2022

    A deepfake takes form in the artificial neural network. This network of neural connections and nodes carries tons of information and data. The developer of the deepfake video puts in a huge amount of data in the form of videos, images, and voices of the person that needs to be simulated. Once this data is fed, the application improves on it through machine learning and can even cross-check for fakeness until it deems fit. The outcome is a near-perfect depiction of the person whose identity has been morphed, including minute details such as skin tone, voice, and facial features, to name a few.

    While such a process could make for a great VFX motion picture, certain anti-social elements use it to tarnish the image of a person or organization. In extreme cases, these deepfake videos also end up being a threat to a nation. 

    Mitigating Deepfake

    If an individual or organization finds himself or herself dragged into a deepfake issue, Techno Companion’s founder, Sahil Jain, recommends reporting the video on the social media platform, followed by reporting to the cyber crime cell.

    Soon after the Rashmika Mandanna deepfake video went viral, the Indian government asked all social media platforms to take down deepfake videos circulating on social media. The government also said it would announce draft guidelines to address the deepfake issue.

    Sahil feels such filters should become a routine practice among social media platforms in a way where each video is vetted before it makes it online.

    But wouldn’t this be a huge burden in terms of time, money, and manpower? Jain disagrees.

    The cost of implementation, the server cost, and the coding fees are there, but that is almost minimal. There won’t be any real people involved. in it. You just have to put the technology in place, and the technology will do it by itself, said Sahil from Techno Companion.

    KPMG recommends a “zero-trust” and “multi-factor authentication” process to mitigate cyber security threats. 

    “The average cost of a cyber security breach was $1.76 million less for an organization with a mature zero-trust methodology relative to those who don’t employ zero trust,” said KPMG in its note on Deepfakes.

    As precautions against identity theft, Regula prescribes thorough ID verification and biometric verification.

    “To ensure that fraudsters cannot reuse users’ liveness sessions for tampering, the enrollment process for every company’s requirements should be set up with unique parameters,” Regula said.

    Digital Laws

    Although the government has asked affected individuals to file a First Information Report with their nearest police station and avail remedies as per the IT rules, India lacks specific laws to deal with the deepfake per se.

    The problem that I see at the moment is that there are not very solid, effective laws to deal with this. Because technology is evolving at the same pace, or at least to cope with it, the laws have to be put in place so that anyone can do it, said Jain from Techno Companion.

    The situation is no different in other countries. 

    Currently, in the US, different states have different sets of laws governing deepfakes and their usage, although no federal law is in place yet. The UK has funded several research projects and programs that create awareness surrounding the deepfake issue. The UK recently enacted the Online Safety Act, which puts the onus on technology firms to monitor the content on the respective platforms. 

    South Korea has made it illegal to distribute deepfake videos that could cause harm to national interests, accompanied by a heavy fine and imprisonment.

    Back in India, policymakers are probably in a huddle over the intricacies of digital law. Meanwhile, Google India has already collaborated with various stakeholders to make responsible use of AI. It has invested around $1 million in the Indian Institute of Madras to set up a multidisciplinary center for responsible AI and is holding discussions with policymakers and researchers on the same.

    “In this world, enforcement is possible with compliance and fines,” observes Lal from Cyfirma.

    Conclusion

    India, along with the rest of the world, is treading through uncharted cyberspace when it comes to artificial intelligence and machine learning. Hence, playing catch and mouse for law enforcers could be a bit more tricky as far as cyber crimes are concerned. For the time being, the government, organizations, and firms can try to create more awareness amongst people on how to deal with cyber crimes and provide easier access to cyber law enforcers. And more importantly, for internet users, an awareness that the eyes too may lie may save trouble to some extent.

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  • Nirma’s Dance to Detergent Dominance and Its Unexpected Decline

    In the 1980s, an iconic TV ad featured the Nirma girl dancing to a catchy tune, marking the beginning of an unexpected business competition that eventually produced an unlikely Indian tycoon. Karsanbhai Patel, the son of a humble farmer and a science graduate, initially worked as a lab technician at New Cotton Mills in Ahmedabad, owned by the Lalbhai group. Following this, he served as a chemist for the Gujarat government’s Department of Mining and Geology in 1969.

    Utilizing his laboratory expertise, Patel endeavored to create a detergent using soda ash and other materials. Once he perfected the formula, he began manufacturing detergents in his modest 100-square-foot garden as a part-time venture. Pedaling through neighborhoods, Patel sold his detergent door-to-door for Rs. 3, significantly cheaper than Hindustan Unilever’s Surf priced at Rs. 13. During his 15-kilometer daily bicycle commute to work, he sold an average of 15-20 packets each day, contributing to the surge in demand for Nirma in his hometown of Ruppur, Gujarat.

    Recognizing the business potential, Karsanbhai Patel left his job after three years to focus on Nirma. He named the detergent in memory of his daughter Nirupama, affectionately known as Nirma, whose unfortunate demise was commemorated through the girl in the white dress featured on the packaging and in TV ads.

    Nirma quickly gained popularity among the middle and lower-middle class, thanks to its high quality and affordable price. Diverging from the conventional strategy of expanding from major cities outward, Nirma adopted a bottom-up approach, targeting second and third-tier cities and towns instead of affluent areas where rivals like Surf dominated.

    However, despite initial success in Ahmedabad, Nirma faced challenges finding retailers as shops hesitated to stock an unfamiliar detergent. In an attempt to boost sales, Karsanbhai extended credit to shopkeepers, but the delayed payments and excuses led to significant losses. This prompted him to instruct his team to retrieve all unsold Nirma packets from retail outlets, resulting in further financial setbacks for the company.

    Despite these setbacks, Karsanbhai Patel’s determination and innovative approach ultimately reshaped the business landscape, making Nirma a household name in India.

    Promotion played a crucial role in enhancing Nirma’s visibility, as Karsanbhai Patel devised a strategic initiative to address obstacles and enhance the brand’s awareness.

    Nirma’s advertisements successfully positioned the brand ahead of rivals like Surf. While competing brands depicted mundane laundry activities, Nirma’s ads presented the chore playfully and engagingly, resonating with consumers. The heightened demand for Nirma detergent in the 1980s, driven by these advertising efforts, led the manufacturer to withdraw a significant portion of its supply from shelves temporarily.

    In 1985, Nirma achieved a milestone by surpassing Surf to become India’s most popular detergent. By 1988, Nirma commanded a substantial 60% share of the country’s detergent market.

    Expanding beyond its core product, Nirma diversified its offerings to include bathing soaps and introduced new products such as soda ash, salt, and scouring items. The brand’s success prompted a response from FMCG giant Hindustan Lever Limited (now HUL), leading to the launch of Wheel washing powder in 1988 as part of Operation STING (Strategy to Inhibit Nirma’s Growth). Despite HUL’s efforts, Nirma maintained its dominance, holding around 60% market share and selling over 1.72 lakh tonnes.

    Nirma’s characteristic jingle, “Doodh si safedi Nirma se aaye, Rangeen kapda bhi khil khil jaye,” persisted in its advertising for over a decade. The brand’s Deepikaji character, competing with Surf’s Lalitaji, became a notable figure in the detergent market.

    Washing Powder Nirma – Historic ad

    While Nirma allocated a modest 3-4% of its revenue to marketing communications, significantly lower than competitors spending 6-8%, the brand remained consistent with its campaign over the years. Notably, Nirma collaborated with Bollywood actress Sonali Bendre to endorse its beauty soaps.

    Sonali Bendre - Face of Nirma Beauty Soap
    Sonali Bendre – Face of Nirma Beauty Soap

    Despite these successes, Nirma faced challenges in diversifying its product portfolio, and introducing toothpaste and hair care products, but struggled to differentiate and position itself effectively. As consumer preferences shifted towards aspirational purchases, Nirma’s low-cost strategy began to lose traction, and the brand encountered difficulties in retaining market share against unbranded competitors. Efforts to introduce products like ‘Nirma blue’ and ‘Nirma cake’ fell short in creating a distinctive identity.

    The Decline

    In contrast to other detergent brands that embraced viral and diverse advertising campaigns along with a range of product offerings, Nirma maintained a consistent approach and refrained from innovation. While competitors, both multinational and local, focused on visibility, viability, and affordability in their messaging, Nirma primarily emphasized affordability. Despite cost increases in key ingredients like Linear Alkyl Benzene (used in detergent manufacturing) and palm oil (used in soap manufacturing), Nirma has refrained from raising its prices for an extended period.

    According to analysts at a Mumbai-based brokerage firm, “While rivals have diversified products across various price points to counteract input cost effects, Nirma is solely positioned as a value-for-money option.” This singular focus has proven detrimental to the brand, resulting in a declining market share in its core business. The company’s stock price and profitability have witnessed a continuous decline since April 2006, with several key factors contributing to its downfall:

    1. Lack of Innovation – Nirma has displayed minimal improvement and innovation in its product lines, reflecting a sense of complacency stemming from its market leader position and a failure to adapt to evolving market dynamics.
    2. Consumer Perception – The low pricing strategy led consumers to perceive Nirma as an inferior brand. This perception was further exacerbated by the premiumization of the detergent segment by FMCG giants such as HUL and P&G.
    3. Lack of Focus – Beyond its initial years, Nirma struggled to identify its core competencies and comprehend its strengths. Ventures into other segments proved costly for the company, contributing to its overall decline.

    The case of Nirma serves as a compelling narrative of the business dynamics, emphasizing the importance of adaptability, innovation, and strategic focus in the competitive market. Despite facing setbacks in its later years, Nirma’s legacy remains intertwined with the dynamic shifts in consumer preferences and the evolving landscape of the FMCG sector in India.

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  • ZestMoney Bows Out as Regulatory Pressures Mount

    ZestMoney, the buy now pay later platform, is set to cease its operations by the end of December, according to an internal communication to its staff. The company, currently employing around 150 individuals, is compelled to take this step as it grapples with financial challenges, despite efforts to revitalize its operations. In a setback earlier this year, ZestMoney faced the departure of its three co-founders, Lizzie Chapman, Priya Sharma, and Ashish Anantharaman, following unsuccessful attempts to secure new funding and finalize an acquisition deal with PhonePe, a digital payment platform.

    In a statement released in May, ZestMoney outlined a strategic shift, emphasizing a focus on core digital EMI and personal loan products while discontinuing SaaS and insurance business operations. Over the past six months, the company’s digital EMI product has faced challenges, encountering resistance not only from consumers but also from crucial partners such as payment aggregators, eCommerce platforms, and non-banking financial companies (NBFCs).

    Prosus, an investor with a significant 19.4% stake in ZestMoney, wrote off its $38 million investment as the company grappled with its financial downturn. Media reports indicate that ZestMoney terminated over 100 employees during a transitional phase. Despite raising approximately $5-7 million in seed funding in July, the company’s financial struggles persisted, culminating in the decision to shut down.

    ZestMoney, which has raised a total of $125 million, including debt financing, experienced a decline following the implementation of new guidelines for Buy Now Pay Later (BNPL) companies by the Reserve Bank of India in June 2022. The regulatory measures prohibited non-bank prepaid instrument issuers from loading instruments with credit lines.

    As part of its wind-down strategy, ZestMoney intends to retain a minimal finance and legal team. This team will focus on selling the remaining assets of the business to a suitable buyer and overseeing the closure process. Although it is unlikely to attract interest from major fintech companies, there is speculation that a traditional NBFC might consider acquiring the technology in a potential firesale.

    Established in 2015, ZestMoney initially operated as a loan-sourcing platform, facilitating rapid credit disbursal at the point of sale, particularly for online merchants. Collaborations with prominent eCommerce players such as Flipkart, Amazon, Myntra, and Nykaa were key to offering pay-later services. Following the breakdown of acquisition talks with PhonePe, ZestMoney attempted a shift in its business model, offering its technology stack as a white-label solution to other fintech lenders and NBFCs.

    ZestMoney’s Loss Surges; Operating Revenue and Expenses Rise
    ZestMoney’s Loss Surges; Operating Revenue and Expenses Rise

    Fintechs Learn from ZestMoney’s Cautionary Tale

    Financial technology (fintech) experts suggest that stringent regulations have prompted non-banking financial companies (NBFCs) and banks to reassess their associations with digital lending platforms. The rapid expansion of the personal loans sector through these platforms has raised concerns at the central bank for an extended period. The Reserve Bank of India (RBI) has consistently urged banks and NBFCs to exercise greater responsibility when engaging with digital platforms for lending. Additionally, pressure from civil rights groups has mounted, advocating for the elimination of predatory lending practices and addressing concerns related to recovery harassment.

    The recent adjustment in risk weightage by the RBI has further complicated these partnerships. While there were speculations about the potential impact on the Buy Now Pay Later (BNPL) business, particularly for platforms like Paytm, the fintech giant has refuted such claims. However, it is anticipated that fintech companies operating in the realms of small-ticket personal loans and BNPL may encounter significant challenges in the coming months.

    The closure of ZestMoney serves as a notable example of how heightened regulations can profoundly disrupt the operations of fintech startups. Numerous fintech ventures have expanded into digital lending in recent years, and the regulatory shifts pose a threat to their continued operations. In August of this year, two major consumer internet giants, Flipkart and Swiggy, announced their foray into lending. While Swiggy ventured into the co-branded credit card segment, Flipkart set its sights on the personal loan business.

    Google Pay has also intensified its collaborations for both personal and merchant loans. Another major player, CRED, entered the lending arena with a BNPL product in 2022 and is currently exploring opportunities to expand its lending product offerings. Despite the saturation of the market with various digital lending platforms, the RBI’s decision to elevate risk weights appears to be a preventive measure against potential long-term catastrophes.

    Fintech startups are recognizing that regulatory compliance is a fundamental aspect of their sector, and not merely an exception. In some ways, startups are acknowledging that merely activating digital lending channels may not suffice. In this context, the case of ZestMoney serves as a cautionary tale for the broader fintech ecosystem.

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  • Vadilal is Like Wine, Adding Value Through the Ages

    Since its modest inception as a street soda shop in 1907, Vadilal, the renowned ice cream brand, has evolved into a household name, embodying the quintessence of frozen delight. The trajectory of Vadilal’s triumph isn’t merely a chronicle of frozen confections; it’s a narrative of foresight, ingenuity, and generations of unwavering commitment. The challenge for the succeeding generation has been to strike a harmonious balance, adhering to core values while implementing crucial changes to enhance their business’s value.

    “The next generation’s role is that of renewal and being the voice of the new generation, addressing modern customers and competition. We trust they grasp the legacy as family members but can act as catalysts for change to ensure the continued success of family enterprises,” remarks Rajan Vasa, office managing partner, Gujarat, KPMG in India.

    Founding the Legacy
    Continuing Through Generations
    Passing the Baton
    Innovations and Achievements
    The Current Scenario

    Founding the Legacy

    In 1907, Vadilal Gandhi, a forward-thinking resident of Ahmedabad, initiated the foundation for this remarkable legacy. His humble enterprise began with the sale of soda, a refreshing beverage that resonated with the local community. Subsequently, Vadilal Gandhi introduced an additional delight – handcrafted ice cream, captivating crowds eager to relish his exquisite creations.

    Vadilal Soda Fountain, 1907
    Vadilal Soda Fountain, 1907

    Continuing Through Generations

    The stewardship of this thriving business passed to Vadilal Gandhi’s son, Ranchod Lal Gandhi, who assumed the responsibility of nurturing and expanding the legacy. In 1926, under Ranchod Lal Gandhi’s guidance, the inaugural retail outlet, aptly named Vadilal Soda Fountain, was unveiled in Ahmedabad. This marked a crucial moment as the focus shifted towards ice creams.

    Demonstrating an unwavering commitment to quality and innovation, Ranchod Lal Gandhi introduced an imported ice cream-making machine from Germany that same year. This strategic decision enhanced the taste and paved the way for expansion. By the time India gained independence, Vadilal had established four outlets across the city, laying a solid foundation for future growth.

    Passing the Baton

    As time progressed, the baton transitioned to the next generation – Ramchandra and Laxman Gandhi, the sons of Ranchod Lal Gandhi. Their entry into the business in the early ’70s marked a period of rapid expansion, consolidating Vadilal’s presence in Gujarat with a network of 10 outlets.

    With the advent of the 1990s, the fourth generation of the Gandhi family entered the scene, infusing new ideas and perspectives. Ramchandra Gandhi’s three sons – Virendra, Rajesh, and Shailesh – and Laxman Gandhi’s son Devanshu, embraced their heritage, propelling Vadilal towards greater horizons.

    Innovations and Achievements

    Noteworthy accomplishments have marked Vadilal’s path. In November 2001, the brand achieved recognition in the Limca Book of Records for crafting ‘The Largest Ice Cream Sundae.’ This monumental feat was the result of collaborative efforts from 180 individuals who assembled 4,950 liters of ice cream, 125 kg of dried fruits, 255 kg of fresh fruits, and 390 liters of assorted sauces within a record-setting 60 minutes.

    The Current Scenario

    Kalpit Gandhi, a fifth-generation member of the Vadilal family, presently serves as the Chief Financial Officer (CFO) of the company. Vadilal has transcended international borders, emerging as the largest-selling Indian ice cream brand in the United States. “Working with the family business has always been my dream,” says Aakanksha Gandhi, the fourth generation to join the family business, holding the position of president-branding and parlors at Vadilal Enterprises.

    The new generation is actively introducing more innovation while steadfastly preserving the family’s core values. Vadilal operates through two distinct entities: Vadilal Industries, responsible for manufacturing, and Vadilal Enterprises, overseeing marketing and distribution. Aakanksha, daughter of Devanshu, joined the business in 2018, taking charge of nationwide marketing and branding efforts.

    “Since becoming part of the brand, my primary objective has been to ensure continuous relevance among the Gen Z and Gen Alpha demographics,” she asserts. At 26 years old, she has been at the forefront of initiatives to elevate Vadilal’s presence in the eCommerce domain, collaborating with influencers, all the while maintaining a delicate balance with the company’s core values.

    A year ago, Aakanksha took the lead in launching Vadilal Now For Ever, a dessert café strategically designed to connect with the younger generation and cultivate lasting loyalty. Even the standalone ice cream parlors, Vadilal Scoop Shops, have expanded to 30 locations across Gujarat and four locations in Delhi. Vadilal is preparing for an upcoming franchise-based, pan-India launch. In the fiscal year 2023, the manufacturing business reported a net revenue of Rs 896 crore, and the marketing and distribution business achieved a net revenue of Rs 930 crore.

    With a heightened focus on innovation in marketing and branding, Aakanksha is poised to transform Vadilal. However, she emphasizes maintaining the essence of the corporate culture established over the years. “We are encouraging a more democratic style of leadership, allowing more opportunities to engage with team members and value their insights,” she affirms.

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  • Fairness or Favoritism? Google’s Spotify Agreement Fuels Antitrust Concerns

    Google has officially acknowledged entering into a unique agreement with Spotify, allowing the music streaming service to bypass the standard Play Store commission fee. This revelation came to light during the ongoing antitrust case between Epic and Google, disclosed by Google’s Head of Global Partnerships, Don Harrison.

    As reported by The Verge, the terms of this arrangement stipulated that Spotify incurred a zero percent commission when users purchased Premium subscriptions through the company’s payment system. In contrast, if a user utilized Google’s payment system, Spotify was obligated to pay a 4 percent commission, significantly lower than Google’s usual 15 percent fee.

    In response to inquiries from the trial judge regarding the Spotify deal, Google asserted that disclosing specific figures would negatively impact ongoing negotiations with other parties. Although Google confirmed the details provided by Harrison, the company sought to rationalize the arrangement by emphasizing that certain developers investing directly in the Android and Play Store ecosystem receive deals that reduce commission fees.

    Harrison further disclosed that Google and Spotify had committed to jointly invest $50 million in a ‘success fund.’ He defended the special agreement by asserting that ensuring the proper functioning of Spotify across play services and core services was crucial for the success of Android phones.

    Introduced the previous year, Google’s User Choice Billing program typically imposed a 15 percent commission on payments made through the Play Store. However, if developers opted for their payment platform, Google offered a 4 percent discount, lowering the commission to approximately 11 percent. Despite this, Google’s VP of Play Partnerships previously acknowledged that, regardless of developers choosing User Choice Billing, they ultimately paid the same amount.

    When questioned about potential similar arrangements with other companies, Google declined to provide further details. Recent revelations indicated that Google had proposed a 10 percent discount to Netflix, which the video streaming platform declined. Consequently, Netflix users are unable to purchase memberships through Android devices.

    Spotify has consistently voiced concerns about in-app purchase fees. In the middle of 2023, the platform took a significant step by discontinuing support for Apple’s App Store billing system, aiming to evade the imposition of a commission as high as 30 percent. Spotify emerged as a prominent participant in the Coalition for App Fairness, a collective that included Epic, and endorsed the antitrust lawsuit initiated by the Fortnite publisher against both Apple and Google. However, in contrast to Epic’s sustained legal pursuit against both tech giants, Spotify seems to have identified a more straightforward and cost-effective resolution to disengage from the legal dispute with Google.

    Epic’s Stand Against Google
    Does Google Favor Big Tech Companies with Lower Commission Fees?

    Epic’s Stand Against Google

    Epic, the developer behind the widely popular mobile game Fortnite, has initiated legal proceedings against Google, alleging that the search giant engages in unlawful price gouging by imposing commissions ranging from 15% to 30% on in-app digital transactions, according to a report by AP.

    In the ongoing antitrust trial, Tim Sweeney, the CEO of Fortnite, testified, asserting that Google Play Store policies are illegitimate and contribute to Google’s monopoly in the mobile app distribution sector, as reported by Bloomberg. Sweeney claimed that Google attempted to sway Epic into releasing Fortnite through the Play Store by presenting a set of financial incentives during a meeting at the California office in 2018. Epic, however, rejected these offers, as stated by AP.

    During his testimony, Sweeney expressed his perception of the situation, stating, “It seemed like a crooked arrangement… Google was proposing a series of side deals, which seemed designed to convince Epic not to compete against them.”

    Does Google Favor Big Tech Companies with Lower Commission Fees?

    Google’s revelation of a unique payment arrangement with Spotify has shed light on the company’s practice of selectively negotiating lower commission fees with certain developers. While Google justifies these deals by emphasizing the investments developers make in the Android ecosystem, critics argue that they create an unfair playing field and disadvantage smaller developers.

    The Spotify deal is particularly controversial given that the company is a member of the Coalition for App Fairness, which is advocating for stricter antitrust regulations against Apple and Google. Spotify’s willingness to engage in a secret deal with Google suggests that the company may be more interested in protecting its interests than promoting fairness in the app market.

    The Epic lawsuit against Google is likely to continue, and the revelations about the Spotify deal could give Epic more ammunition to argue that Google is abusing its monopoly power. It remains to be seen whether Google will be forced to change its policies and allow all developers to pay lower commission fees.

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  • For ONDC, Party’s Just Started, Seen Taking Off In 2-3 Years

    The Indian government’s initiative to make eCommerce accessible to every pin code in the country has resulted in the Open Network for Digital Commerce. Since then, ONDC has been touted as the next UPI (Unified Payments Interface) for eCommerce transactions. A one-stop online shopping web for buyers and sellers to transact with complete price transparency. It has rightly created the buzz to take eCommerce to the next level in India.

    Already, ONDC is showing signs of buzzing activity. In the festive week leading up to Diwali, ONDC recorded almost 1.2 million transactions across 600 cities! In November itself, transaction value spiked to 4.7 million.

    The big question, however, is whether ONDC will have enough muscle power to replace the shopping experience on huge aggregator platforms such as Amazon and Flipkart.

    ONDC has only taken baby steps, experts opine.

    “ONDC is in its early growth stage. But we are hopeful that it will start peaking in the next 2–3 years,” said Aashish Guglani, senior policy associate at the Digital India Foundation.

    In this article, we take a closer look at how ONDC is expected to transform the shopping experience and what room for improvement some participants see within the ONDC universe.

    India’s Shopping Spree
    ONDC Network
    Retail Boom
    Buzzing B2B
    Room for Improvement

    India’s Shopping Spree

    From the word go, ONDC’s potential has been promising, given the sharp rise in online transactions by Indians.

    The open network protocol is expected to act as a force multiplier for various segments—businesses, consumers, application developers, governments, and other relevant participants—through the creation of an interoperable and open playground for various sections to function and compete, ONDC said in a note when it announced the launch.

    According to ONDC, India has the third-largest online shopping market, with 14 crore eRetail shoppers in 2020. Despite the large base, the eRetail penetration level is only 4.3%, compared with 25% in China and 26% in South Korea. This goes to show the untapped potential for eCommerce in India.

    The COVID-19 pandemic forced people to shop online. Slowly but surely, Indian shoppers have now started digging their heels into the online shopping experience. The sudden boom in UPI payments only made shopping a seamless experience.

    ONDC is trying to replicate the UPI experience in the eCommerce space by offering a more transparent framework.

    McKinsey expects India’s digital commerce with ONDC to surge five times to around $340 billion by 2030. 

    With aggregator platforms reportedly charging commissions of 23-25%, ONDC does look attractive as of now. According to media reports, ONDC could start charging a small fee from participating platforms going forward in the range of 2–3%. As of now, seller network participants on the ONDC network may charge a marginal fee to the buyer. Even with these charges, the buyer has the choice to pick a seller based on their pricing points.

    Number of Digital Buyers in India in 2021, With Estimates Until 2025
    Number of Digital Buyers in India in 2021, With Estimates Until 2025

    ONDC Network

    ONDC offers a network for buyers and sellers. Consider it to be a digital land parcel hosting a township of malls, where buyers and sellers meet and transact their goods and services. As of now, some of the sellers on the platform range from food delivery apps to retail giants, small retail stores, and electronic stores, among others.

    When it comes to the ONDC platform, the more, the merrier. The higher the number of participants, the greater the price discovery. As of now, ONDC hinges on buyers’ and sellers’ apps to route customers onto the network. 

    • Buyer Apps/Seller Apps: For example, Paytm, Mystore, Craftsvilla, and Yatri are some of the buyer applications that allow customers to access the ONDC network through their respective apps. Similarly, there are seller-side apps that allow the onboarding of customers, including Magicpin, Bitsila, Growth Falcons, uEngage, and Mystore.
    • Gateways: Gateways are applications that aid the discoverability of goods and services for the buyer based on his or her search request and location.

    Retail Boom

    As of now, a chunk of Indian shoppers prefer to buy products from offline outlets. The Kirana store, infamously termed a ‘mom-and-pop’ store, forms 80% of India’s retail sector. Getting smaller retailers onboard the ONDC network is vital for its success. 

    Realizing the massive potential of ONDC, retail giants are doing their bit to onboard smaller retail outlets. India’s largest retailer, Hindustan Unilever, reportedly plans to help onboard around 1.3 million Kirana stores, which directly purchase from the giant.

    Meanwhile, some companies from other sectors, such as electronics, are in a wait-and-watch mode.

    We will get onboarded when we see a large part of our customers themselves upgrading and taking up this platform. As of now, we are just waiting and watching how this pans out. It seems promising on paper, but let’s see how it gets picked up in our industry, said Ujjwal Sarin, founder of audio electronics company Nu Republic.

    Increased traffic on the ONDC platform holds the key for participants to reach a fair price discovery. Placeorder.com founder and CEO Thomson Skariah says it’s important for businesses to be available on the ONDC network to begin with.

    “It’s about businesses being available on the network to receive orders. You need to make sure that you know this is one more revenue channel for you,” Skariah said.

    Digital India’s Guglani says, “If the stakeholder and the market ecosystem come in, ONDC will be able to reach $500 million as UPI did.”

    Buzzing B2B

    In contrast to the wariness witnessed in the business-to-consumer segment, the business-to-business segment seems to be buzzing with excitement.

    In June of this year, ONDC launched the B2B trade on its platform, which allowed merchants to transact with other businesses and undertake wholesale transactions. This is likely to be a game-changer for businesses going forward.

    With the launch of B2B on ONDC, brands can establish connections with retailers or facilitate their distributors’ entry into new markets. With “plug and play” capabilities (such as real-time ordering, swift delivery, and credit management) offered by eco-system participants, ONDC will enhance the experience for both brands and retailers, said Sathish Gopalaiah, President, Consulting, Deloitte South Asia, in a press release.

    “Retailers (such as grocery stores and pharmacies) could access a wider distribution network, saving time and costs. Direct linkages between retailers and manufacturers would be likely to cut prices, improving margins in sectors such as agriculture and construction,” said a McKinsey report.

    Some experts hope that the network could also provide the elusive answer to questions about access to credit. The Open Credit Enablement Network, like the ONDC, is part of the India Stack of digital infrastructure envisaged by the government of India.

    “Right now, with open credit, because everything will be catalogued, you are digitized. I would like to know what kind of sale you have in a month; we would have that kind of information collateral. Therefore, it becomes easier, cheaper, and less risky for a bank to give you a loan,” Guglani said.

    Room for Improvement

    Although the advantages seem to outweigh the risks at the moment for ONDC, the scope for improvement has nevertheless been expressed by experts. 

    Customer Service

    The Digital India Foundation has named three key risks to ONDC, namely: access and ownership of data, customer service, and evolving roles and responsibilities. It has pegged the risk of the absence of clarity over customer service at 74%.

    “Most of those associated with ONDC claimed to have faced no problem while onboarding, though few wished the process could be faster and the customer care segment more responsive,” said a survey released by Shiprocket on ONDC in August.

    Data Privacy

    Data privacy is also a concern shared by a few participants. At the very outset, ONDC has made it clear that it will not be storing or viewing any transaction data. Despite these assurances, data phishing continues to remain a risk.

    “The government and ONDC are facilitating e-commerce. But, with so many people handling online transactions, their data could be misused by people with technical knowledge,” said Dr. Himanshu Talwar, executive board member of the Young Leaders Council (YLC) Executive Board Member – Young Leaders Council, under the All India Management Association.

    User Experience

    ONDC will have to put up an experience that remains on par with, if not exceeds, global standards. 

    “ONDC’s main challenge is to match the platform’s technological viability with the increasing number of transactions and clients. It needs to compete with some of the finest apps in the world, like Amazon, Flipkart, and Uber. There’s growing pressure on ONDC to keep up with the latest mobile apps and meet customer demand,” said the International Journal of Engineering & Technology in its research note.

    Conclusion

    Like any digital innovation, ONDC too may overcome its initial technical hiccups and upgrade with better versions going ahead. Going by the steady rise in the number of transactions on the platform, it’s only a matter of time before ONDC can become the big disruptor in India’s gargantuan eCommerce space.

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    Open Network for Digital Commerce (ONDC) project aims to bring more retailers & sellers online. Know more about ONDC and its impact on eCommerce.
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