BUSINESS

ANOTHER SIGN OF ECONOMIC SLOWDOWN? ZOMATO SACKS EMPLOYEES

BUSINESS, NEWS

In a bid to reduce ‘redundancy’, Foodtech Goliath Zomato has sacked 1% of their workforce earlier this month. On the 9th of August, the company decided to let go of 60 employees mainly from customer support department of their Gurugram office.

The company issued a statement explaining their motive behind this move. “Over the last few months, our service quality has improved, and the percentage of orders requiring support has come down significantly creating redundancies for about one percent (60 people) of our workforce. Most of these redundancies are in customer support department and also include movements to other departments as part of our Internal Job Placement exercise.”
The company further explained that expansion into more than 500 cities across India led to addition of more than 2000 people into the company’s workplace. This expansion however needs to be constantly realigned to new departments. Zomato further justified the lay offs saying use of new technology also results in further redundancies.
However there is no clarity if these 60 employees were sacked immediately along with a severance pay or if they were asked to serve their notice period.
Reports suggest that for every order Zomato spends up to Rs 5 for customer support & with high orders coming in the costs of customer support were high. In its annual report, the company cited delivery operations as the driving force for its loss. The company is now trying to automate its customer support to cut the human cost & enchance customer service.
Sustainable Growth?
This however isn’t the first time the company has sacked its employees. In the year of 2015, the company had to let go of at least 300 employees, majority of them from United States.
But in 2019, the company is facing crisis of a different kind. If the ‘Food has no religion’ hurt it’s image on social media and drew flak from Right Wing Groups, the Infinity package offered to it’s Flagship Gold Users has dented it’s prospects with Restaurant Association. Several restaurants opposed the idea, leading to a standoff despite several rounds of talks.
Consultancy firm, Market Research Future predicts that at a growth rate of 16%, Online Food Markets could become 17 billion dollar industry by 2023. Companies like Zomato & Swiggy clock in 70 million orders per month approximately. But what remains to be seen is, can these food Giants sustain their own success story in the future.
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IS INDIA READY TO PLAY GLOBAL MUSICAL CHAIRS?

BUSINESS, NEWS

In the year 1996, Michael Jackson had arrived in India for the first time. The fans were thrilled at the prospects of seeing the King of Pop live in action. Mega stars such as Michael rarely navigated to India & the fan response was unprecedented. The streets of the newly named city of Mumbai were filled with fans. The show was a stellar success and is still recalled as one of the greatest shows by Michael.

Cut to 2019, 23 years later, the scene is completely different. In the coming few months, not one but two superstars will arrive in India- Katy Perry and Dua Lipa will be performing in Mumbai. The two singers will be headlining a music festival in the city of dreams. While this is Katy’s second visit, Dua Lipa is visiting India for the first time.
India, today, no longer is a distant market for the Music industry and companies all over the world are willing to invest big. Multimedia corporate bigwigs such as YouTube and Spotify are leaving no stone unturned to reach out to the 1.3 billion strong nation.
What favours India?
Thanks to the humongous growth of IT sector and fierce telecommunication sector rivalry, data prices in India is the cheapest in the world. A user is likely to pay 200 rupees for 48 gb of data per month, far lower than global average. What’s also important to note is India’s rising interest in Western pop culture makes the country a strategic investment spot.
The big players in the game of music streaming include YouTube, Apple Music, JioSaavn, Gaana, Hungama, Sound Cloud, Amazon Prime and Spotify. However it will not be a cake walk for these companies to set up business in India. India still hasn’t warmed up to the idea of music streaming. Many still prefer listening to the radio, plus local music companies are here to provide a tough competition. Remember PewDiePie vs T-Series saga? T-Series went all out beat a YouTuber in the bid to conquer the number one spot.
The other big problem are the diverse languages spoken in India, while it may be easy to conquer the market in North, given the excessive use of Hindi, but down South and in the NorthEast multiple languages are spoken. Also there is a huge divide in what urban and rural India consumes. Companies will have to look into each state and come up with a strategy to capture the market. This will not be an easy task to achieve.
The other big factor to watch out for is the price. Companies like Spotify and Apple make users pay for the content, while Spotify charges approximately 13 rupees per day, Apple usually seeks per song payment, but in India they are trying to incorporate the pay per month module. Expecting the audience to change their spending habits will be a tough task for many companies. Remember, companies like Netflix and Amazon are struggling to reach to wide audience due to this model, while hotstar has a wider reach due to it’s free Content in some genres.
But as the companies try to woo the customers, there is one more audience they need to be aware of- the singers & the music composers. Singers in the bollywood and other regional markets are highly underpaid. If streaming apps need an edge over their content, then they will have to enter in exclusive deals with the content creators. They will have to pay big money to lock in these deals. Whether or not it’s an investment they are willing to make remains to be seen.
In America, several singers such as Taylor Swift refused to tie up with Apple over payment issues. These music streaming apps will have to avoid such issues here in order to avoid the negative press coverage. The other big issue concerning the music industry in India is piracy. Use of apps can lead to leaks of audio clippings of songs. How they battle this will be a upheaval task.
Podcasts have also generated a huge buzz in the recent times, today India is the third largest consumer of podcasts, we are only behind US and China. These apps should also venture into this category. But can they diversify or stick to the original genre of music remains to be seen.
India is a underrated and unexplored market in International arena but what remains to be seen is- are the consumers ready for this big change. Will they change their habits? Will they invest in good quality music that they pay for? Only the future can reveal this answer, but the corporates have a big task ahead of themselves

THE GREAT INDIAN BUSINESS RIVALRIES

BUSINESS

It’s a dog eats dog world out there. The competition is stiff and the money involved is big! In the bid to out do their rival and capture the market, companies sometimes get involved in petty drama. Take a look at how big Indian companies or corporate firms took on each other because of fierce market competition.

Times Now versus CNN-News18

Couple of years back, CNN-News18 called themselves the numero uno of Indian news but India’s self proclaimed number 1 channel Times Now took major offense to it. They released data (36 weeks of it, mind you) from BARC and even went on take their rivals head on by asking questions like, “What’s the desperation CNN?” and “Release the real numbers”. But sadly, the nation did not want to know the answer!

Pepsi versus Coca-Cola

When asked about, who they thought their real competition was, Coca-Cola India had this to say….

“Our real competition is water, tea, nimbupani and Pepsi… in that order.”

For these two American companies, battle fields have been many and India was one among them. This corporate war reached its crescendo in the late 90s when the two indulged in a bitter ad war. This went on for years before both sides realised how silly the entire fight was.

The Hindu versus Times of India

Known for its no-nonsense approach to news, The Hindu, is popular among the older readers. But the Chennai edition of TOI used this as a ploy to attack the Hindu, and they asked The Hindu readers “Stuck with news that puts you to sleep?”. Staying true to their classy self, The Hindu simply released a full front page ad saying, “Stay ahead of the Times”

Colgate versus Pepsodent

After Pepsodent claimed that they were 130% superior than Colgate, the latter dragged the former to the court. “India’s most recommended brand by a dentist” was upset with Pepsodent and asked the court to intervene. Colgate’s claims were set aside by the Delhi High Court. But Pepsodent was panned for using Colgate’s name in the ad. Who knew those pearly whites would cause so much drama.

AMAZON- THE GROWTH STORY

BUSINESS, World Affairs
Year Milestone
1994 Jeff Bezos quits his job, launches Amazon.  Initial startup capital- his parent’s personal savings
1995 Amazon.com goes online with book sales. Bezos raises an $8 Million round of funding from Kleiner Perkins
1997 Amazon goes public at $18 per share
1999 Bezos named Time Magazine’s “Person of the Year” for popularising online shopping.
2009 Bezos acquires Zappos through  stock swap
2013 Bezos acquires the Washington Post
2015 Amazon surpasses Walmart as the most valuable retailer in the United States
2016 Becomes the fourth most valuable public company, goes offline with its first bookstore in Seattle
2017 Amazon acquires Dubai-based Souq.com, Bezos becomes the second richest person in the world

Amazon founder Jeff Bezos became the second richest person in the world, moving ahead of when Amazon acquired on 29 March acquired Middle East’s largest online retailer, Souq.com. According to Bloomberg, Bezos added around $1.5 billion to his fortune (now at $75.6 billion) as his company’s share rose to $18.35 billion as of  29 March.

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