No Kidding!

No Kidding!

Television has been credited with several things, and here's onemore: it may be responsible for creating the market-segment known astweens. Created here is used in the loose sense of the term. Tweensexisted (as one would have expected them to) before the onset of thetelevision age, the period soon after World War II (the late 1940sand 1950s). Howdy-Dowdy, the first ever television serial targetingtweens (or children) went on air in the us in 1947 (NBC). And whentelevision started beaming programmes targeting tweens, marketersrealised the merits of reaching out to them. In many ways, theevolution of tweens as a consumer category was television-led. Therewere other things that contributed to it, too, in the us: theeconomic boom following WW II, for one, and the baby-boom, whichturned parents into benevolent money-machines.

Sixty years after WW II, the same phenomenon is being repeated inIndia. To be fair, the beginnings of the tween-boom in India can betraced back to the mid-1990s. The causative factors, however, remainthe same. The emergence of niche television channels targeting tweens(in this case Cartoon Network that went on air in 1995), the arrivalof several me-too as well as differentiated media-offerings, aneconomic-boom-in-the-making, and other such. Today typical eight-to-12-year-olds in urban India who belong to the higher reaches of thesec (socio economic classification) are aware of brands, conscious oftheir power over their parents, and empowered to take purchasedecisions (especially when it comes to products and services theywill end up using). And with cable and satellite televisionpenetrating the hinterland, tweens in rural areas are pretty much thesame, minus the spending power (for now).

There are two ways to look at this phenomenon. The first is toindulge in the sort of breast-beating that liberals are prone to,lamenting the loss of childhood for these young consumers. The otheris to realise the inevitability of children becoming consumers in anycountry that is working its way up the economic-progression curve.The emergence of tweens as consumers is an opportunity for everyone,for the television channels that helped create the segment, for thecompanies that hope to make money, and for parents who can help theirchildren learn all about consumption without becoming consumerist.That, the chance to create balanced individuals and balancedconsumers, is reason for celebration.

Bearish Symptoms

After 9,000 it's only natural that the punters start setting newtargets for the benchmark Sensex-12,000, and 15,000 for 2006 are justtwo of them. Such naked bullishness isn't unwarranted, but it isn'tas if there aren't any dark clouds hovering over Phiroze JeejeebhoyTower, the headquarters of the Bombay Stock Exchange (BSE). Oneparticularly gloomy patch in the sky is courtesy the rupee's declineagainst us dollar, which has been a major worry for foreigninstitutional investors (FIIs), whose liquidity has been largelyresponsible for the current bull run. The domestic currency hasplummeted by over 6 per cent from $43.48 in July to $46.21 inDecember (at the time of writing). Going forward, the growing currentaccount as well as trade deficit, coupled with a strengtheningdollar, will put pressure on the rupee. In fact, if the forex kittyhas been swelling up, it's thanks almost entirely to FII inflows,rather than foreign direct investments. Experts point out that withthe economy growing at over 8 per cent, the current account deficit,which stood at $6.2 billion (Rs 27,900 crore) in the April-Junequarter can only balloon in the days to come.

A falling rupee will naturally bring down the returns of FIIsinvesting in Indian market. Amongst the BRIC countries, Russia,Brazil and China are running current account surpluses. Similarly,South Korea and Taiwan have current account surpluses, indicating ahealthy currency situation going forward.

Yet another factor that is turning the tide against India is themeasured hike in the US Fed rate from a decade-low 1 per cent to 4per cent. With rates expected to go up to 4.5 per cent or a maximum 5per cent, short-term speculative FII dollar inflows have received ajolt. The Fed rate hikes are boosting the dollar, as more Asianeconomies begin chasing the us treasury for higher returns.

According to Sebi statistics, there is hardly any growth in theFII inflows in 2005 as compared to 2004. The FIIs made net purchasesof Rs 38,965 crore in 2004 while the net purchases so far havetouched Rs 38,964 crore (till December 11). In the same period, theSensex has jumped by over 35 per cent to 9,133.67 points.

What's more, globally interest rates are moving up which is alsosignaling a revival in the debt market; this results in significantshifts in asset allocation. In the meanwhile, India Inc is inexpenditure mode, which could bring down the return on equity and thereturn on capital employed. The rising interest rates bothdomestically and globally will also put pressure on the margins. Infact, South Korea, Indonesia, Thailand and Singapore have seen upwardmovements in interest rates. Are the FIIs watching?

The Renaming Bug

There's much consternation, in some quarters, over Karnataka ChiefMinister Dharam Singh's recent announcement that Bangalore would soontake on its original name, Bengaluru. Some of the protests haveemanated from individuals worried about the impending obsolescence ofthe neologism Bangalored, a term they have apparently just learnt touse in sentences. Others are worried that India's #1 destination forit companies will lose some of its luster. Fact is, in democraticIndia, name-changes are a way of life. Some never catch on; NewDelhi's attempts to get people to say Rajiv Chowk instead ofConnaught Circus or Connaught Place have flopped, just as Chennai'sattempts to get them to say Uttamar Gandhi Salai instead ofNungambakkan High Road. Others have fared better. Bombay is nowMumbai, Madras, Chennai, and Calcutta, Kolkata. All are changes thatevoked a considerable amount of ire, and provoked the usage of reamsof newsprint, just as the Bangalore-Bengaluru thing will. Yet, apartfrom the fact that the change in name has, in each case, beensurprisingly accompanied by a fall in the quality of urbaninfrastructure, nothing much has changed. Mumbai remains India'scommercial capital; Kolkata would like to think it remains itscultural one; and Chennai remains, well, Madras. If the ChiefMinister of Karnataka wants to change the name of the state'scapital, it is within his rights to want to do so. And if the ChiefMinister of Karnataka wants to change Bangalore's name then, it is amove that should be applauded. This, after all, may well be the firstthing the man has done for the city since he took over the reins ofthe administration in mid-2004. The importance of this decision alsoexplains why Singh may have hitherto neglected Bangalore (the name-change must have been weighing on his mind). Now that he has got thattoughie out of the way, maybe he will get on to the easier tasks athand that concern such trivialities as power, water, pot-hole freeroads, over passes, better traffic management and the like. Bravo, MrSingh. It takes a brave man to opt for complete change.