The Meanwhile team decamped to Mombai (aka Bombay) this week to find out what’s happening in the ‘I’ in BRIC – one of the fastest growing markets in the world. With a population of 20 million in a country of 1.2 billion and 771 million mobile phone subscriptions, no visitor to Mumbai is left in doubt that there’s an energy and urgency about the place, even if the traffic ends up being very far from fast as a result. (Seriously, the 3km between hotel and airport mid-morning took 30 minutes.)
The Indian economy
The OECD’s June 2011 review of India identifies adult literacy of 74% and a GDP per head US$1068 (equivalent to US$3296 of purchasing power parity). The review starts with this assessment:
The Indian economy has been catching up quickly in the past two decades, and weathered the global recession well, with only a limited and short-lived slowdown. In just over 11 years, income per capita has doubled. Wide-ranging reforms and increased investment have lifted potential growth to almost 9%, the highest in Indian history, helped by improvements in infrastructure. Inclusive growth of 10% per year is feasible given that demographic developments are set to push up saving, but will only be achieved if the administrative and regulatory barriers facing companies are reduced.
Compared to Western European markets where 2% annual GDP growth is considered outstanding, India is obviously going through something special and ranks second only to China. And the OECD review makes the observation that in contrast to many emerging economies, where growth is largely export led, Indian growth has been driven by domestic demand.
However, some pundits warn that India’s continued success cannot continue unabated simply by dint of population. Take Arminio Fraga for example, a guy who knows a bit about booming economies in highly populated countries following his years as President of Brazil’s Central Bank. In a Business Week interview recently, Dr. Fraga commented:
… for the life of me I can’t see why having more people in India is a good thing. Some population growth can be helpful in some situations. Having a large population that can be educated – that can save and work hard – is possibly a plus, but it’s also a real managerial challenge.
According to the FT in January this year, Facebook accounts for 36% of all Indian social media traffic (and 5.3% of all Web traffic), just over twice that of the former leader, Google Orkut. And the top 10 Indian Facebook pages (by fans numbering one to three million) include MTV, mobile network operators Tata Docomo and Vodafone, the Mumbai cricket team, Kingfisher Airline and Axe (the men’s deodorant).
According to Brand Republic, Warc forecasts that India will be the fastest growing advertising market in 2011 of the twelve major markets it tracks, with growth of 18% this year, and about the same again next year. This compares to an average of 5.5% this year, with the next BRIC market being Russia with 17% growth in 2011.
No meeting at the Meetup
My colleague Jay and I decided to get social in Mumbai with the people who are supposed to ‘get’ social. After a good trawl around the social Web we alighted upon a Meetup group called Mumbai Marketing and, with amazingly good timing, the third meetup was scheduled for this past Tuesday. However, after an hour in traffic, things didn’t turn out to be quite so social. Of the eleven registrants for the meetup, no one else turned up. Not even the organiser. Then an hour’s traffic weaving back to the hotel.
Social media controversy
The Indian government appears determined to track its citizens’ use of the social Web and other communications media, paying particular attention to Blackberry devices, Facebook, Twitter, Gmail and Skype. Perhaps this is motivated by the tensions with Pakistan (there were as yet unattributed terrorist attacks in Mumbai earlier this month), or perhaps by a governing establishment simply feeling ill at ease with the ability of the electorate to coalesce and share opinions and content anonymously.
Ironically, in reciprocation, it appears the public would like more visibility over the actions of government officials and other public sector employees in light of the frequent charges of corruption. Indeed, the police pulled our driver over one morning on apparently vexatious grounds only to be appeased by rupees, and a colleague had to pay an unforeseen charge, in cash for some reason, to customs officials on bringing some filming equipment with him. The headline news throughout the week has been the poor state of Mumbai’s roads and questions about where the money is going.
The New Statesman reported on various facets of the country this month, including this article on the growth in information technology capabilities. There is no doubt that India has risen sharply to be a global info tech hub.
The article quotes Angela Saini, author of Geek Nation: How Indian Science Is Taking Over the World, and whilst it reports that Saini’s overall assessment is positive, she believes that India isn’t so good at technological innovation. Specifically:
She concludes that the big Indian IT firms “capitalised on India’s cheap and educated labour force to do workaday maintenance for western customers. Even now, thousands of software engineers are stuck in drone-like jobs, and this has made the industry slow at inventing products.”
The article evidences this claim by comparing the rate of patent filing of India’s IBM, Infosys, with IBM itself – 300 by Infosys over four and a half years versus 4,000 per annum by IBM.
Being in Mumbai for just one week has proved exhausting. Meetings can take place any time – 8am, 9pm, and Saturdays. The pace is relentless. The enthusiasm infectious. The people lovely. The potential enormous. So we’ll be back regularly.
Thanks to everyone who made us feel so welcome. And you never know, perhaps we’ll arrange the Meetup next time we’re in town.
[originally posted to the Meanwhile blog]