5 More Recession Beaters

After our initial list on 5 sectors doing well in recession , we thought it wouldn’t be a bad idea to highlight more options which exist for you and me to earn our daily bread in these trying times. Check them out

PSUs

This is where you would like to be in a recession. Public Sector Units (PSUs) are the safest havens in times of turmoil. While private companies might get into a job de-escalation mode, take up cost cutting measures, keep a check on employee salaries and general benefits, PSUs or for that matter any government aided organisation continues to function (recession or boom) as if nothing has happened.

If you are someone who prefers a stress free and stable career, don’t look beyond PSUs. Recession is hardly a force to beat these time tested organisations.

SPORTS

Talk about sports in India and the 1^st thing which comes to mind is the 20-20 cricket tournament Indian Premier League (IPL). In a time when all organisations the world over were trying to weed out unwanted expenses to ensure sustainability, IPL-2 was launched with aplomb, fanfare and style in Johannesburg, South Africa and boy wasn’t it a success?

In fact that India was not able to host IPL-2 due to political (polls were scheduled in various Indian states) and security reasons (IPL-2 being launched soon after 26/11 Mumbai terror attack had obvious security threats) and that it had to be finally shifted to South Africa turned out to be a blessing in disguise to the reeling South African economy. Not only did it turned out to be a mega cash grosser for the country, it also provided a lot of business opportunities for small local vendors, in addition it gave a facelift to the South African Tourism Industry.

MEDIA

Media is yet another “evergreen sector” of modern era. Broadly comprising of print, radio, television and internet, it’s a sector which has literally exploded in the last decade or so. In particular the ever increasing TV news channels which have come up with the launch of cable TV and online social media which has rapidly blossomed in the web-o-sphere ever since the advent of world wide web have literally revolutionised the modern media.

The media industry as a whole has successfully leveraged opportunities which have arose as a result of recession.

• The TV news channels have been successful in covering the socio-economic impact of recession.
  
• Radio channels have proved to be a source of much needed stress buster by providing entertainment to the masses through music.
  
• Web or online media has played its part in giving its users a platform to communicate / share / socialise and learn by way of interacting with each other. An important segment of the online space which has done particularly well is the online job search segment.

JUDICIARY

It’s quite obvious that a recession does not result in a decrease in crime rate. In fact the stresses arising due to job insecurity and general restlessness in these times of socio economic turmoil means that crime rate and criminals would only increase. Such being the case the only direction in which the demand for lawyers, judges, legal experts and the legal/judicial system as a whole can go is up.

If you are looking forward to land yourself a job in the Indian Judicial System you don’t even need to be aware that a word called recession exists in economics.

COUNSELLING

As indicated earlier, recession brings with it a baggage of stresses, be it psychological, social or financial. It would not be out of place here to mention that money (rather lack of it) is one of the root causes of all stresses related to the material world.

It then becomes quite needless to explain here how the role of counsellors/counselling gains importance in these uncertain times to deal with all kinds of stresses.

That makes up a total of 10 sectors doing quite alright even in these trying times. Do you know any other sector which we have not been able to cover in our list? Do let us know.

Entrepreneurship ahoy!!!

Entrepreneurship is the way of living that has caught attention in the fashion circles recently.

WHAT THE HECK DOES THAT MEAN???

Let us try to decode that. Entrepreneur is a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk. (as per dictionary.com). So, its not difficult to understand that the art of taking initiative and risk to earn money by managing a business or enterprise may be called ENTREPRENEURSHIP.

Now, if it is simply managing one’s own business enterprise, then why do I call it a way of living. If we travel some time back in time, then government jobs was the path everyone wanted to tread, as there was nothing more secure than that. When this sector got saturated, then came in the IT outsourcing industry to fill the gap, and then came the big giants looking for MBA grads. But how many of the billion people could be entertained by these few sectors. Entrepreneurship had always existed, but it never dared to raise its head due to the risk factor involved. India always had the largest market share covered by local retailers rather than the big giants. These people were no other than our own entrepreneurs. After agriculture, this was the largest sector which fed almost a quarter of India. This is why I called it a WAY OF LIVING.

With the recession hitting everyone hard, especially the bigger players, we saw that no one could feel secure in any kind of job. The safest of the sectors saw companies sinking faster than the Titanic, and the ones which managed to stay afloat were spitting out employees faster then World War II death rates. Where could everyone take cover with the pink slip venom free-flowing everywhere. This is exactly when someone realized that our own retail market had almost no effect of the recession, and he cried out loud that he had found the solution to epidemic like cancer named recession. This is how this sector got everyone’s ATTENTION.

With insecurity prowling free in all industries, everyone’s best bet was the confidence on one’s own skills. This is how this undergrowth like sector started growing into a tree, which would support a majority of India in the coming years. Now that this tree has started bearing fruits, everyone wants a share of this fruit. Today even an IIM grad has no qualms in doing the same retail business which our neighbourhood grocery store had been doing for years. The only difference they are trying to bring in is a global face to this age old art. Every second grad from the elite IITs and IIMs now wishes to be an entrepreneur, as if it were a FASHION.

Now that you have understood the first statement clearly, I can discuss the highs and pitfalls of it.

Good things that will happen:

• India will learn to become more independent, rather than depending on the outsourcing by the west.
• India’s best talents will be engaged in-house rather than leaving the shores.
• They will compensate for the lack of innovation in our government enterprises and industry giants.
• Government wont have to spend a large share of revenue on employment schemes. 🙂

Bad things that are waiting to happen:

• Not all seedlings would grow into trees, a lot of them would either be wiped out or taken over by other trees.
• Fashion is a very volatile activity. Entrepreneurs who do not check their premises before taking the dive would be out-fashioned very quickly.
• With so many mushroom companies everywhere, financial security would become a big issue for loan providers to these companies.

Let me now introduce to you some of the real activists of this fashion industry. Introducing to our readers – the E-Cell from  IIT Kharagpur.

E-Cell in its mission to promote entrepreneurship, not only within confines of IIT Kharagpur campus, but also across the whole nation, conducted the Entrepreneurship Awareness Drive (EAD). E-Cell undertook this massive initiative to promote and encourage students to embrace the concept of starting one’s own enterprise. EAD was launched on 29th September, in the presence of Rashmi Bansal, author of the bestseller Stay Hungry Stay Foolish. Starting from Chandigarh on 29th September, E-Cell conducted Entrepreunership Awareness Camp (EAC) in ten cities in a time span of 10 days. Each EAC featured a successful entrepreneur as the speaker. Some of the speakers were:

• Mr. K.D. Singh, Founder CEO, Alchemist Group
• Mr. Arbind Singh, Social Entrepreneur of the year 2008
• Mr. Pramod Rao, Co-founder, Elitwit
• Mr. Gerard J. Rego, Founder CEO, Vayugrid (Charter member – TiE)
• Mr. Gaurav Ahuja, COO, Red Ginger Hospitality
• Mr. George Anand, Founder CEO, Semantics Learning
• Mr. Pravin Shekhar, Co-founder, Dexterity Ltd.
• Mr. Murugavel Janakiraman, Founder, Bharatmatrimony.com
• Ms. Rama Devi, Founder Chairman, Association of Lady Entrepreneurs of Andhra Pradesh

This post has been published in collaboration with www.orangified.com, another budding enterprise from IIT Kharagpur.

5 Recession Proof Sectors

The global financial crisis which started last year, following the famous sub-prime crisis in the United States, has adversely affected most businesses, industries and institutions across the world, leading to massive job losses and decrease in payroll across industries. However in midst of this mayhem there have been a few sectors which have not only been able to survive the scare of recession but even leverage it to its advantage.

We have compiled a list of 5 sectors which have been successful in beating the recession blues. Here goes the list (In no particular order)

2^ND HAND RETAILERS

Though the retail sector has been severely affected the world over during this financial crisis with many big retail chains/outlets, shopping malls, multiplexes opting for closure after finding it difficult to feed their lavish expensive resources (large pool of highly skilled/groomed/professional staff, huge inventories, capital intensive infrastructure and an upmarket property), smaller 2^nd hand retail players (books, clothes, DVDs) have not only managed to stay afloat some of them have in fact managed a higher growth rate than previous years.

“In August the National Association of Resale & Thrift Shops (NARTS), which claims to be the world’s largest resale trade association, said a survey of its membership about second quarter sales in 2009 compared to the same period in 2008 showed increasing turnover in the second-hand sector.” (Source: Reuters)

With job losses and accompanied reduction in purchasing power of consumers the concepts of “bargain” and “recycling” is fast catching up aiding the 2^nd hand retail sector to bloom and prosper.

Check out “Success Stories” of second hand retailers in the US. Click here

TELECOM

Telecom has been yet another sector which has managed to grow at a healthy rate during the past year thanks to emerging and fast growing economies like India and China.

In particular India has seen a mini revolution of sorts in the telecom landscape during the last couple of years with subscriber base growing exponentially. Purely in terms of growth rate Telecom has outperformed most other segments of the industry if not all. Check this chart.

In spite of the size of the Indian telecom market the overall rate of mobile penetration is still far lower than most developed world economies and therein lies the opportunity for this sector to keep growing.

HEALTHCARE

Healthcare or Pharmaceuticals is another sector which is recession proof because people can’t really get away from their share of medical expenditure on drugs, hospitalisation and general health and disease management activities even in times of recession.

Hospital chains like Apollo, TMH, HCG and pharmaceutical companies like Dabur, Zandu, Biocon, Glaxo, Phizer, Ranbaxy have not only being doing well in terms of turnover or revenue but have actually been investing in clinical research to develop new drugs/vaccines/treatments for modern day diseases.

(HCG has brought a new breakthrough cyberknife technology for cancer treatment in India; Biocon is trying to develop oral insulin tablets for diabetics)

HIGHER EDUCATION

In times of lower available job opportunities people seek for higher and professional education to improve their resume and enhance their job prospects.

Around 8 lakh students appeared for AIEEE (CBSE Engineering) exams in 2008 and the number is expected to rise to 10 lakh this year. In fact enrolment in all professional higher education courses like engineering and management have been growing at a phenomenal rate for quite some time now, the current recession being no exception.

FMCG

Fast Moving Consumer Goods (FMCG) sector which caters mainly to perishable consumer products (like soaps, shampoos, detergents, biscuits, confectionary, chips, toffee, battery, torches, tea, ice cream, cosmetics etc) doesn’t get too affected with recession.

Although demand in cosmetics and other lifestyle products may decrease a little but no real impact comes in the overall demand of food items (like biscuits and confectionaries); batteries and torches; tea, coffee and other beverages; toiletries (soap, shampoo, detergents) etc, which comprises essential commodities of day to day use.

It’s the diverse product portfolio which keeps these FMCG companies going even in a slowdown.

Is recession really that bad ?

How India beat China in small car sales?

Reports say that Indian small car exports grew by 44% in the last seven months, and China saw a drop in small car exports by almost 60%. Not just China, even Thailand and South Korea have seen drastic fall in their exports of entry level cars. Though India is nowhere close to Japan or South Korea in terms of absolute numbers of cars exported, but it sure has carved a niche for small car manufacturing in the past one year. India has already outnumbered China even in terms of total cars exported. This has been a reality check for China, which was until now the leader in manufacturing and exports among the developing economies.

Both India and China have been hotspots for outsourcing by global giants to cut their operational costs. China had been a clear leader until now. But India has been fast catching up. Let us try to understand what India did and where China went wrong.

• Difficult Laws: Chinese laws make it mandatory for any foreign firm to have a joint venture with at least 50% capital held by a local partner. India does not have any such law. Companies prefer India because they get full control of their operations in India, and not in China. Operating in India also saves them a lot of profit which they would have to share with the partners in China.
• Labour Cost: India has been faring better than China in the global labour cost advantage index for almost 7 years now. Chinese media came out with reports last year which mentioned sudden steep rise in labour costs in China. Though India has also seen a rise in the average labour cost, but it has been much lower as compared to China.
• Corporate Tax: Indian corporate tax laws for foreign companies fare better than the Chinese equivalents. India taxes a non-Indian domiciled country only for the income on its local territory. China does not have any such provision.

Now some reasons which favour India over China, but China could not have helped it.

• Booming Market: Indian small car sector is yet to see a boom, as the annual sales still do not cross 0.12mn. China saw a jump in small car sales, shooting the sales volume to almost 1.2mn. But by the time any foreign player sets up a manufacturing unit in China, that unit would have lost its profitability due to a saturated market. Indian market is still waiting to see a boom in this segment. So, all the car manufacterers do not want to miss the party. All of these manufacturers have witnessed a saturated local market in their home countries and have also seen many global giants go out of business. To avoid the same fate they have started camping in greener pastures like India.
• Competition: With the TATA Nano all set to roll into the market, everyone wants to share the pie. To do this the foreign companies must come down to the local market so that they can have very competitive prices against the Nano and other small cars. This has resulted in companies doing a lot of R&D and cutting down on a lot on operational costs. Due to this all the foreign manufacturers based in India have come up with quality products with prices which are the lowest on this globe. Definitely these low cost cars will be in demand everywhere, thanks to recession. This is one of the biggest reasons that India exports more cars than its own consumption.
• Location: This is the best of all. India is so well geographically located at the center of the developing economies of south Asia, eastern Africa and eastern Europe. India lies at the center of the trade routes for the World minus America. Transportation costs to other countries from China is very difficult from its eastern ports, and it is landlocked on the other sides.
• Language: One more indirect reason is ease of technology transfer to India. With such a good command over the English language, technology transfer to India is a very easy task for most of the companies. Compare the same with China and you will find how much of extra work comes in when you have to transfer all your technology to the Chinese in Chinese language. 🙂

We are expecting that soon India will be able to beat China in all sectors of manufacturing. Cheers!!!