All Newspaper editorials in one place – February 20, 2024




February 20, 2024

Combat mode

The BJP hides its failings by adopting an aggressive strategy


The National Council Meeting of the Bharatiya Janata Party (BJP) in Delhi on February 17 and 18 has set the tone for the party’s Lok Sabha election campaign. Prime Minister Narendra Modi set the party a target of winning 370 seats in the Lok Sabha, compared to the 303 seats that it had won in the 2019 general election. The symbolism of the number is about Article 370, which his government invalidated in fulfilment of a fundamental principle of the party. The hollowing of Article 370 that provided a notion of autonomy to Jammu and Kashmir, and the construction of a Ram temple in Ayodhya were two of the three issues that have propelled the BJP’s rise. Having fulfilled them during his second term, Mr. Modi has staked claim to a third, which he said was crucial for the country. In fact, he has raised the stakes by setting a higher target of 370 seats and an additional 370 votes in every polling booth which, if met, can raise the party’s voteshare above 50%. Mr. Modi has also told the party leaders that only the symbol, and not the candidates, mattered. A lot many of the sitting Members of Parliament of the BJP are expected to make way for new candidates.


The peripherality of individual candidates of the BJP is also linked to the centrality of Mr. Modi in the election, which was clear at the conclave. The party will also focus on converting the raft of welfare measures that it has either launched or repurposed into votes. Alongside revving up its organisational engine, the BJP is also seeking to expand its footprint by the continuous induction of leaders from other political parties on the one hand, and tying up alliances with regional parties on the other. Union Home Minister Amit Shah’s sharp attack on the Opposition on the question of corruption and dynastic succession, indicated that the party will remain in offensive mode in the run-up to the general election. Its opportunistic alliances with leaders and parties that it has accused of corruption are shrouded by claims of good governance and transparency. The BJP manages to pull off this feat by wrapping its claims in strong communal identity terms. A resolution passed by the Council hailed the Ayodhya temple as a manifestation of Ram Rajya, an ideal type of just and fair governance. The party is trying to mobilise Hindu solidarity around the temple, and simultaneously present it as an emblem of a non-sectarian national agenda of development and progress. It is a hard act, but the BJP seems to manage this by keeping itself constantly in combat mode.





February 20, 2024

Red Sea blues

January’s export numbers suggest global shipping woes yet to hit home


For the second successive month, India’s goods exports grew last month, albeit with a mild 3.1% uptick from a 1% rise in December. This marks only the fourth month of growth in outbound shipments in 2023-24, and the overall value of merchandise exports this year is down 4.9% at about $354 billion. While January’s $36.9 billion exports are above this year’s monthly average, they are 4% lower than December’s tally. To be clear, such sequential, post-Christmas demand dip is not unusual and all of the decline cannot be ascribed to the elephant haunting global trade corridors — the Houthi rebels’ orchestrated disruptions of shipping lines’ operations around the Red Sea hitting goods flow to the European and U.S. markets. January’s trade numbers, to that extent, suggest that the impact so far is not overtly worrying, although a few key segments seem to be feeling some pain. Engineering goods’ exports growth faltered to a little over 4% in January while the labour-intensive gems and jewellery slipped into a mild contraction, dropping 1.3%.


Apart from the lack of a broader discernible impact from the Red Sea shenanigans yet, the sharp decline in the goods trade deficit is notable as it hit a nine-month low of $17.5 billion — just three months after touching a record high of nearly $30 billion. The flip side is that the recent import bill compression has been driven by some slack in imports of items such as project goods and electronics which suggest weakening of investment and consumption impulses in the economy. The government has exuded confidence that India will match its record export performance of $776 billion in 2022-23, this year as well, despite multiple global headwinds. On the goods front, though, attaining last year’s $451 billion tally looks difficult, especially with cooling commodity prices. Exports of services, reckoned to be up 6.3% this year, may still help bring the overall export figure for the year close to $760-odd billion if they sustain this pace. The outlook for the coming year remains mired in uncertainty and risks. There are weak or mixed signals about demand trends from economies such as the U.S. and Germany, even as the U.K. recorded the sharpest sequential jump in retail sales since July 2020. Interest rate cuts remain elusive for now. Finally, despite the U.S.-led Operation Prosperity Guardian to protect commercial traffic through the Red Sea, shippers have warned that the Houthi factor could compel the use of longer routes for several more months. Longer delivery times apart, the spiked shipping rates and operational costs of exports could force some price hikes and deter already frail demand in some markets and make prospective buyers look for more competitive options for Indian wares.




February 20, 2024

Keep the door open

Farmer unions should rethink. Govt offer for open-ended MSP procurement of pulses, maize, cotton is an opportunity


Farmer unions have rejected the Centre’s offer of assured minimum support price (MSP) linked to the cultivation of pulses, maize and cotton, which are less water-consuming crops than paddy, wheat and sugarcane. The unions’ decision is disappointing. Farmers — not just in Punjab and Haryana, but even MP and Telangana — have a point when they say that they have little incentive today to grow maize, pulses, oilseeds or cotton in the absence of proper MSP procurement by government agencies. This is unlike in paddy and wheat, where the government has to procure in order to meet the requirements of the public distribution system. There’s no similar outlet for most other crops, in which case the likes of Nafed and Cotton Corporation of India would have to sell the procured produce in the open market. The losses booked, if any, would then have to be borne by the Centre. Alternatively, the Centre could simply pay the difference between the market price and MSP for these commodities, and credit this directly into farmers’ accounts.


Either way, the idea — linking MSP to crop diversification and procurement with no quantity limitations — is welcome. But it hasn’t helped break the ice between the government and the unions, which are seeking a “legal guarantee” for MSP in all crops. That’s an unreasonable demand, not the least because national elections are less than two months away. Enactment of any law to make MSP mandatory can be made only by the next, not current, government. Secondly, the government can “guarantee” MSP only on the crops and the quantities it procures. It cannot force private traders to pay any price above the supply-and-demand determined rate. The very fact that the government is ready to undertake open-ended MSP procurement of pulses, maize and cotton is something the unions should view as an opportunity. India is short in pulses and needs to produce more maize (for both livestock feed and as bio-fuel) and cotton (for fibre, oil and meal). And yields of these crops would be higher when grown in Punjab and Haryana.


The use of MSP for crop diversification will work better if the Centre stops open-ended procurement of paddy and wheat, along with a phase-out of water, electricity and fertiliser subsidies. This newspaper has consistently advocated a minimum income support — MIS, not MSP — for farmers. This can be in the form of per-acre or per-farmer direct benefit transfer. MSP procurement should be deployed only for limited purposes such as supplying the PDS or encouraging the cultivation of specific crops. As a general tool of farmer welfare, it would be a fiscal disaster. The Centre needs to do more spadework to explain this to the farmers but the trust deficit doesn’t help. That’s why, after the breakdown of talks late Monday, the government needs to keep the door open, frame the negotiations in a manner that assures farmers their welfare is the key imperative of any change in policy. In the run-up to the elections, its task is cut out.





February 20, 2024

Cease fire

It is high time Israel heeded its friends and well-wishers and paused hostilities — suffering of Palestinian civilians must end


Israel must listen to its friends.” The anguish of the prime ministers of Australia, New Zealand and Canada in a statement demanding an immediate humanitarian ceasefire in Gaza expresses a broader sentiment within the international community. Israel has said that it will launch an offensive in Rafah in southern Gaza if Hamas does not release the hostages it holds in the next 10 days. Reports suggest that over 29,000 Palestinians have already been killed in the conflict. For civilians fleeing Gaza, Rafah is the last refuge — its population has grown by over six times since October 7. An offensive here would be catastrophic for the refugees. It is indeed time for Israel to listen to its friends — including India.


On Saturday, for the first time since Hamas’s horrific attack and Israel’s devastating response, Foreign Minister S Jaishankar said that Israel should be “mindful of civilian casualties”. As he reiterated India’s unequivocal condemnation of the October 7 attacks, he also underscored the urgency of a humanitarian corridor in Gaza and the long-term need for a two-state solution. Jaishankar also framed Israel’s responsibility towards the principles of international law. The gist of his words and the three PMs’ letter is this: Palestinian civilians must not continue to pay the price for the actions of the extremist wing of Hamas. Equally, a ceasefire cannot be one-sided — it will require Hamas to stop its violent actions. International pressure will have teeth and be far more effective, however, if it is championed by Israel’s closest ally.


On Monday, a day after Israeli airstrikes killed at least 18 people, the US said it would block the Algeria-sponsored draft resolution at the UN Security Council, calling for a humanitarian ceasefire. The US has already vetoed several such resolutions at the UNSC and the White House has bypassed the legislature to supply arms to Israel. The justification offered by the American ambassador to the UN is that such resolutions run counter to Washington’s efforts to end the fighting. If that is indeed the case, it is time for the US to step up these efforts. President Joe Biden has been increasingly critical of the civilian casualties and Prime Minister Benjamin Netanyahu’s maximalist positions, calling the former “over the top”. The Netanyahu government — which was facing protests and a huge dip in popularity before the conflict began — must move beyond the rhetoric of revenge towards peace. The killing of civilians must stop. Medical and other aid must be allowed a way through. With the conflict already spreading to crucial commercial lanes like the Red Sea, a ceasefire is the only way to give the region a chance at peace.




February 20, 2024

A Russian tragedy

Alexei Navalny’s story speaks both of the loneliness of dissent and its absolute necessity


The 2022 Oscar-winning documentary on Russian dissident Alexei Navalny opens on a prescient note: In the event of his incarceration or death, what message would President Vladimir Putin’s biggest opponent leave for his country. Navalny’s answer comes towards the end of the movie. “We don’t realise how strong we actually are. The only thing necessary for the triumph of evil is for good people to do nothing. So don’t be inactive,” he says. On Friday, the death of the 47-year-old in a penal colony in the remote Arctic Circle where he was serving a 19-year jail term on charges of extremism, was reported by Russian prison authorities. Amid global outrage and censure over Kremlin’s purported role in the event, Navalny’s death also raises an important question: What happens to the fractured Russian opposition — especially given that the presidential election in Russia is scheduled to be held between March 15 and 17, and that the war with Ukraine shows no sign of abating?


A trenchant critic of the Putin administration since the early 2000s, it was an attempt on his life in 2020 that galvanised global support behind Navalny, despite Russia’s dismissal of him as a CIA agent tasked to foment trouble in the country. The increasing authoritarianism of Putin has meant that the space for dissent in Russia has shrunk abysmally in recent years, with severe clampdowns on civil liberties that brook no opposition. A former lawyer, Navalny was, in a way, the perfect antagonist to Putin and the unofficial leader of Russia’s opposition, scattered across ideologies, and with its most prominent members such as Ilya Yashin and Vladimir Kara-Murza, incarcerated or in exile in the West.


Cold, hard political analysis will say that Navalny’s resistance will rest as a footnote in Putin’s scheme of political aggrandisement, that there is little that stands in the way of the Russian President winning another term in office. Yet, Navalny’s story is crucial in that it speaks both of the loneliness of dissent and its absolute necessity.




February 20, 2024

Shopping Truths

What consumer surveys tell us about men, women, business, ads and India’s economic resilience


Consumer surveys often throw up results that puncture myths, for example, men shop mostly for functional stuff. They don’t, as an IIM-Ahmedabad survey on online shopping habits shows.


Land of dandies | Fashion tops the list of stuff women – and men– buy online. And it’s men who spend more, in per capita terms, on online shopping. Outspending women by 36%, men also manage to finish their buying in less time than women.


What we don’t know | The large gap in per capita spend between women and men should trigger questions. A separate survey carried out by DBS and Crisil on financial independence of women showed that it’s practically non-existent for middle-class women. Does IIM-Ahmedabad’s survey indicate that even technology, which helps people overcome so many other obstacles, can’t quite escape social constraints?

Good times, not for all | Recent consumption patterns also point to other constraints. An analysis by TOI of consumer companies’ performance in the Oct-Dec quarter of 2023 was revealing. Rarely have premium products seen such strong demand. Quick service restaurants report brisk sales of gourmet pizzas. However, sales growth of the regular variant hasn’t kept up. Mass market products continue to report lacklustre sales.


Uneven recovery | The analysis shows that last couple of years have seen a two track pace of bounce back from Covid. For households with an income between ₹3-5 lakh a year, discretionary spending has been squeezed by factors such as inflation. For households with an annual income of ₹10 lakh and more, the pandemic is a distant memory. SUVs and travel are all the rage, leading to happier times for businesses and advertisers.


Many messages | India’s economy runs on consumption. It makes up about 60% of GDP. Consumption patterns provide insights to social changes. Surveys and data from consumer goods firms are corroborated by macro data. Lower-income households haven’t yet joined the party of an economy set to top 7% annual growth for the third straight year.


In the Oct-Dec 2023 quarter, the proportion of self-employed in urban jobs increased by a percentage point to 40.6%. Among women, the share employed as unpaid help rose four straight quarters. No surprise then that mass market stuff’s slow moving. For growth to sustain, that’s the market that needs to grow again.




February 20, 2024

Side By Side

Why Patnaik in Odisha and Jagan/Naidu in Andhra are keen to maintain good equation with Modi


Two states, Odisha and Andhra, cruise along almost noiselessly to their assembly elections. Because their state polls are held simultaneously with Lok Sabha’s.


Friends with Centre | It’s exactly this cover of LS elections that’s given Naveen Patnaik an advantage since he assumed office in 2004. Patnaik benefits from stable ties with GOI, whether UPA or NDA. True, BJP or Congress can’t devote full time or resources to a single state during LS campaign. But that doesn’t take away from Patnaik’s achievement. His record of winning a majority of Odisha’s LS seats wasn’t broken even by Modi’s popularity. Modi is no rival to Patnaik. They have good ties. But in Odisha BJP has made inroads into BJD’s votes. So, Patnaik leaves no place for complacency, as was evident in Padampur byelection, where he personally campaigned after BJD lost an earlier bypoll to BJP.


Wannabe friends | In neighbouring Andhra, heads of both governing and opposition parties want to tie up with BJP. The situation is not peculiar. TDP’s Naidu scraped back to power in 2014 only with BJP’s help. Jagan-led YSRCP’s win in 2019 was a result of a hard-fought and successful campaign. But Naidu’s walking out of NDA ahead of polls had played a role too. Jagan this time must fight both Congress, headed by his sister, and old foe Naidu. Seeking BJP’s backing is insurance. In both Odisha and Andhra, incumbent govts want quid pro quo arrangements with Delhi – simultaneous LS, assembly polls are a reason. This time, the other reason is that Modi is considered the favourite. So, good vibes with him make sense for CMs seeking return to office.





February 20, 2024

Lessons Post-Fail Edtech Must Learn

Quality and pricing hold post-pandemic key


The remarkable boom and equally remarkable bust in edtech over the course of the pandemic, followed by return to school, is a call to action for investors, parents of students and GoI. The special circumstances that locked the country’s students at home and pushed valuations of edtech firms to extraordinary heights may not recur. But need for innovation, improved corporate controls and consumer protection persist. The path to profit is not obscure, and the segment is bound to draw strong investor interest in the world’s biggest market for school education. But edtech startups will have to meet the operational and technology expectations that accompany venture capital during a downcycle in funding.


Additionally, Indian edtech will have to establish itself through the academic value it offers in a more regular school environment. This requires adherence to standards on curriculum and coaching. It will also need to get product pricing right with a declining scope for misselling. Part of the recent boom-and-bust owes itself to unrealistic pricing of courses that led to pushy marketing. This is bound to catch the eye of lawmakers because of the age of the target consumer. Government intervention in edtech in some countries has taken the form of reserving this segment for not-for-profit organisations. The Indian edtech industry will have to exercise sufficient self-restraint to avoid setting off such extreme reactions. Pricing holds the key. Hence, the path to profit must pass through innovation and governance.


Ideally, separate rules should not be required to regulate edtech startups provided there are adequate protections offered to investors and consumers. The country’s learning aid industry is largely informal and lightly regulated. It operates within market-determined prices that tend to curb excesses. Government intervention over market dominance in technology-enabled learning should be adequate to restrain edtech firms from becoming price-setters. That will address issues investors and consumers have faced in the past.





February 20, 2024

Make Beggars Vanish, By Rehabilitation


Despite headline news of the odd ‘entrepreneurial’ beggar earning lakhs, no one prefers to beg. Not even beggars. Also, unfashionable though this may sound, it’s high time India gets rid of its image as a country with visible beggary. This is not only for the sake of optics — a matter of genuine embarrassment for a country aspiring to be a developed country in the next 23 years — but also as a means to rid a profession that serves neither the ‘professional’ nor the economy. Which is why GoI’s BhikshaMukt Bharat plan — that has identified 30 cities to be made beggar-free by 2026 — is welcome. It needs to be taken seriously.


The plan involves collaborating with states to identify ‘hotspots’, conduct surveys and, most importantly, develop a rehabilitation plan. This isn’t the first time begging has been sought to be removed. The Emergency saw an attempt to make beggars ‘disappear’, without providing alternative livelihoods. Later, Delhi government initiated a three-month skill-training programme for beggars. Its failure is still evident at city intersections. Courts have often reminded the state of its duty. In 2021, the Supreme Court recognised begging as a socioeconomic problem driven by poverty, and lack of education and employment opportunities. Similarly, in 2018, Delhi High Court overturned a law criminalising begging in the Capital. Begging is illegal in most Western countries. It is economic progress that has lifted individuals from the poverty trap.


Ending beggary is crucial. However, a successful policy requires more than just removing the homeless. It must, in tandem, have a robust support system encompassing healthcare, education, housing and skills development. Proper rehabilitation must be non-negotiable.




February 20, 2024

Tutorial excesses

Centre’s coaching class guidelines hard to enforce


After a lull during Covid, there has been a spike in reported cases of suicides and accidents involving students from private coaching centres. This has put the spotlight on the sweatshop-like conditions and high-pressure environment that students endure at these institutes, which supposedly prepare them for competitive exams such as IIT Joint Entrance Exam, National Eligibility Cum Entrance Test (NEET) and UPSC with improbable odds of success.


Despite the Supreme Court and various panels pushing for reforms, nothing seems to have changed. The Centre, perhaps , cannot be faulted for trying to lay down minimum standards for this industry. The latest guidelines strive to establish basic regulatory oversight over private coaching centres with over 50 students, by requiring them to register with a competent authority. They will be barred from enrolling students below 16 years of age or recruiting faculty without minimum qualifications and must charge a ‘fair and reasonable’ fee. They have also been asked to allocate a minimum of 1 square metre per student, adhere to building safety codes and avoid classes that exceed five hours a day. While such norms are unexceptionable, the question is whether the States will have the political will to enforce them. They will have to put in place a competent authority and system of inspections suggested by the guidelines.


The Centre, on its part, needs to take a look at why entrance exams such as the IIT-JEE or NEET conducted by the National Testing Agency test candidates on concepts that are outside the CBSE and ICSE syllabus, so that even students who ace their Board exams cannot make the cut. The National Education Policy 2020 had many useful suggestions to reform the Board exam system and obviate the need for private coaching, which can be equally applied to common entrance tests. This included allowing the student to choose subjects of her interest for the exam, designing questions to test conceptual understanding rather than rote learning and having subject-wise exams, instead of a single high-stakes one.


A large part of the blame for subjecting children barely in their teens to this stress, must rest on parents. Parents do not even try to gauge their wards’ aptitude or interests, before pushing them at an early age into a rat-race that locks them into at least four-five years of intensive study and no free time, just to clear an entrance exam. With less than 1 per cent of the 20 lakh JEE and NEET aspirants each year securing seats in government colleges, 99 per cent are left disillusioned. Parents need to wake up to the fact that with the advent of technologies like AI, IT services and the government are unlikely to offer many job openings. Young Indians must be encouraged to pivot towards skills that can be used in up-and-coming sectors such as fintech, Global Capability Centres and financial services. Above all, they deserve a decent, rounded education that improves their cognitive skills so they can negotiate their own future.





February 20, 2024

Global threats

UK, Japan enter recession and others look weak too


Last week, both Japan and the United Kingdom (UK), two of the world’s largest economies, reported that they had had negative growth in gross domestic product (GDP) for two successive quarters. This is generally accepted by economists as a signifier of an economy being in recession. Japan may have, as a consequence, slipped down the list of the largest economies — Germany may have a larger GDP than Japan, in which case the latter is now the fourth- and not the third-largest economy in the world. Not that Germany is doing too well, either. The former engine of the euro zone is now its weakest link. For two decades, Germany’s export-oriented, manufacturing-intensive economy did well, thanks to close links to Chinese productivity and demand, as well as cheap and reliable natural gas from Russia. Geopolitics has now reduced the salience of both these growth drivers. In 2024, Germany is expected to grow only 0.2 per cent year-on-year, as against the predicted 1.3 per cent. This follows a contraction of 0.3 per cent in the previous year. Politics has had a role to play in the UK’s recession as well — the effects of the 2016 vote to leave the European Union are just beginning to play out. In addition, problematic domestic politics has meant that the country has failed to build any new housing or infrastructure, which has made its consumers feel much poorer. Lower consumer demand is what has pushed the country into recession.


The risk to economic growth in the world today is, clearly, politics. The one bright spot in the global economy — the United States — is not immune to this danger. While markets in the US are hitting record highs, companies have begun warning in this earnings season of the risks to their profits from the Red Sea attacks and domestic boycotts driven by divisions over Israel and Palestine. An unorganised boycott of the fast food chain McDonald’s over its business in Israel, for example, seems to have caused it to underperform in the last reported quarter.


Meanwhile, the world’s second-largest economy, mainland China, is finding it difficult to return to its days of world-beating growth. On Sunday, the People’s Bank of China decided not to cut interest rates, although the country was facing major deflationary issues alongside low demand and a slow-moving but intense real estate crisis. Last month, total high-end real estate transactions in China were a third lower in value than they were in the same month of 2023. Given the proportion of Chinese GDP and growth that emerges from the property market, reforming that market is essential if growth is to return to the mainland — but here, again, politics intervenes. Reforming real estate will require Beijing to create independent centres of power in bankruptcy authorities, local governments, and the private sector — and that it is not willing to do. The sole exception to this litany is Japan. In the end, that country’s shrinking economy is inevitable, given that it is also demographically challenged. Its problems are structural and not political — unless it is argued that the country’s inability to reform society sufficiently to make it more attractive to have children is also born of political dysfunction.


The global economy has faced multiple hits thanks to geopolitics. The Ukraine war shook up energy prices; US-China rivalry broke supply chains; now West Asia is once again unstable. For multiple countries, the fragile economic recovery after the pandemic is clearly being threatened by the failure to maintain global order.





February 20, 2024

Fire in the dream factory

Boards at startups need to be made more accountable


The ongoing crises at Paytm and Byju’s — the country’s two leading startups — point to serious governance lapses. In Paytm Payments Bank’s (PPB’s) case, the banking regulator, the Reserve Bank of India (RBI), has been citing violations of know-your-customer (KYC) norms while imposing short-term restrictions in recent years. After PPB apparently failed to put the house in order despite repeated warnings, the central bank issued an ultimatum, prohibiting any deposits, topups, and transactions linked to the company from March 15, extending the earlier deadline by a fortnight. In all this, the role of the board of directors of the beleaguered firm comes under the spotlight. The board, populated with former bankers and bureaucrats, is seen as ineffectual while a serious breach of processes has continued. Some of the board members have resigned since the crisis surfaced, but that’s an easy exit route after a company has come under the regulatory scanner. Some PPB board members have reportedly indicated that the red flag was raised during meetings but the chairman (founder Vijay Shekhar Sharma) had the final say.


At Byju’s, several board members resigned last year with only the founder, Byju Raveendran, and his family remaining. The exit of the independent board members followed the resignation of the statutory auditor, Deloitte. Subsequently, tech investor Prosus, which was part of the Byju’s board, made a public statement that the decision to exit was taken after the leadership at the edtech firm disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance.


There have been plenty of examples in the startup world earlier too of display of a cavalier approach to corporate governance. Over the years, many startups cutting across sectors — real estate to food delivery — have seen rapid business expansion, breathless fund-raising, and sky-high valuations with little attention to profitability, resulting in many firms going belly up.


Some of it may have to do with the very nature of a startup, whether in India or overseas. Entrepreneurs setting up a venture are driven by their passion and, till the funding winter arrived a year or two ago, were handsomely bankrolled by foreign investors. In the race to gain quick traction with customers and investors, the governance rulebook often gets short shrift in a startup’s formative years. However, with scale and size and unicorn and decacorn tags comes regulatory glare too, and, concomitantly, the “animal spirits” of entrepreneurship need to be tempered to bring the business on a sound footing.


But for all this to be possible, tightening the oversight mechanism in corporate governance has to be a priority area for policymakers. That is true both for traditional businesses as well as startups. The involvement of family members and the power wielded by executive management in corporate boards should be reviewed. And independent board members must be given the wherewithal so that their red flag is not dismissed by companies’ executive members and founders, and their families. Ultimately, boards must be accountable for any lapses and wrongdoing in companies that they are supposed to oversee.




February 20, 2024

Elusive success

Super apps tick all the boxes theoretically, but they have been facing an uphill task in the real world


The Tata Group has reportedly not been able to make much headway with its super app Tata Neu, which was launched in April 2022. It’s not that the group, which has several consumer-facing businesses in its fold, has not put in intensive efforts. The problem is largely related to what super apps always find when faced with neutral e-marketplaces like Amazon and Flipkart.


Neutral marketplaces bring all kind of sellers on their platform, thereby giving consumers a very wide choice. In contrast, despite having a wide range of offerings under their fold, super apps have limitations. For instance, the Tatas have presence across sectors like fashion, finance, gadgets, groceries, hotels, health, tech & travel, and financial services, but is still finding it tough to offer real competition to neutral marketplaces.


Perhaps the dilemma super apps face is whether to remain confined to their own products or onboard the offerings of rival firms also. If they remain confined to their own products, they run the risk of becoming walled gardens, which has not worked in the tech world. Most big-tech firms generally avoid the walled-garden approach because it restricts the brand. Facebook and Google acquired stakes in Jio Platforms but did not commit any exclusive services to consumers of Reliance Jio. In fact, Google went ahead and later also acquired a stake in Bharti Airtel.


One is not sure if corporate brands would onboard a rival group’s super app. Tatas have their own hotel chain, so it’s uncertain whether a rival hotel chain would come on its super app. Tatas offer DTH services—would Bharti Airtel join its platform? Even if they do, it’s highly unlikely that they would offer it any special concession as no brand cannibalises itself. Reports suggest that the Tata group is in talks with Uber for a strategic partnership to drive traffic on its super app. Even if it materialises, would Uber offer it anything more than what it already offers its consumers? The other challenge for companies coming out with super apps would be to align the services which their other e-ventures may be offering. The Tatas, for instance, have e-commerce ventures like grocery seller BigBasket. Weaning away consumers of BigBasket to Tata Neu would always be a challenge. The options could be by offering higher discounts, cashback and similar incentives. But in doing so, it runs the risk of cannibalising its own brands.


Apart from China, which is a very different market, super apps have not been successful anywhere else in the world. In India also, major corporate groups have avoided super apps and opted to go in for neutral service-specific apps. For instance, Bharti Airtel launched its music app, Wynk by not going the walled-garden way. It’s downloadable from the Internet and the tariffs are the same for Airtel and non-Airtel users. The various apps provided by Jio are also, neutral and service-specific, and available on the net, open to all users with no tariff differentiation.


Over the years, consumers have got used to service-specific apps, which are neutral marketplace, and have succeeded because they have been built on the platform of core-competency. The concept of super apps sounds fine theoretically in the sense that it would offer convenience to consumers who, instead of downloading 10 apps, can stick to one which aggregates all the services. However, in practice, finding success here is an uphill task.


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