A ‘saree’ is not just a garment but a rope used by the society

Yesterday, on my way back from the office in a bus, I saw a couple on a motorbike speeding past. The guy was dressed in loose Tees and a pair of jeans and the girl behind him in a traditional Indian ‘saree’. It is a common sight in most parts of the country even today and it somehow sparked a desire for me to look a little deeper to probe if there is anything about the society and culture that we can understand from this.

Sitting sideways is something which we would see in very few countries around the world and it gets necessitated most often because of the kind of garment which is worn. In this case the garment being a ‘saree’. Sitting in this position puts the woman into a world where she has to play a role of double balancing. The first: balancing herself on the seat in a direction perpendicular to the motion of the bike. The second: balancing herself with the bike itself which moves ahead on two wheels. Obviously, it is not an easy task and we have seen them struggle and juggle while in this position. However, most of them are able to perfect this skill – at times with a little help by holding the person in the front. The pros even manage to tuck one kid between the two seats and one on the lap. And, the great Indian family is all set in motion in no time.

What it forced me to think is as follows:

At one level, the ‘saree’ is a traditional Indian garment which has added to the overall sensuality and appeal of women. At a deeper level to me it appears like a rope which is used by the society to tie-up women multiple times, to restrict their movement and also punish them in a manner in which they are forced to perform under physically difficult conditions. Most young women struggle while wearing it and often take the help of others who are more adept at this skill – usually a mother, sister or friend. After wearing it, they find it difficult to walk around with it and also to manage the household chores and responsibilities. In one way, it limits their movement within a secured known boundary. History and family traditions have glorified the ‘saree’ to such an extent that women feel a sense of achievement on being able to carry out household work (however difficult the ‘saree’ makes it for them).

To understand the position of the motorcycle and the scooter in the history of the country is also important here. These vehicles opened up the world to common people who had traditionally been dependant on completely undependable means of public transport. However, what is interesting to note here is that this weapon towards extended geographic exploration and physical convenience had been limited to the men in the society. Women have usually been limited to occupying the rear seat either in the capacity of a daughter, sister or a wife. Whenever a girl was spotted as a pillion with anyone else, it would raise eyebrows and she would be given a lecture on socially acceptable behavior.

What is also interesting to observe here is that whenever the woman got a chance to sit in the pillion, she was expected to play a similar role which the ‘saree’ would make her play at home – that of balancing between the odds managing not only herself but also the family. While the woman struggled herself on this rear seat, there was usually a ‘Bittu’ who would be sitting between the couple and a ‘Guddi’ with a bottle of milk on her lap. She was expected not only to carry out the extreme acrobatic act of double balancing on the rear seat but also ensure the same for the kids. In a nutshell, she was expected to manage the family (‘meri family’ – a term commonly used by men to describe a collection which consisted of his wife and kids) rather than being able to enjoy the thrills of travel.

Today, with the society moving ahead and greater amount of sensitivity prevalent towards the needs and desires of women, there are several changes visible. One such phenomenon is the introduction of the mini-scooters aka ‘scootys’. The manner in which it impacts the society and the lives of women is multifold. It has removed the restriction of the wearing specific kinds of clothes which are required for driving. Women today drive ‘scootys’ even with ‘sarees’. This has also brought the women from the rear seat onto the front seat. It has not only provided them convenience and discovery, but also opened up a world of possibilities for them.

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The rise and rise of the DJ EMPIRE

[Dedicating this piece to all DJs and music lovers that I have interacted with over the last couple of years]

The Disk Jockeys (DJ) are an intrinsic part of the Indian entertainment industry today and their role in the evolution of this culture cannot be over-emphasized. Their contribution is not only limited to their loyal audience but also extends to the success of the business as a whole.

However, this has been a long journey with interesting events occurring in the lives of the people on either side of the console. What makes this journey worth exploring a little more in detail is the outstanding manner in which Indian’s have understood this new trend and accepted it as their own.

From what I remember, the first form of popular remix music was the introduction of ‘Jhankar Beats’ into movie songs. Most audio cassettes for Hindi films would come in two versions – one: the usual and the other one: with an oval-shaped fluorescent sticker reading ‘with Jhankar Beats’. They were normally priced at a premium and for popular movies such as ‘Phool Aur Kaante’ and ‘Raja Hindustani’ the stocks would dry in no time.

What followed this phase was a period of ‘devotional bhajans’ sung to the tunes of popular film songs. Ruling this business was Gulshan Kumar and family with the T-Series brand. He was leading this culture of devotional albums while his brother Kishan Kumar played the role of a humble devotee in most of these. Many of these tracks are still popular and form a part of ‘bhajan’ evenings and other religious functions across the country even today.

After this, we saw the first glimpse of the kind of remix music as we know of today. There were old tracks which were re-dubbed with new voices and electronic music (DJ Aqeel being one of the popular stars of these times) and even new tracks which were remixed. This was probably the period when the concept of Disk Jockey started to emerge in the country.

As we started accepting this new kind of music, there was long period when little attention paid to understand what the acronym DJ stood for or meant. The DJ was not a person but an entire package. The mixers, console, disks, songs, lights and speakers along with a strange looking person doing something on these machines is what the term DJ meant to most Indians. There were bizarre variations in the language which was used to describe their work often leaving them confused as to what people thought their role was. People would ‘play DJ’, ‘increase and decrease the volume of DJ at parties’, ‘like good DJ beats and hate slow DJ beats’, ‘listen DJ songs’, ‘celebrate DJ nights’ and do everything associated with the term ‘DJ’ without acknowledging their role at all.

Intrigued would be the apt word to describe the sentiment of people when it came to DJs. There was little knowledge as to what these creatures did, why did they dress up the way the dressed up, why did the music they played sound so different, how did they manage to play tracks one after the other without stopping, etc. etc?

The entire mystery that surrounded this innovation and the complete lack of understanding (even with a lot of effort) was one of the reasons which made this new culture popular.

Thankfully for my DJ friends and many others, the scenario is much different today. Nowadays, there are genre specific enthusiasts. On the other side, there are DJs who are comfortable with specific kinds of music as well. The combination of these two factors is what leads to success of this industry.

If we try and study this phase a little more in detail we will find that apart from the hard work and contribution made by the DJs, there are also several interesting insights about Indians which have played a big role towards the creation of the current avatar.

On the face of it, there are certain obvious factors responsible for the growth of this industry. Increase in the availability and popularity of this new genre of music, growth of internet market leading to better collaboration and sharing, the opportunity for the youth to break free and experience an independent life - if only for a couple of hours, technological development and better access to quality equipment, etc. However, if we look a little deeper, there seems to be more than the obvious as stated above.

One such factor is the love for the game of ‘antakshari’ in the country. It is a simple game for two or more teams where one starts with a song and the other follows up with another song, starting with the last letter. The game has been popular amongst people of all ages for years, much before even I was born. Even today, at family get-togethers, marriages and other social functions, schools and colleges, en-route on journeys, etc., it is a common source of entertainment. One aspect about this game which contributed towards its popularity is the element of continuity. Kids, adults and even elders would jump in as soon as one song would get over with the next one to ensure that there is minimal gap between the two songs and game could continue un-interrupted. Another similar form of art is ‘Dandiya’ and ‘Garba’ where people were able to dance continuously for a long period of time to the tunes of traditional songs continuously.

When the DJs began grooving one track after the other, they were able to capture this strong urge within Indian heart to listen to uninterrupted dance music in a setting where one could feel free and not be intimidated by pressures of family/ social environment. The playlists were adapted live on the basis of reactions from the audience. Also common trend has been to play mixes of popular Bollywood tracks. What happened in the process is that the entertainment was not only made continuous and dance-able but also relevant to the audience.

Another insight which I feel is relevant is from the world that Bollywood cinema has created in the minds of millions of Indian’s. With television still at a nascent stage, there were limited means of entertainment - amongst which Cinema was big. Watching a movie was next to celebrating a festival and was eagerly awaited by all. In a value conscious society, not everyone got the opportunity to watch a movie in the theatre regularly and every movie left a strong image in the minds of the viewers.

Popular mainline cinema was all about dramatizing the reality often to obscene extends. One common example is that of how most songs would suddenly transport the hero and the heroine into the snow capped peaks of Switzerland of the lush green plains in Europe. Every song was made unreal with the characters enjoying few moments of limited intimacy and romance in a dream world. Once the song ended, they were back into the reality which existed in their lives and the story would move on.

With the electronic dance music culture which the DJs introduced in the country and the increase in the number of clubs and discotheques, the young adults for the first time saw an easy option of living that same unreal life in a small way. People would dress up, usually take their girl friends or wife’s, get dizzy on alcohol and then dance while imagining themselves as those characters on screen whom they worshipped. This new culture provided them with the opportunity to feel like stars and live the unreal life they always dreamt of.

Another common Indian trait is that of being loud and being impressed by everything that was loud. The quality of sound wasn’t a concern as long as it was loud enough. No wonder we still see music systems and televisions with Bass Boosters and auto-rickshaws with speakers loud enough for a stadium. Even today, if one takes a stroll along the lanes of a colony, one can distinctly hear the sound of the television playing on the second floor from the street.

The period during which clubbing culture started becoming popular coincided with the emergence of better quality sound systems which were sensitive to the lower notes. Most clubs invested money on getting these equipments which not also delivered high quality audio performance but also ensured that the DJs could maintain audio levels which were loud enough to suit the local decibel requirements. The feeling of being in an environment where it was next to impossible to talk to the person sitting on the next seat was an answer to the Indian psyche where people connected best with music that is loud.

As I write, I feel that there would definitely be more than what I have been able to capture here. I guess that inputs from the stalwarts like Ankit, Sanjay Dutta, Dash, Hydra, Nawed, Shireen, Carlotta, Malay, and many others, whom I have tagged here, about instances of how they have been through this journey would be interesting to know. Would await feedback, criticism and LIKES & SHARES (whatever it be) about the rise of this new empire in this country.

Cheers :)

PS: Apologies for using the phrase ‘strange looking people’ more than once to describe the dressing. What is important to note here is that what seemed strange to most people when they saw the DJs would also become the trend later. No wonder people used to flock around them on every possible opportunity.

The traditional Indian social networking

Indians have kept alive the tradition of every single person engaging with everyone else in the extended family and community even though it gets a little difficult with the challenges of modern day living. To understand this, lets look at a few observations from our lives a couple of years ago and how they have changed today.

What was commonly practiced on most social get-togethers is the introduction and greeting of every member with everyone else who is present at the event. The younger ones were expected to bow and touch the feet of the elders and take their blessings. A small kid from any particular family usually had a harrowing experience of constantly bending and being introduced to an army of people for reasons he didn’t understand. At the same time, he was expected to answer a flurry of questions thrown at him with a smile on his face and showing the least amount of disgust. He was forced to participate in the proceedings and when he tried to escape to play with the other kids, his mother would tell him that it is bad behavior. This round of socializing was done with every family attending the function without thinking much about the bi-lateral relations between the families.

At these event, another common practice is that of clicking pictures in all possible combinations so as to ensure that all those present have a picture individually as well as in all possible group formations (based on sex – all girls, age – all kids, family – entire family, entire extended family, etc.) with everyone else.

Another common Indian practice is that of sending Post cards and Greeting cards on festivals and other occasions. What is interesting is that one would ensure that the names of every single family members are present starting with the head of the family. Often, the last name to sign off would be that of the new born or the youngest kid, thereby introducing the addition to the receiving families. While addressing these cards, the common practice was to write, “Mr. and Mrs. _____ and family,” to make sure that nobody is left out. Addressing to the elder most was un-questioned and was considered as good as addressing the entire family.

What we can understand from such practices is that as a culture we lay tremendous amount of emphasis on engagement with all known social contacts. Social networking with limited amount of technology is something we had perfected long ago. A person was always known as a part of the family in which he was born and not in isolation. The number of people one knew was the social currency he owned. The number of people who knew him was a manner in which is social standing was determined. For every member in the family, all possible care was taken to ensure that one never gets secluded from the society. An independent form of existence within the society was unthinkable and highly detested.

Today, with nuclear families becoming the norm, people travelling across the globe in search of opportunities, paucity of time and advent of newer technology, there is very little face to face social interaction which is seen. However, what is interesting to observe is that although we have moved ahead to become modern in most ways, there are still small traits of our tradition which surface from time to time.

One such example is that when phone calls are made to wish others during festivals. Even today, it is commonly seen that each member of the family has a quick word with everyone in the other family. When a younger one speaks to any elder, he normally seeks their blessings over the phone. For those who are not present during the call an advice is usually left to wish the person once he returns. And not to mention the world of questions which are usually asked and which one has to keep answering.

The only change is perhaps is with the medium of interaction. Even with increasing distances, what is still alive in a small way in India is this tradition of social interaction.

There is more to pricing tissue papers @ Rs. 5000/- during the CWG

The obvious conclusion that comes to our mind is that the businessmen with an intention to make hay while the sun shines quoted obscene figures for tissue papers. However, if we try and look deeper, there could be more to it.

There seems to be a combination of two factors which play an important role here: the increase in the importance of bathroom as a space and the elements which form a part of it and the foreign (therefore expensive) perception which is attached to the tissue paper.

Let’s look at the first one. Bathroom as a space has evolved over the years. There was a time when settlements existed next to rivers and other water bodies and people took a bath in it. Over time, the bathrooms came into existence and evolved from being community spaces to corners outside or within the compound of the house. Then came in the first version of how we know bathrooms as today. Usually there used to be one common bathroom in a house. The Indian hole in the ground also evolved into the Indian commode and then into the western commode. Today, we normally see bathrooms attached to the bedrooms along with one which is commonly reserved for guests.

The above can be understood as an increase in the importance that bathroom as a space occupies in our life and our perception about it. Even the language used to describe the act of ablution has changed. Earlier the mother would normally ask the kid ‘bathroom karo’ while asking it to ‘go to the loo’. The act was replaced by the place in the phrase as if it was an act that must not be named and the place was an easier way to describe a dirty difficult process. Today, the common term used is ‘toilet karo’ a phrase which includes specifying the act in it and thus reducing the association to being something dirty. The act is no more considered as completely base and the language used to describe it has also evolved accordingly.

The second aspect to consider is the perception about ‘toilet paper’ in the Indian mindset. Dry clean was never a part of the Indian culture. It came into existence with Indian’s travelling abroad and experiencing (often with a lot of difficulty), international hotels entering the Indian markets and domestic hotels stacking it for the convenience of the tourists. Even today, it is rare to find the toilet paper in Indian bathrooms. In houses where it is present, it is usually for the occasional guests or for other uses such as cleaning the mirror or drying the wash-basin.

Thus, if we try to understand what ‘toilet paper’ means to Indians, we can assume that it like a foreign element which doesn’t find much utility in their lives or in the bathroom. It does not form a part of the essential/ regular accessories which are a must for the bathroom but more of an article which must be kept for show-value or for the occasional use of outsiders. Thus the perceived value of this item, being foreign and not being a regular-use and non-essential low price accessory is much higher than what its real price is.

When we juxtapose the above two discussion together we see that on one side, the importance of bathroom and its elements and the price associated with them has gone up, and on the other side, toilet paper has a much higher perceived value in the minds of Indians, we can probably find an answer to why this article (which should be so lowly priced) was so hugely over-priced.

As next steps, if the percentage increase in the price of other bathroom items could be compared with the percentage increase in the price of toilet paper, it would be interesting to check if the above theory is correct or not.

Volvo – Name becomes generic to the category

While waiting for a cab outside the office, I came across another cab with a Volvo sticker pasted along the sides and on the rear.

In the past, I have seen local buses, motor-cycles, auto-rickshaws, hand-rickshaws, trucks and almost every kind of vehicle with the Volvo stickers.

I feel that it is an example of how a brand's name while offering certain kinds of benefits (which are new to the category) becomes a category generic especially when it relates to the first mover in the market.

These buses were introduced in India at a time when there were limited road transport options. The common local and state buses were more suitable for the lowest strata of the society and the middle class who could afford to pay a little more for comfort didn’t have too many options. Versions such as Luxury Bus, Video-Coach, Express and Super-fast were merely feel good symbols painted on these vehicles without much tangible benefit. The rich however, had the option of travelling by their own cars or renting them.

This was a period when luxury coach stood for a bus with seats made of sponge and covered with velvet instead of jute and rexine. The touch of luxury also came with the new generation video coach buses which could play a movie or two. Highways stood for ‘long distances’ and ‘over-night’ travel and not much for roads which could connect two points much faster and easier. The air-conditioning was non-existent and the only source of relief from the sultry Indian climate was the window which was shared between seats.

The introduction of the Volvo buses during this period meant a lot more to the Indian middle class than the functional benefits they offered. It was an answer to the middle class’s desire to get a feel of luxury within their means. For them, it wielded them with the power to make a statement, share stories about their experiences with others and also feel a sense of having arrived in life.

It is therefore not surprising, that the brand received huge acceptance and became synonymous with the experience and the benefits that it delivered over the traditional means of road transport.

Today, with the improvement of road infrastructure, more money in the hands of people, lower costs for entry level cars, cheaper and equally good luxury bus options, etc., the pride that people once associated with Volvo buses in their minds, is diminishing. However, it still remains one of the key choices in their consideration set.

What would be the most affected by the 50 paise hike in the retail price of most of the cigarettes?

There is little usage of the 50 paise coins in India as of today. There are very few items which are not rounded off to the nearest rupee. Most of these items are found in the retail shops which sell cigarettes, pan, gutkha, etc. The margins on the sale of these items is extremely low and the vendors usually have to depend on volumes, bulk buys, promotional schemes introduced by the distributors or the companies and also the cross sale of other items like mouth fresheners, etc. for their profits.

Till now, most of the cigarette brands were being sold at prices such as 2.5 rupees, 4.5 rupees, etc. As a result, due to the low availability of the 50 paise coins, they would tender the change in the form of a mouth freshener or a chocolate or any similar item of the same value. Over the course of the day, they would manage to get huge additional sales just by handing out these products instead of money. What worked in the favor of these companies is also the fact that a lot of highly popular brands such as Gold Flake and Classic were priced at 4.5 rupees. As a result, the change would run out quickly and the sales of these items would begin.

It has also happened in some cases that people have developed a liking for one or some of these products which who trial is forced in by these vendors. Some consumers have also begun developing a habit of consuming these items after smoking a cigarette as they do not have anything else to do with it.

The sales of these products has grown to epic proportions by such kind of activities without consumers too many consumers having an active inclination towards buying these products by themselves.

It would be interesting to see how a change in the price of cigarettes, tobacco, etc., would not impact the sales of these dependant products. Cigarette consumers is unlikely to change with minor price changes however the sales of these items would definitely take a hit, at least in the short term.

Why have mutual funds still not penetrated in rural India? What is there in the minds of the people that they have not accepted this product as yet?

Let’s first try to understand what products have been able to penetrate in rural markets and what are the possible reasons for their success?
Investment instruments such as Fixed Deposits, Post Office Schemes, NSC’s, KVP’s, LIC’s, precious metals and property, etc. are some of the products which have been able to penetrate the farthest of the corners of the country.
If we trace the history of human civilization we will find that the concept of a bank is very old. It is almost as old as the existence of money and the formation of an organized marketplace. The origin of the word bank comes from the term ‘banko’ which means a bench. The story goes that traders in the olden times used to sit on a bench and carry out money transactions and thus the origin of this word.
Over the years, people have understood the concept of borrowing money from the money lenders and repaying the same with interest. Also, they have understood the concept of keeping their savings with the bank and earning an interest on the same. Thus, the concept of interest, which a person gets for giving his money to another person, is something which is clear to even the most rural of regions in the country.
Most of the products in the above list are those which operate on the basis of the above formula. If we take the example of FD’s, PO’s, NSC’s, KVP’s, etc. we see that they all work on the same principle. The only difference is that they come with a clause that you need to keep the money with the bank or the respective institution for a fixed duration of time. This is not something that is unacceptable to any person who is promised a sum of money greater than the initial amount to be returned to him, guaranteed, after a period of time.
Prior to the formation of the Life Insurance Corporation of India in 1956, there were 154 Indian insurers, sixteen non-indian insurers and 75 provident societies who held the insurance business in India. Post its formation, it held the monopoly for carrying out the insurance and the pension business in India. There are two kinds of products which were sold by LIC – assurances and annuities. Assurance plans would provide a fixed amount to the dependants of the person insured in case of an untimely death. Annuities, would act in the form of a pension which the person would get after retirement to enable him to maintain his standard of living. By the year 1997, LIC had spread to the farthest corners of the country with around 5,50,000 agents.
The reasons for this growth and the subsequent impact on the minds of the people in the remotest parts of the country are interesting to note. Monopoly was one of the biggest reasons for LIC to grow. However, prior to formation of LIC, the insurance business in India was limited to the urban regions and little interest was taken to develop the rural business. There wasn’t an organization which was huge enough of interested enough to invest in developing the business from regions where there would be a longer gestation period along with low returns. LIC was the first mover and was reaping the benefits. The other reason for the growth of this business at a time when there was almost a complete absence of advertising or any other form of communication media is the strong network of agents who used to earn a good commission, work using the tools of personal interaction and word of mouth and also provide a good product and security. It is this network of agents, who used to earn their living out of these commissions that LIC was able to reach at a level where very few networks in the world would have been able to reach. Also, it is only because of these agents and the simple products, which were explained well by them, that the understanding and acceptance of insurance has been able to reach almost every possible corner of the country. Even today, just as Colgate is synonymous with toothpaste, LIC is with insurance.
Also, LIC agents in the corners of the country, were not just people who would carry out business for the sake of profits. They were people who would get close to the families with whom they would work and would be a part of them in the happy as well as the tough times. They were people who would carry out all the necessary documentation from filling up the forms to getting the claims cheque when the time would come. They would become almost a part of the family as a proper well wisher.
With respect to gold, it has been an adornment for the women since the time civilization has existed. They were the first units of transaction after barter system because they were precious and not everyone had access to them. It is for this reason that they were used to make coins which were used for carrying out the transactions.
With the passage of time, owing to the preciousness of these metals monetarily and also because they are an intrinsic part of the adornment of women on auspicious occasions and otherwise, precious metals have been an investment which are usually on top of the mind with people anywhere in the world. It is also for this reason, that money lenders started lending money in exchange for gold and other precious metals.
Property as a material of possession is almost a part of the human genes. The concept of possession of a place and how it would provide a sense of security and a feeling of power has been seen from the time human evolution has started. From animals who would fight for their own areas, to rulers who would conquer, to nations who would democratize, to owning a little house or a field or an office, the ownership of property is as old as we can possibly look back.
If we go back a couple of decades into the history of this nation, we see that farmers would mortgage their lands to the money lenders for buying seeds, manure, etc and also for running their families. What would usually follow is a burden of a lifelong un-repayable interest and mercy at the hands of these rich landlords. Thus, the feeling of having a land of their own, is something which has been one of the greatest ambitions for the success of the Indian household.
From the above, we see how people not only in rural India but across the country, have been able to understand and accept the importance of investment of their savings into any of the above products. All of these products have an immensely long history which has enabled their understanding and acceptance in the minds of the people.
Now, let’s look at the growth of mutual funds in the Indian context.
Mutual Funds were introduced in India in the mid to late eighties. They started to grow as acceptable products of investments by the late nineties. However, their penetration was extremely low. LIC had far more number of agents than the total number of applications which it had received by this time for LIC Mutual Funds. Also, the financial losses that people suffered owing to the turmoil in the markets made them extremely wary of investing in mutual funds. At the same time, this sector had just started to open up, become professional and start investing in the stock markets. There were far greater number of debt schemes at this time, which used to provide better returns than fixed deposits due to the falling rate of interests and the profits these schemes could earn on mark to market transactions.
As this sector began opening up, we have seen a far greater number of financial goof-ups in the stock markets, entry of foreign companies to whom people are not familiar, maturing of the market regulators and a greater transparency over the years and also a large number of players leading to confusion in the minds of the investors. These new players who have entered the market, are still limited to the urban and semi urban regions and also their marketing efforts are limited to these regions. At the same time, there have been too many uncertainties which this sector has witnessed owing to the conditions of the stock exchanges on the equity side and negative to negligible returns owing to almost stagnated interest rates on the long term debt side. At the same time, they are competing with products which have a distinct understanding and acceptance in the minds of the people in urban and the rural India.
Today, there are a total of 35 asset management companies with a total AUM of around 639130 crores. The largest being Reliance Capital Asset Management Company, followed by ICICI Prudential AMC, UTI Mutual Fund AMC and SBI Funds Management Pvt. Ltd. However, with so many fund houses and schemes in the market, there is still an extremely low penetration of MF’s among the paid workforce at around 2% of the savings. Also, there is a huge percentage of people who do not understand the product at all in terms of the risk and the reward which are associated with it.
Some of the reasons for the success of the top funds are as follows:
1) Huge distribution networks which spread almost all across the country. Eg. SBI, UTI, ICICI, HDFC, etc.
2) Favorable image of the mother brand on the fund house. Eg. Reliance, ICICI, SBI, UTI, etc.
3) Huge investments received from the banking channels by cross selling of these mutual funds. Eg. Reliance, SBI, ICICI, HDFC, etc.
4) Huge investments received from the mother company and its subsidiaries. Eg. Reliance.
5) Corporate short term funds parking money being invested in mutual funds. The major portion of the AUM of all of these fund houses comes from this source and not so much from retail investors.
6) Extensive and established agent networks. Eg. LIC, UTI, etc.
7) Huge marketing and advertising spends which have been made by these AMC’s.
With assets under management of over 60,000 crores as on May, 2009, it cannot be denied that there is a huge amount of money that is being managed by the mutual fund houses. However, the issue lies with the fact that most of this money is from the urban areas, from corporate investors who park their funds for the short term and from a small number of investors with big ticket size investment. The money is divided between hundreds of schemes of these fund houses. Also, the corpus which is actually invested into the stock markets for a long period of time is too little. Mutual Fund corpus is not big enough at present to be able to substantially impact the market. On the other hand, it gets affected by the market turbulence very fast.