Weekend reads from India - April 21, 2018

  • Budget hotel startups - OYO, FabHotel, Treebo (Outlook Business)

    Be it OYO, Treebo or FabHotels, budget hotel brands in India have significant headroom when one takes into account that there are about a million rooms on the supply-side, which are highly fragmented. Add to this demand from millennial travellers and increasing business travel.

    “The number of aircrafts ordered and number of emerging airports, in my opinion, are lead indicators of the amount of travel that people are doing.”

  • US treasury report on major trading partners - “Currency manipulators?”

    India increased its purchases of foreign exchange over the first three quarters of 2017. Despite a sharp drop-off in purchases in the fourth quarter, net annual purchases of foreign exchange reached $56 billion in 2017, equivalent to 2.2 percent of GDP. The pick-up in purchases came amidst relatively strong foreign inflows, both of foreign direct investment and portfolio investment. Notwithstanding the increase in intervention, the rupee appreciated by more than 6 percent against the dollar and by more than 3 percent on a real effective basis in 2017. India has a significant bilateral goods trade surplus with the United States, totaling $23 billion in 2017, but India’s current account is in deficit at 1.5 percent of GDP and the exchange rate is not deemed to be undervalued by the IMF. Given that Indian foreign exchange reserves are ample by common metrics, and that India maintains some controls on both inbound and outbound flows of private capital, further reserve accumulation does not appear necessary.

  • Jeff Bezo’s shareholder letter

    Amazon.in is the fastest growing marketplace in India, and the most visited site on both desktop and mobile, according to comScore and SimilarWeb. The Amazon.in mobile shopping app was also the most downloaded shopping app in India in 2017, according to App Annie. Prime added more members in India in its first year than any previous geography in Amazon’s history. Prime selection in India now includes more than 40 million local products from third-party sellers, and Prime Video is investing in India original video content in a big way, including two recent premiers and over a dozen new shows in production.

  • Why Tech Titans Are Betting on India, in 14 Charts (WSJ)

  • India’s blockbuster cricket league is beginning to rival even English soccer

    Star has come up with a six-month marketing strategy to monetize every aspect of the IPL — starting from the players auction in January and going up to the live telecast of the matches on its 10 television channels in different Indian languages and on its digital platform until the end of May.

    The media conglomerate is expecting 700 million people to watch the IPL this year and ad revenues of more than $300 million. According to advertising sources, Star had sold 90 percent of its ad slots before the IPL kicked off.

  • RBI’s Minutes of the Monetary Policy Committee Meeting April 4-5, 2018 - More hawkish tone

    The MPC notes that growth has been recovering and the output gap is closing. This is also reflected in a pick-up in credit offtake in recent months. The large mobilisation of resources from the primary capital market should support investment activity further. While the domestic cyclical recovery is underway, the long-term growth potential is also expected to be reinforced by various structural reforms introduced in the recent past. On the downside, the deterioration in public finances risks crowding out private financing and investment. Furthermore, even as global growth and trade have been strengthening, rising trade protectionism and financial market volatility could derail the ongoing global recovery. In this unsettling global environment, it is especially important that domestic macroeconomic fundamentals are strengthened, deleveraging of distressed corporates and rebuilding of bank balance sheets persisted with, and the risk-sharing markets deepened.