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Turmoil at TCS
Also in today’s edition: India is going viral; The internet is in the ICU; Banks scout for a Swiss Army knife; The clock’s racing against TikTok
Good morning! Why does the scourge called the ‘pink tax’ exist? You know, the premium women pay for the same/similar products men use—especially when it comes to personal hygiene and beauty and wellness? Business Standard asked a few branding and marketing experts, and found that companies do so because… women care more about personal care 💀 We didn’t make this up. Apparently, the bar is so low for male grooming and everything-adjacent that brands market “targeted benefits” to women, knowing that they’re more likely to care about value addition (and pay for it). Excuse us while we go scream in a corner.
Today’s edition also features pieces by Jaideep Vaidya, Dinesh Narayanan, Venkat Ananth, and Srijonee Bhattacharjee.
The Market Signal
Stocks: Global Investor confidence is shaken as it took just a little over a week for banking crises to emerge on both sides of the Atlantic, sending authorities scurrying for rescue deals and liquidity support.
SGX Nifty indicates that Indian indices will start the day lower. However, they may recover during the day with Swiss authorities managing to broker a deal for UBS to buy Credit Suisse in time for markets to soak in the good news before the opening bell rings. US futures rose soon after.
Sentiment is still fragile so gains for Indian equities will likely be limited. Reuters reported that at least two major European banks were analysing the possibility of the crisis spreading.
Sectors to pick: Metals as China cut CRR, paint, cement and oil refiners with oil prices at 15-month lows real estate after DLF projected record sales growth.
Anatomy Of An Exit
It turns out the unexpected resignation of Tata Consultancy Services (TCS) lifer Rajesh Gopinathan as CEO wasn’t so sudden. His move was prompted by a year-long organisational restructuring underway at TCS that upset several senior executives, including both Gopinathan and his successor K Krithivasan, reports Moneycontrol.
Need to grow: TCS has been feeling the heat lately as rivals Infosys and Accenture win larger deals. TCS’ new team structure where clients were divided not by their industry sector or geographical location but by their “journey” with the firm, did not go down well with the leadership. Gopinathan’s abrasive manner at meetings and focus on margins which cost the company some sizable contracts upset the board too.
Tata Sons chairman, N Chandrasekaran let his displeasure known at a strategy meeting in Switzerland in 2021.
BUSINESS OF SPORT
The India Cricket Jersey Dilemma
Recent reports suggest German sportswear major Adidas is close to signing a five-year contract worth ₹350 crore ($42 million) to become the Indian cricket team’s kit partner. On paper, there’s nothing unusual about one of the biggest sportswear brands in the world sponsoring the biggest team in world cricket. But considering what happened with the Indian team’s previous kit partners, especially Nike, Adidas’ move is a bit surprising. In the latest edition of The Playbook, our weekly newsletter on the business of sports and gaming, Jaideep Vaidya writes about why Adidas would want to wear the India cricket jersey (and why Puma doesn’t). You can check it out here and subscribe to The Playbook for free below.
A weekly newsletter that deconstructs the business of sports and gaming.
It’s Time To Mask Up
Even as India deals with a nasty outbreak of the H3N2 influenza, over 800 cases of Covid-19 were recorded in the country for the first time in 126 days on Saturday. Health ministry data suggests the new Covid variant, XBB.1.16, could be behind the rise in cases. However, most cases aren’t severe; there’s no need to panic, per medical experts…
…not that there is much panic. While the demand for masks and sanitisers has increased, it’s still nowhere near peak Covid levels. Healthcare platform Tata 1mg has, however seen a 30% jump in flu- and fever-related tests in the last week.
The Indian Premier League, though, is playing it safe. It’s sticking to its policy of a seven-day isolation period for Covid-19 cases. Other sports leagues around the world are allowing players with the virus to compete.
Meanwhile: There’s a new Covid origins theory linked to…raccoon dogs.
SOS For Digital Culture
Today marks the beginning of a case whose outcome will affect the world’s greatest repository of culture. At 1 pm Eastern Time (10.30 pm IST), a US court will hear arguments in Hachette v. Internet Archive.
Fill me in: Non-profit library Internet Archive (IA), whose gargantuan media archive includes 735 billion webpages and 41 million books and texts, is being sued by some of the world’s greediest biggest publishers.
In 2020, Hachette, Penguin Random House, Wiley, and HarperCollins sued IA after it temporarily lifted its book lending limit. IA had done so during Covid, when kids and adults needed more supplementary learning resources than ever before. Publishers argue that IA’s controlled digital lending—in which it buys texts, scans copies, and shares/lends those scans for free—infringes copyright.
Hachette v. Internet Archive is a battle for the stewardship of knowledge and culture. A win for publishers will put libraries (and, by extension, us) at the mercy of third parties who’ll decide what texts we can access. As Maria Bustillos writes, “digital culture must not be left in the hands of commercial interests, because corporations don’t protect or develop culture: They sell it.”
IA is a bedrock for Wikipedia citations too, and increasingly critical in a world where AI chatbots and search engines spread falsehoods by citing the wrong books, authors, and information.
IA is a holdout in a world that’s turned culture into intellectual property. Not everything is about money, and it should stay that way.
Saving Private Banks
Swiss authorities have successfully called in a favour from UBS to rescue the 167-year-old Credit Suisse Group. After tough negotiations, UBS agreed to buy the beleaguered compatriot in a slump sale for $3.25 billion, well below its market value as of Friday.
Some 15 years ago, the state had stepped in with $6 billion to save UBS, which was ensnared in the 2008 financial crisis triggered by the collapse of Lehman Brothers. Incidentally, UBS chairman, Colm Kelleher, was then CFO of Morgan Stanley and helped secure Japanese funding to keep the bank afloat.
Governments, fearing public backlash, are reluctant to use taxpayer money to bail out troubled banks. In the US, Signature Bank’s deposits and some loans have been taken over by New York Community Bancorp.
Bracing For The Worst
TikTok’s key stakeholders—creators and advertisers—are preparing a prospective ban in the US by considering alternatives. Needless to say, Meta, YouTube, and perhaps Reddit are licking their lips at the prospect.
Body blow: For creators, TikTok’s much-vaunted algorithm propelled them to overnight stardom, thereby attracting customers (small businesses) and helping build community (around their niches). That is now under threat, which means they'd have to likely start all over again on Reels, Shorts, etc.
Drip and fall: TikTok earned nearly $10 billion in advertising revenue in 2022. That could now be under threat, with advertisers taking a more cautious, wait-and-watch approach given the developments in Washington DC. That could mean a gradual shifting of ad dollars elsewhere. Maybe not yet.
No deal: After two-year-long talks to sell Bisleri to the Tata Group failed, Bisleri International chairman, Ramesh Chauhan, said his daughter and vice-chairperson, Jayanti Chauhan, will take over the running of the mineral water business.
Cashing in: Dream11, Pepsi, Puma, and Parle are among 13 sponsors that broadcaster Viacom18 has so far signed for the Indian Premier League, for which it has the digital rights.
Hindenburg fallout: The Adani Group has reportedly suspended work on a petrochemical project worth ₹34,900 crore ($4.2 billion) in Gujarat because it’s focusing on consolidating operations and addressing investor concerns.
If you can’t beat em…: Leading publishers such as Elsevier and Cambridge University Press have allowed the use of OpenAI's chatbot ChatGPT for academic writing.
Crackdown: India’s drug-controlling body has said that pharmacists should be physically present in medical stores and medicines should be sold under their direct supervision.
Pink slips: Home decor unicorn Livspace has reportedly laid off 100 employees as part of a cost-cutting exercise.
WebEdge3: Microsoft is reportedly testing a built-in crypto wallet in its web browser Edge, which will allow users to send and receive cryptocurrency and NFTs.
THE DAILY DIGIT
The estimated cost of a loss in productivity for US employers due to March Madness, the three-week college basketball tournament that has the country in a frenzy. (LiveMint)
Sister act: Indian fugitive Swami Nithyananda, the self-professed “Supreme Pontiff of Hinduism” accused of rape and child abduction, is pulling a fast one on the western world. In 2022, his representatives attended a Diwali party at the UK’s House of Lords. Last month, a delegation represented his nonexistent nation, Kailasa, at a UN event. But no one’s been had like Newark, New Jersey. The city unwittingly got into a “sister cities” partnership with Kailasa and had to squirm its way into a sheepish apology after finding out that it’d, well, been catfished.
Berry disconcerting: Bijin Hime (beautiful princess). Koinoka (scent of love). Beni Hoppe (red cheeks). These aren’t terms of endearment, but the names of strawberry varieties in Japan, a country so nuts about the stuff that it’s growing the spring-summer fruit in winter months… at great environmental cost. Since the Japanese market places absurd value on hatsumono or ‘first of the season produce’, farmers are growing strawberries in kerosene-powered greenhouses that create artificial spring. We hope the madness stops because the way things are going, there’ll be nobody left to eat these much-desired strawberries.
Enjoy it while it lasts: Take heed, aspiring and bonafide “digital nomads”. The Organization for Economic Cooperation & Development (OECD) is tweaking global tax rules for cross-border remote workers. Why? Because workcations have complicated income tax filing, pension payments, social security, and other compliances for individuals and companies. The OECD’s new rules, due by the end of 2023, may define what does and doesn’t constitute a temporary work stint abroad. We say go for an international workation now, if and while you can.