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Mukund Multani
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  • China's Big Fat Problem
    The traditional Chinese diet is bland. The average meal is primarily vegetables, cooked rice, noodles and fruits with relatively little meat. Natural herbs, roots and spices are thrown in not just for flavor, but because of their digestive properties.
     
    In 1987, Kentucky Fried Chicken (KFC) ventured into China, opening its first store in Tiananmen Square, Beijing. Two thousand more outlets sprung up across China over the next twenty years, a rate of 100 outlets per year.
     
    McDonalds has opened 900 outlets in China; Pizza Hut, approximately 500. Burger King is late to the party with a mere 25 outlets, but is aiming for fast growth and “intends to be on a similar scale to competitors”.
     
    As we all know, fast food products are generally high in saturated fat, processed carbohydrates, sodium, refined sugars, and trans-fatty acids. Such foods have long been associated with illnesses such as diabetes, heart disease, obesity and sometimes even cancer. McDonalds is infamous for being the poster-boy of America’s obesity problem.
     
    This month (March 2010), the New England Journal of Medicine published a study that estimates 10% of adults in China are living with diabetes and a further 15% are considered to be pre-diabetic; the disease has “reached epidemic proportions in the general adult population”. This most recent study doubles the previous generally accepted estimate of diabetics in the country.
     
    However most adults suffering from the illness do not seek medication, preferring instead to ignore the problem or depend on traditional Chinese remedies instead. But these remedies were designed to supplement a traditional Chinese diet, which is slowly becoming a thing of the past, particularly in cities, where the fast-paced life is more conducive to fast-food consumption. At the same time, the next generation of Chinese seems to be more likely to consult their physician than indulge in some moxibustion.
     
    Big Pharma is certainly taking note of these facts, and investors would be wise to do so as well; Eli Lilly anticipates that revenues in China will grow 500% by the year 2015, to nearly $1 billion. The company is even considering some of its operations to India, a move that would help it better service the Asia Pacific region. The move could prove to be very efficient, considering that 7% of adults in India also suffer from diabetes.

    Disclosure: No Positions


    Disclosure: No Positions
    Mar 26 11:10 AM | Link | Comment!
  • Finovate 2009

    Finovate 2009 is an annual event that promises to “showcase the best new financial and banking technology innovations” in the industry. The event was very professionally organized, and was a pleasure to be at. Now, the last major economic downturn was triggered by tech firms, which were subsequently bailed out by the banking industry. However, the current recession is primarily a financial crisis, and therefore, tech firms are struggling to get any sort of backing. The banks at Finovate were conspicuous only by their absence. (Charis Palmer has a detailed post on this on her blog, The Better Banking Blog http://bankingreview.blogspot.com/2009/10/wrap-from-finovate-2009-where-were.html) 

    In any case, Finovate did not disappoint in its objective. I thought all the demos were interesting and deserved to be there. I personally related to a couple of them, which I will talk about below.

    The presentation by Tile Financial (tilefinancial.com) appealed to me, partly because I’m an ideal member of their target market. Their product, called “Spend, Grow, Give” is geared towards Generation Y or people in the 15-25 age group, who will control $1 Trillion of the global economy by 2025. How many banks that you know have a strong relationship with any customer in this age group? Not many, right. Tile’s product represents an impressive attempt to capture this market, early. The company calls their productive “addictive”; it seems that they are trying to match the appeal of social networking sites such as Facebook and Twitter. 

    In brief, the “Spend” section of the program is designed to show users how much they are “spending”, and to teach them basic budgeting skills. The “Give” section allows for “one-click giving” to the charitable organizations associated with Tile. However, the “Grow” section is the most exciting, (although the creators insist that it’s the “Give” section). It allows advisors to access a users portfolio and interact with them on a digital basis. It’s primary use seems to be to bridge the gap between financial institutions and the next generation of investors. This is going to be good (Think Commissions) for whichever AM service Tile ties up with, but it remains to be seen whether consumers will accept the digital platform.

    Continuing with the theme of appealing to the younger Generation, Cents City (www.centscity.com) offers an extremely well-designed product package. The way it works is that kids explore a virtual world with the help of a guru (also virtual), who guides them through missions, teaching them important money lessons in the process. As they go along, kids unlock “rewards” that are offered via Cents City (e.g. a new music album) and obviously, the parents will pay for this reward once unlocked. The program has a one-time fee of $4.95. An excellent product, if you ask me. Kids learn, parents get some return on purchases they probably would have made anyway, and Cents City gets a fair return for what it offers.

    Overall -a great experience and definitely worth attending.

    Disclosure: No positions

    Nov 11 9:35 PM | Link | Comment!
  • Book: Predictably Irrational

    I’m currently reading a book titled Predictably Irrational by Dan Ariely. It ’s yet another book about “the hidden forces that shape our decisions”.  However, Ariely manages to distinguish himself with a witty, honest and engaging style.  He explains how the origins of his unorthodox world-view and the foundations of this book lie in an explosion which landed him (an eighteen-year-old in Israel at the time) in a hospital with 70% burns. His time and experiences in the burn department led him to study at Tel Aviv University, take a class on the physiology of the brain, and eventually venture into the field of behavioral economics. He became particularly interested in human irrationality, which, he explains, is more predictable than we think.

    Ariely wrote the book while he was a fellow at Princeton, and he currently teaches at Duke University, is a visiting professor at MIT, and is the founder of the Venter for Advanced Hindsight, along with a host of other accomplishments.

    Predictably Irrational makes for a quick, entertaining and educational read; no easy task to pull of for any author. Over 13 chapters about 330 pages, Ariely explores such topics as “Why a 50-Cent Aspirin Can Do What a Penny Aspirin Can’t” and “Why we Happy to Do Things, but Not When We Are Paid to Do Them”.

    I particularly liked his observations on the two worlds we live in; one dominated by social norms, such as doing a friend a favor and the other dominated by market norms, such as receiving wages for work. Ariely explains how problems can occur when companies or even individuals try to mix these norms in their dealings and advises companies that they ”can’t have it both ways. If you want a social relationship, go for it, but remember that you have to maintain it under all circumstances.”

    Bottom line: Worth my money.

    Jul 24 11:48 AM | Link | Comment!
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