Is Discounting a bad thing?

acquisition cost
Current Trend of CAC

Discounting is a phase almost every startup (B2C) does to grow/scale up to a bigger level. But, in the midst of new startup era, competitiveness has emerged to a new level that startups has almost forgot everything else and doing only this. If you ask any of the marketing teams of different startups what they have planned for coming New year/ Independence day, I bet most of them would say 50-70% discount, 100% cashback, Free! and so on..

They could only talk and do this because they have funded money and they do because their competitors too are doing! In due course all of them are going after wrong target groups, acquiring bad customers, changing behaviors of good customers who otherwise would have looked for convenience, innovation in your product. They just degrade the value of their products through these campaigns. The moment you realize you should stop this, you are already in race and can’t stop or refrain from doing for fear of backlash from customers (This would give good idea on Offers/Discount race – Evolution of offers)

On the contrary, discounts/cashbacks help you reach out to larger audience in a short span and help you growth hack. But, one must ensure that their product is good enough to retain the customer even after the end of discount/campaign period. But, it has become too uncertain these days as you might not know if your competitor is going to launch a massive campaign again ‘re-acquiring’ customers. Owing to these scenarios, it would be un-realistic to even define customer acquisition cost as there is always ‘re-acquisition’ cost! (Who is your customer?)

A ideal campaign would gain you huge customer base and at the same time your product should be ready enough to retain them owing to the convenience/value addition/awesomeness it has/adds to end users. To some extent cashback would make sense as you are buying yourself second chance to gain trust of users. Referral bonus might make sense in some cases as it gets you customers who are referred by their peers who tried out your product and might liked it.

So, it turns out discounting is after all not a bad marketing strategy if done at right time and in tandem with product launches, cool features etc. But, yes it is very bad if you are doing only that.


Startups – Road ahead

What Next?

We have seen extensive funds flowing in last year (especially late stage rounds) and at the same time some shutting their shops (especially food techs). Some learnt lessons and some still didn’t. As we welcome 2016, here are the changes we might see in our startup eco-system.

Online to Offline, SMEs, Cashless

Enough already debated on whether ecoms can ever break-even. If we look at the major costs to any ecoms –

1. Discounting, Coupons- Many surveys had revealed that discount, cashback, coupons still stand the 1st factor to shop online. Followed by convenience. The day convenience, diversified options, easy payment, safe & secure emerges as top factors, only then we might see healthy business in the balance sheets

2. Delivery costs – Ofcourse it costs crazy to ship a product worth Rs.100 all the way from Delhi to Bangalore. If the same product could some how be mapped to nearest seller to the customer then ecoms could save a lot of money and time (Effectively winning customer by convenience). Drawbacks of this could be sellers in Tier II and Tier III cities will have an undue disadvantage with less customer base when compared to Tier I cities

3. Pick up stores – Taking the above model a step ahead, Most of their sellers actually would have a physical store. If these stores could be made pick up stores effectively creating a strong delivery houses, the delivery costs could come down a lot. Idea is, a delivery would drop the package at a store nearest to customer and customer can pick up when he is free, way back from office or so. Amazon has already started doing this, we might see other players cloning this model

4. Business through Ads – Now that these sites/apps has got significant traffic, they can leverage this to earn revenue through display ads, featured sellers, co-branded debit, credit cards, even financing

5. Rural sellers, SMEs – If there is any good value addition ecoms could do other than giving convenience to consumer, it is giving these rural sellers a wider reach of business and entrepreneurial opportunities. 70% of our population is in these villages and the next leap would be tapping this market – consumer side and more of seller side. We might see regional language compatible sites/apps to attract these consumers and good hand holding for sellers as they would need right skill set in every step of doing online business which they lack now

6. Cashless India – We might soon see cashless ecoms. The current trend of more COD orders than Prepaid orders might overturn. This trend is evident as consumers see convenience with easy return & refund policies, additional discounting on prepaid orders, co-branded bank offers for online payment

Dry market, Consolidation

We have seen enough of hyperlocal players, food tech companies and surprisingly most of them funded (for atleast seed or one round). 1st half of last year had been a honeymoon period for both startups as well as consumers (Enjoyed heavy discounting in various sectors – Food, services, cabs, ecoms etc.) All of a sudden VCs have woken up and started talking about profitability, unit economics etc. which they should have done right from first walking through these young entrepreneurs who has seen crores of money and had no clue how to spend them. End result – Many foodtech, hyperlocal companies shutting/scaling down (Spoonjoy, Dazo, Tinyowl etc.)

We have also seen this ‘me too’ trend – where many startups mushrooming on same product and some mimicking other products from different cities. Now that market is tight and VCs are cautious about their money we might not see many early stage investments which might lead to shutting down and many cases consolidation. Close to infinite hyperlocal grocery, food tech startups will eventually consolidate to 5-6 players.

Please comment your views for a healthy discussion.


Who is your customer?

Who is your customer?

There are 3 type of customers – (Of course not)

1. Loyal, Service

They care only about product, service, value addition. They are not in there for offers or discounts.

2. Cool, New!

These are the ones who want to explore new things, cool products and will adopt fast if they like it. And mind it they won’t give you 2nd chance if you disappoint them.

3. Cheapsters

What is in it for me? They are in the party only for offers, discounts, cashbacks and what not. Few of them you can convert to your loyal customers (try your luck)

So, when you first launch your service/product – are you thinking of growing in a rapid pace? May be, May be not.

Those who grew rapidly, by giving cashbacks, offers etc.. are burning hands now. Because, its simple they have acquired all cheapsters and they are not going to stay with you when you stop those offers. (Swiggy vs Tiny Owl)

But, yes you might end up rolling out few offers – not because you have money to burn, just because others in the race are doing it extensively or you have very new product which demands a habit change (Pay with your phone, laundry pick up etc.)

When you realize you have to stop those offers/bring down acquisition costs, things that refrain you from doing are

1. How do we communicate to users – Just figure out!

2. Users may review us bad – Are they YOUR customers?

3. Competitors are still giving offers – Let them burn! You enjoy the smoke (Ola vs TFS is an exception :P)

Let us discuss case by case aligning to user segments. Segment-1 won’t care unless you are messing around with product or service. Almost same goes with segment-2. Now, you are going to have hard time with your 3rd segment. But, are you interested? Read this –

You are giving Rs.10 daily to your user. For 10 days, continued 20 days, continued 30 days. You have stopped. You know what, 31st day that user is going to ask this – “Where is MY Money?”

These guys will take on social media, play store etc. Sadly there is no moderation on reviews of play store, which might effect new users who want to give a try (Especially 1,2 segments who read reviews). But, don’t make this a barrier to take any marketing decision.

This is how customers are perceiving offers, discounts run by different startups/companies these days. It had been a honeymoon period for all startups till few weeks back. Especially, foodtech – 100% cashback, 300 off on 450/-, 40% cashback paying with paytm/ola money and so on… have lured in many customers. And now that, these start ups are running out of money, they have to stop these offers. But, how are customers perceiving these.

TinyOwl review

I don’t want to censor the user who rated as it is already public and his/her review too.


10% of those who reviewed Uber gave 1 star. Most of the cases are with free ride not getting applied/user blocked.

As they say, prevention is better than cure! Why to start drooling offers when its not necessary or just to increase traction (unhealthy traction).

Know YOUR customer! Traction is important but not one with offer/discount driven.

Mobile Wallets in India – Next generation payment mode

Let us list out all wallets in India we have heard of (as of now 😛 ) Paytm, Mobikwik, Oxygen, Citruspay, mRupee, Freecharge, Momoe, Quikwallet,  Ypaycash, Airtel money, zaakpay, itzcash, Payzaap, Pockets, m-pesa, Ruplee, chillr, Payumoney wallet, Bookmyshow wallet (Very recent), So on…

Wallet War!
Wallet War!

So, Are they making money? If so, how are they making money?

Firstly, you do know that on every transaction you make using your debit and credit cards, the merchant has to pay some commission to the card issuer (Visa, MasterCard etc. ) which varies somewhere between 1-4%. At this moment, this charge is zero when you transact using wallets. Now, a few years back have you seen anyone transacting using cards?

Exactly, Mobile wallet payments is the future payment mode. At least that’s what experts think 🙂

Mobile wallet is the digital equivalent to the physical wallet in which we carry money. It is an online platform which allows a user to keep money in it, just like a bank account. A user needs to make an account with a mobile wallet provider. After which money is added to the ‘mobile wallet’ account using a debit, credit, online transaction from bank account or via cash (a recharge kiosk).

The main difference between a mobile wallet and online transactions via bank account is that, unlike banks mobile wallet does not charge any amount of money on every transaction and saves the customer from the hassle of entering card details and pin number for each and every transaction. It is easy and convenient as the user just needs to sign in the account and make the payment.

Answering our 1st question, if they are making money – Not at this point of time. But, a sure yes at a later stage. They wouldn’t have started else right 🙂

For now, the wallets performed a need gap function – making it convenient for individual merchants to not invest in two factor authentication by acting as an intermediary and convenience to the customers. There is lot of scope and huge business opportunity, which apps like Momoe are tapping on.

These wallet services are backed by investors with good funding. Now, they are at the stage of changing the habitual behaviors of customers. Imagine how we took time (changing our behavior) to change our transactional style from cash to cards. Now its time for other change, cards to mobile wallets, in style 😎

Ofcourse it not only takes time for us to change this habit but also some cash-burn for these wallet service providers to incentivize us.

There are four types of mobile wallets in India – open, semi-open, semi-closed and closed.

    1. Open Wallets are the ones that allow you to buy good and services, withdraw cash at ATMs or banks and transfer funds. These services can only be jointly launched with a bank. Ex: PayTM, M-Pesa, ICICI etc.
    2. Semi-Open Wallets, which allows you to transact with merchants that have a contract with then. You can’t withdraw cash or get it back. You’ll have to spend what you load. Ex: Airtel money
    3. Closed Wallets (not re-loadable with cash and do not permit cash withdrawal) Ex:  prepaid and gift vouchers
    4. Semi-Closed Wallets, which do not permit cash withdrawal or redemption, but allow you to buy goods and services at listed merchants and perform financial services at listed locations. Ex: Mobikwik

Roadblocks ahead?

RBI has been a pro-active thinker to drive adoption and has been very liberal in issuing licenses. Policies are decided and implemented by the The Reserve Bank Of India (RBI). The RBI has been very responsive over the past 2-3 years, bringing in key changes such as increasing the limit of how much money a user can park in the wallet, allowing wallet to wallet money transfers, and direct fund transfer to bank accounts.


Yes, this is a challenge, as typical Indian customer adopting digital commerce, primarily on Internet, will be transacting on average to poor quality telecom networks without much experience in dealing with online firms or with customer service agents in case of issues with payments. There is high chance of transactions getting failed due to poor connectivity and gateway issues. But then, this is something at will evolve and time solves this.

How are customers getting benefited?

Its clear that merchants getting benefited as they don’t have to pay the convenience fee or commission at this moment. For customers, Convenience and speed of doing the transaction are the key benefits. Mobile wallet users enjoy greater flexibility in making secure payments. The convenience of making payments on the go and easy accessibility of this new mode of payment makes it a logical and natural choice. And, additional benefits for adding money into wallets.


As per a McKinsey report, presently number of smartphone users in India is 29 million. Number of mobile internet users is expected at over 2oo million. As you see, there is a huge potential of growth and this is just beginning!
“India is a cash majority country and there is huge scope in getting the cash converted into digital money” – Bipin Preet Singh, Founder and CEO, Mobikwik

Momoe, ‘MObile MOney Everywhere’ payment app which lets its users transact at many restaurants, pubs, retail stores etc. operating in Bangalore at this moment, focusing only on offline payments i.e, in-store payments through their app, targeting untapped market and trying to solve much complex problem. They also rolled out a new feature in their app – Momoe Express – Through which you can load money into your account using Card/Net banking and make faster transactions at the merchant location – Guess how fast? – 0.3 Second !


Evolution of offers

With many players in the market (almost any line of business), it has become very hard for acquiring customers. Forget about retention, which is a nightmare these days even for big players. (Read my recent article on Customer acquisition and Retention) Lets look at different cashburns (Offers, discounts, cashbacks etc.) an organisation has to go through to make its customers transact.

A Game!
A Game!

Acquiring Phase:

Yes, An organisation have to get customers to kick start their product. Now, how do they get one? Obviously they got to spend some money in acquiring each customer, which is Cost Per Acquisition (CPA).

As per current trend, to lure the customer, many companies follow any of the following (not limiting to one):

      1. Sign up offer:
        • Sign up and get Rs.200/- voucher (With/Without min. spend condition)
        • Refer and Earn. “You get Rs.100/-, your friend gets Rs.100/-” (These days, a referrer gets only when his friend transacts, which makes sense)
        • A goodie, may be merchandise or a third party voucher (Bookmyshow Rs.200/- voucher, Rs.50/- Paytm cash etc.) – This is followed by companies which don’t have anything to sell. Content making, information portals, etc. (Ex. News application, A second hand market place, Reviews portal etc..)
      2. 1st Transaction:
        • This is ensured during the sign up offers. If not covered when signed up, they may offer some discount on 1st transaction. Coz, 1st transaction is definitely the most important one which helps company gain your trust or make an impression with you


      • Now that you have transacted once, the cost company incurs in making you transact for the 2nd time will be times less than getting a new customer to transact.
      • They started rolling out discounts on your multiple purchases (Every 3rd purchase 20% discount, buy 1 get 1 for premium customers etc.)

Wallet Offers:

Wallet Wallet everywhere right?! So, lets see what this is. Companies ask you to load money in their wallet giving 5%, 10% more. Lets say 1000 customers on an average added Rs.1000/- which is Rs.10,00,000 = Rs. 10 Lakh and company burned Rs. 1 Lakh to get that. Don’t you think its a good deal?! Getting a business of Rs.10 Lakh at the cost of Rs.1 Lakh. May be, May be not!


    1. Not all customers transact! Lets say 70% of them transact; You have Rs. 3 Lakh of your customers money with you, who may or may not transact even at later stage
    2. ‘Time value of money’ – Unlike bank, these wallet services need not pay interest!
    3. Investment! – Customers money in wallet is in fact direct investment in the company


    1. Losing focus on prime target of product. There is no point in having a wallet without having much diverse products to offer. Paytm has wallet, not Flipkart
    2. Service issues. Lot of complaints get fired against the brand in social media
    3. RBI regulations, of course

Discount v/s Cashback:

Discount is upfront offer whereas Cashback isn’t. Lets say a company offers 20% discount on your transaction (Rs.100/-). They spent Rs.20/- to make you transact. On the other hand, a brand offered 20% cashback into their wallet on your transaction. If you see, they didn’t spend Rs.20/- on your transaction. They would only spend on your next transaction, which ensures more transactions and more business. Again, the above said positives and negatives apply for cashbacks. Though, cashbacks are good marketing strategies, as customer getting aware of the bait, may not actually buy it!

Customer Loyalty:

Now that a company spent so much in acquiring a customer in the form of Offers, Discounts, Campaign costs, Operational costs and so on.. they expect to squeeze out these costs from the customer from his/her subsequent transactions. In reality, Is this happening?

Why should a customer be loyal?

    1. Better service (Depends on product. For food delivery – may be, groceries – I doubt, ECommerce – yes)
    2. Better Price (Which is driving the most, making it tough to retain the customer)
    3. Quality of product (Food – yes, groceries – no diff may be, etc)

Amidst all these factors, a new start-up popping up as competitor backed by deep pocketed investors every alternate day, its getting increasingly difficult to stop offering discounts/cashbacks in order to be in the race. A poker game I must say!

Play till you have money on board
Play till you have money on board

But, a day comes when they have to stop this. Till then, Customer is King!

Customer is King!
Customer is King! Source: smartbusinesstrends

From Acquisition to Retention

“Who cares if we find out we lost a customer after he/she left?”

Using analytics to compete and innovate is a multi-dimensional issue. It ranges from simple (reporting) to complex (prediction). We are now in an era of man+machine interactions. There is a drift from “Serving customers with few channels” to “integrating multi-channels, devices”, from “lone demographic segmentation” to “complex behavior segmentation”

You have acquired a customer. Now what? Retain the customer, as the chances you can get existing customers to do more business with you is much more likely than what it takes to go out and get somebody new. An Organisation needs passion and precision when it comes to customer retention. The objective of performing analytics for ‘Retention’ is not just to understand why you lost a customer; but how to prevent you from losing one before it happens. In this blog we want to tell how important customer retention is and the ways to improve customer retention.

Here are few important ways to improve customer retention:

  1. Customer SegmentationKnow Thy Customer

Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, and so on. Customer segmentation allows a company to target specific groups of customers effectively and allocate marketing resources to best effect. Better customer segmentation for customized services.

Market Segmentation
Market Segmentation (Source:

Customer segmentation includes:

  • Collection of data
  • Integrating data from various sources
  • Data analysis for segmentation
  • Effective communication among business units
  1. Customer funnel optimization and improvement
Customer funnel Optimization
Customer funnel Optimization

Identify the blockage points –

  • Are you getting enough leads at the top of funnel?
  • How many visitors have converted to registered users?
  • Are you able to catch the decision trigger?
  • Are you able to bring back the customer?

Ideate on the causes of blockage points, solve them. Removing the blockage points will increase the conversion rates in your funnel.

  1. Suggest products

You now got a customer through the funnel. What next? Suggest products which customers might like based on their previous buying history. Companies are now interested in understanding every aspect of customer interaction, websites purchasing patterns, social media, support calls, transactions etc. The combination of customer’s transactional history across channels with their online and social behavior is the ‘Holy Grail’ here.

Understand behavior (Source:
Understand behavior (Source:

Machine intelligence is getting increasingly married to human insight. Let us look at following interesting applications:

  • Recommendation based on social media relationships: “Several of your Facebook friends have recently enjoyed visits to our restaurant, so we’re offering you 15% off to try it yourself”
  • Recommendation with regard to cross-sell sales: “We hope you’ve liked the 40 inch LED TV purchased with us, as a token of loyalty we want to extend the gratitude and here’s a coupon for 20% off valid across all Home theaters”
  • Recommendation based on customer behaviors: “We are sorry we missed you this Sunday at Baskin Robbins after nine straight weeks of enjoying your company! Here is a free ‘Warm Brownie Sundae’ for you”
  • Recommendation based on location: “We see you have just landed in Mumbai, and your final destination is Marriott in Juhu. Here is a ₹ 500 Ola cab coupon to get you there”

Identify the patterns of past purchases, browsing history, social media behaviors and build an algorithm using a training set to train the model and implement the algorithm thus developed on the desired set which gives you “Machine learning based recommendations‘’. So simple, isn’t it? (Just kidding)

  1. Customer Satisfaction

The most important factor that drives to retain a customer. If you are successful in making your customer happy on their first purchase, chances are high in gaining them back. An organization needs to focus on the value and support provided to the customer during their engagement.

Customer Satisfaction (Source:
Customer Satisfaction

The following helps in maintaining healthy CSAT score –

  • Improved NPS (Net Promoter Score)
  • Increased customer satisfaction and fewer calls to call centers
  • First call resolution
  • Social Media engagement

As they say, “water water everywhere not a drop to drink”; Most of the data is unstructured which is hard to clean and bring into shape for analysis to work. Customer data analytics can unleash significant financial rewards for an organization’s sales, marketing and customer services. With so much data to contend with, companies often struggle with making sense of information from customers (segmentation), public records (social media data) and external databases (web history, buying pattern etc.); The aggregation of data renders any analysis on the individual customer level impossible. Profit and revenues are determined by a multitude of variables, which in addition are highly correlated. Data aggregation and correlation from these sources are crucial to find hidden insights.

Please do comment!



Why this Kolaveri Di?

Yo mama, nothing will be sweeter than gifting! (Proved to be correct for me)

But, budget will always restrict you. In the due process, Don’t fall into these kind of baits:

899 - 314(cashback) = 584/-
899 – 314(cashback) = 584/- (Price might have changed now)

Watch this,

399 + 30(shipping) = 429/-
399 + 30(shipping) = 429/-  (Price might have changed now)

Well, lady looks similar but not the price!

Now, don’t think that this is just a 155/- price difference, you have locked 300 more (which you got as cashback) into that ATM website! and more orders waiting from you for ATM…Its about TRUST too

Why this Kolaveri Di?

Want to buy Kurtis at best price? (For gifting ofcourse 😉 )

Regional Imbalances of ‘Maha’rashtra

Regional Imbalances of ‘Maha’rashtra

Thanks for the encouragement and support for my previous post. As an extension we worked on similar data for Maharashtra state. We shooked our heads to get into the insights from the results. These results have moved us. Let me walk you through.

Please read my post on Telugu States to understand the data and variables used for the following analyses. (Standard Of Living)

The following chart shows the positions of districts of Maharashtra based on Index calculated for Standard of living:

Index Rank for Districts

Index Rank for Districts
Index Rank for Districts

Before I discuss about the above chart, lets see what this Vidarbha is –

Vidarbha, the eastern region of Maharashtra, comprising Nagpur Division and Amravati Division. It occupies 31.6% of total area and holds 21.3% of total population of Maharashtra. Vidarbha holds two-thirds of Maharashtra’s mineral resources and three-quarters of its forest resources, and is a net producer of power. In recent times, there have been calls for a separate state of Vidarbha, due to perceived neglect from the Government of Maharashtra and incompetent political leadership in Vidarbha. Hence, I highlighted this region in order to understand the contrast. I will highlight other unpleasant facts about this region as we go through.

So, the above chart, clearly shows only one district from Vidarbha region – Nagpur. Similar with Marathwada region. If we look at the geographical location of the top districts all of them are in proximity to Mumbai. Which is no wonder and pretty obvious as Mumbai being so damn rich neighbors will definitely get a share of it. And the districts at the bottom are those far away from Mumbai !

Let me put it this way – Bhandra, Wardha, Chandrapur, Gondia, Amravati share borders with Nagpur. Why is that we see them so behind.

Ok, Is Mumbai times richer than Nagpur? I don’t know. Even if its so, why is that?

Why didn’t Nagpur evolve as Mumbai did? (By that I mean, the region surrounding it)

Nagpur is a central hub for business, it was given very top priority during British rule making it capital of Central Province. When constitution of India went into effect in 1950; Central Province and Berar became Madhya Pradesh, with Nagpur as capital. ‘Orange City’, ‘Multi-modal International Cargo Hub’, ‘Tiger City’ etc. Why didn’t this hold up long? Vidarbha’s poor Connectivity, Transportation ?

I do agree its for building economy, investments, development – Mumbai, greater good etc. But, aren’t they humans too?

Lets see how chart looks for Urban households-

MH Urban

Index Rank for Districts (Urban)
Index Rank for Districts (Urban) 

Almost no different from previous one.

Lets see for Rural households (Mumbai, Mumbai sub-urban aren’t provided with Rural households data) – The facts to follow will blow your brains.

MH Rural

Index Rank for Districts (Rural)
Index Rank for Districts (Rural)

One common thing with all the above charts – But for Nandurbar, which is already one of the twelve districts in Maharashtra currently receiving funds from the Backward Regions Grant Fund Programme (BRGF) all the districts from bottom are in the regions of Vidarbha and Marathwada !?

Vidarbha is rich in Mineral and forest health,hub of textile industry. Having said that, Vidarbha’s economy is primarily agricultural. There have been more than 200,000 farmers’ suicides in Maharashtra in a decade, of which 70% being in the 11 districts of Vidarbha region. Though rich in minerals, coal, forests and mountains, this region is always underdeveloped because of its continuous dominance by the political leadership from the other parts of the state, especially Western Maharashtra. (Source: Wikipedia)

Why suicides in Vidarbha and Marathwada?

This is mainly because of the infertility of the land, lack of ample amount of water resources, lack of new technologies and due to the negligence of the state government towards the farmers’ needs. The main crop in Vidarbha is cotton, but the farmers growing it do not get their share from the government, which leads to the high distress among them, leading to the massive suicides. Due to the absence of any responsible counseling either from the government or society there were many farmers who did not know how to survive in the changing economy.

Don’t you think its government responsibility to enlighten farmers of the conditions and consequences of the same? Ultimately these lead to financial and mental stress to farmers. Such stresses pushed many into a corner where suicide became an option for them. This also led the farmers and others in this region to make a call for a separate Vidarbha state.

Vidarbha Movement:

1853: After British conquests from Mughals and Marathas in central India, in 1853 “Nagpur Province” was formed with Nagpur as capital. It was administered by a commissioner under the central government.
1861: “Central Province” was formed by the British, with Nagpur as capital.
1903: On 1 October Berar was also placed under the administration of the commissioner of Central Provinces. It was now named as “Central Province and Berar”.
1935: Government of India Act, passed by British parliament formed provincial assembly, providing for an election. Central Province and Berar was kept a separate entity, with Nagpur as capital.
1950: When constitution of India went into effect in 1950; Central Province and Berar became Madhya Pradesh, with Nagpur as capital.
1956: “Vidarbha State” with Nagpur as capital was recommended by Fazal Ali commission (appointed in 1953) for reorganisation of states in India.
1960: On 1 May the “Vidarbha state”, recommended by Fazal Ali commission for reorganisation of states, was merged with, newly formed Maharashtra State.

Now what? Separate state?!

Hmmm, I have no knowledge to comment on that. But, read what Politician and Economist Late Dr. Shrikant Jichkar stated –

″I do this every time the demand surfaces. Those who made an issue of it have lost elections. The Shiv Sena won seats there despite being opposed to Vidarbha and the BJP lost despite being in favor of it. If Vidarbha is hived off, we will have no funds from day one to run the new State. The region’s share is burdened by a deficit and Monopoly Cotton Purchase Scheme, Employment Guarantee Scheme and such activity will immediately cease since we would not have money to pay salaries. All available resources – iron ore, surplus power generation, forestry – would not be enough. In this context, Mumbai – and by implication the rest of the State – subsidizes Vidarbha’s sustenance. Mumbai is the door to the temple of development and we cannot allow a division of the Marathi-speaking State.″

Marathwada: One of the five regions as shown in title image. Consists of 8 districts; Aurangabad division (Aurangabad, Jalna, Beed, Osmanabad) and Nanded division (Nanded, Latur, Parbhani, Hingoli). After having a look at above charts, almost all districts of this region are falling behind.

Region Small, Medium Industries(%) Large Industries(%) Per Capita Income(Rs) Special Economic Zones Foreign Direct Investment(%)
Marathwada 07 11 60,013 10 02
Vidarbha 13 14 65,502 10 08
Western Maharashtra 80 75 105,488 96 90

(Source: Wiki)

All I want to convey with this post is – Why such imbalances? We don’t want just investments/development in/of One or two cities. It will only yield positive results for those invested (Mostly richest of riches and FDIs). We are neglecting our very own relatives and children. What if you are born in a small village in Bid or Gadchiroli and your father is a poor farmer there?

One last question –

If govt. had to spend a 1000 crore fund for development, where will it invest?

A SEZ in Pune/Mumbai or for a scheme in Bid/Gadchiroli. We know the answer anyway 🙂

If you acquire land from a farmer he don’t know anything else to do. If you still think its for their own good then go ahead and please do keep in mind to educate him to do something else.

Interesting fact: Hinduism is the predominant religion in Vidarbha region. Buddhism is second most followed religion. This is unusual compared to the rest of Maharashtra and even most north Indian states where usually Islam is second most followed religion. The significant following of Buddhism is due to Neo-Buddhist movement started by Dr. B. R. Ambedkar. (Wiki)

Note: The data is from 2011 census and this analyses is done just based on 1 dataset mentioned in this post. Hence, there is definitely great chance of improvement with multiple data types. And this is just our opinion, as the weightages and segments considered may differ and definitely would be better for someone experienced in this line of field. Your comments are valuable, as this will encourage to learn more.



A look into ‘Standard of Living’ in Andhra and Telangana states at District Level

A look into ‘Standard of Living’ in Andhra and Telangana states at District Level

I recently got to know about the availability of enormous data at Census website through one of my friends – Chetan Goel.

We went ahead and downloaded the data on Households with amenities and assets at Sub-District level. Its good to see such a well maintained data which helps policy makers make wise decisions and choices, given enough background work done on this.

As an exercise or just to test our own abilities we wanted to analyze and get some insights out of this. Starting with the data of Maharashtra state and Andhra Pradesh (Since its 2011 census, it represents United state of Andhra). I want to focus more on the findings rather than the methodology, as it may vary with different perceptions and may involve many other variables and economic factors. I will discuss for the later state(s) as my house is counted in this 🙂

If you can look at the data from the link given above, it represents various amenities and assets of households (percentage) at different levels (District, Sub-district, Urban, Rural).

A broad view of the data will more or less give us an idea of the ‘standard of living’ of the people. The parameters Electricity, Sanitation, Drinking water, Quality of House, Cooking, Assets all combined (coefficients or proportions may vary) seem to be depicting the standard of living of a family. We chose these segments with equal weightage and since the data is of percentages, we didn’t normalize it. Since various amenities within each segment differs from each other in mode of living relating to corresponding life style, we assigned certain weights accordingly.

For Example – The following materials are listed under the ‘Material of wall’ segment: Grass/ Thatch/ Bamboo etc., Plastic/ Polythene, Mud/Unburnt brick, Wood, Stone not packed with mortar, Stone packed with mortar, G.I./ Metal/ Asbestos sheets, Burnt brick, Concrete. Our corresponding weights to the above materials varied from 100 to 30 (Concrete-100, to Mud & Polythene-30).

We further took the Arithmetic Mean within each segment to calculate the overall performance of the segment. Similarly, once we got the corresponding indices of each segment, we brain stormed and researched on various indices calculated – HDI, MPI. We went on to take Geometric Mean in calculating our final index with entries from 6 main segments discussed at the beginning of this post.

Our findings are below: Rank of Index – Districts (Overall)

Index Rank for Districts

No wonder, Hyderabad and Ranga reddy districts topping the chart. Hence, agitation from Andhra people after bifurcation. But, Only those 2 Telangana districts in top 10. Hence, the dream of Telangana came true!

Lets see how chart looks for Urban households of districts

Index Rank for Districts (Urban)

The urban populations of Krishna and Visakhapatnam are more than 40%. Bad to see Guntur well below, which is going to share new capital region with Krishna district. Telangana districts are at decent positions when compared to previous charts. Surprising to see Andhra districts at the bottom of the table which performed well in the previous chart (other than Srikakulam).

Main reasons could be:

  1. The urban population of these districts is less (Prakasam -19.5%, Srikakulam – 16.16%). But, Kadapa – 34%, Anantapur – 28% has fairly good urban population
  2. The life sytle of urban populations in Kadapa and Anantapur are low when compared to other districts. Why? – Depends on occupation, may be migrated to urban as working class (Please comment your views)

Lets see how chart looks for Rural households of districts

Index Rank for Districts (Rural)

Well, West Godavari, East Godavari, Krishna, Guntur, where Agricultural lands being fertile, abundant and regions having good rainfall, have topped the list.

Surprised to see Visakhapatnam which is having 47% of Urban population disappoint here which topped previous lists. Now, we realize how backward the rural regions of this district are given the overall district stands at 3 and Rural regions stand 3rd from bottom! (The urban development is completely shielding the rural backwardness) Pity!

Yes, Rural areas of Telangana state are backward. Lets hope their dreams come true with new statehood.

And, Srikakulam – Agency area, most backward district at all levels. Lets hope some good for this district.

Vizianagaram – Less heard district, very clear from above charts that some thing has to be done.

Note: The data is from 2011 census and this analyses is done just based on 1 dataset mentioned in this post. Hence, there is definitely great chance of improvement with multiple data types. And this is just our opinion, as the weightages and segments considered may differ and definitely would be better for someone experienced in this line of field. Your comments are valuable, as this will encourage us to learn more and expand our vision.



Data Analytics 101

Data Analytics 101

As the name suggests – Analysis of Data!

So simple it is right? The much simpler thing is companies making billions of dollars on this business.

Analytics is the discovery and communication of meaningful patterns in data. Especially valuable in areas rich with recorded information (health insurance, banking, insurance, logistics) analytics relies on the simultaneous application of statistics (in modeling), computer programming (transforming data) and operations research (decision making) to quantify performance. Analytics often favors data visualization to communicate insight.

Analysis of data is a process of inspecting (an overview you get by looking at data and simple tools in different data analysis software), cleaning(data imputing, missing values, outliers etc), transforming(adding new variables, deleting unnecessary variables etc) and modeling data (using different regression models) with the goal of discovering useful information, suggesting conclusions, and supporting decision making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains.

Analytics is a multi-dimensional discipline. There is extensive use of mathematics and statistics, the use of descriptive techniques and predictive models to gain valuable knowledge from data – data analysis.

The insights from data are used to recommend action or to guide decision making rooted in business context. Thus, analytics is not so much concerned with individual analyses or analysis steps, but with the entire methodology. There is a pronounced tendency to use the term analytics in business settings e.g. text analytics vs. the more generic text mining to emphasize this broader perspective. There is an increasing use of the term advanced analytics, typically used to describe the technical aspects of analytics, especially predictive modeling, machine learning techniques, and neural networks.


Marketing Optimization:

Marketing organizations use analytics to determine the outcomes of campaigns or efforts and to guide decisions for investment and consumer targeting. Demographic studies, customer segmentation, conjoint analysis and other techniques allow marketers to use large amounts of consumer purchase, survey and panel data to understand and communicate marketing strategy.

Portfolio analysis:

A bank or lending agency has a collection of accounts of varying value and risk. The accounts may differ by the social status (wealthy, middle-class, poor, etc.) of the holder, the geographical location, its net value, and many other factors. The lender must balance the return on the loan with the risk of default for each loan. The question is then how to evaluate the portfolio as a whole.

Risk Analytics, Digital Analytics etc are some of the examples where Data Analytics are extensively used in taking key decisions.

Let us walk through an example of applying data analytics in business terms.

Suppose you own an Insurance company and want to introduce a new accidental policy in the market.

Your check points would be

  • Price of the premium
  • Market segment (Region, Age group, etc)
  • Claim Amount
  • Terms and conditions etc.

You go ahead analyzing the data for number of accidents occurred, medical claims, accidental claims, age groups, etc in a particular region over past few months or years (in general years).(In most cases you don’t analyze as you need expertise in analyzing such a large data which will generally be in millions of data, you hire an analyst company to do this work for you. Here is where Data Analytics companies come in play, earning billions!)

They analyze the data and bring out the insights from it showing you the summary of number of claims, prices of premiums, revenue, costs etc.

From which you will be able to take decisions on above said check points and make a risk analysis on the entire model again and again (so that you don’t go bankrupt!).

Applications of the Data Analytics vary from different lines of businesses ranging from finance, housing loans, credit cards, insurances etc.

This is just the introduction of Data Analytics business. I will keeping adding the knowledge I get in this sector as time progresses (Am an Analyst!)

Do Comment.

Thank you,