No Child’s Play

Sports Management in India

From building morale and inculcating values of sportsmanship to being used as a tool to build diplomatic relations, sports have been central to human progress. To say that India is fascinated by sports or that cricket is a religion would be a gross understatement. However, despite the enthusiasm and the multitude of talent, the state of Indian sports today leaves a lot to be desired.

The Need

There is no dearth of talent in India. What India lacks is the system to unearth these talents and provide them with a platform to flourish. With an increasing number of global sporting events (IPL, Commonwealth Games, Indian Grand Prix, World Chess Championship) coming to India, the need for structured sports management and its marketing is being felt more than ever before. A National Skill Development Council (NSDC) Skills-Gap study in the sports sector found that by the year 2022, India would need the following –



This represents significant challenges and opportunities in the sports sector in India.

To begin with, we live in a society that encourages academic excellence, relegating sports to a lower priority. Despite its potential, sports is largely seen as a recreational activity rather than a profession. The ecosystem that surrounds sports remains largely neglected, with the focus being only on the players. Moreover, women sports continue to be ignored in India.

India’s preoccupation with cricket represents another challenge, as it has deterred the development of other sports. World champions in sports such as snooker, squash and chess go unrecognized. Indigenous games such as kabbadi and kho-kho have taken a backseat. Few opportunities are available for training, competitions and outreach for these games.

As far as resources are concerned, there are glaring gaps in almost every field of sports management in India. There is a conspicuous absence of the most basic infrastructure. According to the Comprehensive Sports Policy drafted by the Ministry of Sports and Youth Affairs in 2007: of the 770 million people below the age of 35 in India, only 50 million have access to organized games and sports facilities. The sports sector is largely under the purview of the public sector. Although private sector’s contribution has been growing, it is still small and largely unorganized. A combination of slow bureaucratic approach, organizational delays and poor maintenance has led to sub-optimal results with regards to new initiatives. Other concerns include the limited availability of qualified teachers and coaches, few opportunities for sports research, and the low level of coordination between various government bodies which are responsible for promoting sports.


The ever-increasing opportunities in sports sector present a platform for aspiring sportsmen and individuals associated with sports and allied services. The sports sector is becoming an increasingly important strategic business unit for many corporate houses in India. There are several untapped avenues that can be used to promote interest in sports, and generate employment in the process.

1. Global mega events in India

Examples: Indian Premier League, World Cups, Asian Games, Commonwealth Games, Indian Grand Prix

Major responsibilities at these events are often outsourced due to the lack of competent local talent. Although they happen in India, a major part of the organizing team comes from abroad. In spite of the outsourcing, local employment generation does take place. Commonwealth Games 2010 resulted in an overall economic impact of US $4,940 million on India’s GDP during a period of four years and expectedly created employment opportunities close to 24.7 lakh. The Indian Grand Prix saw an inflow of US $100 million into the Indian economy through the travel and hospitality industries. The Indian Premier League is directly and indirectly responsible for the employment of more than 15,000 people.

2. Domestic Competitions

Examples: I-League, National A, Ranji Trophy, Franchisee tournaments

Professional domestic competitions provide a platform for talent to be recognized. They help build infrastructure at the grassroots level, and enable non-sportspersons to gain exposure in the professional organization of sporting events.

3. Facilitating global sporting events

Examples: EPL, Tennis Grand Slams, NBA, Tour de France

A substantial segment of the Indian audience is interested in several sporting events that happen across the globe. Local clubs and sports centers could utilize these events to increase awareness among the masses. It would also help them in developing a consumer base and a fan following that is essential for their survival. Support for broadcast and commentary of these events would help these sports in India.

Changing Scenario

Sports is slowly evolving both on and off the field and is now gathering momentum, inching towards becoming an integral part of the common man’s life. The funding for sports in India has increased from INR 270 million in the Sixth Five Year Plan (1980 – 1985) to more than INR 46 billion in the Eleventh Five Year Plan (2007 – 2012).


The government has launched several schemes under the Tenth and Eleventh Five Year Plans that focus on uplifting the sports infrastructure, training and coaching facilities at the basic grass-root level as well as developing world class facilities.

Various institutes offering education in professional sports management have come up in the last decade. Sports is now an important strategic business unit in corporate, with many of them actively participating in the promotion of sports. India is now a regular host to some of the major global sporting events including the Chennai Open (ATP World Tour), Indian Open Super Series (Badminton), Indian Grand Prix (Formula 1) and various sports leagues (cricket, football, hockey, badminton, motor sports, golf).


A systematic and structured development of an environment conducive to the flourishing of sports is imperative for the long-term well-being of the country. There is immense potential for employment by developing professional sports management. There is also immense potential for revenues, both for the government and the private sector. Beyond contributing to India’s GDP, developing sports will also positively influence society by creating healthy, fit and productive citizens.

Sumit is a PGP1 student at IIM Ahmedabad and a member of Consult Club. He graduated from IIT Madras in 2013 with a Dual Degree (BTech + MTech) in Mechanical Engineering. He is interested in technology, business development and sports management. 


Much ado about Sachets

In the FMCG industry, packaging of products has always been the most important factor driving consumer behaviour and fuelling marketing initiatives. A change in packaging technology always brings about a paradigm change in consumer patterns. Tetra Pak, a Swedish company introduced a flexible packaging product in the 1950s and forever changed the packaging of liquid consumables.

The next breakthrough in flexible-packaging occurred in 1983. C.K. Ranganathan, a Madras based entrepreneur started selling shampoo in small packets (later called ‘sachet’, meaning small bag in French), instead of bottles, to make it affordable to the poor. These sachets were small, flexible, and inexpensive. Ranganathan’s firm, now known as Cavin Kare, started on a shoestring investment of $300 became the market leader in shampoo in the Indian rural market by the early 1990s.

There was a fortune to be explored at the bottom of the pyramid. Even today, around 4 billion of the global population of 7 billion are living on a budget of less than $2 per day. These potential consumers are hungry to improve the quality of their lives by using new technology. With this in view, MNCs like Unilever and Johnson & Johnson entered the sachet market through India in the mid-1990s. The advent of the new millennium already saw 60% of shampoo sales in India in the form of sachets (see Exhibit 1 for complete evolution). Early in the 2000s, P&G, the largest consumer goods company globally started selling their flagship shampoo brand – Pantene in sachets in South-east Asia and India. The sachet market was no longer constrained to India. It was a huge opportunity for all companies to grow their businesses across categories in developing markets. Industry bigwigs like Unilever, P&G, Nestle, Kraft, ITC, L’Oreal and others started selling everything from food & beverages to laundry products in the form of sachets.

Exhibit 1: Evolution of Sachets in the Hair Care Market Segment

Himanshu FMCG 1

This large-scale explosion of sachets was great news for consumers. The minimum price payable for a premium product like Olay had gone down from $10 for a tube to Rs.10 for a sachet. Sachets had opened a new plethora of products for consumers worldwide. The developing markets witnessed an unprecedented growth in their demand for consumer goods in the new millennium. Nearly 90% of this growth was driven by demand for sachets (Exhibit 2 shows the approximate number of sachet users in India in the 2000s).

Himanshu FMCG 2

(Data as per IRI’s 2011 FMCG review)

For manufacturing companies, the picture was not so rosy. For small companies like Cavin Kare, which had introduced the world to the concept of sachet, it was now difficult to compete with MNCs like Unilever and P&G. They could not leverage scale across products like the MNCs. While Cavin Kare cannot manage more than 5 variants in their sachet SKUs (Stock Keeping Units), Unilever has more than 100 sachet SKU variants. As a result of fierce competition, MNCs emerged on top with growing market shares (See Exhibit 3 for total sachet market share split in India).

Himanshu FMCG 3

(Data as per IRI’s 2011 FMCG review)

For the conglomerates like Unilever and P&G, sales volumes had increased multifold. However, this had come at the cost of diminishing profits. Large scale proliferation of sachets had led to price wars in almost every market category. Returning to the shampoo industry example, the typical gross margin for any shampoo making company is around 70% – 80% for bottles. This number comes down to almost 20% – 30% for sachets. Therefore, the increase in profits is not proportional to the increase in sales for any manufacturer. Further, price wars in almost every category have led to companies selling their product at a loss in order to grow market share and maintain marketing momentum. When P&G launched the Rs.3 Pantene sachet, Unilever immediately slashed the price of their Clear sachet to Re.1. Cavin Kare responded by launching a 50 paise Chik shampoo sachet. Consequently, profit margins keep going down with increase in sales. Further, manufacturing costs also have risen with companies vying for higher service levels and increased manufacturing capacity. Almost every company today faces the higher profitability vs. greater market share conundrum.

The cost pressure has led to new capabilities in supply chain excellence for companies to reduce costs. Relatively new concepts, such as ‘Shelf Back Design’, may be the path forward. The idea is to design and operate the supply chain “from the shelf back”, delivering whatever it takes to win the consumer (see Exhibit 4 for an example). However, this design requires a lot of flexibility and responsiveness, which may limit the cost reduction potential of the design.

Himanshu FMCG 4

Overall, sachets have been instrumental in bringing about 2 key changes in the consumer goods industry. Consumer base has increased multifold on account of the packaging innovation while manufacturing firms been forced to look out for more innovative supply chain solutions to compete for cost. Technological and operational improvements at every link of the supply chain is now the need of the hour to sustain profitability.

Himanshu Pandey is a PGP1 student at IIM Ahmedabad, and a member of the Consult Club. Prior to joining IIM-A, he worked with Procter & Gamble in the Supply Chain function as a capacity planner and project manager. He holds a Bachelors degree in Aerospace Engineering from IIT Bombay.

Non-Profit Organizations, Telemarketers, and Accountability

Over the past few years, I had been receiving calls from various Non-Profit Organizations (NPOs) requesting for donations to help their cause. Feeling a sense of compassion, I would gladly write a cheque and be overwhelmed by the thought of about how I had contributed towards the well-being of humankind. However, after writing a cheque to a particular NPO, I started receiving phone calls every week from the same organization. Assuming that the NPO knew that I was not a billionaire, I began to wonder – do they have the resources to make such redundant efforts?

Economies of Scale: An illustration

The money that these NPOs need to carry out activities comes primarily through either government grants or household and corporate donations. I will focus only on household donations in this article.

 If an NPO wishes to solicit a credible donation amount it needs to make a large number of telephone calls. For that, it needs to incur infrastructural costs, work-force costs, training costs and acquire the necessary phones and related equipment. Suppose an NPO manages to make 10,000 calls a day garnering Rs. 50,000 after a mammoth effort. What if someone else could do this with ease? Professional Telemarketer Fundraisers – Bingo!

A telemarketing company (TC) can make use of economies of scale, professional staff, experience and a huge infrastructure to approach donors efficiently. Of course, it would not be affiliated with a single NPO: Affiliation with multiple NPOs would result in economies of scale. If the TC manages to make 50,000 phone calls a day and raise Rs. 250,000, it might take a cut of Rs. 150,000 to cover its operating expenses and earn profit for its shareholders. A maximum of Rs. 100,000 (40% of the donated amount) goes to the NPOs.

NPOs get more funds and the TC’s business makes hay. Everyone is happy – Really? What about the poor donor who was naive in thinking that 70-80% of his contribution would go in aiding the actual cause? Feeling deceived, cheated, angry or foolish?

If a smart donor dared to ask the telemarketer about the amount of contribution that will eventually reach the charity, the telemarketer would smartly tell the donor exactly what he needs to hear: 80-90% of the contribution amount.

The Industry

Though telemarketing companies have been in existence since the 1970s, they started flourishing over the last decade and a half due to the telecom revolution in India, a wide range of products that people do not need to buy, and a huge growth in the number of new NPOs. A report published in March 2012 by the Central Statistic Office (CSO) shows that the number of NPO registrations increased from 5.5 lakhs during 1980s to 11.22 lakhs in 1990s and 11.35 lakhs during 2000s. A number of these NPOs tie up with TCs for fundraising activities. The TCs usually charge a substantial percentage of the donated funds in lieu of the services provided. Owing to the booming growth of NPOs in India, the scenario seems just ripe for these companies to start exploiting unaware, emotional donors. The mushrooming of TCs catering to many sectors and their excessive phone calls to customers led TRAI to implement a ‘Do Not Disturb’ registry of phone subscribers who cannot be approached by telemarketers in the absence of permission from the subscriber.

Non-Profit Accountability

NPOs in India usually overspend on overheads. A 2006-07 government report revealed that out of $2.15 billion in foreign aid received, around $680 million was used for organizational expenses. Also, the credibility of NPOs, particularly those which allow its patrons to avail tax deductions, has come under severe public scrutiny. There have been allegations of money laundering and fund-misappropriation against some well-known trusts. Lack of transparency in public disclosure of the accounts, and non-standard accounting practices have allowed NPOs to be a part of such malpractices. The government has been able to probe and take action against just a few hundred trusts out of millions that exist.


  • The donors get irked due to repeated calls from numerous telemarketers representing various NPOs. This problem is accentuated by mismanagement of records while outsourcing to telemarketing companies and absence of due diligence by the TCs.
  • Because of misappropriation of funds, the compassionate donors feel betrayed and lose motivation to contribute to genuine NPOs.
  • Lastly, because of misappropriation of funds by NPOs and money laundering, the government loses tax revenue.


Greater regulatory oversight and public disclosure of flow of assets in this sector is required. Policy changes should be aimed at achieving the same:

  • The TC should be required to disclose its name and the contractual agreement with the NPO to the prospective donor.
  • Feedback should be taken from the patron on the frequency of donations he wishes to make in a year and this feedback should be strictly taken into account before making repeated calls.
  • Ideally, no minimum contribution amount should be defined by the NPOs. A person should be free to make a contribution of any amount to any cause he wishes.
  • NPOs’ should be forced to disclose their accounts to the public using standard accounting practices, and their compensation to TCs should be unambiguously mentioned in their communication.

“Taru Agrawal is a PGP1 student at IIM Ahmedabad and a member of the Consult Club. He is a graduate from IIT Kanpur in Mechanical Engineering, and worked at Deutsche Bank before joining IIM Ahmedabad.”

Syria, Rupee, and Crude Imports

As global oil prices move higher owing to geo-political uncertainties in the Middle East and the rupee continues to weaken, the Indian economy faces gloomy prospects. The impact of the weaker INR and higher oil prices will, on the whole, have negative implications for India’s fiscal balance and inflation. Crude oil price in INR terms is currently at an all-time. Brent crude is getting closer to INR 8,000/barrel and is about 40% costlier than at the end of May, 2013. Accordingly, fiscal concerns are coming back. Under-recoveries have once again gone up in recent months despite continued, albeit small, upward revisions in domestic oil prices. Diesel under-recoveries will likely go up to INR 12/litre by end-August from a low of INR 3.8/litre about three months back. The crisis in the Middle East, initiated by sanctions on Iran and escalated by a war like situation in Syria, is creating uncertainty in global crude supplies. As a result, crude oil prices are likely to rise above the benchmark $120. With India already challenged by the effort to substitute Iranian crude post the embargo, this development is likely to compound India’s energy woes.

Fig. International Crude Oil prices (left)   versus   Crude Oil Prices in INR terms (right); Source: Barclays Oil & Gas

Fig. International Crude Oil prices (left) versus Crude Oil Prices in INR terms (right); Source: Barclays Oil & Gas

Syrian Crisis

The increasing likelihood of some form of US led military action in Syria is compounding concerns about the stability of the world’s key oil-producing region and this is likely to exert upward pressure on prices until the nature of the possible military intervention becomes apparent. But the bigger risk for the oil market is the potential for the Syrian conflict to spread to neighboring producing countries and endanger regional output. Iraq, currently OPEC’s second largest producer, has already seen its security situation significantly deteriorate because of Syria. Violence is running at the highest level in five years because of a renewed round of bombings and shootings. Sanctions on Iran and the recent labor and payment problems in Libya have brought OPEC disruptions to almost 2 million barrels per day (mbd), adding to the 0.8 mbd in unplanned shortages in non-OPEC countries.  While Libyan output is trickling through, and improvements could be expected in Iraq with the start-up of new fields; the return of supplies is likely to be staggered with a high possibility of a relapse to low levels in Libya, Nigeria, Iraq and South Sudan. Thus, with geopolitical tension and physical shortages on the rise, crude oil production may be at an inflection point.

Weakening Rupee

Since crude is the biggest component of India’s import bill, a weak rupee is bad for the economy. Oil companies, which pay for crude in dollars, will have to shell our more rupees for importing oil. This will increase India’s current account deficit. The weakening of the rupee means that there is little likelihood of a respite from high fuel prices. The consolation lies with the fact that since global commodity prices have been falling, there is no imminent threat of a price hike in commodities either. However, given the sensitivity of India’s current account to higher oil prices, if oil averages were to remain around US$120/barrel through rest of the fiscal year, it can potentially pose a 30 basis points hike in India’s current account deficit. Softer domestic demand reflecting weak growth momentum and government initiatives to contain the current account gap also remain important considerations in this context.

 Looking Ahead

 With an appreciation of the rupee unlikely in the short to medium term, India’s crude import, accounting for over 75% of India’s overall import bill, is likely to increase India’s already stretched Current Account Deficit. In addition, prevailing uncertainties in the Middle East, especially Syria, are likely to push the international crude prices over $120 in the near term. This will compound India’s deficit woes.  With India already struggling to substitute Iranian crude, a further drop in supplies from existing sources may severely expand India’s energy deficit. This is bound to have a cascading effect on Indian industry with utilities and infrastructure impacted first, followed by other sectors. These considerations, in addition to the incumbent government’s election largess in the form of the Food Security Bill, are likely to prompt credit agencies to re-evaluate India’s sovereign credit rating, which may have an adverse impact on institutional inflows and credit availability. It’s clear that India’s currency and energy security concerns need to be mitigated, by prompt policy corrections, and by the development of alternate supply markets to source India’s energy requirements.

Debabrata Ghosh is a PGP1 student at IIM Ahmedabad and a member of the Consult Club. He is a graduate from BITS Pilani in Chemical Engineering.