Good morning! Move over Dancing with the Stars, it’s time for ‘Dancing with the Executives’. The Wall Street Journal reports that executives of western companies often find themselves in the middle of dance routines at annual company events in China. Dancing and singing are just some of the ways in which they’re expected to break the ice between C-suite executives and the workforce. Since Chinese corporate life is extremely regimented and hierarchical, these events are a perfect opportunity to let loose. Tbh, western executives dancing to China’s isn’t exactly new.

🎧 Are we ready for AI-driven Lok Sabha elections? Also in today’s edition: American CEOs are busting some moves in China. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts. 

Adarsh Singh and Roshni Nair also contributed to today’s edition.

The Market Signal 

Stocks & Economy: As expected, the Reserve Bank of India left interest rates unchanged while reiterating that it will ease the restrictive policy only when it is convinced that the fall in inflation is durable, the test of which will be it staying near 4%. Governor Shaktikanta Das said food inflation shocks were still a risk and sudden spikes could unmoor expectations. 

The policy statement also flagged the rising global public debt to GDP ratio, which is set to reach 100% by 2030, as a concern. Debt levels in advanced countries are  much higher  than those in emerging economies.

China, meanwhile, reported that retail prices fell the most in over 14 years in January, raising the risk of deflation despite reluctant policy measures from the government. Falling prices prompt consumers to postpone purchases, accelerating the deflationary spiral. 

Asian stocks started mixed. The GIFT Nifty indicates a weak start for Indian equities.

MEDIA

Starry Eyed… Cement Bags?

This year, as the cement industry readies for an 8% jump in demand, two market leaders are bringing out the movie heroes. 

Sunil Malhotra and Rahul Mehra are facing off again. Shree Cement has roped in Sunny Deol as brand endorser. But market leader UltraTech is shifting the narrative, using Shah Rukh Khan to pitch itself as a crucial character in India’s growth story as demand for cement shifts from homeowners to commercial buyers. 

Old playbook: Strongmen for strong cement isn’t new. In the 1980s, when no one cared about cement brand names, upstart Gujarat Ambuja mixed the country’s technically strongest cement. As founder Narrotam Sekhsaria writes in The Ambuja Story, veteran ad man Ravi Gupta sold the cement like cool consumer brands (think: Thums Up/Parle). And so, the Ambuja Giant was born.

Today, this is Advertising 101. All ‘boring’ goods—from rebars to PVC pipes to ceramic tiles—have big movie stars hawking them for big money. 

CONSUMER

Revenge Is Off The Table

Revenge shopping made sales of fancy things boom during the pandemic. But that phase is over. Growth in sales of fashion, makeup, and fast-food restaurants has fallen by half to 9% in India, and the slowdown will persist this year.  

Budget-priced goods are the hardest hit and even festive season sales of the December quarter couldn’t lift demand. 

Fool’s gold: Maybe it was all those EMIs piling up. Indians bought high-priced goods on credit in record numbers last year. Credit card debt grew 32.6% to a six-year high.

Nest egg: Banks have a different problem—missing savings accounts. Customers are moving their savings from bank deposits to mutual funds that offer higher returns than a savings account.

Luxe life: As expected, rich Indians remain unaffected. Luxury fashion and cars did brisk sales in 2023, even as international brands make a beeline for new hotspots such as Bengaluru. 

POLITICS

Turf Battle Erupts On Election Eve

It is a rare event when those in power themselves take to the streets. 

Chalo Delhi: Kerala chief minister Pinarayi Vijayan and colleagues protested at Delhi’s Jantar Mantar on Thursday. Arvind Kejriwal and Bhagwant Mann, chief ministers of Delhi and Punjab, respectively, also joined them. They followed Karnataka chief minister Siddaramaiah, who led his team to protest at the same venue on Wednesday. Members of Parliament and ministers from Tamil Nadu also joined the agitation. The leaders allege they are suffering “financial injustice” at the hands of the central government, which is deliberately choking off funds to the southern states. 

The formula wizard: The Centre recently appointed economist Arvind Panagariya as the chairman of the 16th Financial Commission, which will devise a formula to share the country’s tax revenues between the states and Centre. The southern states are mulling a joint forum to present their case to it. 

They say the Centre is jumping over constitutional fences and principles of federalism to encroach on their turf.

The Signal

The Centre and states have been trading barbs over sharing financial resources ever since the former began restricting untied funds and tied money to milestones. Although the issue is related to resources, it is serving as a common grouse for opposition parties in the south to coalesce weeks ahead of the general elections. Regional and financial discrimination is a relatively neutral weapon than caste cohort-based rights espoused by Congress leader Rahul Gandhi. 

TECH

Copying The Copycats

The Information has a trifecta of exclusives about leaders catching up with followers.

One: Apple is building foldable iPhone prototypes. Samsung—which Apple once accused of stealing its designs—Google, etc. already have such devices. Apple’s designers wanted thinner models with outward-facing displays when shut, an engineering obstacle. So foldable iPads may come first, since those aren’t subject to stringent drop tests.

Two: OpenAI, whose ChatGPT triggered an AI arms race, is developing AI agents that execute complex tasks by accessing consumer devices. Think Windows Remote Assistance on steroids, something that surpasses Microsoft’s or Google’s AI-powered enterprise apps.

Three: Amazon is rethinking fees, commissions, and intercontinental shipping to compete with Temu and Shein, which are nipping at its heels in the US.

Another biggie: WIRED reports that WhatsApp is working on interoperability with rivals such as iMessage and Signal. Caveat: they should sync with Meta’s/WhatsApp’s terms, encryption protocol, and servers.

AUTO

Hydrogen Crashes The Party

In case this bears repeating: it’s not a great time for the electric vehicles (EV) market, which, apart from cooling demand and investments, is grappling with a nickel glut and the emergence of lithium-alternative batteries. Now, it’s hydrogen’s turn to pop its collar.

Hydrogen has been hot for decades, but costs involved in scaling up infrastructure kept it from being adopted full throttle as a clean vehicle fuel. According to Axios, that may change after the Biden administration announced tax credits and other incentives last year to encourage production in the US.

Because hydrogen offers better driving range than EVs and refuelling is quicker than recharging, Honda, GM, Nikola, Hyundai, and Toyota are bringing fuel cell-powered trucks and crossovers to market. Volvo and Daimler have joined hands for a hydrogen fuel venture. And engine manufacturer Cummins is making diesel-alternative hydrogen combustion engines.

FYI

Guilty but not charged: A federal investigation found that US President Joe Biden willfully kept classified documents at his home and revealed their contents to his ghostwriter. He will not be charged, however. 

No go: India will scrap the Free Movement Regime with Myanmar that allows tribes within 16 km on either side of the border to move freely without visa. India will also build a 1,643-km long wall along the border across four states.

Didn’t leave a choice: The Reserve Bank of India has said that the drastic action against Paytm followed “persistent non-compliance” by the company despite getting enough chances. 

Boss, DND: Australians will soon get the right to disconnect or the choice to ignore work emails and phone calls after office hours. It follows France, Belgium and Spain in stopping unreasonable contact.

Sell-off: British American Tobacco, 30% owner of Indian cigarette maker ITC will divest some of its stake in the company.

Big Tech backing: Bengaluru-based AI startup Sarvam, which is building models in Indian languages, is partnering with Microsoft to develop voice-based generative applications on its cloud.    

In the black: Food and ultra-fast grocery delivery company Zomato posted a profit of ₹138 crore (~$16.6 million) in the September-December quarter compared with a loss of ₹347 crore in the same period of 2022.  

THE DAILY DIGIT

$54 trillion

The national debt of the US by 2034, as projected by the country’s Congressional Budget Office. (The New York Times)

FWIW

Marketing or truth?: That’s what folks online were wondering when it was ‘revealed’ that cosmetics brand CeraVe is actually owned by Michael Cera. Pictures of the actor carrying giant bags of CeraVe products around New York City went viral. Influencers started speculating about it and soon enough, Cera was being asked questions about it. After all, Cera and CeraVe just make perfect sense, right? Turns out, the marketing gurus at CeraVe thought the same and turned it into an elaborate marketing campaign for a big Super Bowl reveal/commercial. Don’t know about you, but the campaign gives major Arrested Development vibes. 

Vocab gurus: Girl math, quiet quitting, mob wife aesthetic… these are just some of the terms that have crossed into common parlance from TikTok. Their success has spawned a whole genre of internet videos where people just try to coin a new term that’ll cross over. Because social media clout isn't just about follower count anymore. Naturally, not everyone’s a fan of this, and parody accounts have popped up too. Some, like this piece, fundamentally see it as a shift in culture from its top-down former self to a more democratic self. Is it good though? We’ll let you guys decide.  

Wrong order: E-commerce was supposed to make life easier. And it has… to a certain extent. But it has also birthed newer problems, like getting orders wrong or worse, getting counterfeit goods. Many frustrated customers have posted about their misery, airing grievances and lashing out at the companies. Companies on their part are equally confused and have labelled such instances of ‘return fraud’, where buyers return fake/wrong items with the express intention of fraud. Plus, websites like DHGate that sell counterfeit luxury goods have also added to the problem. Another reason why we can't have good things in life.