Tuesday, November 15, 2016

The customs nightmare for gadget lovers - a guide on what not to do

Like most gadget lovers, I spend a fair amount of money ordering from international sites and sellers. There will always be something that I cannot find on an Indian site - it could be as small as a replacement cable for my earphones - or something as big as the new Pebble smartwatch that I have been eyeing. Or sometimes, even if I find them on Indian sites, they are at eyewatering premiums over the same product on say, Amazon USA.

To a large extent, my international purchases have been restricted to eBay sellers, or Amazon. Recently however, I was tempted by the newly launched Beddi Alarm Clock, a $99 smart alarm clock that raised Kickstarter backing and also got a lot of favorable reviews.

I ordered it direct from Witti Design, the creators, who were offering international shipping at $20, making the total order value $120(approximately Rs. 7500). It was shipped through DHL, who delayed delivery by a week, citing hold up at customs. Finally, they called me and asked me to send an invoice copy for the product. I did not have an invoice - instead I sent a screen grab of the order page on the Witti Design page. 2 days later the product arrived at my door with an invoice of charges slapped by DHL, attached below. For those who do not have the patience to click, the various duties/octroi/handling charge all amount to Rs.4223. If you add back to that the $20 shipping fee, I would have effectively paid nearly 90% of the product value as shipping, import etc - making it  a disastrously impractical purchase. I love new gadgets and iOT but I would balk a little at owning an alarm clock costing Rs. 12,000.

Here are some of the problems that I faced, and what I have learnt:

1) In my basic understanding, customs duty would have been levied at a maximum of 30% for an electronic product on the entire invoice+shipping value, and I would have expected a customs duty of approximately Rs.2200. I verified this using the horrendously complicated import duty calculator on the Indian Customs Website. Instead, customs has been charged at Rs.2917. The only explanation I can think of for this, is that I have been penalised for absence of an invoice, and the Customs took the assessable value, as being higher than the invoice value (approximately Rs.12,000)

In order to understand the customs duty better, I asked DHL for a proof of payment and they sent me this document. All it proves that in the cattle truck of customs clearance, no one would have really bothered about getting the exact value of one item right.

Learning 1: When buying directly from a seller abroad, especially a startup, insist on getting the invoice copy and remind them that the courier/customs need to receive a copy of it too. In this case, I blame DHL for even accepting the consignment sans an invoice. They are the 'experts' who should have known better, but probably did not care about just another small value parcel.

2) You would notice the handling and warehousing charge that DHL has levied. Both these were disputed by me. Importing a product to India involves clearing through customs, and so this should have been quoted as part of the original fee. If the handling charge arose as a result of their mistake in not obtaining an invoice copy, then I should not be asked to pay it. Warehousing charges, though nominal, were again not due to my error but the seller/ courier failure to arrange the proper papers.

Learning 2: The courier/clearing agent is your choice between the proverbial devil and the deep blue sea. 

For maximum peace of mind, you should import only through Amazon, who will quote to you upfront an 'Import Deposit Fee' - an extortionate amount that corresponds to anything between 30-40% of invoice value of the product, and offer you the option to purchase at an unfavorable exchange rate (Rs.70 was the going conversion rate against the dollar, when I checked last week). Amazon guarantees that you will not be charged extra, however, that's a small consolation when you have paid the maximum that you could. Amazon promises to refund any amount that is not used, but in 10 years I have never got a refund. I would love to hear if anyone has.

On the other hand, you can ship through regular post (postal charges are not added to Customs Duty) but you will have to stand in queue and clear your own product at Customs. Waste of time and temper flares are the chief threat here and both are guaranteed at Customs. On the other hand, you get to present your case personally and you can never under-estimate face to face interaction and negotiation in India. I have personally been allowed to walk with nominal duty on a television set after pleading my case. If I had been present to explain my alarm clock, I am sure that the customs duty would be lower.

The courier will save your time and is supposed to expertly handle customs - in this case, it did not happen and I was left with a huge price to pay. I would advise that both devil and deep blue sea are at least predictable in their outcomes and depending on your time and budget, you should choose one or the other. Working directly with the courier can become a nightmare of logistical red tape - more on that in this blog.

3) I conveniently forgot it when ordering, but octroi is payeable if Mumbai is the destination for the product! Though Mumbai is the port of entry, octroi would not have been charged if I had a delivery address in Thane or Vashi. 

Learning 3 : One more reason to look forward to the unified GST which will hopefully lead to abolition of octroi, forever. Meanwhile, you still pay a price to be a citizen of Mumbai (or a few other cities). 

Meanwhile, if you find a local site which is offering your product, compare the price they are offering with what you will pay after customs and octroi (Don't compare with the US price!). Then decide what makes better economic sense.

Also, unfortunately, even in this era of liberalisation it still makes better sense to do what earlier generations of Indians did - ship to a relative in the USA and wait for them to bring the product to India. Or, wait till you travel yourself. It will save you a lot of time and money. In a recent survey of airport authorities, I was told that Customs department focusses passenger surveillance on detecting and stopping gold, drugs and currency - or other criminal acts. They derive more revenue from their Cargo operations and focus their attention there. Cargo is unfortunately where your precious imported products land up, straight into the Customs net.

4) At the same time, I had ordered a small value item off eBay from an international seller. It was shipped free of charge through Hong Kong Post and delivered to me by the postman within a week. The seller had marked the invoice value as $20 and indicated the product as a gift, so no customs was charged. 

Learning 4 : There are legitimate workarounds and some sellers understand them. It's good to learn what these are and leverage them to your advantage. For example, the cost of shipping through post is not added to your customs duty, unlike courier charges. It also pays to have an expert friend who can help you to specify which category your goods should be imported/declared as. Goods declared under certain categories attract lower customs duty than others and the range is as wide as 10-110%

5) After a lot of time spent arguing with DHL and trying to understand the charges, I did what I should have done initially - I reached out to my seller, Witti Design. When I explained the issue to them, they did something unprecedented and heartwarming. They offered to bear half of the costs, without any further questions. Within 24 hours, the additional amount was deposited in my PayPal account.

Learning 5: It pays to deal directly with small sellers and companies who care about individual customers and whom you can reach out to on a one to one basis. In fact, anytime when you ship internationally, you should reach out to the seller BEFORE purchase and clarify shipping and customs charges. Having a rapport and relationship with the seller can ease a lot of heartache.

6) You should not think that my ordeal ended with the fees. I tried unsuccessfully to visit the DHL office to pay their fees and collect my package. Only to be told that they had instructions from the seller to only deliver at home. I asked WittiDesign to send an authorisation letter to DHL so I could collect my parcel. They sent me a 'yes it's ok' email and I took that to DHL only to be told that they need a certain format to be filled. They pointed out that the name of the company and the name of the shipper did not match and rejected the email. I had to 'allow' them to deliver at home.

Learning 6: I was tempted to say, do not ship with DHL. They suck!!!
Jokes apart, it's a toss up between dealing with customs yourself and dealing with a bureaucratic, rigid, rule-bound courier. I think DHL riled me up just as much as the Customs Office would have and probably more - I expect government officials to throw the book at me and I expect a courier company to be more customer friendly. Just remember, that as an importer, it is your responsibility to facilitate clearing of your goods, whether you are an individual or a company. Either ways, you pay - in money or in time and effort that you put in. If you want to save the Amazon tax, and save paying huge import duties, your only way is to familiarise yourself with the rules and see how you can best protect your interest.

I was discussing this with some of my uncles and family elders and one of them gave me possibly the best advise that I can end this article with, 'Don't buy abroad", one of my uncles said. "It's the age to Make in India. Find a local substitute'

Appropriate advice in an age when trade agreements are ending, borders are closing and imports may get more and more expensive.

By the way, the Beddi Alarm clock is doing fabulous and I plan to do a review about it soon, so stay tuned!

Tuesday, July 19, 2016

Throwback Tuesday - Gadgets from the 70's and '80's

Unless you were born in the 70's or earlier, what I'm speaking about may be gibberish to you...so here goes. Put your hand up if you have ever;

1) Extracted an entangled cassette from a player and repaired it by splicing. I have redeemed several precious tapes by cutting and sticking them with cellotape, in a pre-digital era when there were no music backups. 

Scotch Tape was a double meaning term in those days so you needed to specify if you were reffering to this;

Incidentally, Instructables has this neat tutorial on how to repair a cassette.

2) Rented LPs (Vinyl records) from a local library.

We used to have a large vinyl collection at home, including a number of Western Classical concerts.

We even had this (A reel to tape recorder, precursor of the digital tape recorders)

3) Played an arcade game OR a text based adventure game on a VGA monitor (Pre Color monitor era)

4) Been stranded with a corrupted floppy drive and lost data

5) Typed your school or college project on Word Perfect or Word Star (so you remember a limited set of DOS commands). 

6) Your biggest prize possession was a video game - like these - if you didn't have someone to get you a Nintendo from abroad.

7) Your second biggest prize possession was a CD Discman (a definite upgrade from a walkman)

8) You have rented and watched camera prints of movies on VHS (and you had a VHS player at home) 

9) Tandy, Commodore and ZX Spectrum were the objects of aspiration. Radio Shack and Sinclair Computers were brands that were familiar to you if you used PCs.

10) You were part of a parental debate as to whether to buy an Uptron or a BPL Color television.

11) Once you bought the television, this was what you saw on it through most of the day;

But you looked forward to seeing a better sight; 

(Gitanjali Iyer, one of the most polished newsreaders of the times)

12) You have booked an STD or ISD call instead of dialling directly

Share your fond (and frustrating!) gadget memories from the 70's and 80's

Thursday, June 16, 2016

The Offline Internet

Hike, India’s homegrown answer to the ubiquitous Whatsapp Messenger, launched Hike Direct in end 2015. Touted by CEO Kavin Mittal as an ‘incredibly powerful’ breakthrough technology, Hike Direct allows two users of the app who are within a 100 metre radius to chat and share pictures, stickers and files at high speed without using their data connection. Hike Direct uses Wi-Di technology that bypasses the slower Bluetooth connections, allowing data transfer speeds of upto 40 Mbps. Effectively, you can share a 100 MB file with a friend in 10 seconds, and neither of you will use a paisa of your data plan.

However, Hike is not the first mover in the offline game. That crown goes to ShareIt, which has consistently ranked amongst the Top 5 apps in the India Google Play Store since the past few years. ShareIt allows users to transfer files, movies, music and even apps to each other without a data connection, phone to phone. And like Hike, it’s completely free to use.

Both of these apps are examples of what I like to call the Offline Internet, which is a real phenomenon to reckon with in the Indian market. The Offline Internet is a network of mobiles that are a repository of content – games, movies, music, pictures – which gets shared between users at minimal data cost. The Offline Internet represents the way that the Next Billion mobile users are discovering, sharing and consuming content, bypassing restrictive data plans.

It’s not hard to understand why the offline internet exists. Put yourself in the shoes of the young, enterprising consumer who has just purchased his/her first smartphone. What is the first thing you need when you buy a new phone? Apps, music, games, movies – all the stuff that makes your device a personal entertainment system. How do you get it? Do you spend further on expensive data recharges to download everything or stream it off the net? Do you make the journey to a shady ‘download store’ to fill up your SD Card? Do you fiddle with a PC and cables? Or do you just ask your cool friend who has everything on his phone already, to share it with you – and in the bargain, help set up your phone with the latest apps that you need to have? Obviously, that’s the easiest and fastest way to get up and running.

The reluctance to use up data, so alien to the affluent always-connected Indian, is real and palpable, even amongst the allegedly internet-addicted Indian youth. The student will switch off data during classes and switch it on when travelling back home. Call centre employees switch off their data at work (where mobile phones are often forbidden). Many people paradoxically switch off data during travel, or at times in the day when they simply do not want to surf. Even Whatsapp and Facebook can wait till it’s the right time to check them again.

India ranks amongst the countries with lowest cost of mobile usage in the world:

(Source : World Bank Blog

However, it’s a different story when we look at the cost of data vs income. The Broadband Commission for Digital Development, sought that by 2015, broadband services should be available in all nations at 5% of Monthly Average Income, or lower, in order to be affordable. 

However, India, like many other nations with a large number of poor people, faces challenges in achieving this target.

(Source : Measuring The Information Society Report, 2015 by International Telecommunications Union)

In a post entitled The Data Trap, the JANA blog points out that at India’s hourly minimum wage of 20 cents/Rs.13,  it would take 17 hours of labor to pay for 500 MB of data. Hopefully, mobile data prices are continuously falling (and minimum wages are rising). Still, these two sources point to the extent of challenge in getting people online – and keeping them online for sustained period of time. Either affordability has to improve, or people have to see a benefit of being online.

What are the implications of the offline internet for marketers and app developers?

  1. Make apps small. According to VC Firm Lightspeed Ventures, the ideal app size for markets like India is below 5 MB, vs 10-15 MB globally.
  2. The crucial elements of your app experience should be able to function offline or in a hyrid offline-online environment. This is however, carries a difficult trade-off – to work offline, an app needs to store data on the phone and most budget smartphones today are space constrained. It’s common for people to bump off apps that they don’t use, especially if they are hogging handset space. Google has acknowledged the need for offline internet by making YouTube an offline functionality in countries like India.
  3. The example of ShareIt demonstrates that shareable apps are a workable concept in India. People who procrastinate on whether to download a new app, may be willing to use it if they can get it free from a friend. For the developer, this means letting go of control – and also losing out on Play Store download stats. But I am sure that it’s still possible to keep a track of shared API’s. Or to partner with ShareIt to be a featured app and keep a track of shares!

No matter what you choose to do, the offline internet is a phenomenon that we cannot ignore, especially as internet penetrates into the lower pop strata.

Monday, June 13, 2016

Artificial Intelligence is the New Black

"Over time, the computer itself — whatever its form factor — will be an intelligent assistant helping you through your day. We will move from mobile first to an AI first world” – says Google CEO Sundar Pichai.

Artificial Intelligence is the technology of the future that Google, IBM, Amazon and Microsoft have been investing in for years. It represents a future that could leave Apple behind if it takes off. But what exactly is Artificial Intelligence? Is it like those computers that beat Vishy Anand at chess? And if that’s the case, how exactly is it going to change my life?

Voice Assistants like Apple’s Siri, Microsoft’s Cortana or Google’s newly announced Assistant represent the tip of the iceberg where Artificial Intelligence is concerned. To be understood – and to trigger actions based on voice – is not as easy as it sounds, given the huge variety of languages, dialects, accents and individual pronunciations that exist on this planet. If we have made progress in this area, it is because of the increase in the global user base, which has made continuous learning and refinement possible.

But where AI can play a much bigger role is in handling the vast, unimaginable dump of data that has been generated across millions of websites, apps, social media sites and internet users, across the last decade or so when internet usage accelerated sharply.

IBM points out on its website that 90% of the world’s data was generated in the last two years, and 80% of that data is unstructured. Whether it is organisations seeking to organize and structure their own internal archives or a website seeking a deeper understanding of their own user data – Artificial Intelligence can help to make sense of it.

For example, IBM’s Watson Health has partnered with the American Diabetes Association to analyse clinical and research data and create apps that aid doctors in managing the disease. The partnership will give IBM access to 300,000 patient records and 66 years of data. The goal is to use this vast data dump to train Watson to understand diabetes and make data-driven recommendations. Watson Health is already working with Medtronic to build ‘cognitive apps’ that monitor blood sugar level and then automatically adjust the insulin dosage in insulin pumps.

Or take a recent development by the Accessibility Team at Facebook called Automatic Alternative Text – which will begin to ‘read out’ the content of photos to visually impaired users, by ‘seeing’ what they contain eg. Three people smiling. Across Instagram, Facebook and Whatsapp, users upload nearly 2 billion photos everyday, and Facebook’s Artificial Intelligence division is building software that recognizes images automatically, using machine learning. The technology is still at an early stage – it can reliably identify concepts in certain categories like transportation, nature, sports, food and people. It can identify a pizza or a selfie, but not the detailing (eg. Pizza with olives and pepperoni). But it’s still a huge step forward, that Facebook can accurately categorise a range of photos with 80% confidence!

The more gimmicky side of AI has always fascinated people and created great sound bytes for media – Frankenstein Robots, participating in reality shows and beating real life contestants. Now, we also have creative AI - for example, a neural network wrote the screenplay for Sunspring, a sci-fi film that is ‘fascinatingly incoherent’. Meanwhile, Google’s Project Magenta aims to create art using AI – spanning music, videos and other visual arts. Google AI was used to write a (Rather creepy) love poem after reading 3500 romantic books; you can read the text here. One of the line goes like this;

There is no one else in the world.
there is no one else in sight.
they were the only ones who mattered.
they were the only ones left.
he had to be with me.
she had to be with him.
I had to do this.
I wanted to kill him.

However, the new age AI is moving away from gimmicks into a more hardworking space – making sense of complex data, answering more complex queries from that data, and learning to analyse patterns in a more human like, intuitive way. Also, the results of AI are actually directly impacting people’s lives rather than being utilized only at an institutional level. Mobile apps represent a way in which the benefits of AI can literally reach people’s pockets today. We don’t need to read about it, or watch it on TV. We can actually experience it – like the visually impaired people who can now ‘hear’ Facebook photos!

Tuesday, January 5, 2016

Facebook Basics - Good Service, Bad Positioning!

I am adding my voice (belatedly) to the heated arguments that are being made, both for and against, Facebook's 'Free Basics' offerings via internet.org. I waited before weighing in,so that I did not react from my own initial biases, and also because this gave me a chance to understand more about internet.org and what Facebook is really trying to do.
So here is my stance - I believe that Free Basics is a good service for EVERYONE (not just poor people, or people without internet access). It may or may not motivate people to graduate to paid internet access. It can definitely help Facebook to reach out to its future user base. It's not a bad or evil service.

What I am against is the positioning that Facebook has taken with Free Basics. The strange campaign that "the freedom of the internet is under threat", which is being thrust under our noses and news feeds all the time. We are led to believe that banning Free Basics is akin to an attack on the poor, their rights, to posing obstacles to the larger cause of a free internet. Zuckerberg's fierce opinion piece in the Times of India claims, "Choose facts over false claims. Everyone deserves access to the internet. Free basic internet services can help achieve this. Free Basics should stay to help achieve digital equality for India."

What got me curious, was the vehemence of Facebook's response to the TRAI review and public feedback on its campaign (much of this feedback comes from Facebook's own customer base in India). Why is Facebook fighting so violently, and spending so much money, to position itself as the champion of the poor? Especially - why are they spending good money on full page ads and PR? Spending hard cash is a serious business decision - an investment to either grow, or protect, market share and image. 

Here's the thing - I think that Mark Zuckerberg REALLY believes in Free Basics. No, he is not faking his anger and hurt. It was truly intended as a grand Social Responsibility gesture on the part of Facebook, to reach out internet services to deprived masses. And as I said, that's not a bad thing. Where Facebook  went wrong, was in positioning their offering. They have elevated it to the scale of Service to Humanity and in my view, they are taking themselves way too seriously, way too early. The benchmarks for Service to Humanity are high, and Facebook has yet to match up to them.

Let's start off with Internet.org, Facebook's initiative to bring internet to the unconnected world. (I am sure they spent a fortune to buy this domain, and the connotations that it represents). If Facebook's aim was to equate Free Basics with the Internet, then this was a big mistake. Internet is a loosely used term today, but what it actually means, is the infrastructure backbone of the world wide web - the network of computers and servers around the world, with the ability to transfer packets of information between each other. The core principle of the internet is free and open peer to peer communication, which means that anyone can connect with anyone else on the internet. An extremely misleading domain name for Facebook to adopt, if their goal was to offer a limited, curated set of sites. They should have adopted the term internet.org, only if their intention was to offer access to the entire, unabridged, open internet. Otherwise, they were laying themselves wide open for criticism.

Secondly, let's talk about the term 'free' which has a very different meaning in the online world, than it does in the offline world.  Free is not just about paid vs. unpaid access. The creators of the Internet and World Wide Web have made all the underlying codes and information architectures, open source, royalty free and freely accessible to everyone, which is why the internet has experienced the explosive growth that it has. Yes, free = free transfer of intellectual property, giving up of profit-earning and sharing of all underlying source codes. 

That's the benchmark for 'Free'. Maybe it's unfair to compare Zuckerberg to the founders of the Internet but then - internet.org was his idea! And as I said, this is nothing but bad positioning of an offering that intends good - just that hubris has elevated the goodness of the offering to levels that it cannot actually achieve. 

Now, to come to the last part - Facebook has called this initiative Free Basics. Why not Facebook Basics? Why are they shy about keeping their name out of all the good work that they are doing? Google does lots of projects to bring internet to the masses - all Google branded (Ok, now they are Alphabet branded). There is a reason for this question. Facebook seems to control Free Basics silently, from the background. There is no group or foundation including neutral third parties, that represents Free Basics, or mediates with the public. It appears as though Facebook is hiding behind names, trying to play down their role in these ventures when actually they are the sole owners and drivers! There is a lack of honesty and transparency in this stance that I find disturbing.

Had Facebook called their initiative ''Free Basics by Facebook" or "Facebook Basics", and positioned it as a promotional marketing service, probably no one would have had objections. Isn't that closer to the truth of the offering - that it's a Facebook owned initiative to get more people to try Facebook and a bunch of other sites. Their failed attempt to position this service as occupying a higher moral ground has led to the backlash against them. It's perhaps unfair, that people are ignoring the aspect of social good that the service was intended to achieve. But spending money shouting about it, is not going to help achieve it. A positioning cannot be hammered into people's minds through ad claims. If people don't see it the way you do, they don't see it. Better to move on, and adopt a more realistic positioning.

Commercialism and Capitalism are not dirty words in the modern era. In fact, commercial businesses have a huge potential to do good to the communities they live in. Capitalism raises the standard of living in countries, more than socialism has ever succeeded in doing. One of the admirable things about commercial and capital ventures is the clean commitment to build great products that ensure business growth. There is very little hypocrisy in such commitments. I would advise Zuckerberg and Facebook to take a long, hard, objective look at themselves. Separate the emotion and hubris from the hard cold facts and acknowledge that their misguided positioning of Facebook Basics might be hurting their brand image. 

Humility, owning up to mistakes and backing off from wrong positions are all the hallmarks of great business leaders and I look forward to seeing Mr. Zuckerberg display these traits!