On Episode 1011 of The Core Report, financial journalist Govindraj Ethiraj talks to Nishant Arora, Senior Vice President of Marketing at Netcore Cloud as well as Nakul Saxena, Business Head - Housing Finance, Kotak Mahindra Bank.

SHOW NOTES

(00:00) Stories of the Day

(00:50) Oil Prices Are In Dangerous Territory

(01:26) Rubio Comes To Reliance

(04:47) The Last Man Standing In AI Stocks

(06:30) Smartphone Sales Crash As Expected

(08:41) How Are Indians Buying Online This Festive Season?

(19:53) Why Younger Indians Are Buying Houses, Contrary To Popular Perception

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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning, it's Wednesday the 21st of October and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

Oil prices are in dangerous territory.

Rubio comes to Reliance

The last man standing in AI stocks

Smartphone sales have crashed as expected

How are Indians buying online this festive season?

And why younger Indians are buying house contrary somewhat to popular perception?

Markets, Oil, US-India Trade and AI Stocks

Welcome back after a short market holiday break and things unfortunately are worse than where we left off on Monday. At least in global oil markets, oil prices rose further on Tuesday with Brent touching a five-month high. There were fresh reports of Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf, Reuters reported.

Brent crude futures were up to $111 a barrel, which is the highest since May. Now, oil prices are an immediate and major concern for India. Though for the US, it's all about refined product, particularly diesel.

All negotiations with the US, of course, have the complete makings of a win-lose deal, no prizes for guessing who's losing. US Secretary of State Marco Rubio said on Tuesday, the United States will be discussing with Reliance Industries and Mukesh Ambani about refining more Venezuelan crude. The US will further talk with Reliance regarding producing oil in Venezuela.

Rubio told journalists after landing in Mumbai and starting his three-day visit to the country, this is his second visit to India in 2026. Now, all of this is in the backdrop of a US-India trade deal, which is in suspended animation and various other disagreements, some expressed publicly and some not. Back to Reliance, it appears to be leading the Diplo commercial engagement with Rubio, which highlights America's priorities rather than Indian.

Elsewhere, Reliance's subsidiary, Jio Platforms, is also in the news. The company's 8,110 crore rupee anchor book, that's Jio Platforms anchor book, for its upcoming initial public offering or IPO was oversubscribed more than 30 times, with institutional bids crossing about 250,000 crore rupees, setting a record for demand, according to bankers who spoke to Bloomberg. Jio Platforms, which houses the group's telecom and digital businesses, is raising about 30,000 crore rupees at the upper end of the price band.

It opens for subscription today, that's the 21st of October, and closes on the 23rd of October. On Monday, stock prices were down, with private banks leading the losses as investors digested earnings from key lenders, even as high crude prices once again put pressure, though, of course, prices were even higher on Tuesday. As we just mentioned, private sector banks saw their stocks dropping about 2%, with HDFC Bank and Axis losing even more after missing quarterly earnings views amidst margins, Reuters reported.

The Sensex was down 876 points to 73,852 and the Nifty was down 257 points to 22,888. The rupee was mostly unchanged on Monday, losing some early gains after stock prices fell, and importers stepped in to buy dollars over a largely subdued trading session, a Reuters report said, adding that it was mostly between 94.76 and 94.96 before closing the session at 94 rupees 92 paise on Friday. Elsewhere, spot gold was also down slightly and is now at about $4,120 as of Tuesday morning, while US gold futures for delivery were at about $4,139 per ounce.

Back to oil. It is evident that oil and gas producers in West Asia are trying hard to de-risk themselves from the state of hormuz. How long could it take? Well, investment in alternative logistics routes in the Gulf to mitigate the impact of the Iran war could make the state of hormuz redundant in the next five years, Reuters quoted HSBC group CEO Georges El-Hediri saying on Tuesday.

Hormuz carries or carried before the war a fifth of global oil and liquefied natural gas trade. Speaking at an HSBC Future Forum event in Dubai, El-Hediri said that they do see this region being able to recover and then continue growing, but it would mean a lot of investment. The Middle East, North Africa and Turkey are offering about $872 billion in individual project packages as part of a wider $1.4 trillion planned and unawarded infrastructure pipeline, Reuters quoted HSBC saying in a report on Monday citing data from MEED, a Dubai-based construction industry market intelligence platform.

Back to global markets, and of course, AI stocks are once again feeling the heat. The latest trigger appears to be a forecast from Wall Street research and advisory firm Gartner, which said that $3.5 trillion in AI investment could be on the rocks due to profitability concerns amongst the top AI models. Gartner's forecast, which was put out last week, helped send shockwaves through the AI trade, and the firm's chief forecaster John Lovelock told CNBC on Monday that returns are not yet backing up the full scale of investment.

Consolidation and takeovers among AI-dedicated companies known as NeoClouds could ensue, partly due to a mismatch in timing, he said, adding that At the moment, we have more compute capacity than we have demand, and we have a lot of the tokens and processing power being given away in freemium solutions. He also said that everyone in the AI race is running for a last-man-standing position, and pretty much every market that Gartner was tracking in the AI race was likely to collapse down to a duopoly. And the duopoly, of course, is Anthropic and ChatGPT.

As a result of their profitability analysis, Gartner predicted last week that 80% of NeoClouds, which are AI-dedicated computing-powered providers, could cease functioning as independent companies. Meanwhile, a small Korean AI data centre firm, Elise, did a small IPO, but set the tone for the whole market after it fell 30% on its trading debut on Tuesday, according to CNBC, which added that U.S. stock futures were also giving up some of their overnight optimism following a bounce-back for AI stocks on Monday. A negative close for CoreWeave as well as elevated yields on Oracle debt exposed Persistent credit concerns in the AI trade, CNBC reported, adding that other data centre firms have cancelled their IPO plans, including NVIDIA-backed Firmus, Blackstone-backed Airtrunk, and SoftBank unit SB Energy.

Smartphone Sales Crash As Expected

India's smartphone shipments fell about 26% year-on-year to about 35 million units for the third quarter of July to September of calendar year 26, marking its sharpest decline since 2016, according to data from Omdia, quoted by Business Standard. The fault has been projected by firms like Counterpoint Research in our conversations with them a few months ago on the core report and has been triggered by rising memory prices, thanks to which, among other things, there are no Rs. 10,000 smartphones now, as Counterpoint had projected a few months ago.

The top five smartphone brands all reported declines in shipments, including Apple's iPhone shipments, which fell about 20%. This is, remember, third quarter for the calendar year. Samsung was the only exception, with shipments declining just 1% to about 6.7 million units.

Apple's shipments fell from about 4.9 million units to about 3.9 million units.

CBRE and Data Centres

Still sticking to data centres and AI, real estate giant CBRE, which has a substantial presence in India as well, is acquiring a company that equips data centres in a $1 billion deal, the latest sign that commercial real estate is tying its growth to the AI spending boom, The Wall Street Journal reported. CBRE in India also operates in the data centre space.

CBRE has agreed to pay about $610 million in cash for the London-based Onnek Group, plus about $400 million tied to growth targets over several years. Onnek's 800 employees instal and maintain cabling and equipment racks inside data centres for major technology companies in Europe and Asia Pacific. That acquisition, along with CBRE's 2024 purchase of a US-based DirectLine, takes it deeper into newer territory, which is the technology found inside data centres, The Wall Street Journal said.

Until recently, CBRE's data centre work has focused on its traditional roles, such as construction services, management, financing, and sales and lease brokerage. And that, of course, applies to India as well. In general, commercial real estate services firms are increasingly looking to the technology sector for growth.

How Are Indians Buying Online This Festive Season?

As brands gear up for the festive shopping season underway, the race to attract customers is often defined by bigger discounts and louder promotions. How indeed are customers buying online? And what is driving their purchase decisions when they do buy? And why do they hesitate on the occasions that they do? There are some common themes emerging. A new report from Netcore Cloud says, Netcore is a Mumbai-based customer engagement and marketing automation company that also manages roughly 75% of India's total enterprise email traffic.

The report identifies five common barriers to purchase, from uncertainty around the first jewellery purchase and last-minute gifting to delivery anxiety, incomplete big-ticket purchases, and one-time buyers who never return. I spoke with Nishant Arora, Senior Vice President of Marketing at Netcore Cloud, who worked on this report. And I began by asking him to walk us through the major online buying trends that he was seeing this season.

INTERVIEW TRANSCRIPT

Nishant Arora: So one of the biggest insights that we're seeing is festive season is the first time many customers—in fact, we saw that one in four festive shoppers this year was a new customer, and the annual transaction value is right now doubling.

And the third trend that we are seeing, which is kind of competitive today if you think about it, like the growth in quick commerce is almost 100%, or quick commerce revenues are growing 100%. And you can argue, right, like why does somebody need, say for example, a washing machine quickly or a laptop in the next 30 minutes? But that's a trend that we are seeing increasingly: that, hey, like there are new people who are starting to buy in the shopping season, the values are going up, and quick commerce as a channel is emerging where people are expecting everything at their home very, very quickly. Next-day delivery is no longer good enough.

Govindraj Ethiraj: And are you seeing that washing machines are actually being delivered that fast in some cases?

Nishant Arora: Yes, we're seeing like a lot of categories. Say for example, even I was catching up with somebody who does lunch boxes. So usually, right, like for school kids, people plan, "Okay, I have to give a lunch box maybe next day or day after tomorrow." But the growth they are seeing in quick commerce is tremendous, and it's across all categories. Even in clothing, fashion, every category, we are seeing quick commerce is emerging as a top channel.

Govindraj Ethiraj: Right. And as you go one layer deeper, and you've looked at how consumers are buying within their shopping carts and what makes them either hold on to something or actually move ahead or add something, so what are your findings there?

Nishant Arora: Okay, so our biggest finding in that is like, see, this is a long-standing promise of personalisation. And what we are finding is brands who are personalising or making what the customers want available and making it easy for their customers to find them, they are succeeding.

Like, say for example, this year we are starting to see an emergence of agentic e-commerce or AEO, right? Like, say for example, if somebody is wanting to make a purchase decision, they are asking, say, a ChatGPT or a Gemini, like, "What is the product they should buy?", asking them to find good deals for them, and they're scouting the internet to find, you know, like, "These are the good deals." So we're seeing this trend play out.

Then the second trend we see playing out is brands who are building deeper customer profiles. Like, say for example, we can take example of two brands, right? So a person may want a particular design of a shirt, right, but maybe their favourite colour is not available. And brands who are doing deep customer research will know the behaviour of this person, will know that they buy irrespective of the discount, and they have clicked on the colour option and found that, okay, the colour option was not available, and that is why they didn't buy.

While, right, like we see the laggards—they would see this as a purchase hesitation and start to offer discount, while the person is not interested in discount. The person is looking for, "Hey, know that I'm trying to find the colour that you don't have on the website, and when you have that colour on the website, let me know. And if you notify that, 'Hey, this is available now,' I will go ahead and purchase it."

So that was the second big trend we saw, right? Like, and by virtue of that, what we see is brands or e-tailers or stores that are getting personalisation right, they're increasingly starting to see more revenue compared to brands that are using traditional—or like, I think the abandoned cart journey is a play that went live 10–15 years ago, that you give a discount to somebody who puts things in the cart, and those brands are continuing to lose margin by only offering discounts.

Govindraj Ethiraj: Right. And you've said that one in four are first-time buyers. So you're saying that basically the way the total, let's say, user base of e-commerce shopping is growing at that pace, and those new shoppers are coming in during festive times—I'm just trying to see this number in the context of the overall size of pie.

Nishant Arora: So one in four is a new buyer because, see, there are two trends that are happening. One is, as customers get more and more comfortable making purchase decisions online, many brands which were traditionally not sold online are now starting to see these reasonably big online businesses.

Like, I'll give you an example of when CaratLane started in India: there was a lot of question mark on, "Can you really sell jewellery online?", right? So, and then eventually, if you saw the growth of CaratLane, what they were selling online was low-value items. And this year you will see like really large-ticket jewellery purchases are happening online.

Even like there was a lot of talk earlier or trust issues on, "Hey, like I'm buying this expensive brand of jeans or clothing, which maybe online will be duplicate." Now, as and when brands are building trust, a lot of people are increasingly trusting online commerce to give them what they want. And they're trusting them that, "Hey, if I'm buying a jewellery from, say, a Senco Gold on their website, I'm going to get the exact same quality that I will get from them in the store." So maybe like last year I didn't buy jewellery online, and this year, when I got a notification that, "Hey, this is the auspicious muhurat of Akshaya Tritiya," and I'm not able to go to a store because, you know, like of course traffic, life, and multiple other priorities—the gold that I wanted to buy, I'm buying online today.

So and that is contributing to a lot of new shoppers buying online, and a lot of new categories opening up for new shoppers.

Govindraj Ethiraj: And you're also saying that a lot of this, at least the last Diwali, was not about being the cheapest, and is that something that you see continuing this year as well?...

Nishant Arora: You see what we have to talk about is that there are people who are different priorities, right? So there are a lot of people who are discount buyers. The historical trend that we see is a lot of brands have started to create an association of festive season with discounts in the mind of the customers, which has resulted to—if you look at, right, like a lot of startups raised a lot of money, and then they put that money without building a successful business model.

While now it is more about, "Hey, like I need to have profitable, efficient growth." And efficient growth is like, what I'm buying for 100 rupees I cannot sell for 98, so I need to optimise the level of discounts. Which is what we are increasingly seeing: that while, yes, the discount buyers, you will only get them to convert when you offer the products or services that you're selling at a particular price, there is a big market out there that is looking for personalised offers or personalised recommendations of what they can buy aligned to their tastes, aligned to their affinities, aligned to where they are in their life. And capturing that is a much more efficient growth mode for digital commerce versus being the player which offers the maximum discount.

And there is obviously a very hard limit on how much discounts you can offer, and which limits your growth. Say for example, every sales season we see one or two items that are deeply discounted, but they get sold out in five minutes. So a customer who came to your website to buy that—say, like, say for example, if you're selling the latest iPhone for 30,000 cheaper than what the prevailing price is, but you can't supply to the whole country, so you limit the number of units and after 15 minutes people are walking away from your store disappointed.

So this play has its limitation, while personalisation, understanding your customers, and giving them relevance is much more popular. And the other thing is also true, right? Like right now with digital commerce, our customers are also getting overwhelmed with options. So it's extremely important to—say for example, if somebody's visiting a digital commerce store or opening an app, can you personalise and show me exactly the 10 things that you think I may buy? I may, and the likelihood of me making a purchase decision is much more, which is continuation of trend we are also seeing in OTT, right? A lot of people spend so much time trying to figure out what show to watch on Netflix; versus same thing in e-commerce, a lot of time is wasted in trying to figure out what I want to buy.

If you are overwhelming people, you're not going to make the sale. Well, give them fewer options, but options that are much more relevant to them. And brands who are personalising the app and website are also seeing increased traction.

Govindraj Ethiraj: Last question: so you've touched upon clearly some of the major trends that have driven the way people consume, how they consume, how much they spend, their need for urgency. What are the—what are the things that could change? You mentioned agentic already. As you look ahead, including, let's say, the next three-four months, or could we see some newer trends debut this festive season?

Nishant Arora: So one of the biggest trends we are seeing right now—and this is actually a good news for our customers—increasingly, people are starting to get annoyed with the spam that they're receiving. Especially over last one year, AI voice calling has come into the picture and so many spam calls are coming.

And increasingly, what we're seeing is additional touchpoints do not result in a sale. So you calling a customer who does not want to buy from you 20 times using AI calling—sure, it is cheap—or sending them 20 WhatsApp messages is not having any incremental impact. And every time you get a bot or you get a WhatsApp message, the cost for the brand is going up. So it's a lot of money that is getting wasted, resulting in people who are increasingly getting annoyed.

So what the biggest trend I'm seeing right now, which is going to play out over next one to two years, is optimising on the type of reach-out that we do—personalised—and stopping when the additional touchpoint is not going to add any value. Which makes it much more pleasant for the customer, because you're no longer annoying them with spammy messages and calls, and much more cost-efficient for the brands, because they are no longer spending a crazy amount of money which is not adding any incremental revenue for them.

Govindraj Ethiraj: Right. Nishant, thank you so much for joining me.

Nishant Arora: Thank you.

Why Younger Indians Are Buying Houses, Contrary To Popular Perception

There are subtle yet definite shifts in the way Indians are buying homes, particularly younger Indians, off late. For starters, young Indians are buying homes, contrary to the earlier post-COVID perception that youngsters were veering off physical assets. Nevertheless, home buying is mostly a family decision and pretty involved, as perhaps it should be.

I spoke to Nakul Saxena, Business Head, Housing Finance at Kotak Mahindra Bank last week, and I began by asking him how he was seeing the home loan market in the context of recent rate hikes by the Reserve Bank of India, and also given the fact that there could be more rate hikes in the near future.

INTERVIEW TRANSCRIPT

Nakul Saxena: See, what happens, the segment in which we operate, it's a home loan, it is not a impulse purchase, like you have a special scheme coming on consumer durable, special scheme discounts coming on mobile, so the customers take an impulse purchase. What happens in a home buying process, it is never an impulse, you have that idea in mind and then you go out and search for the properties, you go out and search for the localities and once you have finalised and then you show it to the family and then the family decides, once that decision is made, then you think of how we will fund that. So it's a long drawn process, it's never a, it's generally six to nine months process for the first time of buyer because it's a very big purchase for the entire family and it is never an impulse.

So it is a long drawn process and generally people go through different phases as and when they keep crossing that phase.

Govindraj Ethiraj: Right, so you're saying to that extent it's inelastic when it comes to what the interest rate should be. So tell us about your home loan portfolio or home loan book, what does it look like?

Nakul Saxena: So I handle the mortgages and when I say mortgages, it includes the home loan, it includes the loan against property and it includes the affordable side of the home loan also. So we have around 160,000 odd crores and generally it is on around 30% of the Kotak bank book. So it's a pretty pretty large book which we have.

Generally we are a pretty decent player in the market and on the loan against property we have around five and a half percent market share and on the home loan side we have around two and a half percent market share when it comes to the disbursement side of the book.

Govindraj Ethiraj: Right and within the mortgage portfolio, what would be the, let's say the demographic or other insights in terms of who your borrowers are? There are different set of demographics.

Nakul Saxena: So basically when we started, we started on the largest cities but gradually and now we have developed a large book and we are now present in some across the country in some two and two cities across the country and generally what we are seeing is, especially after the COVID impact, what has happened is that because a lot of companies came with their work for home culture and generally people who are sitting in the larger cities, they tended to move towards the hometowns and all and generally that that has seen a spike growing across the country, growth in the home loan industry. So people are buying in their hometowns and they are settling down there, a lot of things are happening and a within their nearby places where they want to stay. So that flexibility is there.

Govindraj Ethiraj: So you're saying that you've seen a shift or move towards tier two or tier three cities in your portfolio, which I'm assuming is also similar to other portfolios and I'm going to come to how you feel people should look at home loans in their total savings and let's say investment basket. But before that, tell us about Gen Z and I know we're all talking about Gen Z for various reasons but tell us about how you've been seeing this cohort respond or acquire or take home loans, particularly post COVID.

Nakul Saxena: See what has happened, as I said after the COVID impact, a lot of people have got the flexibility and especially the Gen Zs are very different in terms of decision making, in terms of their adaptability and generally they come on a pretext that they are the generation which has a lot of knowledge available. So generally when we were there, our knowledge was very limited. Now the knowledge aspect is very, very high.

So they are able to take much, much informed decisions and generally the Gen Z is also because initially when the people start, they start on the consumer durable side, either the mobile phone or the trade side and generally they move towards the larger ticket home loans like the vehicle loans, the car loans and then towards the normally the home loan is it's towards the end. But we are seeing a lot of Gen Zs coming and taking a home loan and it's a very good trend.

Govindraj Ethiraj: So you're saying they're taking it earlier in their life cycle and also before maybe they take a car loan or they may not take a car loan at all.

Nakul Saxena: Generally it is after the car loan because generally and sometimes even before the car loan because with the development of this Uber and a lot of these people say why do I own a car because owning a car is always and it's a depreciating asset whereas when you look at the home loan, the home is always an appreciating asset. So normally it's an informed decision.

Govindraj Ethiraj: And in your mind behaviourally what's changed in the way they are taking loans? I mean because this is counterintuitive. The sense that everyone would have is that this generation up to let's say 30, 35 will not take home loans for various reasons including the fact that they're enjoying life, travelling and spending their savings on other things.

Nakul Saxena: So a lot of times what happens home purchase always a lot of emotion attached. So it is my space and it is my personal space and I will decorate it the way I want it. So generally what happens it's true for every human being and can be Gen Z or anybody else.

So people like to have their own space but it can be a smaller space and depending on the kind of income which they're able to generate and a lot of times there's a double income also so then they are able to take a bigger house. But generally it's a lot of emotional thing when they are they want to buy even if they like to travel they like to do a lot things. But generally it has seen that it is a very emotional connect and my kind of space I want to decorate it the way I want it to be.

Govindraj Ethiraj: So generally it's a very emotional connect. And therefore they're moving towards it much earlier in life than what we expected.

Nakul Saxena: So generally I will say we always have two set of customers. One is a 40, 45 plus customer who is very financially very well sound off. So typically that customer goes and buys a much larger two-bedroom going to three or three bedroom going to a four.

And generally the young this is the first time buyer generally go for the smaller ticket sizes and generally it's that I have arrived. So these two set of customers the behaviour is very different but the objective is more or less same. And emotionally also historically they also have seen with their parents amongst their relatives.

So what has happened a lot of people had made money in the real estate. So that factor also plays a lot of impact on them that if I take a leverage of the bank money and can I get a little higher return if I choose a right place. So a lot of financial decision also comes into play emotional decision also comes into play.

So they look from both aspects right from the investment that it can give you a feature I return and at this point of time the emotional connect that it is my space.

Govindraj Ethiraj: Right and are you designing your products differently in order to access this market or these separate markets differently as well. So I will give you in a very simple term so that everybody understands.

Nakul Saxena: So what happens as I said earlier when a customer buys a home loan okay. What happens home loan is not one requirement he also has other cash flows going out like investments his daily expenses his medical expenses his travel expenses his white good expenses. So all those expenses are always there and home loan always remains one of the highest ticket sizes in terms of his role.

So what happens as you have been said as we started off that the RBI has increased the repo rate the expectation is the repo will go further. So idea of this product being launched was when RBI increases the repo rate the customer EMI goes up. So what we came out with the product was looking at the customer side that he has got so many expenses to manage and for the first kind of customer like when I was a customer when I bought my home loan generally at that point of time I over stretched and when I checked with my friends also when they're buying a home they're over stretching themselves.

When they're over stretching what happens in next one year they are just on the brink. So the idea of this product was key now the repo will go up if you offer this to the customer and the customer is going to benefit a lot. So what happens it brings in predictability.

So the customer knows my EMI is fixed for three years four years and five years depending on what kind of vision he has for the market depending because we cater to different set of customers. So the predictability is there. Second as and when the repo increases his EMI is not going to increase.

So what happens he has a saving also and third the predictability comes into the picture and he can finalise and plan other expenses which are going up.

Govindraj Ethiraj: And how are you pricing this in a way that your exposure is protected if interest rates keep going up?

Nakul Saxena: Very very good question. So historically what has happened whenever this product has come out in the market it has always been one and a half percent or two percent higher than the floating rate. So we as Kutak we thought about the customer point of view and this product we have brought at the similar rate what we are giving the floating rate also.

So there is no differentiation in the product offering and the rate of interest is more or less same what we are giving to the floating. So the customer has got a very clear choice and he can decide and it is only beneficial to him. That is why the idea of us knowing more and more people to know because this product is only good when the interest rates are going up.

It is not a good product when the interest rate goes down because then the EMIs will go down. Then he's on the saving mode. Now he's on expense mode.

If he takes the home loan he benefits.

Govindraj Ethiraj: So you're saying if interest rates go down then but I'm still locked into that same ring.

Nakul Saxena: Yes.