Why Only Star News is Behind Speak Asia?

According to the latest salvo from Star News, the daily profit earned by Speak Asia is Rs. 15 Crores!!!  Now, that's bound to sweep you off your feet.  I don't think even the biggest corporate houses in India can claim of such whooping profit per day.

How this figures out???

Well, let's do some calculations.

Speak Asia membership fee per member =  Rs. 11,000.
Daily Number of Membership = 35,000
Per Day Income = 11,000 x 35,000 = Rs. 38 crores 50 lakhs.
Per Day Spending plus Return to Members (Rs. 4000 per month) = Rs. 23 crores 50 lakhs.

Per Day Profit = Rs. 15 crores

Now, that is some figure to talk about.  Well, I think there is nothing wrong with Speak Asia as long as they are paying out to the members, which I think they can continue to afford to give back for another year or two and by that time one would have got around 1 lakh rupees back by the end of two years for an investment of Rs. 11,000.  So, for the short term (two years), I think there is nothing wrong with the company modus operandi and also from the investors' point of view.

Things might start taking a downturn when the membership values start trending down and the payback trends start going up, but that is a story after maybe 2 years.

So, the company is not doing anything bad for the investors at least for the next two years and in fact Star News is also saying that what will happen after two years.  But, why to bother for after two years when you when gets back his investment back in less than three months and then starts getting profit for the next 21 months. I think, if we think from that angle, there is nothing wrong with the Speak Asia modus operandi.  It works on the same Ponzi model that we have seen for the last 30 years if it is earning crores but still giving back the consumers their return, let them do.  What's wrong with it???



© 2011 Ranjan Kumar