Varun Jain, The Economic Times
New Delhi, 25 May 2015

The company has dedicated sub-verticals to look after institutional sales of various product categories. Voltas is also looking at cash & carry formats of modern trade partners, who are aggregators for the B2B segment.

Panasonic is working closely with developers, architects, interior decorators, project management consultants, services consultants, companies, retail chains and the hospitality industry.

Demand for air-conditioners from the commercial segment is catching up fast with an increasing number of offices, stores and business apartments being set up. The growth of the retail, hospitality and commercial sectors has boosted demand as they involve large-scale application of ACs, said Vipin Agrawal, general manager and head – CAC at Panasonic India Pvt Ltd.

“We are looking at selling around 15,000 units through B2B vertical this year, and generate revenue of about Rs 750 million,” Agrawal said.

Videocon, which is looking to double its market share to 12% in the overall air-conditioning market, says its targets can be achieved through the B2B segment. The company plans to sell overall 4.5 lakh units this year, valued at about Rs 1,100 crore.

The realty sector is one of the biggest growth opportunities, said Videocon Industries COO (air-conditioners) Sanjeev Bakshi.

According to Videocon’s research, there are 1.6 million houses that will be delivered this year, which will be ready for possession. On an average, one AC will be fitted in each house, said Bakshi.

To drive the effort, the Indian home appliances maker has formed a separate vertical that will only look at B2B sales.

“We expect 20-25% revenue should come through this segment this fiscal,” said Bakshi.

Industry players assume the growth of air-conditioning in the B2B segment would be 25-30% compared with single-digit growth in the retail sector. According to analysts, the market in India for room ACs is 3.5 million to 4 million units, with a penetration of about 3%.

Purchase of ACs by individuals is elastic, depending on weather pattern changes and they may be replaced with air coolers due to pricing or electricity bill concerns, according to Devangshu Dutta, chief executive at retail consultancy firm, Third Eyesight. Institutional purchases are more planned and can provide a significant and long-term buffer to consumer demand, he said.

Lloyd Electric, which aims to corner an 11% share in the domestic AC market, estimates it can sell 500,000 units through the B2B vertical and generate revenue of Rs 750 crore this year, according to Nipun Singhal, director, Lloyd Electric & Engineering Ltd. The company plans to set up new factories and invest in new machinery and technology, said Singhal.

For Mitsubishi Electric India, the B2B segment is expected to account for more than 50% of its business from air-conditioners annually. According to the company’s spokesperson, the B2B segment helps diversify the risk of seasonal fluctuation and helps in spreading revenue across categories since it is not a seasonal business.

(Published in The Economic Times.)

Varun Jain, The Economic Times

New Delhi, 21 May 2015

Myntra.com, India’s largest online fashion retailer, has seen a 10% drop in sales since it shut its website and turned a mobile app-only etailer last week. The company, owned by Flipkart, had factored in such a decline and hoped to return to the level of sales prior to the move in the coming weeks, according to a source. Its closest rivals, Snapdeal and Amazon, however, said they had no plans to wind up their websites and focus only on mobile phone users.

"Our data shows that there are still many customers who use PCs to shop online. We do not want to force our customers to use one specific medium to shop on Snapdeal," a Snapdeal spokesperson said.

This is the case even as 75% of Snapdeal’s orders are placed on mobile phones. Akshay Sahi, customer experience head at Amazon India, too, said, "We believe that as a consumer-obsessed company, we have to enable our customers to shop anytime, anywhere, and anyway they want."

Another major online marketplace, eBay, which generates over 45% of its total traffic through mobile devices, is not willing to bet exclusively on mobile app either. "At eBay, we believe in an inclusive strategy rather than an app-only strategy," said Shivani Suri, head of marketing at eBay India. "With the growth of smartphone penetration and given that the first interface for most of the users is mobile, we consider it as key medium. However, it doesn’t mean that we are not going to cater to the rest of the screen." In India, as in the rest of the world, it has been observed that a multiscreen user is most engaged, said Suri.

Myntra, which reportedly generates more than 90% of its traffic and 70% of its orders from its mobile app, closed down its website last Friday and moved to a mobile-only platform. Its parent, Flipkart, plans to follow suit within a year. The move is driven by rapid penetration of smartphones in the nooks and corner of the country. Another rationale is that focusing entirely on the mobile app will help the e-commerce player give customers a better shopping experience.

According to a recently released report by Goldman Sachs, the e-commerce market will account for 2.5% of India’s GDP by 2030, growing 15 times and reaching $300 billion (about Rs 19,200 crore) from $20 billion (about Rs 1,280 crore) at present. The report also stated that India will have the second-largest digital population in the world with one billion users by 2030, powered by online mobile penetration.

India has enough spectrum and telecom infrastructure to provide 3G data coverage to 25-30% of the population, it said. "Further, 3G-enabled smart phones are available for $40 with more than 900 phones launches last year," it said.

Another report by the Internet and Mobile Association of India and market research firm IMRB International said that the number of mobile internet users in India is expected to reach 213 million by next month, up from 173 million in December 2014.

Although a number of recent reports predict a massive surge in smartphone usage in India, which suggests Myntra has made the right decision, several experts told ET that they are not convinced of the soundness of the e-tailer’s move. Some industry watchers said that slow internet speed on mobile devices and expensive data plans could play spoilsport. "One could argue that while it is okay to reduce or even stop the investments on PC-web, it could be foolish or even dangerous to discount it as a past that has completely ceased to exist," said e-commerce expert and independent consultant Ratul Ghosh.

Many shoppers who are comfortable with PC may not be keen to shift to app, he said. "What will happen, in my opinion, is that affiliate websites will have a party once they are the only route to the inventory on the PC-web. And we all know that’s 5-10% more expensive a sale."

Devangshu Dutta, CEO of retail consultancy firm Third Eyesight, said app shopping will possibly prevent comparative shopping, making the experience more "sticky", and could allow the site to further customise the experience based on location and phone-based data.

However, he said, a smaller number of web browsers are generating a disproportionate share of the sales, which suggests that they are bigger spenders than mobile users, so that is definitely a negative trade-off if a site goes to an app-only experience.

Amazon’s Sahi said nearly half of the company’s traffic comes through mobile phones. "All of Amazon’s development and innovation is app first, and it will continue to be our flagship experience," he said.

ET had earlier reported that fashion retail portal Jabong is also not in a hurry to opt for app-only mode. "We strongly believe customers should have the choice to buy either on smartphone or computer," Jabong co-founder Praveen Sinha had said.

(Published in The Economic Times.)

Varun Jain, The Economic Times
New Delhi, 15 May 2015

Akshay Sahi, customer experience head at Amazon India, too, said, "We believe that as a consumer-obsessed company, we have to enable our customers to shop anytime, anywhere, and anyway they want."

Myntra, the country’s largest fashion retail portal, closed down its website on Friday and moved to a mobile-only platform. Its parent, Flipkart, plans to follow suit within a year.

The move is driven by rapidly increasing traffic from smartphones. Another argument is that focusing entirely on the mobile app will help an e-commerce player give customers a better shopping experience.

With the increasing penetration of smartphones, the number of mobile Internet users in India is expected to reach 213 million by next month, up from 173 million in December, according to a report by the Internet and Mobile Association of India and market research firm IMRB International.

Experts ET spoke to, however, are not convinced about the strategy of going app-only.

Devangshu Dutta, chief executive of retail consultancy firm Third Eyesight, said app shopping would possibly prevent comparative shopping, making the experience more "sticky", and could allow the site to further customise the experience based on location and phone-based data.

However, he added, a smaller number of web browsers are generating a disproportionate share of the sales, which suggests that they are bigger spenders than mobile users, so that is definitely a negative trade-off if a site goes to an app-only experience.

Ratul Ghosh, an e-commerce industry expert and an independent consultant, said, "One could argue that while it is okay to reduce or even stop the investments on PC-web, it could be foolish or even dangerous to discount it as a past that has completely ceased to exist."

He feels that many comfortable-with-PC shoppers may not be keen to shift to app. "What will happen, in my opinion, is that affiliate websites will have a party once they are the only route to the inventory on the PC-web. And we all know that’s 5-10% more expensive a sale," Ghosh said.

Amazon’s Sahi said nearly half its traffic comes through mobiles. "All of Amazon’s development and innovation is app first, and it will continue to be our flagship experience," he said, adding that, however, it will continue to operate its website.

Earlier ET has reported that fashion retail portal Jabong is also not in a hurry to opt for mobile-app only mode. "We strongly believe customers should have the choice to buy either on his smartphone or on the computer," Jabong co-founder Praveen Sinha had told ET.

(Published in The Economic Times.)

A seminar was organised on the 12th of May in Zeist (the Netherlands) on “the Opportunities & Challenges for Dutch (Semi-) Processed Food Companies in India”. Highlights of a report and other insights were presented by Devangshu Dutta, chief executive of Third Eyesight. Other entrepreneurs who also shared their experiences in India, and the Dutch agricultural counsellor, Wouter Verhey, was present at the event.

The sessions included:

• Welcome and opening remarks by Wouter Verhey, Agricultural Counselor India & Sri Lanka at the Embassy of The Netherlands in New Delhi.
• The market for processed food in India by Devangshu Dutta of Third Eyesight, India.
• Entrepreneurial challenges in the food sector in India by Peter Uyttewaal, Partner India of Larive International. The characteristics and strengths of the Dutch Food and Grocery Industry by Sekhar Lahiri of FNLI.
• Discovering the Pot of Gold in India by Sumit Saran of Future Consumer Enterprise Limited, India.

You can download a summary of the report via this link: India – Opportunities Challenges for Dutch Processed Food Companies

Devina Joshi, Business Standard
Mumbai, 11 May 2015

Interestingly, Amazon India flagged off operations in June 2013 without much marketing hullabaloo; its first marketing campaign hit the media only in April 2014, with a focus on delivery. With ‘Aur Dikhao’, the e-commerce major wishes to step out of the metro brand imagery it has come to acquire owing to its international lineage, and penetrate deeper into tier I and II towns. "We want to bring the brand to the local Indian guy who rides a bike and carries a smartphone or has internet access. That is our core audience," says Manish Kalra, director, integrated marketing, Amazon India.

For Amazon, the foundation for an emotional association with the Indian way of things was laid in the Kindle PaperWhite commercial of 2014 (incidentally, that Indian ad has been inducted in Amazon’s global campaign). The ‘Aur Dikhao’ campaign drives the ‘we understand India’ message by making use of colloquial shopping lingo. "We’re tapping into mass pop culture with this," says Raj Deepak Das, chief creative officer, Leo Burnett Group.

The company’s fervent need to be more ‘Indian’ is understandable – after all, it has been a late entrant in the booming $20 billion Indian e-commerce market which is slated to touch $300 billion and account for 2.5 per cent of the India’s GDP by 2030, according to a report released by Goldman Sachs last week. As per a Morgan Stanley report, Amazon India has a market share of 15 per cent, a distant third behind homegrown boys Flipkart (44 per cent) and Snapdeal (32 per cent).

Flipkart and Snapdeal did a decent job of advertising the compelling prices online marketplaces offer over the years – in fact, almost every e-commerce brand has propped its advertising on the planks of pricing, convenience, delivery and variety. Flipkart launched its first ad campaign centred on books in the summer of 2011, while Jabong rolled out its first TV ad attempt in 2012, emphasising the ease of transaction. Snapdeal went mainstream in the same year, with its ‘yamdude’ campaign signifying how even the God of Death cannot resist its tempting deals, and followed that up with a big bash Diwali campaign with 50 commercials featuring 28 celebrities in 2014. Snapdeal currently has Aamir Khan as its brand endorser for its latest ‘Dil ki deal’ campaign.

How does the new campaign take forward Amazon’s strategy in India? One can’t stay away from pricing in a growth-phase industry like e-commerce, after all. The current marketing agenda has been set by horizontal platforms Flipkart, Snapdeal etc, over the last two years. "During that period, practically all the players have been in a market-acquisition mode, so an outsized amount of marketing spend is focused on driving traffic to their webstores quickly, where the dominant theme is deals/discounts," points out Devangshu Dutta, chief executive at management consulting firm Third Eyesight. "So, Amazon has little choice but to follow that strategy too, even as it establishes itself in the market in other ways."

This explains the ‘Whattey Deal’ ads (for Amazon’s summer sale) running alongside the thematic ‘Aur Dikhao’ campaign currently. "Lucrative pricing is very tactical; it is almost like category hygiene and cannot be a long-term differentiator," stresses Kalra. And therefore, Amazon has decided to pitch its offering on the ‘variety’ premise for the long-term, while it continues to propagate a mix of pricing and delivery in its tactical communication. As analysts put it, only players with deep pockets can afford to do short-term tactical advertising alongside thematic brand campaigns, and Amazon qualifies on that count. The ‘Aur Dikhao’ campaign scores on the Indian insight parameter and with other attempts like being the lead sponsor for the India Fashion Week 2015 and sponsoring the IPL, Amazon India sure seems to want to ‘show more’ to the masses.

(Published in Business Standard.)