Contact

Procter & Gamble plans Walmart-like pact with Future Group 

Sagar Malviya, The Economic Times

Mumbai, 24 October 2016

Procter & Gamble (P&G), the world’s biggest consumer goods company, is exploring a long-term partnership with Kishore Biyani’s Future Group akin to the one it has with Walmart in the US, that could involve joint sales forecasting and planning, exclusive product releases, embedding officials at each others’ headquarters and even supply-chain initiatives.

Top executives of P&G and Future Group have held a series of meetings to take their association beyond retailer-client relationship, two officials aware of the development said. While discussions are at an early stage, a few senior executives from P&G’s global office are expected to meet Future Group officials next month to deliberate on the contours of a long-term joint business plan.

“It could be a similar partnership that P&G has with Walmart in the US where they share data on consumer behaviour, plan product launches and even lean on each other for supply-chain initiatives,” said one of the officials.

A month ago, P&G global chief executive David Taylor visited India and toured a few retail outlets, including Big Bazaar. Last week, Biyani and Future Group’s FMCG president Devendra Chawla visited P&G’s Cincinnati headquarters.

P&G’s three entities in India, which sell products ranging from detergents and shampoo to razors and sanitary napkins, have a combined revenue of under $2 billion, less than 3% of its overall global sales.

The business pales in comparison with Unilever’s that is nearly thrice as big in the country with products across price points. However, unlike its Anglo-Dutch rival, P&G has been more focused on premium products that generate high sales at modern trade outlets in contrast to its rivals who stock several mass brands on retail shelves.

Future Group has the widest network in the country with around 13 million square feet of retail space in 221 cities through a 700-odd store network of supermarket brands such as Big Bazaar, EasyDay and Nilgiris.

“It is standard practice for us to engage with our partners across the retail landscape, including all our partners in modern retail, e-commerce and traditional retail, to develop unique plans that create superior value for the shopper,” a P&G spokeswoman said. Future Group declined to comment.

P&G has invested more than Rs2,000 crore in India in the past three years, mainly to set up manufacturing units to reduce dependence on pricier imports. At present, it has seven manufacturing facilities in six states, accounting for more than 90% of its products sold in the subcontinent. P&G’s strategy in India has been paying off — profit margin is up 750 basis points and the company has gone from losing significant money in the country to triple-digit profits in the last two years.

“As modern trade grows, P&G would want a significant share similar to what it has in developed markets. So, rather than just a distributorled model, it is a smart step to align its needs with that of a retailer. Critical issues such as lower product availability on shelves could also be addressed,” said Devangshu Dutta, CEO at Third Eyesight, a retail and consumer goods consulting company.

(Published in The Economic Times)

Festive sales: Amazon, Flipkart are now going offline in smaller towns

Alnoor Peermohamed, Business Standard
Bengaluru, 24 October 2016

E-commerce companies in India are exploring the idea of setting up offline stores in smaller towns as they look to grow their customer base and improve logistics in the unmapped areas.

Rather than investing in their own stores, e-commerce marketplaces are partnering with local merchants who can assist offline buyers in purchasing goods online. Amazon began its assisted commerce programme, Udaan, in 2015 while rival Flipkart is mulling doing the same now. “Project Udaan is going to play a key role in our effort to make Amazon accessible within a few minutes to all our customers. We believe that the initiative has the potential to be a game changer for Amazon in India,” said the US retailer in a statement.

The move to tap offline stores in small towns comes as e-commerce marketplaces begin seeing a larger chunk of their sales coming from outside the six large metros. During its five-day Big Billion Days sale earlier this month, Flipkart said over 65 per cent of its orders came from Tier-II and below towns.

Amazon claims it sees a similar percentage of sales coming from non-metro cities and rural areas. The company said  it received orders from 90 per cent of all serviceable pincodes in India during its five-day festive sale, during which it sold 15 million items on its platform. Udaan is present in 18 states across 188 locations and services over 700 pincodes, according to Amazon.

It has partnered with sellers as well as hundreds of local stores. Amazon trains store owners to help customers browse its website on a PC and buy products online.

Flipkart declined to comment for this story.

“Consumer goods sales are concentrated in bigger cities. This is why it still makes economic sense for a retailer to set up stores in bigger towns even though there’s a lot more competition. But it (online-to-offline retail) is feasible, because you don’t have products sitting in small markets locked away there,” said Devangshu Dutta, chief executive at consulting firm Third Eyesight.

The efficiencies that e-commerce bring in could finally open up India’s rural markets to retail, but there’s still a looming question of whether there is actually any demand here. Dutta adds that a critical mass needs to be reached where availability of products pushes demand and vice versa.

Flipkart and Amazon might be the largest e-commerce players to be exploring taking the offline retail route to enter India’s hinterland, but they aren’t the only ones doing so. Storeking, an e-commerce firm focusing on serving India’s rural areas, has partnered with large players Amazon, Flipkart and Snapdeal to bring online buying to rural areas.

Storeking says it has partnered with over 25,000 offline stores across 100 districts and services around 10 million customers a month. Apart from facilitating commerce, Storeking also gathers intelligence on customer needs in each region, helping it reach brands and cut exclusive deals with them to serve rural customers.

Xiaomi, one of the largest smartphone manufacturers in the world, has partnered with Storeking to bring its Redmi 3S+ smartphone to offline stores in small towns and villages.

E-tailers are not the only ones pushing retail offerings to customers in rural India, with the government being one of the biggest advocates of this. By lending a hand to e-commerce players by giving them store access at its many e-Mitras, the government is looking to kick-start rural commerce and create more employment.

When Amazon signs up a merchant as a partner for Udaan, it trains him and shares  a commission for every sale. In turn, merchants act as a front for customers in small towns and villages to shop online, while their stores act as delivery and pickup points, making it much easier to sell goods.

(Published in Business Standard)

Online baby products seller FirstCry to acquire BabyOye for Rs 362 crore 

Madhav Chanchani, The Economic Times
Bengaluru, 20 October 2016

Online baby products seller FirstCry is acquiring offline retailer Mahindra BabyOye for Rs 362.1 crore in a primarily stock deal, a development that signals how building an offline presence is becoming important for vertical etailers.

Founded by serial entrepreneur Supam Maheshwari, First-Cry will acquire the unit of $18 billion software-to-automobiles congolmerate Mahindra & Mahindra, which in turn will invest in the Pune-based startup.

FirstCry has now been valued at $300-350 million (Rs 2,000-2,330 crore), according to two sources familiar with the matter. The deal will nearly double its valuation from about $155-160 million last year.

Mahindra’s will get a minority stake in FirstCry as part of the transaction. FirstCry owner Brainbees Solutions will issue shares worth Rs 354.6 crore to Mahindra Group and pay Rs 7.5 crore in cash, according to filings made with stock exchanges.

As a part of the transaction, First-Cry has also raised Rs 226 crore ($34 million) in fresh funding from Mahindra, Switzerland’s asset management company Adveq and Infosys cofounder Kris Gopalakrishnan, besides existing backers like SAIF Partners, IDG Ventures India, NEA, Valiant Capital and Vertex.

The deal will help FirstCry create one of the largest omnichannel distribution plays in India with nearly 300 stores across 125 cities in the country. The company had earlier said that it planned to open 700 franchisee stores in the next 3-4 years and the Mahindra brand will help it build more trust in the market.

“With this transaction, our true omni-channel potential will evolve as we will have a significant network to take the orders online and get them delivered or picked up from stores,” CEO Supam Maheshwari said, adding that customers order 11 times a year from FirstCry. He declined to comment on the valuation. The deal will help First-Cry move faster towards its goal of profitability, as it leverages scale to drive cost efficiencies, rope in more brands and even expand to international markets.

FirstCry will also look at more acquisitions, especially in segments like kidswear brands and digital media startups targeting parents, according to Maheshwari.

FirstCry’s acquisition of Mahindra BabyOye reverses the trend of justoffline players such as Future Retail acquiring Fabfurnish at a distress price of less than Rs 10 crore and Titan Company buying 62% in online jewellery retailer CaratLane for Rs 357 crore.

All vertical etailers, from eyewear player Lenskart, furniture seller Pepperfry and lingerie player Zivame, have built or are building a large offline presence. Even fashion portal Myntra, part of Flipkart, plans to sell its private labels through offline retail.

The move also comes at a time when the world’s largest retailers are looking to build omnichannel players. US brick and mortar retail giant Walmart has made building an online presence a priority, also acquiring etailer Jet for $3.3 billion.

On the other hand, online retail giant Amazon reportedly plans to open retail outlets in the US. The baby and mother-care segment presents a $12-billion market, but it also presents its own challenges given the complexity of products. 

“It holds huge potential but it’s also troublesome to operate as it has a mix of FMCG type of products, then apparel and then also more durable products which do not sell as fast,” said Devangshu Dutta, CEO at retail consultancy firm Third Eyesight.

Mahindra Retail operates stores under BabayOye in two formats, 39 under franchisee agreements and 81 company-owned stores. While FirstCry is acquiring the franchisee division, Mahindra Retail will continue to operate company-owned stores as it becomes master franchisee for the brand. Mahindra Retail will shut down its online commerce business under BabyOye, a startup which it acquired in 2015 in order to build out its online commerce business.

“Fundamentally, Mahindra Retail had a physical presence only and the online business had a very nascent presence,” said Zhooben Bhiwandiwala, president of the group’s private equity unit Mahindra Partners under which the retail business is housed. “It made no sense for both the organisations to be battling each other in the marketplace and burning cash.”

Experts tracking the space said the deal will give FirstCry access to Mahindra Retail’s stores, which are located in more premium or high-street areas, besides international kids brands like Carters. Mahindra BabyOye had seen revenues stagnate between Rs 205 crore and Rs 230 crore for the last three financial years. The business was also reporting losses ranging from Rs 114 crore to Rs 121 crore during the period, and the deal allows the conglomerate to offload a business which was not core.

“With this deal, Mahindra is consolidating its presence in the space, and FirstCry will become most powerful and well-financed entity,” said Bhiwandiwala, who will also join the board of FirstCry.

(Published in The Economic Times)

E-commerce space widens this Diwali, more buyers outside metros 

Alnoor Peermohamed, Business Standard
Bengaluru, 20 October 2016

E-commerce in India has long been accused of being built on massive discounting and catering mostly to well-to-do customers in large metros. While this has been largely true for the past four years or so, today, large e-tailers including Amazon, Snapdeal and Flipkart argue they are at an inflection point where e-commerce becomes universal in the country.

That inflection point came during the festive sales these players held at the start of this month and has been in the making for at least the past nine months. For the first time, more customers outside large metros shopped for products online and were even willing to pay more for convenience – a stark contrast to how the industry has been perceived.

Amit Agarwal, country manager at Amazon India, said: “A week before the Great Indian Festival sale started, a popular comment would have been that e-commerce in India is primarily limited to well-off families in urban India. But more than 65 per cent of our shipments go to Tier-II and below cities and during the festive sale, it was higher – closer to 70 per cent.”

One of the biggest reasons for this has been the trust e-commerce companies have built in consumers’ mind. Cash payments, which allowed customers to pay for goods only when delivered, are at an all-time low, indicating an increase in trust. While not only making it much easier to accept payments, e-commerce companies see this as a way to reduce returns.

During the recent festive sales, which kicked off at the start of this month, Flipkart said cash-on-delivery (COD) accounted for 60 per cent of goods sold on its platform, down from 75 per cent a year ago. Rival Snapdeal pulled off an even better show, claiming that for the first time, more than 50 per cent of all its orders were prepaid.

“The festive season is an inflection point for the growth of e-commerce industry,” Snapdeal said in response to a questionnaire sent by Business Standard. “The increase in smartphone penetration and the explosion of choice at the sub-Rs 10,000 price point shows the importance of digital access for all.”

Flipkart pegged the share of orders coming from Tier-II and Tier-III cities at 65 per cent, saying it was nearly double of last year’s Big Billion Day sale. Snapdeal said 60 per cent of its sales came from outside metros, while Amazon said the number of shoppers from smaller cities grew 30 times during its sale.

While penetration is growing, it’s forcing e-commerce companies to change the way they do business. Marketplaces, by definition, cannot stock their own inventory, so they rely on sellers. But to get products shipped to customers from smaller cities, they’ve now begun stocking their sellers’ inventories at their own warehouses strategically placed to ensure quick deliveries.

“With 27 fulfilment centres across 10 states and among the strongest distribution and delivery network, it is no surprise that this festive sale saw such a strong degree of transactions from Tier-II & -III cities,” said Amazon.

Chief Executive of Flipkart Binny Bansal said in a recent interview more than 60 per cent of the 15.5 million orders the company processed during its five-day Big Billion Day sale were fulfiled by the company itself. This was in stark contrast to just 20 per cent during its sale last year, which led to a massive pileup of deliveries and disgruntled customers because deliveries were delayed.

Experts, however, argue the changes seen this festive season are part of growing sensibilities at e-commerce companies to reduce cash burn. With the new foreign direct investment norms for e-commerce marketplaces disallowing such players from discounting products, it’s gotten much harder to play the price war.

Chief Executive at consulting firm Third Eyesight, Devangshu Dutta, said: “There is a pressure within the e-commerce businesses to discover more margin. Discounting is less aggressive and the focus is as much on building margin during the festive season as on gathering turnover. Product mix and merchants are being reconsidered.”

E-commerce grew in India on the back of books, a model Jeff Bezos had perfected in the US with Amazon years earlier. Books were cheap enough for customers to trust relatively new e-commerce companies with, were easy to ship and had an almost universal demand. In a decade, that story had completely changed.

Indians are now buying everything from smartphones, clothing, consumer durables to even vehicles and homes online. The ticket prices for purchases are on the rise, too, and experts credit this not just to growing income levels, but acceptance by consumers to make larger purchases online. Out of the millions of orders Flipkart got during its sale, for instance, over 100,000 had a value higher than Rs 50,000.

For Amazon, an estimated two million orders out of its 15 million during its sale were subscriptions for its Prime membership. While the membership cost just Rs 499 a year, Prime members in the US spend on an average $1,200 a year on the platform, double what a non-Prime member spends.

Amit Agarwal, who heads Amazon’s India arm, said it was a huge win, indicating that India’s e-commerce market was evolving even faster than what was seen in the US. It took a decade for Amazon to roll out Prime in the US and another decade for it to become a norm – half of all households in the US are estimated to have one Prime member. In India, it’s taken just three years and adoption is already off the charts.

But India’s e-commerce market has been built on an immense amount of capital being pumped into offering discounts to hasten adoption. This could come back to hurt e-commerce companies as all they’re doing is pulling customers away from offline channels with the lure of discounts, and once they stop, people might just go back.

“If the industry insists on having e-commerce being seen as separate from the rest of retail, it will be fighting a battle against itself in which there are no real winners except for advertising media and the last player left standing with money in the pockets,” added Dutta.

(Published in Business Standard)

Are Flipkart, Amazon discount sales affecting white goods brand perception? 

Firstpost
New Delhi, 18 October 2016

Online festival sales and the big billion day sales are presumably happy times for customers going by the units sold claims by online market places. However, they are creating much heartburn for some of the white good manufacturers whose products are being sold at prices below what they are being sold at the company showrooms or at the retailer’s end.

The combined sales of all the three e-commerce entities in the recently concluded five day big billion day sale spectacle was pegged at around Rs 6,500 crore, up 20 percent over the previous year, according a report in The Financial Express.
 
The Bengaluru-headquartered Flipkart pipped its nearest US-based online retail giant Amazon’s Indian arm with 15.5 million units sold against the latter’s 15 million units.

White goods manufacturers are now crying foul at the heavy discounts being offered, according to The Economic Times.

It isn’t that the discounts offered by online marketplaces are really that huge on all the products, says Nilesh Gupta, Managing Director, Vijay Sales, consumer electronics chain. He sees online as a space that creates a market for goods.

“Though consumers check for white goods and electronics online, the purchases are made offline, usually. The prices of the white goods and electronics are not hugely different to impact offline sales or market,” he says.

Consumers don’t make large ticket purchases of white goods periodically, says Gupta. When they do realise that if the product brought online is not being repaired by after-sales service of the company, then consumers will be cautious on buying these items.

It is a myth that is being created by the online marketplaces that they offer ‘discounts’ during festival periods, says Gupta. “It is only offered for select products and not across all product categories. On white goods too, discounts are minimal. I see this discounting by online marketplaces as a disturbance for offline businesses for 3-4 days and then it dies down. The online sales and discounts are a temporary phenomenon,” says Gupta, dismissing the fuss over large-scale discounts and sales bonanza that online marketplaces whip up periodically. “The discounts are hardly much,” he says.

It is worrisome, though, some say that not all white goods sold come with a warranty, while some concur that they are basically clearance sales. Even those who claim that goods sold on the marketplaces are goods which are not in demand are worried over potential loss of reputation for the company. That is one of the reasons why besides the oft-voiced complaint of vendors and retailers associations, white goods manufacturers too are now raising the pitch against discounts offered by online marketplaces.

Companies want to protect the price points at which their products are sold and would not want a marketplace to lower it than what they offer offline. “When the price of a product is knocked down on a marketplace, for instance, it affects the brand’s perception in the consumer’s mind and also at the dealers,” says Devangshu Dutta, Third Eyesight.

Indian rules allow for a Maximum Retail Price (MRP), but since there are no rules yet to take action on anyone who sells below it, they can be sold by marketplaces at below MRP under the guise of discounts and sales, informs an analyst.

Though everyone wants to sell products at ‘exciting’ prices cashing in on festival period sales, aggressive discounts can impact the brand’s credibility with the trade.

The consumer runs the risk of getting a product that does not offer a warranty and the company not willing to do after-sales service. When that happens, the brand’s credibility goes down for the consumer as well.

But some brands do have contracts that do not allow for their products being sold at the contractual price.

For instance, furniture. Godrej Interio has a contract drawn up with online marketplaces which do not allow for the latter to sell their products at a rate below what is stipulated.

“We work with a lot of marketplaces. We deliver the products though it is sold online through a marketplace. Marketplaces do not have an inventory for our products. We don’t encourage a price advantage that goes against any of the channels through which our products are sold,” says Bedraj Tripathy, Marketing Head, Godrej Interio.

The company also does its own checks on marketplaces to ensure that their products are not sold at prices below what has been mandated through the contract.

(Published in Firstpost)

How Paper Boat rowed against the tide to find success

Rashmi Pratap, The Hindu Businessline

Mumbai, 17 October 2016

When Neeraj Kakkar and his team at Paper Boat decided to launch Kanji, a tangy probiotic drink popular in Punjab and Uttar Pradesh, they were surprised to find that the original recipe had been modified due to unavailability of the key ingredient: purple carrot.

With orange and red carrots having taken the Indian market by storm, farmers had virtually stopped cultivating the variety needed to make Kanji. And the substitute was a combination of orange carrots and beetroot.

After an intensive search across geographies, they learnt that purple carrots were being cultivated in southern Turkey. Hector Beverages, the parent company of Paper Boat, imported its seeds in 2014 and began cultivating in Udhagamandalam (formerly Ooty). Now, the first crop is ready, and Hector Beverages is looking to add Kanji to its portfolio by this winter.

“We want to be the reference taste for every beverage we launch. We also believe that if there is something better-tasting than our product, we will stop selling it,” says Kakkar, explaining why he didn’t settle for the carrot-beetroot combination for his Kanji.

And that is one of the pillars of the company’s disruptive business idea, which has helped Paper Boat become the preferred drink for many despite entering a market crowded by the Pepsis and the Cokes, as late as in 2013.

The disruption

Paperboat created a new category of branded ethnic-flavoured drinks when it burst on the scene, and its packaging too set it apart from the crowd.

Devangshu Dutta, chief executive at retail consultancy Third Eyesight, says Paper Boat’s innovative products and packaging have been a force of ‘creative disruption’, and the company has been able to back that up with distribution.

“Paper Boat’s traditional Indian flavours and its differentiated packaging give it a unique look at retail stores. The company has clearly gone after market share and taken a penetrative approach. Whichever geography they choose, they are going after it very aggressively. It is clear that they want to be a deeply penetrated mainstream product,” he says.

But making a mark wasn’t easy. Retailers were wary of stocking the products, fearing they wouldn’t be sold. And that’s when Paper Boat’s deployed its second disruptive strategy: a no-questions-asked return policy. “We gave our retailers the freshest of products and refunded them in full in case of returns,” says Kakkar.

Most large companies, in contrast, only refund a percentage of the money. But Paper Boat’s ‘insurance’ cover on returns ensured that its Aam Panna, Gol Gappa and Aam Ras beverages adorned every retailer’s shelf.

The third pillar of Paper Boat’s success has been customer-centricity: it sources the best quality raw materials from across the country. “We have invested in quality function. Our aim is to be better than MNCs because being equal to them has no meaning,” says Kakkar.

Another factor, which Kakkar believes has worked well for the brand, is its communication strategy. “Be it communication on TV or social media, we have followed the same distinctive tone of nostalgia and innocence. Once you speak the same language, people remember you better.”

The stories that the brand narrated were reminiscent of the way IndiGo airlines lovingly created stories for its Airwiches (sandwiches on air). Tellingly, Paper Boat beverages are served on board IndiGo, bringing two great storytellers together at 30,000 feet.

Paper Boat relies heavily on digital marketing, and its digital campaigns are as funky as the brand. On Instagram, it tells its brand story using creative doodles, videos and photographs, cleverly using two puppies named Hector and Beverages to add fun to the storytelling.

“We are digital first and mass media second. We use the cheapest way to reach out to people,” says Kakkar.

The challenge

But according to Harish Bijoor, CEO of the Bengaluru-based brand consultancy that goes by his name, “Paper Boat’s communication is good, interesting and different, but it is niche — and that is a negative.”

“Niche marketing is good as an early entry strategy, but if a brand wants to appeal to a slightly larger mass, which has the money, it cannot remain niche,” he says.

Today, ethnic flavour drinks have a nearly 50 per cent share of the Rs2,000-crore juices category. Already, other brands – Dabur Hajmola, Cocofly – are emerging, with ethnic flavours similar to Paper Boat’s. Copy-cats typically eat into the market share of the incumbent. Going forward, Paper Boat may have to reach out to a larger audience in a tone familiar to them.

Dabur’s Hajmola Yoodley is surprisingly capturing public imagination. It’s seen more on modern trade shelves (which is not surprising, given Dabur’s FMCG distribution strength) and is piggybacking on the familiar Hajmola brand, which helps with customer connect.

Dutta believes that Paper Boat’s geographic footprint can grow over time, as has been the case with some other players. “They have an adequate presence in certain geographies and they are not as strong in some others just like many other FMCG brands. I think it is a matter of time before they expand,” he adds.

Paper Boat, meanwhile, is also keeping a close tab on costs. It replaced tetra packs with a flexi pouch that uses just 8gm of plastic as against 25gm for a pet bottle, making it cheaper by at least 50 per cent. “Even transportation costs go down with this packaging,” Kakkar points out.

And profitability, he says, is not a concern. “Ours is not a cash-burn business. We continue to invest in growth and advertising (at the cost of profitability),” Kakkar adds.

For now, the company has settled down to a strategy of having some year-long products like Chilli Guava or Aam Panna and other temporary launches once a year like Thandai during Holi, Panakam during Ram Navmi and Kanji for two months in winter.

So far, Paper Boat seems to have got its mix right. Its ability to continue to juice out success from its differentiated strategies will, however, be tested over the next few years.

(With inputs from Chitra Narayanan)

(Published in The Hindu Businessline)

Supam Maheshwari Has a Way of Mothering Impossible Dreams

Madhav Chanchani, The Economic Times
Bengaluru, 17 October 2016

FirstCry founder Supam Maheshwari is one of the only entrepreneurs in the online-retail space who was also running a business during the 1999 2000 dotcom bubble, which has perhaps helped him chart a different course from his peers. His company started adding offline stores in 2012 when omni-channel was not the buzzword, FirstCry is based out of Pune and not startup hotspots of Bengaluru or Delhi, and he has also been able to spin off a logistics business.

And on Saturday , Maheshwari pulled off a unique transaction where his company acquired Mahindra BabyOye in a stock deal and also secured an investment from the $18-billion conglomerate. By consolidating its largest competitor, the 42-year-old Maheshwari will now be the CEO of by far the largest baby and mothercare retailer in India, both online and offline.

“His ability to think strategic and macro, and suddenly go deep micro is something very unique,” said Sudhir Sethi, chairman of IDG Ventures India, which invested in the company in 2012. “He is extremely comfortable with extremely comfortable with uncertainty, and charting out a new path which has not been done before.” Players in the online commerce market will now keenly watch Maheshwari, who unwinds by playing squash on weekends and spending time with family, as he integrates the offline operations of Mahindra BabyOye and FirstCry to build an omni-channel play.

“There is no divide between on line and offline channels, as from a customer’s point of view it’s retail,” said Devangshu Dutta, CEO at retail consultancy firm Third Eyesight.

“Omni channel holds potential over the long term and companies need a management team which understands the business.”

But the going has not always been so smooth for Maheshwari, a mechanical engineer from Delhi College of Engineering and MBA from IIM-Ahmedabad, who knows he has his task cut out. He started his first company , eLearning startup Brainvisa Technologies, in March 2000 which raised `3 crore from Infinity Ventures 3-4 months before the dotcom bubble burst. The business started as a customer facing online test preparation play but had to pivot to a business-to-business model. After running the business as CEO for over seven years, it was acquired by Indecomm Global in 2007 for $16 million where he also saw impact on corporate business of Lehman Brothers brankruptcy. “You become richer by experience, there is no shortcut to it. Importance of cash, running a business in a cost-efficient way and building that culture internally is very important,” said Maheshwari about his Brainvisa experience.

Maheshwari said that he has applied these lessons at FirstCry , which he founded in 2010 with Brainvisa colleague Amitava Saha. He was also the first online retailer to start adding online stores in 2012, a trend which has been followed by several vertical etailers now. And in 2012, he also launched a logistics business to fulfil its own orders. XpressBees, which is now run by Saha, started taking third-party orders in 2015 and raised `85 crore in funding after spinning off from FirstCry. But along the way, he has also taken some tough calls, like shutting down the personal care products selling business Goodlife in 2013 admist funding winter in ecommerce space.

People who have worked closely with him say Maheshwari is a tough taskmaster, and great at spotting opportunities which will help him expand his business, even if they don’t fall into conventional methods.

“He is very driven and committed to the cause of the business,” said early-stage fund India Quotient’s Anand Lunia, who was a cofounder at Brainvisa. “He does not think theoretically and gets stuck to a particular notion of strategy , which is what most startups do.”

(Published in The Economic Times)

Festive discounts, online shopping and retail evolution in India

P. Karunya Rao of Zee Business in conversation with Devangshu Dutta, Chief Executive, Third Eyesight and Narayan Devanathan, Group Executive & Strategy Officer, Dentsu India, about festive discounts, the evolution of ecommerce and retail business in India.

 

E-commerce firms slug it out as Indian festival season kicks off 

Promit Mukherjee and Supantha Mukherjee, Reuters/Yahoo
Mumbai, 4 October 2016

India’s two largest e-commerce players are looking to use the country’s biggest festive sales season this week to bolster their valuations as they seek fresh capital and look to fend off Amazon’s growing inroads into the domestic market.

For India’s Flipkart and Snapdeal, strong sales during India’s equivalent of the U.S. Black Friday sales could give both companies some leverage in their current push for investment.

With private equity money flows drying up and Amazon.com pledging $5 billion investment to gain ground in India, local e-commerce vendors will be looking to use this season’s numbers to show investors their ability to drive sales.

Flipkart is currently in talks with retail giant Wal-Mart Stores and a strong showing of sales during this week could give it more negotiating leverage. Snapdeal is also preparing to raise fresh capital to defend its turf.

The high stakes battle between Flipkart’s Big Billion Day sales bonanza, Amazon’s Great Indian Festival sale and Snapdeal’s own initiative dubbed the Unbox Diwali Sale, means employees at all three players are working marathon hours to meet stiff sales targets.

“Our teams are working around the clock during Big Billion Days,” said a spokesperson for Flipkart, adding that many are camping out in office for the week, and working 14-18 hour days in a bid to keep up with frenzied demand.

All three companies say their sales seasons have so far been successful, but did not comment on how the sales momentum is stacking up against their own internal targets.

Flipkart says it sold 2.25 million units in the first 12 hours of its 5-day sale, which kicked off on Sunday.

Its closest competitor Amazon India said it sold 1.5 million units in the first 12 hours of its sale that began on Saturday. Amazon said its first day of sales was three times higher than the corresponding first day sales last year while second day sales were five times higher.

Snapdeal said more than 2 million users logged in on the first hour of its sales, leading to more than 180 orders per second at launch.

“With companies under pressure to make money, they don’t want to let the opportunity go to a competitor…but you can’t keep burning cash by offering huge discounts,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

(Published in Yahoo)

Shopping in online festive sales? Here is what you should know 

Vivina Vishwanathan, Mint

Mumbai, 3 October 2016

If you are an online shopper, you will find yourself in the midst of the annual festival sales offered by various e-commerce companies. This year, e-commerce companies, such as Flipkart, Amazon and Snapdeal kicked off their annual sales from the first week of October.

Flipkart’s Big Billion Days 2016 began from 2 October and will end on 6 October. Day 1 is for fashion, home d�cor, televisions and home appliances. Day 2 is for mobiles and mobile accessories. Day 3 is for all other electronic items and days 4 and 5 are for the complete range of products.

Amazon’s Great Indian Sale ends on 5 October while Snapdeal’s Unbox Diwali Sale will end on 6 October. ShopClues offers a 10-day sale which ends on 10 October.

Deals and offers

The discounts range between 10% and 70% depending on the product and the website you shop from. Along with this there is an additional cash back offered by banks if you use their debit or credit cards.

For instance, SBI’s debit card holders get an additional discount for buying on Flipkart during the sale period. “SBI’s credit card holders can avail 10% instant discount of up to Rs5,250 during the offer period. This is in addition to discounts given by the merchant,” said Vijay Jasuja, chief executive officer, SBI Cards.

He further said that merchant-offered equated monthly instalments (EMIs) have been a big driver of sales. “We anticipate EMI purchases to contribute significantly to the overall card spends this year too,” said Jasuja. Banks tied up with e-commerce companies expecting more spends.

“Last year, we saw a growth of over 30% in our total credit card spends during the festive season. E-commerce spends rose considerably, upwards of 45% during the same period,” Jasuja added.

Similarly, HDFC Bank Ltd has offers for Amazon customers, while American Express has tied up with Myntra and ShopClues to give additional discounts.

Keep in mind

Experts say that compared to the last 2 years, the discounts are lower this time. “If you notice, the message around discounts and offers has been very subtle and e-commerce companies are now focusing more on sustainability.”

Hence, consumers will, in a way, get less discounts than in the last couple of years,” said Ankur Bisen, senior vice-president, retail and consumer at the retail consultancy Technopak Advisors.

The retailers know that consumers will buy and sensitivity to discounts is lower during the festival season. “There is a large segment that still buys around the festivals and we are seeing overall growth in consumption,” said Devangshu Dutta, chief executive officer, Third Eyesight, a retail consultancy firm.

But to make the most out of what is on offer, shop around. Some companies give additional discounts if you buy through their app. So, you may get instant deals if you download the app and then buy.

Check your internet connectivity to avoid any glitches. Also, by registering with the websites, you can checkout faster.

Using credit cards and debit cards can give you additional discounts. Remember that no e-commerce platform offers additional discount for cash on delivery. Hence, choose the mode of payment wisely. Clean your browsing history as most of the e-commerce firms use algorithms to understand what you need and that could impact the prices.

Happy shopping.

(Published in Mint)