Written By Sulekha Nair

An April 2018 government press statement stated that some 7,968 startups received recognition in financial year 2017-18, as as against 797 recognitions in fiscal 2016-17.

The Narendra Modi government has every right to take credit for being open to business as they have done much more than any government has for business in India, say industry observers. Experts who spoke to Firstpost cited a slew of programs like ‘Make in India’, ‘Startup India’, ‘Stand-Up India’ and ‘Fund of Funds’ that have given a fillip to India Inc., especially the startup sector in what is now the world’s sixth-largest economy.

Speaking at a government-industry interface session in Lucknow, Uttar Pradesh (UP), Prime Minister Narendra Modi said industrialists too contribute to nation building and that it is not right to label them all as thieves; but those who do wrong “will have to leave the country” or live in jail.

“We are not the people who will be afraid of standing beside industrialists. You would be knowing some people (who are such) that you would not find a single photo of them with an industrialist/businessman. But there is not a single businessman in this country who would not have gone to these people’s places and bowed to them in reverence,” he added.

Agreeing with Modi’s statement, Adhil Shetty, co-founder & CEO, BankBazaar, said the government’s schemes, over four years, have helped financial services, for instance, develop in tandem with e-commerce growth. India is now one of the key markets for fintech firms as a result of the huge demand for services.

“There’s strong support from the government by way of initiatives such as the Jan Dhan financial inclusion program, the biometric-based Aadhaar initiative that aims to give every Indian a unique identification number, and the Unified Payments Interface (UPI). Policies such as ‘Digital India’ have also made the average Indian more confident about transacting online. This has created a market for fintech companies,” Shetty said.

Analysts, investors and experts singled out the importance given to the startup sector. “By recognising startups as a sector, the government has given wings to entrepreneurial dreams,” said one analyst who requested anonymity.

“The government is quite pro-business and has been doing a lot to help startups,” said Anil Joshi, managing partner, Unicorn India ventures.

An April 2018 government press statement stated that some 7,968 startups received recognition in financial year 2017-18, as against 797 recognitions in fiscal 2016-17. Furthermore, it said that a total of 8,765 startups have been recognised by the Department of Industrial Policy and Promotion (DIPP) since January 2016.

“Five years of UPA-II against four years of the NDA government and the latter has done well not just for the startup sector but also for micro, small and medium enterprises,” said Arvind Singhal, Chairman, Technopak Advisors.

The BJP government is pragmatic and acknowledged the role of business in the country, said Singhal, who, referring to GD Birla, JRD Tata and others who made a significant contribution to business and to nation-building, posed a question,”What is the point of demonising the business community in the country?”

It was Congress President “Rahul Gandhi [who] did a lot of damage by calling this government a ‘suit-boot ki sarkar’,” Singhal opined. Just as there are rich and poor farmers and good and bad ones, the same apply to business. “For every Mehul Choksi and Nirav Modi, there is a Ratan Tata, Kumar Mangalam Birla, Adi Godrej, Sanjay Lalbhai and Mukesh Ambani – Ambani is investing his money in his ventures and isn’t asking for government loans,” Singhal added.

The government has given the term ‘businessman’ a good image. Earlier, if someone said he was doing business, it was seen as something seedy or crooked, said Devangshu Dutta, Chief Executive, Third Eyesight, a consulting firm focused on the retail and consumer products sector. The word ‘businessman’ is not abusive anymore and the credit for that should be given to this government, he added. While the government has provided a climate for entrepreneurship, there is still a lot to do like simplifying complex rules that govern business and ensuring those rules are implemented, according to Dutta.

To be fair to the government and to the prime minister, Modi has constantly talked about investing in India in any international fora or country he is invited to. Foreign direct investment (FDI) in India increased by about three percent to $61.96 billion in fiscal 2017-18 on account of steps taken by the government to improve the business climate, and owing to liberalised norms. FDI inflows stood at $60 billion in the previous fiscal. The figure includes equity inflows, reinvested earnings and other capital.

But the picture is not all rosy. Take the angel tax, for instance. It is a tax on capital that is raised by unlisted companies by issuing shares in excess of their fair market value. The number of angel and seed funding deals halved to 435 in 2017 from 901 in 2016, according to a report in VC Circle. The total disclosed value of these deals also fell sharply to $245 million from $374 million.

The recent update by the Central Board of Direct Taxes (CBDT) that coercive measures would not be taken to recover outstanding dues still does not address the root cause of angel tax, said entrepreneurs. Paula Mariwala, Partner, Seedfund and co-founder, Stanford Angels, termed the government’s actions with regard to angel tax as ‘completely bizarre’. She said the government has no business questioning the valuation of a start-up that basically has no revenues.

While agreeing that the angel tax needs clarity, Joshi of Unicorn India Ventures said these issues would take a while to be cleared up. There is clarification on the definition of startups, for which one must give this government credit, he said. “No one can expect wonders in a four-year tenure. But, the reactions have been positive as far as this regime is concerned,” he added.

Issues that businesses face in India must be addressed immediately and India Inc. shouldn’t focus on what a political party is saying. “Political parties have a job to do and we should not hold politicians to task. There is no end to name calling and it is unproductive,” said Sairee Chahal, Founder and CEO of Sheroes.in, a website that focuses on women and the career space.

Emphasising that the focus needs to be on whether there has been any real growth on the ground, and also if industry has met the goals set by the government be it GDP, forex or financial services, she said industrialists are not a constituency at all. “Industrialists are rich and industry will find a way to get its work done no matter which government is in power. What is important is if we have better results as a country in terms of the basics like electricity, infrastructure, human development, among other things.”

The Modi-led government is seen as doing more, but I don’t know if it is doing more, Chahal added.

Source: firstpost

E-commerce giant Flipkart, which owns eBay India, will shut the service on August 14

Written By Alnoor Peermohamed & Romita Majumdar

With Flipkart deciding to pull the plug on eBay India on August 14, 2018, this will finally bring to an end the era of one of the earliest movers in the country’s online retail space. The San Jose-headquartered company, right after Walmart’s decision to acquire majority stake in Flipkart on May 9 this year, had announced its plan of trying luck in the country on its own once more. But, the market today is no more the same as it was 14 years ago when eBay entered the country.

Back in 2004 when eBay forayed into the country with the acquisition of online auction site Bazee.com, the laws around shopping on Internet were not clear. Avnish Bajaj, the then CEO of Baazee.com, paid the price when he was arrested over the listing of a pornographic content on the website by a user. Despite this, the market was wide open as the concept of buying products online was just taking shape.

eBay clearly an early mover’s advantage which the company failed to capitalize on, eventually losing out to players who even entered the space much later than it. Finally, it ended up in the lap of Flipkart, bruised and battered and only to be shelved.

In an email to employees on Monday, Kalyan Krishnamurthy, CEO of Flipkart, announced that eBay India would be shut and in its place the company would launch a new platform for used and refurbished goods under its F1 Info Solutions & Services subsidiary. eBay’s dream of riding on the back of Flipkart’s success in India to power cross-border e-commerce for its global audiences, a last resort of sorts to remain relevant in India, has also failed.

“eBay came to India after they acquired Baazee 14 years back and after that, a lot of the initial time was lost in trying to find a space for themselves. I’m not sure that they were clear or committed to the opportunity in India as this country had its own challenges – regulation, technology adoption, access,” said Sanjay Anandaram, a venture capitalist and startup mentor.

While $50 million for Baazee back in 2004 was a lot of money, subsequently eBay’s appetite to invest in India was lacking. Over the decade of Flipkart’s existence, the company has raised $10 billion (with the completion of the Walmart deal) and still remains to be a loss-making company. Similarly, Amazon which entered India in 2013 has so far invested close to $5 billion, but in the case of eBay, such a large commitment was certainly lacking.

eBay CEO Devin Wenig in an interview with ReCode in April 2017, reiterated that investments in India’s e-commerce space were not rational, being one of the biggest reasons the company decided to pack off its India unit to Flipkart and invest in the company rather than grow independently.

“The market has been overheated, not rational, and probably over-invested in too many companies. It’s been a very unhealthy e-commerce dynamic for a few years. The conclusion was, it was going to have to consolidate, that fewer parties were probably a good thing for the market,” Wenig had said.

While its true that one needed and still needs a big appetite to compete in India’s e-commerce space, the flurry of investments only began flowing after 2014. For the first decade, eBay simply did not focus on becoming a dominant player in India, unlike how its peers who set up shop in the subsequent years did, according to Devangshu Dutta, Chief Executive at Third Eyesight.

“It comes down to the importance you give the market. Flipkart’s focus was winning the India market and Amazon entered India with the strategic mindset that this was an important market. Whereas India didn’t really figure very high on eBay’s plans. They saw India as another market to be in,” added Dutta.

Moreover, with eBay’s global business beginning to falter, the company’s India unit paid the price. The company cut employment and scaled down its business twice after 2014. While it continues to have a development centre here, one could say eBay has failed at even using India’s technology prowess which other retailers such as Amazon, Walmart and Target has done so well.

Even now as eBay plans a second stint in India, it’s focus is on cross-border retail which is still only a tiny chunk of the country’s e-commerce potential. Moreover, the US online retailer will have to once again build up a base of retailers who can list products to sell on its global platform. On the consumer front, players like Alibaba and even Amazon are already making strong headway in making it easy for Indian consumers to shop for products from overseas retailers.

“The anticipation is that we will come back into the Indian market both through an import and an export strategy. We will start with export meaning Indian sellers selling on other marketplace platforms around the world that was something that we turned over to Flipkart. We are going to get that back upon the closing of the transaction,” said Wenig in a call with investors announcing the company’s second-quarter results this month.

Source: business-standard

Trollies are seen outside an IKEA store in Wembley, north London January 28, 2015. IKEA Group, the world’s biggest furniture retailer, posted on Wednesday a…

Written By Suneera Tandon

IKEA seems more obsessed with doing it right than doing it fast.

The Swedish furniture retailer, which has been present in India for close to five years, has waited all this while to open a store in the country. Over these years, IKEA has been studying the Indian market and understanding consumer preferences in order to localise its offerings.

But days before its much-awaited launch, the company has again postponed the plan owing to quality concerns. The store, scheduled to open in the southern Indian city of Hyderabad on July 19, will now be inaugurated on Aug. 09.

“IKEA Retail India decided to move the date as it needs some more time to live up to its expected quality commitments towards customers and co-workers,” Peter Betzel, CEO of IKEA Retail India, said in a statement. “Our main priority is to create an inspiring and safe experience for both customers and coworkers.”

The delay has upset its potential customers, but the company is doing everything to ensure the disappointment doesn’t last.

Brand experts say that in the long haul the delay may not matter much.

“In the lifetime of a brand, this is unlikely to have an adverse effect,” said Kiran Khalap, co-founder and managing director of brand consulting firm Chlorophyll. ”Most desirable brands have long waiting periods, yet buyers don’t abandon them.”

Firefighting

This isn’t the first time IKEA’s encountered such a situation. Earlier this year, bad weather forced it to postpone the launch of its outlet in Exeter, England, at the last minute.

Within minutes of announcing the delay in Hyderabad, the company’s social media handles began addressing customers’ concerns. These channels have been in damage control mode since then.

“IKEA’s launch is high-profile and will be dissected deeply by everyone, not only customers,” said Devangshu Dutta, CEO of retail consultancy, Third Eyesight. “Rather than have a launch that is marred by defects or incomplete in some ways, it is sensible from an operational perspective and responsible from a branding point-of-view, to delay the launch and communicate the delay widely.”

Source: qz

Written By Rasul Bailay, ET Bureau

NEW DELHI: Reliance Industries has identified last-mile delivery as the biggest challenge for its planned online marketplace venture and will focus on nurturing this aspect of the business, where rivals Flipkart and Amazon have asignificant head-start, sources said.

“Last-mile delivery and the overall customer experience are going to be priority areas for Reliance,” a source said, asking not to be identified. Reliance plans to invest heavily to build a robust supply chain, including its own delivery logistics, and will also use third-party companies as “it wants to take ownership of delivery and experience,” the source said.

Source: economictimes

Written By Varsha Bansal, ET Bureau

BENGALURU: With fashion being the second-most important category after smartphones for the Flipkart Group, its Myntra and Jabong units plan to invest $300 million over the next three years to improve market share, according to people familiar with Flipkart’s three-year outlook.

Myntra-Jabong also expect to triple their gross merchandise value — a proxy for gross sales—to $4 billion in three years, from $1.2 billion in fiscal year 2017-18. The retailers intend to triple their combined customer base and improve their share of the domestic online fashion market to 50%, from an estimated 35% now, these people said. Myntra chief executive .

Source: economictimes