“Fashion is a zombie business. It is dead and it doesn’t know it yet,” says Devangshu Dutta, Founder of Third Eyesight, a specialist management consulting firm.

This is a must-watch excerpt from a presentation and panel discussion anchored by Devangshu Dutta on 27 March 2019 at the India Fashion Forum, in Mumbai.

The challenge he presents is simple: create a new business model for the fashion sector.

While the rise of Delhivery has been quite spectacular since its beginning in 2011 to become India’s first unicorn in logistics technology space, but it would leave room big enough, unlike e-commerce, food markets etc., for other startups including Ecom Express, Xpressbees, Shadowfax etc. in the e-commerce logistics space.

Written By Sandeep Soni

E-commerce logistics startup Delhivery this month catapulted to the hallowed unicorn club with the valuation hitting around $1.5-billion mark after it raised around $400 million from SoftBank, Carlyle Group and Chinese conglomerate Fosun. While the rise of Delhivery has been quite spectacular since its beginning in 2011 to become India’s first unicorn in logistics technology space, but it would leave room big enough, unlike e-commerce, food markets etc., for other startups including Ecom Express, Xpressbees, Shadowfax etc. in the e-commerce logistics space to have a piece of the pie. India’s e-commerce retail logistics market size last year (as per a KPMG report) was worth $1.35 billion.

Against $652 million raised by Delhivery so far, its competitors sit on a much lesser pile of equity funds. For instance, Xpressbees has raised $157 million, Wow Express has got $7.2 million, Shadowfax has $40 million raised, and Ecom Express has raised around $180 million, so far as per deals tracker Crunchbase.

“I don’t think it’s a winner-takes-all market. In the venture space there are a few companies that get a lion’s share of mind with investors and, therefore, a lion’s share of the money. When a lot of money chases a limited number of deals, it is inevitable that a few companies raise a lot of capital, as has happened in the e-commerce and other spaces as well,” Devangshu Dutta, CEO at retail consulting firm Third Eyesight told Financial Express Online.

Delhivery, which grew to more than 21,000 team members last year, delivers to 1,700 cities in India and has 3,500 clients, as per data available on its website. The company claims of shipping 4 lakh products daily.

“They (Delhivery) invested in technology, raised successive rounds of funding, and created a certain amount of traction. With multiple funding rounds, your investors also start telling your story to the market and the story gets amplified,” said Dutta.

Beyond, e-commerce logistics, it is the market for long-haul logistics to maximise efficiency for underutilized trucks and optimising time and cost for shippers, that has Blackbuck and Rivigo among top players.

Blackbuck, which raised $43 million from Goldman Sachs and Facebook co-founder Eduardo Saverin’s B Capital earlier this month has also become India’s second most-valuable logistics startup after Delhivery. The data sourced from business signals platform Paper.vc showed that the startup’s valuation has hit $862 million (Rs 6,039 crore) mark, ahead of its competitor Rivigo’s $526 million valuation.

Delhivery’s revenues for FY18 reportedly stood at Rs 1,070 crore — 42 per cent up from the preceding year while losses went marginally up from to Rs 684 crore from Rs 630 crore.

Source: financialexpress

Written By Naveen Menezes & Alnoor Peermohamed, ET Bureau

BENGALURU: Ola’s licence to operate cab services in Karnataka is set to be restored after it pays a penalty levied by the state transport department, possibly as early as Monday.

The transport department has decided to lift the six-month suspension imposed on Ola on Friday for running “illegal bike taxi services” in violation of its licence after the chief minister intervened.

“I convened a meeting on the directions of chief minister HD Kumaraswamy. The chief minister wants the suspension order to be revoked and I have conveyed the same to the officials,” Karnataka chief secretary TM Vijay Bhaskar, who held separate meetings with the transport department and Ola representatives on Saturday, told ET. “It’s up to the department to decide on the penalty.”

Order has ‘Served its Purpose’

Social welfare minister Priyank Kharge said that neither he nor the chief minister could be part of the meeting with the transport department and Ola representatives due to the election code of conduct. “The issue has been resolved,” he said. “Ola has agreed to pay the penalty on Monday. Cab services will not be affected.”

The amount will be decided by State Transport Authority, a quasijudicial entity, on Monday. “I cannot decide (the penalty) on my own,” said transport commissioner VP Ikkeri. “The question of how much the penalty is going to be is like asking a judge what his judgement is going to be.” If Ola does not pay the penalty, the department will act as per the law, he said.

Ola declined to comment. On Friday, it said it would work with officials to resolve the matter. “Usually we levy a penalty of Rs 50,000 per offence,” said a senior transport department official who didn’t want to be named. “Since it’s a very different violation, we will have to study the number of offences Ola has committed. We may have to seek legal opinion too.” The transport department believes the suspension order on Ola had “served its purpose”, the person said.

“In spite of warning Ola multiple times over the last one month, they continued to operate illegal bike taxi services on their platform,” he said. “We had even seized two-wheelers, but in vain. It’s only when we warned them of withdrawing the licence that the company has removed bike taxi services on Friday.”

Ola will be keen on getting the suspension lifted as quickly as possible. “To an organisation the size of Ola, I would expect that any fine the government would levy would not be material,” said Vikrant Kumar, a partner at law firm L&L Partners. “What will really affect Ola is if the direction (suspension) is upheld, because the revenue loss over six months will be severe and will give a huge boost to its competitors.”

The transport department ordered the company to suspend all operations, including four-wheeler cabs, within the next three days in a letter sent to Ola parent ANI Technologies Pvt. Ltd. on March 18. “This notification is unfortunate, and we look forward to an opportunity to address these concerns directly with state officials to find a solution for our driver partners and millions of Ola users in Karnataka,” Ola had said in a statement.

The state transport department had issued a notice to Ola February 15, warning the company that it would suspend its aggregator licence if it did not comply with the ban on bike taxis. ET had reported this development on February 18, after which the state said it seized more than 400 bike taxis attached to Ola and rival Rapido.

“Regulatory run-ins for ride-hailing companies aren’t an Indiaspecific issue; this happens in many other markets including fairly advanced economies,” said Devangshu Dutta, chief executive of consulting firm Third Eyesight. “The constant gripe that traditional taxi players have is that they are forced to follow strict rules, whereas ride-hailing firms are not as strictly regulated, and this has created tension everywhere.”

Bengaluru, where Ola is headquartered, is also its single largest market in the country. The city is estimated to have 120,000 cabs, out of which around 65,000 operate on the Uber and Ola platforms interchangeably, state authorities and experts said.

Source: economictimes

After restructuring its prices, the British retail giant is focussing on womenswear and lingerie to expand in India.

Written By Ankita Rai

After nearly two decades of operations here in India, British retailer Marks & Spencer (M&S) has launched Rethink, its first India-specific marketing campaign. It seems like the brand has done a bit of rethinking itself. The retail major has launched a revamped product range at competitive prices, and also brought in a service proposition by introducing in-store stylists. M&S India has identified womenswear and lingerie as its key focus areas, with an eye on tier II markets for expansion.

“India is the second largest market outside the UK with 71 stores. It is the only market where we have a dedicated approach focussed solely on the Indian consumer, rather than repurposing any products launched elsewhere,” says James Munson, MD, Marks & Spencer India.

Globally, M&S faces stiff competition from fast fashion brands such as H&M and Zara. In India, both H&M and Zara have crossed the Rs 1,000-crore sales mark, while M&S claims to have done so, too, in February this year. Will M&S’s revamped efforts help it create impact in a highly competitive market?

Devangshu Dutta, chief executive, Third Eyesight, says that Zara and H&M have clear audiences in the bigger cities — the young, fashion conscious lot with high disposable incomes. “Marks & Spencer’s pricing strategy is to focus on the upper-middle-class consumers, not limited to the metros. There is growth opportunity there.”

According to company filings, Marks and Spencer Reliance Retail India’s revenue has shown a steady growth of around 10% CAGR from Rs 620.82 crore in FY15 to Rs 899.93 crore in FY18. This growth has been attributed to price restructuring, local sourcing and a strong focus on women’s fashion.

“Womenswear and lingerie are our fastest growing businesses. In fact, the lingerie business has seen 40% growth in the last two years. At present, menswear and womenswear contribute equally to our business,” says Munson.

Currently, M&S has 10 standalone lingerie stores in key metros and tier II cities like Lucknow and Jaipur. It plans to open six stores in the next two months, of which three will be lingerie and beauty stores.

Rationalising the price tag

Getting the pricing right has been vital to M&S’s India story. “When M&S entered India, it merely duplicated what it was doing in the UK. It was out-priced in the market. The local sourcing supply chain was not developed, while sizing was a big issue,” says Ankur Bisen, SVP, retail and consumer product division, Technopak.

However, today, a t-shirt for women could be priced at Rs 599, while a dress could cost Rs 1,499. “Around 65% of our range in women’s tops is below Rs 2,500. Last year, we reduced the prices of kidswear by 20% across the range,” Munson informs.

Almost 30% of its products are sourced from India itself.

Sourcing locally has helped cut prices further. Almost 30% of its products are sourced from India itself. In fact, India is one the top five sourcing hubs for the company’s global business. It works with 111 factories in India, with over one lakh employees.

Making inroads

With rising competition in metros from other global players, M&S is strengthening its e-commerce play and also expanding its footprint beyond the metros. A fifth of its turnover is from the non-metro markets, such as Ahmedabad, Bhubaneswar, Guwahati, Kochi and Coimbatore. Munson shares that upto 44% of the company’s online sales (via Amazon, Flipkart, Myntra, Ajio and Jabong) comes from tier I and II markets. In fact, M&S is seeing online sales growing at 75% y-o-y.

At present, it has 22 stores across 19 tier II cities; each store reflects the local trends and needs. For instance, at M&S Kochi, linen clothing is on offer all year round, given the climatic conditions, Munson shares.

According to experts, M&S needs to work on its product range and positioning to drive growth. “Unlike fast fashion brands, M&S’s global positioning is core fashion and basics, with a gender-neutral positioning; it is a family store. Therefore, it will see growth in small cities,” says Bisen.

Bisen believes that M&S will also need to connect with the millennials — the cohort H&M and Zara appeal to — with relevant products. Besides, he says, “the casualisation of fashion and online integration” could pose challenges for the brand.

Source: financialexpress