Tata Group invests Rs 1,150 crore in consumer operations in Q1

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July 25, 2019

Written By Writankar Mukherjee, ET Bureau

KOLKATA: The Tata Group has infused more than Rs 1,150 crore equity into the group’s consumer businesses across retail, ecommerce and white goods in the first quarter of this fiscal year, as per latest regulatory disclosures.

These funding has been made in four entities: Tata UniStore (which owns Tata Cliq), Infiniti Retail (which runs the Croma chain of electronic stores), Voltbek Home Appliances (which is into durables) and Trent (lifestyle chain Westside and Star hypermarket).

Source: economictimes

Snapdeal’s shift in focus on tier-II cities and beyond gets backing from Anand Piramal

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July 23, 2019

The investment has been made by Piramal in his personal capacity even as Snapdeal has strategically shifted from discount-driven strategy to focusing on value-conscious buyers living in areas beyond metros and tier-I cities.

Written By Sandeep Soni

In the last two years, Snapdeal has added over 60,00 new seller partners, who have added over 50 million new listings.

E-commerce marketplace Snapdeal, which is now making a healthy comeback after 2017 slowdown and an acquisition fallout with Flipkart, has raised undisclosed investment from Piramal Group’s executive director Anand Piramal. The investment has been made by Piramal in his personal capacity even as the company has strategically shifted from discount-driven strategy to focusing on value-conscious buyers living in areas beyond metros and tier-I cities. “Snapdeal’s sharp execution in bringing a great selection to the mass market segment in tier 2-3 cities has been quite successful,” said Piramal in a statement adding that Snapdeal’s revenues have grown rapidly since 2017 with profitable unit economics.

Snapdeal had called off its proposed merger around August 2017 with Flipkart for $850 million, a valuation that plummeted from $6.5-billion valuation in early 2016. Moreover, Amazon’s growing business in India had also displaced Snapdeal as the real competitor to Flipkart. However, instead of merging with Flipkart, Snapdeal tweaked its growth to focus on “value-conscious buyers — around 400 million that are still at an early stage of discovering and buying goods online,” according to Kunal Bahl wrote in a Linkedin post last week. This population mirrors the “selection found in the bazaars of India. This is a market worth nearly $163 billion and only about 1-2% of this is online,” Bahl had said announcing Snapdeal’s audited financial results for FY19.

“The inflection point in Snapdeal’s journey was when they stepped back from the cut-throat competition that was happening between them, Amazon, and Flipkart in 2017. Snapdeal took that decision when they had little cash in the bank. It was a hard time to take that decision because any other alternative strategy would have also needed capital. So they took that decision to focus on core business,” Devangshu Dutta, CEO at retail consultancy Third Eyesight had told Financial Express Online.

Snapdeal’s consolidated revenues grew to Rs 925.3 Crores in FY19 vis-a-vis Rs 535.9 in FY18, marking a sharp increase of nearly 73% in a 12-month period. Moreover, its losses shrunk by nearly 71 per cent from Rs 611 crore to Rs 186 crore in FY19. Its traffic also grew 2.3X to 70 million unique monthly users even as the number of transacting users grew 2.2X in the last 12 months. Anand Piramal’s support to Snapdeal’s turnaround comes “from his own experiences of building and operating large companies in competitive sectors like real estate and financial services,” Bahl said.

The company’s over 80 per cent users come from India’s small towns and added more than 60,000 sellers with over 50 million new listings. Overall Snapdeal has over 5 lakh sellers and more than 200 million listings on its marketplace.

Source: financialexpress

How to ace sale season

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July 20, 2019

Go with a battle plan, scan the racks to get the best deal. Make a killing. Here are tips on how.

Written By Madhushree Ghosh

Don’t get so excited by the discount that you lost sight of the price.(iStock)

How the sale calendar has changed (and why)

The retail business was traditionally linked to the social calendar, so big discounts were offered around religious and cultural occasions (Diwali in India, Christmas in the West). The idea was to tap into the celebratory mood and encourage more buying in seasons of giving, when people were shopping anyway.

As the retail industry grew, the business decided it would help to create demand at other times of year. Which is why some department store chains have sales and ‘promotional offers’ on at almost all times.

In India, the single biggest driver of sale-season buying is the feeling of getting a ‘great deal’, says Devangshu Dutta, retail consultant and chief executive at the consultancy firm, Third Eyesight.

Outside of the festive demand cycle, but also sometimes within it, retailers play on this trigger by promoting ‘one-time discounts on MRP’ or package deals that encourage you to buy more than one of an item. It’s a form of advertising that actually gets you to pay, in the end, often for something that wasn’t selling to begin with.

If you’re looking to fill gaps in your wardrobe, now’s the time. High street brands offer up to 70% off in end-of-season sales, three to four times a year, and the current monsoon sale season is now underway.

There are two types of sale-season shoppers — the kind that barely notices a sale is on, and ends up paying full price (what a loser) instead of scanning the racks to get the best deal; and then there’s the type that goes in with a battleplan. Be that type. Make a killing. Here are tips on how.

DON’T GO ALONE

Take a trusted companion, but make sure it’s someone who won’t whine about the crowds, lose interest halfway or hijack a sweater you picked up first. Pick someone who will stand in the trial room line for you, no matter how serpentine. Or go in teams so that when someone is choosing and trying, others can get in line (don’t forget to queue in advance at the cash counters too).

Everything in life is easier with a list. Decide what you need (please don’t forget that fast fashion is now one of the most polluting industries in the world, so do the species a favour and don’t buy stuff you already have). A list will also keep you organised. Head to the appropriate racks. And, if shopping online, sort and add items to your cart in advance, so when sale starts all you need to do is click.

DO NOT GET BLINDSIDED

Don’t get so excited by the discount that you lost sight of the price — it may be half off, but if it’s still a Michael Kors bag way outside your budget, put it down. Also, don’t take home something you don’t really like, just because it’s on offer at a ‘never-before-never-again’ price. If you don’t like it at first glance, you’re never. going. to like it.

Do you really need a Bluetooth headset, or is it the dopamine talking? It might help to remember that sales are conducted to create a sense of need. So are you buying that dress because you have a slot in your wardrobe for it, or ‘because it’s your cousin’s best friend’s birthday in a few weeks’ (which, we know, is code for, I just can’t resist it right now).

Source: hindustantimes

How Kunal Bahl’s Snapdeal is finding its lost mojo

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July 18, 2019

Ratan Tata-backed Snapdeal having lost steam after its merger with Flipkart was called off while Amazon too had displaced it as among the leading e-commerce company apart from Flipkart is now steadily regaining its lost ground but in a new avatar.

Written By Sandeep Soni

Around August 2017, Snapdeal had called off Flipkart’s offer of buying it out for $850 million, down from $6.5-billion valuation it had in early 2016. Snapdeal’s sales had plunged, products count has also gone south even as Amazon had displaced it to become the new formidable competitor to Flipkart’s stronghold in the Indian e-commerce sector. The ecosystem had almost written it off with media reports narrating the fall. More than two years after the company’s founders Kunal Bahl, Rohit Bansal decided to battle it out on their own with a renewed Snapdeal 2.0 focusing on its core business of online retail, the lost mojo is coming back for Bahl and Bansal.

“The inflection point in Snapdeal’s journey was when they stepped back from the cut-throat competition that was happening between them, Amazon, and Flipkart in 2017. Snapdeal took that decision when they had little cash in the bank. It was a hard time to take that decision because any other alternative strategy would have also needed capital. So they took that decision to focus on core business,” Devangshu Dutta, CEO at retail consultancy Third Eyesight told Financial Express Online.

Snapdeal’s revenue grew by 73 per cent year-on-year from Rs 536 crore in FY18 to Rs 925 crore in FY19 even as losses shrunk by 70 per cent from Rs 611 crore to Rs 186 crore, Kunal Bahl said in a LinkedIn post as part of the company’s audited financial results for FY19. Snapdeal’s traffic went up 2.3X to 70 million unique users per month. But what led to Snapdeal’s founding that lost zing back? There are a couple of factors.

Capturing value-conscious Buyers

Kunal Bahl in one his blog last year had said that the company would focus on the value-conscious buyers — around 400 million that are still at an early stage of discovering and buying goods online. This lot doesn’t speak fluent English, less disposable income, lives beyond metro and tier-I cities and are not brand conscious. “Given their vast numbers, the supply of value-priced selection is growing online exponentially – mirroring the selection found in the bazaars of India. This is a market worth nearly $163 billion and only about 1-2% of this is online,” Kunal Bahl said in the blog.

“It is a shift from discounts to value. Snapdeal is trying to get customers’ mind off the price element. If you are looking at a product’s price, you are looking at it as a commodity. If you are looking at it as a commodity then you are looking at the like-for-like comparison and going for the lowest price,” added Dutta. This echoed with Kunal Bahl’s focus for next year. “We are not aiming for triple-digit growth rates,” said as he believed that “consistently compounding revenue growth create large and valuable enterprises.”

Rebuilding Seller Base

Snapdeal has been able to grow its listings to 200 million with 50 million listings coming in the last two years with more than 60,000 new sellers even as it uses artificial intelligence and machine learning to help its sellers aware of new trends and gaps in the product-pricing mix unlike “some other marketplaces use these interventions to promote their private labels or favourably position their proxy sellers,” Bahl said. For example, Snapdeal’s machine learning-based smart courier allocation tool analyses “the first-mile decision (pick-up) with a last-mile decision (delivery) identifying the partner(s) who can deliver the shipment in the most efficient manner.” “This is certainly a factor for their growth because if you are playing a pure marketplace game then sellers are relatively more comfortable because you are not a competitor to them,” said Dutta.

Tech Shift

Not just on the seller end, AI has become integral to Snapdeal’s efforts of ensuring that its no-frills customers can come across products that they want to buy — affordable and unbranded. AI helps in optimising catalogue and enhancing search based on which the customer is offered personalised and relevant products more than just top deals of the day or top discounts or top-selling items. Snapdeal has also created multiple short videos on the functionality of products for customers to understand them.

“Clearly at one point Snapdeal realised that investors are backing away from investing more money into them because the sense then was that Amazon would take over the market. You need really deep pockets to acquire market share if you are losing money on every dollar earned. However, e-commerce is at a nascent stage and we shouldn’t deal with it as if it is a short window of opportunity that is closing,” Dutta said. Moreover Snapdeal has been constantly engaging with its customers in their offices by inviting them to understand one-ono-one about how they shop and what they shop.

Source: financialexpress

Traditional ayurvedic neem soap brands turn over new leaf to enhance appeal

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July 15, 2019

Hindustan Unilever’s Hamam, Jyothi Labs’ Margo, Wipro’s Chandrika soaps and Cholayil’s Medimix have been trying to up their game by adopting brand purpose, brand ambassadors and, in some cases, even product innovation. But popularity, especially amongst the youth, evades them.

Written By Venkata Susmita Biswas

Lack of product innovation, unappealing marketing and dull packaging haven’t helped matters.

The quintessential green, no-frills soap bars wrapped in boxes bearing images of neem leaves once enjoyed a place of prominence thanks to their ‘medicinal value’. Today, even as Indians are increasingly opting for ‘natural’ and ‘herbal’ beauty and skincare products, these green soaps are finding fewer takers.

Hindustan Unilever’s Hamam, Jyothi Labs’ Margo, Wipro’s Chandrika soaps and Cholayil’s Medimix have been trying to up their game by adopting brand purpose, brand ambassadors and, in some cases, even product innovation. But popularity, especially amongst the youth, evades them.

Lacking colour

These green soaps are mainly the traditionalist’s favourite; they do not have a pan-India consumer base. K Ramakrishnan, MD, Kantar Worldpanel, South Asia, says that the segment of natural soaps is led by and grows most in the South.

Oddly, these soap brands have not been able to leverage evolving consumer preferences — towards organic and herbal products across categories. According to Ashwini Deshpande, co-founder and director, Elephant Design, it has to do with the brands’ indifference towards enhancing user experience.

Lack of product innovation, unappealing marketing and dull packaging haven’t helped matters. “As newer products and brands have come up, consumers who can afford better products are gravitating towards multinational brands or Indian brands with better fragrances and brand positioning, rather than these green bar soaps,” points out Devangshu Dutta, CEO, Third Eyesight, a consulting firm.

Marketing communication from these brands has typically focussed on attributes like the authenticity of the ayurvedic formula and the purity of ingredients. Deshpande says that while prioritising these aspects, “brands miss out on enhancing internal and external sensorial factors such as shape, fragrance, colour of the product, and the look and feel of the packaging”.

Neem-based and herbal products from brands like Himalaya or even the premium Kama Ayurveda have found takers owing to their appealing positioning and product innovation. Whereas traditional legacy brands, Dutta says, are consciously pitching to a customer who is looking at price as the driver.

Quick fixes

To appeal to younger audiences, Margo underwent a revamp in 2017, and Medimix brought on actor Parineeti Chopra as its brand ambassador earlier this year. The Rs 300 crore soap brand Hamam has used brand purpose to establish the soap as one that empowers women. Meanwhile, Wipro’s Chandrika soap refreshed its packaging this month.

Product innovation has been conspicuously missing in this category, though. Medimix launched a green ayurvedic face wash in 2017 that looks similar to the Himalaya Neem Face Wash. Margo, which earns Rs 192 crore from its personal care segment, plans to launch a face wash variant of its neem soap later this year. Additionally, to expand its market share by getting non-traditional users into the fold, Margo experimented with a glycerin-based neem soap in West Bengal in 2018. In its annual report, the company mentions that it plans to roll out the product in other parts of India.

Since the prices of these soaps (around Rs 30 per 100gm) are similar to that of the soap category leaders Lifebuoy, Santoor and Dettol, they do not have an edge. In the face wash category too, the pricing is not much different — a 100ml face wash of Medimix costs Rs 99 as against Rs 120 for Himalaya. The choice is, hence, not difficult for the brand conscious consumer.

Medimix has tie-ups with hotels which helps in sampling, but does not yield high dividends. “Only 3-4% of the total revenue comes from hotel tie-ups because the value of the product sold is low, even though the volume sold is high,” informs Pradeep Cholayil, CMD, Cholayil.

Source: financialexpress