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September 29, 2019
Written By Deepti Chaudhary
More than 400 million Indians had access to cashback and EMI offers on Amazon.in. (Photo: iStock)
Bengaluru: The ongoing festive season sales have turned to be the latest battleground for India’s top two online retailers to achieve supremacy of this fast-expanding market.
Walmart-backed Flipkart and Amazon India have both claimed record sales on the first day of sales on the back of strong demand from cities beyond the major metros.
Flipkart’s The Big Billion Days (TBBD) started on Saturday night (8pm), while Amazon India’s Great Indian Festival sales began on Saturday noon for Prime subscribers and opened for all 12 hours later.
Flipkart claimed that it recorded two times sales growth on the first day of the festive sales, compared to last year’s opening day sales of the TBBD, as the number of transacting customers from Tier II, III, IV cities doubled. Travel is the fastest-growing category on Flipkart, with 12X growth compared to last year, according to the company.
“We started this festive season by setting audacious targets for ourselves and our teams. By all indications, this is going to be the biggest festive season that India has witnessed,” said Kalyan Krishnamurthy, chief executive, Flipkart in a statement. “There is no doubt that e-commerce has not only lifted consumer sentiment but has also driven the industry to set new benchmarks. Affordability and value-driven themes clearly are the pulsating chords for India and Bharat. We are in the centre of it all and are able to serve the ecosystem for their unique needs”
On 2 September, Mint reported that Flipkart hopes to double sales during its flagship TBBD event because of an increase in sellers’ base, new products and pocket-friendly financing options, among other reasons. The company is also aiming at a gross merchandise volume (GMV) of about ₹1 trillion (about $14 billion) this fiscal year, up at least 45% from the previous year. Flipkart is yet to start its mobile and electronics sale, but Amazon India said fashion and smartphones were its top two selling categories. “Because of the availability of very strong affordability and exchange programmes, a record number of customers upgraded to premium phones on Amazon. When we just look at the slice of premium phone brands OnePlus, Samsung, and Apple on Amazon, their sales exceeded ₹750 crore within 36 hours,” said Amit Agarwal, global senior vice president and country head, Amazon India, over phone on Sunday evening. Amazon Fashion recorded a 4.6 times jump in unit sales compared to its unit sales on day one of Great Indian Festival sale last year. It did not specify any unit numbers. The first day of the latest Great Indian Festival has been Amazon’s biggest opening ever wherein it also had a record number of Prime signups, Agarwal said, without elaborating.
Source: livemint
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September 23, 2019
Realising that sourcing within India helps cut costs, Uniqlo established an office in Bengaluru in 2016 to identify and work with partner factories in India. The company currently procures cotton fibre from India, as a result.
Written By Venkata Susmita Biswas
The Indian retail landscape is abuzz with East Asian retailers. The likes of China-headquartered retailer Miniso, Korean lifestyle brand Ximiso, and Japanese retailer of household and consumer goods, Muji — all known to be low-cost retailers — have set foot in India to grow their businesses. Besides, Japanese apparel retailer Uniqlo, known to make functional clothing, is set to open its first offline store in India in October.
However, carrying forth the mass-market and low-cost positioning from their home countries to India — a $670 billion retail market — will be a challenge for these brands.
Priced to entice?
Muji which prides itself on being “lower priced for a reason” is hardly a low-cost brand by Indian standards. For instance, a 24-sheet notepad at Muji costs around Rs 100, while a pair of ankle-length socks costs Rs 390.Uniqlo, which has a mid-market positioning in Japan, has priced its most basic t-shirts in the range of Rs 990-1,990. It is worth noting that a basic t-shirt from Uniqlo costs ¥990-1990 in Japan (Rs 658-1,323). In comparison, t-shirts at H&M and Zara start at Rs 399 and Rs 450, respectively.
Devangshu Dutta, chief executive, Third Eyesight, says that any international fashion brand tends to have a premium tinge in India even if it is a mass/mid-market brand in its home country. “In addition to perception, there are multiple reasons for this. Average household incomes in India are far lower than those in markets like Europe. Therefore, even maintaining price parity of products leads to international mass/mid-market brands turning into premium brands in the Indian market. Furthermore, sourcing from outside India and having local partners, too, drive prices up.”
Miniso and Ximiso sell everything from nail paints and earphones to stuffed toys and bento boxes, and are similar to dollar stores or the Japanese 100 Yen stores. According to Rajat Wahi, partner, Deloitte Consulting India, these retailers are addressing an untapped market in India. “They offer a host of products in the range of Rs 100-500, similar to the neighbourhood kirana and stationery stores, but in a better retail environment. This is a real sweet spot for retailers in India who want to scale up volumes,” he adds.
However, offering value for money is critical when selling such products. Tyrone Li, India head, Miniso, says that the retailer maintains its global positioning of being a “budget brand” in India, with an aim to make high quality designer products available to the masses. Miniso’s highest selling products in India are cosmetics and nail paints. Nail paints at the store cost Rs 190, while the average price of Miniso products is approximately Rs 280.
When in India…
Wahi believes that retailers that position themselves as prestige or even masstige brands will take longer to scale up here.
Functioning in a price-conscious market like India has driven each of these retailers to tweak their businesses. Muji reduced prices of more than 450 items across departments while launching its India operations. “We made our supply chain more effective, reduced a few unnecessary costs that did not add value to the products or customer experience, and optimised operational costs,” says a Muji spokesperson.
Dutta says improving pricing flexibility and introducing India-specific products that have better margins will in turn drive better engagement. This explains why Uniqlo, which competes with foreign retailers like H&M and Zara, has introduced a premium cotton kurta collection to not just adapt to India, but also differentiate itself from competitors.
Realising that sourcing within India helps cut costs, Uniqlo established an office in Bengaluru in 2016 to identify and work with partner factories in India. The company currently procures cotton fibre from India, as a result.
Meanwhile, Miniso has a more hands-on approach. Based on feedback from a consumer, the retail chain lowered the price of a product by making amends to its supply chain. The retailer is also consciously expanding its presence beyond malls. “While the mall culture is booming in India, it is still not the most accessed place by Indian shoppers,” Li reasons.
Source: financialexpress
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September 22, 2019
Experts say the vernacular market in the country presents a massive opportunity for e-commerce players. As per a recently released report by RedSeer Consulting, there are 530 million internet users in India, of which 260 million users are ‘monetisable’.
Written By Devika Singh
E-commerce major Flipkart recently launched its Hindi interface, allowing for its products across platforms (website and app) to be browsed in the language. Amazon, too, now offers Hindi browsing options on its website and iOS app; last year, the global e-commerce behemoth had introduced Hindi on its mobile site and Android app. These efforts are an attempt to capture the next 200 million users.
Experts say the vernacular market in the country presents a massive opportunity for e-commerce players. As per a recently released report by RedSeer Consulting, there are 530 million internet users in India, of which 260 million users are ‘monetisable’. The report says a large share of this audience, 80% or about 210 million, prefers content in vernacular languages and are likely to drive the growth of consumer internet, with $300 billion in annual spending power. However, sustained efforts beyond just providing language options will be the name of the game, say experts.
After having introduced its Hindi interface, Flipkart is now gearing up to introduce audio-guided navigation on its platform to help new users on the platform. “We started with Hindi and the plan is to go ahead with other languages as well in the future. Within a year, we plan to introduce southern languages on our platform,” says a Flipkart spokesperson. Experts say Amazon, too, would use audio in some way to tap new users, given that it already has voice technology (Alexa).
As per Amazon India, Hindi use on its platform has grown six times since the launch and customers are heavily using features like ‘scan and pay’ and ‘UPI payments’ in Hindi. “We are eying the current set of 150 million customers, with an added aim of bringing e-commerce through Amazon to the next set of 100 million customers in India. The Hindi product is a big enabler,” says Ravi Desai, director, mass and brand marketing, Amazon. The e-tailer has created a separate campaign for south India for its upcoming Great Indian Festival sale.
However, it is crucial to go beyond language offerings to usher in growth. “Many of these users would be using e-commerce for the first time. E-tailers need to create comfortable experiences that encourage frequent use, as first-timers would require a lot of hand-holding in the entire purchasing process,” says Ujjwal Chaudhry, director, RedSeer Consulting. “It is not only about the language but also about converting the nuances of English originated e-tailing to a more localised context.” Analysts say the experience right now is very suboptimal and e-tailers need to up their game. “Companies are not doing enough and they are not doing things quickly enough. They should be quicker to move into these vernacular markets and quicker to address the needs of people who are outside the English-speaking borders,” says Devangshu Dutta, CEO at retail consultancy Third Eyesight. He cites an example of a news app start-up he had mentored a few years ago. “We pushed the company to look at local languages, particularly Hindi. The moment it introduced this, downloads exploded,” he says. “It is a myth that the audience that does not speak English is not tech-savvy or sophisticated.” Customisation is also very important to tap such users. Amazon initially used algorithms and technology to translate its offering in English to Hindi, which did not work. However, it has now adopted a more colloquial version, as a result of which the Hindi listings are similar to their English version.
“The product description, as well as the type of products in the feed, need to be more customised to suit audience needs. In the interiors of India, the average order value at which customers will buy is going to be different than metros. And the products will have to get curated keeping that in mind,” observes Ankur Pahwa, partner, EY.
Source: financialexpress
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September 20, 2019
Written By ETech
Startups and technology companies have welcomed the government’s move to cut corporate taxes.
The announcement by finance minister Nirmala Sitharaman on Friday could provide an incentive for many startups to move towards profitability, industry insiders said.
“This move will reduce the divergence between capital gains tax and corporate tax substantially, thereby creating an incentive structure for many startups to look for profits,” said Nithin Kamath, chief executive officer, Zerodha, one of the very few large profitable startups from Bengaluru.
Many investors in startups sell their stakes at a higher valuation and only pay a lower capital gains tax, putting profitability on the backburner. This move will propel such entities to move towards profitability, experts said.
“We believe that the increased savings will spur investments and job creation especially in the rural, semi-urban and non-agricultural MSME sectors,” said Sujeet Kumar, co-founder, Udaan.
The government’s chief reason behind cutting corporate tax is to push its ‘Make in India’ initiative, and many medium scale manufacturers might benefit directly, they said.
“Entrepreneurs with manufacturing operations under proprietorship and partnership entities might now look to create a corporate structure going forward, because of the tax benefits being offered, so overall it may help in formalisation of the economy,” said Devangshu Dutta, chief executive, Third Eyesight, a consulta .
At a macro level, ecommerce and payment startups are looking at the move as a booster dose to help lift consumer sentiment.
Kunal Bahl, chief executive officer of Snapdeal took to Twitter to say he expected increased consumer spending after the announcement.
Kalyan Krishnamurthy, chief executive of Flipkart, also said it will boost market sentiment and economic activity before the festive season.
Although a tax reduction will benefit corporates directly, how much of that will trickle down to consumers is the big question.
What India needs now is improvement of consumer sentiment, and whether the announcement will spur consumer spending remains to be seen, industry experts pointed out.
“Sentiment is a major factor governing spending, be it for business or consumers. A reduction in personal taxes would have had a direct impact on consumer sentiment during the festive season. Whether this move will help at all remains to be seen,” said Dutta from Third Eyesight.
Source: economictimes
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September 3, 2019
Other popular online-first fashion private labels such as StreetStyleStore (SSS) and StalkBuyLove, which were initially operating only out of their own platforms, are also now selling products on Myntra.
Written By Devika Singh
In the competitive fashion e-tailing segment, smaller e-tailers and online-first private labels are now flocking to the sector’s mega marketplaces in order to survive. Consider how fashion marketplace Voonik, which has pivoted its business model to become a fashion brand, recently launched 350 products on Snapdeal. The start-up also plans to introduce its products on Amazon and Flipkart-owned Myntra. Similarly, premium work wear brand FableStreet started selling on marketplaces this year and its products are now available on Tata CLiQ, Jabong, and Myntra, with plans to launch on Amazon soon.
“Marketplaces have the scale and far higher traffic than on our own website,” admits Ayushi Gudwani, founder and CEO, FableStreet. “They can help us acquire new customers,”she said.
Other popular online-first fashion private labels such as StreetStyleStore (SSS) and StalkBuyLove, which were initially operating only out of their own platforms, are also now selling products on Myntra.
Perhaps among the first to kick off this trend was SAIF Partners-backed FabAlley. According to Shivani Poddar, co-founder, FabAlley and Indya, about 23-25% of the company’s business comes from marketplaces. The company is present on Myntra, Flipkart, Amazon and AJIO. “Say, if we were to reach about one lakh people through our website in a day, this reach would go up to over a million users on Myntra. Therefore, from a brand discovery and awareness point of view, working with marketplaces helps us,” Poddar says. However, given the funding crunch in the space and frequent shutdowns of many players, cross-selling seems like a last-ditch attempt at survival.
Data from analytics firm Tracxn show that overall investment in the fashion e-tailing space has fallen drastically in the last six years. While in 2014, the market saw an investment of $208.84 million in terms of funding, this came down to $58.92 million in 2018, whereas 2019 has seen an even lesser $34.80 million investment in it so far.
Besides FabAlley, few have raised funds for a while now. Earlier in the year, fashion discovery start-up Wooplr wrapped up its operations citing lack of funds, while another similar start-up Roposo has turned its model around. According to sources, StalkBuyLove, too, has hit a rough patch with a mass exodus of several employees.
While there is no dearth of funds for dominant players in the space — Myntra, Jabong, TataCLiQ and AJIO — e-commerce marketplaces such as Flipkart and Amazon, too, are betting big on the fashion e-tailing segment. The Indian e-tailing market, as per a forecast from Redseer Consulting, is on track to hit a GMV (gross merchandise value) of $32 billion in 2019 and fashion would have a 19% share in this pie. Given the fierce competition in the space, it doesn’t seem surprising that smaller players are struggling.
“With the onslaught of Flipkart and Amazon, almost everyone is feeling the heat. Given the scale of discounts on these marketplaces and the money spent on customer acquisitions, it is tough to expect a company, which has perhaps raised a Series A or a Series B funding, to survive,” says Aman Kumar, chief business officer, KalaGato.
According to data from the analytics firm, the apps of StreetStyleStore, FabAlley, StalkBuyLove and Voonik have even less than 1% market share by reach compared with Myntra, Club Factory, SHEIN, AJIO, TataCLiQ, and Jabong. KalaGato defines market share by app install as market share based on the number of installs relative to other apps.
Devangshu Dutta, CEO of retail consultancy Third Eyesight, is of the view that the cross-selling strategy being adopted by these players can prove to be a win-win for marketplaces as well as smaller fashion e-tailers, if there isn’t much target segment overlap.
“The biggest problem for e-commerce players is repeat purchases, with growth being driven chiefly by deals and discounts,” he says. “Having unique offerings and having a good brand mix can bring the customer back,” he adds. This way, he says, while the brand gets an extended market footprint, marketplaces get to offer a plethora of choices to the customer.
Source: financialexpress
