Flipkart ups physical retail presence to take on rivals, boost business

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January 25, 2020

In Sept, Flipkart had said it brought onto its platform 27,000 kirana stores in non-metro cities to expand its reach

Written By Yuvraj Malik | Bengaluru

Walmart India’s wholesale business includes 28 Best Price stores and three warehouse properties

Walmart-owned Flipkart may absorb Walmart India’s wholesale business, which includes 28 Best Price stores and three warehouse properties, as the two groups look at consolidating operating units and driving synergies, said people in the know. If the amalgamation goes through, Flipkart will acquire a sizable physical retail footprint, which will likely complement its core e-commerce business.

Flipkart, which operates Myntra marketplace and PhonePe payments app, will use Walmart India’s centres as stocking and fulfilment units for fast-moving items, such as groceries, consumer packaged foods (CPGs), and kitchen inputs, the sources said. This will enable faster hyperlocal deliveries of these items.

According to a media report, Flipkart may also use these units to strengthen its own business-to-business (B2B) sourcing business, which will now be focused on selling inventory to kirana stores. A spokesperson from Flipkart declined to comment on the matter.

In September, Flipkart had said it brought onto its platform 27,000 kirana stores in non-metro cities to expand its reach. Taking those partnerships a step further, the e-commerce player may now start supplying to them as well. The move follows the launch of JioMart, the e-commerce venture by Reliance Industries, which has partnered with thousands of kiranas to sell on JioMart, and also buy through it.

“The customer base of Flipkart and Walmart wholesale is very different. Flipkart’s customer base is consumers, while Walmart’s is quasi-consumers,” said Devangshu Dutta, CEO at retail-focused consulting firm Third Eyesight. “But as fulfilment points or inventory holding points, there would definitely be synergies.”

The development comes at a time e-tailers are taking an omnichannel approach to grow business. In August 2019, Amazon had signed a deal to acquire 50 per cent in a joint venture with Future Group, the operator of Big Bazaar and Easy Day chains, which also gave the former a stake in Future Retail.

As part of the deal, Amazon India has become the authorised online sales channel for all Future Retail stores. Amazon also owns 5 per cent in the Shoppers Stop chain.

“Flipkart’s digital capability and Walmart’s supply chain will create competition for Amazon and Jio,” said Vishnu Gullipalli, CEO and solution advisor, Retail Insights, a retail technology consultancy firm.

“Flipkart leadership in the B2C segment will help extend its position in the B2B market, especially in the grocery category. Flipkart last-mile delivery strength will make the B2B2C space relatively exciting,” said Gullipalli.

Walmart India was set up in 2007 as Bharti Walmart, a joint venture between Walmart and Bharti Enterprises. The JV was dissolved in 2013. Walmart has faced challenges scaling the business in India, both before and after Bharti Enterprises’s exit. In FY19, it posted a Rs 172-crore loss; it earned Rs 4,065 crore as revenues.

“If you look at their growth strategy medium- to long term, they are tapping into India’s retail sector. They are trying to be a retailer in India. Walmart had to follow the wholesale route because its JV with Bharti fell through. Amazon is following a financial portfolio route. One way or the other, the target is to be a retailer,” said Dutta.

Source:

Walmart India lets go of top executives across divisions

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January 13, 2020

But there’s already a waiting list for these new micro apartments.

Written By Sagar Malviya

MUMBAI | NEW DELHI: Loss-laden Walmart India is in turmoil as the world’s largest retailer is in the process of sacking about a third of its top executives based at local headquarters in Gurgaon, according to people aware of the development.

Walmart announced the layoffs of more than 100 senior executives including vice presidents across sourcing, agri-business and the fast-moving consumer goods (FMCG) divisions at a townhall on Friday. It also plans to shut the

Source: economictimes

How the online shopping boom has created a new sector of employment

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January 5, 2020

Written By Shelley Singh, ET Bureau

Key to a great online shopping experience is the final delivery of that box home — on time, always, intact — come rain, hailstorm, blistering summers or the cold wave currently sweeping across most of north India. The experience that starts on a shopping app ends with a delivery agent knocking on the door. Unlike brickand-mortar retail, where buyers get to see and feel the product before buying, online shoppers wait impatiently for the delivery boy to arrive so the package can be opene

Source: economictimes

Will JioMart disrupt the e-comm discount game?

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January 3, 2020

Written By Ananya Pathak

Reliance Industries’ e-comm venture JioMart will compete with the likes of Amazon, Grofers, Bigbasket and Flipkart.

Having established itself as one of the major players in the telecom sector, Reliance Industries has now made a move in the e-commerce segment by launching its online grocery delivery service – JioMart – ‘Desh ki Nayi Dukaan’. Powered by Reliance Retail and Reliance Jio, the service has been launched in parts of Maharashtra – Navi Mumbai, Kalyan and Thane and this will be scaled up nationally soon to compete directly with the likes of Amazon, Grofers, Bigbasket and Flipkart.

JioMart is an online-to-offline (O2O) marketplace under which it will source grocery items from nearby merchants, instead of procuring them from a native warehouse. The platform does not sell groceries directly to the customers but instead, connects offline retailers with online buyers. With an assurance to offer over 50,000 grocery products soon, the website claims to offer free home delivery without the restriction of minimum order value and express delivery service as well as a “no questions asked return policy”.

Interestingly, ‘Desh ki Nayi Dukaan’ reminds us of Amazon’s ‘Apni Dukaan’ campaign with which the brand attempted to connect with customers in the remotest parts of the country.

Considering Reliance Jio’s cost undercutting game in the telecom sector, we wonder if the players in the e-comm segment should worry about JioMart disrupting the discount game in this category.

We ask experts.

Devangshu Dutta, chief executive, Third Eyesight

India’s e-commerce sector has grown on the back of aggressively promoted deals by the two leading incumbents, Amazon and Flipkart as well as other e-commerce companies. So JioMart’s target consumer is already primed by them.

However, discount as a one-point strategy is not a strategy. Discounting is one of the easiest ways to acquire the attention of a value-seeking consumer – dropping prices or offering special discounts or deals is a quick way to break through the customer’s mental barriers and existing transactional relationships, because price is one of the easiest comparisons to make.

The question isn’t whether Reliance can or will throw enough capital into the game to out-discount the market leaders. A consistently loss-making business isn’t a business, but a charity! Once a certain amount of market momentum and share is built, companies find ways to build up prices and margin, and Reliance will do that over time. The critical factor is for the customers to feel that they are getting good value for the money they are paying. I don’t think Reliance’s retail strategy, offline or online, is to be seen as the lowest priced provider.

Mahesh Uppal, telecommunications consultant and owner, ComFirst, (a telecom consulting firm)

Well, they will attempt to beat competitors on price. Indian consumers are extremely price conscious and for any new player, being price competitive would be an important part of the strategy. Having said that, we must also recognise that Jio does not have as much experience or success in consumer facing businesses as the companies it is going to be competing with in the e-commerce space.

I think the Amazons and Flipkarts of the world have a much longer history in consumer-facing businesses. So they will certainly pose major challenges when it comes to consumer satisfaction. While price continues to be an important factor, the ease with which you can shop at an e-commerce platform, the efficiency, the options, ease of return and replacement, are equally relevant in the e-commerce space. While there is no doubt that Jio has as much a chance of competing and succeeding in price, how easy it will be for it to compete on delivering overall consumer satisfaction, only time will tell.

Abneesh Roy, executive vice president, Edelweiss Financial Services

Clearly, this will be a brief disruption because Jio is known to be extremely focused on market share and will be willing to spend a lot of money, if required. The Jio database that they already have, in terms of their telecom business, will be a big advantage. They have been testing this for a long time, we are aware of that. The key challenges here would be how the mom-and-pop shops come to the platform in terms of numbers because they will be varying in terms of tax compliance.

Abneesh Roy

Currently, mom and pop shops are losing market share with the rise of modern trade. For them, this is imperative as they will be able to better compete with the online e-commerce platforms.

It is good for the consumer and FMCG companies because the discounts and the offers will be taken care of by the platform and not the brands. The more the number of players in the segment, the better it gets. The volume growth of these brands will definitely see the impact of better promotion, increased visibility and competition in the space.

Source: afaqs