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January 14, 2016
Richa Maheshwari, The Economic Times
Bengaluru, 14 January 2016
Amazon is running a pilot programme on delivering packages in India’s biggest cities over distances of 3-5 km — by bicycle. It was debuted in Mumbai last month and has been expanded to Bengaluru, Hyderabad, Delhi and Chennai. The programme is set to be extended to more cities.
"Being conscious of the environment we live in, reducing carbon footprint is the need of the hour," said Samuel Thomas, director, transportation, Amazon India. "We have taken this eco-friendly step by introducing bicycle deliveries, which also helps delivery associates with easier access in congested metro cities."
The couriers ride geared bikes and carry packages of up to 7.5 kg per trip. With incentives, a bicycle messenger could earn about Rs 7,000 to Rs 8,500 a month compared with Rs 14,000 a month for those on motorbikes, according to people aware of compensation levels.
Online retail, which is being increasingly adopted by Indian shoppers, is expected to account for 3% of the total by 2020, according to a PwC report. Further, orders per million are expected to more than double from five million in 2013 to 12 million by 2016. While this will mean more opportunities for e-commerce companies, delivery staff will have to ensure goods reach buyers in time.
The US-based online retailer is working on novel methods of delivery, including Prime Air, "designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, also called drones," according to its website.
The e-commerce giant is seeking delivery alternatives as logistics
costs rise, experts said.
"In India, the density of population is higher, hence
bicycles will help them reduce cost compared to motorcycles. Similarly,
in the US, since the market is less dense, air cargos will help
them reduce cost, reduce time and improve accuracy," said
Devangshu Dutta, chief executive officer of consultant Third Eyesight.
"The purpose is the same, how it is done is different, depending
on the geography." Amazon said using cycles was green and
enabled couriers to slip through traffic easier, when asked whether
this would allow it to lower costs.
"Our focus for this initiative was two pronged – to be eco-friendly and to be able to cut through congestion in metro cities," it said. "You’ll find more people who own bicycles or if need be can afford to purchase one. It is lighter on the pocket to own a bicycle compared to a bike. We will see how it goes with Amazon with respect to safety and then decide whether we want to add bicycles to our fleet or not," said Vijay Ghadge, chief operating officer of GoJavas, primary logistics arm of e-tailer Jabong.
(Published in The Economic Times and The Times of India)
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January 6, 2016
Shambhavi
Anand & Varun Jain, The Economic Times
New
Delhi, 6 January 2016
Discount
sale on winterwear has started in the middle of the season, as
an unusually warm winter has hurt demand, forcing top brands to
tweak their strategies. Industry experts estimate India’s annual
winter wear market at around $2.3 billion (Rs 15,300 crore). This
year, sales are around 15% below the expected level because of
a mild winter in the North, said two of them.
Brands such as Woodland and Marks & Spencer, which are high on winter wear, started selling winter wear in October, a month earlier than usual, expecting people to buy in anticipation of a harsh winter. While several of them are now replacing heavy woolens with light ones, brands such as Levi Strauss and Woodland started offering discounts on winter apparel, footwear and accessories as early as December 23.
"Due to the balmy winters this year, we at Woodland have tweaked our inventory at the stores accordingly. Since we see slow demand for bulky winter merchandise, we have stocked our stores with sweatshirts, fleeces, bomber and gilet jackets instead, which have been flying off the shelves. We also have a range of ankle boots, which have been the rage all winter and have replaced thigh high boots this season," said Managing Director Harkirat Singh.
Marks & Spencer is focussing on light knits, cable knits and cashmere jumpers this season.
"This winter, layering was a key trend. As every part of India does not face winter with same intensity, having a range of styles in linen refreshed in latest colours of the season really helps, so we continue to offer linen all year round," said Venu Nair, managing director of Marks & Spencer Reliance India. He refused to comment on current trading and trading over the last quarter citing the silent period before reporting its group results on January 7.
Pepe India, which is primarily a denim brand but also sells winter apparel extensively, launched its winter collection ahead of Diwali. "Normally we used to launch winter collection after Diwali, but this year we went ahead with it by October 15. We also reengineered our product line and brought more of sweat shirts and lighter denim jackets which are useful for a longer part of the season," said CEO Kavindra Mishra.
Most parts of northern India, which is a huge market for winter wear for apparel brands, has experienced warmer winter this year. According to the India Meteorological Department, minimum temperature as on Tuesday was 5-7 degrees above normal in places such as Delhi, Chandigarh, Punjab, Haryana and Himachal Pradesh.
"Winter wear is an extremely seasonal product and it is limited to a small part of the geography of India," said Devangshu Dutta, CEO at consultancy Third Eyesight. "From that point of view, the sales of winter wear would have got impacted." However, he said, it is too early until late January to term the season a write-off.
"We have seen that the weather patterns are fairly unpredictable;
so you can actually get a cold snap in the middle of January and
that time it pushes up sales."
(Published in The Economic Times.)
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December 16, 2015
Devina
Sengupta & Jochelle Mendonca, The Economic Times
Mumbai,
16 December 2015
Consumers
could have a say in the watch or even car produced by the Tata
Group as its companies strengthen social media and digital platforms
by crowd sourcing ideas.
Titan, which sells watches and spectacles, will be among the first to start asking consumers for detailed inputs in the next few months. The plan may be replicated across consumer-facing units such as Trent and Tata Motors.
Such companies use listening tools based on social media feeds to manage brand and reputation, said a data analytics partner at one of the big four accounting and consulting firms that’s working with Tata on the plan. Titan and other Tata group firms are taking this to a new level, the person said.
Consumer feedback will be used to inform product design and service delivery, said the partner, who didn’t want to be named.
Crowd sourcing is a way of getting ideas and feedback from a large group of people, primarily those who are online, rather than from employees and suppliers.
"Titan is already doing it for some of its brands," the company said in an email.
More companies are looking at this to increase engagement with customers. Over the last two years, they have been resorting to crowd sourcing to identify features and product names. Sony decided to use the method to choose the name of its new speaker range last year, while McDonald’s asked UK customers to suggest recipes for its menu.
Tata MotorsBSE 2.05 % is no stranger to such exercises.
"We involve our audience in all our new launches, by creating content and communities built around their interests which resonate with the values of the car," a spokesperson said in an email. "Crowd sourcing and social play a key role in our awareness campaigns as we recently saw in the Zica name unveil campaign, where a multi-city scavenger hunt fuelled by digital was used to reveal the name." Zica is the latest model in the Tata Motors range.
Lifestyle and retail company Trent did not respond to queries.
Unfiltered inputs mean the management team can quickly connect with what the customer is seeking.
"With growing internet penetration, the ability to aggregate such inputs has expanded dramatically while the costs have dropped," said Devangshu Dutta, CEO of retail consulting firm Third Eyesight. "Certainly, it also makes the business and the brand more approachable and friendly, if done right.
It also helps provide a different perspective.
"Businesses can get locked into familiar strategic analyses and predictable behaviour and crowd-sourced ideas can provide perspectives that may be way outside the management team’s conventional thought processes,” Dutta said.
Tata group chairman Cyrus Mistry has been focusing on digital over the past few years and all group companies have been asked to get more consumer centric.
ET reported earlier that the conglomerate had mandated customer-facing businesses to appoint chief digital officers to improve their offerings. Former Citigroup executive Deep Thomas was named head of customer analytics in February.
The new push is in line with the group’s aim to become one of the top 25 global brands in the next 10 years and double its total market value to $350 billion. The group’s total revenue stood at $108.78 billion in the year to March.
The Tata group is expected to launch its ecommerce venture in December based on the marketplace model, similar to that of Flipkart, Amazon India and Snapdeal. It will offer both Tata and non-Tata products, mainly related to electronics and lifestyle.
(Published in The Economic Times.)
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December 15, 2015
Sagar
Malviya, The Economic Times
Mumbai,
15 December 2015
Lifestyle
online retailer Jabong crossed the Rs1,000 crore sales mark in
the year to March, doubling its revenue from a year ago but deep
discounting has led to a nearly threefold increase in the net
loss.
Xerion Retail, which runs Jabong, posted a loss of Rs 43.6 crore on sales of Rs 1082.9 crore, as per a Registrar of Companies filing. A year ago, it had sales of Rs527 crore with a net loss of Rs16.6 crore. Sales of the company, incorporated four years ago, amount to a third that of Shoppers Stop, India’s largest department store chain started 25 years ago.
India’s ecommerce market is set to rise to $103 billion by FY20 from $26 billion now, according to Goldman Sachs. At this stage of evolution, online retailers have to go through years of operating losses, given high initial investments as well as the incentives they provide in the form of discounting to attract consumers online. At the same time, several online retailers are said to be getting more circumspect with discounts as they seek to shore up their balance sheets.
Jabong, which was started in a one-room office at Golf Course Road, Gurgaon, in December 2011 is now part of Global Fashion Group portfolio, a subsidiary of German online business developer Rocket Internet. Both key cofounders Praveen Sinha and Arun Chandra Mohan quit this year amid speculation that the company is on the block. A week ago, Sanjeev Mohanty joined Jabong as CEO and managing director from Italian fashion brand Benetton.
"Jabong is transitioning from a startup to a professionally managed profitable ecommerce business. We are putting together a strong leadership team," he told ET. "Our focus will be on more and more curation, building unique assets and increasing assortment."
High growth and losses are par for the course at ecommerce companies, an expert said.
"There is a management churn issue but it is more difficult to bring losses down if you have to show high growth trajectory," said Devangshu Dutta, chief executive at retail consultancy Third Eyesight. "For Jabong, loss is not a problem as long as they have enough cash on the balance sheet and there is constant product injection in its portfolio to excite consumers."
India’s biggest homegrown ecommerce companies Flipkart and Snapdeal are flush with cash as overseas investors in the two companies look to get a piece of a market that’s set to surge further. Amazon India too has indicated that it may exceed the $2 billion that CEO Jeff Bezos had pledged to spend last year, with sales growing more rapidly than expected. In comparison, Jabong has raised about $100 million from a consortium of investors including Swedish investment giant AB Kinnevik and Rocket Internet.
Myntra, owned by Flipkart, and Jabong were considered the leaders in the fashion category, but Amazon India is gradually getting aggressive with the segment consistently among its top three. During the festive season, Amazon saw its fashion segment grow fivefold from a year ago.
Apart from this, most lifestyle product makers are either shying away from offering heavy discounts for their wares or giving price-offs for old merchandise, something that goes against Jabong’s business model of offering fast fashion or the latest collection.
Hence, the online retailer has launched over a dozen global brands such as Dorothy Perkins, G Star Raw, Tom Tailor and Bugatti Shoes exclusively for India that also helps them earn higher margins. Just two months ago, Jabong helped British brands Topshop and Topman enter Indian market through its platform.
"We are focusing on growing the ‘just-in-time’ marketplace model where we don’t hold inventory risk," said Mohanty. "This is helping us create efficiencies and de-risk a lot of our business, while allowing us to expand the number of vendors and substantially increase the number of products listed on our platform, which now stands at close to 400,000 SKUs (stock-keeping units). We also continue to increase our assortment to offer more choices to visitors on Jabong."
(Published in The Economic Times.)
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December 10, 2015
Bindu D. Menon, The Hindu Businessline
Mumbai, 10 December 2015
Brands riding on Bollywood heartthrob Salman Khan are heaving a sigh of relief with the Bombay High Court overturning his conviction for a 2002 hit-and-run case. Brand watchers point out that the verdict will only increase his standing among brand owners.
In May, a lower court had convicted Khan of culpable homicide and sentenced him to five years in jail for driving over and killing a man sleeping on a pavement. But the appeals judge ruled there was not enough evidence.
Khan tweeted that he accepted the ruling with ‘humility’.
But the biggest relief is undeniably for the brands he is associated with. According to celebrity management firms and brand consultants, the mass hero has as much as ?200 crore riding on him.
Khan endorses over 10-12 brands including Thums Up, Being Human, Revital, Wheel, reality show Big Boss, men’s innerwear Dixcy Scott and PNG Jeweller.
Film analyst Komal Nahata points that currently there is about Rs. 100 crore riding on his films.
“Salman Khan’s stand is vindicated. His upcoming film Sultan is slated for release in 2016 and has about ?100 crore riding on it. Brands which were previously considering exiting him as a brand ambassador will reconsider their decision.”
According to Shailendra Singh, Jt. MD of Percept India, “Salman’s brand was already flying high. Now it will skyrocket. The emotional connection of the fans, the box office and the brand was hugely backing Salman’s freedom and now they have got it. It is also interesting that it has come at a time when the three Khans (Salman, Shah Rukh and Aamir) are finally getting along.”
Echoing the sentiments, Jagdeep Kapoor, brand guru and founder of Samsika Marketing, noted: “Brand consultants will see how they can cash in only Salman Khan’s appeal to take their brand’s credo forward.”
As per industry sources, brands pay anywhere from Rs. 5 lakh and Rs. 5 crore per endorsement to Salman.
Picky MNC brands
Asked how MNC brands which are picky about their celebrity choices will react to the verdict, Devanghshu Dutta, CEO, Third Eyesight, said: “The arena we are playing in is largely driven by emotions and brands would also reconsider their decision. Indian companies are flexible in their approach but it is MNCs which are picky. Cases will not make a significant improvement in brand ambassador’s selection”.
(Published in The Hindu Businessline.)
