admin
August 21, 2015
Anumeha
Yadav, Scroll.in
New Delhi, 21 August 2015
On Thursday, the Rajasthan government signed an agreement with Kishore Biyani’s Future Group, best known for its retail chains Pantaloons and Big Bazaar, to launch the new Annapurna Bhandar Yojana. Chief minister Vasundhara Raje described the scheme aimed at an upgrade of ration shops as the beginning of a “new era of public private partnership in the public distribution system.” Raje had earlier in July announced that public schools and health centres will be handed over to private players under a PPP model.
Ration or fair price shops provide wheat, rice, sugar, kerosene, and, in some states, edible oil and pulses to beneficiaries at subsidised prices. On Thursday, Raje said the tie-up with the retail giant will improve the lives of villages as the “upgraded ration shop in villages will mean that beneficiaries can buy all goods at one store, like a shopping mall.”
While the government is yet to make the Memorandum of Understanding public, this is how the new scheme will work on the ground.
Will the ration shops be replaced?
No. The agreement does not mean ration or fair price shops in Rajasthan will be replaced by rural and peri-urban versions of Big Bazaar, or that the Future Group will now own or its staff manage ration shops in villages.
Subodh Agarwal, principal secretary, food and civil supplies department in Rajasthan, said that under the agreement, Future Consumer Enterprise Limited, a Future Group company, will be able to sell multi-brand consumer goods at ration shops. In the first phase of this experiment, Biyani’s company will supply processed food items, home care and hygiene products to one-fifth, or 5,000, of Rajasthan’s 25,000 ration shops in cities and villages. Ration shops will continue to be managed by existing ration dealers, Agarwal said. He added that the 5,000 shops had been selected on the basis of their existing capacity. In the next phase, more may be brought under this scheme.
Currently, 4.5 crore of the total 6.8 crore or 67% population buys subsidised wheat at Rs 2 per kg, sugar at Rs 13.5 per kg, and subsidised kerosene from ration shops. They will continue to get these at the same rates, while new products will be made available. It will be the Future Group’s responsibility to stock and procure these through its own network, separate from the existing public distribution network, said officials.
What’s in it for beneficiaries?
More availability and choice in consumer goods, at discounts.
As per the agreement signed on Thursday, Future Group will make available 146 items in 48 categories at the new Annapurna Bhandar or the selected ration shops at discounted prices. As per a government statement, the products that will be added to the ration shops will include oil, ghee, pulses, jaggery, spices, flour, other processed food such as noodles, wafers, biscuits, chocolate, “personal care products such as hair oil, shampoo, toothbrushes”, “home care products such as toilet cleaners, detergent bars, mosquito repellent”, and stationery such as pens and notebooks. The company will be required to stock products of multiple brands instead of only procuring their own products, as per the agreement.
What will it do to retailers?
The entry of a large retailer with big pockets is expected to hit the existing small retailers. In several villages, farmers with small and medium size landholdings supplement their livelihood with self employment by running neighbourhood grocery stores or selling such items as soap and shampoo in small quantities. Their businesses may be affected, if not immediately, then over a period of three to five years.
Retail experts say the entry of Biyani’s group may also have an effect on suppliers as any large retailer will prefer to transact with fewer large suppliers, rather than a high number of small suppliers.
Officials said that though the government had been in talks with several companies – including Reliance, Sahara and Metro – before the launch of this scheme, when an expression of interest was invited in January, only Future Group applied.
Retail experts said the move may open up a new market segment for the group. “By doing this, Biyani will be able to have critical mass in the market, build an understanding of the segment of the consumer serviced by this platform in Rajasthan, and potentially use this as a springboard for building a new company,” said Devangshu Dutta, the Chief Executive of Third Eyesight, a retail and management consultancy.
A retail expert working with a rival company, who did not wish to be named, said the experiment may or not work for Biyani since rural consumers prefer to buy in very small quantities, in the form of pouches, for instance, which is different from the Future Group’s current consumer base. This may require the company to re-engineer its processes to a significant extent.
Is this a first?
NC Saxena, a retired Indian Administrative Service officer, said Kerala and Gujarat had already experimented with providing more consumer items at ration shops.
Ashok Khandelwal, an activist with the Right to Food Campaign in Rajasthan, cited the case of Punjab, which provides 18 consumer items such as candles and low price cloth through ration shops, to demand that Rajasthan also provide more items at controlled prices to consumers. “Between 2011 and 2013, 21 items were offered at a few ration shops run by ration dealers who procured and sold them,” Khandelwal said. “Some items such as tea and salt worked fine, and were made available to beneficiaries at lower prices, but in the case of pulses, there were problems. The prices of pulses at ration shops went up higher than market prices because of irregularities in procurement.”
At present, local entrepreneurs apply to get the dealership of running ration shops. In some villages, the Gram Sewa Sahkari Samiti, or village level cooperatives, manage the ration shops. This new scheme, Annapurna Bhandar Yojana, was started on a pilot basis last August in six ration shops. Biyani’s company got the contract to run five ration shops in Jaipur, while the local cooperative Gram Sewa Sahkari Samiti has been operating one upgraded Annapurna Bhandar ration shop successfully in Udaipur.
Khandelwal argued that the government could have worked on smoothening the procurement and allowed existing local entrepreneurs, ration dealers, village cooperatives to procure and sell more items at the upgraded ration shops.
Amra Ram, a former MLA of the Communist Party of India (Marxist), said there was a risk that while the government might tightly control the prices of goods in the initial years, it will stop doing so later. “There is nothing to stop private players from charging higher prices in subsequent years to make more profits. The same pattern is visible in private hospitals and schools run on cheap land from the state,” Amra Ram said.
(Published in Scroll.in.)
admin
August 11, 2015
Varun
Jain , The Economic Times
New Delhi, 11 August 2015
India’s
increasingly app-only online marketplaces are promising richer
shopping experience when 4G, the mobile telecom technology that
offers quick data downloads, gains more traction. Flipkart, Snapdeal
and Myntra will load streaming video content and visual search
feature to help shoppers select products, said top executives
at these companies. Flipkart, in fact, already launched a visual
search feature.
Fourth-generation, or 4G, telecom technology allows downloads
several times faster than 3G and 2G, the more common technologies.
Bharti Airtel, which recently launched 4G in nearly 300 towns,
says its service allows users to download a movie in three minutes.
For ecommerce companies, this means they can offer richer features,
for instance the video of a model doing the ramp showcasing the
latest fashion collections, on their website to entice buyers.
With Reliance Jio Infocomm, the telecom unit of Reliance Industries, set to launch 4G later this year and others like Vodafone India, Idea Cellular and Aircel also expected to jump into the bandwagon, adoption of 4G is expected to see a spike.
“4G is ridiculously faster than what is available now. The kind of experience you can deliver on 4G will be amazingly better than what one could experience on a Wi-Fi or a desktop today,” said Shamik Sharma, chief technology and product officer at fashion retailer Myntra. “And, if you can envision that world and you can build for it, you can delight your customers.”
Punit Soni, chief product officer at Flipkart, said once 4G is adopted at a mass level, there will be a lot of evolution on visual search and video will start playing an important role. “When we know we are in a 4G-like environment, we would probably start exposing our users to a lot more video streaming and video based experience,” he said.
Flipkart recently launched a visual search feature. If you like the dress or footwear that someone is wearing, you can take a photo and upload it on the site. The visual search feature will do the search and come up with similar products on offer.
Anand Chandrasekaran, a former Airtel executive who is now chief product officer at Snapdeal, expects videos playing an extremely important role in shopping in the 4G scenario. “If you take a model like Exclusively.com, looking at a luxury dress designed by a world-class designer, I would probably want to see a video of a super model walking down the ramp wearing those. So I think there are a lot of use cases where video can start playing an important role once 4G gets a nationwide presence,” he said.
Devangshu Dutta, chief executive at retail consultancy firm
Third Eyesight, said when it comes to browsing and enriching the
view of the product, especially like 3D imaging and virtual draping
of fashion products, there is a need for significantly better
connectivity than what we have today. 4G can help solve this issue.
(Published in The Economic Times.)
admin
August 3, 2015
Shambhavi Anand & Rasul Bailay, The Economic Times
New Delhi, 3 August 2015
The
stage is set for the next big fight in the online world as new
CEOs take the helm at the top fashion ecommerce companies amid
mounting challenges of getting customers to buy clothes and accessories
without deep discounting.
Over the past few quarters, sales at online fashion companies
have slowed as they tried to cut the millions of dollars that
went into subsidising products to lure customers with heavy discounting.
The change of guard now becomes even more pertinent for growth,
analysts said.
Two weeks ago, Flipkart-owned fashion portal Myntra said it hired
Ananth Narayanan, a McKinsey India director, as its new chief
executive officer to replace Mukesh Bansal, who was named last
year as the head of commerce at the country’s largest ecommerce
company.
German investor Rocket Internet is preparing management changes at Jabong.com in a bid to lift the performance of the country’s secondlargest online fashion retailer, ET had reported on July 22. CEO Arun Chandra Mohan and managing director Praveen Sinha are likely to be replaced.
"Now, conversations within ecommerce companies are shifting towards making more margins rather than being purely about market acquisition," said Devangshu Dutta, CEO of retail consultancy Third Eyesight. "This will also drive strategies and organisational behaviour that may cause shuffling among senior roles and people."
Reliance Retail recruited Sanjay Mehra, a veteran of 25 years with stints in Gap and Nike, as the chief executive for its fashion and lifestyle ecommerce business. The company is working to bring a host of relatively lesser-known international brands from Europe for its online venture, which will be quite different from its brick-and-mortar fashion business. The Tata Group last year hired Sarvesh Dwivedi as head of lifestyle for its upcoming ecommerce marketplace.
Even though it is a late entrant, Amazon is aggressively ramping up the fashion and lifestyle business. Vikas Purohit, the head of fashion at Amazon.in, has put in place a team, including Vikram Raizada, former CEO of Tara Jewels, and Manish Saksena, ex-chief osperating officer at Tommy Hilfiger India. Fashion designer Narendra Kumar also came on board in 2103 as a creative director to boost Amazon’s portfolio.
The boom in the online fashion segment is such that the Seattle-based ecommerce giant is creating its own private label in the fashion and lifestyle segment, perhaps making India the first country where Amazon has its own private fashion labels.
"Initially ecommerce — in fashion as well — revolved around building the market and was more transaction-based," said Nitin Chhabra, chief executive of Ace Turtle, which has the mandate to bring dozens of foreign brands to sell on Myntra. "As there are too many me-too models currently, the time has come to have differentiating aspects and fashion ecommerce companies will move toward more personalisation and enhance the experience part of it."
Indians bought fashion products worth $559 million online in 2013, according to an April report by venture capital firm Accel Partners, an investor in Flipkart.
Snapdeal has said it is targeting to sell $2 billion worth of fashion and lifestyle products this year through its flagship platform and Exclusively.com, which the New Delhi-based company acquired in February.
In a bid to reach its goal, Snapdeal picked Amit Maheshwari, vice president of its fashion division, as the new chief executive of Exclusively. com, which sells labels from designers, including Rohit Bal, Manish Malhotra and Tarun Tahilani.
Reliance Industries and Tata Group, India’s biggest conglomerates, also want a share of India’s burgeoning online fashion market.
Reliance Retail is planning a big push in the ecommerce segment this year through the rollout of an online fashion store, chairman Mukesh Ambani announced at the Reliance annual general meeting last month.
The Tata Group is seeking to make a mark by enlisting global fashion brands as part of its portfolio, which is expected to debut in the springsummer season next year, according to people familiar with Tata’s plans.
Tata is trying to convince Spain’s Inditex, a partner with Trent, to sell its highly successful Zara brand on its marketplace. Zara is sold only on its own site and not through third-party websites. So if that happens, it would be a first for the Spanish brand.
(Published in The Economic Times.)
admin
August 1, 2015
KNN Bureau
New Delhi, 1 August 2015
Minister
of Industry, Health and Power Government of NCT of Delhi Satyender
Jain said Delhi need to have specialised retail shopping zones
for different products to enhance the overall shopping experience
in the city.
Inaugurating the CII Delhi Retail Summit here on Friday, Jain urged the retailers in Delhi to be more competitive in terms of pricing, which will in turn increase sales for them.
He further stated that the retail in Delhi has a lot of potential, which needs attention in terms of customer satisfaction.
Retail sector in Delhi has potential to grow up to three times even though there is tough competition from the online segment. The city has tremendous scope for growth in the area of health, education and retail sector, he said.
The minister also informed that the state government is planning for infrastructural development to provide competitive price on rental space compared to the neighbouring states to promote retail sector in Delhi.
On the occasion, Past Chairman, CII Delhi State Council, and Executive Director, The Bird Group, Ankur Bhatia said with increase in urban population and changing consumer behaviour, Delhi has a lot to look forward in terms of retailing in the city.
He added that the retail development in the city has largely been scattered with numerous small shopping zones mushrooming all across the city which need to be organized through single ownership for better management and experience. He also emphasized the need for organising an annual Delhi Retail Festival.
He also said that retailing continues to be a good business model across the country and also stressed on the need for single ownership of malls for better management.
The summit also witnessed various leading retailers and institutions coming together for a day, including Head, Ambience Mall, Deepti Goel; Managing Director, STARCENTRES, Pranay Sinha; Managing Director and CEO, Bharti Reality, S K Sayal; Chief Executive Officer of Third Eyesight, Devangshu Dutta; Head of Retail, Unitech Group, Munish Baldev; Chief Executive Officer, Select City Walk, Yogeshwar Sharma; Senior Vice President, DLF Luxury Retail & DLF Promenade, Dinaz Madhukar and Chief Executive Officer, The Beer Café, Rahul Singh were among other eminent speakers at the summit.
(Source: KNN Bureau .)
admin
July 29, 2015
Ravi Teja Sharma & Rasul Bailay, The Economic Times
New Delhi , 29 July 2015
Riding
on the back of humongous investments and rising valuations, ecommerce
companies and technology startups outpaced IT/ITeS firms for the
first time as the biggest office space taker in the country in
the first half of the year.
Companies in this segment leased more than 6 million square feet
of office space, or over 35% of the total, according to property
research firm Knight Frank. Flipkart leased 3 million sq. ft.
in Bengaluru with Embassy Office Parks, Amazon took 1.3 million
sq. ft. in Bengaluru, Snapdeal 5 lakh sq. ft. in Gurgaon, Housing.com
1.5 lakh sq. ft. in Mumbai and Zomato recently leased 1.2 lakh
sq. ft. in Gurgaon.
"The difference between startups of 1999-2000 dotcom boom
and now is that this time these startups have raised large sums
and business is actually happening. This is propping up the commercial
office space market in India at the moment," said Viral Desai,
national director – office agency at Knight Frank India.
The ecommerce industry has attracted large amounts of funding over the past few years. Funding in the sector increased to $4.3 billion in 2014 from $800 million in 2013. In the January-June 2015 period, investors have already put in $1.8 billion in ecommerce companies.
Flipkart has so far raised $3.4 billion in the eight years since it was formed, with the latest $700 million infusion valuing it at $15 billion. Amazon is readying a $5 billion war chest for its Indian operations.
Desai said Bengaluru and Gurgaon are where the most action is from these ecommerce and tech startups.
The money raised by ecommerce companies has been deployed essentially in two places, marketing and backend infrastructure, which includes people, said Devangshu Dutta, chief executive officer of retail consultancy Third Eyesight.
"A lot of them have widened their product portfolio and deepened the markets access and their businesses have grown tremendously. So while we may say it is a technology-based business, the execution of the business is dependent on people to a large extent, in terms of product sourcing and in terms of vendor management, supply chain, customer support, etc. With that growth in the team, it is very natural, and it is also an indication of what they expect in terms of future growth," he said.
(Published in The Economic Times.)
