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February 6, 2020
Written By Writankar Mukherjee, ET Bureau
KOLKATA: Tata’s has started direct selling to consumers through Tata Cliq in the namesake e-commerce marketplace, converting it into an entity which will become a seller holding inventory and not just run a marketplace. The group has also invested over Rs 300 crore into this entity – its highest ever — to support this expansion of role , two industry executives said.
The executives said this could be termed as an almost last ditch effort to spruce up the three year old e-commerce business since Tata Cliq has largely remained a fringe player in the Indian e-commerce landscape dominated by Walmart-owned Flipkart and Amazon.
Earlier, retailers, brands and other sellers would sell through TataCliq and the platform would earn revenue from it.
The new model may lead to higher sales and faster growth, since as a seller in the platform Tata Cliq is now holding inventory whereby it can directly control price, supplies, delivery and offer discount to consumers, two industry executives said.
As per regulatory filings made by the company to Registrar of Companies and sourced from Veratech Intelligence, Tata Cliq has raised around Rs 313 crore from its promoters – Tata Industries Ltd – this year till now. There has been fresh fund infusion in December and January.
The executives said bulk of this money will help Tata Cliq expand into the inventory model. Tata Cliq has already started trials of direct sales with television and home appliances of top brands like Xiaomi and Voltas, and will expand into other high value and fast moving categories like smartphones to gain volume.
In response to an email, Tata Industries executive director KRS Jamwal said the e-commerce business is experimenting with selectively acquiring head inventory, specifically for enhancing customer experiences, better delivery mechanisms and for enhanced margins. “This does not necessarily imply that we are implementing the inventory model,” he said.
Jamwal said the current infusion of capital is part of routine infusions of capital and will be ongoing. “Unlike a VC funded company, capital is not raised in bulky rounds,” he said.
He said the group is innovating an alternate ecommerce model that will speak to audiences who prioritise trust, brands and new launches as much as value.
An industry executive said Tata Cliq is approaching to sell exclusive models so that it can have a distinct space in the market as a seller and has a long-term target to generate a majority of the platform sales by itself.
Veratech founder Mohit Yadav said the shift to inventory model gives a unique advantage to Tata over Amazon and Flipkart as it is an Indian company and will not be tied down by the stringent foreign direct investment regulations in e-commerce. “It will help Tata leve .
Retail analyst Devangshu Dutta, chief executive officer at consultancy firm Third Eyesight, said just because Tata Cliq is now holding inventory it may not mean that it can easily achieve the scale of Flipkart and Amazon. Flipkart and Amazon have become what they are after years and spending billions of dollars, he said.
“That way, the Tata group is fairly conservative in spending capital and is not oriented towards throwing money at a business just to gain scale. However, holding inventory makes the business more predictable than depending on partners. After all, you don’t have to depend on the partner retailer for product availability, service level and pricing,” said Dutta.
Tatas have been investing money into the e-commerce business. In 2018-19, Tata Industries had invested Rs 292 crore, Rs 224 crore was in FY18 and Rs 172 crore in FY17. However, it’s a fraction of the thousands of crore which Flipkart and Amazon are investing on their India business every year. As per RoC filings, Tata Unistore net losses was Rs 246 crore in 2018-19 while its income was Rs 110 crore.
Source: economictimes
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February 5, 2020
Written By Smita Balram, ETtech
Over four years after acquiring Jabong for $70 million, Walmart-owned Flipkart has formally closed its operations to shift focus completely on its premium fashion platform Myntra for its apparel business. As part of the move, Jabong’s flagship portal and app are being redirected to Myntra’s shopping window.
Experts said the move will help Flipkart consolidate operations and make its marketing budget efficient.
“The way ecommerce market in India has developed, customers need to be reacquired consciously. Since the level of stickiness is low, it is better to bring consumers to one site than spread money across multiple sites,” said Devangshu Dutta, founder of Third Eyesight, a strategy consulting firm, adding, “given how Walmart’s focus as a business is fairly cost and efficiency conscious, it makes sense to consolidate operations.”
Myntra did not respond to ET’s queries on official confirmation till press time. In July last year, Flipkart had said that it had begun to cut a bulk of its marketing expenditure on Jabong and redirecting users towards Myntra by offering incentives.
The Indian clothing market will be worth $59.3 billion in 2022, making it the sixth largest globally, comparable to the United Kingdom and Germany, according to data from McKinsey’s FashionScope.
However, online accounts for less than 10% of organised apparel retailing with Flipkart that acquired Myntra in 2014 and Jabong two years later, controlling about 70% of the market.
According to data sourced from SimilarWeb, which tracks web analytics for businesses, app downloads of Jabong in India had dropped by 12.71% in December from November in 2019. Usage on the app had been steadily declining as well.
Daily active users on Jabong were down by 10.61% in the same period. Myntra app, on the other hand, saw a 41.18% rise in downloads and daily active user count was up by 31.87%.
Source: economictimes
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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.
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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
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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
