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

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

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

According to a report published by RedSeer Consulting, the e-commerce industry witnessed a 64% year-on-year growth to reach $2.3 billion worth of sales (GMV) between the five festive days last year.

Hindustan Times

E-commerce websites provide heavy discounts to make the most of the festival momentum.(Reuters Photo)

Jamshedpur-based Nilanjana Ghosh, 26, who is pursuing a fellowship, likes to buy her regular items whenever she is able to crack the cheapest deal. She generally keeps items such as electronics, books, household requirements, art and craft, interior decoration and costly cosmetics for festive seasons. Apart from these, Ghosh regularly purchases clothes during the Diwali and Durga Puja festive sales. She spends at least ₹5,000 a year on clothes, and during other festive sales, she spends ₹2,000 on an average. “Even for bulk purchases, I wait for festive seasons,” she said.

In the upcoming season, Ghosh is planning to buy a mobile phone or a tablet and a bookshelf which might cost her ₹15,000 or more, although this is a one-off expense. “I also try cutting some corners by effectively using coupons, wallet balance and points,” said Ghosh.

Ghosh is not the only one when it comes to stalling expensive electronic purchases for festive seasons. Gone are the days when you would have to wait for months together to give yourself a chance to loosen the purse strings. This is visible in numbers too. According to a report published by RedSeer Consulting, the e-commerce industry witnessed a 64% year-on-year growth to reach $2.3 billion worth of sales (gross merchandise value (GMV)) between the five festive days last year – October 9-14 – and around 55% of the total GMV was mobiles, 23% was electronics, 14% was fashion and 8% were other products.

Mostly, people wait for festive sales only when the purchase is not urgent. “Generally, I don’t stall for online festivals unless I’m purchasing items which are not immediately required. Mostly, purchase of high-priced gadgets (mobiles, tablets, etc) or inessential items (board games, etc) are stalled,” said Bengaluru-based Pranjal Paul, 26, who work as a business development lead for a cleantech company.

When it comes to timing the purchase of clothes, Paul believes the discount varies a lot depending on the type of clothing. “I tend to buy more of jackets, blazers, t-shirts (which aren’t absolutely required at that point but are guilty pleasures) during online festivals. But I shop for formals or jeans whenever I require,” said Paul.

Like Ghosh, Paul too, has stalled some electronic purchases for the upcoming festive season. “This year I’ve bought a Bluetooth speaker, an online streaming device, a pair of earphones, couple of blazers and jackets. In the upcoming online festival, I am planning to buy an I-pad and related accessories,” he added.

However, Paul admits having overspent and falling prey to these lucrative offers. While he spends around ₹3,000 to ₹4,000 during festive offers, the number has shot up by thousands with a lot of over-spending in the past. “The portable Bluetooth speaker for instance, was a guilty pleasure, because I had a speaker and it was not essential to buy a new one at all,” said Paul.

Reasons for heavy discounts vary. “E-commerce websites try to make the most of the festival momentum to gain more traffic or they may have over-ordered inventory that they may want to clear,” said Devangshu Dutta, founder, Third Eyesight, a retail and consumer goods consulting firm. Reasons for heavy discounting can also depend on the state of the economy.

“Currently the automobile sector is not doing well. So a lot of the related products are witnessing sluggish sales and companies are trying to use heavy discounting to clear the inventory,” said Dutta.

It is easier and faster to surf through websites and find the best deal whereas when it comes to something like white shirts, there is more than one variety available so it is difficult to know if you are being over-charged. “The only way you can play smart is by being able to differentiate between what you need and what you want,” said Dutta.

Source: hindustantimes

Written By Deepti Chaudhary

Kalyan Krishnamurthy, CEO, Flipkart. The ambitious targets from the e-commerce platform come at a time when several consumption driven sectors are reporting a dip in sales. Bloomberg

Walmart-owned online retailer Flipkart hopes to double sales during its flagship Big Billion Day (BBD) event, two people aware of its sales targets said. The company is also aiming a gross merchandise volume (GMV) of about ₹1 trillion (about $14 billion) this fiscal year, up at least 45% from a year ago, the people said on condition of anonymity.

According to RedSeer Management Consulting, a research and advisory firm focused on the consumer internet market, Flipkart had a 60% share of the $2.5 billion sales by e-tailers during the five-day event in 2018. The Flipkart Group—including Jabong and Myntra—had posted a GMV of $7.5 billion for FY18, according to British investment bank Barclays.

When contacted, Flipkart refused to comment on its financial targets. Flipkart, however, confirmed that the upcoming Big Billion Day sale will be its biggest on the back of increasing sellers’ base, new products and pocket-friendly financing options, among other reasons. The Big Billion Day is Flipkart’s flagship annual festive season sale, where discounts are sometimes as high as 80%.

“The Big Billion Day for us brings forth all the values we stand for in our customers’ mind — access and affordability. With innovation as our rallying call, we are confident that this BBD will be one of the biggest that the ecosystem as a whole will experience. From our nurtured sellers to our trusting patrons, there is something for everyone,” said Kalyan Krishnamurthy, CEO, Flipkart.

Nandita Sinha, head, customer growth and engagement at Flipkart corroborated that “this will be our biggest BBD in terms of number of customers transacting and engaging with us”. “We have been working with brands to create really exciting propositions. Our share of wallet across categories will increase,” she added.

In the run-up to BBD and the festive season, customers will have the opportunity to earn what the company calls SuperCoins, earned by shopping on Flipkart or on any of the SuperCoin partners, and use them to avail of deals during the sales period. It has also increased the number of sellers, particularly from tier III cities, by 50,000. “There is a 40-50% increase in the number of sellers participating in the festive season sales,” said Nishant Gupta, head of marketplace, Flipkart.

During this year’s festive season, Flipkart will provide credit to close to 50 million customers through innovations like Flipkart Pay Later, Cardless Credit and Debit card EMI. Customers will also be able to avail of no-cost EMIs on many products. Flipkart, under its co-branded card programme, will also be offering cashbacks and no-cost EMI options through co-branded credit cards.

Nearly 50 new fashion brands will be available during the festive season sales. Flipkart and Myntra customers can browse across 11 private label brands from Lifestyle including brands such as Forca, Code, Fame Forever, Nexus, Juniors, Melange and others.

Flipkart’s ambitious targets come at a time several consumption sectors are reporting a decline in sales. The country’s largest carmaker Maruti Suzuki India on Sunday reported a 32.7% decline in sales at 1,06,413 units in August. A Parle Products Pvt. Ltd official recently said the biscuit maker might lay off up to 10,000 workers as falling demand and slowing economic growth in the rural heartland could lead to production cuts.

Devangshu Dutta, chief executive of retail consultancy Third Eyesight, says while GDP growth has gone down, it’s still growing and that individual businesses can still grow. “It is possible for Flipkart to grow this year too, particularly if they are going to be aggressive with pricing. If a customer feels she/he is getting value at this platform, then they will buy. When there is a perceived slowdown, people are primed to look for value. Flipkart might step up aggression on EMIs, and other financial options, which help will in the cash flow of customers. With aggressive discounting, EMIs, and advertising, once can push traffic and conversion,” Dutta said.

It will, however, boil down to how much Flipkart promotes the offers now. “The question is – net, net, will it be a profitable season after promotions for Flipkart? Only the company can tell,” says Dutta.

Source: livemint