Written By Sharleen Dsouza

Billionaire Radhakishan Damani just entered Jeff Bezos’ turf.

His supermarket chain D-Mart is running a pilot that allows customers to order online, and have everything from staples to shampoos either delivered at neighbourhood kiosks free or at their doorstep for a fee. India’s most valued retailer has set up 40 such booths in Mumbai.

We have started a pilot run in a small part of Mumbai and will expand after understanding consumer response to this service. Neville Noronha, Managing Director, Avenue Supermarts Told BloombergQuint While it’s a pilot, D-Mart’s scale could be a big advantage when rolled out across its network of 140 outlets in 10 states. Damani is betting on the ‘everyday low prices’ model that made him a billion

While it’s a pilot, D-Mart’s scale could be a big advantage when rolled out across its network of 140 outlets in 10 states. Damani is betting on the ‘everyday low prices’ model that made him a billionaire in a blockbuster initial public offering of Avenue Supermarts Ltd. in March. Shares have since gained nearly fourfold.

It’s also what Amazon is trying in Seattle to compete with Wal-Mart with its “click-and-collect” kiosks. That followed its $13.7-billion Whole Foods buyout, aimed at disrupting the brick-and-mortar grocers in the U.S. The American online giant has similar plans for India, having got clearance to invest $500 million in food retail. D-Mart joins Flipkart that resumed online grocery sales to counter

D-Mart’s kiosks are located at places where the supermarket chain doesn’t have outlets. Customers can pick up products ordered online—both through the app and the website—at the booths. For home delivery, they will have to pay 3 percent of the bill or Rs 49, whichever is higher. “This is D-Mart’s way of capturing an extra share of its existing customers’ wallet,” Devangshu Dutta, chief executive

It’s an experiment all retailers are trying to increase their turnover. Also, if a delivery cost is involved, it becomes a deterrent for the consumer to shop online,” said Arvind Singhal, chairman of retail consultant Technopak Advisors. Also, D-Mart is not an aspirational brand, he said.

Online grocery shopping in India is relatively small; it will take a while before anyone cracks the code.

Source: bqprime

Written By Ratna Bhushan & Chaitali Chakravarty, ET Bureau

NEW DELHI: Top Indian retailers are furious at Amazon over what they see as ambush marketing — inside their own stores no less. Amazon has said the exercise was part of normal promotional activities.

The India arm of the American online giant bundled its gift coupons with products of ITC, Nestle and Coca-Cola being sold on the shelves of large organised retail chains such as Big Bazaar, Hyper-City, Star Bazaar, D-Mart, Walmart-owned Best Price Modern Wholesale, Big-Basket and others. Not anymore it seems — the brick-and-mortar retailers are removing the items as they see this as a move by Amazon to acquire their customers.

“We will not allow ambush marketing at any cost,” said Kishore Biyani, founder of Future Group, the country’s largest brick-and-mortar retail network. “We have started removing such products from the shelves and told brands not to supply us packs that have any promotional tie-up with a rival retailer.”
Packs of brands such as ITC’s Yippee Noodles, Nestle’s KitKat chocolate and Coca-Cola’s Sprite and Fanta soft drinks are among the brands that are, or were, being retailed at offline stores along with Amazon gift coupons. D-Mart chief executive Neville Noronha described the move as being “below the belt.” He added: “Principally, the brands should have spoken to us. Amazon is using us as a channel to acquire customers without any agreement with us. We’ve communicated our point of view to the brands.”

Amazon founder Jeff Bezos has pledged to pump $5 billion into India and has said it will continue to invest and grow in the country. It’s now focused on selling food and grocery online with deals and promotions and has earmarked $500 million for this after the government allowed foreign direct investment in the retailing of such items, provided they are made and packaged in India.

The marketplace said the exercise was part of its promotion. “Amazon regularly runs various kinds of promotional activities with sellers and brand partners in keeping with its vision to make online commerce a part of everyday life,” a company spokesperson said in an email.

FMCG Cos Neutral
The consumer goods companies adopted a neutral tone. Nestle said: “We value our relationship with all our trade partners and collaborate with them for our promotions. In the recent KitKat promotion, there are some operational issues and we are in touch with our partners.”

A spokesperson for ITC, which makes a host of packaged foods and grocery products including biscuits, noodles, frozen foods, soaps and deodorants, said: “Like every FMCG (fast-moving consumer goods) company, we run different consumer promotion schemes across multiple products from time to time to benefit consumers and promote the sale of our offerings. Currently, there are 38 promotion schemes across multiple products.” There was no response from Coca-Cola.

Rakesh Biyani, joint managing director of Future Retail, said it was disappointing that large companies like Amazon were directly incentivising consumers with currency/money, which is equivalent to indirect participation in pricing. He said such marketplaces aren’t allowed to do this. “The act of promoting a specific distribution channel through a cash incentive on products sold through traditional distribution is not good for the growth of the industry,” he said. “Small traders and retailers will be significantly impacted from a promotion, which is incentivising consumers to shop in a competing channel.”

Analysts said the episode reflected the intense competition.

Not a new practice
Globally, companies have long engaged in cross-channel promotions and ambush marketing, consulting firm Third Eyesight chief executive Devangshu Dutta said. Such practices may not be unethical unless specified in the contract.

“Having said that, offline retailers are fully within their rights to return the packs they take objection to,” he said. “Finally, smaller retailers which contribute the much bigger segment of sales may not be able to take a stand which the bigger, organised ones are taking.”

This is not the first time Amazon and brick-and-mortar retailers have been engaged in a bitter battle over discounting and pricing strategies.

Large e-commerce players, which are known to burn cash to acquire customers, have been frequently alleged to indulge in predatory pricing by offline retailers. In the middle of last year, the government had issued guidelines on marketplaces aimed at putting an end to deep discounts offered by online platforms, a move that brick-and-mortar retailers said levelled the playing field.

While online penetration of food and grocery penetration is still less than 1%, Morgan Stanley expects this to become the fastest-growing online category, expanding at a compounded annual growth rate of 141% by 2020 and contributing $15 billion, or12.5%, of overall retail sales.

Source: economictimes

Written By Sulekha Nair

People have become more realistic and know what a structural reform is. But the fire and chutzpah in Narendra Modi’s speeches now do not seem to evoke the same euphoria as earlier

Notwithstanding the policy decisions such as demonetisation and a hurried rollout of the goods and services tax (GST) that have negatively impacted a large populace in the country, Brand Narendra Modi seems to be largely untouched as of now. However, with the situation on the ground remaining bleak, it remains to be seen how long can he hold on to the image, aver experts.

Perception of Brand Modi, when Narendra Modi was freshly elected as the Prime Minister, was that of a bold and courageous leader who people expected to bring about sweeping changes. Brand experts say that it was an unrealistic expectation but frustrated by the policy paralysis of the UPA government, voters expected Modi to bring about the achhe din that was his poll promise.

But despite the sweeping changes that have put many of the country’s poor in deep trouble, the brand Modi remains undented. However, perception of Brand Modi is an individual opinion and may differ in tandem with the ground reality. Experts aver that though there is a bit of ‘apprehension’ on the growth front, the country is on the right track.

Brand Modi is intact, argues Arvind Singhal, Chairman and Managing Director, Technopak Advisors, a Delhi-based management consultancy firm, as any decision which is seen as negative by certain sections like demonetisation is on par like any decision taken by a Chief Executive Officer or Managing Director of a blue chip firm. “Some decisions may not work out. It is same for the prime minister too. But that does not mean the intentions were not right,” he says.

Steps taken by Modi were to stop leakages and if some of them did not, it is due to high expectations of the public, counter some. “You don’t expect a magic wand to take away all the issues that ails the country and has been not just the making of this government,” they say.

When PM Modi was talking about his government’s policy decisions on Wednesday during the inauguration of the Golden Jubilee Year of the Institute of Company Secretaries in New Delhi, was he a tad too defensive? Harish Bijoor, Chief Executive Officer of brand and business strategy firm Harish Bijoor Consults Inc, is emphatic that Modi was anything but defensive. He points to the PM’s body language which exuded confidence just like his speech where the tone and tenor was like that of a prime minister than a prime ministerial candidate of the past. “There was a great deal of sobriety and realism about the position he handles and the size of the economy,” he said.

People have become realistic over time, feels Santosh Desai, managing director and CEO, Future Brands, and understand that structural reforms take a longer time. The fire and chutzpah of Modi’s speeches do not evoke the same kind of euphoria that it evoked in his listeners as before though, he admits, but says that his charisma is intact. “There is a sense that there is no alternative to Modi as a leader,” he says, cautioning that it is too premature to write off Brand Modi.

GST, demonetisation a dampener

The longevity of Brand Modi will depend on how the government fares in the next few quarters, sector experts say. However, there are grievances on the ground, especially with small and medium businesses (SME) and entrepreneurs who have been impacted by the GST. There are issues with the telecom policy and GST, which an entrepreneur (speaking on conditions of anonymity) felt was skewed in favour of the big industrialists. “We were able to do business for which the big industrialists charged heavy fees. By bringing us into the GST ambit, we have been dealt a heavy blow,” he said.

Small businesses are heavily reliant not only on cash as currency but business for cash flow. On paper, the policy says that anyone who has a business below Rs 20 lakh in revenues does not have to apply for a GST number, but when you do business across state borders you do need to have one. The buyer may pay well after the invoice is raised, which means you would be paying for GST from your pocket. In effect, as a small entrepreneur, you bear the GST cash outflow apart from giving a long credit line to your customer which is usually not financed by banks since they are loathe to give loans to small business. GST is fantastic for transparency and compliance but the cost for the latter is high especially for small businesses, say sector experts.

Media and the stock market cover perhaps only the top five percent which are individually large businesses, says Devangshu Dutta, chief executive of Third Eyesight, a consulting firm. The reality is that 95 percent of businesses are small and are major contributors to the economy, he says.

“Larger businesses can have manpower solely for compliances, but small businesses do not have that luxury. For the entrepreneurial spirit of this community of small businesses to be unleashed, the number of points of government compliance touch-points must be reduced,” he says.

Brand Modi will have to look at the grievances of small and medium businesses and entrepreneurs who form the backbone of the economy, sector experts said.

Source: firstpost

Written By Deepti Govind

Bengaluru: Reebok India Co. launched its seventh exclusive brand store in Bengaluru on Monday evening and plans to add five more over the next year in the city, a top executive said. Bengaluru, along with Mumbai and Delhi, have been identified as priority markets by Reebok, owned by German sports shoe maker Adidas AG, as part of its efforts to revive sales and profitability in India.

Source: livemint

Written By Sulekha Nair

Many experts feel by giving the startup sector the required boost and making the entrepreneurs’ life easier, Modi will be able to meet his election promise

With less than two years to go for the next general election, the government’s report card has become too unpleasant with failures at multiple levels. The economic situation is so bad that State Bank of India in a recent report pointed out that slowdown that is now experienced is real and not technical. Many economists have called for more public spending to arrest the slide.

Clearly, the biggest blot on the government as of now is the miserable failure in keeping the promise to create millions of jobs. According to Mahesh Vyas of the Centre for Monitoring Indian Economy, about 1.5 million jobswere lost during January-April 2017.

The estimated total employment during the period was 405 million compared to 406.5 million during the preceding four months, September-December 2017. You need not look elsewhere for the reasons for this grim situation. It is the government’s own policies – especially the demonetisation and a hasty rollout of goods and services tax. Both have broken the back of the small and medium enterprises, which form the biggest employers in the country.

This shoddy record on jobs is likely to come back to haunt Prime Minister Narendra Modi when he returns to the people seeking votes in 2019. And the fear of a backlash is palpable in the party. That is precisely the reason why the government is now planning a stimulus package for the economy.

When the government announces the stimulus, one sector that is looking up for a handholding is the startup sector, which has been facing a lot of pain-points despite the government’s Startup India, Digital India programmes. Analysts feel this sector, which has potential to create jobs, needs to get more than a mere dekko from the package, said analyst.

Startups solve many problems that the big companies are loathe to and are also job creators. The environment has not been ‘friendly’ despite the claims to the contrary, observed industry experts.

Startups deserve a lot more than what has been given so far, said Devanghsu Dutta, chief executive of Third Eyesight, a consulting firm focused on retail and consumer products sectors. He says the best stimulus package the government could offer is to create an environment in which it is easy to do business. The number of compliances required to run a business is humongous.

“How do you expect a startup that is running with minimal staff to find the time and resource to finish this lengthy process? A disproportionate time, money and resources are spent to get all the compliances. This only affect companies that want to remain compliant though,” he remarks.

A recent NITI Aayog report said the average time taken to incorporate a company in the country is 118 days. This is against the claims that this has now been reduced to less than a week.

Another issue is not only starting up but also about shutting down. Startups find that even after they have shut shop, there are detailed processes that takes a couple of years before they can shut down.

Harish HV, Partner, India Leadership Team, Grant Thornton India LLP, wants the government’s package to make it easier for startups to shut down so that they can work on a new idea and startup again. “Do you know how difficult it is to shut down a business and start up again? Many big businesses did that before becoming the huge companies that they are now,” he said, adding that bankruptcy is not the best way to do it.

Many experts say that by giving the startup sector the required boost and making the entrepreneurs’ life easier, Modi will be able to meet his election promise.

The country is not short of labour, says Ashish Kohli, CEO, SME Finance at Anand Rathi Global Finance Ltd. “The government should come with reforms that give work if only as volunteers in government NGOs so that people can contribute,” he said. He says reforms package announcements and what happens on the ground are two different things.

“The government should take away the unnecessary laws that make it difficult for startups and SMEs to function. You have the bankruptcy law, the debt tribunals and NCLT. But who will educate small entrepreneurs about them? This is a country where the Mallyas will run away taking huge loans from banks while the small entrepreneurs find it difficult to get loans.”

The government’s ease of doing business has been anything but that for entrepreneurs. A few of them even told Firstpost on condition of anonymity about the difficulties they face when they try to log in online or talk about the various compliances that take away their time and energy. All these when they have left their comfortable jobs only to pursue their business ideas. Though taxation has been simplified, there are a few states in the country where warehouses and logistics are still taxed separately, they said.

The government should consider giving incentives to products that are made in India, said Sanchit Vir Gogia, chief analyst, founder and CEO of Greyhound Knowledge Group, a global strategy and transformation research, advisory and consulting group.

“Excise duty makes products expensive. Subsidies around excise duty is crucial,” he said. With manufacturing sluggish, giving subsidies and incentives to products made in India would help manufacturing and startups, he said.

While the government has not yet revealed which all sectors are likely to get the boost from the government, clearly expectations are soaring. Finance minister Arun Jaitley and the prime minister will have to do a fine balancing act to do minimum justice.

Source: firstpost