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August 29, 2022
By Sharleen D’Souza & Sourabh Lele
‘First-ever end-to-end shopping experience’ on messaging platform, says Mark Zuckerberg
Meta Platforms Inc, the parent company of WhatsApp, will partner with Reliance JioMart for a service where WhatsApp users can buy groceries on the messaging platform from the Indian retail firm.
Mark Zuckerberg, chief executive officer (CEO) of Meta Platforms, said in a Facebook post, “[I am] Excited to launch our partnership with JioMart in India. This is our first-ever end-to-end shopping experience on WhatsApp–people can now buy groceries from JioMart right in a chat.”
“Business messaging is an area with real momentum and chat-based experiences like this will be the go-to way people and businesses communicate in the years to come,” he said in an announcement coinciding with the annual general Meeting (AGM) of Reliance Industries the parent company of JioMart.
A Reliance press statement said the service “will enable users in India, including those who have never shopped online before, to seamlessly browse through JioMart’s entire grocery catalog, add items to cart, and make the payment to complete the purchase–all without leaving the WhatsApp chat.”
WhatsApp users can shop on JioMart via by messaging “Hi” to +917977079770.
Mukesh Ambani, chairman and managing director of Reliance Industries, said, “The JioMart on WhatsApp experience furthers our commitment to enabling a simple and convenient way of online shopping.”
“Reliance Retail is looking at touching as many consumers across the country and WhatsApp is a logical platform as India is the largest market for the messaging app in the world,” said Devangshu Dutta, CEO of Third Eyesight, a retail consultancy firm. While WhatsApp is important for growth, Reliance Retail will also need to work on product availability and the cost of delivering to the customer, he said.
Ambani said Reliance’s retail business model has “five imperatives”, or ‘Panch Pran’. These include: enriching customer experience using technology; operationalising and growing multiple channels; integrating with small merchants and providing them a platform to prosper. The fourth imperative is to expand the product portfolio and the fifth one is to strengthen logistics and supply chain.
Isha Ambani, director at Reliance Retail Ventures, said at the AGM that the digital commerce platforms–reliancedigital.in and JioMart–enabled the retail major to deliver 93 per cent of online orders from stores within six hours. “We rolled out our JioMart Digital (JMD) initiative during the year. The platform enables small electronics merchants to sell the entire product portfolio of Reliance Retail on an assisted selling model, helping them deliver superior customer experience and growing their income,” she said.
The company’s new commerce initiative is on course to partner with one crore merchants as it expands to cover the entire country in the next five years, Isha Ambani said.
Last year, Reliance Retail entered pharmacy retail with the acquisition of Netmeds. That year, it launched new operations through Netmeds Wholesale and onboarded merchants in 1,900 towns and cities.
Source: business-standard
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August 3, 2022
Written By Ratna Bhushan
Large restaurants have increased the amount of discounts and promotional offers by 15-20% on their own apps compared with those offered by aggregators Swiggy and Zomato, to offset steep commissions and search optimisation fees being charged by the aggregators and reduce the dependence on them, industry executives said.
India’s largest quick service chain, Domino’s Pizza which operates 1,625 outlets, launched multiple “free rewards offers” on its own app last weekend, across delivery, takeaway and dine-ins.
While Zomato and Swiggy charge commissions of 15-30% on every order, new tech platforms like ThriveNow and Google-backed DotPe levy only 3-5%. These food tech platforms allow restaurants to set up their own digital services.
Domino’s, McDonald’s, Social, Punjab Grill, deGustibus Hospitality, Street Foods of India, Wow!Momo and Pizza Hut are among the ones offering higher discounts on their own apps.
For large brands, orders from their own apps are averaging anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
“Our focus is to increase promotions and give more value through our own delivery platforms to entice customers to transact and reduce dependence on more expensive aggregators,” said Rohit Aggarwal, director at Lite Bite Foods, which operates Punjab Grill, Artful Baker and YouMee. He said close to 20% of the company’s delivery business was now through its own platforms.
Executives said the relationship between restaurants and aggregators involved both a huge benefit and cost.
“There’s the inherent benefit which restaurants reap from the aggregators in terms of scale and last-mile delivery, specially for the mid-sized restaurants which don’t have the budgets to set up their own deliveries. But the restaurants are also dealing with the very steep cost of commissions,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
Some brands that offer direct deliveries are also focusing on the nascent but emerging subscription-based meal services and menu customisation.
“It is extremely important for restaurants to take back some control of their digital landscape, rather than being totally dependent on the aggregators. This will not only save them huge delivery costs but also give them access to more customer data; aggregators have thrived on discounts, which is funded almost entirely by the restaurants,” said Anurag Katriar, chief executive of Indigo Hospitality.
In addition to third-party delivery operators such as Dunzo and Shadowfax, which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet.
Riyaaz Amlani, chief executive at Impresario Handmade Restaurants, which runs Social, Smoke House Deli and Salt Water Cafe, said: “We are offering the best price on our own platforms and our discounts are in the range of 20-25%.”
For large brands, orders from their own apps are anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
In addition to third-party delivery operators such as Dunzo or Shadowfax which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet. Some that offer direct deliveries said they were also focusing on the nascent but emerging subscription-based meal services and menu customisation.
Mid last year, over a dozen large restaurant chains had collaborated to start a #OrderDirect movement, amid escalation of a long-standing tussle between restaurants and aggregators. The food services chains alleged that aggregators charged steep commissions and masked critical customer data.
According to estimates by the National Restaurant Association of India, the annual food services market in India is of about Rs 4.2 lakh crore and could grow to Rs 7.7 lakh crore by 2025.
India’s largest quick service chain, Domino’s Pizza which operates 1,625 outlets, launched multiple “free rewards offers” on its own app last weekend, across delivery, takeaway and dine-ins.
While Zomato and Swiggy charge commissions of 15-30% on every order, new tech platforms like ThriveNow and Google-backed DotPe levy only 3-5%. These food tech platforms allow restaurants to set up their own digital services.
“We’ve grown 40% this quarter over the previous quarter, enabling restaurants to set up their own direct ordering platform; we expect to see further escalation in demand in the upcoming festive season,” said Dhruv Dewan, cofounder at Hashtag Loyalty, which operates ThriveNow.
Jubilant Foodworks, the master franchise for Domino’s Pizza in India, had acquired a 35% stake Hashtag Loyalty late last year.
Thrive charges a 5% commission and is working to increase its scale from 11,300 restaurants at present, Dewan said.
Domino’s, McDonald’s, Social, Punjab Grill, deGustibus Hospitality, Street Foods of India, Wow!Momo and Pizza Hut are among the ones offering higher discounts on their own apps.
For large brands, orders from their own apps are averaging anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
“Our focus is to increase promotions and give more value through our own delivery platforms to entice customers to transact and reduce dependence on more expensive aggregators,” said Rohit Aggarwal, director at Lite Bite Foods, which operates Punjab Grill, Artful Baker and YouMee. He said close to 20% of the company’s delivery business was now through its own platforms.
Executives said the relationship between restaurants and aggregators involved both a huge benefit and cost. “ .
“There’s the inherent benefit which restaurants reap from the aggregators in terms of scale and last-mile delivery, specially for the mid-sized restaurants which don’t have the budgets to set up their own deliveries. But the restaurants are also dealing with the very steep cost of commissions,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
Some brands that offer direct deliveries are also focusing on the nascent but emerging subscription-based meal services .
“It is extremely important for restaurants to take back some control of their digital landscape, rather than being totally dependent on the aggregators. This will not only save them huge delivery costs but also give them access to more customer data; aggregators have thrived on discounts, which is funded almost entirely by the restaurants,” said Anurag Katriar, chief executive of Indigo Hospitality.
In addition to third-party delivery operators such as Dunzo and Shadowfax, which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet.
Riyaaz Amlani, chief executive at Impresario Handmade Restaurants, which runs Social, Smoke House Deli and Salt Water Cafe, said: “We are offering the best price on our own platforms and our discounts are in the range of 20-25%.”
For large brands, orders from their own apps are anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
In addition to third-party delivery operators such as Dunzo or Shadowfax which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet. Some that offer direct deliveries said they were also focusing on the nascent but emerging subscription-based me .
Mid last year, over a dozen large restaurant chains had collaborated to start a #OrderDirect movement, amid escalation of a long-standing tussle between restaurants and aggregators. The food services chains alleged that aggregators charged steep commissions and masked critical customer data.
According to estimates by the National Restaurant Association of India, the annual food services market in India is of about Rs 4.2 lakh crore and could grow to Rs 7.7 lakh crore by 2025.
Source: economictimes
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July 24, 2022
Written By Akanksha Nagar
Urban Company aims to bring quality, innovation and affordability to the unorganised beauty services market
As the pandemic started hammering the business, a sizeable number of beauty professionals who worked at salons jumped onto the up and coming tech-enabled home services marketplaces.
The bulk of the Indian beauty services industry remains unorganised and fragmented, dominated by expensive salon brands or small players that offer dubious products, inconsistent service and unsolicited advice. With a push from the pandemic-led restrictions, there has been a sudden rise of a clutch of organised, on-demand players that offer professional beauty care services in situ. Urban Company, for one, has witnessed a big rise in service calls in recent months, driven by rising aspiration levels and disposable income, and the growing demand for standardised and safe in-home services. The segment contributes over 40% of the total revenue for the company already. As per published documents, the firm posted a 13.8% increase in revenue from operations to `239 crore in FY21 compared to `210 crore in FY20.
According to Expert Market Research report, the Indian beauty and personal care industry attained a value of `54,558 crore in 2020, and is set to grow at a CAGR of 11% in the 2022-27 period. Of this, the Indian salon market, which stood at `55,000 crore in FY20, is expected to touch a whopping `2 trillion in FY25, at a CAGR of 28%.
Numbers aside, the spread of the Covid pandemic forced the industry to switch to reverse gear as many salons shut down permanently or closed down unviable outlets just to stay afloat. Enrich Beauty which had salons in cities like Mumbai, Delhi, Bangalore and Ahmedabad, for instance, shut down five salons since 2020, bringing the total count down to 83.
As the pandemic started hammering the business, a sizeable number of beauty professionals who worked at salons jumped onto the up and coming tech-enabled home services marketplaces. Says Anand Ramanathan, partner, Deloitte India, “Service aggregator marketplaces have helped increase organisation and bring standardisation in delivery.” It was a win-win for both the customer and the brand. Brands could directly engage with the end consumers and the customer was assured quality—of both the products used and the services rendered.
Mukund Kulashekaran, chief business officer, Urban Company, says the fundamental shift in the beauty service market has been in terms of improved quality. As long as the market remained fragmented, there was zero investment in training or upgradation of services, or in product innovation. None of the small regional players really had the wherewithal to take that leap.
Focus on quality
Urban Company devoted a lot of time and attention to training the service providers while also pursuing innovations to raise the standard of the products on offer. While it uses a number of high-end brands, it has also begun to develop its own to make its services more accessible and compete on a larger scale. It operates three levels of salons: the luxury (average ticket size `2,500), the mid-mass premium (`1,200), and the classic, which is at the economy end of the spectrum (`750) and uses proprietary products for the classic and mid-mass premium segments.
Quality is assured by continuous testing and keeping a sharp eye on customer feedback. There is also significant investment in training and automation. It currently has an in-house team of over 200 full-time trainers across 50 cities. It is stepping up investments in technology to both improve product quality and to act promptly on feedback.
The firm had introduced in-home hair and nail services for women amid the pandemic, which, Kulashekaran says, has scaled quite well. Demand for men’s salon services, launched right before the pandemic, has increased from 20,000 transactions pre-pandemic to as high as 150,000 transactions per month. It launched a Skin Clinic for laser and advanced facials in seven cities and has signed on more than two million clients already.
In terms of geographical spread, while the top ten cities account for more than 80% of its revenue, non-metros are rising fast in terms of revenue share.
Long haul
The company prioritises brand-related communication rather than performance-related. The focus is more on the video medium than the click-through media. So the focus area is TV, but YouTube in case of a targeted campaign.
In the next stage of expansion its communication strategy will be key. Jagdeep Kapoor, founder, chairman and MD, Samsika Marketing Consultants, says that while expanding beyond metros the brand has to be less urban in terms of perception and imagery and take into account the culture and taboos, and the differing definition of beauty.
Samit Sinha, managing partner, Alchemist Brand Consulting, says to keep up the pace of growth the brand has to invest in its service providers, and not just its customers. This is a business model that will not be difficult to replicate. The trick will be to incentivise the beauty care technicians so that they are able to offer high-quality services to the customer and have little reason to join a rival brand. The thing to remember: Like most other service businesses, beauticians too can bypass the company and establish direct relationships with customers — a phenomenon that has plagued the ride hailing and ride share services in India.
BOX: Staying on track (Insights from Devangshu Dutta, CEO, Third Eyesight)
Three factors that will determine success
• The customer sees the aggregation platform as the “provider” of service, rather than a listing agency. So the company needs to totally own the customer experience, end-to-end.
• Ensuring quality of service consistently is the biggest enabler for growth.
• Over time, UC has moved to this “ownership” of the experience, which does mean additional investment, but also pays off in the end.
Three factors that might undo the good work:
• If it doesn’t keep working on customer experience ownership, it could slip
• Margins/commissions need to be reasonable, otherwise, service professionals may abandon the platform
• Given the high customer acquisition costs, it has to drive repeats rather than one-time or low-frequency purchases.
Source: financialexpress
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June 24, 2022
Written By Christina Moniz
Prashanth Aluru, a former Facebook and Bain hand, will be behind the steering wheel for this venture
The Aditya Birla Group has just announced the launch of its ‘house of brands’ business entity, TMRW, to support digital fashion and lifestyle brands. TMRW, which will operate as a wholly owned subsidiary of Aditya Birla Fashion & Retail (ABFRL), aims to build and buy over 30 brands in the next three years, the company said in a statement.
With this move, the company expects to make its entry into the D2C market, which is expected to be reach $100 billion by 2025. “What a brand like Shoppers’ Stop does in brick and mortar, ABFRL is doing online. While in the past, the company was known for certain brands, it is now pivoting itself towards a wider pitch with bigger variety of brands that could potentially appeal to a wider range of consumers,” said Ankur Bisen, senior partner and head, food and retail, Technopak Advisors. The launch could be ABFRL’s next step in positioning itself as a fashion major, he said.
Prashanth Aluru, a former Facebook and Bain hand, will be behind the steering wheel for this venture.
ABFRL will compete with start-ups like the Good Glamm Group and Mensa Brands, among others. The number of D2C brands and online sellers in the country have grown over the last couple of years, and experts believe that TMRW could be the company’s endeavour to become relevant to new-age consumers. Brands like Reliance Retail and Myntra are going down the same path, says Bisen.
The opportunity is immense; according to a report by IMARC Group, the Indian textile and apparel segment reached $151.2 billion in 2021 and is set to grow at a CAGR of 14.8% between 2022 and 2027.
ABFRL, which has a network of over 3,300 stores across India, is home to brands like Pantaloons, Van Heusen, Louis Philippe and Allen Solly, and has partnerships with labels like Forever 21, American Eagle and more recently, Reebok. The retail company has also forayed into the ethnic wear business and has forged strategic partnerships with designers such as Sabyasachi, Masaba and Shantanu & Nikhil.
Having reported losses for the last three years, the company narrowed its losses to `108.72 crore in FY22 on the back of revenues of `8,136.22 crore. The company reported a 55% surge in revenues during the last fiscal. While Madura Fashion & Lifestyle contributed 68.4% to the company’s FY22 revenue, the remainder 31.6% came from Pantaloons, according to Bloomberg data.
Ambi Parameswaran, author and founder of Brand-Building.com, said ABFRL has already built a good retail presence for the brands in its portfolio. “There must be significant synergies at the back end, but the brands are managed separately,” he said. “I suppose the new venture, TMRW, will offer all these brands as well as all the other ethnic brands that ABFRL has acquired in the last three years.”
He said the synergies will probably lie at the back end with supply chain, logistics, finance and HR. However, the brands will most likely be given the space to build strong individual identities.
This is not the company’s first foray into the e-commerce space. ABFRL shut down its e-commerce venture, ABOF (All About Fashion) in 2017, though in August last year, it said the brand would be made available on Flipkart and Myntra.
A concept like ‘house of brands’ is potentially beneficial to both — the large conglomerates and also to the smaller, emerging brands that are acquired. In a D2C framework, niche brands that would otherwise find it difficult to navigate the established multi-layered distribution and retail channels see greater feasibility in connecting with their customers directly through digital channels.
According to Devangshu Dutta, CEO of retail consultancy Third Eyesight, this makes it viable to launch a product range, which would not be immediately entertained in established channels, and allows them to retain their distinctiveness. With the passage of time and with their growth, some of these brands could also expand into established modern retail and traditional retail formats and to a more mainstream audience.
“Large companies, on the other hand, can find it difficult to grow their existing brands beyond a certain pace, and often may not be able to break new ground in terms of product development and customer experience. At some point, inorganic growth by acquiring other businesses and brands becomes an important element of their strategy,” Dutta said.
The house of brands model, to be sure, comes with its fair share of challenges. Angshuman Bhattacharya, EY India partner and national leader – consumer products and retail, said the strategy must have clear synergies from an operations and distribution perspective. “Possible challenges could emanate out of the non-compatibility of categories with the distribution. Another potential challenge could be in supporting multiple brands with marketing investments, failing which the realisable value envisaged during acquisition could stay unfulfilled,” Bhattacharya said.
The other downside, as Dutta pointed out, is that over time there is consolidation of market power within a handful of companies. This has happened across the globe and across sectors, and can negatively impact consumer choice, supplier dynamics and pricing.
Source: financialexpress
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May 30, 2022
Written By Akanksha Nagar
Having acquired Patanjali Ayurved’s food retail business, the company has ambitious plans
While its edible oil business has been its mainstay, Ruchi Soya’s CEO Sanjeev Asthana is confident that the share of FMCG revenue could touch 20% this fiscal.
Ruchi Soya has its sights set on clocking `20,000 crore- `22,000 crore in revenue over the next five years from its FMCG business, after recently having acquired Patanjali Ayurved’s food retail business worth `690 crore. The Patanjali food portfolio comprises 21 major products, including top-selling items such as ghee, honey and juices, besides staples such as atta and spices.
To achieve its target, Ruchi Soya plans to launch a D2C (direct-to-consumer) channel in the next two months for its nutraceuticals business, with more categories to follow, while also increasing its investment on e-commerce and expanding its offline footprint. It is quite active across all key online marketplaces including Flipkart, Amazon and JioMart.
According to the latest Statista report, India’s FMCG market was valued at $110 billion in 2020, and by 2025, it is expected to touch $220 billion, as more brands adopt the D2C route. Several top FMCG makers, including Hindustan Unilever, Dabur and Emami, have launched D2C brands in the past two years.
Oiling other products
While its edible oil business has been its mainstay, Ruchi Soya’s CEO Sanjeev Asthana is confident that the share of FMCG revenue could touch 20% this fiscal. It is targeting `7000 crore in revenue from FMCG and `25,000 crore from commodity sales by the end of FY23. “Over the next five years, the revenue split between FMCG and commodities will be equal,” he says.
Furthermore, Ruchi Soya plans on consolidating and rationalising the Patanjali food portfolio, while simultaneously revamping some of its existing products. “The aim is to reposition the entire company towards being a food FMCG major,” says Asthana.
Following the acquisition, Ruchi Soya will be renamed Patanjali Foods (after regulatory approvals). Asthana says that brands such as Nutrela, Mahakosh, Ruchi Gold and Sunrich will continue to be marketed under their existing names, while all the businesses that are coming in from Patanjali will use the Patanjali brand in exchange for a brand licensing fee
evangshu Dutta, chief executive, Third Eyesight, says the company name change may work in its favour, since there is a large audience aligned with the image and values of Patanjali Group and its founder Baba Ramdev.
Casting a wide net
But not all is smooth-sailing. Alagu Balaraman, CEO, Augmented SCM, suggests for the company to scale up, it needs to build a robust traditional distribution network, since a bulk of sales still happens through these channels. “The cost of doing e-commerce delivery is significantly high,” he notes.
Ruchi Soya is working on those lines. Asthana says besides utilising Patanjali’s existing distribution muscle, it is expanding its offline retail footprint by adding 10,500 non-exclusive modern grocery stores and 4,500 exclusive ones every month.
Source: financialexpress
