admin
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
admin
January 3, 2020
Written By Ananya Pathak
Reliance Industries’ e-comm venture JioMart will compete with the likes of Amazon, Grofers, Bigbasket and Flipkart.
Having established itself as one of the major players in the telecom sector, Reliance Industries has now made a move in the e-commerce segment by launching its online grocery delivery service – JioMart – ‘Desh ki Nayi Dukaan’. Powered by Reliance Retail and Reliance Jio, the service has been launched in parts of Maharashtra – Navi Mumbai, Kalyan and Thane and this will be scaled up nationally soon to compete directly with the likes of Amazon, Grofers, Bigbasket and Flipkart.
JioMart is an online-to-offline (O2O) marketplace under which it will source grocery items from nearby merchants, instead of procuring them from a native warehouse. The platform does not sell groceries directly to the customers but instead, connects offline retailers with online buyers. With an assurance to offer over 50,000 grocery products soon, the website claims to offer free home delivery without the restriction of minimum order value and express delivery service as well as a “no questions asked return policy”.
Interestingly, ‘Desh ki Nayi Dukaan’ reminds us of Amazon’s ‘Apni Dukaan’ campaign with which the brand attempted to connect with customers in the remotest parts of the country.
Considering Reliance Jio’s cost undercutting game in the telecom sector, we wonder if the players in the e-comm segment should worry about JioMart disrupting the discount game in this category.
We ask experts.
Devangshu Dutta, chief executive, Third Eyesight
India’s e-commerce sector has grown on the back of aggressively promoted deals by the two leading incumbents, Amazon and Flipkart as well as other e-commerce companies. So JioMart’s target consumer is already primed by them.
However, discount as a one-point strategy is not a strategy. Discounting is one of the easiest ways to acquire the attention of a value-seeking consumer – dropping prices or offering special discounts or deals is a quick way to break through the customer’s mental barriers and existing transactional relationships, because price is one of the easiest comparisons to make.
The question isn’t whether Reliance can or will throw enough capital into the game to out-discount the market leaders. A consistently loss-making business isn’t a business, but a charity! Once a certain amount of market momentum and share is built, companies find ways to build up prices and margin, and Reliance will do that over time. The critical factor is for the customers to feel that they are getting good value for the money they are paying. I don’t think Reliance’s retail strategy, offline or online, is to be seen as the lowest priced provider.Mahesh Uppal, telecommunications consultant and owner, ComFirst, (a telecom consulting firm)
Well, they will attempt to beat competitors on price. Indian consumers are extremely price conscious and for any new player, being price competitive would be an important part of the strategy. Having said that, we must also recognise that Jio does not have as much experience or success in consumer facing businesses as the companies it is going to be competing with in the e-commerce space.
I think the Amazons and Flipkarts of the world have a much longer history in consumer-facing businesses. So they will certainly pose major challenges when it comes to consumer satisfaction. While price continues to be an important factor, the ease with which you can shop at an e-commerce platform, the efficiency, the options, ease of return and replacement, are equally relevant in the e-commerce space. While there is no doubt that Jio has as much a chance of competing and succeeding in price, how easy it will be for it to compete on delivering overall consumer satisfaction, only time will tell.
Abneesh Roy, executive vice president, Edelweiss Financial Services
Clearly, this will be a brief disruption because Jio is known to be extremely focused on market share and will be willing to spend a lot of money, if required. The Jio database that they already have, in terms of their telecom business, will be a big advantage. They have been testing this for a long time, we are aware of that. The key challenges here would be how the mom-and-pop shops come to the platform in terms of numbers because they will be varying in terms of tax compliance.
Abneesh Roy
Currently, mom and pop shops are losing market share with the rise of modern trade. For them, this is imperative as they will be able to better compete with the online e-commerce platforms.
It is good for the consumer and FMCG companies because the discounts and the offers will be taken care of by the platform and not the brands. The more the number of players in the segment, the better it gets. The volume growth of these brands will definitely see the impact of better promotion, increased visibility and competition in the space.
Source: afaqs
admin
December 27, 2019
Devangshu Dutta talks about how 2020 could see retailers get inventive to drive footfall and sales
Written By Guest
Remember the year 2000? After Y2K passed safely, that year some optimistic analysts predicted that India’s modern retail chains would reach 20% market share by 2015. Two years after that, another firm declared that modern retail will be at around that level in 2020 — but wait! — only in the top nine cities in the country. Don’t hold your breath: India surprises, constantly. As many have noted, “predictions are tough, especially about the future!” What we can do is to reflect on some of this year’s developments that could play out over the coming year.
The discount wave
In many minds, 2019 may be the ‘Year of the Recession’, plagued by discounting; but that demand slowdown has been brewing for some time now. However, there’s another under-appreciated factor that has been playing out: while small, independent retailers can flex their business investments with variations in demand, modern retail chains need to spread the business throughout the year in order to meet fixed expenses and to manage margins more consistently.
To reduce dependence on festive demand, retailers like Big Bazaar and Reliance have been inventing shopping events like Sabse Sasta Din (Cheapest Day), Sabse Sachi Sale, Republic Day/ 3-day sale, Independence Day shopping and more for the last few years. In e-commerce, there’s Amazon’s Freedom Sale, Prime Day, and Great India Festival; and Flipkart’s The Big Billion Days sale. This year, retailers and brands went overboard with the Black Friday sale, a shopping event concept from the 1950s in the US linked to a harvest celebration marked by European colonists of North America.
We can only expect more such invented and imported events to pepper the retail calendar, to drive footfall and sales. The consumer has been successfully converted to a value-seeking man-eater fed on a diet of deals and discounts. With no big-bang economic stimuli domestically and a sputtering global economy, we should just get used to the idea of not fireworks, but slow-burning oil lamps and sprinklings of flowers and colour through the year. Retailers will just have to work that much harder.
admin
December 24, 2019
Alibaba backed startup competes with Flipkart-owned Ekart, SoftBank-backed Delhivery, Warburg Pincus-funded Ecom Express and Flipkart-backed Shadowfax.
Written By Sandeep Soni
Alibaba’s prospectus showed the company plans to issue 500 million new shares and could raise up to $13.4 billion after the so-called over-allotment option is exercised. (Reuters photo)
Chinese e-commerce juggernaut Alibaba, which backed Pune-based logistics startup Xpressbees with $35 million in January last year, is looking to enhance its stake in the company. The tech major is now putting $10 million more in it, according to the regulatory filings by the company. “This investment appears to be an extension of the Series D round raised by XpressBees in 2017,” business signals platform Paper.vc said in a note. Xpressbees had also raised $5 million in venture debt from InnoVen Capital in February this year. The company competes with Flipkart-owned Ekart, SoftBank-backed Delhivery, Warburg Pincus-funded Ecom Express and Flipkart-backed Shadowfax.
“The company requires additional funds for the growth and expansion of its business,” the company said in the filing, adding that “it is proposed to raise the capital (Series D1 compulsorily, convertible, cumulative, non-participating preference shares — CCPS) by preferential allotment of shares to Alibaba.com Singapore E-Commerce Private Limited “Proposed Investor”.” The company will issue 9,317 CCPS.
The e-commerce retail logistics sector was worth $35 billion in 2018 and would grow 36 per cent in the following five years, according to a KPMG and CII report. Currently, Delhivery is the biggest player in the sector valued at over $1 billion — the first unicorn in logistics technology space and unlike other markets such as food tech, e-commerce etc, won’t be the winner-take-all-market. “I don’t think it’s a winner-take-all market. In the venture space, there are a few companies that get a lion’s share of mind with investors and, therefore, a lion’s share of the money. When a lot of money chases a limited number of deals, it is inevitable that a few companies raise a lot of capital, as has happened in the e-commerce and other spaces as well,” Devangshu Dutta, CEO at retail consulting firm Third Eyesight had told Financial Express Online.
Xpressbees is among the leading Indian startups backed by China’s top two corporate — Alibaba and Tencent that have poured billions of dollars and helped many of them turn unicorns. While Alibaba has backed Paytm, Snapdeal, BigBasket, Zomato; Tencent has invested in Hike, Flipkart, Byju’s, Ola, Swiggy, Dream11, Udaan etc.
Source: financialexpress
admin
December 11, 2019
Written By Writankar Mukherjee
KOLKATA | MUMBAI: Retailers have advanced their end-of-winter and year-end sales by one to two weeks this year after business in November turned out to be flat or lower than a year earlier, poor consumer sentiment and predictions of a warmer season.
Ecommerce marketplaces Amazon and Flipkart, too, have lined up promotions this month and next to clear inventory, three executives said. Discounts will be offered across a range of products, including electronics and smartphones, they said.
According to Yogeshwar Sharma, executive director of Select CityWalk mall in south Delhi, shopping has become offer-driven now and retailers are looking to give such options almost every month. “Winter stock is also risky since brands will have to hold the merchandise for a year if they remain unsold. So most retailers will offer full-priced products as well as discounted ones and early winter sales are becoming a norm now,” Sharma said.
“However, retailers and brands, too, are to be blamed for this vicious cycle by purchasing far more merchandise in advance based on predictions which turn out to be faulty. This then creates issues with cash flow, forcing them to offer discounts,” said Devangshu Dutta, chief executive officer at consultancy firm Third Eyesight.
The trend of bringing forward winter sales from the usual time of end-December or early January started two years ago, following poor business in the preceding months. This year, Woodland, Spencer’s Retail and 2Bme have already started their year-end sales.
Woodland India managing director Harkirat Singh said the sale has been advanced this year on expectations of better growth than last year’s sale, offering discounts even on winter wear. “May-June business was down, picked up little during Diwali, while November was flat,” he said.
Arvind Brands, which operates Arrow, US Polo Assn., Sephora, Calvin Klein and Tommy Hilfiger stores, will start its sale from the third week of December.
Electronics and smartphone retailers such as Reliance Digital and Vijay Sales are trying to establish year-end sales in these categories though their bigger promotion is near Republic Day. Vijay Sales director Nilesh Gupta said the year-end promotion will help in clearing inventory.
“The advancement started two years ago due to low sales, but retailers haven’t got back to the original end-of-season sale schedule since the base is already set now and growth will generally be compared over same period last year,” said Vasanth Kumar, managing director, Lifestyle International.
However, a senior industry executive said not all retailers and brands may unveil deals early. “While some brands are advancing end-of-season sale, it is not a secular trend. Leading retailers would rather sell full-priced merchandise in December and start their end-of-season sales only in the first week of January, which was the trend until two years ago,” said Rajendra Kalkar, president (west), High Street Phoenix Mall.
The India Meteorological Department has predicted a warmer December-February.
Source: economictimes
