Register Now Join the 3rd Edition of Business Leadership Summit 2022

The e-retailer is also looking to aggressively increase the offerings and assortments of their private brands.
“There are over 800 products spread across various categories such as staples and kitchen ingredients, FMCG products, personal hygiene products like soaps, shower gels, face wash, hand wash, hand sanitizer, etc, personal care products like moisturiser and deodorants, home needs like cleaning products and furnishing items, food products and snack items, baby products and a lot more under these 8 brands. We plan to increase it to 1200 products by the end of 2020,” said Kumar.

The demand for private label brands is on a rise as consumers are seeing the value of getting the same quality product as a national brand at least 40-50 percent lesser cost, feels Kumar.

Out of 600 categories that BigBasket has on its platform, the company has private label brands in around 150 categories, according to Seshu Kumar Tirumala, national head, buying and merchandising at BigBasket.

“Every month we launch private brands in around 6-7 categories. We keep exploring when and which category we need to launch private brands. There is still a huge gap and we need to address it,” said Tirumala.



Tirumala also said around 90 percent of the agricultural commodity like rice and dal available at BigBasket is their own private brand while 100 percent of the fresh produce like fruits, vegetables, and meats are private labels.

According to Pinakiranjan Mishra, Partner and National leader, Consumer Products and Retail at EY, private brands are a good strategy for online and offline retailers provided they offer value to consumers beyond just price. This means that they should have equivalent quality, new product introductions, etc, he said.

“However retailers often underestimate the cost of private brand development,” Mishra noted further.
According to industry experts, while private label brands help in building the stickiness to the customers, it also gives the retailer control over the quality and supply chain of the product apart from ensuring better gross margins.

“Private labels can fulfill one or more objectives. They have the potential to deliver better gross margins, a critical element in the thin-margin grocery business. Retailers can address specific need gaps for their customers that are not addressed by established brands. Thirdly, retailers can pitch private label at opening price points in a category, to entice consumers.

Private labels are usually, but not always, cheaper than comparable products from established brands,” said Devangshu Dutta, chief executive of a retail consultancy firm, Third Eyesight.

In the offline grocery space, one in every five products sold at the country’s biggest hypermarket chain Big Bazaar is owned by Future Consumer, a sister concern of the Kishore Biyani led Future Group.

“While we have challenged companies, especially MNCs, the customer decides to buy products or brands at our stores eventually,” Biyani, founder of Future Group told ET earlier. “There was a void in several categories since FMCG companies were not strong or didn’t invest in building them. FCL brands have filled that gap, and our aim is to have 70% share at our stores by 2022,” he had told ET.

ET had earlier this month reported that fashion e-commerce player Voonik has decided to move to fully private label business after struggling to survive independently and scaling down and downsizing staff significantly.

“We always had the plan to increase our private labels, we are now expediting it,” said Sujayath Ali, co-founder of Voonik to ET earlier. He said the company would move to a completely private label-led business in the next 3-6 months.

Source: retail

---

Juices for PMS, patches for cramps: Period care gets padded up

admin

May 25, 2019

Skincare, haircare, and now, there’s period care. While FMCG companies continue to rule the market, new players bring the promise of comfort and sustainability to women who can afford the extra buck

Written By

Source: the-ken

---

Alibaba And Vijay Shekhar Sharma’s E-Commerce Dream Is In Trouble

admin

May 24, 2019

Paytm Mall’s market share declined to 3.4 percent in 2018 from 5.6 percent in 2017.

Written By Nishant Sharma

Source: bqprime

---

Is Amazon a friend or foe? India’s two largest retailers have divergent views

admin

May 21, 2019

Written By Sangeeta Tanwar

For both the traditional players, cracking online sales is important as they prepare for a future beyond high street retail.

Online sales in India will balloon from last year’s $18 billion (Rs1.25 lakh crore) to $170 billion by 2030, Jefferies India predicted recently. This potential aside, Indian e-commerce is still nascent and retailers are still perfecting their strategies.

“E-commerce is now a game of two dimensions, one of scale and the other of last-mile ubiquity. Whoever gets this right, will manage growth, revenue, and customer acquisition,” said Anil V Pillai, director of the independent marketing firm Terragni Consulting.

As for the Future Group, it thinks the best way to achieve this is by riding piggyback on Amazon’s proven capabilities in scale and last-mile delivery.

How the plan evolved

In 2016, the Future Group had made its first e-commerce acquisition by buying out the struggling furniture retailer FabFurnish from its German incubator Rocket Internet. Biyani had hoped to find synergies between the startup and his group’s furniture brand Hometown.

A year later, hit by heavy losses, FabFurnish was shuttered. Biyani downplayed the move saying his losses were “compensated” as the company had learnt “enough” from the episode.

The move now to partner Amazon seems to have stemmed from that learning.

Over the past month, the two have been trying to make joint plans, including in distribution, warehousing, and creating products for Amazon and its grocery format, Pantry. Also, Future group brands, including Big Bazaar, are being aligned with Amazon Now, which promises delivery of everyday essentials within two hours, suggest media reports.

A more serious handicap will be Amazon controlling Future Group’s data and customer relationships in the partnership. “In e-commerce, ownership of customer relationship and data, which offers consumer insights, is the real asset,” points out Devangshu Dutta, CEO of Third Eyesight, a consulting firm focussed on retail and consumer products.

Vianello agrees: “When you have your own e-commerce venture, as Reliance Retail plans, you are the owner of the data and you can slice and dice it to come up with exciting product offerings and improved service experience.”

This is one of the advantages that RIL might have seen in going it alone.

Going solo

“Reliance Retail has taken a more integrated approach towards e-commerce,” observed Dutta. “The company is set to leverage its pan-India retail presence and Reliance Jio’s (RIL’s telecom business) data capabilities to roll out an e-commerce platform,” explained Dutta.

The synergy between Reliance Jio and Reliance Retail is a big advantage. The retailer has about 10,000 stores across 6,500 towns in India, while Jio has a subscriber base of 306 million. After bringing many Indians online with Jio’s affordable data offerings, Reliance now hopes to get most of them to start shopping online as well.

The challenge, though, would be in getting the last-mile delivery right. “Reliance Retail could be at a disadvantage here compared to the Future Group, which has its delivery mechanism in place courtesy its partnership with Amazon,” suggested Vianello.

Moreover, like with Jio, consumers will expect heavy discounts from Reliance’s e-commerce venture as well, which may be difficult to sustain given the initial investments. “Biyani’s (online) launch involves lower upfront costs, while Reliance Retail’s will be resource hungry since it’s an almost greenfield project,” pointed out Pillai, adding, “Reliance’s challenge is the overwhelming perception about the group being a price warrior and disrupter.”

So, which strategy will triumph? Everything comes down to execution. “Success in retail, including e-commerce, is about more and more customers choosing to transact with you repeatedly. Achieving this is a difficult and ongoing process. There are no guaranteed or permanent winners,” says Dutta.

Source: qz