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July 28, 2023
Manu Balachandran, Forbes India
July 28, 2023
Revant Himatsingka doesn’t despise junk food.
The 31-year-old firmly believes that those who consume it also know the perils and long-term risks associated with it. From obesity to heart disease and diabetes, junk food is often counted as a more serious threat to life than even smoking according to some studies. “Most people who consume Coke and cigarettes know they are bad for you and consume them,” Himatsingka says.
Himatsingka, however, has a problem with junk food masquerading as healthy. That’s why over the past few months he has been busy calling out its makers, and in the process taking on some of the world’s biggest FMCG behemoths.
Since April this year, Himatsingka, through his social media profile, Foodpharmer, claims to have taken on almost all the FMCG companies in India, whose products he has reviewed, and in the process has been swamped with lawsuits. Himatsingka has a following of half a million followers on Instagram.
“Food is probably 60-70 percent of what shapes our health,” Himatsingka told Forbes India over a telephone call. “And what is shaping our food today is packaged food, which is very different from what our grandparents grew up eating. Most packaged food is just selling junk and they’re marketing it as healthy. This happens even more in relatively poorer countries.”
Himatsingka began his war against fake claims with a video about Bournvita, made by confectionary maker Mondelez. That video, critiquing the children’s drink for its excessive use of sugar, was shared across social media and on WhatsApp. Himatsingka poked fun at Bournvita’s tagline Tayyari Jeet Ki (preparing for victory), instead suggesting that Bournvita was preparing children for diabetes.
He listed out all the ingredients in Bournvita, debunked claims that the drink is healthy, and remarked that half of a package of Bournvita is sugar, and [it] even contains cancer-causing ingredients.
Trouble soon followed. Mondelez sent Himatsingka a legal notice asking him to take down the video within 24 hours. Coincidentally, the notice came to him on the last day of his notice period at McKinsey where he had been working as a consultant. Unfortunately for Mondelez, the video continues to be in circulation, more so across WhatsApp. Himatsingka took down the video and even issued a statement saying that he had no interest or resources to take on the company in any court cases.
“Most people have Coke once a week,” Himatsingka says. “But people have Bournvita twice a day. So you end up having 14 [servings of] Bournvita in a week. So, the net impact of Bournvita is probably worse than that of Coke.”
“As a growing market, India is potentially a natural “dumping ground” for poor products and processes that have been used by prominent brands in other markets,” Devangshu Dutta, the founder and CEO of management consultancy firm Third Eyesight says. “It is incumbent upon Indian customers to be diligent, picking up cues not only from Indian consumer-activists and but also their counterparts in the developed economies.”
From Kolkata to New York and back
Himatsingka grew up in an upper-middle-class household, with a homemaker mother and a father running his own business in Kolkata.
After his schooling, Himatsingka went to New York to study finance at the New York University’s NYU Stern School of Business where he graduated in finance. For a year after that he worked with a bank in the US. At 22, he ventured out into writing a book, Selfienomics, a self-help comedy book focusing on managing finances, health, religion, death, starting a business, and even completing projects on time.
“I wrote one chapter on how to read a food label even then,” Himatsingka says. “Back then, and even now I believe that it is the most important skill in the 21st century.” While he did secure admission into the illustrious IIM Bangalore, Himatsingka turned it down, instead focussing on his book.
By 2018, Himatsingka went to do an MBA at Wharton and followed it up with a course in nutrition, while also starting work at McKinsey as a consultant. “As a consultant, you work to solve business problems and you try to structure solutions,” Himatsingka says. “We focus on our career when it comes to structuring solutions and being data driven. But I try to extrapolate that into life. In life, one of our most important aspects is health.”
Himatsingka was also concerned by the growing link between cancer and heart diseases to packaged and processed food. In 2019, a study published in the British Medical Journal (BMJ) suggested a possible link between “ultra-processed” foods and cancer. The study defined ultra-processed foods as those lacking vitamins and fibre, which also contain high levels of sugar, fat, and salt. Such ultra-processed food, the study noted, represents as much as half of the daily energy intake in several developed countries.
“This is such a big problem and no one is talking about it,” Himatsingka says. “No one is trying to solve it. So, I thought, I wanted to do something in this space.”
That meant, Himatsingka, who by his own account was making very good money in the US, decided it was time to come back home, and try and do something around awareness. “I’m very social impact driven,” Himatsingka says. “April 1st is when I made the Bournvita video. I made a video showcasing how Bournvita was falsely labelling itself. Their label showed that you get stronger bones and muscles. Then I got a legal notice from Bournvita asking me to take down the video in 24 hours.”
The idea for the Bournvita video, Himatsingka says, came from his concern that a product like Coke had become the face of obesity and junk food, while many others were marketing themselves as healthy, without it being so.
Mondelez, the makers of Bournvita soon retorted that the drink contains nutrients such as Vitamin A, C, D, iron, zinc and copper that help build immunity and have been part of its formulation for 70 years. It also said that every serve of Bournvita has 7.5 grams of added sugar, much less than the recommended limit for children.
imatsingka though found support from unexpected quarters. The Nutrition Advocacy in Public Interest India (NAPi) a think tank comprising independent experts in epidemiology, human nutrition, community nutrition and paediatrics, medical education, administration, and management, issued a statement supporting Himatsingka.
“The food product Bournvita falls under the ultra-processed food (UPF) category based on its ingredients list,” NAPi said in a statement. “This industrial formulation is inherently harmful. There is enough scientific evidence present in the public domain pertaining to the negative impact of increasing consumption of UPFs on human health, which include several chronic diseases such as obesity, diabetes, cardiovascular disease, cancer, and depression (Non-Communicable Diseases-NCDs).”
The National Commission for Protection of Child Rights (NCPCR) also issued a notice to Mondelez asking the company to review and withdraw all misleading advertisements, packaging, and labels. The NCPCR is a statutory body to protect child rights.
Fighting it out now
Personally, for Himatsingka, the pushback from Mondelez couldn’t have come at a worse time. “I had just quit my job. And my family was asking me what I was trying to do with my life. They said ‘you had such a good job, you left all of that, now you are getting into a legal fight’,” Himatsingka says. “So I removed the video as they asked me to. And that got even more attention.”
Since then, Himatsingka has been actively taking on FMCG companies and their products in the country, ranging from ketchup, and chyawanprash to juices and bread among others. Himatsingka recounts having received legal notices from Dabur and even been asked to remove a video by Sting Energy, owned by PepsiCo.
He says his strength, however, comes from many parents who have reached out to him and are thanking his efforts for making them aware of the importance of reading labels. “People are reading labels for the first time and have now started figuring that many of the products are not that healthy,” Himatsingka says.
However, the pressure of the job continues to be heavy. “There is a lot of pressure,” the 31-year-old says. “These companies send legal notices and I have no idea how to deal with it. These are very technical and very dense documents, where they analyse each line and write a paragraph on each line. I once got a 300-page document from one company and they were asking me for a few crores. It’s strenuous.”
What lies ahead?
For now, the 31-year-old says his focus remains steadfast on raising awareness around food.
“Because of the Bournvita controversy, the rollover impact is that all the other companies are also going to get scared now to falsely market themselves,” Himatsingka says. “I cannot think of a human problem that is relatively easy to solve than nutrition labels and it creates massive impact.”
A few weeks ago, Himatsingka raised awareness about the growing consumption of bread in India and how most makers of bread who sell whole wheat or brown bread use more maida, which has less fiber, and is unhealthy. He had also called out juice makers for their use of sugar by comparing various mango juices available in the country.
“When a movie comes out, there are reviews and I can openly say whether I liked a movie or not,” Himatsingka says. “So why can’t I say the same about a food product? I’m just unboxing a product and saying what is there inside it. So I don’t think I’m legally wrong. They can ask me for whatever money they want. But I don’t think they can win on that.”
Along the way, he says he has also seen positive changes in companies. For instance, Himatsingka made a video on ketchup and explained how Maggi Rich Tomato Ketchup has more sugar than tomato in its ingredients. “Last month, they (Nestle) announced that they’re changing the recipe,” Himatsingka says. “They’re reducing their sugar content and they are going to have more tomatoes than sugar. One tiny change like that has such a major impact on the large scale.”
Experts agree that the growing scrutiny about ingredients is certain to give FMCG majors sleepless nights. “Given that food has a disproportionate share in our spend, an enormous impact on our health as well as a tremendous ecological footprint, it is only natural for consumers to question the composition, the origins, and the overall impact of the food that is being sold by leading brands,” says Dutta of Third Eyesight. “Over the last several decades, packaged food has become laden with synthetic flavouring, colouring, and shelf-life-extending chemicals, which are being called into question by activists through blogs and social media. On several occasions, prominent companies are forced to change their product composition or, at the very least, admit to the health-negative implications of their ingredients.”
Meanwhile, over the past three or four weeks, Himatsingka says he hasn’t been flooded with lawsuits. That’s partly because he has become quite careful about how he words his statements, instead focusing only on the merits of his argument.
“There are millions of problems in the world. But most of the problems are very hard to solve, like air pollution. But teaching people how to read a food label is easy. I feel learning how to read a food label is more important than coding in the 21st century, where most of what we’re eating is processed or packaged.”
Indeed, the fight is long. And Himatsingka is only gearing up for more.
(Published in Forbes India)
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July 19, 2023
Faizan Haidar, ET Bureau
19 July 2023
E-commerce companies’ share in warehousing space leasing has fallen to 3% amid declining demand from more than 20% during Covid-19. With the easing of the pandemic, demand faltered for e-commerce companies, even as bricks-and-mortar rivals rented 14% of space during the January-June period as they witnessed a demand resurgence.
In 2020, during the pandemic, e-commerce took more than a fifth of warehouse space while physical retailers had a 9% share, according to data by Savills India.
The overall leasing activity in India continued to grow, with a total space take-up of 22.4 million square feet in the first six months of 2023, up from 20.9 million sq ft a year ago.
“E-commerce companies had over-committed space during Covid, expecting the exponential growth they experienced at that time to continue. There are many facilities where they continue to pay rentals without utilising the full space,” said Gagan Randev, executive director, India Sotheby’s International Realty.
According to Savills data, after increasing demand for warehousing space over the past five years, tier-2 and tier-3 cities saw the share of e-commerce declining to 4% in the January-June period from 34% a year ago.
“In the past three years, year-on-year space absorption from e-commerce has undergone a significant change due to increased investments in their warehousing operations and footprint optimisation through automation, shelving and improved racking systems. These investments have enabled them to increase their existing storage space and enhance overall operational efficiency,” said Srinivas N, managing director, Industrial and Logistics, Savills India.
Experts said the companies are also looking to outsource the space they had taken during the pandemic.
“E-commerce overbuilt the capacity as Covid-led growth was harvested by them. Now that capacity is vacant. That’s why you see a lot of marketplaces trying to externalise their services. That is not coming out of a business model, that is coming out from vacant space,” said Ashvini Jakhar, founder of Prozo, which manages supply chains for companies.
In the first half of 2023, the third-party logistics sector continued to drive warehousing demand, accounting for 44% of the total absorption, up from 37% a year ago, followed by the manufacturing (22%), retail (13%) and fast-moving capital goods and consumer durables sector (6%).
“E-commerce, grew exponentially during Covid when physical retailers were constrained by prevailing conditions and immediately after that when chain stores were still recovering from the pandemic shock,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “However, the retail business in India is predominantly offline; as demand continues to grow overall, it is only natural for physical retailers’ own growth to be driven by the market’s momentum and that would be reflected in warehousing space taken up by them across the country.”
For most retailers, after Covid-19, the warehouse is the epicentre for omnichannel distribution network for offline as well as online clientele.
(Published in Economic Times)
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June 30, 2023
Pooja Yadav, Afaqs
June 30, 2023
Over the last two-three years, we have seen technology innovations making its way into the Indian jewellery sector. Brands have been trying to transform the online jewellery segment by using various technologies like augmented reality (AR), artificial intelligence (AI), live video assistance, computer-aided design (CAD), computer-aided manufacturing (CAM), and more.
Despite the numerous innovations, the offline jewellery segment is still ahead of the online space, when it comes to sales. What makes the offline jewellery segment outpace the online segment?
The Indian e-commerce market is expected to grow to $111.40 billion by 2025 from $46.2 billion in 2020, as per an International Institute of Gemology report. While the segment remains to grow, what drives it back is the customer preference for physical jewellery stores.
Vipin Nair, marketing head & CRM at Malabar Gold & Diamonds, points out, “As of now, there seems to be no real alternative to trying on jewellery pieces in a retail store. Brands have been able to crack the logistics part, but not the ‘feel’ part. AR/VR has been around for a long time, but it doesn’t give you a feel of the jewellery pieces. It is a poor technology. The big purchases will continue to happen only in offline stores.”
Nair adds that despite the many challenges in the online space, it is now growing faster than before. “Earlier, there was a disconnect in the online segment. A customer had to wait for two-three weeks to receive a product. The online platforms seem to have cracked this business model, as whatever you like today, you can order and get it in a day’s time.”
Online jewellery segment started gaining popularity in 2020. In 2018, Tanishq started its e-comm website, and many other brands accompanied it in the online journey. What started with Tanishq has become a new journey for many start-ups and brands in the online space.
During Covid, the jewellery industry has been one of the worst-hit. Advent of online shopping and consumers relying on digital platforms during pandemic, helped brands strategise and invest more on online platforms.
According to Devangshu Dutta, founder and chief executive of Third Eyesight, trust is important when one is buying jewellery.
“It’s not a question of innovations. You can have virtual trials, whether it is online or in a store. But at the end, the customers have to see the piece and then buy it. Even if you are an online brand, you have to be able to offer an omnichannel experience. You have to enable in-home experience.”
As per Dutta, what’s required in this segment, is a change of mindset. “The share of online and modern retail will grow with time.”
Brands like Tanishq, Bluestone, Malabar, Kalyan Jewellers, Tata CLiQ, etc., are working on newer technologies. Then there are new players like the Aditya Birla Group that is set to foray into the branded jewellery retail business, with an investment of Rs 5,000 crore. The group’s new venture ‘Novel Jewels’ will have in-house brands in large-format exclusive retail stores across India.
Rashi Goel, founder and CEO, Performonks, says that the new brands entering the category, are trying to change the rules of the game. “These brands cater to working women, who want lighter, modern and fashionable pieces that they can match and wear with their outfits every day. So, the battle will be of brand building.”
“Tanishq offers light pieces, but tends to advertise heavy wedding jewellery, because that is in line with the category codes. The Aditya Birla Group will have to differentiate itself through the product experience. It will have to tell a brand story that takes the category narrative forward. If it is targeting young women looking for modern styles, it may benefit by having a direct-to-consumer (D2C) element (alongside retail stores in big cities). It could incorporate technology, where women can ‘try on’ jewellery virtually on the app.”
Recent trends
Citing the World Gold Council, Asian Lite International reports that there is a growing demand for lightweight and studded jewellery. Bridal jewellery alone accounts for at least half of the market share.
“Women prefer lightweight jewellery because it is practical and blends well with a modern lifestyle,” shares Nair of Malabar Gold & Diamonds.
Technology innovations may bring in some challenges, but they are also helping many people, in terms of convenience and choice. The online segment, which is still a fraction of the offline segment, is lately generating interest among digital savvy millennials.
Puneet Mansukhani, partner, KPMG in India, states that the online jewellery space has been garnering significant attention, especially amongst the millennials.
“Customer expectations are changing. Personalisation is playing a critical role. Technology involvement is increasing by the day, with AR taking the lead. However, the industry still has to tackle challenges around pilferage.”
On the upcoming trends, Mansukhani says, “Jewellery which is made to order with a modern look of hyper-personalisation (customised), is gaining importance, considering that value and convenience continue to be the top drivers of consumption.”
Manufacturers are increasingly focussing on producing lightweight pieces to satisfy the demands of young consumers, especially those who want to wear gold jewellery that matches with their western outfit every day, as per a World Gold Council report.
According to Third Eyesight’s Dutta, since fashion (lightweight) jewellery usually doesn’t cost much, “a consumer is not that invested in it. You can buy it online, like any other fashion product.”
The World Gold Council report adds that studded jewellery – known as ‘Polki’, ‘Kundan’ or ‘Jadau’ – has an estimated market share of 15-20%. The share of studded jewellery in North India is considerably higher. In South India, consumers are more inclined towards gold products, 60-70% of which are studded with diamonds and the remaining 30-40% are set with precious or semi-precious stones.
Jewellery landscape
In India, jewellery was traditionally purchased for investment purposes. People used to believe in buying heavy jewellery. But now, there’s a shift towards versatility and contemporary jewellery.
Nair states, “Contemporary designs are getting a lot of traction lately. It was not the case 10-15 years back. Lightweight jewellery is now in vogue and heavy jewellery is restricted to occasions like weddings. People now are looking for something practical. They are more into the design, quality, etc.”
Will the changing consumer preferences impact the bridal jewellery market?
Bridal jewellery dominates the gold jewellery landscape, with 50-55% of market share. Indians usually purchase gold for two occasions – weddings and festivals.
Around 11-13 million weddings take place in India every year. With women marrying at an average age of 22 and more than half of the country’s population below the age of 25, the demand for bridal jewellery will remain strong over the long-term, as per the World Gold Council data.
Going forward
The jewellery manufacturing landscape in India is largely unorganised and skill-intensive. Most jewellery pieces are still hand-crafted by artisans.
“Hence, the scale continues to be limited. Although we are gradually seeing jewellery retailers invest in large set-ups. We are also witnessing the overall jewellery market heading towards formalisation on the back of GST, government policies around hallmarking and exports,” shares Mansukhani of KPMG.
“For large players looking to enter this space, automation and focussing on in-house manufacturing, could help jewellers counter the high manufacturing charges.”
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June 29, 2023
Dia Rekhi & Faizan Haidar, Economic Times
New Delhi, June 29, 2023
Fast Retailing, the parent company of Uniqlo, is looking to set up a significant manufacturing presence in India through about 20 ‘production partners’, multiple people aware of the development told ET.
One of the world’s most valuable clothing retailers, Uniqlo already has a cluster of production partners in India and is looking to expand this network through a significantly large investment, they said without sharing any estimated amount.
“The investment amount will be significant because Uniqlo is serious about India and views it as an important market,” one of the persons said. “Unlike the existing facilities in India, which cater more towards exports, the production partners that Uniqlo will bring to India will be specifically meant for the domestic market.”
One of the company’s production partners that ET spoke to confirmed that their current mandate is to produce only for exports.
Uniqlo, which is Asia’s biggest clothing brand, had said India is one of the top priority markets for them where consumers are increasingly shifting from ‘fast-fashion’ to long-lasting essentials and functional wear.
The company’s ambitions for India are considerable with its CEO Tadashi Yanai indicating that he wants Uniqlo to become the “best-selling retailer in India”.
The Japanese brand opened its first door in September 2019, but stringent lockdown measures announced to contain the outbreak of the pandemic in March 2020 delayed the expansion plan.
The brand is now planning to enter Mumbai and Bangalore. It has already opened stores in Lucknow and Chandigarh after Delhi.
Uniqlo does not own any factories. Instead, it outsources production of almost all its products to factories outside Japan.
As per a report titled ‘The Uniqlo case: fast retailing recipe for attaining market leadership position in casual clothing’, this model allows Uniqlo to keep its breakeven point low and improve return on investment.
“As we expand our global sales, we continue to grow our partner factory network in countries like Vietnam, Bangladesh, Indonesia, and India,” the company has stated on its website.
As per its list of garment factories, as on March 1, 2023, Uniqlo has 227 factories in China, 54 in Vietnam, 33 in Bangladesh, 13 in Indonesia, and 16 factories in India and Japan among several other locations.
As the world’s second most-populated country, India is an attractive market for apparel brands, especially with youngsters increasingly embracing western-style clothing.
Over the past decade, global brands Zara and H&M became market leaders in the fast fashion segment in India.
“For global brands, India should be one of the most logical sourcing hubs given its large vertically integrated manufacturing sector on the one hand and the large, growing domestic market driving demand on the other hand,” Devangshu Dutta, founder of retail consulting firm Third Eyesight, told ET. “However, its weight in the sourcing baskets has historically been low due to several reasons, in spite of China being visible for decades to the management teams of brands and retailers as a concentrated sourcing risk,” he said.
Uniqlo’s existing production partners in the country include Shahi Exports, Brandix Lanka, Tangerine Design, Maral Overseas, Shingora Textiles, Silver Spark Apparel, SM Lulla Industries Worldwide and Penguin Apparels.
As per Fast Retailing’s first-half results, the company said its revenue was 1.4672 trillion yen, or around $10.2 billion, and that its operating profit had risen to 220.2 billion yen ($1.53 billion), bolstered by strong performances from operations in several regions, including India where it said it generated significant increases in both revenue and profit.
With regard to Uniqlo International, in particular, it said revenue stood at 755.2 billion yen ($5.25 billion), while operating profit was 122.6 billion yen ($852.93 million).
The company said regions like India “reported significant revenue and profit gains as they enter a full-fledged growth phase”.
(Published in Economic Times)
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June 29, 2023
Raghavendra Kamath, Financial Express
June 29, 2023
Zara, touted as “Fast Fashion Queen”, has achieved a unique feat in India. The Spanish brand has been growing its revenues without opening any new stores.
The fashion brand, run by a joint venture between Tata-owned Trent and Spain’s retail group Inditex, posted a 40.7% growth in its revenues to Rs 2553.8 crore in FY23. The catch is that while many retailers/brands garner sales from opening new stores, Zara did not open any store but closed one during FY23.
In FY21 and FY22, its store count remained constant at 21 but its revenue grew 61.2% in FY22. Zara’s revenues grew at a 15.5 % CAGR in the last five years.
“Zara did not foray into any new city and closed one store. That said, it saw an exceptional performance on store productivity (83% higher than FY19). The increase in revenues lead to highest ever Ebitda margins at 16.3%,” said Nuvama Institutional Equities in a recent report.
The contribution in productivity includes contribution from online and also increase in store sizes, the brokerage said.
A mail sent to Inditex did not elicit any response. Trent executives could not be contacted.
Experts attribute Zara’s success to increase in customer spends and improved offerings by the brand.
“The customer base they are targeting has grown and their merchandise mix has become sharper,” said Devangshu Dutta, chief executive officer at Third Eyesight, a retail consultant.
Dutta said when a retailer opens stores, it would immediately boost sales, but to maintain sales momentum, one has to have “right merchandise at right price and have stores at right locations”.
Zara is known to churn its designs and styles very fast, and target young customers. In its Indian venture also, its parent Inditex controls merchandise mix and so on.
“The said entities (Zara and Massimo Dutti) are obliged to source merchandise only from the Inditex Group. Also, the choice of product & related specifications are at the latter’s discretion. Further, the entities are dependent on Inditex for permissions to use the said brands in India subject to its terms & specifications,” Trent said in its FY23 annual report.
Zara is also focusing on opening in select locations, a reason it could not open more stores in the country, experts said.
“The incremental store openings for Zara continue to be calibrated with focus on presence only in very high-quality retail spaces,” Trent said.
Susil Dungarwal, founder at Beyond Squarefeet, a mall management firm, said that propensity to spend has gone up among Indian shoppers after the pandemic and Zara being a renowned global brand with its stylish merchandise seems to be have been the beneficiary of the trend.
“They understand customers very well and brought products which are liked by Indian shoppers in terms of looks, styles and so on,” Dungarwal said.
Zara is a case study for Indian brands as to how to run a retail business successfully, he said.
(Published in Financial Express)
