Monthly Archives: May 2016

India’s GDP can rise by $1-tn if everyone gets internet access: Report

If internet was to reach everyone, India’s GDP could be increased by an extra $1 trillion by 2020, according to a report.

Snapdeal IN

Four of five Indians could afford internet if data costs fell by 66%, according to a Facebook-commissioned report on internet access. But Indian telecom operators already run data services at a 11% loss, making cost-cutting difficult.

Netmeds IN

The statistics mean that a data plan, currently priced at Rs 100 should not cost more than Rs 34, if India has to make the internet affordable for 80% of its population.But the adverse economics imply that this cannot happen without intervention from the government —- whose Rs 20,000-crore ($2.9 billion) plan to connect each of India’s 250,000 panchayats (a village administrative unit) with broadband by 2018 — is three years behind schedule.

Snapdeal IN

The internet reached 29% of Indians —- 354 million users in September 2015, IndiaSpend reported. It could rise to 39%, or 462 million users, by June 2016.

But if it were to reach 100%, India’s GDP could be increased by an extra $1 trillion by 2020, according to the Facebook-commissioned report published this month. To put this in perspective, India’s GDP crossed the $2-trillion mark for the first time in 2014, according to World Bank data.

To optimise data costs, the report considered 500 MB data plans, classifying them “affordable” if each cost less than 5% of a person’s monthly income.

Netmeds IN

The report, titled “Connecting the world: Ten mechanisms for global inclusion”, is based on a study done by PricewaterhouseCoopers for Facebook.

Internet access drives up GDP

The Facebook report said that global GDP could grow by an additional $6.7 trillion by 2020, if internet reaches every human being. If that happens, the GDP of China and India could reach $2.089 trillion, nearly a third of the hypothetical world output.

Universal internet access can also bring half a billion people worldwide out of poverty, according to the report.

High data costs in developing countries:

Data costs in India, as in several other developing countries, are a major barrier.

Netmeds IN

While 92% people in South Asia live in range of a 2G network, no more than 17% can afford a 500 MB monthly data plan. Two other regions–sub-Saharan Africa (11%) and Middle East and North Africa (17%) — are comparable to South Asia. In contrast, 94% of North Americans can afford such a data plan.

article source : read more….at Hindustan times

 

SoftBank’s investments in India may surpass $10 billion

SoftBank, which owns one of Japan’s biggest mobile carriers and a controlling stake in US-based Sprint Corp, will make its first $350 million investment in a solar project in India, its Chief Executive Masayoshi Son said.
 Having made a string of technology investments in India, Japanese telecom and Internet giant SoftBank has said its investments in the country will top $10 billion in 5-10 years.

SoftBank, which owns one of Japan’s biggest mobile carriers and a controlling stake in U.S.-based Sprint Corp., will make its first $350 million investment in a solar project in India, its Chief Executive Masayoshi Son said.

“We have already invested $2 billion and we are interested in investing more,” he said. “India has a great future. We are interested in investing in Internet companies and also in solar energy. We would make strong commitments.”

Mr. Son said SoftBank is looking at accelerating the pace of investments in future.

“We also made a first move on solar energy. We are making $350 million investment in first project in solar (in India). We will expand. In next 5-10 years, we will definitely make probably around $10 billion of investments,” he added.

In June last year, SoftBank announced a joint venture with Bharti Enterprises and Taiwan’s Foxconn Technology Group to generate 20 gigawatts of renewable energy. This would entail the three partners investing about $20 billion.

Mr. Son said achieving the electricity generation target would depend on power purchase agreements being signed with offtaker states, adding that “we will support it.”

SoftBank’s investments in the past two years include $627 million in online-retailing marketplace Snapdeal and leading a $210 million funding round in taxi-hailing app Ola Cabs.

It paid $200 million for a 35 per cent stake in InMobi, an Indian mobile-advertising network.

SoftBank also has a JV with the Bharti Group, Bharti SoftBank, the investments of which include the mobile application Hike Messenger. Its other investments cover real estate website Housing.com, hotel-booking app Oyo Rooms and Grofers.

Mr. Son said India’s market is poised for massive growth, making it an important destination for investors.

Asked whether concerns about high valuations would lead SoftBank to cut its planned investments in the country, he said, “We are very very confident about India, so we will increase investment. I am not worried. I am very very excited about the opportunity.”

Mr. Son, who had previously predicted that India’s e-commerce industry would become a $500 billion business in the next 10 years, is confident that it will grow exponentially.

“And it will become like China and become worth hundreds of billions of dollars,” he said.

Though India has lagged China on development of the Internet, SoftBank believes the country will grow strongly over the next decade.

On consolidation in the e-commerce space, he said, “We always thought that whenever there is an opportunity to win, I am sure there will be lots of co-operation.”

Asked what he wants from the government on renewable energy push, Mr. Son reply was “just support international standard” for paying for electricity generated and consumed.

“On making investment, there is international stand on the rules. For example, if we make investment, then we want payment… there are international rules and standards and as long as India provides (that), we don’t need any advantage. As long as there is parity with international standards that is enough,” he said.

SoftBank, Bharti and Foxconn plan to invest in the joint venture called SBG Cleantech.

India is targeting generation of 100 gigawatt of solar power by 2022, up from around 5 gigawatt today.

article source: the Hindu business line

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Khadi units’ sales soar 14% to Rs 37,935 crore

NEW DELHI: India Inc may be complaining of weak rural sales due to poor rains for two years in a row, but khadi and village industries , which manufactures products ranging from honey to soaps and food to handicrafts, are cloaking a double-digit growth.

Data available with TOI shows sales of khadi and village industries shot up by over 14% to Rs 37,935 crore during 2015-16, while India’s top FMCG players reported a much lower sales growth. The only exception perhaps is Ramdev’s Patanjali Ayurved, which claimed to have grown faster by more than doubling its turnover to Rs 5,000 crore last year.

Unlike FMCG firms that rely on their own plants for production, khadi and village industries products are manufactured by 7 lakh privately-owned household units.

These units are funded through schemes such as PM’s Employment Generation Programme

A small part of the produce is sold through Khadi Boards and outlets owned by Khadi and Village Industries Commission (KVIC). The majority of products, which could be henna, papad or agarbattis, is directly sold through private shops.

 Unlike Patanjali, which has launched a high-decibel campaign, village industry sales have been driven by an aggressive distribution push, including to institutional buyers such as Air India and Indian Railways, said KVIC chairman VK Saxena. Air India for instance has placed a Rs 8 crore order to source khadi products for kits given to first and business class travellers.

Khadi fabric and garments sales witnessed a 29% growth and crossed Rs 1,500 crore mark for the first time. While the government is pushing khadi, there is also a change in the sales mix with readymade garments now accounting for around 45% compared to nearly 30% two years ago.

 KVIC is now tying up with Paytm to offer “high-end products” online. It has also entered into arrangements with companies such as Raymond and Fabindia. Sources said that KVIC will for the first time also enter into franchise agreements for around 20 new stores in Kolkata and Mumbai, with Delhi expected to join later.

Big Bazaar announces monthly eight-day discount scheme starting June

Big Bazaar, country’s largest hypermarket chain, on Friday announced to launch a discount scheme ‘Monthly Bachat Bazaar’ starting June on the first eight days of every month to take on E-retailers like Amazon and Flipkart.

The move by Kishore Biyani’s Future Group-owned supermarket chain is aimed at ensuring higher footfall across the month instead of just weekends or the first few days after people get their salaries.

“We wanted to bring together all the might of Big Bazaar in an effort to get new customers and at the same time reward existing ones,” said Sadashiv Nayak, CEO of Big Bazaar to Economic Times.

“On Friday, Kishore Biyani announced the customer-reward system internally to all employees on Google Hangout, calling it the next wave of growth for the 270 or so Big Bazaar outlets,” said the Economic Times report.

“The strategy has been formulated to take on the likes of online retailers and help in increasing customer base and help them stop from migrating online, The Economic Times reported on Monday,” added the report.

The new Monthly Bachat Bazaar initiative will be a fixture for every month of the current financial year. Every shopper who buys goods for Rs 2,500 will get cash bonuses and vouchers across segments worth Rs 2,000 from June onwards. The vouchers will be redeemable for the rest of the month ensuring repeat footfalls even during otherwise lean shopping periods.

In fact, after the government last month issued guidelines on overseas investment in online marketplaces, Biyani welcomed the decision and said that the move will prevent e-commerce firms from controlling prices and selling below cost.

article source: Business Today /30-May-2016

 

Amazon India scores highest in user loyalty, says study

The company tries to ensure their call centres pick up calls on a single ring

E-commerce platform Flipkart’s co-founder and chief executive officer, Binny Bansal, recently made news when he introduced net promoter score (NPS) as their new metric. Thereby, keeping aside the other popular e-commerce benchmark, gross merchandise value (GMV) of products sold on a platform.

However, a study shows Amazon India is already a market leader in this space. NPS is an index that measures users’ readiness to recommend to others a company’s products or services. So, NPS translates into customer loyalty and retention.

According to a study conducted by RedSeer Consulting, a research and advisory firm that works closely with start-ups, Amazon India already has the highest NPS among all online marketplace majors. The findings are a result of studying 1,800-odd online shoppers across India.

“We conclude that customers’ overall satisfaction level is highest for Amazon, followed very closely by Flipkart, while Snapdeal ranks third,” said Mrigank Gutgutia, engagement manager at RedSeer.

The Indian operation of the Jeff Bezos-led e-commerce major had around 88 per cent NPS, compared to Flipkart’s 85 per cent. Snapdeal, which in the past few months has taken a number of steps, including relying heavily on precision analytics to satisfy customers, was third at 69 per cent.

RedSeer said the satisfaction score was equal to the percentage of customers who rated their shopping experience as four or five on a scale of one to five, minus the percentage of customers who rated their experience as one or two.

Without giving the actual figures, Amazon put its overall growth in 2015 at 250 per cent growth. This year so far, the growth is pegged at 150 per cent.

“My impression about Amazon is that they stuck to the basics. They have followed exactly what they do in the US, with certain tweaks for the Indian market. They have not done any major acquisition as a Flipkart buying Myntra or Snapdeal acquiring Freecharge,” said Amarjeet Singh, partner- tax, KPMG in India.

Singh added that Amazon’s interaction with vendors is a lot more sophisticated. “At a corporate level after they lost out on China, they have put in a lot of investment and efforts behind Amazon India and their international network has supported them.”

What might have helped is that Amazon’s biggest rival in India, Flipkart, has had to face challenges. On Friday, Morgan Stanley, a minority but a significant investor in Flipkart, marked down the value of its holding in the company for a second time in three months. With the latest mark-down of 15.5 per cent, the total value of Flipkart has dipped to $9.4 billion, from a high of $15.2 bn a few months earlier.

AMAZON’S ATTRACTIONS

  • The company tries to ensure their call centres pick up calls on a single ring
  • Average time allotted for a customer query is a minute
  • Usage of predictive analysis to study consumer behaviour

article source: Business Standard /29-May-2016