Monthly Archives: June 2016

Indian e-commerce industry’s growth comes to a halt, Snapdeal worst hit

Behind numerous headlines of a cash crunch hit ting major Indian e-commerce companies, and commerce companies, and their valuations being questioned, is a revelation not too many people are talking about. Indian E-commerce was emblematic of frenetic growth until very recently, but the last six to eight months have seen the industry come to a grinding halt, making it an inflection point for all the players involved.

TOI accessed and analysed data for top e-tailers, which revealed that the onlineretail market stagnated between May 2015 and 2016 in terms of the value of goods sold. While in May last year, the e-commerce biggies clocked a gross merchandise value, or GMV , run rate of $9 billion, that number has only inched up to about $10 billion at the end of May this year, translating into an 11% annual growth. In December last year, the total GMV run rate had reached $10.5 billion on the back of the festive season, which typically sees a rush of discounting from all e-tailers.

GMV is overall sales on an online marketplace, excluding discounts and returns which are an integral part of the e-commerce market.

The data gleaned from primary research and vetted by multiple stakeholders in the industry indicated that Flipkart , the country’s largest online retail player, has seen its GMV run rate stall at about $4 billion for almost a year, while an aggressive Amazon has gone from clocking $1 billion to $2.7 billion in gross sales. However, Amazon’s operations in India only began three years ago and it’s been gaining ground on a smaller base. What’s worth noting is that Flipkart notched up a 400% growth the year before, when it’s GMV zoomed from $1 billion to $4 billion, post which the numbers have gone flat.

Gurgaon-based Snapdeal, on the other hand, has seen an almost 50% knock-down in sales numbers after similar highs it touched exactly a year ago. The company said as of June, its GMV run rate was more than $2.5 billion.

An email sent to Flipkart’s spokesperson did not elicit a response till the time of going to press. In an earlier interaction with TOI, Amit Agarwal, Amazon’s India head, had said the online retailer hadn’t witnessed any signs of a slowdown and, instead, had grown shipments impressively at 150% in the first quarter of the calendar year.

E-commerce companies earn anywhere between 5% and 15% in commission from sellers, which makes up their revenue. GMV had been the key metric for all e-tailers in India to show rapid growth and ratchet up their valuations in multi-billion dollar fund-raises over the past two years. But with sales staying flat or declining, most e-commerce players are now starting to focus on returning customers, which their founders keep stressing in media interactions.GMV run rate varied from month to month and is pretty jagged, depending on promotions and discounts that are available at the time. But the data collated by TOI points to a palpable slowdown for the first time after a heady period of growth.

Reduced discounting slowing growth?

Post March this year, most e-tailers have reduced promotional campaigns after the Indian government introduced new policy guidelines for online marketplaces. The fresh rules prohibit online retailers from offering discounts directly. Cash burn for Amazon, for instance, had risen up to almost $80-90 million per month in the early part of the year -more than double of Flipkart‘s -but has since stabilized, people privy to the matter said. Amazon’s Agarwal, when asked about it recently, did not give details on the mounting cash burn involved in weaning away Indian consumers from rivals.

An investor who has been tracking e-commerce says if the market has momentarily stopped growing, it’s because online players have reduced investments into market development. A slug of risk capital came into India’s online commerce industry, with Flipkart leading the pack. Founded in 2007 as an online bookstore, the Bengaluru-based poster boy of India’s thriving startup ecosystem scooped up $3.2 billion, a majority of the funding coming over the past two years, while Snapdeal collected $1.3 billion. The Jeff Bezos-led Amazon, too, has been pumping billions into India, the latest being a $3-billion investment announcement -taking its overall commitment for the country to $5 billion in three years of launching here.

Has Online Consumer Base Capped Out?

India’s online shopping market, according to rough estimates, is 60-70 million, and is expected to go up to 100 million in the next few years. A notable spike happened in the past three years, but the divide between tier I and tier II cities is still very wide. The top 6-8 cities contribute 90% of sales for all the consumer internet players, including app-based cab aggregators like Ola and Uber.

 In an earlier interaction with TOI, Binny Bansal, cofounder & CEO, Flipkart , said the e-commerce major was keenly looking at ways to tap into its existing base of users. “There are 50-60 million consumers buying online today. Given the large base, it makes sense to ensure you are selling more to the same customers as that opportunity is big enough compared to three years back,” he had said. Snapdeal‘s co-founder & CEO Kunal Bahl, too, has reiterated his focus on the e-tailer’s high-value consumers, suggesting GMV was not the metric his company was chasing anymore. “Our GMV run rate continues to be healthy and above $2.5 billion. We are significantly focused on delivering the best experience, growing our net revenue which has increased three times in the last 12 months,” a Snapdeal spokesperson said in an emailed response to TOI. GMV was described by many as a vanity metric during the past few years when e-commerce registered exponential growth.

 “The moment of reckoning is coming or may have come already for Indian e-commerce companies. The ease with which these companies have been able to raise money from VCs may have made them all sloppy , and the test then will be which ones can now work on the `building-a-business’ channel. As for whether the fault lies with Indian consumers for not jumping fast enough onto the online wagon, it is a chicken-and-the-egg problem that we have to deal with,” says Aswath Damodaran, professor of finance at the Stern School of Business at New York University.

What all of this will mean for online retailers is that from here on, raising new capital at present valuations will be a very tough proposition. Flipkart has been conserving cash and has substantially brought down its burn rate to wade through this phase of slow growth.Besides Amazon, there’s Alibaba stitching up plans for a direct entry into e-commerce, making it a contest between the two global powerhouses and the Indian incumbents. The next one year will be extremely significant for the local online retailers as they go back to the basics and try to make their businesses self-sustaining while moving towards a tough path to profitability.

The £3 smartphone is finally here: World`s cheapest mobile aimed at connecting rural India will ship this week

The world”s cheapest smartphone costing just £3 is finally set to begin shipping later this week in an attempt to connect poorer regions of India

article source: Dailymail.co.uk

  • First phase of shipping for Freedom 251 finally set to begin on June 30
  • Shipping delayed in February after 7 million visitors crashed website
  • Comes with a four-inch screen, 8MP rear camera and 3.2MP front camera
  • Critics claimed it would be impossible to create smartphone for that price


The world”s cheapest smartphone costing just £3 is finally set to begin shipping later this week in an attempt to connect poorer regions of India.

Aiming to make internet access affordable to millions of people across the country, the Freedom 251 device goes on sale on June 30 and will only be available to pre-registered users in India.

Despite briefly being available earlier this year, the manufacturers were forced to refund over 30,000 pre-orders and delay shipping after its website crashed.

Weight: 130g

Operating System: Android 5.1

CPU: 1.3 GHz Quad-Core

Memory : 1GB RAM

Rear camera : 8MP

Front camera : 3.2MP

Screen : 4-inch display

Internal Storage: 8GB (up to 32GB)

Battery : 1800 mAh

Developed by Ringing Bells, a technology firm based in Noida, more than 200,000 devices will be sold during the first phase of delivery.

Customers who registered their interest in the device will pay on arrival of the product, with many certain to miss out.

The gadget comes with a four-inch screen, an 8MP rear camera and 3.2MP front-facing camera.

Users of the phone will have 8GB of storage and 1GB RAM available to them, while a 1.3GHz quad-core processor powers the device.

Running on Android Lollipop 5.1, the gadget available in either black or white, comes pre-installed with Facebook, YouTube, Google Play and WhatsApp.

First unveiled in February, the firm”s website crashed after seven million people registered their interest just hours after it was announced.

In a notice to its customers soon after the outage, the company said it was receiving 600,000 hits per second on its website.

First unveiled in February, the firm”s website crashed after seven million people registered their interest just hours after it was announced (picture of original advert)

The Freedom 251 device goes on sale on June 30 in an attempt to improve internet access for millions of people. The manufacturers were forced to refund over 30,000 orders after its website crashed earlier this year

With the manufacturing cost of each phone claimed to be over £40, the firm is choosing to use innovative marketing techniques to showcase their device.

And they are hoping for a large volume of sales to help recover costs from production.

The Indian Cellular Association (ICA) previously said that a smartphone with specifications such as the Freedom 251 device has can not be manufactured for that price.

Although the company never discussed the economics behind their operation, analysts questioned the business model.

Tarun Pathak, an analyst at Counterpoint Technology Research, said: “It looks like it”s highly subsidized by the company and it”s not clear how they plan to sustain this.”

India is Asia”s fastest growing smartphone market with 103.6 million smartphones sold in 2015. Most Indians still buy cheap smartphones that cost less than £150.

Other attempts at cheap engineering in India have not been very successful.

A laptop costing just £7.50 was announced by the Indian government in 2008, but ended up costing over £75 by the time it reached the market.

 

Ola signs MoU with Haryana govt to create 10,000 entrepreneurs in the state

Proposes Rs 350 crore investment over five years to bring more smart mobility solutions across the state


Avon True Idol 18″ Waterproof Dark Grey Student BackpackOla,
India’s leading for transportation, has signed a Memorandum of Understanding (MoU) with the Government of Haryana, to create over 10,000 entrepreneurs in the state. As part of the MoU, will invest Rs 350 crore over the next five years to skill and train thousands of men and women and help them take their first step towards entrepreneurship. Ola will also work with the state government to introduce innovative and customised mobility solutions like Ola Auto, Ola Bike, and across the state. The company will further build for local mobility needs using its technology to serve citizens across Haryana, giving them instant access to reliable and convenient mobility.

Sudhir Rajpal, Managing Director, HSIIDC said, “Haryana is developing at a rapid pace. Our government recently introduced the ‘enterprise promotion policy’ for here. Ola’s commitment to building mobility for citizens by using cutting edge mobile technology and by enabling entrepreneurship and skilling will be invaluable for the state’s growth. We are confident that our partnership with Ola will further accelerate government’s efforts of pumping the economic development of the state with a focus on skilling and creating entrepreneurial opportunities for tens of thousands of men and women across the state.”A state with the one of the highest per capita incomes in the country, Haryana is banking on technology and skill development among the youth for further development in the region. It is through focused training and skilling initiatives with the involvement of the Government and private enterprises such as Ola, that men and women in the state can realise their entrepreneurial dreams. Once trained, these individuals stand to benefit from Ola’s technology platform. Driver partners working with Ola across India have seen their incomes grow by as much as 40 per cent. In fact, more than 70 per cent of the drivers associated with Ola are entrepreneurs themselves.Pranay Jivrajka, Chief Operating Officer at Ola said, “We are proud to partner with the Government of Haryana to create more than 10,000 entrepreneurship opportunities across the state. To this end, we are planning to invest over Rs 350 crore in Haryana over the next 5 years. We will work with the government to train and provide the right skill set to thousands of men and women across Haryana and help them take their first step towards entrepreneurship.”

Jivrajka added, “We will also improve access to mobility in cities across the state by bringing on-board innovative transportation use cases like Ola Auto, Ola Share, Ola Shuttle, and many more, to complement the existing urban transportation system in Haryana.” Ola is currently present in five cities in Haryana including Gurgaon, Faridabad, Panchkula, Kurukshetra and Ambala and plans to expand its services in the region further. Ola’s portfolio of smart commuting solutions including multiple options in cabs, Ola Auto, Ola Bike and shared mobility solutions like Ola Share and Ola Shuttle are immensely popular among citizens across the state.

 

Coca-Cola to set up bottling plant in Uttarakhand’s Sitarganj

Coca-Cola asked the State Industrial Development Corporation of Uttarakhand to clear its stand on common effluent treatment plant and other issues

Amazon outnumbers Flipkart to become number one in overall reach

Flipkart has slipped from numero uno position in overall reach as incumbent Amazon continues to grow with scorching pace. After having over 40 per cent hair cut in valuation, Flipkart knocked down to second position and Amazon has surpassed the Tiger Global funded company in overall website traffic, according to a report by Kotak Institutional Equities.

Kotak gathered and analysed data from November 2015 to May 2016 from web traffic analytics company SimilarWeb. The data shows that Amazon generated between 33 per cent and 62 per cent more monthly traffic than Flipkart during aforementioned period.

Amazon had an average monthly user visit of around 180 million, 50 per cent more than Flipkart’s 120 million. The report did not mention independent numbers for mobile web and PC traffic for the two companies. However, on Google Playstore, Amazon was ahead of Flipkart in app ranking in June, according to Kotak, that used data from mobile app analytics platform App Annie.

Amazon outplaced Snapdeal from second position to become second largest online marketplace by shipments in March 2016. Flipkart’s share of shipment fell to 37 per cent in March from 43 percent in the same month of previous year while Snapdeal fell to 14-15 per cent from 19 per cent last year. Meanwhile, Amazon gained 7 per cent in overall shipment in March this year when compared to the shipment volume same month last year.

Flipkart also witnessed markdown of its valuation by three of its investors including Morgan Stanley, Valic Co and Fidelity Investment. The markdowns estimate Flipkart’s current valuation between $9.2 billion to $10.7 billion, which was $15.2 billion in July 2015.

The gain in terms of reach is significant for Amazon and is a matter of concern for Flipkart and Snapdeal both. Traffic doesn’t have strong correlation to actual business but strong reach certainly gives higher chances of conversion and engagement.

Over the past six months, the battle of Indian e-commerce’s crown has intensified and Amazon appear to have an upper hand over Flipkart and Snapdeal with its superior technology, fulfillment, supply chain and deep pocket. Amazon India’s growth is further surged as its parent company recently announced additional $3 billion for the Indian arm. On the other hand, Flipkart and Snapdeal haven’t yet raised a follow-on funding on current valuation.

 

Nadia Chauhan on a mission to make Parle Agro India’s number one F&B company

Nadia Chauhan, Joint Managing Director and Chief Marketing Officer of Parle Agro, has her sights set on the goal of making the Food and Beverage (F&B) company a Rs 5,000-crore entity by 2018 and the number one beverage company in India. Frooti, Appy Fizz, the company’s two much-loved brands, have been enjoyed by most of us.

article source: YourStory – June 24, 2016

Founded in 1929, Parle Products was owned by the Chauhan family of Vile Parle, Mumbai and was split into three separate companies – Parle Agro, Parle Bisleri and Parle Products. Each of these were owned by different factions of the original Chauhan family. Parle Agro started operations in 1984 with Prakash Chauhan at the helm and his daughter’s who are part of the business too.

With Nadia’s father, Prakash Chauhan, at the helm, Nadia joined the company in 2003 as part of the marketing team managing the brand Frooti. Over the years she has grown to take over the entire marketing department, sales, R&D, transformation, global markets, new business and eventually take on her current role as Joint Managing Director and CMO, Parle Agro.

Born in California and brought up in Mumbai, the 30 year old studied commerce at H. R. College.

Early steps

When she was a child, product sampling was a breakfast staple, and family discussions revolved around the products that the company was launching.

“I got to spend a lot of time with my Dad who used to involve me a lot in office regularly. I spent all my holidays at the office attending meetings with him, being part of brand launches, and important sales meetings and campaigns. It was unusual for a kid my age, but I absolutely loved it. I believe these experiences have added a lot to make me who I am today. Especially the passion that I have developed for our business, having been a part of it from such an early age, and having the opportunity to have shadowed my father was truly the best business lesson that I could have ever asked for,” Nadia quips.

A very young entrepreneur

At at the age of 11 she started her own venture. With ample encouragement from the family she started Just Divine, a baking company. She would bake brownies on order. “Since at that time we didn’t have social media, I used to make sales calls and go door to door selling. It was an amazing experience. Then I ventured into making tie and dye T-shirts that I sold door to door all over our neighbourhood in Vile Parle East. Eventually, I found my place –at Parle Agro,” she says.

Parle Agro


In her current role, Nadia is responsible for developing and building Parle Agro. The most exciting aspect of her role she says “is to envision the future, and chart out a road map for the company to achieve the aggressive goals and the large vision we have for ourselves to make Parle Agro the largest F&B company in India.

Core values

According to Nadia, the core values of the company and the family have been defined so well that there is no scope for cracks. “When my father inducted me and my sisters into the business, the key thing he did was to define each of our responsibilities based on our passion, skills, strengths and ability to contribute to the business. It made it so easy for us to settle down in our roles.”
With their father clearly laying out the foundation for Nadia and her sisters, the siblings were cognisant of the larger picture. “We clearly understood that if the business was to continue and grow then it would move forward with us as a family and we would have to be able to work towards it,” Nadia explains.

Marketing and Innovation

Nadia believes that marketing helps the business develop on a much larger scale. “We want to bring to the market things that the Indian consumer has not experienced earlier. It has to be new and innovative and not be a ‘me too’ product,” she adds.
One of the key drivers other than a disruptive market strategy is innovation. “When we are competing with multinationals with much larger budgets it is important that we stand out. At the same time we take a lot of pride in being an Indian company. So one of our responsibilities is to deliver the best products to Indian consumers,” Nadia says.

Leadership

Having had a wonderful leader in her father herself, Nadia talks about her own leadership approach: “I believe everyone should have a voice and everyone definitely has a point of view and I feel as a leader it is important to ensure that everyone’s point of view is addressed and heard. It doesn’t matter if you agree with it but its important that the point of view is out there because that leads to healthier decision making and team building. Empowering people and respecting them is very important because everyone has ambitions and passion and it is important to nurture that.”

A healthy balance

Man or woman, Nadia insists that everyone needs to have a healthy balance in life. “We work from 8.30 to 5 pm so that we can spend the evenings with family or pursue our hobbies and other activities of interest,” she says.

When asked what works for her, she says, “Everyone works out their own method of achieving their balance, and what works for everyone is different. I honestly feel a lot more need to stay fit to run after my kids. They demand so much physical energy from you.”

Nadia spends a lot of time with her kids over the weekend at her farmhouse. As a child she used to do horse riding for hours, an activity she plans to take up when her kids grow up a bit more and can ride with her too. This summer vacation she and her kids have discovered legos and she is thoroughly enjoying building lego sets. As activity she calls – addictive.

It’s all about what you want

Nadia is where she wanted to be, doing something that she is extremely passionate about. She has found her calling and as advice to others still looking for theirs, she says-
“Whether you are a man or a woman, as long as you have a dream and a vision that you are extremely passionate about, and as long as you are committed to it nothing can hold you back. With conviction you will find the ability to do all that it takes, and do all that you have to.”

 

Arun Jaitley woos Chinese investors at ‘Invest in India’ forum

The finance minister says even in an unsupportive global environment India would be the only economy that moves towards 8% growth rate