Budget 2017

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Amrutha Bhamidimukkula, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur


The country is fast moving from desktops to handled devices and smartphones are improving in their penetration and ease. This highlights the prominence of mobile banking in our lives. Quick adaption by a large chunk of the population, though sudden and to some extent forced, to mobile banking and e-wallets was one of the saving graces during demonetization. Making smartphones more affordable and promoting cheaper data services will be one of the key expectations. Affordable mobile handset or consumer durable items of a certain price limit may be given concessions on duties.

For the e-commerce market, particularly, major businesses have demanded clarity of FDI in B2C e-commerce through automatic route. Last year, the government allowed FDI into B2C e-commerce but disallowed the marketplaces like Flipkart and Snapdealto offer discounts to consumers thus ending the discount wars. Though consumers enjoyed the discount wars, brick and mortar stores claimed they suffered hugely due to such business tactics.

The government will want to put the country back on the high growth path. So, improving customer confidence and consumer spending will be vital as well.

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Myntra – All set to diversify

 

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Tamas Oberoi, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Flipkart-owned online fashion marketplace Myntra is diversifying into home furnishing, precious and non-precious jewelry and personal care segments in an attempt to widen its consumer base and shore up profits.

The company has set a target to be profitable till 2017 and expects a 500 cr  from home furnishing segment in the next two years.

The company has tied up with 40 brands for the home furnishing segment, and will enter the personal care products space and jewelry segments by July.

The estimated size of the domestic jewellery and billion market in India is between $30 billion and $40 billion, respectively, and online sales of fashion and fine jewelry combined stood at $150 million in 2015.

But with Reliance and Aditya Birla already in the competition,the margin in home furnishing might be tight. Myntra’s main focus should be on jewelry  and furniture because they are high value items and earn big returns which might help i tin achieving profitability by 2017

Welcome Mizuno!!!

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Tamas Oberoi, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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E-commerce players Flipkart & Myntra have signed an exclusive deal with a Japanese sportswear brand Mizuno to sell its merchandise in India from today. 

The introduction of Mizuno, an iconic name in the sportswear category will further boost interest among fitness and sports aficionados.Mizuno, founded in Osaka in 1906, specializes in manufacturing sports equipments, especially golf clubs and accessories.

E-Commerce is an important channel for any international brand who wants to enter India.In India, global companies are increasingly entering the Indian market through the e-commerce route. This move helps them save on capital and understand their scope for growth in the country’s retail environment.

Online retail, which is being increasingly adopted by Indian shoppers, is expected to account for 3% of the total retail sales by 2020.

In recent times India has become a favorite market for global brands due to it huge market size and increasing disposable income and with the advent of E-Commerce this trend is going to follow.

100% FDI in E-commerce

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sachin Mehta, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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After years of lack of clarity in the way e-commerce companies worked in India, some clarity has been brought. The decision of the government to allow 100% FDI in e-commerce companies, however with certain restrictions is expected to make the whole business more regulated.

The government has allowed 100% FDI in e-commerce business with a view to attract more foreign investments. As a result of this decision the Indian players are expected to get a major boost. The growth in the e-commerce companies will have a cascading effect on the other sectors as well including manufacturing and logistics which will positively contribute to the overall growth of the economy. The new FDI ruling also lays out a well-defined meaning of the market-place and the inventory based model for e-commerce companies.

However, e-commerce firm will not be permitted to sell more than 25% of the sales affected through its market place from one vendor or their group of companies. As it turns out, the FDI ruling does not only come as a rude awakening to sellers but buyers as well. According to the guidelines, no seller has the right to revise the price of a product which ensures fair competition. This ruling could mean the end of special sale days like Flipkart’s Big Billion Day or special offers provided by the likes of Amazon, Snapdeal etc. The government has recognised the situation on the ground and tried to put in safeguards to see that growth of e-commerce doesn’t continue the way it was doing it earlier and at the same time the traditional retailers get little less competition, fewer disadvantages which started accruing to them once e-retailer came into the existence.

One of the major concerns is that Indian market is not yet ready for opening up e-retail space to foreign investors. It will seriously impair small time trading of brick and mortar stores. Small time shopkeepers are not highly qualified and will not be able to compete with sound e-retail business format.

Though, with new policy there is clarity which can assist in growth by considering all stakeholders involved in the sector. But the fact is that there are several concerns about how efficiently this policy will work and whether the foreign companies would adhere to all the guidelines being imposed.

Indian Retail: A lucrative segment

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sachin Mehta, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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In the last decade, many large international retailers are investing heavily in the emerging markets due to high growth potential. The developing countries have become one of the favourite destinations for parking their capital in form of investments. The main focus is on to create a diverse investment portfolio by including various countries with different levels of risks and diverse consumer profile.

The lucrative Indian markets have attracted number of global retailers to expand their customer base in India. The online retail in India has reached at its in-flexion point where the number of Indian retailers are competing with global retailers including the likes of Amazon and Alibaba. With the entry of Wal-Mart in the Indian market, the physical retail is also showing signs of tremendous expansion. Indian retail is expected to grow from $600 billion in 2015 to a market of $1000 billion in 2020.

The Indian retail landscape is going through strong evolutionary undercurrents that have completely redefined how the major players are operating in the market. The diverse potential consumer segments coupled with the increasing awareness provides a wider customer base for the companies. With number of companies coming up with their private labels, it has proved to be a win-win situation for both retailers as well as customers. The Indian customers are increasingly accepting the private labels providing a greater scope for companies to expand and grow. The recent clarifications related to FDI relaxation have provided an interesting dynamic to the Indian Landscape.

However, one of the biggest challenge the industry faces is the fragmented structure of Indian retail. Around 92% of the Indian retail comprises of fragmented unorganized sector which lack the scale to grow. The e-retail in India is relatively in its infancy as being one of the vibrant cash economy, the customers purchasing behavior involves an initial overall inspection of the product from different perspectives and paying subsequently. Poor supply chain network and the escalating real estate prices have only contributed to the challenges faced by the retail sector.

Despite of several teething issues the Indian retail sector is expected to grow in the coming years. The liberalization of FDI policy will help in freeing up the procedural bottlenecks which are almost hallmark of any foreign investment in India. Subsequently, many global companies are making a move to invest in India to leverage the strong demand potential contributing to the continuous expansion of retail sector in India and the generation of number of employment opportunities.

 

Buying a car….is one click away!!!

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Tamas Oberoi, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Mahindra and Mahindra has recently tied up with Flipkart to sell its small SUV ‘KUV 100’ through its platform. I believe it’s a great move considering the craze for E-shopping in Indian youth in recent times. India has now an internet base of about 243 million which is more and more galloping with increasing number of smart phone users.KUV-100 is a car for mass market and what better platform than Flipkart  which has a pan India reach and a market share of about 44 percent.

It’s a win-win situation for both Mahindra and Flipkart. For Mahindra they will have access to a huge customer base through Flipkart and also it will play an active role in promoting KUV-100 through advertisement on its site. For Flipkart, they were already selling automobile accessories and by including KUV-100, they are expanding their product category and building a complete ecosystem to become a one stop destination for all automobile needs.

Flipkart is now pressing the peddle hard to sustain as the Number 1 E-commerce website in India by expanding its product categories aggressively. Now it’s on Snapdeal and Amazon to roll up their sleeves and step up to the challenge. It ‘s an exciting times for E-commerce companies and the next 2-3 year will decides who will rise as the jack of all trades and rule the E-commerce market in India.

Snapdeal to acquire GoJava

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Nishita Agarwal, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur
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From ‘Food,clothing and shelter’ humans have now moved to ‘Food, clothing ,shelter and technology’. We are spend maximum of our time online and that makes the E-commerce sites the fastest growing business.
As mentioned in 16th March news if Indiatoday, Snapdeal is in the purview of expansion and to strengthen the logistics in the country is in talks to acquire the logistics firm GoJavas which was the logistics firm to Jabong.com as well. The deal is expected to range between Rs 150-200 crores.
The major acquisitions in the e commerce sectors were Flipkart acquiring Myntra and Amazon acquiring Jabong. Snapdeal also has personal investment from Mr Ratan Tata. Snapdeal is also in talks to acquire Freecharge for 2800 crores which is expected to be the biggest deal in Indian internet industry according to The Economic Times 12th March news. The entire E commerce sector requires a strong supply chain as they strive to reduce the time in which the order reaches the customer as it is a strong point over which various firms compete. Amazon has 24hr delivery policy. E commerce operations requires an proper website management, vendor management, secure payment, quick delivery to facilitate a good online shopping experience as online shopping lacks the touch and feel factor of brick and motor shopping. So companies are focusing on logistics.
With the constant improvements, we can expect a very smooth online shopping experience.

Reference:

http://indiatoday.intoday.in/technology/story/snapdeal-to-acquire-jabongs-former-logistics-arm-gojavas/1/424118.html
http://businesstoday.intoday.in/story/snapdeal-acquire-logistics-firm-gojavas-for-rs-200-crore/1/216982.html
http://articles.economictimes.indiatimes.com/2015-03-12/news/60048124_1_doozton-snapdeal-group-buying-site-grabbon-com

Paytm hot in e-commerce market

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Subham Das , MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur


 

On 11th March,2015 The Economic Times reported, “There is no reason why Alibaba can’t invest in both Paytm and Snapdeal. Snapdeal has been negotiating with Alibaba since their last round and every time they differ on the valuation front.”

On 13th March, the Financial Express reported, “Flush with funds, having raised about $575 million from Chinese e-commerce major Alibaba affiliate Ant Financial Services against a 25% stake, Paytm plans to achieve a gross merchandise value of $4 billion next fiscal, up from the present $1 billion. It has SAIF Partners, Intel Capital and SAP Ventures among other investors. Sharma and SAIF Partners, which has so far invested about $70 million in the company, continue to remain majority shareholders.”

On 13th March, Mr. Ratan Tata publicly showed his support for Paytm and expressed his willingness to join the board of Paytm. This is obviously a very good sign for the mobile payment e-commerce site of India. Mobile payment space in e-commerce is hugely evolving and it’s a great way to tap the mobile-consumer market. With ever increasing mobile user market in India, the internet recharge sites like Paytm, Freecharge have almost eliminated the local kirana shops recharge business.

With the new investments pouring in and with the support of business tycoon such as Mr. Ratan Tata, we can expect a lot more innovation and new service offerings from Paytm in the near future.

Enter the Dragon – Alibaba makes a grand entry in India

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Ishan Dogra, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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According to a report published in Economic Times on February 6,2015, Alibaba has finally made its grand entry in India by acquiring 25 % stakes in One97 communications, the parent company of payment gateway – Paytm.
Alibaba.com, founded in 1999 by Jack Ma in Hangzhou city of China, is the one of the largest e-commerce firms in the world. In 2014, the e-commerce giant had a market capitalization of $246.02 Billion and was termed as the most valuable e-commerce firm. The e-commerce maverick changed the rules of game, when it released its Initial Public Offering (IPO) in the US last year.

Alibaba was one of the first companies in e-commerce space, that opened the doors of Chinese B2B (business-to-business) supply chain to the entire world. So an industrial buyer, situated anywhere in the world, could order custom motors and parts from Chinese factories. Lately, the company has been focusing on inorganic growth, with acquisition of more than 100 companies in US in 2014.

This move also signals the entry of Chinese giant, in the already competitive Indian market place for online shopping that is dominated by Amazon, Flipkart, Jabong and Myntra.  According to, Vanessa Zeng, an analyst with Forrester, Alibaba would be able to emulate its Chinese business model in India, as both the countries are similar in terms of large population, traditional retail sector and rising e-commerce sector.

Although the grapevine from industry also suggests that, this move could just be to build a ‘Aliplay’ (China’s leading third-party online payment solution) of India. Irrespective of the motive, one thing is sure, Indian e-commerce space is bound to face competitive times ahead. With the already saturated e-commerce space, the Indian competes will have to come up with innovative solutions to counter the might of big foreign players such as Amazon and Alibaba.

 

But, one can definitely expect this deal to be a happy news for the Indian consumer, who can expect a lot of ‘Big Billion day’ sales and similar initiatives in the future.

 

References

1.      http://economictimes.indiatimes.com/industry/services/retail/alibaba-enters-indias-e-commerce-space- with-          25-stake-in-paytm-owner-one97/articleshow/46138131.cms

2.      http://articles.economictimes.indiatimes.com/2015-01-18/news/58200636_1_jack-ma-paytm-taobao/2

3.      http://en.wikipedia.org/wiki/List_of_largest_Internet_companies

4.      http://fortune.com/2014/09/08/alibaba-amazon-b2b-ecommerce/

 

 

 

 

 

FMCG Giant HUL enters E-commerce

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Nishita Agarwal, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur

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Indian E commerce industry which is worth $12.6 billion now is the emerging field for future investments. It was for this similar reason and looking at the reach of e commerce and the speed at which it is entering the consumers life, the FMCG giant HUL also plans to change its operating model and enter in the e commerce segment.

As mentioned in the 9th February article of Economic times, HUL business model is changing from physical servicing to online ordering. It will be soon that the consumers will be able to buy every FMCG product from HUL site with features similar to that of other e commerce sites.

Availability of labor makes it easier to follow the e commerce model in India. HUL is a FMCG giant whose products reach even the remote location. The strategic decision to enter into e commerce is to tap the population which no more prefers going out to shop. From grocery to vegetable, everything today can be bought online. India has close to 10 million online shoppers and is growing at an estimated 30%. HUL e commerce will follow a distributor’s network model to deliver the goods.

Prime reason for the big giants to adopt e commerce model is because majority of urban population prefers virtual shopping experience. The reasons for this are better internet services, rise in living standards, price discounts, busy schedules etc.

Online world has now become an integral parts of our lives and big companies lives no stone unturned when they have to reach their consumers.

Referrence:

http://articles.economictimes.indiatimes.com/2015-02-09/news/58967835_1_hul-spokesperson-ceo-william-pinckney-amway-india

http://en.wikipedia.org/wiki/E-commerce_in_India