Ecommerce Business and Investments

Agri-entrepreneur ventures are helping people grow vegetables, experiment with new practices, and start operating their own farms, by providing them with small plots on a rental basis. This, in turn, is helping farmers get high rentals, access to technology, and assured buyers for their produce.

In a corner of the vegetable farm, Puneet Singla walks through the neatly cut rows of cauliflowers, brinjals, tomatoes, and spinach. Sometimes he plucks the weeds or munches on a radish, which he has just harvested along with wife Rachna and the labourers on the farm. Their mobile phones are filled to the brim with pictures of their rural life

Agri reporter based in New Delhi, tracking the commodity market, food sector, trends in the hinterland to policy matters.Prime minister awardee for excellence in journalism in agricultural research and development in 2014. Invited to USA and Canada on an exchange program to see their farm and allied sector. In the past 15 years have reported from different geographies- Chandigarh, Gujarat and New Delhi which has exposed me to the highly fragmented Indian farm sector and its regional variations. Have tried my hand at organic farming. Catch me on twitter @MadhviSallyET or madhvi.sally@timesgroup.com

owning 1 acre to 2 acres and growing three or four varieties of vegetables will ensure that we get quality produce at affordable rates and an organised market for the sellers,” he says. Chopra says he aims to capture the entire value chain from farm to consumer and complete the consumer's healthy-eating basket with fresh and dry-food products.

According to a report in CNBC on Thursday, Amazon, in once case, warned a seller it would delete their listing for surgical face masks for making "unapproved medical marketing claims."

E-commerce giant Amazon has warned sellers that it is removing listings for products from the platform that claim to cure the novel coronavirus.

With the coronavirus spreading to over two dozen countries and the overall death toll in mainland China surpassing 2,000, fighting misinformation about the virus has become a major challenge.

On top of it, some sellers are even trying to cash in on the fears of the virus by making false claims.

According to a report in CNBC on Thursday, Amazon, in once case, warned a seller it would delete their listing for surgical face masks for making "unapproved medical marketing claims."

But despite the warning to third-party merchants this week, a quick search by CNBC led to several examples of products that appeared to flout these rules, including disinfectant sprays and cleaners that claimed to "kill" the coronavirus.

The charge of hosting products claiming to "kill" coronavirus emerged after the platform earlier dealt with accusations of hosting unsafe, counterfeit, and even expired goods.

Amazon was reportedly one of several technology companies that had discussed with the World Health Organization on measures to fight misinformation about the coronavirus spreading on their platforms.

“UberEats was a great brand and a great organisation,” said Vivek Sunder, COO, Swiggy at a Ficci Ladies Organisation event in Chennai. “Uber Eats suffered from being a global company. Global companies have scale and capability and also access to capital. While Indian companies have the ability to customise,” he said.

Weeks after UberEats was taken over by Zomato after it failed to make an impact in the food delivery segment, a senior Swiggy official said that the enterprise failed because it couldn't customise to Indian market.

UberEats was sold to Zomato last month for an enterprise value of nearly $350 million in an all stock deal. The American company’s Indian arm was tottering and Swiggy was learnt to be negotiating to acquire it, but dropped the idea, ostensibly due to a valuation mismatch. A PTI report had said that UberEats India business contributed just 3% of the global gross bookings but accounted for over 25% of adjusted EBITDA losses for the first three quarters of 2019.

“UberEats was a great brand and a great organisation,” said Vivek Sunder, COO, Swiggy at a Ficci Ladies Organisation event in Chennai. “Uber Eats suffered from being a global company. Global companies have scale and capability and also access to capital. While Indian companies have the ability to customise,” he said.

“It is not the fault of the venture,” he said citing, many MNC subsidiaries were struggling as their global headquarters could not visualise the customisation need. “For us in Swiggy, all I have to do is go down one floor, into my tech office and ask them to make the changes, while at the MNCs, it may be the 40th requirement which awaited the global HQ nod,” he said. At the end of it, if the management at HQ did not see merit in requirement they get junked. “The challenge Uber Eats faced is that of a glocal-local problem, he said.

A note put up at research firm Greyhound Research’s website quoted CEO Sanchit Vir Gogiahad as : “This deal is a reminder for global companies and startups that in many industries, they are going to need a local player partnership to (play) the market better.

Swiggy’s Sunder said the delivery platform was conducting a pilot project where food cooked by home makers would soon be available. “Swiggy Homely is not available in all zones. The pilot is currently on. We will bring the home chef on the platform and give home style meals to our customers,” he added.

The firm that runs brands such as Louis Philippe and Pantaloons is betting on consumers shifting from the unorganised market to branded apparel. The company said its growth has so far remained unaffected by newer rivals as each of its top brands generate Rs 1,000-1,500 crore in annual sales, each bigger than fast-fashion rivals.

 Aditya Birla Fashion and Retail, the country’s largest clothing firm, plans to open more than 500 outlets this year, nearly three times its average annual expansion, at a time when the overall economic slowdown has made most retailers go slow on increasing brick-and-mortar network and shift focus to online.

The firm that runs brands such as Louis Philippe and Pantaloons is betting on consumers shifting from the unorganised market to branded apparel.

“The general consumption habits are changing, especially in a digitally connected network, when you are seeing desire for brands and aspiration for better quality products,” said Ashish Dikshit, managing director at Aditya Birla Fashion and Retail (ABFRL) that runs more than 3,000 outlets. “There is a very large upgradation and movement to buy brands and the opportunity in a country like India will keep emerging from new markets.”

Aditya Birla Fashion to open 500-plus stores this fiscal
With liquidity stress persisting in wholesale channels, most retailers across consumer products, liquor and apparel have been facing pressure to push inventory in smaller towns and hinterland.

Experts said the underlying situation hasn’t dramatically improved due to liquidity issues and there is still nervousness in terms of stocking up.

“The wholesale business appears to be undergoing some structural shift triggered by liquidity issues in the economy and management (of ABFRL) is strategising to invigorate the same whilst simultaneously speeding up exclusive brand outlets (EBOs) expansion, including conversion of some large wholesalers into EBOs,” JM Financial said in a recent investor note.

The company said its growth has so far remained unaffected by newer rivals as each of its top brands — Louis Philippe, Van Heusen, Allen Solly and Peter England — generate Rs 1,000-1,500 crore in annual sales, each bigger than fast fashion rivals.

It now plans to launch a new mass-market ethnic wear brand. “One of the segments we have always sort of stayed away from was ethnic wear because we thought it was fragmented, (and that the) ability to build brands will be lower,” said Dikshit, who started his career in the group 25 years ago. “We (have now) realised we are missing on a very large opportunity. Women’s wear is 40% of the overall apparel market, and three-fourths of that is traditional.”

Last year, ABFRL had acquired artisanal online retailer Jaypore-.com and 51% stake in Finesse International Design, which runs bespoke apparel retail brand Shantanu & Nikhil, to enter the premium ethnic wear segment.

Same-store sales growth of the company’s lifestyle brand division at 15% was one of its highest ever during last quarter while Pantaloons that opened over 40 doors in a year, reported record operating profit at Rs 109 crore with margins crossing 10% for the first time. Also, it will put a 12-season inventory model which will help in bringing freshness to the assortment mix and allowing trade partners to right stock inventory.

The overall apparel market of India is valued at Rs 5.3 lakh crore, according to Nielsen. With annual sales of Rs 8,117 crore in FY19, ABFRL has strong presence across men, women and kids apparel, but it is largely restricted in western wear formats. But it is increasingly getting competitive with global fashion brands such as Zara, H&M and Vero Moda pushing their lower priced westernised clothing in their market.

Impact of coronavirus on Indian industries

The outbreak of coronavirus in China comes at a time when the Indian economy is going through a difficult phase and the virus outbreak could make the slowdown worse. Let us have a look at how the outbreak has affected different Indian industries.

China closures may leave e-commerce shelves empty

Amazon and Flipkart, the country’s two largest web retailers, are likely to see an impact on overall sales due to the prolonged closure of factories in China on account of the coronavirus outbreak, analysts and industry insiders told ET. A supply crunch in smartphones, televisions, large appliances and consumer electronics, which comprise about half their gross merchandise value (GMV), would come on top of the slower growth in sales during the recent festive season compared with the previous year.

While the repercussions of a hit on the supply chain for electronic goods will be felt across sectors, online retail’s exposure to them is significantly higher. Other categories such as furniture, home decor, fitness equipment and toys will also get affected, as per experts, due to the supply shortage.

China shutdowns hit Indian electronics companies

Smartphone and consumer electronics companies in India said they were staring at production cuts and possible delays in launch of new products due to the coronavirus outbreak in China that has disrupted component supplies. China accounts for 75% of total value of components used in TVs and almost 85% in case of smartphones.

“Production will be badly hit. There will be at least 15-20 days’ delay in supply of components. We have closed our purchase office there. New product launches will be delayed. If this continues, there will be chaos since no company holds stock in large quantities due to fluctuating input prices and subdued domestic demand,” said Avneet Singh Marwah, CEO of Super Plastronics, the company that sells Kodak and Thomson brand televisions in India.

Surat diamond industry likely to face a loss of around 8,000 crores

The Surat diamond industry is likely to face a loss of around Rs 8,000 crore in next two months as Hong Kong, which is a major export destination, has declared a state of emergency due to the coronavirus outbreak in China. "The Surat diamond industry is staring at a loss of around Rs 8,000 crore for February and March, said Dinesh Navadiya, regional chairman, Gems and Jewellery Export Promotion Council. Polished diamonds worth around Rs 50,000 crore are exported from Surat to Hong Kong every year, he added.

Phone makers face an alarming situation

Future component supplies to Chinese brands such as Xiaomi, Vivo and Oppo look under pressure. While Apple now sources iPhone XR and 7 from India, their components come mainly from China. A top executive at a leading Chinese phone maker said, “We are very, very concerned. There are travel advisories for our staff (regarding travel to or from China), and even the incoming cargo is now being hit. While buffer stock is being used now, there is no clarity on how we will tackle a longish disruption in supplies.”

Companies such as Xiaomi, Vivo and Oppo have carried out an assessment of their existing stocks and supply chain, and are worried about arrival of the next batch of supplies. “It is a fluid situation, but all indications suggest that things may become difficult in the weeks to come when it comes to production at factories.”

Leading players in the auto industry worried as cornovirus hits businesses

The auto industry, while being self-reliant, is also worried as China has now started playing a significant role in the Indian market, especially as electric mobility starts picking up (largely in twowheelers).

MG Motors (a subsidiary of SAIC), which is enjoying a good run in India with vehicles such as Hector SUV and newly-launched ZS electric, fears the company may not have enough cars to dispatch to showrooms as supplies from China come under a squeeze. “It’s already a hand-to-mouth situation for us. If things don’t improve over the next six to seven days, we will be severely affected,” MG India MD Rajeev Chaba told TOI.

Spread of coronavirus affects Agra footwear industry

The outbreak of the deadly novel coronavirus (nCoV2019) in China has affected the footwear industry in Agra as supply of raw material from that country has stopped completely. Industry sources say raw material worth Rs 15 crore for manufacturing finished footwear is imported from different parts of China to Agra every month.

“Due to coronovirus outbreak, import of footwear component from China has completely stopped since January. This has affected manufacturing of finished footwear in micro units in Agra. Medium and large scale manufacturers maintain stock of components supplied from China. The footwear industry of Agra will suffer major losses if the situation does not normalise in the next one month,” said President of Agra Shoe Factories Federation, Gagandas Ramani.

Out-of-bounds China market hits Rajasthan businesses

Gems and jewellery, importers and manufacturers of furniture, stationery items, toys and other raw material traders based out of Rajasthan have been most affected by the outbreak of coronavirus in China.

“Now, there is no scope to replace parts of the machines if need arises. The impact will be significant if the virus problem continues to prevail. A significant part of the exports go to China and it will certainly impact the industry,” said Ashok Dhoot, vice-chairman, Centre for Development of Stones, a subsidiary of RIICO.

The travel and tourism industry is also losing steam as travellers from other countries have started cancelling bookings after nCov cases were reported in India. A tour operator said, “Visitors from other countries have also started cancelling bookings fearing that India might also witness a spread of the virus. While no cases have been found in Rajasthan, nCov cases in Kerala have made foreign tourists, who had plans to visit India, apprehensive.”

Low cost non branded garment trade in Bengal becomes victim of coronavirus

“As an immediate impact, retail level price has started shooting up with rapidly depleting inventory here. Even worse is uncertain long term impact in the supply side in China. We are highly worried as the trade has almost completely become dependent on them,” said Bijoy Saha, a wholesaler in Siliguri dealing with Chinese kid’s ware, caps, belts etc.

According to market insiders, to cater to near 1.5 crore rural people from 5 industrially backward districts around Siliguri, these wholesalers annually import items worth around Rs 250 crore.

Flipkart has over the last few months ramped up its supply chain capabilities and engagements with manufacturers in the run-up to the launch.

Walmart-owned Flipkart will launch its wholesale business in the upcoming quarter, two sources directly aware of the development said, as it gears up to take on Amazon’s B2B division, Reliance’s Market and Tencent-backed Udaan, apart from other vertical e-commerce startups.

Flipkart has over the last few months ramped up its supply chain capabilities and engagements with manufacturers in the run-up to the launch. The company is also running a pilot FMCG project supplying to kirana (corner) stores in the Delhi NCR region, one of the sources said.

Flipkart has also held conversations with B2B FMCG supply chain startup Jumbotail for a potential investment to strengthen its kirana store procurement experience, according to multiple sources aware of the matter. Jumbotail did not respond to an email query sent by ET.

“Flipkart will focus on FMCG and fresh foods categories to begin with, and over time, build the electronics and fashion category,” one of the source added. “The idea is to look at the B2B space with the same technology-first approach as B2C,” another person said, adding that the company will significantly invest in scaling up the vertical this year.

Adarsh Menon, senior vice president at Flipkart, has been appointed to lead the initiative. Quite a few executives from the consumer marketplace have been transferred to this division over the last five months to build out categories and do early pilots, sources added.

A Flipkart spokesperson did not directly comment on the launch of its wholesale business. "We view the B2B segment as an opportunity to support and grow kiranas and SMEs in the country," the spokesperson said. “Technology can play a critical role in making the kirana ecosystem very robust and efficient.”

The move comes at a time when Flipkart’s parent Walmart has let go of more than 100 senior executives, including vice presidents, across sourcing, agri-business and the fast-moving consumer goods B2B divisions. Speculation has been rife that Flipkart would eventually merge with Walmart’s wholesale cash and carry business in India, which has been incurring heavy losses over the years.

In December, Flipkart made an investment in fruits and vegetables supplier Ninjacart to boost its sourcing from farmers.

In October, Flipkart registered an entity Flipkart FarmerMart, marking its entry into the food retail category. In addition, Flipkart has also invested in Shadowfax, a B2B last-mile delivery platform.

Rival Amazon has been actively scaling up its B2B division for the last 18 months, with competitive pricing as well as credit tie-ups. Udaan, on the other hand, is a multi-category trading platform with services including credit, logistics, Software as a Service, marketing, sales, and distribution.

Flipkart leads Walmart’s international ecommerce numbers

Walmart said Flipkart now had over one billion visitors a month, with monthly active customers growing by 45% in the last one year and transactions per customer increasing by 30% in the same period. Apart from Flipkart leading international ecommerce sales for Walmart, the company said that the unit had reported record sales during its BigBillionDays sale event last year.

US retail giant Walmart on Tuesday reported that ecommerce contributed 12% to its international sales during the quarter ended January 31, led by Flipkart and online grocery delivery in several markets.


In its fourth quarter earnings report, the company said that international sales had grown by 2.3% to $33 billion, despite a disruption in Chile that negatively affected operating income by $110 million. “We remain excited about the opportunity we have there (in India). The way Flipkart and PhonePe are scaling is impressive," Doug McMillon, CEO of Walmart, said in his post-earnings presentation to investors and analysts.

The company added that Flipkart now had over one billion visitors a month, with monthly active customers growing by 45% in the last one year and transactions per customer increasing by 30% in the same period. Judith McKenna, CEO of Walmart international, told investors, “Flipkart is continuing to grow as Indian customers become more and more comfortable with ecommerce and the access and affordability that it has provided.”
Flipkart leads Walmart’s international ecommerce numbers Apart from Flipkart leading international ecommerce sales for Walmart, the company said that the unit had reported record sales during its BigBillionDays sale event last year, without breaking out any specific numbers. However, on a fullyear basis, the Bentonville, Arkansas based company, reported a reduction in free cash flow on account of including a full year of Flipkart’s operations, among other factors. Walmart reported that free cash flow was down to $14.5 billion in the year that ended Jan 31, 2020, compared to $17.4 billion in the previous reporting period.

The Karnataka High Court said that they have no evidence of Amazon, Flipkart getting into exclusive deals with smartphone firms. The probe into both companies following a plea by a Delhi-based traders’ body, had alleged that the ecommerce firms were working with preferred sellers, violating competition laws.

 India’s competition watchdog did not have any material on record to prove that e-commerce marketplaces Amazon and Flipkart entered into exclusive deals with smartphone manufacturers on their platforms, according to a transcript of a court order.

The Karnataka High Court had on Friday stayed the Competition Commission of India’s January 13 directive ordering a probe into both companies following a plea by a Delhi-based traders’ body which had alleged that the ecommerce firms were working with preferred sellers, violating competition laws. “The contention urged on behalf of the petitioner (Amazon) that CCI has imagined (the) existence of ‘some agreement’ merits consideration,” the court order read.

CCI has no proof against Amazon and Flipkart: Karnataka HC

ET has access to the court order.

“...it is recorded in paragraphs No. 22 and 23 (of the CCI order) that there ‘appears’ to be exclusive partnership between smart phone manufacturers and ecommerce platforms. This finding is based on allegations made in the complaint,” it said, granting Amazon and Flipkart interim relief.

DMart’s Noronha wealthiest CEO in India

With more than Rs 3,100 crore of net worth, Ignatius Navil Noronha, CEO of Avenue Supermarts that runs D-Mart stores, has emerged as the richest professional in the country.

Who is India’s richest non-promoter professional? He is neither a tech whizkid, nor a new-age banker. And neither is he an alumnus of the mighty IIT+IIM combo. Instead, he is in a line of business that’s as traditional as it gets – groceries, largely.

With more than Rs 3,100 crore of net worth, Ignatius Navil Noronha, CEO of Avenue Supermarts that runs D-Mart stores, has emerged as the richest professional in the country. His boss Radhakishan Damani, the reclusive founder of Avenue Supermarts, is now India’s second richest person, with a net worth of $17.8 billion, next only to Mukesh Ambani. Ramakant Baheti, CFO of DMart with shares worth Rs 666 crore, is now India’s third-richest on the list of top professionals. Of course, the net-worth stats are purely based on the stock they own in the companies they lead, and these calculations don’t include salary and other compensation elements.

The online retail industry is braced for a possible 1% tax on each sale made by sellers on their platforms from April if the proposal is approved by parliament next month.

 Amazon and Walmart's Flipkart are among online retailers demanding that India scale back a proposed tax on third-party sellers on their platforms, saying the burden of compliance will hurt the fledgeling industry, according to documents seen by Reuters.

The online retail industry is braced for a possible 1% tax on each sale made by sellers on their platforms from April if the proposal is approved by parliament next month. The move is part of a broader plan by Prime Minister Narendra Modi's government to increase tax revenues and counter a sharp economic slowdown due to weakening consumer demand.

But the tax will hurt the country's fledgeling e-commerce sector, according to a presentation prepared by the Federation of Indian Chambers of Commerce and Industry (FICCI) for the government and seen by Reuters.
"(It) would cause irreparable loss to the entire industry with increased compliance burden," the lobby group said on behalf of e-commerce companies. "This will also lead to reduced trading activity."

Another influential lobby group, the U.S.-India Strategic Partnership Forum (USISPF), is asking the government to give e-commerce firms more time to comply with the tax proposal. It wants the implementation of the new tax to be deferred to April 1, 2021 or later, according to a copy of its proposal reviewed by Reuters.

Amazon declined to comment. A spokesman for Bengaluru-based Flipkart said it was working with industry chambers to voice sellers' concerns and highlight the increased cost of compliance. The Finance Ministry also declined to comment.

'EXTREMELY DETRIMENTAL'
Some third-party sellers are also pushing back against the tax, arguing it would negatively impact their working capital, adding that they already contribute to a nationwide sales tax.