Delivery firms gain as Indian e-commerce space rakes in investment​s

Provide platform to connect artisans, small traders and end-consumers
Mumbai, October 24:  
India’s fledgling $3.2-billion ecommerce industry seems to have got a fillip with Prime Minister Narendra Modi’s ambitious Make-in-India campaign. The nascent yet rapidly growing sector, which has been working with small and medium enterprises and helping them sell their products online, hopes to involve more such players.
Showcasing products
As part of one such scheme, e-commerce major Flipkart has inked a pact with the Textiles Ministry to provide weavers a marketplace to showcase their products. For manufacturers, analytical data will be provided to help them acquire a customer base, and accordingly scale up supply.
Generally, small entrepreneurs tend to contribute over 20 per cent of total sales for online companies such as Fabfurnish.com and Paytm.
Several online firms have begun associating with the Prime Minister’s initiative, which focuses on manufacturing in India, and are using their technology and platforms to support local manufacturers and craftsmen.
Online marketplace ShopClues.com has also launched a campaign wherein it will showcase merchandise from India’s iconic markets, such as the ethnic weaves of Surat, silver jewellery from Jaipur, electronic goods from Nehru Place in Delhi, textiles from Tirupur and chikankari from Lucknow across various States.  Radhika Aggarwal, Co-Founder, ShopClues.com said: “We are the first e-commerce player to launch a special ‘Make in India’ initiative. Through this, we intend to turn the spotlight on numerous local manufacturers and small traders, and provide them a platform to gain a pan-India reach so that they can participate actively in the country’s retail revolution.”
The company has over 5,600 brands and over 75,000 merchants listed on its site, of which 4,600 are regional and local brands. Fashion portal FashionAndYou claims that it is seamlessly connecting small retailers with customers. Says the portal’s CEO, Aasheesh Mediratta: “E-commerce is already serving as a great platform to connect artisans, manufacturers, boutique labels and designers with the end consumer. More than two-thirds of our business comes from this segment.”
Customer base
FashionAndYou says it is also working towards enabling small manufacturers access to a wide customer base, with no investment. Meanwhile, a few companies such as Printvenue.in and Bluegape.com are riding high by selling ‘Make-in-India’ merchandise.

Gung ho over e-tail, SoftBank invests $627 mn in Snapdeal: All you need to know

Japan's SoftBank Corp said on Tuesday that it would invest $627 million in online retailer Snapdeal, marking the latest investment by the telecommunications company as it expands aggressively overseas.
SoftBank, which bought No 3 U.S. mobile carrier Sprint Corp last year for $21.6 billion, said earlier this month it was taking a minority stake in Hollywood movie studio Legendary Entertainment for $250 million.

According to a press release from Snapdeal, with the latest round of investment SoftBank has now become the leading investor in the Indian etailer. Snapdeal has raised close to $1 Billion this calendar year, it said.
"These investments stand testimony to confidence displayed by investors in the company’s pure marketplace model and are in line with Snapdeal.com’s growth strategy and vision to create life changing experiences for 1 million businesses in India," the release said.
The telecom giant SoftBank yesterday pledged an investment of $10 billion (over Rs 60,000 crore) in India's IT and communications space. SoftBank's commitment is one of the biggest from a Japanese firm after Prime Minister Narendra Modi's visit to that country.

"CEO of SoftBank and Japan's richest businessman Mr. Masayoshi Son met me today. He expressed great optimism in India's changed investment climate and in the leadership of Prime Minister Shri Narendra Modi," Telecom Minister Ravi Shankar Prasad said on his Facebook page.
Softbank is one of the major telecom and internet corporations of Japan and its Chairman and CEO Masayoshi Son is the richest man in Japan. The company yesterday said it will look for opportunities in telecom space and the fast-growing e-commerce sector in India.
The proposed investment was committed in a meeting with Telecom Minister Ravi Shankar Prasad, an official statement said. Son is the richest man in Japan.

Son told Prasad that the visit of Prime Minister to Japan has created a climate of hope and optimism about greater economic cooperation between the two countries, it added.
With a market cap of $92 billion, SoftBank has operations in broadband, fixed line telecom, e-Commerce, finance, media and marketing. SoftBank already has made investments in Indian companies including InMobi and Hike. India-born Nikesh Arora, a former Google executive, is the Vice Chairman of SoftBank.

"He (Son) further expressed immense faith in the great eCommerce potential of India. He estimated it to become a $0.5 trillion business in the next 10 years," the statement said.
The Indian e-commerce company had earlier said that it sees the Indian etailing market growing to $5 trillion in the next few years.
In 2007, SoftBank had established a subsidiary in India called Japan Telecom India Private Limited.
Earlier this month, SoftBank Corporation signed an agreement to invest $250 million in media company Legendary Entertainment.

E-comm buzz: Amazon to buy Indian start-up; Snapdeal gets $627 mn from SoftBank

The battle for leadership position of the fast-growing Indian online retail industry just got more intense.

While E-Commerce giant Amazon is all set to make its first investment in an Indian startup by picking up a minority 20 percent stake in gift card technology and retail firm QwikCilver Solutions, Japanese telecom and media group SoftBank has agreed to buy a $627 million stake in Snapdeal.
"The valuation will be about two to three times the projected net income plus a premium of about 20% as this is a strategic investment," The Economic Times reported today, quoting an investment banker. The report added that QwikCilver, which also provides gift cards and prepaid stored value card solutions, aims to reach Rs 1,000 crore in overall transactions this fiscal.

In order to emerge on top, online retailers will have to look at investing in or acquiring companies that have a potential to scale. During the Big Billion Day, Flipkart sold 20 lakh products worth about $100 million (over Rs 600 crore). Rivals Snapdeal and Amazon have been equally impressive.
Highlighting India as a new priority in its aggressive expansion, SoftBank said on Tuesday it's also leading a $210 million round of investment in an Indian logistics business in a separate deal. The cash-rich Japanese company made waves with its plans to grow outside its home base last year when it bought No. 3 US mobile carrier Sprint Corp for $21.6 billion.

SoftBank said it will become New Delhi-based Snapdeal's biggest investor.

The investment in Snapdeal is the largest in India's growing e-commerce sector since industry leader Flipkart raised $1 billion in July and Amazon said it would invest $2 billion in India. Snapdeal has more than 25 million registered users and more than 50,000 business sellers, according to a statement by SoftBank.

Amazon India attracts more traffic in sale month than annual Taj Mahal visitors

More people visited its website during a recently concluded month-long shopping bonanza than tourists thronging the Taj Mahal every year, claimed Amazon India on Monday.

The festive season had fuelled a fierce competition as well as debate in the e-commerce space this year. Like its competitors, Amazon India, too, offered an “Online Shopping Dhamaka” from September 21 to October 21, during which sellers offered deals and discounts on a host of products across categories on www.amazon.in.

The American major also claimed that sellers, with monthly revenues of over Rs 10 crore in the online market, grew five times in this period.

Even though Amazon India refrained from sharing any figures (like most of its peers), it tried to sustain its claims of success through metaphoric comparisons. (See chart)

It said: “...traffic on Amazon.in during the month-long Online Shopping Dhamaka was over 15 times that of the total number of tourists thronging the Taj Mahal every year.”

The company also claimed that the total weight of the shipments it made in the last one month was equal to over 800 “adult elephants”, with mobile devices contributing to “nearly half of the traffic”. Other top categories included consumer electronics, books, home, beauty products, and shoes.

Amazon India said if all the books sold from the portal in the last one month were stacked up, the pile would be higher than Mount Everest, the world’s tallest mountain peak. The pairs of shoes sold on the e-commerce major’s portal in India during the 30 days would be enough to walk to Mars and return, “without running out of a pair of shoes”, it added.

It also said the sarees sold on Amazon.in over the last one month could “engulf the cricket pitches of all ODI (one-day international) grounds across the globe 20 times over”.

As against competitor Flipkart, which ran a one-day — “Big Billion Day” — sale ahead of Diwali, Amazon India spread its festive season sale through an entire month. Buyers were offered new deals on each day of the sale, which spread over Navratri, Durga Puja, Dussehra, Karwa Chauth, Dhanteras and Diwali — festivals that Indians consider auspicious for making new purchases. During the month, Amazon India ran three major events including “Mission to Mars” (October 4-6), “Diwali Dhamaka Week” (October 10-16), and “Dhanteras Dhamaka” (October 21).

“The response has been beyond our wildest expectations,” said Amit Agarwal, the country manager and vice-president of Amazon India. “With millions of customers making their first purchase on Amazon.in this festive season, over 50 per cent orders coming from non-metros... traffic spikes witnessed on multiple occasions throughout the month-long celebrations stand proof of the cheer and delight that our customers and sellers experienced this festive season on our platform.”

Buyers from metropolitan cities like Delhi, Mumbai, Bangalore, Hyderabad and Chennai topped consumption during the sale period, while Pune, Ahmedabad, Jaipur, Nagpur, Coimbatore and Bhubaneshwar were the top participants in the non-metro category. The website also saw increased interest from cities like Surat and Baroda in Gujarat, Patna in Bihar, and Ludhiana, Amritsar and Chandigarh in Punjab.

Flipkart, Myntra rope in Ace Turtle to bring in more global brands

Flipkart and its associate Myntra have mandated Bangalore-based e-commerce consultancy firm Ace Turtle to bring a host of global fashion brands as the two online retailers are ramping up their global fashion and accessories line to tap growing demands for such products in India.

As part of the deal, Ace Turtle will bring a raft of global labels to sell on Myntra as well as Flipkart while Ace Turtle itself will manage the standalone India e-commerce sites of those foreign brands that come on board through this alliance.


Ganesh Subramanian, chief operating officer of Myntra, said his company will refrain from operating the single-brand online stores as its focus is to create a robust multi-brand e-commerce company. "We at Myntra and Flipkart are looking at bringing a good number of international brands that are currently not available in the country,"he said. "The global brands get multi-brand platforms on Myntra and Flipkart and Ace Turtle gives opportunities for these brands to go online on their own that is equivalent of their exclusive online brand outlets. It is win-win for all of us."


Top fashion portals such as Myntra and Jabong have been trying to get more and more foreign brands and have signed exclusive arrangements with various brands.


Jabong has signed exclusive deals with brands including Dorothy Perkins, River Island and Mango among others, while Myntra has signed up labels including Guess, Desigual and Scotch & Soda.

Both the fashion portals have been also working with some western designers to create their own global standard private labels. Jabong has set up a design-cumbranding office in London and hired global talents from Asos, River Island and from Zara's parent Inditex, while Myntra has hired Italian designer Vanni Lenci to create some private brands.


Myntra and Ace Turtle have already signed up some global brands that they declined to name.

Nitin Chhabra, CEO, Ace Turtle, said deals with some more global brands are in the pipeline. His firm currently manages online store for kids' apparel seller Kapkids and is in the process of rolling out four estores for some Indian and foreign brands in the next three months.


Subramanian of Myntra said the Myntra-Flipkart combine works with a host of brands and the arrangement with Ace Turtle will give it an additional bandwidth to get more international fashion retailers online.

Indian e-commerce set to hit $ 6 billion mark in 2015

Electronic commerce in India is forecasted to reach 6 billion dollars, taking a huge jump of 70 % from previous 3.5 billion dollars.

Praveen Sengar, research director at Gartner, said digital commerce in the country is still at a nascent stage, representing less than 4 % of the total retail market, but it is one of the fastest growing e-commerce markets in the Asia-Pacific region, Enterprise Innovation reported.

Sengar added that B2C e-commerce leads the market in India, while B2B is limited to organizations that drive online channels to integrate with their partners and distributors.
The market research firm Gartner Inc. said mobile commerce is also increasing traction and marketplaces, consumer product goods, and food and beverages companies have taken notice and started investing in mobile commerce.


Currently, less than 5 % of total digital commerce happens through mobile, but Gartner believes it will help organization skip the desktop wave with increasing penetration of affordable smart devices with connectivity and a rapidly growing ecosystem to engage customers on mobile. 

E-commerce companies riding the Make-in-In​dia wave

Provide platform to connect artisans, small traders and end-consumers
Mumbai, October 24:  
India’s fledgling $3.2-billion ecommerce industry seems to have got a fillip with Prime Minister Narendra Modi’s ambitious Make-in-India campaign. The nascent yet rapidly growing sector, which has been working with small and medium enterprises and helping them sell their products online, hopes to involve more such players.
Showcasing products
As part of one such scheme, e-commerce major Flipkart has inked a pact with the Textiles Ministry to provide weavers a marketplace to showcase their products. For manufacturers, analytical data will be provided to help them acquire a customer base, and accordingly scale up supply.
Generally, small entrepreneurs tend to contribute over 20 per cent of total sales for online companies such as Fabfurnish.com and Paytm.
Several online firms have begun associating with the Prime Minister’s initiative, which focuses on manufacturing in India, and are using their technology and platforms to support local manufacturers and craftsmen.
Online marketplace ShopClues.com has also launched a campaign wherein it will showcase merchandise from India’s iconic markets, such as the ethnic weaves of Surat, silver jewellery from Jaipur, electronic goods from Nehru Place in Delhi, textiles from Tirupur and chikankari from Lucknow across various States.  Radhika Aggarwal, Co-Founder, ShopClues.com said: “We are the first e-commerce player to launch a special ‘Make in India’ initiative. Through this, we intend to turn the spotlight on numerous local manufacturers and small traders, and provide them a platform to gain a pan-India reach so that they can participate actively in the country’s retail revolution.”
The company has over 5,600 brands and over 75,000 merchants listed on its site, of which 4,600 are regional and local brands. Fashion portal FashionAndYou claims that it is seamlessly connecting small retailers with customers. Says the portal’s CEO, Aasheesh Mediratta: “E-commerce is already serving as a great platform to connect artisans, manufacturers, boutique labels and designers with the end consumer. More than two-thirds of our business comes from this segment.”
Customer base
FashionAndYou says it is also working towards enabling small manufacturers access to a wide customer base, with no investment. Meanwhile, a few companies such as Printvenue.in and Bluegape.com are riding high by selling ‘Make-in-India’ merchandise.

'E-commerce industry to touch $90 bn by 2021 in India'

The e-commerce industry is worth USD 13 billion today and is expected to touch USD 90 billion by 2021, according to eTailing India Founder Ashish Jhalani.

This 700 percent growth will change the way organisations allocate internet advertising budgets in India, eTailing India Jhalani said in a statement here today.
"E-commerce is a full-fledged industry today, from being ancillary part of the retail industry less than a few years ago. Much like Apple changed the music industry, e-commerce will not only impact retail, but also the advertising industry, Jhalani said.

Shoppers in India are increasingly using smartphones to buy products; sites such as Flipkart, Snapdeal and Shopclues have reported that that up to 35 percent of their traffic comes from the mobile phone. With the high penetration of phones in India and improving internet connectivity, e-commerce firms are expected to reach millions of new users in the coming years, he said.
In line with the growth of e-commerce, one-third of the world's advertising revenue is also expected to go digital by 2018, Jhalani said.


At a recent conference, Google India declared that Indian internet users will surpass the number in the US by the end of 2014 and around 500 million people will be online by 2018.

E-commerce companies riding the Make-in-India wave

  

Provide platform to connect artisans, small traders and end-consumers

India’s fledgling $3.2-billion ecommerce industry seems to have got a fillip with Prime Minister Narendra Modi’s ambitious Make-in-India campaign. The nascent yet rapidly growing sector, which has been working with small and medium enterprises and helping them sell their products online, hopes to involve more such players.

Showcasing products

As part of one such scheme, e-commerce major Flipkart has inked a pact with the Textiles Ministry to provide weavers a marketplace to showcase their products. For manufacturers, analytical data will be provided to help them acquire a customer base, and accordingly scale up supply.

Generally, small entrepreneurs tend to contribute over 20 per cent of total sales for online companies such as Fabfurnish.com and Paytm.

Several online firms have begun associating with the Prime Minister’s initiative, which focuses on manufacturing in India, and are using their technology and platforms to support local manufacturers and craftsmen.

Online marketplace ShopClues.com has also launched a campaign wherein it will showcase merchandise from India’s iconic markets, such as the ethnic weaves of Surat, silver jewellery from Jaipur, electronic goods from Nehru Place in Delhi, textiles from Tirupur and chikankari from Lucknow across various States.  Radhika Aggarwal, Co-Founder, ShopClues.com said: “We are the first e-commerce player to launch a special ‘Make in India’ initiative. Through this, we intend to turn the spotlight on numerous local manufacturers and small traders, and provide them a platform to gain a pan-India reach so that they can participate actively in the country’s retail revolution.”

The company has over 5,600 brands and over 75,000 merchants listed on its site, of which 4,600 are regional and local brands. Fashion portal FashionAndYou claims that it is seamlessly connecting small retailers with customers. Says the portal’s CEO, Aasheesh Mediratta: “E-commerce is already serving as a great platform to connect artisans, manufacturers, boutique labels and designers with the end consumer. More than two-thirds of our business comes from this segment.”

Customer base

FashionAndYou says it is also working towards enabling small manufacturers access to a wide customer base, with no investment. Meanwhile, a few companies such as Printvenue.in and Bluegape.com are riding high by selling ‘Make-in-India’ merchandise.

Mobile shopping set to drive e-commerce in India

The online retailers are taking the smartphones route to tap the market opportunity offered in Tier-II and Tier-III cities. Most leading players expect 90 per cent of their online shopping to come through smartphones and tablets within the next few years.

India is the second largest mobile phone market with more than 930 million customers. According to IDC data, the domestic smartphone market grew 84 per cent in the second quarter of 2014 and is expected to grow rapidly.

With the huge market potential offered by smartphones, companies such as Snapdeal, Flipkart, Myntra, among others, have already launched mobile applications.

“The growth in internet usage in India, largely on mobile devices, is the key driver for e-commerce growth. Specifically for fashion, the non-availability of the latest brands in Tier-II and Tier-III cities has led to high interest in online shopping,” said Myntra Chief Revenue Officer Prasad Kompalli.

Over the next three years, online market place Snapdeal expects 90 per cent of its order to come from people who buy through their mobile devices.

“Currently, around 60 per cent of our orders come through our mobile platform. We are hoping to receive 75 per cent of our transactions through mobile within the next one year. The same is expected to touch 90 per cent over the next three years,” said Kunal Bahl, Co-founder and CEO of Snadeal.com.

Another reason for the increase in mobile commerce is the penetration of smartphone into the rural markets. Around 45per cent of the online users in India access internet only through their mobile phones. As per industry experts, out of all shopping queries in India, 30 per cent come from mobile phones, however, presently less than 5per cent of total digital commerce happens through mobile

According to a recent report from IT research and advisory firm Gartner, the eCommerce market is expected to grow 70 per cent and touch $6 billion in 2015.

“Mobile commerce will help organisation skip the desktop wave with increasing penetration of affordable smart devices with connectivity and a rapidly growing ecosystem to engage customers on mobile,” said Praveen Sengar, research director, Gartner. 

How Amazon India deals with Fake Products

How does Amazon India deal with fake products? A couple of days ago, we were alerted about an allegedly fake Xiaomi Power Bank being sold on Amazon India, with verified buyers writing reviews indicating that the product being sold is fake. 

What’s worth noting is that this product is a part of the “Fulfilled by Amazon” program, which means that it is being warehoused with Amazon India, and delivered by them. Given that fake goods are being sold online, and brands are warning consumers against purchasing products online (details here), the fact that a product is being Fulfilled by Amazon would make a consumer more confident about purchasing it.

Ashish Jain wrote in his review: “The product I received is fake. No 20 digit code for verification and several other conclusive signs of its being a fake product. I Xiaomi India customer care and inquire about their product generally. I was told by them that every original product has 20 digit verification code which shows its originality.” 

We wrote to Amazon India, asking them three questions:
1. How does Amazon India ensure that products being sold on its marketplace by sellers are genuine? In your statement to us, you claimed with certainty that “All products sold on Amazon.in through our sellers are genuine.” So do you inspect each product shipped for whether it is genuine?
2. What recourse do buyers have if they are, as it is alleged in this case, sold products that are fake?
3. What action are you planning to take against sellers of fake products, like it is alleged in this case? Please share details of action taken in the past, in case there have been any such instances.
Given Amazon’s response to us (below), it appears that:

- Amazon doesn’t check products for authenticity prior to shipment, whether Fulfilled by Amazon or not. It does random checks via mystery shopping and for complaints about fake products, apart from processes that they’re not willing to explain (“we do not break open the seal of the products we have mechanisms in our FCs to ensure that the products are genuine”)

- It has transferred liability to the seller. It offers buyers 100% purchase protection through an A-to-Z Guarantee. It works with sellers to offer a refund or replacement with a genuine products, if the product is not Fulfilled by Amazon. In case of Fulfilled by Amazon, it offers buyers a replacement.
- Amazon delists sellers, if they’re selling fake products.

Our take: We’re not sure of how effective Amazon’s processes are in identifying complaints in reviews on the site: The first mention of the product being fake was October 6th 2014, and despite subsequent comments from buyers, it took an email from us for them to investigate the seller. Also, note that the only action against the seller that Amazon has mentioned is delisting of the seller. So unless someone complains, by chance a mystery shopper buys the product, or Amazon’s (apparently slow) processes figure things out, the buyer can keep selling? Something here needs fixing.
***

Amazon’s Response
At the outset, all sellers listing their products on Amazon.in are required to enter an agreement to list and sell only genuine products. We further commit to ensuring a 100% Purchase Protection for the shopping done on Amazon.in through our A-to-Z Guarantee.

With regard to your query on how do we check?
There are two ways sellers can list and sell products on amazon.in. There are sellers who list, pack, ship and deliver directly to customers. In these cases we don’t have the chance to review the products. But should a customer, right owners, brand owners for Trademark and IP infringements bring the complaint to our notice, we will work with the seller to ensure that he either does a full refund or sends a genuine product to the customer.

We also have in place a mystery shopping for these sellers on the platform who list, pack and ship products on their own and we scrub our platform periodically to test random sample products that are prone to counterfeit and fake complaints and take action on the sellers.
If the seller has opted to list on amazon.in and uses our Fulfillment By Amazon service, then while we do not break open the seal of the products we have mechanisms in our FCs to ensure that the products are genuine. In an unfortunate situation, should a customer contact us regarding a fake product delivered even via our FBA service, we will take back the fake product and replace it with a genuine product.

Additionally we have metrics in place to record counterfeit complaints, measure the size of the problem and mechanisms in place to control it, basis the learning of our global counterparts to further reduce the inconvenience caused to our customers.

In either case, if we determine that the seller violated the agreement to sell genuine product, we delist them from the platform. There have been several instances where sellers have been delisted.

Softbank likely to invest 650 million dollars in Snapdeal, picks up 35 per cent stake

SoftBank Corp is set to invest up to $650 million in Snapdeal in a deal that could see it become the largest shareholder with a nearly 35 per cent stake in India's second-biggest online retailer and is expected to be solemnised in the last week of October when the Japanese mobile and Internet giant's founder and CEO Masayoshi Son visits India.

Multiple sources familiar with the transaction have told ET that the latest round of fund-raising, which will leave Snapdeal with a valuation of around $2 billion, could also see Nikesh Arora, former Google board member and now vice-chairman of SoftBank, pick up a 5 per cent stake in his personal capacity and be appointed to the Indian company's board, possibly as its non-executive chairman.

"The deal is almost done. The big visit of (SoftBank founder) Son to India is in that direction," said one source, who has been directly involved in the discussions. Son, 57, who is Japan's richest man with a net worth of around $22 billion, will be in India on October 27 and 28 for a visit that could also see him call on Prime Minister Narendra Modi, the latest in a series of high-profile international business leaders to do so. At least two other sources confirmed that a deal had been all but sealed and would be announced in weeks.

An investment by SoftBank, which has already invested in a bunch of Indian startups, most notably InMobi, and has a joint venture with the Bharti Group, will at one stroke make it a serious player in India's online retail sector. It will give the Japanese firm, already the biggest investor in China's ecommerce behemoth Abibaba with a 32 per cent stake, a strong foothold in the Indian market, which like China offers phenomenal headroom for growth with its billionplus population that is fast embracing shopping on the Internet.

The investment in Snapdeal by SoftBank will be the Japanese firm's single largest to date in the country and will also rank as a big endorsement of the market potential for ecommerce in India which has lured several big investors.

In late July, a clutch of investors led by USbased Tiger Global invested $1 billion in Snapdeal's bigger rival Flipkart, valuing it at around $7 billion. Another rival, USbased e-tailing pioneer Amazon Inc, has pledged to invest $2 billion in its Indian operations.
SoftBank declined comment on the deal while a statement from Snapdeal said: "This is speculation and we don't comment on speculations". Nikesh Arora also declined to comment when asked about his purported investment and his possible chairmanship.

A fund-raising by Snapdeal, which was founded by schoolmates and friends Kunal Bahl and Rohit Bansal in 2010, has been the subject of feverish speculation for weeks now, especially ever since its rivals managed to put together a massive war chest to fund their aggressive expansion plans in India's fast-growing online retail market.

On Wednesday, Reuters News reported that Snapdeal, which already counts former Tata Group chairman Ratan Tata and Wipro Chairman Azim Premji's family investment firm Premji Invest among its shareholders, is close to raising $600-650 million from existing investors led by Soft-Bank, although ET has learnt that SoftBank and, at most, Arora will be the only investors in this round.

"The temptation is to raise as much or over $1 billion, but it's more likely that this round will only see Soft-Bank invest," said another person familiar with the discussions who also pegged the amount involved at around $650 million. Multiple sources pegged the pre-money valuation at around $1.2 billion and a postmoney valuation of around $2 billion.

Other sources said the transaction could see some of Snapdeal's early institutional backers such as Kalaari Capital, Nexus Venture Partners and Bessemer Venture Partners not participate in the latest fund-raising round and even partially exit the company.

"There are large investors keen to put capital and given the size of this fund-raise, we will not do much of a dent," said an executive at one of the venture capital firms.


Snapdeal, which began life as a discount coupons site and then metamorphosed into an online marketplace that now has more than 50,000 sellers, has an investor roster that includes eBay, Intel Capital, Temasek, BlackRock and Tybourne, most of which have bought into the company at one of its many funding rounds.

Experts said a deal with SoftBank, coming at a time when the sector has attracted negative publicity, hostility and government scrutiny, could help underline the red-hot characteristics of India's ecommerce sector. "If true, this only shows that the appetite for putting big money by foreign investors in India's ecommerce story remains very high. Global investors are betting on the market, not withstanding any negative publicity which has been moving about last couple of weeks," said Arvind Singhal, chairman of retail and advisory firm Technopak.

Snapdeal last raised money in May this year when investors such as Temasek, BlackRock Inc, Myriad, Premji Invest and Tybourne stumped up $100 million at an estimated valuation of $1 billion.
The company has raised a total of $320 million from investors in its various rounds, of which $233 million was secured this year over two rounds. Industry experts expect SoftBank, which was one of the earliest backers of Alibaba having funded its founder Jack Ma some 15 years ago, to get the Chinese firm and Snapdeal to possibly collaborate, share best practices and explore synergies. SoftBank, which was also an early investor in Yahoo, has a trophy investment in Alibaba. Its stake in Alibaba was worth more than $70 billion when the company listed in New York last month.

Right back at you! Flipkart buys Diwali dhamaka domain to bust Amazon’s day

This week has seen it all. First Flipkart starting the proceedings for the week by dishing out the Big Billion Day sale, making big moolah, getting trolled by competitors and facing barrage from upset buyers. Round two of this episode, sees Amazon facing backlash from Flipkart which hardly comes as a surprise to anyone.

Anyone managing to sell products with hefty discounts (ranging up to 50% in some cases) are sure to attract negative and positive criticism. Making things a bit more interesting, Snapdeal and Amazon not-so-quietly managed to make a name for themselves amidst the confusion that was a constant feature of the Big Billion day sale on October 6.

Amazon went to the extent of buying the bigbillionday.in to troll Flipkart's misery in open sight and now, we have Flipkart paying back the favour to the US-based retailer with its purchase of diwalidhamaka.co.in domain that directly takes you to the Flipkart homepage. On the hindsight, Flipkart's deals were much more appealing to consumers with regards to their pricing, in comparison to the deals that were being offered by Amazon today.

At the end of the day, it's hard to comment on who came out as big winners but nevertheless, Flipkart managed to open up sales avenues for the e-commerce fraternity that could become a common sight in the near future. There are lessons to be learnt ( a lot of them) and now we'll have to wait for the next move to happen from these respective online shopping sites.

Update: Turns out, diwalidhamaka.co.in is now redirecting to Amazon India site and Flipkart has no affiliation to the site. The domain is actually owned by person named Anjali from some part of the country (details protected). The domain play was some kind of prank played, keeping the whole e-commerce battle in relevance

Amazon in talks to acquire Jabong; move a counter to Flipkart's Myntra buy?

Amazon is in preliminary talks to buy Jabong, part of the US-based online retailer's plan to bolster its presence selling fashion products, four people aware of the discussions told ET.

Jabong is one of the fashion portals that Amazon is interested in acquiring, and Jabong has other suitors, the sources said, cautioning that a deal is not imminent. A regulatory filing by Rocket Internet, which incubated Jabong, put the value of the fashion portal at 388 million euros, or $500 million (Rs 3,000 crore).

A person with direct knowledge of negotiations said that Jabong is holding out for much more at least $700 million. Amazon said it does "not comment on anything we may or may not do in the future". Jabong did not reply to emailed questions.

Deal to be complicated

"After Myntra got acquired by Flipkart, Jabong is the ideal candidate," said a person who is working closely with Amazon on the negotiation. A big chunk of the $2 billion that Amazon founder Jeff Bezos has promised to invest in India is meant for acquisitions, this person said. Amazon is battling leader Flipkart for dominance in one of the world's fastest-growing markets for online retail, expected to reach Rs 50,000 crore by 2016 according to consultancy Crisil.

Last month, Bezos told ET that the value of goods sold by Amazon India in a year had topped $1 billion and that fashion was one of the "exciting frontiers" for the Seattlebased company. Jabong, which counts Germany's Rocket Internet and Swedish investment firm Kinnevik among its investors, is the secondlargest fashion portal in India after Myntra, which was acquired by Flipkart in May for an estimated value of $370 million.

According to industry estimates, the Flipkart-Myntra combine has a market share of over 50% in fashion retail and Jabong 25%. Fashionara and Limeroad are the other significant fashion portals. ET has not been able to establish if they are in talks with Amazon. For Amazon, getting it right in India is vital to its fortunes, especially because its presence in China is negligible where Alibaba dominates.

And the key to getting it right in India lies in fashion, the fastest-growing category for online retailers. According to retail consultancy Technopak, fashion accounts for 25% of the online retail industry's sales. To boot, operating margins in fashion are around 35% in an industry where gross margins are in negative territory.

Amazon India started offering fashion products on its marketplace in May, and an acquisition offers a swift route to scaling up. In the United States, Amazon chose a similar strategy to improve its fashion credentials by buying Zappos in 2009. Shares of UK-based clothing portal Asos have been on the rise after rumours of an acquisition by Amazon.

A deal with Jabong, while it may be desirable, will be complicated, said a source who is directly involved in the talks. The complication arises from the fact that in September, investors Rocket and Kinnevik began the process of merging five of their international fashion ecommerce companies, including Jabong, into a single global entity.

Big billion question: Who'll foot the bill for discounts?

Flipkart, the country's largest online retailer, has been offering deep discounts across categories, stretching up to 80%, as it looks to widen its lead over rivals Snapdeal and Amazon.

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Flipkart has been offering deep discounts, even up to 80%, across categories as it looks to widen its lead over rivals Snapdeal and Amazon

NEW DELHI/BANGALORE/KOLKATA: Flipkart, the merchants on its platform and manufacturers are sharing the tab for the biggest sale-day yet in Indian online retail. The Bangalore-based company sold goods worth $100 million on Monday and the deep discounts will mean that its margins are going to be negative, but it is counting on some help from its partners while it stays focussed on boosting its topline.

Flipkart, the country's largest online retailer, has been offering deep discounts across categories, stretching up to 80%, as it looks to widen its lead over rivals Snapdeal and Amazon.

The company has raised a total of $1.2 billion this year, equipping it with a cash hoard that it is using to further its goal of increasing market share and growing the size of the market.

Sachin Bansal, the cofounder and CEO, said Flipkart had been working on the offers with brands and sellers for the past few months. The deals it strikes vary across categories and merchants, with no standard formula. In some cases, sellers have picked up the full tab. For example, Pepper Closet, a merchant with Flipkart for about a month, had differential discounts depending on the product. For apparel, Pepper Closet was keen on clearing its surplus inventory and therefore picked up the bill for a 50% discount, business head Kanwar Singh said. On the other hand, for kitchen and bar utility items, Flipkart is bearing the cost of the 20-40% discount.

Not all sellers have come on board to share the tab with the online retailer. A senior executive of a leading consumer electronics retail chain said the discounts are driven entirely by the marketplaces. "We as a seller did not even know that few of our listed products would get discounted for these flash sales," he said, requesting anonymity.

Another seller said the company had listed its models at the existing market price in the offline trade. "But we were shocked to see that the product has been sold at a discount which is actually lower than our buying price. But we have been assured we will get the full amount at which we have listed it," he said.

Since online retail is a nascent industry, companies are not too perturbed by negative margins, and investors are backing the game plan of acquiring customers at the expense of the bottomline. Even Amazon, which posted revenue of $75 billion last year, has red ink on its books.

"It's a tactical call taken by Flipkart, and they have certainly done the math. These (discounts) are built into their margin model," said Ankur Bisen, vice president at Technopak.

Flipkart’s The Big Billion Day – a pricing SCAM?

Flipkart recently announced The Big Billion Day sale on 6th October 2014 as an equivalent to the Black Friday sale in the USA. Lots of people are excited about it. They claim to give 30%-90% discounts on most products. They claim some of the categories of products on sale are clothing, perfumes, phones, laptops, etc. So I decided to check out whether these claims of discount is real or not. Thanks to “Compare Hatke” chrome extension from BuyHatke, we can understand how the prices were in the last few days and whether they have suddenly increased or not! I’m taking totally unrelated items to show the price comparison here..

Swayam Doublesheet which has been consistent at around Rs.1124 for over a month now, has suddenly shot up to Rs.1500. Tomorrow they might show a 30% discount and reduce it to original price!

Van Heusen Slim Fit Men’s trousers which were hovering between Rs.1200 to Rs.1700 in the last 1 month have suddenly shot up to Rs.2200 in just 1 day! Cool technique to show people a huge Rs.500 discount on their favorite trousers on 6th October??!!

One of the best selling perfumes, Calvin Klein Be Eau de Toilette, had its price hovering around Rs.1650 for the last 3 months, suddenly it has shot up by around Rs.300 and is now available at Rs.1920.. Even Compare Hatke chrome extension which doesn’t know about this pseudo sale is suggesting only around 40% of the time to buy this product at the current price as they know prices might come down soon!

I have not even scratched the surface of this issue as I’m just looking at the price fluctuations on Flipkart site itself. There have been many instances (in fact in the above screenshots itself) where it was mentioned by Compare Hatke that cheaper products are available on Ebay, Amazon and well Flipkart itself before they discontinued older priced products! But the shocking fact was the above image of a Soch sari which is exorbitantly priced on Flipkart site when the same can be bought for less than half the price on Soch website itself. What kind of discounts are you talking about then, Flipkart?

Like they say, being well informed is to be empowered. So don’t fall for the marketing trap and ensure that you make the right decision while buying the products, be it The Billion Day or Diwali Dhamaka Week!

The Big Sale Day - Monday

While Flipkart claims to have made $10mn (INR 600 crores) in #BillionDay sale, Snapdeal claims that the company has witnessed sales of over a crore rupees a minute, with lakhs of products being sold in a single day.

The company hasn’t shared any number on overall revenue, but over a million Snapdeal apps were downloaded in one day. At a crore per minute, was it close to Flipkart’s 600 crores (assuming 10 hours)?

You have to give in to Snapdeal for a creative marketing campaign and then going big on Twitter/social media – they didn’t spend so much on the marketing campaign (Flipkart did a great job of blocking all media including Radio during the day).

Flipkart Vs. Snapdeal – The Marketing War

Amazon to sell packaged food and beverages in India

Online retailer Amazon.com Inc plans to sell packaged food and beverages in India from mid-October, the Economic Times reported, citing a person familiar with the matter.Amazon, which has already started accepting bookings for Coca-Cola Zero - the beverage's low-calorie variant, will eventually start selling fresh food in India, the ET said. 
Amazon is already in talks with brands like Kelloggs and Cornitos, the paper said.
Amazon India did not immediately respond to a request for comment.
Amazon, which opened its Indian website last June, has drawn up the battle lines by slashing prices, launching same-day delivery, adding new product categories and embarking on a high-voltage advertisement campaign.
In July, Amazon said it will invest a further $2 billion in India after the country's largest e-tailer Flipkart attracted $1 billion of fresh funds, raising the stakes in a nascent but fast-growing e-commerce sector.

Jeff Bezos reminds Flipkart he is the boss

Image: Amazon founder and CEO Jeff Bezos poses as he stands on a supply truck during a photo opportunity at the premises of a shopping mall in Bangalore. Photograph: Reuters

 

Amazon pitches discount strategy against India rival's; festive sales war hots up as eBay jumps in, too.

A day after Jeff Bezos, the legendary founder and CEO of Amazon, said in media interviews that his company did not pay any attention to competition and that it preferred to focus on improving customer experience, the American online major’s response to Indian rival Flipkart’s marketing blitz was out in the open. 

Prominent print advertisements on Monday pitched Amazon’s discount strategy against Flipkart’s. 

The Amazon ad said, why have a “one-day dhamaka’’ (sensation) when sales can happen everyday. 

Flipkart billboards all across Bangalore have been screaming over the last few days, “The big billion day — greatest sale ever’’ on October 6, in the largest festival campaign by the company.

The Flipkart hoardings, many of them on the highway road from the airport to the city, were being interpreted as a way to tell Bezos, in India for a week, that Amazon was in for big competition in Indian e-commerce. 

Image: Amazon founder and CEO Jeff Bezos with Amit Agarwal, Country Manager, India at Bangalore. Photograph: Amazon

Bezos said on Sunday that Amazon did not believe in such distractions and he would like to put heads down and concentrate on customers. “Rivals don’t get us revenues, customers do,’’ the man who’s known to be a combination of a micro-manager and a happy-go-lucky boss told Business Standard on Sunday evening in an interview, while laughing and offering witty one-liners.

When asked whether he had noticed the big billboards on Flipkart’s Diwali sales, Bezos said ‘’no’’, dismissing the talk on competition as "a bunch of noise’’. 

He added, "It’s a noisy world we are living in’’, but distractions must be kept aside to perform well. 

"That has been our approach so far, and I'm not going to change that." On whether he had ever thought Flipkart’s Sachin Bansal and Binny Bansal, who had earlier worked at Amazon, would one day give him competition, Bezos said, "I don’t think much about these things.’’

But competition matters. Apart from the prominent ads in the papers today, suggesting Amazon’s sales are more lasting and widespread than Flipkart’s one-day bonanza on October 6, Bezos in fact took on his competition within hours of landing in India. 

In a photo-shoot organised in Bangalore on Sunday morning, the Amazon boss dressed up in a sherwani and posed to the delight of the shutterbugs, quite similar to what Virgin group’s Richard Branson has done many times, to reiterate the India identity of Amazon. He also symbolically carried a $2-billion cheque at the shoot. 

Amazon had recently announced a $2-billion investment in India, just a day after Flipkart held a conference to talk about the $1 billion it had raised.

Though Flipkart is not talking about what the "big billion’’ meant in its campaign, a source said the reference was to the population of India and that the upcoming sale would have something for everybody. 

 

Mukesh Bansal, CEO of Myntra and a top strategist for Flipkart now, told Business Standard, this would be the biggest sale India had seen. Myntra was recently acquired by Flipkart. And the inspiration for the Flipkart sale seems to be China’s Alibaba, which is in the news for its $25-billion IPO. "It’s more like the Single’s Day sales at Alibaba, where you gift yourself,’’ said a source. 

Last year, Alibaba did estimated sales worth $5 billion on the Single’s Day. 

Image: (L-R) Sachin Bansal, Mukesh Bansal and Binny Bansal

Flipkart co-founder and CEO Sachin Bansal had last week quipped, in reply to media questions on Bezos’ visit, that Amazon seemed to be  worried about the whole place and that the American  company was putting all efforts here as India was the next frontier in e-commerce after China. 

When Bezos was asked if he indeed had come to India in panic, he refrained from any direct attack, saying, "I can only say I’m super happy to be here.’’ The following day, Amazon told the world, through its ads, that it was more relevant to offer discounts on a daily basis than choosing a specific day for it. 

Neon boards announcing Amazon's festival sale have already appeared in Bangalore.

“Introducing online shopping dhamaka... The biggest festive celebration begins on amazon.in,” the boards say. 

Meanwhile, another US e-commerce player has jumped into the fray to offer festival discounts. eBay has announced a 'Diwali Fest’, which will be live from September 25 to October 23.