Sunday 30 November 2014

Woodland stops shipments to Amazon, Flipkart as discounts pinch offline sales

Woodland, the outdoors and lifestyle (footwear, apparel and accessories) brand, has stopped shipments to e-marketplace operators including Amazon and Flipkart.
It is understood that pricing disparity created by the e-commerce platforms with discounts and offers has affected Woodland's brick and mortar store sales.
Confirming the development, Harkirat Singh, managing director, Woodland, said the company has been selling to the e-marketplace operators and everything was going good.
"But all of a sudden, in the last two-three months we saw e-marketplace operators giving a lot of discounts and offers because of competition between them. This has created problems and hence we have stopped their shipments," said Singh, adding all orders (from e-marketplace operators) have been put on hold since over a month now.

While Amazon, Flipkart and Snapdeal did not respond to dna queries, a Jabong spokesperson said they aren't facing any such shipment issues from Woodland.
dna has learnt that executives from Amazon and Flipkart are in talks with Woodland management to sort out the matter and restart shipments.
Flipkart executives have met Woodland management a week ago while Amazon officials held meetings earlier this week.

Singh said that talks are currently on with the e-retailers and that Woodland has sought a written commitment from Amazon and Flipkart on the discounting issue.
"We are hoping to sort out this matter in the coming months," said Singh.
On its part, to ensure the discounts and offers don't impact Woodland's core business, that is, offline sales, the management is in the process of introducing new designs and collections that will be sold exclusively through the online channels. "This will help create clear differentiation for our offerings on the online and offline channels," he said.
Woodland also sells from its own website. Growing at 25-30% annually, the company is expecting to close the current fiscal with overall revenues of Rs 1,300 crore.
"Sales from offline stores will continue to contribute around 90% to overall revenues," said Singh, adding rest 10% come from online sales.

The company currently retails its merchandise through 500 stores in addition to selling merchandise (footwear) from multi-brand outlets. Woodland expects to open 60-70 new stores annually wherein a store measuring 2,000 square feet and above will call for an investment of over Rs 2 crore, while the smaller stores will cost less depending on the size. The company plans to invest Rs 30-40 crore in expanding manufacturing capacity.

Amazon to let desi sellers go global

Amazon is set to launch its first cross-border trade, or CBT, service here, which will enable small sellers in India to reach out to global customers, according to people familiar with the plans. The initiative could well become one of the most significant trump cards for the world's largest online merchant as Alibaba flexes its financial muscle after the initial public offering.

For instance, through Amazon's FBA (Fulfillment By Amazon) programme in the US, sellers sell their products in international markets by paying a small fee. In 2013, an estimated $4.4 billion of Amazon's $74.5 billion in sales came from its FBA sellers, according to a Citi report. Now, Jeff Bezos-led e-tailer is trying to get more international sellers under its umbrella in other markets.

Asked about its impending initiative, an Amazon India spokesperson said: "We are committed to enable Indian SMEs to grow profitably in the new digital age and we remain focused on exploring opportunities to provide them fast, easy and convenient access to both domestic as well as global markets."

"Even Alibaba, which allows Indian sellers to sell their products in countries like China, has tasted huge success through this model," says Arvind Singhal, founder and chairman of retail consultancy firm Technopak. "Around 80-90% of Alibaba's revenues come from charging fees on these transactions, while only 10% comes from the e-tailer selling these products itself. Similarly, through a CBT programme, Amazon will be able to generate significant revenues by charging fees on each transaction from sellers here."

At present, while buyers in India can buy products from international sellers on Amazon India, sellers cannot sell their products in other countries through its website. EBay India, on the other hand, allows sellers to sell their products in around 201 countries through its CBT program. Out of the 50,000 sellers on eBay India, 15,000 sell items like gems, jewellery, ethnic clothing and home decor internationally.

According to sources, Amazon India has poached executives from rival companies, who are experts on CBT. Recent job listings by Amazon India on LinkedIn suggest the e-tailer is looking to hire people for its newly formed global selling team that will help grow its seller business around the world, with the India team focusing on helping Indian sellers list on other Amazon global marketplaces.

Amazon has poached executives from rival companies, who are experts on cross-border trade services. Ebay and Alibaba provide sellers access to overseas markets.

E-commerce on a roll, draws Rs 20,000-crore funding so far this year

India's booming e-commerce story is prompting investors, both local and international, to park crores of rupees in the sector, with no signs of abating in the next few years. Indian e-tailers are still at a nascent stage when compared to their counterparts in China and the US and that is perhaps propelling investors to pump funds into the sector.

According to investment advisory firm Grant Thornton, the year 2014 has seen nearly Rs 20,000 crore ($3,300 million) in mergers and acquisitions (M&A) and private equity (PE)/venture capital (VC) activity so far in e-commerce, four times more than the deals done in the same period last year. The Jan-Oct period in 2013 saw Rs 5,448 crore ($908 million) in investment activity.

This year's investment activity also surpasses last year's full-year period by over three times. For Jan-Dec 2013, total M&A and PE/VC activity stood at Rs 6,126 crore ( $1,021 million).

If this is not enough, M&A and PE/VC activity in e-commerce today is nearing another investor favourite, consumer and retail. Year-to-date investment activity for  consumer and retail  in 2014, according to Grant Thornton, stood at Rs 26,796 crore ($4,466 million). For the full year 2013, total investment activity in consumer and retail stood at Rs 25,638 crore ($4,273 million). Clearly, e-commerce is closing the gap.

While investment activity jumped three to four times this year over last year for e-commerce, it has shown marginal growth (five per cent) in the case of consumer and retail. "My sense is the boom we are seeing in e-commerce will continue for the next two to three years," said Harish HV, partner, Grant Thornton.

The Jeff-Bezos-owned Amazon is close to making its first acquisition in India, of Rocket-Internet-backed in a deal worth Rs 6,000-7,000 crore ($1-1.2 billion). If the deal does go through, it will surpass Flipkart's acquisition of Myntra in May 2014 for Rs 1,800-2,000 crore.

"These valuations defy logic.

E-commerce companies talk about valuations of $10-15 billion, which even some of the big corporates do not have. I am at a loss to explain anything about this," said Arvind Singhal, chairman, Technopak Advisors.

Also, the smaller players addressing niche segments are poised for staggering growth. The latest report by Google predicts niche e-commerce portals will report healthier growth than e-tailers in the general space.

"Smaller players don't have the big funding the poster boys of the industry do and that is why these niche companies come up with great products and services. In the coming years, we will see more such niche players growing at a staggering rate," said Mohit Bahl, partner, transaction services, KPMG India.

This was vouched for by Tata Sons chairman emeritus Ratan Tata, who invested in online jewellery retailer Bluestone and furniture seller Urban Ladder recently. Tata has put his own money into Snapdeal as well and his investments in e-commerce are estimated to be at least Rs 10 crore.

"There is an untapped potential for internet access and also goods and services which are not accessible in tier-two and tier-three cities. I would expect valuations in the short term to go up, as it is the demand and supply mismatch that is pushing up (valuation) levels. There is more demand for services and less supply of e-commerce companies," said Sushanto Mitra, founder, Lead Angels.

Navroz Mahudawala, founder and managing director, Candle Partners, a Mumbai-based investment advisory firm, said, "The current e-commerce funding wave is very similar to the enthusiasm one witnessed in the Indian retail sector between 2002 and 2007. Several retail companies were funded by PEs at exorbitant valuations and profitability even at that point in time was a casualty. The same can be seen now, except that if valuations in retail back then were driven by the ability to build square feet and future revenues, the buzzword now is gross merchandise value."

How long is this trend expected to last? "The wave would continue till funding continues in 'leaders' such as Alibaba. Any reversal there would signal the drying of funding in markets like India," said Mahudawala. Till then, e-commerce will ride the investment wave.

Online grocers come up trumps in India's e-commerce boom

Put off by snarled city traffic and a shortage of parking, more Indians are shopping for groceries online, helping e-tailers like and turn in profits while supermarkets are struggling.
The online grocers benefit from low overheads, as they store goods in warehouses outside big cities where commercial rents are sky-high. Some like can also charge more for certain items than traditional supermarkets, which means even more profits in a country where all food retailers enjoy margins as high as 20 percent on rice and other staples. director Ganesh Krishnan said the company would turn a profit this year, just three years after it was set up. By contrast, analysts say supermarkets like More, owned by the Aditya Birla Group, and Reliance Industries Ltd's Reliance Fresh are struggling to attract enough customers to make a profit as they compete with the small neighbourhood stores where most people buy food. Both conglomerates declined to give figures for their supermarket operations.

"You can go shop at a Walmart or Tesco in the U.S. and U.K. and they have parking. You can take the shopping carts right up to your car, so it's smooth," Krishnan told Reuters. "In India, none of this exists."
Densely populated cities have proved attractive for web grocers in Asia. Analysts estimate online sales of fresh produce in China could quadruple to 40 billion yuan ($6.5 billion) in five years from about 11.5 billion yuan in 2013.

Overall, e-commerce is rapidly growing in India, fuelled by an expanding middle class and better web access, and the potential for online grocers in particular is huge.
Most food shopping in India is done in cramped groceries that offer limited variety. Urbanites also frequent supermarkets, but e-grocers are becoming more popular as more shoppers are willing to pay extra for the convenience of not dealing with traffic and parking problems.
Sales of food and groceries currently account for more than two-thirds of all retail sales, consultants Technopak say, and the value of these sales is expected to nearly double to $686 billion by 2020.
Investors are taking note. In September, Helion Ventures and Zodius Capital led a funding round that raised 2 billion rupees ($32.6 million) for Rival Localbanya is also looking to raise a similar amount to expand nationwide, its co-founder Amit Bhartiya said.
By running their own delivery networks, and warehousing outside the city, e-grocers are better able to control costs: analysts say the operating costs of traditional supermarkets are higher when you factor in rent and utility bills, for example., which started out in December 2011, currently has about 220,000 active customers Mumbai, Bangalore and Hyderabad. It plans to launch in Pune, Delhi and Chennai in the next three months, highlighting just how quickly online grocers can grow compared to traditional supermarket chains.
"Where brick and mortar grocery in India fails to muster scale, online can do it very, very quickly just by the sheer opportunity of reaching a number of people with much less investment," said Harminder Sahni, managing director of consultants Wazir Advisors.

E-commerce players gearing up for Google's online shopping festival

Many online sites are gearing up for a surge in business with a fortnight of discounts during the ongoing Google-led online shopping festival followed by Black Friday and Cyber Monday next week. The affiliate sites are creating 'howto' guides for best deals in different categories, anticipating a four-fold rise in traffic and a similar jump in revenue.

Sites that offer price comparisons, couponing and best deals may come up on top by creating 'how-to' guides during the GOSF (Google Online Shopping Festival). Smaller e-commerce merchants also gain from the rising traffic, given that they offer niche products and comparable discounts.
Typically, GOSF aims to tap firsttime shoppers, which constituted a large chunk — nearly 30% — during the 2013 festival. "This year, we have five times the number of merchants against when we started GOSF in 2012. Though there are 250 million internet users, only 35 to 40 million users shop online. Our idea is to get more and more first-time shoppers to experience this," says Nitin Bawankule, industry director for e-commerce, local and classifieds at Google India.
"While Black Friday and Cyber Monday are not Indian phenomenon, we have created a GOSF section specifically on Desidime to help shoppers. Diwali and GOSF make up nearly 30% of our annual revenues and last year the traffic went up by 120% during GOSF. We will be adding 20 additional servers this year in anticipation of the volumes," says Mehul Jobanputra, CEO and co-founder of Desidime.
Given that 14 days of pre-GOSF which would showcase 14 different e-commerce players offering their best deals, affiliates will turn a channel for product discovery and collating updated deals. "Price wars are likely on key days and it is a big question whether the featured e-commerce players offer their best deals on the day they are featured or on days when their competitors are featured,leading to never-seenbefore discounts.
Given the technical interruptions last year and earlier this year for the shopping festivals, there is a better amount of preparedness," says Swati Bhargava, co-founder of cashback and coupon site Cash-Karo, which is expecting four times the traffic and three times the revenues during the GOSF days. The smaller e-commerce players reach out to a larger audience, expecting to benefit from the rising traffic. Last year, smaller players registered twice the traffic during GOSF.
"GOSF is a good platform for the smaller players who do not have the marketing muscle. The listing will be random and will rotate so as not to have any specific merchant's name on top. However, greater the number of categories the merchant offers, better the presence," says Bawankule.
Many smaller e-commerce players register a repeat customer base of up to 50% due to the exposure during the event. "During GOSF, there is a bump which remains. Many of our partners reported a 50% rise in repeat customers' post-GOSF and the festival benefits everyone in the ecosystem. The overall sales go up nearly three times.
The idea to launch a microsite is to help people search for best deals which are catalogued based on the brand or categories," says Sameer Parwani, CEO and founder of Coupondunia. The affiliate site started its dedicated microsite for GOSF on Monday. Incorporated in 2010, the couponing website was acquired by Times Internet earlier this year.

Digital media network Komli Media, which ran a series of deals and coupons ahead of the GOSF pre-party between November 17 and November 23, indicated better results for smaller players, given that the top e-commerce players will be holding on to their deals in anticipation of GOSF.
"The increase in transactions for the bigger players has gone up by 20 to 30% while smaller e-tailers have seen a jump of nearly four times the usual transactions over a period of two days," says Sandeep Balani, director, publisher development at Komli Media, which incentivised affiliates as part of its offer.

India Post collects over Rs 280cr via CoD for e-commerce firms

India Post collects over Rs 280cr via CoD for e-commerce firms
New Delhi: Within a year of joining the e-commerce bandwagon as a distribution channel, government entity India Post has transacted business worth Rs 280 crore in the Cash-on-Delivery (CoD) segment alone for firms like Flipkart, Snapdeal and Amazon.

While the amount of revenue generated for itself could not be ascertained, government officials said India Post is very keen on developing its e-commerce related services as a major revenue model going ahead.

"India Post collected over Rs 280 crore from consumers and gave it to e-commerce firms, since CoD facility was started in December 2013. The department with its huge network can serve as the best agency for not just delivering products, but also collecting money," a government official said.

However, this is a small chunk of the overall market size for e-commerce in India, which runs into billions of dollars already and is growing at a fast pace every year.

CoD has emerged as one of the most sought after services for e-commerce entities and 50-75 percent of orders are placed with various online retailers with this payment option, while the remaining opt for credit card or bank payments.

In India, customers tend to prefer CoD as the online payment modes are yet to catch up in many parts of the country while many people are not comfortable with advance payments for products purchased online.

India Post's cash handling services like core banking solutions, money transfer and a robust account system can further help e-commerce firms in collecting cash from users in urban as well as rural areas, the official said.

India Post has about 1.55 lakh post offices, making it the world's largest postal network. On an average, a post office serves 21.21 sq km area and about 7,175 people.

Another official said various e-commerce firms have been using India Posts CoD facility since it was introduced. Firms like Flipkart, Snapdeal, Amazon, Shopclues, Naaptol, Telebrands and Homeshop18 are some of them.

India Post has set up booking counters in the premises of some customers like Amazon and Naaptol, while for Snapdeal it is exploring setting up of e-commerce booking kiosks in post office locations.

Communications and IT Minister Ravi Shankar Prasad has also said previously that India Post is best suited to offer delivery services to e-commerce players, given its wide reach across rural, urban and semi-urban areas.

The Minister has directed officials from the Department of Posts to focus on opportunities in e-commerce sector.

India Post is also ramping up its infrastructure to grab a major chunk of the distribution, delivery or logistics, which will touch about USD 9 billion by 2021.

According to market experts, e-commerce business in India was about USD 6 billion in value in 2012 and is expected to touch USD 76 billion by 2021 of which distribution, delivery and logistics constitutes around 12 percent.

Thursday 27 November 2014

Apple cuts online price of iPhone 5S to clear stocks; ties up with Amazon, Flipkart and Snapdeal

Just ahead of the launch of the next iPhone,Apple is offering a price cut on its outgoing flagship device. It has tied up with online retailers Amazon, Flipkart andSnapdeal to offer discounts on the iPhone 5S in a move that's sharply contrarian to the strategy of brands such asSamsung and Sony that are fighting to ensure price parity between online and brickand-mortar stores.
Apple is offering an extra Rs 1,500-2,000 in margins to online retailers to liquidate 5S stocks ahead of the new phone launch. This, combined with the usual discounting by e-commerce sites, has made the 5S about Rs 8,000 cheaper online than in brick-and-mortar stores.
That's probably the widest price gap currently for any smartphone or electronic gadget, according to three of Apple's top trade partners.
Tried & Tested Strategy
The 16GB iPhone 5S is available online at Rs 38,000-39,000 while it costs Rs 46,000-47,000 in stores. The idea is to clear out stocks of the 5S, which will get a substantial downward price revision when the new flagship iPhone model is launched, trade sources said. It's a strategy Apple routinely adopts in the US and Europe.
Apple has scheduled a global event on September 9 in Silicon Valley that's widely expected to be the unveiling of a new largescreen iPhone and smart watch concept. Emails sent to Apple, Amazon, Flipkart and Snapdeal did not elicit any response as of press time. "Apple's sudden focus on e-commerce sites has become a nightmare for us," said the chief executive officer of a leading cellphone retail chain, requesting anonymity. "We have even told them that if the situation continues, we may stop picking up stocks of iPhones since our sales have suddenly taken a hit."
While big retail chains have taken up the issue with Apple and have threatened to stop stocking its products, some have negotiated special consumer offers on the 5S, such as a free case with each purchase. Apple follows a uniform pricing strategy around the world, hence it cannot reduce prices across all sales channels in the market. A top trade executive said Apple's strategy was in stark contrast with what other consumer electronics and smartphone makers are currently trying to achieve - a level-playing field between offline and online trade. "We have to see whether Apple is doing this discounting as a regular phenomenon before taking a decision on the way ahead," the person said.
Explaining the large online-offline gap, another of the company's trade partners said, "Apple is offering 3-4% extra margin to ecommerce to be passed on to consumers as discount, apart from usual schemes such as 1-2% more margin if sales target is reached.
The e-commerce firms are further doing their own discounting which has made the price difference this wide." Apple offers an 8-12% retail margin on iPhones, according to those in the trade. As per estimates, modern retail and the exclusive Apple stores contribute around 20% each to iPhone sales in India, while ecommerce and general trade accounts for the remaining 60%.

Alibaba founder Jack Ma in India; to meet Snapdeal’s Kunal Bahl

Alibaba founder Jack Ma is on a visit to India, his first to the country after a record-shattering initial share sale saw the ecommerce company raise $25 billion (Rs 1.5 lakh crore) in September. Ma, who is China's wealthiest man with a net worth of nearly $30 billion, is in India as part of a business delegation and has met several Indian entrepreneurs, according to those familiar with the details of his visit.
Sources said that in the list of entrepreneurs meeting Ma is Snapdeal's Kunal Bahl. SoftBank is an investor in both Alibaba and Snapdeal and ET reported in September that the Chinese firm is considering an investment in the Indian e-tailer to enter the country.
Alibaba did not reply to questions about Ma's meetings. However, spokeswoman Pamela Munoz said, "Jack is in India with a business delegation and, together, will be participating in a number of meetings with local businesses."
Ma is the latest in a long line of global business leaders who have traveled to India after the election of Narendra Modi as prime minister. Facebook's Mark Zuckerberg, Microsoft's Satya Nadella, Amazon's Jeff Bezos, Google's Sundar Pichai, Canadian investor Prem Watsa and SoftBank's Masayoshi Son have all visited since May, an indication of the increasing attractiveness of India as an investment destination. Son, who has vowed to invest $10 billion in India, has put $627 million into Snapdeal, led a $210-million round of funding in taxi aggregator Olacabs and invested an estimated $70 million in realty portal
Alibaba, which is listed on the New York Stock Exchange and has a market value of nearly $280 billion, is being seen as a rival to Amazon in the US and around the world. While Amazon is rapidly scaling up its presence in India and vying with Flipkart and Snapdeal for market leadership, Alibaba has not yet set foot in what is one of the world's largest markets for online retail.
Ma, a former English teacher who keeps a very low profile, was last in India in 2009 just ahead of the general election that returned the UPA to power. This time, he is part of a Chinese business delegation from his home province Zhejiang.

Tuesday 25 November 2014

India Post ramps up operations to handle ecommerce services

 India Post is re-inventing itself to cater to the burgeoningeCommerce services industry in the country by setting up data centres, arming the postman with hand-held devices and implementing softwares for facilities like cash on delivery (CoD). 

The modernisation project is being supervised by an Inter Ministerial Steering Committee, which includes officials fromFinance Ministry, Department of Electronics and Information Technology and other stakeholders, according to sources. 

The aim is to cash in on the growing demand for delivery and logistics in the eCommerce space. 

India Post, with its huge network and experience in handling mail and parcels, is the best agency to provide pan-India delivery service, sources said. 

According to market analysts, India's e-tailing space is estimated to be worth over USD 6 billion with delivery and logistics comprising around 10-12 per cent. 

India Post has about 1.55 lakh post offices, making it the world's largest postal network. On an average, a post office serves 21.21 sq km area and about 7,175 people. 

The project is also looking at providing standard web- based integration system and an end-to-end tracking service for the eCommerce firms. This will also enable the Department to undertake large consignments of goods and services. 

India Post will also provide hand-held devices to about 15,000 postmen and other hardware in mail offices, with procurement expected to be completed by December 2015.

These devices would enable connectivity in rural areas, they said. 

"Besides, softwares are being created for real time delivery data updation, money remittance systems for Cash on Delivery (CoD)/electronic generation and settlement of bills and interface with tracking systems of Railways and Airlines for complete visibility," a source said. 

India Post will also have multiple access channels like POS, portal, mobile site and call centre for information, complaint management and article booking. 

"To roll out these services, the modernisation project has various initiatives to augment capacities like setting up of data and recovery centres, softwares for money remittances services, etc," the source added. 

A primary data centre has already been operationalised in Mumbai and work is on for a data recovery centre (to be set up in Mysore by December this year). 

"Besides, software solutions for mail operations, money remittances (CoD), retail business, inventory management, Finance & Accounts is being worked on and this is likely to be rolled out by December next year," sources said. 

Communications and IT Minister Ravi Shankar Prasad had said India Post with its rural, urban and semi-urban reach was best-suited to offer delivery services to e-commerce players. 

Already, the West Bengal circle of the Postal Department has approached various industrial bodies with a plan to create an online marketplace for local traders.

Flipkart partners SMEcorner to help finance small sellers

India’s leading e-commerce marketplace Flipkart has partnered with SMEcorner, an online financing platform for SMEs (small and medium enterprises), to assist sellers on its platform avail loans from banks and NBFCs (non banking financial companies) without the hassle of dealing with middlemen.
The partnership, inked last week, has already attracted a large number of active sellers from Flipkart to apply for loans on “There are many websites that offer personal/retail loans, mortgages, credit cards, etc, but none that offer SMEs an online platform to apply to banks/NBFCs for loans. Given the large number of SME sellers on e-commerce websites, we launched,aimed at arranging finance for the e-commerce ecosystem.
Besides Flipkart, we also look to tie-up with other e-commerce sites, large B2B portals and SME chambers,” Samir Bhatia, founder & CEO, told BusinessLine.
Gap in financing
A huge gap exists in debt financing in the SME sector, which is looking to bridge.
“According to data collected by the International Finance Corporation (IFC), around 41 per cent of SMEs in India do not have access to bank loans or other related products offered by financial institutions. IFC reports a financing demand gap of ₹2.93 trillion in the SME sector,” pointed out offers four kinds of loans – loan against property, working capital loan, unsecured business loan and loan for medical equipment.
Explaining how it works, Bhatia said, “When sellers on Flipkart require financing, the company refers them to us. Sellers can access the Flipkart button on our website and apply for a loan online by filling in details. After a preliminary credit analysis to figure out the seller’s credit-worthiness, we send the application to all our partner banks and NBFCs. The chance of getting a loan is much higher this way,” said Bhatia, who has partnered with 8 financial institutions.
No fees
“Unlike middlemen, we do not charge a fee to the SME sellers but get paid by the financial institutions for our services. We are looking to partner with many more financial institutions” said Bhatia.
At present, Flipkart has 5,000 sellers on board, of which 50 per cent are SMBs. Having partnered with FISME (Federation of Indian Micro and Small and Medium Enterprises and NCDPD (National Centre for Design and Product Development), Flipkart is looking to attract 50,000 SMBs to sell on its platform by August 2015.

Monday 24 November 2014

Karnataka's traditional retailers strike against e-tailers, OEMs

Small and medium electronics and hardware dealers acrossshut shop on Monday to protest against the allegedly unfair practices of their online counterparts, leading to huge losses.

According to the Federation of IT Dealers’ Associations-Karnataka (FITDAK), which spearheaded the protest, brick-and-mortar retailers of electronics and hardware in the state have seen nearly 50-60 per cent decline in business due to the steep discounts and “predatory pricing” by online sellers.

Around 600 electronics and hardware stores in Bengaluru — and around 2,500 across Karnataka — were shut as part of the protest on Monday.

“Companies raise funds for either making capital expenditure or operational expenditures. But none of that is happening. Instead, all the funds that these online retailers are raising is being spent on supporting heavy discounts that they offer. They are investing Rs 2 for making a sale of Rs 1,” B Ananda Rao, president, FITDAK, told Business Standard.

“We could appreciate competition from online retail portals if they were flourishing by the virtue of a technology revolution or exceptional logistics strength. But sadly, their aggression and growth is seen only through predatory pricing by way of offering huge discounts,” he added.

Predatory pricing, or undercutting, is a strategy where a product or service is sold at a very low price with an intention to drive competitors out of the market or create entry barriers for potential competitors.

According to the brick-and-mortar retailers who participated in a rally at Bengaluru’s town hall on Monday as part of the protest, on an average day websites offer discounts of 12-30 per cent on the maximum retail price of an electronics and hardware product. This excludes the “bumper sale” days that most held in October, to tap into the festive season demand.

While this was only a daylong protest, traditional retailers in the state have threatened to go on an indefinite “purchase bandh” (they would stop taking any fresh stock from manufacturers) from the second week of December, if the matter is not addressed.

According to Rao, on November 21, his association, along with several other representatives of electronics and hardware sellers met Manufacturers’ Association for Information Technology’s officials and several other manufacturers.

“They confessed that this predatory pricing practice is out of their control but we have asked them to find a solution to this,” Rao said. “We will wait for a couple of weeks to hear back from them, else we will go on a purchase bandh.”

Rao added the members of FITDAK are also disturbed with several Indian businessmen, such asand Azim Premji, investing in e-commerce companies, which are selling items on heavy discounts, leading to predatory pricing.

Earlier this year, Wipro’s Chairman and Chairman Emeritus Ratan Tata had announced an investment in Snapdeal. Earlier this month, Tata also announced an investment in online furniture retailer Urban Ladder.

“As India’s leading e-commerce marketplace we pride ourselves in helping manufactures and medium and small enterprises or sellers to reach out and sell directly to buyers across the country. In fact, this model has helped the manufacturing industry, as it supports the sales of products and creates huge employment, including jobs in ancillary industries. As a marketplace, we do not keep an inventory or sell to consumers. It is our sellers who keep the inventory in our warehouse,” a spokesperson said. “With regards to following ethical practices, Flipkart is in compliance with the laws-of-the-land and continuously encourages sellers on the platform to abide by it.”

The Woolmark Company launches e-commerce marketplace

The Woolmark Company has launched an e-commerce marketplace on its consumer-facing website,, making Merino wool products more discoverable for consumers worldwide.

Called Merino Shop, this online tool is powered by ShopStyle and allows consumers to browse the world's finest wool clothing and accessories. This website was designed and developed by global digital marketing agency Lowe Profero.

As an ingredient brand, the Woolmark brand communicates the story of Merino wool and takes consumers on the journey from farm to fashion. But thanks to Merino Shop consumers are now able to link the products they buy back to the story behind each product, adding integrity and authenticity to their purchased goods.

" is our primary channel for educating consumers on the benefits of Merino wool through highly engaging content," explains The Woolmark Company Chief Strategy and Marketing Officer Rob Langtry.

"The past two years has seen our digital presence significantly grow and our key campaigns are increasingly moving to a digital basis. Whilst currently we are about 60:40 digital:traditional, within the next three years we are likely to shift towards 90:10."

Moreover, Merino Shop allows tens of thousands of Australian woolgrowers to explore the diverse range of products created from the fibre they cultivate.

Recently redeveloped, The Woolmark Company's website aims to increase consumer engagement and provide a central marketing channel for the fibre, its products and its brand image. is an engaging online destination that explores the use of Merino wool, from fleece to fashion. Told through the perspective of the world's leading fashion designers and brands, and the clothes they create, it is a place for consumers to learn about the true substance of the world’s finest wool.


Saturday 22 November 2014

Flipkart delivers fake speaker, delists seller

A Gurgaon-based software professional who ordered a speaker from found the product delivered did not have a seal, bar code or price tag, and read 'Made in China'.

This comes days after a consumer received a brick and soap bar instead of a mobile phone from a seller on rival Snapdeal.

"I am surprised Flipkart does not check that the product it or its vendor, Deal Junction in this case, is selling is a fake," said the consumer, who did not wish to be named.

Also, an organisation called the has started a petition against Flipkart on, asking it to ban as many as 39 sellers. According to Sanjay Gupta of the Artists Society, who started the petition, these sellers are selling products that infringe copyright.

"Due to e-commerce portals like, where anyone can sell stolen art, there has been an exponential rise in the past year of cases in which logos, trademarks and original artwork are being incorporated into various products without consent from their owners," Gupta said in his petition.

Gupta claimed 39 sellers were illegally selling merchandise in the names of Manchester United, Barcelona, Real Madrid, Wayne Rooney, WWE, Sachin Tendulkar, Star Wars, Calvin and Hobbes, Cristiano Ronaldo, and the Indian Premier League.

These are not first such complaints against the Bengaluru-based e-commerce major and Flipkart said it took it "very seriously".

"Products sold on our website are listed by our sellers. We act as a platform to connect sellers and customers and are always in compliance with the laws of the land," a spokesperson said.

"We take strict action against sellers who attract negative feedback about their service or are found in selling products that are fake, in violation of copyright, our code of conduct and operating guidelines, or any applicable law," it said, and added steps against such sellers could range from removing a specific product to delisting.

Flipkart, which faced consumer anger on social networking websites after its sale in October, has reached out to the consumer who was delivered the fake speaker. "We assure you that we are investigating the incident. In the interim, we have delisted the seller for failure to comply with our code of conduct and policies," Flipkart wrote back.

It also offered the consumer Rs 1,000 "as a token of apology", apart from refunding the initial amount paid. The company said it had found one seller who had an original speaker that was ordered but not in the colour he wanted.

"I can still see so many sellers on Flipkart selling the same speakers in white colour, which is what I had ordered. Does this mean all of them are fakes?" the software professional asks.

Indian e-tailing market to reach $15 billion by 2016: Google report

ccording to a recently released report by Google, the Indian online shopping market is all set to touch $15 billion by 2016.

Back in 2012, the size of this market was $8 million and is currently around $35 million. The Indian online shopping market has registered over 12x growth over the past 4 years.

According to Google's annual online shopping growth trends report, done in collaboration with Forrester Research, the online shopper base in India will reach 100 million by 2016. 50 million new buyers are expected to join the online shopping bandwagon from Tier 1 and tier 2 cities, the report says.

Rajan Anandan, MD, Google India, said that India has tremendous opportunity in mobile transactions as we are adding 6 million new users to the internet every month, most of them on the mobile phone. Mobile is indeed expected to be the game changer for the Indian online shopping space. Major players like Snapdeal are already clocking more than half their transactions through mobile.

The report also revealed that women buyers in tier 1 cities are far more active than male buyers, and outspend men by 2x. Women shoppers are also adding sheen to fast emerging online shopping categories like apparels, beauty and skincare, home furnishing, baby products and jewellery. The research finding is consistent with search query trends seen on Google which showed query volume for apparels growing at 64 per cent.

According to Nitin Bawankule, Industry Director for Ecommerce, Local and Classifieds, Google India, "Though the shopper confidence in online buying has gone up, challenges like unsatisfactory experience, last mile connectivity and lack of confidence in online payment remain." This is apparent from the fact that 50 per cent of all online transactions in India are still Cash-on-Delivery (COD). The report also found that 62 per cent people who have shopped online have not been satisfied with their experience and most of such grievances came from tier 2 down cities.