Friday 30 January 2015

Zomato acquires Turkey-based Mekanist in all-cash deal

NEW DELHI: Online restaurant guide Zomato has acquired Turkey's popular restaurant research service firm Mekanist in an all cash deal for an undisclosed sum.

Post this acquisition Zomato's restaurant coverage will increase from about 27,500 restaurants in Istanbul and Ankara to more than 50,000 restaurants across Turkey.

Commenting on the development, Zomato Founder and CEO Deepinder Goyal, said: "Mekanist has established itself as one of the heavyweights in the online restaurant search and discovery space in Turkey. We're excited to be joining forces with them as we continue to grow in one of our most important markets."

On being asked how the company plans to raise funds for the acquisition Goyal told PTI: "We already had the money."

Mekanist is one of the earliest and most successful service player to emerge from the Turkish startup ecosystem, and we're excited about them becoming a part of Zomato, he added.

The two teams will be working closely over the coming months to integrate Mekanist into Zomato. All of Mekanist's traffic and restaurant-related content will move to Zomato, and Mekanist app users will be able to use the Zomato app, Zomato said.

"With the power of Zomato, we will now be able to offer dinners in Turkey in even wider range of restaurants to choose from," Mekanist Co-founder and CEO Ali Servet Eyuboglu said.

This is a big win for restaurant owners, as they will benefit hugely from Zomato's business-focused features, he added.

This is Zomato's seventh acquisition in the past six months, having acquired Urbanspoon for USD 52 million to enter the US and Australia markets only a couple of weeks ago.

Zomato recently also acquired local dominant restaurant search players in New Zealand, Poland, the Czech Republic, Slovakia and Italy.

Paytm plans to add over 1 lakh sellers, hire 4500

NEW DELHI: The poster boys of Indian e-tailingFlipkart and Snapdeal, might soon have tough competition from mobile wallet brand Paytm. Amidst rumours of fresh fund infusion,Paytm is looking to aggressively ramp up its mobile marketplace by adding over one lakh merchants in one year. 

It also has plans of hiring 4,500 people across various verticals during same period, according to Renu Satti, VP, business development, Paytm. Snapdeal has around one lakh sellers on its market place. 

"From sales and product and engineering to logistics and customer service, we are looking at candidates across all categories and hierarchies," she said. "And with regards to merchants, apart from retailers across geographies, we are also focusing on SMEs such as Dharavi Market among many others." 

At present, Paytm, which is owned by Noida-based One97 Communications and headed by its chairman and MD Vijay Shekhar Sharma, has around 2,000 employees on its payroll and 15,000 sellers on its market place. It started its journey in 2010 as a mobile recharge and bill payment service and later started diversifying into wallets and other electronic payment services. 

"We have the advantage of having the trust of the consumer as well as the merchant because of our RBI licensed wallet," said Satti when asked about competition from well-entrenched players in the country's e-tailing business. Paytm received the wallet service license from RBI last year and has around 20 million active users, more than the number of credit card users in the country, according to industry estimates. It has plans of touching 100 million users by 2016. 

Mobile wallet companies such as Paytm, Oxigen and Citrus allow users to fill money into their electronic wallets and engage in transactions with merchants who have partnerships with a mobile wallet service provider. From the 1-2 million recharge transactions that Paytm does every day, conversion of even a small percentage of that into sales of products might be a big opportunity to begin with for the venture that has the backing of names like SAIF Partners, SAP Ventures and Intel Capital among others. 

Wednesday 28 January 2015

Tata Group plans e-commerce marketplace foray under Ashutosh Pandey

NEW DELHI: Tata Group has started putting together a team for its proposed big-bang foray into e-commercemarketplace under Ashutosh Pandey, former COO of the Group's bookstore chain Landmark.
The Group has also roped in Sarvesh Dwivedi, who has been heading the lifestyle division of eBay India, three people familiar with Tatas' plans told ET. Gurvinderjit Singh Samra, who has worked with Tata Group's different arms, including its life-science and healthcare unit, Titan and Indian Hotels, has joined the e-commerce team, two of them said. "Obviously there is a small team as things are currently being sketched," one of them said.
Latif Nathani, managing director of eBay India, confirmed the departure of Dwivedi from the company, but said he is not sure where Dwivedi is headed. Prior to eBay, Dwivedi worked with and Reliance Retail among other firms.
ET had in September reported that the Tatas are preparing for an entry into India's lucrative e-commerce business with a marketplace model similar to Flipkart, Amazon and Snapdeal. A spokesperson for Tata Sons said that the Group has "interest" in e-commerce, but refused to share details for the proposed venture. "As we had told you on September 22, e-commerce is of interest to the Tata Group, and we will share more information at the appropriate moment," the person said in an emailed reply to ET.
Tatas currently run e-commerce portals for its Croma consumer electronics chain and Landmark bookstores. Its proposed new e-commerce marketplace, which will provide an online platform for small and large vendors and retailers to sell their wares, is expected to be launched next year.
In the initial phase Tata Group plans to sell products from its own brands including Star Bazaar supermarket and Westside department store. The company is also in talks with its joint venture partner Inditex to get Spanish brand Zara on board as well.
E-commerce in India is expected to almost double in two years to $20 billion by 2015 from $11 billion in 2013, according to a just-released report by Motilal Oswal Securities.

E-commerce boom: Why it is increasingly important for physical retailers to upgrade themselves

About a year ago, many — that included some of India's largest organized retailers — were in near denial that India would feel the impact of e-tailing in the near future. Today, the pendulum has swung to the other extreme. Some of India's oldest and largest brick-and-mortar retailers believe that the newly arrived e-tailers are their biggest threat now. Various associations that represent the interests of India's over 16-million independent retailers are now actively lobbying against etailers, including India's homegrown ones. The same associations had long reserved their vitriol only for multinational retailers despite the fact that the top-three organized retail businesses in India, each having revenues in excess of Rs 15,000 crore in 2014, are Indian owned while the largest multinational retailer in India is struggling to cross even Rs 1,000 crore in revenues.

India's current consumer spending on merchandise (and hence the size of India's retail market) is about $525 billion. If India sees a real compound annual growth rate (CAGR) in the next 10 years, and the consumer price inflation remains around 6% CAGR in the same period, India's merchandise retail spending will touch about $1,100 billion by 2020, and $2,100 billion by 2025. It is easy to see what is driving this strong growth in retail consumption — a relatively young population, convergence in lifestyle aspirations across urban and rural India and rise of dual (or multiple) income households especially in urban India.
Consumption Patterns
To better understand the current and future impact of e-tail on India's physical retailers, it is important to gain a measure of what India is currently consuming and how that consumption is split between rural and urban populations.
As the chart Retail Consumption Across KeyCategories shows, even 10 years from now, almost two-thirds of India's retail spending (not total consumer spending because that also includes services such as housing, healthcare, transportation, education etc) is on food, followed by about 9% on apparel, then jewellery, and then consumer electronics, including mobile handsets.
Of this retail spending, rural India (spread across over 6,60,000 villages) accounts for almost 52%. Even by 2025, rural spending would still account for 43% of spending (see Distribution of Consumer Goods Spending). India will see very strong growth in all channels of retail: the traditional independents, the modern corporatized chains, and e-tailing not only in the coming 10 years but indeed, even much beyond that. Those who fear for the demise of traditional retail from corporatized retail (whether Indian or foreign owned) and now from e-tail will do well to note that Indians who are currently consuming merchandise worth $479 billion from independent mom-and-pop stores will consume more than four times (goods worth about $2,125 billion) from these stores by 2025. The corporatized retailers do not have much to fear either and they are likely to increase their own collective revenues (only from physical stores) from about $46 billion today to over $100 billion (excluding e-tail) by 2020 and perhaps over $345 billion (physical retail and e-tail) by 2025.
As far as e-tailing is concerned, notwithstanding its immense appeal for the metros and other parts of urban India, and notwithstanding its visible impact in select categories such as mobile phones and consumer durables, it will continue to have a fairly small share of the overall retail spending in India even after 10 years (see Current and Future Impact of E-tailing in India).
Negligible Share
To put simply, if seen only from the perspective of a few categories such as consumer electronics, apparel and footwear, furniture and home furnishings, and a few others (and that too largely in the top 15-20 cities and for products targeted towards the middle and upper-middle-income socio-economic strata), there is already a measurable impact of e-tail channel on physical stores in 2014. And no doubt, this will become more significant by 2025. However, if seen from the overall consumer spending perspective, the share of the e-tail channel by 2020 is expected to be around 3% on a net sales value (and perhaps 4% by gross merchandise value) and no more than 10% by 2025.

Amazon, e-commerce rivals fuel commercial property boom in India

NEW DELHI: Internet retailer Amazon and its fast-growing local rivals are driving a boom in commercial property leasing in India as their storage needs rise, with shoppers in the country going online to buy everything from televisions to groceries.
Demand from e-commerce firms, a tiny fraction of retail industry, accounted for as much as 40 per cent of 1.7 million square feet of warehouses leased in 2014 - a seven-fold increase from 2013, according to consultants CBRE South Asia. Warehouse rents have risen by a quarter over the past year.

4 hottest jobs in Indian e-commerce industry

User interface developers, e-commerce merchandising specialists, interaction designers and digital marketers to be in demand in the e-commerce industry in the coming years.
The Indian e-commerce industry warmed up in 2014, with a large chunk receiving funding in millions. Companies which received big ticket investments last year include online retailers -Flipkart, Amazon and Snapdeal, fashion e-tailers - Jabong and Myntra, furniture e-tailer - Urban Ladder and Pepperfry, and baby care portal - Firstcry.
The e-commerce industry is projected to experience a significant growth of 70 per cent, clocking $6 billion revenue in 2015, according to Gartner. To aid such breathtaking growth rate and create a strong foothold in the market, these companies are on a hiring spree. Here is a look at some of the key roles which are in demand in e-commerce.
UI/UX developers: In times when customers demand instant gratification, even a slight technical issue in the website or the mobile app demotivates consumers in buying from the particular site. This is driving the need for coders specialised in creating an intuitive and consistent user experience across different platforms.
"There is a dearth of talented UI developers in the market. Currently, we are looking at hiring UI developers who have 2-5 years of experience and who have the ability to build, test and design e-commerce properties which match global standards," adds Ashu Malhotra, HR Head,
Interaction designers: The primary role of an interaction designer is to visualise a consumer's journey through the website or app and predict user scenarios and stories.
"Within e-commerce companies, interaction designers have to design specifically for digital natives who have a short attention span. Along with this interaction designers also need to track content consumption, transaction and CRM data to connect the dots and fine tune user experiences. Conceptual skills and creative visualisation abilities will continue to matter along with complementary data driven approaches," said Sridhar Dhulipala, co-founder, Bizosys Technologies, who was previously Principal UI Designer at Infosys.
E-commerce merchandising specialists: These are specialists who need to oversee the daily selling and promotion of the e-commerce site offerings in accordance with its merchandising and marketing plans.
"In an e-commerce business one of the most critical roles is that of an e-commerce merchandising expert who can attract new and varied customer segments by placing the right kind of products on the website. Such people, who have the aptitude to identify new products portfolios, are always in demand within our industry," said Amit Agarwal, head HR & Admin, HomeShop18.
Digital marketers: As competition is intensifying in the e-commerce market, it is not enough to just have an attractive e-commerce and m-commerce website. Reaching out to current and prospective customers through all possible communication channels has become a necessity.
"There is a demand for digital marketing experts who can conceptualise customised content for marketing campaigns designed for diverse media - such as social, mobile and sales enablement platforms. Having compelling creative story telling abilities is an essential trait," shares Abhineet Sawa, digital marketing head at

Tuesday 27 January 2015

E-retail: Short-term valuation or long-term value creation?

The Indian e-commerce sector is expected to grow 70 per cent in 2015 and cross $6 billion to become one of the fastest-growing e-commerce markets in the Asia-Pacific region. Market players are providing various incentives to lure customers in order to gain market share. They have adopted a low margin and high customer acquisition cost business model. However, players must focus on long-term value creation while racing for the bigger piece of the pie.

The e-commerce companies are not focusing on certain operational essentials as their internal functions are not able to keep pace with the explosive growth.

Logistics anomalies: In instances where consumer experiences have been less than satisfactory, companies are facing challenges in maintaining the quality of services, leading to reduction in customer satisfaction. Listing sub-standard products on the website, delivering pieces of wood/soap/marble instead of the promised smartphones and listing faulty pricing strategies can create unwanted hassles for customers.

Customer security and safety issues: Rapid expansion of business operations have led to overlooking of critical business processes. Some recent unfortunate incidences related to individuals' security and safety issues have raised serious concerns related to background check of employees. Companies, as well as their manpower sourcing partners, should follow strict measures to check their employees' antecedents. While expanding their operations, the e-commerce players need to diligently fulfil the responsibility of ensuring security and privacy of their customers.

Compliance defaults: Since e-commerce is a nascent market in India, the regulatory system is not very developed. There are various conflicts between the e-commerce companies and government on interpretation of regulations. For instance, there is a debate regarding the liability of unpaid service tax on these companies. Although these companies claim to be facilitators between buyers and sellers, they are using warehouses to store fast-moving products to reduce their delivery time. Further clarity in regulations and diligent compliance by companies will ensure smooth operations.

Are deep discounts sustainable?
Despite concerns related to operations, the increase in velocity toward gaining scale is enthusiastically backed by multi-million fund injections of foreign investors. With significant funding backup, e-commerce companies are able to adopt strategy of providing considerable discounts while earning wafer-thin margins. This strategy of providing regular deep discounts to scale up is making the game difficult for e-commerce players and is becoming a tiger ride, which is difficult to dismount. The high growth expectation of PE investors in e-commerce is likely to suffer a setback when PE firms do not find it lucrative to fund consumer subsidies without an alternate differentiation strategy. The irony in the e-commerce space is that there is low brand loyalty.

As a profitable model is yet to evolve, less-than-expected performance on a "Big Sale Day" or accidental miscalculations in pricing should be seen as small hiccups in an attempt to attract consumers to the concept of online shopping.

There is a need to take a more patient approach towards e-commerce while players take the long road to create high brand value by providing reliable services along with differential offerings. To ensure smooth growth, companies should invest in optimisation of warehouse operations, loyalty management, robust recruitment process, stronger backend technology infrastructure, better digital store front and logistics management especially in rural areas where they rely on third party logistics. It will be interesting to see how this industry unfolds, as the players gain experience and serve the country with full sincerity.

E-commerce expansion benefits real estate and logistics sectors

India’s warehousing and logistics real estate segment has benefited immensely from the expansion in e-commerce over the last two years. The emerging retail segment took up about 1.7 million sq. ft. of warehousing space across Mumbai, Chennai, Bengaluru and the Delhi National Capital Region in 2014, according to a report by CBRE, a leading commercial real estate services and investment firm. The report said that almost 25 per cent of the total warehousing/logistics space uptake across India in 2014 was by e-retail players, while the uptake in logistics space rose by more than seven times over that of 2013.
The last few years saw the segment becoming a new addition to the mix of major office space demand drivers in India as online retailers increased their footprints for front-end as well as back-end requirements.
“By the end of 2014, approximately 3.5 million sq.ft. of office space had either been leased or was in various stages of negotiation by e-commerce firms across the country, a growth of more than 400 per cent year on year,” the report titled, ‘Indian Online retail driving realty,’ said.
India’s online retail sector saw exponential growth as a number of local market-specific services — cash on delivery (COD), multiple payment options, and EMI options — assisted in developing the growth curve of ecommerce in the country. Online retail as a sector is still at a nascent stage in India, as leading players try to establish a strong foothold and consumers get accustomed to this new medium of shopping.
In the outlook for e-commerce, the report said, the sector’s future looks buoyant and it is likely to emerge as a strong demand driver for real estate space in the years to come. “The sector will also play a major role in the evolution of existing logistics providers, as well as in the development of logistics infrastructure in the country.”

AaramShop to launch services in East Africa, South-East Asia

Delhi-based AaramShop, which allows customers to shop at local neighbourhood stores via the internet, is planning to enter East African and South-East Asian countries.
The company will find local partners and launch services in these markets through the franchise model.
Last year, AaramShop had launched its services in Pakistan by tying up with Red Bucks Grocery, a company promoted by an ex-Unilever employee in Pakistan.
“We would test the limits of our technology in new markets such as Nairobi (Kenya) in East Africa, Vietnam and Indonesia in South-East Asia and even the UAE through the franchise model. There would be no equity participation and it would be an asset-light model run through franchises,” said Vijay Singh, CEO & Managing Director, AaramShop.
“Like in India, goods are sold on MRP (maximum retail price) in Pakistan and not on recommended price like in the more developed markets. In the past year, we have got 7,000 grocers on our site in Pakistan and have a franchise partner since we cannot own equity in this country.”
In India, it currently has 5,000 grocers registered on its site.
The company is providing them with technology-based solutions to reach out to their neighbourhood consumers.
“We should have 60,000 grocers with us by next year,” Singh said. 

Revenue generation
AaramShop does not charge the grocers for its services, instead its revenues come from consumer goods companies and brands that sell through its site for services such as analytics and advertising.
“We get our money from most of the big FMCG companies such as HUL (Hindustan Unilever) and P&G (Procter & Gamble) for providing services like coupons and advertising on our site,” he added.
AaramShop’s services are mainly restricted to the local neighbourhood ‘kirana’ stores and general trade outlets, not modern trade retailers.
The three-year old home-grown start-up is now planning to raise funds through private equity players.
“We have been waiting to get our business model right and generating funds on our own in the past. But now, we hope to raise ₹36 crore in our first round through PE players,” said Singh.
Apart from grocers, AaramShop has also added local pharmacy outlets on its site.

Thursday 15 January 2015

Flipkart content ‘objectionable’ for Telangana

What does Flipkart, an ecommerce major, have in common with, and Nothing, it would seem. But all four are on a list of websites the government of Telengana wants blocked for "objectionable content". A senior government official told ET the state government feels some websites need to be blocked to avert crimes against women as "there is a strong concern that viewing porn sites is leading to crime against women."
"The state government has sought our help in directing various internet service providers (ISPs) to set up appropriate software tools which will block content violating the provisions of the IT Act of 2000, as amended by amendment ACT 2008," the official told ET. The list of ISPs include Airtel, Hathway, Idea Cellular, Reliance Communications, Tata DoCoMo, Tata Indicom and Vodafone.
The country's largest e-commerce player's name has cropped up for supposedly promoting and selling alleged objectionable products, but the names of the products couldn't be ascertained. Flipkart didn't respond to an emailed request for comment. The state government's request comes barely a fortnight after the government blocked 32 websites and links, including several popular online tools like Vimeo, Github and Sourceforge, as they were found to have hoisted 'jihadi propaganda'.
The government later ordered ISPs to unblock all 32 of those websites. The block was believed to have been imposed at the behest of the Anti-Terrorism Squad, Mumbai. The government had invoked section 69A of the Information technology Act (2000) and Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules ("Blocking Rules") to ban these websites.
Many websites have been blocked in India from time to time on various grounds. Following the Muzaffarnagar riots in September, more than 80 websites and links on social media were blocked. In June last year, the Delhi High Court ordered the blocking of 472 file-sharing websites.

Arvind eyes Rs 1000 cr revenue from e-com foray in three years

Arvind Internet the online arm from Arvind textiles is eyeing revenue of Rs 1,000 crore in the next three years from its foray into the e-commerce space. According to senior officials in the company, Arvind Internet will be launching several business models under its e-commerce foray.

To begin with the company announced the launch of, which uses omni-channel including online, offline and kiosks. “This is the first of the several launches that we plan to do under our e-commerce brand. Towards the mid-of next year we will announce our second big launch. Between these two brands we expected to clock revenue of Rs 1,000 crore in the next three years,” said Kulin Lalbhai, executive director, Arvind.

Lalbhai also shared that between each of these launches there will be a gap of atleast one-and-a-half years.

“All the models that we will launch in the e-commerce segment will be focused on lifestyle and omni channel models. We have been planning to enter the e-commerce space for some years now. For us e-commerce is not a channel to just sell products but how we engage with customers,” he added.

With Arvind Internet is trying to merge personalization and mass consumption.

“Personalisation is a global phenomenon. We are trying to use technology to give users personalized products and they will have a factory at their disposal,” said Lalbhai.

“Over the last one-and-a-half years the company has built a factory that can come out with thousands of design in a day. It is supported by an automated warehouse that takes care of the delivery,” said Lalbhai.

Users using can schedule a home visit with Creyate’s ‘Style Stewards’. They not only take a customer’s measurements, they also give them style advice and complete wardrobe solutions. “Our style stewards are not your local tailor, these are smart girls and boys who have good experience in retail and trained for over two months with us,” he added.

Other than a home visit, users can also avail of Creyate retail outlets, which according to Lalbhai are on the lines of Apple Store’s. “We will also have pop-up stores or digital stores. These would be kiosks set at strategic places like malls, or areas where you have high concentration of young professionals. These would be set at certain location for a certain period of time and then moved to other areas. The first of this is soon to be launched in Delhi,” said he.

At Creyate users can get access to fabric that Arvind provides or even opt for international fabric.

The products from Creyate are at a premium of 15-20 per cent from brands such as Louis Philippe or Arrow. Depending on the fabric a product will be delivered between 12 – 25 days

Arvind Limited is the manufacturer of garments under brands such as Flying Machine, Colt and Excalibur.

The company also has retail brands such as Megamart, Next and Club America.

Arvind Limited has licence for selling products of several global brands such as Arrow, Elle and US Polo Assn, and a joint venture in India with Tommy Hilfiger.

Amazon eyeing majority stake in logistic firm Blue Dart

India's bustling $15 billion e-commerce market is all set for a shakeup as a mega deal is on the cards.
US giant Amazon is learnt to be in preliminary talks to acquire a majority stake in leading courier and integrated express package distribution company Blue Dart, sources privy to ongoing discussions told ET NOW.
" Amazon is evaluating options to buy out the 75 per cent promoter stake held by DHL Express Singapore PTE Ltd in Blue Dart and the talks are currently at an early stage and it may or may not fructify into a deal. If the transactions materialises, it will help Amazon expand its overall customer reach, beef up its delivery services and provide an edge over domestic rivals Flipkart and Snapdeal," said an individual on the condition of anonymity without elaborating further.
ET NOW could not independently verify the valuations of the likely deal. At current market prices, a 75 per cent stake in Blue Dart would cost around $2 billion dollars.
In response to email queries from ET NOW, Amazon said " 'We dont comment on anything we may or may not do in future' and a DHL spokesperson said that the company does not comment on market speculation or rumours. Blue Dart declined to comment.
According to the company website, Blue Dart has an extensive domestic network covering over 34,248 locations, and services more than 220 countries and territories worldwide through its group company DHL, a leading global player in express distribution services. Blue Dart has warehouses at 72 locations across the country as well as bonded warehouses at Ahmedabad, Bangalore, Chennai, Delhi, Mumbai, Kolkata and Hyderabad.

Tuesday 13 January 2015

Quikr to launch delivery services

Online consumers, who are into selling and buying of second hand or used goods, will now be able to deliver or ship their products for free and with convenience. Online classified, which is the business of used goods, plans to provide delivery services to its subscribers.
At present, sellers are supposed to ship the products to the buyers on their own cost. This, the company said, was an inconvenient, tedious and time consuming process for the users. So far no other classified portal provides delivery services.
Increase in transactions
The Mumbai-based firm is already testing the potential of delivery services here for the last few months and has witnessed a 50 per cent increase in transactions in the city.
It plans to roll out the service in all the five major metros such as Delhi, Kolkata, Bangalore, Hyderabad and Chennai in the next three months.
Pranay Chulet, Founder and CEO, Quikr said that the decision to launch delivery services was a part of the company’s constant focus on innovation. “Delivery services in this category are a very local phenomenon and for that we are looking at tying up with local or regional movers and packers,” he said.
Heavy competition
Logistics and delivery is critical for any online portal and smooth deliveries can lead to a sudden spike in traffic to the online portal, feel experts.
This is also the reason why several e-tailers are competing on fastest deliveries. Flipkart is looking at delivering products in just 4 hours. Its competitors Amazon and Snapdeal are also contemplating the same.
Experts feel that Quikr’s decision could also boost the used goods market, which is also growing at a faster rate but at the same time poses threat from online retailers who are selling goods at deep discounts thus luring consumers to buy new products.
Messenger service
Quikr is also betting big on its newly launched product – Quikr Nxt – which it claims to be the world’s first instant messenger by a classifieds major to enable seamless transactions. With Quikr Nxt, buyers and sellers can immediately connect through chat.
“This feature will transform India’s online classifieds market as it enables users to communicate with each other at their convenience and request more details about the product or service,” Chulet said, adding that the company will be launching at least 7-8 more innovative products.
The company, which raised $60 million from Tiger Global in August last, said it has grown over five times in the last one year.

Vertical e-commerce companies in a race for funds

It is not only large e-commerce companies that have received funding to the tune of billions of dollars with valuations working out in multiples of billions of dollars. The biggest piece of action has actually happened in the vertical e-commerce segment, which has scores of companies in different product categories.
Experts say very few of such companies will survive and the leaders in their respective segments will make decent money for entrepreneurs and investors mostly via acquisitions by larger companies.
As far as investors are concerned, vertical e-commerce presents them an opportunity to get a pie of e-commerce especially if they have missed the horizontal opportunity.
First a look at the ones who have raised the biggest chunks of capital in multiple rounds. Fashion e-tailing, which has seen the maximum number of companies in the fray, is led by Myntra which was acquired by Flipkart in 2014.
Myntra had raised a total funding $125 million from Premji Invest, Tiger Global, NEA-IUV, IDG Ventures and Accel Partners before being acquired by Flipkart.
Next in line is Jabong, which has raised multiple rounds including the last round of $27.5 million from UK-based investor CDC Group around February.
In September last year, Jabong's Germany-based incubator Rocket Internet merged the company with four other fashion entities in other geographies.
Fashionandyou, which has faced multiple internal upheavals and leadership issues, has raised $58 million from Sequoia Capital, Smile Group, Norwest Venture Partners, Intel Capital and Nokia Growth Partners.
There are many smaller niche companies including Limeroad - which specialises in women's wear - that has raised about $20 million from Tiger Global, Lightspeed Venture Partners and Matrix Partners. Another player, Zivame, which specializes in lingerie, has raised upwards of $6 million from Unilazer Ventures, IDG Ventures and Kalaari Capital.
Many in the fashion space have not survived. That includes men's wear  e-tailer, which shut down last year. Fetise had raised $5 million from Seedfund.
Jewellery, a subset of fashion e-tailing, has seen multiple companies so far. Some of the biggest fund-raisers include Caratlane, which has raised about $27 million from Tiger Global Management.
Then, Bluestone, which raised over $15 million from Kalaari Capital, Accel Partners and Meena Ganesh, has taken the lead over others including Voylla and Youshine.
Baby products has been another hot area with multiple investors chasing this space. One of the biggest, Firstcry has raised $33 million so far from Temasek Holdings, IDG Ventures and SAIF Partners.
Babyoye got about Rs 25 crore from Helion Venture Partners, Tiger Global, Accel Partners and Bollywood actress Karisma Kapoor.
Eyewear e-commerce company Lenskart has so far raised over Rs 200 crore of capital from TPG Growth, TR Capital, IDG Ventures and Unilazer Ventures. Lenskart, which is owned by Valyoo Technologies, has reportedly shut down its other websites including Bagskart, Jewelskart and Bagskart.
In the last few years, a lot of action has been seen in the furniture and home furnishings space.  Home furnishings e-tailer Zansaar has raised Rs 30 crore from Accel Partners and Tiger Global.
Pepperfry has so far raised $28 million from Bertelsmann India Investments (BII), the strategic investment arm of the international media company Bertelsmann and Norwest Venture Partners (NVP).
Close competitor Urban Ladder has raised about Rs 150 crore from Kalaari Capital, SAIF Partners, Hong Kong-based Steadview Capital Management as also corporate honcho Ratan Tata.
Beauty products has also drawn investments. While Nykaa has so far raised Rs 20 crore from private investors, HNIs and NRIs, IvyCap ventures recently invested an undisclosed amount in online beauty and personal grooming website Purplle.
In the online healthcare space, the only company to raise significant funding is Healthkart, which raised $22.5 million from Intel Capital, Sequoia Capital, Omidyar Network and Kae Capital.
So it is for the online grocery space wherein the biggest company so far, Big Basket has raised $45.8 million from Helion Venture Partners, Zodius Capital, Ascent Capital and LionRock Capital.
In another niche online vertical, movie rentals service Seventymm has so far raised a total of Rs 90 crores in funding from NEA, Matrix Partners India, Draper Fisher Jurvetson and ePlanet Ventures.
Vertical companies have seen several acquisitions but barring Myntra's acquisition by Flipkart for roughly $300 million, none have yielded any value whatsoever. Most acquisitions so far have resulted in shut shops post acquisition.
Electronics retailer LetsBuy had raised $6 million from Helion, Accel and Tiger Global before being acquired by Flipkart in 2012. However Flipkart shut down Letsbuy within months of acquisition.
Similarly Snapdeal had acquired sports products e-tailer Esportsbuy in 2012 but shut it down the same year.
Fashionandyou acquired fashion and beauty products e-tailer UrbanTouch for $30 million in 2012 but shut it down in a year's time in 2013.
Urbantouch had raised over Rs 30 crore from Accel and Tiger Global. Also kids' products e-tailer Hushbabies acquired Mangostreet, an e-store for kids' products, but shut it down.

Nike, Titan, USPA offer buyers online experience offline

How would you like it if you could go to a garment store, stand before a screen there, and see how you would look in one of the dresses displayed on a poster without trying it out? Or walk into a mall, and have your favourite brand find out you're in there and offer you a special discount? Brands know you will love this, and are roping in startups to bring such technology inside brick-and-mortar stores.

With consumers getting used to the conveniences of the online shopping world, brick-and-mortar stores are using technology to bring in features like 'virtual reality', 'unlimited product stock', 'similar searches' or 'related products' options. Nike, USPA, Satya Paul and Being Human are among the brands using technology products in their stores to give customers the advantages that e-commerce portals offer.

Shopsense is one such startup which provides brands technology-based solutions to engage with customers in the store. The company installs a tablet-like device in the store, which customers can use to browse through all the brand's products, the way they would on an e-commerce portal. It allows customers to mix and match products and see how they would look in the ensemble. "There will also be more engagement between the customer and the store salesperson.

The salesperson can observe what the customer is looking for on the screen, and pick out similar products from the shelves. Customers can also look at inventory from other outlets and this sometimes helps brands reduce real estate costs," says Harsh Shah, co-founder of Shopsense. Brands say that using such products see a 12-15% increase in revenues.

Another augmented reality-based startup TeliBrahma, which has a similar product where a screen in the store can show you how you would look in a particular dress, is working on integrating it with the mobile. "A lot of shopping happens on the mobile now. There will be a product where you could choose a picture from your gallery, and the app will show you how the person in that picture would look in another dress," says Suresh Narasimha, founder and CEO of TeliBrahma.

While solutions like these work on the front-end, and at the back-end come products like Torchsight. The company uses wireless technology to capture signals from smartphones and collates data on how many people walked into a store, how long they stayed or how many are repeat customers. Torchsight installs a device inside the store which captures such data, then analyses the data and sells it to brands.

Brands can then use this data to design their marketing campaigns, find out which products do well and which don't, and even customize offers for customers. "They could, for instance, use the device and find out when a customer walks near the store and try to lure him into the store with special offers," says Anup Balagopal, co-founder, Torchsight.

Companies are using technology to interact with customers outside the store as well. Brands like Titan's Helios, Pizza Corner, Louis Philippe, Future Group, Lawrence & Mayo, and Nerolac Paints work with Nifty Window, whose technology allows physical stores to showcase their inventory online, and update the inventory information and make offers in real time. "If someone is in a particular locality and searches for a certain brand store there on her mobile phone, not only will our store link be on top of any search list, but it will also provide full details of the inventory in the store, including pricing. This even allows the buyer to compare the store price with prices on e-commerce sites and decide where to buy from," says Sujit Zachariah, who was product director at Yahoo, US before founding Nifty Window last year.

Wednesday 7 January 2015

Colliers International: China and India to lead retail growth as e-commerce booms

n terms of retail real estate, China and India will be the markets that see the greatest growth in 2015, according to Colliers International's 2015 Property Outlook. But markets such as Indonesia are also benefitting from political stability, and most Asian markets are seeing solid growth in consumption.

"The increased spending power of the younger generation, the rapid growth in middle-class families and the sustained pace of urbanisation across the continent have been the driving forces behind retail sales over the past few years," Simon Lo, Executive Director of Research and Advisory Services, Asia, said. "Those are all positive factors and look set to continue for at least another five years."

In China, retail sales are rising at 10 to 12% per year, one of the fastest rates in Asia, driving strong demand for retail real estate.

"The boom in e-commerce is encouraging international retailers to enter the market," Helen Mak, Senior Director, Retail Services of Colliers Hong Kong, said. "Topshop set up its online store in China before opening any outlets at all, and Zara has also increased its online presence."

Slowing growth is a challenge for the Chinese economy, but investors with a medium- to long-term view on growth prospects should view this as an opportunity rather than an impediment.

E-commerce is also emerging as a force in India, with market penetration driven by electronics, apparel and a wide range of fast-moving consumer goods. Besides going online, Indian consumers are also becoming increasingly brand-conscious. That provides an opportunity for both international and domestic retailers to broaden their footprints.

Retailers across the region are set to benefit from growth in tourism. The number of visitors from mainland China is projected to reach 140 million in 2015. Hong Kong, Singapore and South Korea will continue to be the favourite destinations for those travellers, making up one-third of total outbound traffic.
Why India’s top online retailers such as Flipkart, Myntra, Jabong moving beyond discount-led model

Retailers' new tactics to take on e-commerce

2014 may well have been the year of e-tailers. But concerned about their eroding bottomline, offline retailers have come up with personalized tactics to draw new and old customers. With white good products also taking the online route, brick and mortar firms have taken a heavy beating this year. “It’s never a fight between online and offline. But the disruptive pricing strategy of e-tailers is the most worrisome trend,” said B.A. Kothandaraman, chairman and MD of southern retail giant Viveks Ltd. “When online folks offer huge discounts below cost price, how can offline retailers sustain,” he asked.
Though online is only 10 per cent of the total $500 billion retail market in India, the new stream has had a free run in 2014 and pegged to touch $16 billion by 2018. Unfazed by the onslaught, retailers are trying to encash their biggest asset – human resource. “The biggest advantage and disadvantage of e-commerce is its impersonal experience. We are trying encash this by investing on sales force training and Big data,” said D. Sathish Babu, MD of Univercell.
“We spend a considerable amount in doing data analytics about the customer’s buying preference so that when he walks in to the shop, the front office salesman is able to suggest suitable products for him,” he added. In fact, Retailers Association of India has launched free 4-6-week training programmes to hone etiquette, communication and computer skills of shop floor assistants.
Adopting the FMCG retail strategy, as Spencers, Reliance Fresh and More, white good retailers too are looking to garner a share of the market with own labels. “We have launched flat panel televisions this year and hoping to get into air conditioners next year. This way we want to hold a section of customers who go for durability than brand name,” said B.A. Srinivasa, CEO of Viveks Ltd. Further, retailers are also trying to value-add services apart from offering products to engage with customers. For example, while most apparel retailers already have their customized tailoring services, retailer Viveks has come up with a plan to offer servicing solution across all product brands.

Flush with Wall Street funding, Snapdeal and Myntra kick off 2015 with big sales

Flush with new rounds of investor funding, e-commerce companies, Snapdeal and Myntra, have kicked off their first sales of 2015, as they look to grab a larger slice of the Indian consumers' wallets.
Snapdeal, which is the country's largest online marketplace, kicked off its "End of Season Sale" last week, with the company already claiming to see a 150% jump in sales, compared to its overall GMV figures in the last week of December.
"We expect to touch lives of about 5 million shoppers during winter EOSS 2015 from 8,000 cities and towns across India with more than 20,000 sellers participating in the sale," said Amit Maheshwari, vice-president, Fashion at Snapdeal, in an email statement to ET.
Company representatives, while refusing to disclose the average daily sales it records during non-sales periods, however confirmed that Snapdeal expects to cross $1 billion in GMV from its fashion and apparel category alone, by the end of the current fiscal.
"There has been a massive movement of shoppers from offline market to online market and overall figures for EOSS 2015 are expected to sky rise as compared to previous years," Maheshwari said.
In October, Snapdeal claimed to have sold goods worth Rs 600 crore during its Diwali sales
The Delhi-based e-commerce company is not alone in its endeavour to stamp its presence among India's growing digital population.
Fashion e-tailer Myntra, too, held its "End of Reason" sale that closed on January 4, as it attempts to hit the $1 billion (Rs 6,000 crore) in gross merchandise value mark in the coming fifteen months, a three-fold growth.
Questions, however, continue to be asked of the country's e-commerce firms of their ability to handle large order volumes, their technology infrastructure and backend systems.
In June last year, Flipkart's much-hyped Big Billion discount sale was marred by technical glitches and recriminations from swarms of buyers angry and disappointed with pricing and availability of products.
"Most of our shipments 80% take less than 3 days. Service is becoming hygiene," said Ganesh Subramanian, chief operating officer, Myntra, adding, "About 70% of Myntra's deliveries are handled in-house."
In order to hedge customer traffic and prevent technical glitches, the Bengaluru-based company allowed only a limited number of users on its website at each time, which led to the delay.
"Our store is full of shoppers and our systems are operating at maximum capacity. We are trying our best to sneak you in. Please check back in a few minutes to shop at India's biggest fashion sale!" Myntra's web page said when a customer tried to access the website.
Needless to say, irate consumers soon took to social media to air their grievances, complaining about a 30 minute delay in login, order summaries not being acknowledged by the website after payment for at least a couple of hours.
However, the deep discount sales will continue for the foreseeable future as India's three major e-commerce companies - Bengaluru-based Flipkart, Snapdeal and Amazon - duke it out for top honours in an industry that is expected to touch $23 billion, according to a Nomura report, by 2019.
While Snapdeal raised $627 million from Japanese media, telecom and internet giant SoftBank in October last year, Flipkart, which owns and operates Myntra, raised a whopping $700 million from investors in December.
The online e-tailers could, reportedly, end up spending up to $1 billion on discounting products and marketing, as they try and out manoeuvre each other in a high-stakes game.
Snapdeal, which saw a 5X rise in revenue to Rs 168.1 crore for the financial year ending March 2014, however, saw its losses widen to Rs 264.6 crore over the same period, compared to FY 2012-13, according to documents filed with the Registrar of Companies.
Correspondingly, Myntra, which was bought by Flipkart in May 2013 for an estimated $370 million, reported revenue of Rs 441 crore, but saw losses shoot up to Rs 173 crore in the same period, compared to the year ago fiscal.

Snapdeal targets 50 pct women sellerbase by year-end

Focused on expanding its seller base, online marketplace Snapdeal plans to bring in more women to its platform and expects them to account for about half of its merchant base by the end of this year.
Currently, about 30 per cent of Snapdeal’s sellers are women entrepreneurs.
“A big focus for us this year would be to bring more women on board our platform. The online medium offers flexibility of working from home and also working hours. Many of these entrepreneurs are balancing their businesses and family life easily,” Snapdeal co-founder and CEO Kunal Bahl told PTI.
He added that women sellers are operating across categories like jewellery, apparel and home decoration and furnishing.
“Currently, about 30 per cent of our base is women entrepreneurs. We would want this number to grow to about half (of the total base) by end of the year,” he said.
Snapdeal has over 60,000 sellers on board and expects to cross the one million mark soon.
The firm currently houses over 5 million products across 500 diverse categories. Snapdeal reached more than 40 million people.
One of the biggest online marketplaces in the country, its competitors includes homegrown firm Flipkart and global giant Amazon.
eCommerce has taken India by a storm and has shown potential to grow further with the Indian government, firms and investors trying to capitalise on its popularity.
A report by consulting firm Technopak pegs the USD 2.3 billion e-tailing market to reach $32 billion by 2020.
Another report by consultancy firm PwC and industry body Assocham suggests that eCommerce firms are expected to spend up to USD 1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

Beauty startup gets funding from IvyCap, an online beauty and personal care site, has raised its first round of institutional funding from IvyCap Ventures as the startup looks to scale up its services business and tap the international markets. Purplle's earlier investors include networks like the Mumbai Angels, the Chennai Angels and early-stage investment fund Blume Ventures.

Founded by IIT-Delhi alumnus Manish Taneja and IIM-Ahmedabad graduate Rahul Dash, the three-year-old Mumbai-based startup competes with the likes of Nykaa, another beauty e-commerce portal owned by investment banker-turned-entrepreneur Falguni Nayar, which had raised $3.4 million last year.

Talking to TOI, Taneja said the undisclosed amount of funds will be used to create a TripAdvisor-like marketplace for discovery of beauty and grooming products and services. "Our plan is to stay in the beauty vertical, stick to online and not diversify into offline and make our international foray soon. The focus going forward is to establish a hyper local beauty community, the discovery process will further lead to purchase of product and services," Taneja said.

Purplle has tied up with more than 7,000 salons, spas, skin care and hair care chains across Mumbai and plans to take that number up to 50,000 across 30 cities by the end of this year. "We hope to close 2015 with annualized sales of $30-40 million," Taneja said.

Besides specialized players, subscription-based discovery commerce players like Fab Bag inspired by US-based startup Birchbox also operate in the online beauty space.

Vertical e-commerce ventures in the beauty and grooming space haven't been able to scale up in size as horizontal biggies Flipkart, Snapdeal and Amazon have dominated the market by offering huge discounts and a vast selection. Urban Touch, one of the first startups in this category, which was acquired by Fashion and You for $30 million in 2012, was shut down a year later.

Vikram Gupta, managing partner of IvyCap Ventures, said, "We still believe several e-commerce verticals remain relatively untapped in India, and that niche players with rich content and in-built intelligent discovery features are going to be the next wave of value creation. Purplle is looking to be become the one-stop shop for beauty and grooming."

The Mumbai-based IvyCap is in the midst of closing its new Rs 900-crore fund and counts IIT deans, and IIT, IIM and BITS alumni as its anchor investors. It has deployed Rs 250 crore from its first fund across six startups that are mostly in the tech space.

Tuesday 6 January 2015

20 ecommerce trends and predictions for 2015

Just before Christmas I asked our expert panel of ecommerce professionals to look into their crystal balls and predict the trends that are likely to shape ecommerce in 2015. 
Here are 20 such predictions, from mobile to multichannel...

The expert panel

  • Matthew Curry, Head of Ecommerce at Lovehoney. 
  • Dan Barker, e-business consultant
  • Stuart McMillan, Deputy Head of Ecommerce at Schuh
  • James Gurd, Owner of Digital Juggler 
Let's start with Dan Barker's predictions... 


Magento 2, which was first announced more than 1,500 days ago, will shake things up and even more medium-and-above sites will switch across to it.

Big phones

The era of giant phones arrived in 2014, and will finally bump up conversion rates on mobile a little more, and they'll become a real buying device for a lot more people.
It’s hard to split out the different iphone versions in Google Analytics, but this helps for iPhone 6+ .
The '6' is quite a lot like Samsung's S4 was. If you look at the numbers in Google Analytics for that device & the subsequent versions, you'll see they usually converts better than most other phones.

Social shopping

In 2015 someone will finally launch a social shopping platform that takes hold. Like Tumblr or where your little blog forms part of a much broader ecosystem, and users can buy across multiple seemingly standalone sites through a unified basket or payment system.
But maybe that's just me hoping: there's been a strange situation over the last few years where many ecommerce platform changes have benefitted very small sites (eg. you can launch a website for almost nothing now), but  most digital marketing changes have benefitted really large sites.


Apps will resurge a bit further next year I think. A few years ago everyone launched an ecommerce app; a few took hold but most did not.
Quite a few of the bigger sites (mostly high street retailers) have relaunched much enhanced versions of theirs over the last couple of years, and eBay are constantly touting the phenomenal percentage of their sales that go through phones, I therefore think that these will come back again for smaller sites - especially those doing lots around content too.

Apple Pay

I'm still holding out on the idea that Apple will eventually launch a method of buying through any device using them as a payment provider.
I think they'll eventually launch something so that you can buy across any device using them as a payment provider. 

Enhanced Ecommerce

Google Analytics 'enhanced ecommerce' will be simplified and start to properly take off.
We're in a strange situation where Google has launched this - an incredible add-on that lets you see clickthrough rates on products in search & category pages, lets you compare add to bag rates within and across categories, lets you properly take care of returns and promotions - and yet it's too fiddly for most to get working right and so it's not used. I hope that will be fixed.

Cross-device tracking

Cross-device tracking will become more accepted and make a big difference. I’ve got my own cross-device tracking tool running on some sites, and it’s very interesting looking in particular how regular customers dot between devices, some buying across all three device types.
There are some patterns within it, the three most obvious being ‘time of day’, ‘first purchase’, and ‘size of basket’ all having an effect on which device users seem more likely to use.


From a legal point of view things are a bit of a mess for small retailers selling digital goods. It seems once every two years an EU directive gets introduces that messes things up. #VATMOSS is the current instance of this, but I’m sure more will come in the UK.


Google's stranglehold generally will continue. People think of it largely in terms of search, but of course its display network is huge, they pretty much own the web analytics market up to enterprise, and Gmail and the new tool ‘inbox’ are growing nicely.
Inbox and Gmail in particular changed things over the last year. Bundling of promotional emails seems to have had a little bit of an effect, and that is only likely to increase; they changed the way ‘opens’ are tracked in Gmail too which meddled about with things. Alongside all of that, whey will of course push even more heavily into ecommerce with search and do it all very well as they always do.
People have started to get a bit smarter around retargeting: using it purely for new customer acquisition, instead of blanketing everyone, or using it to win back customers rather than targeting those who were probably going to buy anyway.


On email a bit more broadly: Email seems to have come to the fore again in 2014, with more and more sites adopting those 'Sign up for our newsletter!' pop-overs as soon as you land on the site.
I think that will continue in two different strands: Firstly people will get a bit cleverer with email as a customer acquisition channel; Secondly I think people will start using those overlays a little bit more creatively (or at least I hope so).
Matthew Curry's predictions for 2015...

Stripped-back ecommerce

I think we're going to start seeing some more stripped back experiences, built for speed, driven by tremendous search functions.

Content and commerce

I can expect to see less of the 'content ghetto' where editorial and product are distinct areas of the site.
Microcontent-ey user signals are already a mainstay of Product Listing Pages, such as 'New Arrival' or 'Exclusive', but I would expect to see product and content merge in these places, with guides, looks, and editorial combined with products on a single "listing" page.

Customer journeys 

There's a realisation coming that the customer journey does not start and end on their site, but is a much more fluid multi-site journey, not just ROBO but including social, blogs, offline media and yes, competitors. It's a flip from the old omnichannel thinking of "The customer comes to me in these ways" to 'here's how I am in the places my customer is'.
Finally, I would expect to see a wake up from the complacency of 2014. We've all got a bit too familiar and happy with the status quo this year, but if even the mighty ASOS can take a tumble by taking it's audience for granted, so can everyone else.
Complacency is a disease of the successful, we need to regain our hunger!
James Gurd on ecommerce in 2015...

In-house expertise

I predict a continued increase in investment in in-house capability, reducing the dependency on third party agencies and consultants to adopt a stronger gamekeeper policy. 

In-house analytics 

We'll see a growth of in-house analytical and optimisation teams in recognition that data is the key to success.
2014 has seen C-level decision-makers recognise the value of senior optimisation experts and put budget into recruitment, rather than spending big on an enterprise tool and using it only for reporting. 
Indeed, according to Econsultancy's Measurement and Analytics Report 2014, more than a quarter of client-side respondents say they have more than five employees dedicated to data analysis.
This is double the proportion in the 2013 survey.
numbers of data analysts 

Shift in mobile focus from apps to mobile web 

We'll see a shift in mobile focus from apps to mobile web, making sure the UX of web browsing on mobile devices is as good as possible, taking advantage of the latest tech capabilities so that the need for a pure native app becomes harder to justify.
The caveat here is that brands with an established existing app will continue to tap the app market until they see a seismic shift to their mobile site. Apps can still play a key role but I think we’ll see them as differentiated services rather than ‘our website in an app store'.
Stuart McMillan from Schuh: 

Smartphone traffic

I expect smartphone traffic to be 50% of our mix by peak trade next year and desktop to only be 25%. So, for us that means a continual push towards mobile excellence.
On the subject of mobile, I expect the number of native app downloads to reduce, certainly in the retail sector.

Multichannel integration

I expect further multichannel integration, with a continued rise of Click and Collect type services, although many retailers will struggle with legacy systems and unable to fully realise a single view of stock and fulfil immediately from any location.
Those that can, will start to make better use of products such as Google’s Local Inventory Ads.


Delivery services will also improve; deliveries taking longer than three days will become more unacceptable.

Testing and CRO 

Lastly, I expect that there will be a widening gap between those that test their websites effectively and those that don’t, there are going to be many good and bad examples for Econsultancy to talk about!