Amazon has designs for your voice beyond Echo

E-commerce giant Amazon grabbed public attention with the October launch of its Echo line of smart speakers in India last year. Pre-launch discounted pricing and TV ads helped push sales into tens of thousands topping internal expectations. That early magic may have worn off – reviews point to an experience that is still work in progress for English speakers with Indian accents.

But that hasn’t stopped Amazon from taking the next step in its strategy for voice search in India, more or less mimicking its approach for the technology in other markets. It is working to introduce devices embedded with Alexa, the artificial intelligence engine that powers the Echo device, in India. In the coming months, the company expects Indians to be able to buy several voice-controlled devices ranging from smart switches to televisions, from set-top boxes to home controls, from mobile phones to automobiles.

These products, the company expects, will build it a critical mass for its voice search and voice-controlled devices and services. Amazon looks at the Alexa ecosystem in three legs, said Adam Berns, Director of Business Development, Alexa Voice Service. The first leg is its own devices: Echo Dot, Echo, Echo Plus, and Echo Spot that begin retailing at Rs 4,099 and go on to Rs 14,999.

The second leg is about so-called skills and how to enable more use cases through the devices. For instance, integrating with music streaming app to play your favourite songs or asking for a live cricket game update.

And, the third is its global ecosystem of third-party devices using Alexa Voice Service, or AVS, a software kit that allows devices to use Alexa’s voice assistance software on any compatible hardware device. Some popular third-party devices include Sonos’ voice-controlled smart speaker and Ecobee’s voice-controlled thermostat.

In India, tie-ups announced include with set-top box maker Mybox Technologies, consumer electronics brand BPL, and Bengaluru realty company Embassy Group.

Embassy wants to build Alexa-enabled smart homes with pre-installed Amazon Echo devices that will allow residents to control smart home appliances by voice. These devices will also enable residents to interact with each other, monitor movements, and help optimise energy consumption.

BPL has announced a series of speakers called VoiceOne smart speakers with Alexa’s voice integration.

Partnership is the key

Other devices the AVS team is looking to target in India include speakers, wired headphones, and automotive products. Global brands such as Jabra and Harmon Kardonare looking at introducing their Alexa devices in India.

“We believe that Indian customers prefer more value in a $100 speaker,” said Berns in an interview early May. “So it’s important for us to have partners in India to reach to a bigger market, customize products according to market needs here, get Indian manufacturers who know the roots in India, and understand the Indian market.”

“The real strength of your technology is not to hold and do it all yourself,” said Berns. “It’s to figure out how to quickly get your partners to market. For us, scale is all about third party.” Alexa has more than 12,000 smart home devices across 2,000 unique brands including marquee names such as Philips, Zigbee and Emerson.

The voice assistance market is the new battleground for tech giants Google, Amazon, Apple, and Microsoft. The jury is still out for whether Indian consumers will warm up to Amazon’s Echo devices and Alexa-enabled products and services or plump for Google’s smart home speakers, launched here last month.

India specific sales numbers of Echo or Alexa-powered devices and Google Home devices are not available but the latter has the edge globally. According to a report by analyst firm Canalys, it sold 3.2 million of its Google Home and Home Mini devices in the first quarter of 2018, while Amazon shipped 2.5 million Echo devices. Since its launch last October, Google claimed early this year that it was shipping more than one Google home per second.

Like Amazon, Google has a partner programme for the proliferation of its voice-based services and recently announced its list of partners covering lights, TVs, ACs, security cameras, and air purifiers. To its advantage, Google has a deeper integration into user’s activities thanks to products such as Android phones, Chrome browser, Gmail, calendar etc. finding wide use.

Amazon is fighting back by introducing and encouraging developers to build on Alexa, thus increasing the usability of the product. Alexa has around 30,000 skills in the US and about 15,000 for India.

“If you look at Amazon’s global play, their main aim is to add more users to its ecosystem and build the stickiness for these users. By partnering with different manufacturers and democratizing its own platform, Amazon is taking a good horizontal strategy to acquire more users,” said Neil Shah, research director at Counterpoint research. Google, on the other hand, has a tight control on its Android ecosystem and isn’t dependent on support from original equipment manufacturers as much, he added.

Mass market approach

Mybox tie-up to launch Alexa voice services is illustrative of AVS’s strategy in a price sensitive market like India. When the feature rolls out by the end of July, Mybox set-top box users will be able to use all the features on Echo devices – voice command-based shopping, booking cabs, and playing music as also control the TV screen.

Delhi-based Mybox, which has over six million customers in the country, will begin with a few users for trial before opening up to all subscribers. Mybox managing director Amit Kharbanda said the company is in talks with other set-top box makers to make the service available.

Mybox has two plans: one, through Alexa integration, a cable operator using Mybox’s set-top box will be able to give subscribers an Alexa experience. Two, customers can activate the set-top box using an Amazon kit that will have a WiFi-based dongle with a voice-based remote. The kit will be priced at around Rs 999.

Kharbanda said the cable operator approach makes sense in India given how cable TV networks have been looking for ways to increase revenue per customer. “The existing skills that you have on an Echo device will all work with the set-top box. But considering this will have an added video card advantage, we will see some more skill sets being developed for this platform as we start selling,” he said.

“Technologically, the product is changing the way Amazon is looking at things. In a way it is the fastest way for the proliferation of Alexa in Indian market,” said Kharbanda.

Households in India accessing television programming over cable TV networks number some 106 million – about 2.5 times the number of satellite-based direct-to-home TV connections (42 million), according to 2016 data. Public broadcaster Doordarshan accounts for some 30 million TV homes.

Globally, set-top box makers have started looking at voice integration as a plausible use case. E.g.: EE TV set top box maker in the UK and Verizon’s FiOS TV boxes in the US that have been introduced as an Alexa skill for Echo users. Both these, however, require an Echo device for smooth functioning.

“Voice is a great enabler in the Indian TV market that has so many spoken languages that limit user interaction with a dumb remote,” says Shah of Counterpoint. “If Amazon’s Alexa can crack multiple language support in deep content search, it could be a game changer and also help advertisers, content creators, and cable guys analyse user data that they have no means of doing today.”

Elsewhere in the world

Globally, Amazon has partnered with many devices such as speakers and home automation switches (e.g.: Switch+ connected light switch from ecobee) for Alexa voice services. Alexa is also available on Toyota car models including Avalon, Rav4, and the popular Corolla.

“We look at Alexa and think we need a billion AVS devices in the world that people interface within every part of their day,” Berns added. That is only possible through an active partner programme.

FactorDaily earlier reported that Amazon is looking to launch Alexa in cars as an infotainment device.

If Amazon and Berns have their way, all gadgets and utility devices in your house will be Alexa-enabled – mobile phones, lights, television, microwaves, coffee maker, toaster… you name it.

BigBasket’s B2B Arm Increases Losses By 7 Times Reaching $96.35 Mn

In the increasingly competitive online market space, the wholesale B2B arm of online grocery delivery startup BigBasket, Supermarket Grocery Supplies, has increased its overall losses by almost seven times reaching $96.35 Mn (INR 653 Cr) in FY17 from $14 Mn (INR 95 Cr) in the year earlier.

An ET report quoted the company’s financials with the Ministry of Corporate Affairs to reveal that the company recorded a rise of 12% in its operating loss for FY17 which reached $46 Mn (INR 312 Cr) from $40.8 Mn (INR 277 Cr) in FY16.

The increase in overall losses has been attributed to “fair value changed to the financial liabilities”.

Some of the major expenses that contributed to the company’s mounting losses include employee benefit expenses of $20.5 Mn (INR138.9 Cr).

Further, BigBasket’s B2B arm doubled its revenue to $173.60 Mn (INR 1,176 Cr) in FY17 from $83.10 Mn (INR 563 Cr) in FY16.

BigBasket had registered two operating entities: Supermarket Grocery Supplies, the B2B arm which sources products and sells it to Innovative Retail, that runs the online grocery portal.

Innovative Retail reported revenues of $160.92 Mn (INR 1,090 Cr) in FY17, a 107% jump from $77.8 Mn (INR 527 Cr) a year ago.

Losses increased to $28.19 Mn (INR 191 Cr) when compared to a revenue of $15.25 Mn (INR 103.4 Cr) made in FY16.

BigBasket Gaining Foothold

Recently, reports surfaced that BigBasket is looking to raise $300 Mn – $500 Mn from Chinese conglomerate Alibaba and some other new investors.

At present, BigBasket has been taking a slew of initiatives to create market dominance with offline expansion as well. Inc42 had earlier reported that BigBasket plans to tap the offline market through kiosksthat will stock fruits, vegetables, FMCG goods and other daily grocery items.

To this end, the Bengaluru-headquartered online grocery platform has already launched a pilot for its new offline service and has also built a separate app known as BB Instant.

With the aim of further bolstering its service, BigBasket is also looking to introduce a subscription programme for everyday essentials like milk, bread, etc.

Additionally, the Alibaba-backed Paytm was planning to integrateBigBasket on its platform as more than half of the orders on Paytm Mall belong to the grocery and FMCG categories; this integration is expected to increase Paytm Mall’s orders to 60%.

BigBasket offers about 20,000 products from over 1,000 brands and is present in 26 cities across the country, including Bengaluru, Hyderabad, Mumbai, Pune, Chennai, and Delhi. It offers express delivery of orders within 60 to 120 minutes.

The Booming Indian Grocery Industry

Earlier, Inc42 had reported that Indian ecommerce major Flipkart has indicated its plans to launch grocery services in five cities by July. Flipkart’s grocery operations would start in Hyderabad, followed by Chennai, Mumbai, Delhi-NCR, and Pune.

Beyond the big ecommerce players, existing startups in the sector include ZopNow, Satvacart, Godrej Nature’s Basket, Quikr, Grofers and DailyNinja, among others.

Gurugram-based online grocery delivery startup Grofers, which is present in 26 cities, is said to be in talks to raise $60-65 Mn in funding from Japan’s SoftBank Group with Tiger Global Management’s support.

As Amazon continues its tryst in India, Amit Agarwal, Amazon India head, shared that the company expects groceries and household products to account for over half of its business in the country in the next five years, as it moves to broaden its offerings in the segment and foray into areas such as fresh produce.

Amazon opened 15 fulfilment centres to create a specialised network forAmazon Now, while its food retail plans have hit a roadblock.

A report by Kalagato further revealed that as of March 2017, BigBasket held about 35% market share in the online grocery segment, closely followed by Grofers at 31.5%, and Amazon at 31.2%.

According to a Goldman Sachs report, the Indian online grocery market is estimated to reach $40 Mn (INR 270 Cr) by FY19, growing at a CAGR of 62% from 2016 to 2022.

Morgan Stanley expects the online food and grocery segment to become the fastest-growing segments in India, expanding at a CAGR of 141% by 2020 and contributing $15 Bn or 12.5% of overall online retail sales.

With Flipkart ready to enter the grocery market with Walmart’s offline presence, BigBasket and other players need to be ready for the next level of disruption in the crowded and competitive grocery market.

How Alibaba is planning to counter Amazon and Walmart in India

It was around three months ago that Vijay Shekhar Sharma made a passionate pitch for India with his key backer Alibaba at its headquarters in Hangzhou, China. The setting was a board meeting of payments-to-ecommerce company Paytm*, which Sharma helms. (Three of Paytm’s board meetings are held in China every year, one in India).

Sharma, according to a senior Alibaba executive, stressed how India’s ecommerce market is hyper competitive. Not that Alibaba needed much convincing.

Global retail giant Walmart was in talks with investors in Flipkart, India’s No. 1 ecommerce player, for a buyout and US ecommerce leader Amazon was counter-bidding. Walmart finally walked away with control of Flipkart paying $16 billion for 77%.

The competition, Sharma said, was at least a year ahead of Paytm Mall in terms of execution, strategy, and money of Paytm Mall. “Sharma wants to concentrate on payments, where (Paytm) has a significant lead in the India market… He wants to consolidate that position,” said the Alibaba executive, who asked to stay anonymous because he is not authorised to brief the media.

Now that the Flipkart deal is sealed and Walmart has said it will pump in another $2 billion into the company (FactorDaily has reported an initial public offer is planned within three years), change is afoot at Paytm and Alibaba in India.

Paytm Mall will soon be taken over and run mostly by Alibaba. Paytm will continue to be a shareholder in the entity, the executive said. The timeline is sometime in July or August, but before that some results need to be shown. “Sooner Alibaba takes over the product commerce business part, it is better,” he added.

FactorDaily had reported earlier that Alibaba plans to buy out Paytm Mall.

The focus will be on month-on-month growth in gross merchandise value or GMV sales, onboarding more sellers, growing inventory, and an improvement in logistics. (GMV is gross sales excluding discounts and promotions.) FactorDaily was not able to get details of the targets.

India’s ecommerce market is booming. Already at $30 billion, Citi Research estimates it to reach $202 billion in the next one decade. A lot can change by then. At present, around 70% of the Indian ecommerce market is divided between Amazon and Flipkart.

Alibaba intends to change that and its strategy is good news for Indian ecommerce buyers.

Paytm has come under fire after a sting operation last week by media company Cobrapost showed a senior company executive claiming that it has shared data with law enforcement agencies based on a call from the Prime Minister’s Office. The executive, Ajay Shekhar Sharma, also said he had close ties with Indian right-wing organisations. Paytm has denied the allegations stating that user data is safe and is shared with law enforcement only when the request is legally compliant.

A new price warrior

In this battle against Amazon and Flipkart, Alibaba has SoftBank on its side. “After SoftBank’s exit from Flipkart, it can put any amount of money in Paytm Mall… Masa believes in Alibaba’s strategy,” said a second source, also an Alibaba executive. Masa is short for Masayoshi Son, founder of SoftBank.

Alibaba has earmarked $2 billion for Paytm Mall. SoftBank will put in additional money. Paytm Mall will suddenly be flush with cash like its larger rivals. Flipkart has got a $6 billion war chest, and Amazon has $2.5 billion left from Jeff Bezos’ announced commitment to the India market.

With all the money Paytm Mall has, Alibaba plans to make it a price warrior. “Product prices will be about 20-25% cheaper than what Amazon and Flipkart sell them for,” said the first executive. “With deep pockets we will win… In China, too, we offered the products at 25% cheaper than what competitors’ prices. That was the reason for our success.”

Alibaba plans to build the supply chain that will help with the discounts. “We will squeeze out close to 30% through better supply chain and bulk orders,” said the first executive.

“Alibaba had to take some quick steps,” said K Vaitheeswaran, e-commerce veteran and author of Failing to Succeed, a book on his journey as the founder of India’s first e-commerce company Indiaplaza. “Whether this will get Paytm Mall success, that’s not certain.”

Vaitheeswaran’s scepticism is for a reason. Paytm Mall has been competing with Flipkart, Amazon and Snapdeal for the last few years but without much success. Until Snapdeal’s fall, it always ranked fourth. “There are only three reasons why any ecommerce company will succeed: pricing, selection and convenience. You need to build operational efficiencies for that. Paytm hasn’t shown any significant execution in any of the areas.”

Executives at Alibaba hope that will change. To begin with, Alibaba’s quietly growing b2b business has four million merchants. Though not strictly comparable, Flipkart has about one lakh sellers transacting with local purchasers and Amazon India some 3.5 lakh. Most of these merchants sell internationally on Alibaba but now can become sellers on Paytm Mall – providing a huge inventory. “Procurement, listing and transporting the inventory will come at a much lower cost because those processes are already in place,” said a third source aware of Alibaba’s plans.

This source pointed to Alibaba’s investment in Xpressbees Logistics and said it will help in better management of logistics.

The All-in-One store

Then, there is Paytm Mall’s push helping offline merchants being able to sell online. The idea is to give brick-and-mortar stores an online storefront and make them digitally savvy for ecommerce. Here is a detailed story on how offline is the new online strategy for Paytm Mall.

But that will not be enough, said the third source. “Vertical integration is important. The categories have to be in place,” he said. To this end, Alibaba has plans to acquire an apparel brand or to make a strategic investment – say in a company like Future Group, which counts 30% of its revenues from apparels. “Only integration of garments has not happened. We need to buy out a particular label. That supply chain is missing right now,” said the first source.

For almost everything else, it has an investment in place. In grocery – widely considered the next big battleground in Indian ecommerce – Alibaba led a $286 million round in online grocer BigBasket.

“The backend has to be integrated,” the second source said. “Those things will start happening soon.” In other words, Paytm’s grocery business will be fulfilled by BigBasket.

Alibaba has invested nearly $2 billion in Indian companies ranging from Paytm to Zomato.

For tickets, Paytm and TicketNew will play a pivotal role.

In food, there is Zomato. “The investments in these gives you a direction of Alibaba’s play in India… These will become our supply chain when we take over Paytm,” the first source said.

Food and grocery will become tabs on Paytm Mall, where people can order food and buy grocery. That is something that Amazon and Flipkart are yet to build.

Add to that: the 180 million users of Paytm’s digital payments business. “We will find out ways to get those people to shop online – through special offers, discounts, and loyalty programs,” said the third source. “Since our prices will be less than others, they will return to us.”

There is more. Alibaba has plans to launch video. FactorDaily has reported earlier that Alibaba is already in talks with multiple production houses to create original content. “Once the content is in place, we will get them integrated on the Mall. Videos will feature as a separate tab, eventually, on the shopping platform,” said the first source.

Growth will come with Alibaba moving to markets beyond the traditional ecommerce buyers.

The next 100 million customers

“The tier-I market is saturated,” the third source said. “The moment you can lower the prices, it will work very well in tier-II, III and rural markets.”

One way to go into non-urban areas is using the UC Browser, an Alibaba-owned browser that already has 130 million monthly active users in India, largely in the SEC B and C category towns. According to estimates, UC Browser has over 40% market share in India, just behind Google’s Chrome.

“We will put the (Paytm) Mall inside the browser,” the first source said. Which means, Paytm Mall will be a tab on the browser and every time someone clicks it, the mobile website of the ecommerce platform will open.

People are already watching news, short Bollywood clips, sports, regional content, and reading on UC Browser. With shopping added to it, the browser will have a lot more to offer, the first source explained.

Alibaba plans to optimise the website to make it lighter and user friendly for these users, who do often do not have access to high-bandwidth connections.

Cash-on-delivery will remain the preferred option for first-time buyers but for those who want to pre-pay, Paytm’s payment gateway will be available. “We already have a robust payment gateway,” said the first source.

To be sure, this battle will be a long one with the likes of Flipkart and Amazon targeting first-time buyers in hinterland India, too.

India has become a critical market with its 1.3 billion people, some 40% of who are under the age of 18 years and a prime market for internet and ecommerce consumers. “After the US and China, it’s the largest market for online commerce. Everyone wants a pie of this market and everyone has a strategy in place,” said Raghu Viswanath, founder and managing director for Vertebrand, a Bengaluru management consultancy.

Whose strategy will triumph is something that will be clear in time.

Promod To Expand Its Retail Footprint In India; To Retail Via E-commerce

India is among Promod’s top five markets with a huge potential for growth. By 2025, the French fashion brand is ready to expand in more than 100 retail doors across India and launch e-commerce with Rs 100 million.

As part of its retail expansion plan, Nadine Caux, Managing Director, Promod informed that the brand is soon to open new stores and venture into an exclusive e-commerce brand website. The website will allow customers to order international styles and collect it in stores or vice versa. “Consumer satisfaction through this omnichannel route will attract more loyalty. As a fashion brand we have the vision to dress every woman, hence, we want our brand to be present across major cities as well as tier 2 & 3 cities in India,” said Caux.

The women’s wear market in India contributes 38 per cent of the total apparel industry. It is estimated to be worth Rs 1,11,467 crore ($17.5 billion in 2016) and is expected to grow at a CAGR of 9.9 per cent to reach Rs 2,86,456 crore ($44 billion in 2026). This includes the Indian and the western wear markets. Promod holds a key majority in the current market and is paving its way to being the top five markets globally.

Highlighting the top fashion trends for 2018, Caux said, “Women want more style that reflects their cool, casual and easy feminine spirit. Trends like floral embroidery with embellishments on tops and denim; the play of light fabrics in print dresses and tops will rule the summer months,” she said.

Promod’s design team is working on fashion trends and draws inspiration from daily lives and activities. “Our India team shares style feedback from all its regions which culminates in a specific range for India. For eg., the denim fits are customised to Indian body type and for India, Promod has launched six styles,” she said.

As per the revenue projected, Caux is confident to grow at a very rapid pace over the next 10 years in all the channels with 1000 cr + by end of the 10th year. Talking about the future of fashion, Caux said, “Denim is a high growth category in women’s wear and is expected to grow by a promising rate of 17.5 per cent for the next 10 years to become a market of Rs 10,209 crore from Rs 2,035 crore currently. Initially, the denim brands focussed primarily on men, but with the change in the demand and preferences, the brands have started catering to women consumers.” Women’s t-shirts and tops categories are also growing fast owing to the generic inclination for western wear categories. The women tops and shirts market is valued at Rs 2,236 crore and is expected to grow at a CAGR of 14 per cent to reach Rs 8,291 crore by 2026. The women’s t-shirts market of Rs 933 crore is growing in tandem with the growth of other casual wear categories and is expected to grow at a CAGR of 17 per cent to reach Rs 4,484 crore by 2026.

So how big is e-commerce for Promod? She responds, “We initially started with Myntra and the online response from Myntra has been very encouraging in year one. We are looking at offering around 2000+ styles in the coming year and looking at doubling our turnover. Also, we see tremendous growth in online shopping in the coming years, and will launch the portal to leverage this opportunity.”

Reverse Auction based eCommerce Platform, Arzooo.com Raises Seed Funding from Omphalos Ventures India

Bangalore-based Arzooo.com, a reverse auction based commerce platform, has raised Rs 1.5 crores in a seed round of funding from Omphalos Ventures India. With the current funds, the company plans to further develop their technology, and expand its operations to the top-ten Indian cities by March 2019.

Founded by two former Flipkart employees, Khushnud Khan and Rishi Raj, Arzooo.com virtually exploded into India’s e-commerce ecosphere in July 2017, with their reverse auction model that gives high value buyers the lowest price on their chosen product, beating prices elsewhere online, in real time. Since their launch, the company has served more than 2,000 customers with an average ticket size of Rs 22,000 on high value branded goods, and a monthly run rate of Rs 7 million.

With Arzooo’s technology, customers are no longer bound to buy a product at the price listed on a popular e-commerce site, nor do they need to browse through various sites to find or compare for the best price. All customers need to do is, decide on a product and just go to Arzooo.com enter the model id and demand the best price. Subsequently, top suppliers bid and compete for the order beating prices elsewhere online. The algorithm at Arzooo takes the lowest of the reverse bid prices and offers it to the customer, thus saving valuable time and money. 

Commenting on the announcement, Sagar Ramteke, Partner – Omphalos Ventures India LLP stated, “The Arzooo team has a deep understanding of India’s consumer market for high value goods and has a grand vision of expanding this segment in the country. They are making good inroads with their unique business model. To have an e-commerce disruption coming from India is very exciting and empowering. We, at Omphalos Ventures, are proud of our association with such a game changing concept and team.”

Speaking on the occasion, Khushnud Khan, Founder & CEO, Arzooo.com said, “With this funding round, we plan to leverage deep tech and build algorithms that help us predict discounts in real time and reduce retailers’ efforts to put in best prices through current systems.We are also expanding our operations to Hyderabad, and other South Indian cities will follow soon. The plan includes expansion of services to the top 10 Indian cities by the end of the current financial year. Our goal is to take this service to top 50 Indian cities across categories in the next three years.”

Founded in June 2017, early-stage venture capital firm, Omphalos Ventures India plans to invest in around 30 startups by 2020. Recently, it has backed FreightBazaar, a cloud based integrated B2B freight collaboration platform that improves reliability and efficiency of freight transportation.

eBuX becomes the e-commerce solution of choice for Mars chocolates and Kraft Heinz

In a recent development, eBuX has announced its partnership with Mars Chocolates and Kraft Heinz making further inroads into the FMCG sector with its e-tailing commerce and analytics solutions. eBuX is a scalable solution, built on machine learning algorithms and robust technology that is scalable and stable, for brands that aids in driving brands' performance across e-commerce marketplaces.

According to a recent report by Boston Consulting Group and Google, 40 per cent of all fast moving consumer goods (FMCG) purchases in India will go online by 2020, making it a $5-6 billion business.
Also, large FMCG firms in India will spend 20-25per cent on digital advertising by 2020 and even reach 50-70 per cent for select premium brands. With the improvement of infrastructure, online shopping will grow exponentially in cities beyond the metros and together it is expected to comprise more than 50 per cent of the total online shopper base by 2020.

Understanding the impact on this segment, companies in the FMCG sector are moving towards digital transformation in order to adapt to the changing consumer landscape and shopping habits. Both Mars and Kraft Heinz have signed up for e-content services, optimized brand visibility and procuring solution license through their partnership with eBuX.

Shweta Sharma

Shweta Sharma, chief business officer, eBuX at AdGlobal360 says, "We are very excited to partner with Mars Chocolates and Kraft Heinz for our eBuX solutions. As the shopping patterns of consumers evolve, these are exciting times for the FMCG marketplace. Through eBuX we are looking to add value to their brands by creating an enhanced shopper experience across marketplaces and insights through data analytics across marketplaces. We customize strategies as per brand needs as each brand needs a bespoke dedicated communication and execution solutions."

Rakesh Yadav

Rakesh Yadav, chief executive officer, AdGlobal360, says in a press note, "We are delighted by the tremendous progress made by eBuX in the FMCG space by helping marquee and leading brands in their mission to enhance their digital presence across e-commerce platforms in such a short span of time. We welcome Mars Chocolates and Kraft Heinz to the rapidly growing eBuX family. eBuX is an online channel analytics solution for product manufacturers and an innovator at the forefront of the eCommerce analytics. It helps brands with data points such as on-site discoverability and Share-of-Search across marketplaces of Amazon, Flipkart, Paytm, Grofers, Big Basket etc. eBuX Analytics is constantly attuned to the evolving dynamics of the online shopping e-commerce revolution, delivering e-commerce Insights and Online Store Audits to manufacturers around the world."

Unlocking the potential of Indian e-commerce

The Flipkart-Walmart deal is a great step forward for the development of e-commerce in India as it is certain to generate employment and infuse competition in the organized retail segment. Photo: Reuters

Walmart has now announced an investment in Flipkart, India’s most promising e-commerce startup. The market has been waiting a while for some investment activity to validate the longstanding potential India’s middle-class market promised. It has been estimated by Brookings and others that India’s consumption class is set to become the world’s largest. The demographics pointed in the same direction. With 65% of the population below 35 years of age and with average wages rising about 10% a year, this did not seem unlikely.

However, it took its time showing up. The lull since 2012 and the recent sluggishness after demonetisation and the implementation of a complicated goods and services tax (GST) system introduced an element of uncertainty. But now, with a giant investment of $16 billion by Walmart for a 77% stake in Flipkart, the Indian market has received a much awaited fillip. The startup space that had been looking weary will now get a massive endorsement.

Criticism of this will come from the swadeshi quarter that will sense a sell-out of an Indian entity in the core retail sector. However, Flipkart is already invested in by New York-based Tiger Global Management and now by Tencent Holdings and Microsoft Corp. And with the Union government opening up just about every sector for 100% equity, there is no reason why the retail sector should be left out. It is the largest employer of unskilled and semi-skilled labour and employs a large number of people in logistics, project management, delivery, warehousing and back office operations. This should offset the fear, largely unfounded, that small neighbourhood stores and mom-and-pop establishments will close down.

Sensing the need to shape up for intense competition, Amazon India has already declared it will hire 8,000 people in its logistics division. Given the unemployment situation and the inability of the manufacturing sector to hire during the slump, it is retail and e-commerce that will fill the gap, if allowed to. We may also see new regulations, which would enable a large segment in the online retail business, if India brings in simple and clear rules on e-pharmacies. Once that takes off, we will see a new market segment evolve.

For long, we have spoken of the last mile problem in delivery of goods and services in the country. A large number of case studies show how firms and customers suffer because the delivery mechanism cannot tackle infrastructure and warehousing problems across small towns and in rural India. With large-scale investment in e-commerce, this has already seen a major change, with tier II and tier III cities being served by the likes of Amazon. Multinational fashion brands and accessories now easily reach tier II cities where subdued demand, helped by large consumer surpluses, results in big potential.

Supply chains for grocery, fruits and vegetables have also resulted in gigantic wastage. The supply chain bottlenecks resulted in huge inventories for Indian firms, with nearly a quarter of goods stuck in the process. Nearly 50% of fruits and vegetables perish owing to the creaky logistics network. All this will now start getting sorted out as supply chains get modern technology, state-of-the-art information technology, back end systems, and real time inventory management.

Indian companies and multinationals operating in the country were faced with complex tax structures and various interstate barriers that will hopefully get sorted out as the GST system refines and takes shape. With this, inefficiencies would reduce and a world-class online and offline retail infrastructure would replace the archaic and unorganized process that existed to tackle uncertainties of law, regulation, and transportation. India’s e-commerce potential is immense.

As internet access improves, the number of users will go up exponentially from the 400 million today. This will also push up the meagre sum of just about one million e-commerce transactions per day. Today, online sales are at a fraction of the $17 billion market.

The Flipkart-Walmart deal is a great step forward for the development of the retail sector in India. It will certainly generate employment, especially for the semi-skilled labour force. Also, as it infuses competition in the organized retail sector, it will give a fillip to e-commerce in the country. We should now see some dynamism in this market, that is, at the moment, in its infancy and has been struggling to get out of its big city, cash-on-delivery shackles. As large retail moves to cashless transactions and smaller towns, consumer spending will go up, and so will the need to develop skills in logistics, procurement, quality control and distribution. For a country threatened with rising unemployment, this would come across as a big move forward.

What will be required is large-scale real financial inclusion and trust in the banking system and payment gateways. Then we would see an improvement in a situation where even though 70% of the population has bank accounts, 75% of e-commerce deals are inefficient cash-on-delivery transactions. This is owing to faulty point of sale (POS) machines, poor connectivity and lack of trust. This new deal, which brings Walmart to the country, will help change the situation dramatically.