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.

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 portalQuikr.com, 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 Fetise.com, 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.

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

Read more at:
http://economictimes.indiatimes.com/articleshow/45786515.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst