Furniture brand accuses AskMe’s Mebelkart of copyright infringement

Online furniture and home furnishing marketplace Mebelkart is in the middle of litigation. Furniture group Housefull International has taken Mebelkart to courtfor non-payment of dues and imitation of brand name. Housefull claims that it had stopped selling on Mebelkart as the latter had defaulted on dues worth Rs. 28 lakhs.

However, they discovered that Mebelkart was selling furniture under the name ‘Housefull’. Akshay Chaturvedi, co-founder of Housefull International, says,

“After terminating our partnership with (Mebelkart), later in March we started receiving negative feedback from market associates about our products being fake and definitely not resembling the original quality.”

Lawsuit demanding repayment of dues and copyright infringement

Housefull filed a case against Mebelkart with the Mumbai police to seek repayment of the outstanding Rs. 28 lakhs and a compensation of Rs. 150 crores for ‘damaging their reputation’.

Mebelkart on the other hand, has rubbished these claims. Rahul Agarwal, CEO of Mebelkart says that the marketplace had removed Housefull, and not the other way round, “Housefull was delisted from the website due to non-compliance with our terms and conditions.” He further claimed,

“There is no product under the ‘Housefull’ brand name being sold and no use of any trademark of the said brand. ‘Housefull’ is a generic term, and several sellers use the word in their product descriptions.”

A quick scan of Mebelkart did not throw up any results for Housefull; but this need not be taken as an authoritative conclusion.

Mebelkart AskMe Groups’s protégé

Interestingly, the AskMe group owns 75% share in Mebelkart.

Litigations are not new to online commerce. Recently, Paytm filed a case againstSnapdeal accusing the latter of stealing business data. The recent court verdictdoes not fully placate Paytm, but the judiciary is nobody’s pacifier!

Amazon agrees to FDI norms to benefit its sellers?

100% FDI in ecommerce has resulted in an ecommerce disruption. The restriction on ecommerce discounts and the 25% sales cap on online marketplace sellershave been criticized and praised. The high rollers (in this case, marketplaces) in online retail haven’t said much about their plans to implement the 100% FDI norms.

Amazon in the Midst of it all

Amazon aims to meet the FDI requirements, but needs time to do so, which is why it appealed to the government and IAMAI for more time. The foreign marketplace wants to put together a process that will enable its sellers to fulfill the new FDI requirements, revealed Amazon Indian’s MD Amit Agarwal in an interview.

Taking Steps to Follow FDI Regulations – Doing it for the sellers

Amit Agarwal spoke about the recent FDI norms declared by the government.

“The Clarity allows us to invest more to make sellers successful. We will put a process in place that we can provide some clarity to our large sellers on how their share is shaping up, so that they can manage their own business on the platform. We have always been compliant and will continue to be complaint,” He said.

The largest seller on Amazon is Cloudtail. It accounts for 40% of sales on the marketplace and is a joint venture set up by Amazon and Infosys co-founder NR Narayana Murthy’s Catamaran ventures.

Other Marketplace Attempts to Meet the New Regulations

Last week we learned about Flipkart’s intent to shrink WS Retail’s share in sales. The process will take time, said the marketplace. This will give other sellers a better opportunity to sell and flourish.

Snapdeal on the other hand said it has no issues because none of its sellers have monopoly.

Can Amazon Beat Flipkart?

When asked about their rivalry with Flipkart, Agarwal gave this reply,

“All I can say is if I look at last year, we grew by 250%, which is four times what the industry grew. And we sold in the last quarter of last year, more than what we sold in the entire year. And we continue to see very strong momentum and no slowdown.”

Strangely, Agarwal’s team is motivated by paranoia. He says, “My entire team is paranoid of a very simple fear that customers will only shop on Amazon until the very moment they find  better customer experience somewhere else. And that paranoia keeps us going every single day.”

Amazon’s Investment in India

MD Amit Agarwal also mentioned that the ecommerce giant, Amazon, will keep investing aggressively in India. At the start of this month the marketplaceincreased its authorized capital by Rs.8,000 crores.

Agarwal was recently promoted to Amazon’s core leadership S-team. It allows him to work closely with the marketplace’s founder Jeff Bezos. He said in theinterview, the experience so far is very exciting and humbling. But the important bit is, this is an indication of Amazon’s excitement; about the momentum its franchise in India has gained. That too in such a short span! The marketplace also plans on investing aggressively in the country to transform the way we buy and sell. He added.

Snapdeal enters air travel segment, after online food & bus ticketing

Snapdeal wants to be everywhere! Last month the company had partnered with online food-ordering platform Zomato and bus ticket booking firm Red Bus. Around the same time, it was believed that the marketplace has also collaborated with Cleartrip for hotel & flight booking.

Yesterday on 26^th April 2016, the ecommerce biggie finally announced on Twitter that its app users could now book flight tickets online.

Eat, fly, travel via Snapdeal

According to this deal, the companies have integrated their application program interface (API) with Snapdeal. Post the successful integration, the etailer will display the respective icons (food, bus and air tickets) on their website as well as app.

As of now, all three services are available on Snapdeal’s app, but on the website, only online bus ticketing icon is visible.

A Cleartrip manager revealed,

“Snapdeal will have access to our flight inventory, and we will share a portion of our commission with them.”

Building an ecommerce eco-system

Online travel that includes hotel and ticket booking has the largest market share (87%) in the Indian ecommerce industry. Therefore, it seems wise that Snapdeal decided to dabble in this segment.

Venturing into finance, real estate, travel, food, logistics and other such sectors besides retail proves that Snapdeal is keen on setting up a sustainable ecommerce eco-system. The etailer want to look beyond GMV and invest in technology and other profitable arms.

However, some believe that their core focus area will always be its marketplace.

“Getting the inventory and the price is a commodity business… But these are mega malls with many buyers. For Snapdeal, travel will never be its main business, for us, it is,” said Ashish Kashyap of Redbus.

The lure of online travel

Online travel is crowded and tough market to crack, but the potential is huge. More so for marketplaces that already has huge buyers/visitors base. Ecommerce biggies have realized that without much investment, they can create an alternate and healthy source of revenue.

Paytm had entered the travel space last year with bus ticketing service. The Alibaba backed marketplace has now declared that it will soon offer road, rail, airline and tour bookings as well.

Abhishek Rajan, Head- Travel Marketplace at Paytm said,

“Our intention is to continuously add new travel categories to the platform and drive organic growth without making large marketing investments.”

Ecommerce investors turn focus to profitable growth: CII-Deloitte report

As the e-commerce market grew by leaps and bounds in the last four years, investors have shifted their focus to profitable growth to achieve stability, a CII-Deloitte report says.

According to the report, e-commerce B2C segment has grown significantly, leading to creation of many ‘unicorns’.

“However, focus of investors going forward seems to have shifted to profitable growth to achieve stabilisation of the economic model,” said the report titled ‘e-Commerce in India – A Game Changer for the Economy’.

It further said the primacy on profitable growth seems to be leading to collaborations and partnerships across the value chain with the aim of optimising costs.

It forecast that since the e-commerce B2B segment is showing signs of rapid digital adoption, this is likely to feed the significant rise of MSMEs and entrepreneurs from the Indian hinterland.

With a push from investors for profitability and early break-evens, the leading e-commerce companies are seen to be cutting down their burn rates by as high as 50%.

“This aggressive drive comes at a point when capital is becoming scarce for top venture-backed online retail companies. There is also a reduction in dependence on discounts as a growth strategy,” the report added.

The e-commerce industry is expected to form the biggest chunk of the Indian Internet market with a value of approximately $100 billion by 2020.

According to the document paper, the e-commerce growth has been brought about by increasing Internet and smartphone penetration in not just metros, but in tier two and three cities.

Mobile devices are further expected to drive sales through online platforms over the next 5 years, it said.

E-grocer PepperTap bites the dust; ‘Logistics Company’ its new identity

Gurgaon-based on-demand grocery delivery service PepperTap has decided to shut down its operations.

“We couldn’t shake off the feeling that we were walking (not racing like some other companies) towards the edge of a cliff hoping that things will get better before we reach the abyss,” wrote Navneet Singh, CEO of PepperTap.

The founder felt that by continuing to operate in the e-grocery field where the company was losing cash on every order no matter how big or small, they might be doing a major disservice to their investors and employees. Hence, even though shutting down the business was a difficult choice but a necessary one.

Singh added,

“Because the unique challenges of this business are not solvable in the short term and certainly not solvable without massive injections of capital, we would have to confront this issue sooner or later.”

Great start but couldn’t handle the pressure

The grocery start-up which was in for the long-haul had a great start. Their popularity grew rapidly and investors were generous with funds.

Just a year ago Singh had shared with IndianOnlineSeller,

“We were lucky to get our first order on the day of our android app going live. We slowly grew from a humble 50 orders a day to 100 orders per day within January 2015. Today we are 125 people and 10,000 customers strong.”

A year later things have drastically changed. In February this year, the company closed operations in 6 top metros. Its direct competitor Grofers made it even more difficult for PepperTap to function smoothly. On top of it, the investment climate changed.

An ex-employee disclosed how Grofers’ growing business jeopardised PepperTap’s measured but well-planned growth plan,

“Overnight, the plan changed. We were told to focus on aggregation and fulfilment. We had to be faster than Grofers.”

Hyperlocal business model is the problem?

It appears to be, yes.

Big Basket, which has been asked to come clean about its business model, is the current market leader in the online grocery business. The co-founder of BigBasket feels that this ecommerce vertical can only be successful or feasible by following an inventory-led format, not an on-demand one.

PepperTap’s founder too shares the same sentiment,

“The reason BigBasket can give you deeper discounts on perishables is because they source from wholesalers and stock inventory. They don’t go through retailers. Every bit of money they make is their own.”

To be fair, the entire hyperlocal grocery & food-ordering industry is struggling at the moment.

PepperTap’s focus on logistics business

PepperTap’s goal from here on is to channel all its energy on the logistics business – parent company Nuvo Logistics. The company is going to use the knowledge it has acquired in the last year and a half while trying to solve last-mile delivery issues and fulfill the ‘on-demand’ delivery promise.

Stating that his start-up was ‘born to be a logistics company’, Singh said,

“We are already working with many e-commerce firms and have a strong reverse logistics operations. In the next few months, we will focus on strengthening our forward logistics.”

We hope that PepperTap’s transition from grocery to pure logistics pays off.