EORS brings mixed results for Myntra, Jabong

The ‘End of Reason’ sale has ended, and the results are out. While Myntra (and Jabong) CEO Ananth Narayanan is upbeat about the results, we hear that they have not been able to meet their own targets. According to insiders, Myntra did sales worth Rs. 350 crores, and Jabong raked in Rs. 100 crores. Myntra has said that it has witnessed a 160% increase in its revenue, with men’s casuals topping the popularity chart (followed by sportswear and women’s ethnic attire).

Narayanan maintains that all targets have been met, and there is no shortfall. He says,

“I don’t think we fell short. Although internally I always push the teams to do more, but if you look at our expectations as to where we got to, it was essentially Rs8 crore over what we originally expected.”

Demonetisation the chief villain

Kala Gato, research and analytics firm, observes that the ecommerce industry is lagging behind by 15 to 20% of its average figure. Myntra also observed a slip in its growth and sales after the demonetisation.

The company is looking at achieving a GMV of Rs. $ 1 billion in 2017. It is also hopes to earn profits by 2018 (however, one wonders if this is over ambitious considering that the company saw a drop in its growth in 2016 ) Narayanan said,

“We crossed a billion dollar run rate this year, we want to cross a $2 billion run rate by 2018 March. We want to be not just unit economic positive but overall profitability. We want to exit the next year with EBIDTA zero January-March 2018.”

Towards this, the company plans to ramp up its private labels, curb discounts, focus on customer engagement, and cutting supply chain costs.

2017 has begun on a hopeful note for Myntra. As the year progresses we will find out how the company’s fortunes will grow.

Flipkart’s WS Retail in the pink of financial health; Amazon launches city-specific selling platform

In December 2016, IOS reported how the revenue of Amazon’s largest seller Cloudtail surpassed Indian retail giants’ Shoppers Stop and Tata Trent’s revenue. While the Amazon seller might have won against offline retailers, it lost to its toughest rival – Flipkart’s WS Retail.

WS Retail clocked Rs 13,921 crore revenue in FY 2015-16

The home-grown ecommerce giant’s own seller WS Retail witnessed a 33% revenue increase at Rs 13,921 crore in the financial year 2015-2016. Flipkart’s largest seller’s income is nearly three times more than Cloudtail’s FY 2015-16 revenue of Rs 4,591 crore.

WS Retail’s regulatory filings report stated,

“The profit of the company has increased more than six times which is mainly the result of efforts of the management to increase the revenue and reduce the expenses incurred by the company.”

However, this financial report is of the pre-FDI period.  In late March 2016, the new ecommerce guidelines were announced that put a 25% sales cap from one vendor. As a result, Flipkart started reducing WS Retail’s share and introduced new vendors. Needless to say, the largest seller’s FY 2016-17 report card would be a little different in terms of revenue.

It would also affect Cloudtail’s numbers, which is anyway less than WS Retail.

Meanwhile, what’s Amazon up to?

Amazon lost a point to Flipkart in Cloudtail VS WS Retail race. But the Jeff Bezos’ company has various tricks up its sleeves.

Amazon India swears by the localization strategy to win the Indian ecommerce war against Flipkart and other players. Be it localized ads or payment solution, the American etailer is quite aware of the Indian consumers’ needs and wants.

The online marketplace’s latest offering is a city-specific digital platform for small vendors.

The program has been launched in Bengaluru, which would allow home-based businesses and small merchants to register on the platform via smartphones. Sellers from the fashion jewellery and ethnic-apparel category would get an opportunity to reach out to local buyers within their city through this new initiative by Amazon. Home décor and other categories will also be added in the future. Individuals can also buy and sell pre-owned goods.

Mahendra Nerurkar, General Manager and Director, Junglee.com at Amazon.com revealed,

“We have opened up the programme for individual sellers as well as home entrepreneurs in the fashion accessories and ethnic apparel categories. We have seen 600 sellers and home entrepreneurs registered with us over the period of one-and-half months.”

Some features of this Amazon program:

• Smalls sellers looking to increase inter-city sales get access to Amazon’s huge platform

• Fixed fee structure, that starts at Rs 10 as commission for orders below Rs 1,000

• Amazon India’s logistics network handles order fulfilment, right from picking and packing the product

• Products are delivered within 3-5 days

• Payments are released quickly and payment methods are similar to Amazon India that includes COD and Amazon Pay

Seller Alert! Terms of use of Fulfilled by Flipkart have changed

Online marketplace Flipkart is no stranger when it comes to introducing change. The etailer has changed its policies regarding weights numerous times. And now, at the start of this new year, the ecommerce company has done it again.

Flipkart has introduced new changes to the terms of use of its fulfilled by Flipkart feature. It informed online sellers via email that these changes would be made effective from 5th January 2017. The changes made are with regards to weight issues for fulfilled sellers on the platform.effective from 5th January 2017. The changes made are with regards to weight issues for fulfilled sellers on the platform.

Let’s take a look at what they are.

1. Disputes in volumetric weight calculated during inwarding into warehouse

• Volumetric weight disputes will not be entertained for all products that fall under the verticals stated below:

• Sellers with products that do not fall in the above list will be allowed to raise requests for recalculations in case of discrepancies. However, the seller is required to share valid proof of discrepancies.

2. Disputes in actual/dead weight

In this case, sellers will be allowed to request recalculations in the event of discrepancies. Proof of the discrepancies will need to be provided.

Flipkart states that it will not be able to liable to reverse any amount disputed regarding weight disputes.

How can sellers be prepared?

A – Sellers must thoroughly check the lxbxh and weight values of their products under inventory in the Flipkart Fulfilment section on the seller portal. In the event of discrepancies in these values, a dispute must be made according to the above changed policy.

B – Flipkart urges sellers to make sure they are proactively checking the volumetric and actual weight of their products. At the same time, the etailer states that only valid proof will be taken into consideration. So sellers must do the needful.

Top executives exit chaos continues at Flipkart; CEO Binny Bansal replaced by Kalyan Krishnamurthy

Looking at the series of resignations, we wonder if Flipkart is not a great place to work. Earlier this week, three people from Myntra and Flipkart’s top management left the company.

In the span of just few days, Flipkart is hit by exit of three more top level executives.

Who’s leaving now?

In the recent exits, Flipkart lost its Ekart head, marketing head and customer shopping experience head. They are:

• Saikiran Krishnamurthy, Head of Flipkart’s logistics unit Ekart
• Surojit Chatterjee, Senior Vice President & Head of Product Management at Flipkart
• Samardeep Subandh, Chief Marketing Officer

Kalyan Krishnamurthy, the new CEO

In January 2016, co-founder Sachin Bansal handed over the Flipkart CEO mantle to his fellow co-founder Binny Bansal. Exactly a year later, Binny Bansal has been replaced by Kalyan Krishnamuthy as Flipkart’s CEO.

The home-grown etailer had re-hired Krishnamurthy in June 2016 as its business head to reduce its troubles.

A Flipkart official revealed,

“When push came to shove, we had to bring back Kalyan. If Flipkart had actually hired and (assimilated the high-profile executives) well, we’d have had enough people who could’ve taken up the role and we wouldn’t have needed him. But it was obvious he was the only guy possible at that point.”

And this move worked for Flipkart because the tough taskmaster made some major changes in the company.  He fired non-performing top executives, set high targets, kept a tab on company spends and elevated the pressure on employees to perform.  As a result, BBD 2016 was a success and many brands (like Motorola and Xiaomi) returned to Flipkart from Amazon on an exclusive basis.

That’s why Krishnamurthy’s appointment as Flipkart’s CEO hasn’t surprised anyone.

“Kalyan was anyway running the show before this, so this isn’t a complete surprise,” said a company insider.

Binny Bansal, Flipkart Group’s CEO

In his new role as the group CEO at Flipkart, Binny Bansal’s responsibilities would include:

• To keep an eye on capital distribution across all the group companies
• To oversee merger and acquisition activities
• Handle CEO selection at Flipkart’s other companies such as Myntra, Jabong and PhonePe

While everything looks fine from the outside, company insiders disclosed that Binny wasn’t too happy about the fact that Krishnamurthy called the shots in Flipkart.

A company executive revealed,

“Binny (wasn’t) too happy that (Kalyan was effectively running most of Flipkart). He is a very hands-on kind of leader so he obviously resented this. But the point is, he couldn’t do anything about it.”

Industry watchers believe that the recent three exits is a direct result of Krishnamurthy becoming the new CEO. In the past, Mukesh Bansal and Ankit Nagori had resigned after Binny took over as CEO. The same happened after Krishnamurthy’s re-appointment. In October 2016, Flipkart’s CFO Sanjay Baweja had resigned and in November the CTO Peeyush Ranjan had quit.

More top-level exits in the offing?

New Snapdeal CPC rate card out; It’s time to revise your bid rates again

Marketplace advertisements are an important facility that helps online sellers distinguish their products and brands from the rest. Sellers use them to improve visibility and better their sales. IOS recently questioned the accuracy of marketplace ads. We revealed that this form of promotions takes patience and attention to detail to perfect.

If you sell on Snapdeal you may want to rework your advertising strategy because its CPC rate card has been changed again.

Snapdeal offers the ad facility to online sellers through its cost per click (CPC) facility. Not so long ago the etailer announced it would be changing its CPC rate card and sellers would be required to make necessary adjustments. The etailer has decided to change its CPC rate card once more.

The marketplace informed online sellers through email that a new rate card is in effect. You can check the new rates here.

Snapdeal said, “We urge you to revisit your CPC campaigns and adjust your bid prices to accommodate the changes, if required. In case you do not change your bid price, it will remain unchanged.”