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Tag: flipkart

  • Sevenfold growth forecast for Indian eCommerce

    Sevenfold growth forecast for Indian eCommerce

    The Indian eCommerce industry is expected to burgeon in the next four years, according to a report by the Confederation of Indian Industry (CII) and Deloitte Touche Tohmatsu India.

    While the business to business (B2B) segment is expected to more than double from US$300 billion last year to $700 billion in 2020, the business to consumer (B2C) segment will grow more than seven times from $13.6 billion to $101.9 billion, says the report.

    It will be supported by a spurt in number of online shoppers, from 20 million in 2013 to 220 million in 2020, as well as a three-fold increase in average spending by online shoppers, from $147 in 2013 to $464.

    However, there is a price: combined losses for eCommerce companies such as Flipkart, Snapdeal (Jasper Infotech) and PayTM (One97 Communications) last year stood at $557 million, says the report. It notes that most B2C eCommerce companies globally, even after five to 20 years in business, have low profitability.

    “This trend, however, does not hold true for B2B eCommerce companies, which are profitable with greater GMV values.” The report attributes this to lack of heavy discounting, greater emphasis on quality rather than price, and higher volumes of purchases.

    A spurt in internet penetration, especially via mobile devices, is expected to propel eCommerce sales in India, with the report saying the proportion of 3G users among internet users has improved substantially since 2013, when about 28 per cent of the 150 million mobile internet users in India had 3G connections. This year, about 59 per cent of the estimated 371 million mobile internet users in India are expected to have 3G connections.

    According to the report, India had the highest share of mobile based eCommerce sales (41 per cent), ahead of China (37 per cent) and the US (15 per cent). The report also estimates a significant growth in the digital payments segment, from $20 billion in 2014 to $115 billion in 2018, though 60 per cent of transactions in India currently use cash on delivery.

    While payments in instalments and digital wallets account for less than 2 per cent of overall transactions, they will grow faster than plastic money, says the report. eCommerce firms such as Flipkart, Snapdeal and Amazon India are seeking to strengthen their payment offerings.

    Snapdeal bought utility payment service provider FreeCharge for $400 million last year, in the biggest domestic consumer internet deal. Amazon acquired Emvantage Payments for an undisclosed amount in February, and market leader Flipkart acquired payment services start-up FX Mart, which holds a prepaid wallet licence, in September last year. In March, the company launched mobile wallet Flipkart Money, 18 months after shutting down its payment gateway PayZippy.

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  • China $1.1T eCommerce Market On Horizon

    China $1.1T eCommerce Market On Horizon

    According to a recent report from Forrester, total eCommerce revenue for China, Japan, South Korea, India and Australia is projected to nearly double in the next five years, from $733 billion in 2014 to $1.4 trillion by 2020. That same report goes on to detail how these five Asian online economies have already outpaced the combined online retail markets in the U.S. and all of Western Europe, with China and India ranking as the two largest and fastest-growing markets worldwide.

    It goes on to point out that the Chinese market already surpassed that of the U.S. in 2015, and China remains the world’s largest eCommerce market, despite seeing its overall economic growth dip below 7 percent for the first time since 2009.

    “While the days of staggering year-over-year eCommerce growth in China are gone,” wrote Lily Varon, lead author of the Forrester report and analyst for eBusiness and channel strategy, “current growth rates are solid and more consistent with other mature markets in the region, like Japan and South Korea.”

    Varon also went on to project that China would continue to lead the region’s market growth, expanding to be nine times larger than Japan’s $122 billion market in 2020 and 17 times larger than South Korea’s $65 billion.

    India is also projected to see online sales expand by five times, fueled by a rapidly increasing number of online shoppers entering the market and per capita online spend continuing to increase. However, in the case of India, Varon noted that the country’s underdeveloped logistics, “challenging” connectivity, as well as a traditionally cash-based culture, would pose significant challenges to online retailers looking to grow the online India market.

    The Forrester report goes on to note an important and defining trend across the region: the dominance of Web-only retailers, such as Rakuten and Amazon in Japan; Taobao, Tmall and Jingdon in China; and Flipkart and Snapdeal in India.

    “Consumers have flocked to online pure-plays rather than their traditional retail counterparts,” Varon wrote. “In very few markets in the region do traditional retailers hold any dominant position or even come close to competing with the Web-only giants.”

    Having noted the significance of Web-only players, Varon shared that omnichannel functionality had not been as robust in Asian markets as it had in the U.S. or U.K. This, though, was starting to shift, as more traditional retailers start to make the move towards eCommerce in Asia. Australian retailers have been forced to play catch-up, with omnichannel offerings, such as click-and-collect, being adopted by global players, like TopShop and Zara, and helping to bring omnichannel services to the local market.

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  • Myntra India pins hopes on sportswear

    Myntra India pins hopes on sportswear

    Adding more products and international brands to its portfolio, online fashion retailer Myntra India aims to grow its outdoor and sports range revenue by 20 per cent over the next 15 months.

    Owned by Flipkart, the company earns about 15 per cent of its revenue from sportswear and has just introduced apparel and footwear from US brand The North Face (TNF), reports The Times of India.

    “The North Face is an important addition to our list of international exclusive brands,” says Myntra head of eCommerce Prasad Kompalli.

    He says the outdoor category is expected to double its growth in 2016-17.

    TNF’s range went on sale this month. Part of VF Inc, it was founded in California in 1966 and specialises in outerwear, fleece and coats. It competes directly with Columbia Sportswear, which entered India in December 2013.

    VF Asia executive Bruno Feltracco says India offers a huge opportunity as a market.

    “Our experience in China helped us decide to first go online and understand the market. There is nothing that prevents us to go offline after we reach a certain stage,” he says. “We already have some of our other brands here doing really well.”

    VF Asia’s other brands include Lee, Wrangler and Nautica.

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  • WS Retail’s 10K crore sales offer peek into Flipkart’s performance

    WS Retail’s 10K crore sales offer peek into Flipkart’s performance

    WS Retail, the largest seller on India’s biggest online marketplace Flipkart, nearly tripled its turnover to Rs 10,163 crore in FY15 — more than the combined sales of top brickand-mortal retailers such as Shoppers Stop, Future Lifestyle, Tata’s Trent and Aditya Birla Group’s Pantaloons.

    Experts feel WS Retail’s numbers, which were submitted by the company to the ministry of corporate affairs earlier this week, offer a peek into Flipkart’s likely performance for the year to end-March 2015, given its dominant position on the e-tailer’s platform.

    Cutting dependence on WS retail

    Flipkart’s own annual revenue numbers are not known. “WS Retail numbers should be good barometer to the performance of Flipkart considering it gets a bulk of its sales from this seller,” said Ruchi Sally, director at retail consultancy Elargir.

    The six-year-old company, originally founded by Flipkart’s founders Sachin Bansal and Binny Bansal, sells nearly 80% of its merchandise to Flipkart. Three years ago, the Bansals sold their stake to former OnMobile Global chief operating officer Rajeev Kuchhal and a clutch of investors.

    WS Retail reported a net profit of Rs 67 lakh on sales of Rs 3,135 crore for fiscal year 2014, which was higher than Flipkart India’s revenue of Rs 2,846 crore for the same period, the numbers showed. Another company, Flipkart Internet, which earns commission and advertising revenues from sellers, posted total sales of Rs 179 crore last year. Both WS Retail and Flipkart didn’t respond to email queries sent by ET.

    Flipkart’s head of commerce Mukesh Bansal told ET last month that Flipkart was on course to sell goods worth $10 billion (Rs 65,000 crore) during fiscal 2016. The company has in the past said it had achieved $4 billion worth of gross merchandise value or GMV, which is industry jargon for sales, last year.

    For years, WS Retail was the mainstay seller on Flipkart, the one encountered most by customers shopping on its platform. However, in the last year and a half, Flipkart has sought to diminish its prominence as part of its shift away from an inventoryled model to a marketplace one, even though WS Retail remains its top seller even now. Indian laws also prevent foreign-owned internet retailers — Flipkart is registered in Singapore and a majority of its ownership is held by overseas entities — from only operating inventory-based models.

    While Flipkart has 60,000 sellers on the platform already, it is planning to double the count by March next year in an effort to convert itself into a pure marketplace much like the one its rival Snapdeal operates.

    “Flipkart has been reducing its dependence on WS Retail in its effort to simplify its business structure. It is expected that such a step and simultaneous addition of new vendors on its website directly shall automatically reduce the trading volume of WS Retail over time,” said Rakesh Nangia, founder and managing partner at tax and transaction advisory firm Nangia & Co.

    In fact, Flipkart informed several companies and brands, which sell on the site through WS Retail, to sell directly to consumers through its marketplace few months ago. However, WS Retail will continue to be the seller for Flipkart exclusives such as the Motorola and Xiaomi handsets.

    Snapdeal already has 2 lakh sellers listed on its marketplace while Amazon India has nearly a lakh sellers, although in its case, Clouttail, its joint venture with NR Narayana Murthy’s Catamaran Ventures, is its biggest vendor.

    A month ago, Flipkart bought back the logistics business of WS Retail, which has also seen exits of two shareholders — Meenu Gupta and Sujeet Kumar — who together held a 25.3% stake.

    According to WS Retail’s annual filings for fiscal year 2015, Rajeev Kuchhal owned 49.7% stake, while one of Flipkart’s early employees, Tapas Rudrapatna, controlled another 24.8%. In fact, Rudrapatna was given Rs 24 crore as a one-time bonus for ‘increasing sales beyond targets,’ said the filing.The latest shareholding pattern after these exits and logistics business sell-off hasn’t been filed yet.

  • WS Retail’s Logistics Division Has Been Bought Back By Flipkart

    WS Retail’s Logistics Division Has Been Bought Back By Flipkart

    Flipkart Ltd., the parent company of India’s homegrown ecommerce portal Flipkart.com, which is based in Singapore, has bought back the shares of their logistics business from WS Retail. Business analysts are predicting that this move has been made keeping in mind their IPO launch, which can happen somewhere between 2016 and 2017.

    This acquisition has been made via Instakart Services Pvt Ltd., a new entity which was formed in June, 2015. This new entity’s directors are Ankit Nagori (Chief Business Officer at Flipkart) and Rajnish Singh Baweja (Flipkart’s Finance Controller). It is not yet clear how much money has been traded in this acquisition, and Flipkart has refused to share more details.

    One spokesperson from Flipkart said, “We, as a policy, do not comment on specific transactions.”

    Flipkart’s IPO Plans

    By purchasing the logistics arm of WS Retail, a company which is again, a part of Flipkart Ltd., the management is trying to simplify the company structure and make it more presentable for public listing scrutiny in near future.

    In May this year, Flipkart Chief Financial Officer Sanjay Baweja said that Flipkart is not looking for IPO for the next couple of years, as they are not ready with the strict regulations and scrutiny which comes with it.

    Sanjay had said, “We are still at a stage where we do not want to stand scrutiny on a quarterly basis. We would rather keep ourselves private for as long as we can and then we will see what lies ahead.”

    Considering that Flipkart is headquartered in Singapore, an Indian listing is not possible. As per insider sources, Flipkart is aiming for a listing at New York based NASDAQ, which is world’s second largest stock market.

    Flipkart’s Complex Company Structure

    As per various speculations, WS Retail will be closed down in the next few years, as Flipkart will convert fully into a marketplace and advertisement based business model, ditching inventory based model.

    WS Retail was actually created to get around the strict FDI rules in India. WS Retail was formed in 2009, as a seller on Flipkart’s own platform.

    Technically, WS Retail buys the products from Flipkart India Pvt. Ltd., and sells to Indian customers. Flipkart India Pvt. Ltd. is the B2B division of Flipkart Ltd. And as FDI is allowed in B2B ecommerce, but not in B2C; this arrangement made sense to the tax collector.

    However, In 2013, Flipkart sold WS Retail to a group of investors led by former OnMobile Chief Operating Officer Rajiv Kuchhal. This was done to comply with other FDI norms in India, as a special investigation had started to look into the tax issues inside the company.

    Buying back the logistics arm from WS Retail is just the start of a new restructuring process, specially aimed for the IPO listing or so we think…

    We will keep you updated as more details come in.

    “WS Retail’s Logistics Division Has Been Bought Back By Flipkart Ltd; Is It Preparation For IPO Launch?”, 5 out of 5 based on 2 ratings.

  • India eCommerce to lead BRICs

    India eCommerce to lead BRICs

    India – not China – is set to become the fastest growing B2C eCommerce market of the BRIC countries in the next five years.

    A new publication by Germany-based secondary market research expert yStats.com India B2C eCommerce Market 2015 also reveals the main challenges faced by online retail in this country, including underdeveloped logistics and low credit card penetration.

    The rapid growth of B2C eCommerce in India is driven by a combination of its vast population, increasing internet penetration and the scarcity of organised retail – especially in small towns and rural areas.

    “Next year, India is predicted to top the USA to become the second largest country worldwide in terms of the number of Internet users, behind China. While China has been the leader among the BRIC markets in terms of online retail growth in the five years to 2014, during the next five-year period India is predicted to take over this position,” says the report.

    Online retail in India has much room for growth. B2C eCommerce share of total retail sales was estimated at less than one per cent in 2014, while the share of internet users making purchases online was below one quarter. Another sign of immaturity is the high share of online travel in total eCommerce sales, reaching close to two-thirds according to some estimates. Furthermore, Internet penetration on the 1.3 billion population in India was relatively low in 2014, although showing an improvement from a single digit figure in 2010.

    “The spread of mobile Internet is expected to especially benefit the state of connectivity in this country, while also driving mCommerce sales up,” said the report.

    Apart from low Internet penetration, some major challenges faced by B2C eCommerce in India include underdeveloped logistics infrastructure and low credit card penetration. Online merchants’ profitability suffers from the necessity of accepting cash on delivery and offering free shipping.

    The top three eCommerce companies in the country – Flipkart, Snapdeal and Amazon India – developed their own logistics capabilities using recently obtained investment. Other eCommerce players that benefited from investment pouring into the Indian market include marketplace operator ShopClues, online classifieds website Quikr and online accommodation booking website Oyo Rooms.

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  • Flipkart launches 20 pick-up centres to mitigate delivery issues

    Flipkart launches 20 pick-up centres to mitigate delivery issues

    A pilot project, Flipkart claimed, has received an overwhelming response from customers with more than 80% of shipments picked up through the stores over a period of 6 months. Banking on the success of the first phase launch, the company aims to open 100 such centres by March 2016.

    Logistics and good customer experience are the most common sticking points for e-commerce companies in India. As a result, most online retailers are increasingly partnering with logistics firms to address the problem.

    “Our efforts are focused on expanding our delivery network without compromising on the customer service levels and expectation,” said Neeraj Aggarwal, Senior Director (Delivery Operations) at Flipkart. “We also plan to offer several value added services like instant returns, spot trials, open box deliveries and exclusive product demos at these experience zones to enhance customer engagement.”

    Online retailer Flipkart on Tuesday introduced 20 pick-up centres for its customers in 10 cities across the country. These so-called ‘experience zones’ will allow customers to walk into a centre at their own convenience and collect products ordered online.

    The centres have been set up by Flipkart’s logistics and delivery unit Ekart.

    Unavailability of customers during delivery and restricted entry of delivery boys into informationtechnology parks, gated communities and educational institutions are among the primary reasons that leads to customer dissatisfaction with the delivery process, Flipkart said in a statement.

    Flipkart expects this alternative delivery model to catapult customer convenience, while enhancing scale and reach in supply chain expansion.

    The company said these collection points will form a key element of Flipkart’s rural expansion strategy. “Flipkart plans to expand their reach into Tier 4 towns and rural areas by making the entire town serviceable from a pick-up centre, a reliable alternative to door delivery in small towns,” it said.

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  • Flipkart launches financial assistance programme for vendors

    Flipkart launches financial assistance programme for vendors

    Online retail major Flipkart on Friday launched its financial assistance programme Growth Capital Initiative for sellers across the country. The company has tied up with leading banks and financial institutions such as Bajaj Finserv, Axis Bank, NeoGrowth, Lendingkart and Capital First, for the same.

    The platform will compare lending services between different financial players and enable access to capital. While Flipkart will play the role of a curator, the platform will create an arena and ecosystem of financial services for sellers that will be governed by the market forces.

    “Lack of funding has often emerged as one of the key hurdles for small businesses. In fact, most of the lending organisations consider them as ‘un-bankable’ which results in a lot of SMEs/units closing down or borrowing from other sources at higher rates. We see a huge unmet demand in this sector. Our initiative will provide simple, hassle-free and competitive options to sellers to avail financial services,” said Ankit Nagori, Chief Business Officer at Flipkart.

    With this initiative, sellers across India will be able to gain quick access to loans with basic documentation and within minimum turn-around-time. Our focus is to simplify the whole capital fund gathering process so that they can make timely investment and focus on developing their businesses, added Nagori.

    Rivals Snapdeal already has a financial assistance arm for vendors in place since last year while Amazon has tie-ups with various financial institutions in the country for the same. In addition, there are start-ups like Lendingkart.com and Capital Float that assist vendors in online e-commerce to seek easy loans.

  • Flipkart to use Singapore image search tech

    Flipkart to use Singapore image search tech

    Flipkart, India’s largest online marketplace, has started rolling out image searching on its mobile shopping app which it clams will revolutionise the shopping experience.

    Flipkart is using ViSenze technology developed in Singapore for visual search and image recognition.

    The image search system allows users to upload photos of fashion items and find similar products in terms of color, pattern or style inside the Flipkart merchandise database. This eliminates keywords guessing when searching for a product, thereby simplifying the search process.

    Additionally, users browsing Flipkart’s catalogue can find visually similar products with a single tap. This brings offline-like shopping experience to mobile, acting as a virtual “shop assistant” who would show products of same color or design when users see something they like.

    This simplified search experience comes handy on the online marketplace that lists over 30 million products and is accessed by 45 million registered users, 75 per cent of them via smartphones. These new features are currently in beta and are due to be released to all users in the upcoming days.

    “We are proud we have managed to offer a solution that is also capable to handle unique needs for the Indian market such as ethnic wear,” said Oliver Tan, CEO and co-founder of ViSenze.

    The tech company originates from an R&D spin-off from the National University of Singapore, and develops highly advanced visual search algorithms, combining state-of-the-art deep learning with the latest computer vision technology to solve search and recognition problems faced by businesses in the visual web space.

    The company provides its visual technology APIs through a Software-as-a-Service offering to online retailers, content owners, brands and advertisers, app developers and digital publishers, enabling their platforms to recognise products for retrieval purposes or instant purchases.

    “The partnership with Flipkart not only attests to the strength of our products, but also reinforces our mission to enable retailers to capitalise on smart innovations in visual technology to uplift conversions, while empowering shoppers with real-time ability to search without the hassle of keyword guessing. And we will continue to innovate in this area,” said Tan.

    Key clients using the company’s image search service include internet retailers and marketplaces like Caratlane, Zalora (a Rocket Internet company), Reebonz, and Rakuten Taiwan, as well as patent search engines like PatSnap.

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  • Authorities turns down FDI in retail e-commerce

    Authorities turns down FDI in retail e-commerce

    The Union authorities won’t ease overseas direct funding (FDI) guidelines for digital commerce.

    Minister of State for Commerce and Business Nirmala Sitharaman final month met executives of Flipkart andSnapdeal and representatives from the Confederation of Indian Business (CII) and the Federation of Indian Chambers of Commerce and Business (Ficci) to evaluate the impression of FDIon Indian e-commerce corporations.

    The assembly spawned hypothesis that the Nationwide Democratic Alliance (NDA) authorities may permit overseas e-commerce corporations to function in India. New Delhi can also be underneath strain from Washington and Tokyo to chill out its FDI coverage for e-commerce.

    “B2B (business-to-business) is one of the best coverage. We’ll simply not permit B2C (business-to-consumer). India strongly believes that B2C is towards the buyer’s curiosity. If China and Japan haven’t opened up, why ought to we?” a prime official with the division of commercial coverage and promotion (DIPP) informed Enterprise Normal.

    Extra conferences on playing cards
    Throughout Sitharaman’s assembly a number of the factors that emerged have been permitting FDI in e-commerce would face assault from small retailers and the market can be flooded with imported items. Sitharaman deliberate to carry extra conferences on this problem, the official stated.

    The NDA authorities needs the ‘Make in India’ marketing campaign to achieve success earlier than opening up B2C e-commerce to overseas retailers. In addition to, Indian business just isn’t enthusiastic concerning the transfer.

    In a illustration to the DIPP, the CII said overseas corporations must be allowed after Indian e-commerce gamers had acquired the power to tackle the competitors. The chamber sought safeguards for Indian corporations like native sourcing, privateness, security towards tax evasion and checking e-wastage.

    At current, 100 per cent FDI is allowed in business-to-business (B2B) e-commerce, whereas it’s banned within the business-to-consumer (B2C) phase. Apart from, there’s a 30 per cent native sourcing rule for overseas gamers.

    Market set off
    Giant Indian e-commerce corporations like Flipkart and Snapdeal have grown considerably since their inception in 2007 and 2010, respectively. International e-commerce giants like Amazon can function in India beneath the marketplace mannequin. In some instances, overseas gamers have tied up with native corporations to enter the Indian market.

    In response to a report by Technopak, the adoption of market fashions by e-tailers is fuelled principally by enterprise scalability and FDI coverage compliance.

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  • Grocery to be next gateway for Paytm

    Grocery to be next gateway for Paytm

    Alibaba-backed payment platform Paytm is set to enter the online grocery market under a new business vertical to be headquartered in Bengaluru. The development, at a time when domestic e-commerce giant Flipkart is also preparing to start grocery retailing, a space currently dominated by small and mid-sized players, suggests investors and analysts are viewing grocery as the next big growth avenue in e-commerce.

    Through affiliate Ant Financial Services, Chinese e-commerce giant Alibaba is infusing USD575 million in Paytm, whose wallet user base recently touched 50 million. Paytm is going to use part of the fresh funding for its foray into the new business of grocery retailing.

    Paytm’s grocery segment, initially with a team of about 20, is likely to begin operations soon. Online grocery is expected to help boost its transaction rates and customer acquisition, both important benchmarks for investors at the time of valuing a company for fresh funding.

  • Flipkart to create 2 million jobs in 2015

    Flipkart to create 2 million jobs in 2015

    Indian leading e-commerce company Flipkart on Wednesday said it would directly and indirectly create about two million jobs in 2015 through its marketplace and ancillary services.

    Among other segments, logistics and warehousing would be key employment generators, the company said. In 2014, the e-commerce industry created about half a million jobs, according to Flipkart.

    The Bengaluru-based company employs about 33,000 people. Earlier this week, Flipkart said it planned to double the size of its technology team in 2015 to 2,000.

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  • Flipkart may be readying itself for Nasdaq listing

    Flipkart may be readying itself for Nasdaq listing

    E-commerce major Flipkart is believed to be working on an international listing, with Nasdaq in the US emerging as the preferred destination. Experts say before an initial public offering (IPO), expected in 12 to 18 months, the Bengaluru-based company must strengthen its financials and organisational structure.

    “The choice of stock exchange will be a challenge, as listing in India is fairly impossible because of issues such as profits and the traditional definition of promoter, etc,” said Harish H V, partner at Grant Thornton. He added Nasdaq seemed the best choice, considering it was known for listing technology companies and the fact that it was much easier to list there. Flipkart might consider Singapore, too, as listing norms in that country aren’t as strict as in many others, it is learnt.

    Consultants said if an IPO was launched in the next six to eight quarters, Indian stock exchanges wouldn’t be considered, considering the requirements related to a company’s profits. For public issues of companies without a three-year ‘profitability’ record, the Securities and Exchange Board of India had, in 2012, reduced the retail investor quota from 35 percent to 10 percent of the issue size. The move, aimed at protecting retail investors (those investing up to INR2 lakh) from IPOs of loss-making companies, limited the participation of small investors in successful IPOs such as those of Just Dial and Snowman Logistics.

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