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Tag: flipkart

  • LeEco India ready to roll out 1000 stores

    LeEco India ready to roll out 1000 stores

    Chinese tech firm LeEco India plans to open 1000 outlets across the subcontinent by the end of this year.

    Expecting half of its revenue in India to come from physical stores, LeEco filed an application five months ago with the Foreign Investment Promotion Board (FIPB) to open single-brand retail stores.

    These will be a mix of company-owned stores as well as franchise outlets, says LeEco India COO for smart electronics business Atul Jain. “This is in line with our aim to be among top three brands in the country by 2018.”

    LeEco, which also has an offline presence in China, has not revealed the cost of setting up the stores. However, it will be spending nearly US$10 million on marketing in the three months starting October.

    Already the company has tied up with multiple distributors across organised and unorganised channels in India and is already available in about 3000 outlets in cities including Bengaluru, Chennai, Delhi, Mumbai, Pune and Varanasi. It expects to reach 65 cities and have a presence in 6000 to 8000 outlets by December.

    No longer exclusive

    Launched exclusively on Flipkart, LeEco’s products will now be available on other eCommerce marketplaces such as Amazon India and Snapdeal. Flipkart has contributed nearly 75 per cent of LeEco’s sales in India.

    LeEco has invested Rs.50 crore (US$500 million) in setting up a smartphone assembly plant in the Greater Noida area, in partnership with Compal Electronics. The factory has an initial capacity of 60,000 units a month but this will be ramped up to 200,000 by the end of December.

    By the second half of next year, the company plans to start exporting products to Hong Kong, Indonesia, Malaysia, Russia and Singapore, says Jain. LeEco sold more than 70,000 phones and 2000 televisions last month alone.

    Other plans include a partnership with Hungama to offer music services from next month.
    Founded by billionaire Jia Yueting in 2004, LeEco positions itself as the Apple, Netflix and Tesla of China. Apart from smartphones and online content, the company sells TVs, electric vehicles and virtual-reality headsets.

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  • Revenue up 36pc for Zalora parent

    Revenue up 36pc for Zalora parent

    The Lazada and Zalora parent is paring back its losses after divesting operations in two markets.

    With operating losses nearly halved and excluding disposals in India and Southeast Asia, Global Fashion Group (GFG) has reported a 36.3 per cent rise in net revenue.

    Backed by Rocket Internet and comprising online fashion retail businesses in emerging markets, GFG says net revenue in constant currency rose 47.5 per cent to 456 million euros (US$512.73 million).

    GFG sold interests in Thailand and Vietnam for an undisclosed amount to retailer Central Group in April. It also sold its Indian fashion business Jabong to Flipkart for $70 million in cash in August.

    GFG raised 330 million euros in funding from existing investors in July, cutting the holding of Rocket Internet to 20.4 per cent.

    The company says adjusted losses before interest, taxes, depreciation and amortisation (EBITDA) narrowed to 67.6 million euros in the first half of this year from 120.5 million euros in the same period last year. The EBITDA margin improved to a negative 14.8 per cent in the first half from minus 33.4 per cent, which the company says was driven by tighter inventory management and cost-cutting.

  • Coupang Sales Growth Bolsters SoftBank’s Bet on Korean Retailer

    Coupang Sales Growth Bolsters SoftBank’s Bet on Korean Retailer

    Coupang’s net sales more than doubled in the first half of the year, helping to validate SoftBank Group Corp.’s bet that the South Korean web retailer will carve out a piece of Asia’s booming e-commerce market.

    Net revenue rose to 868 billion won ($782 million) in the first half of the year, helped by retail expansion and increased margins, according to a financial document seen by Bloomberg. Gross merchandise volume climbed 26 percent to 1.8 trillion won in the period, the document showed.

    SoftBank, whose investment in Alibaba Group Holding Ltd. has zoomed past $70 billion, backed Coupang in June 2015 with $1 billion in financing that valued the Seoul-based company at $5 billion. The bets are part of billionaire Masayoshi Son’s quest to replicate his success with Alibaba, an investment that started with a $20 million stake more than 15 years ago. SoftBank’s expansion in Asia has also led to deals with India’s Snapdeal and Indonesia’s Tokopedia.

    The number of products offered by Coupang more than tripled to 700,000 items from a year ago, according to the document. The startup launched its Rocket Pay services and opened a fulfillment center in Korea, the first of two planned for this year, the document showed.

    Matthew Nicholson, a spokesman for SoftBank, declined to comment. Coupang Chief Executive Officer Bom Kim didn’t immediately reply to an e-mail seeking comment. Backers of Coupang include Sequoia, Greenoaks Capital and Rose Park Advisors.

    The startup, founded in 2010, is burning through cash to expand and capture users as it competes with sites such as Ticket Monster, a Korean online retailer that’s owned by Groupon Inc., KKR & Co. and Hong Kong-based Anchor Equity Partners. Forward Ventures, Coupang’s parent, said its operating loss widened to 547 billion won in 2015, compared with a 121.5 billion won loss in 2014.

    SoftBank’s e-commerce bet in India is under even more pressure. Snapdeal, which has struggled to narrow the lead of its home-grown rival Flipkart Ltd., now faces competition from Amazon.com Inc. In June, Amazon Chief Executive Officer Jeff Bezos pledged to invest another $3 billion in his company’s Indian operations, bringing the total to $5 billion.

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  • Toms and another global brands for Myntra

    Toms and another global brands for Myntra

    Flipkart-owned Indian online fashion company Myntra has added two international brands to its platform, Toms and Meters/Bonwe.

    This makes Myntra home to more than 30 global brands, says its head of international brands business, Gunjan Soni.

    US-based Toms is known for its footwear range while Chinese brand Meters/Bonwe focuses on fashion-forward styles for young men and women.

    “Our partnership with Myntra will allow us to cater to the dynamic fashion choices of millennials in India who want to dress well with an individual style without the hassles of store shopping,” says Meters/Bonwe spokesperson Jay Zhou.

    Toms MD Helen Thompson says Myntra will help the brand start its commercial relationship in India. “We have already been working to produce locally as well as give shoes and restore sight through Toms’ partnerships.”

    Online retail, which is being increasingly adopted by Indian shoppers, is expected to account for 3 per cent of total retail sales by 2020, according to a PWC report.

  • Flipkart trumps rivals in Jabong bid

    Flipkart trumps rivals in Jabong bid

    A year ago, Jabong’s founders turned down $700 million plus from Amazon; this week they sold for $70 million to Flipkart’s Myntra.

    Indian eCommerce site Flipkart has sealed a shock deal to acquire Jabong, the nation’s third largest online fashion retailer.

    The news came just a day after rival bidder Snapdeal presumed it had won the battle.

    Flipkart’s success is expected to provide a crucial advantage in its battle to ‘own’ the clothing eCommerce space, giving it an advantage of scale and local knowledge in fighting off US-based Amazon.

    Flipkart’s subsidiary Myntra will reportedly pay US$70 million for the troubled Jabong business. That’s a fraction of an offer from Amazon in early 2015 which valued Jabong at between $700 million and $1 billion.

    “The acquisition…. holds an important lesson to all investors and entrepreneurs,” observed Harsimran Julka of Tech in Asia. “Exit when you don’t want to sell.”

    Jabong is one a growing group of failing Southeast Asian eCommerce websites owned by Germany’s Rocket Internet which has witnessed the value of its businesses shrink dramatically over the last 12 to 18 months. It has sold off Foodpanda, Zalora and Lazada websites in several regional markets in a bid to stem growing losses.

    “The acquisition of Jabong is a natural step in our journey to be India’s largest fashion platform,” said Ananth Narayanan, CEO of Myntra. “We see significant synergies between the two companies especially on brand relationships and consumer experience.”

    Julka wrote that in buying Jabong, Myntra will acquire one of the best sourcing systems, catalogs, and loyal customer bases, especially amongst women buyers, within India.

    “With Myntra’s app-only experiment going kaput last year, the company lost a lot of traction in India.

    “The buyout will also give a boost to profitability of Flipkart, as the fashion category is the most profitable of all eCommerce segments, with gross margins as high as 80 per cent.”

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  • ABFRL takes over Forever 21 India

    ABFRL takes over Forever 21 India

    Aditya Birla Fashion and Retail (ABFRL) will acquire US-based clothing brand Forever 21 India from existing local franchise partner Diana Retail.

    The Rs.175-crore (US$26 million) transaction involves a business transfer agreement, not share transfer, says ABFRL in a filing with the Bombay Stock Exchange.

    The Forever 21 business will become part of ABFRL’s Madura Fashion & Lifestyle division.

    ABFRL was formed after the consolidation of the branded apparel businesses of the Mumbai-based Aditya Birla Group, one of India’s largest conglomerates. It has a presence in 375 Indian cities.

    Forever 21 has a network of more than 700 stores worldwide.

    “With the acquisition of Forever 21, we aim to create a strong foothold in the womenswear business in the western-wear segment, which is growing at 20 per cent,” ABFRL MD Pranab Barua said in May when the company announced it would enter into a deal to acquire Forever 21’s online and offline rights for the Indian market.

    In March, it is reported that Flipkart’s online fashion store Myntra, which sells Forever 21 products, was seeking to take over management of the US brand’s India  brick-and-mortar stores.

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  • Adidas Group India plans shopping app

    Adidas Group India plans shopping app

    Sportshoe brand Adidas Group India is planning to launch a shopping app by December, primarily to drive customer engagement through content and loyalty programs, as well as boost online sales.

    It is a significant move as it indicates increasing fragmentation in online fashion shopping, as most brands do not have independent shopping apps, reports Live Mint.

    With its app, Adidas is aiming to strengthen its online presence as brands and offline retailers adopt omnichannel strategies to offer customers access to products across physical stores via their mobile phones and websites.

    “Our engagement with consumers does not end in incremental sales,” says Adidas Group India’s senior eCommerce director Abhishek Lal. “Shopping is just a small fraction. We are planning an app and rewards program to increase engagement with the brand.”

    Separate apps will be rolled out for Adidas and its subsidiary Reebok India.

    Adidas is currently available on online stores such as Amazon India, Flipkart and Myntra, and online channels contribute 10 to 15 per cent of the company’s overall sales, says Lal.

    Other brands are already building online stores to reduce their dependence on the likes of Amazon India and Myntra. Leading the way is Madura Garments with two online stores, Abof and Trendin. Its brands include Allen Solly, Louis Philippe and Peter England.

    By launching an app, Adidas is also trying to tap into social commerce by offering content and creating communities of fashion followers.

    “Social commerce is complementary to pure play eCommerce, and also the way forward for us,” says Lal. “There is no history of a single-brand app yet, so it is hard to assess what the outcome will be.”

    Adidas has also expanded its omnichannel presence since its launch early last year. Adidas plans to bring about 400 stores under the omni-channel loop by December. Those already involved in the strategy have had their revenue grow about 3 to 5 per cent.

    “There has been some impact on revenue because of omni-channel,” says Lal. “A lot of sales were lost because sizes were not available in stores. There was also a lot of cross-selling. We have a brand called Neo which is available only online, so a lot of people walked into the stores and bought Neo on the tab. That is an upsell opportunity.”

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  • LeEco India moves into stores

    LeEco India moves into stores

    Chinese internet and ecosystem conglomerate LeEco India has ventured into the offline retail space to expand its consumer base in an increasingly competitive market on the sub-continent.

    It has started selling its Le 1s smartphone, initially available exclusively on Flipkart, through retail stores across prime locations in Delhi and Mumbai. In the second phase, LeEco plans to cover nearly 70 per cent of retail stores across India that sell mobile technology, by the end of September.

    “We have fast-tracked our growth trajectory in India, and our entry into the physical retail space affirms it,” says Smart Electronics Business of LeEco India COO Atul jain.

    LeEco has also just launched its eCommerce platform LeMall in India, and also has a new ecosystem membership program. As well as providing users with high-quality content, the program integrates personal cloud services (LeEco Drive), LeMall and after-sales services.

    Founded in China in 2013, LeMall is now available in Hong Kong and the US with a product range including smartphones, smart TVs, reverse in-ear headphones, all-metal earphones and Leme Bluetooth headphones. The company started in India in January with the Le 1s and Le Max, and now has 555 service centres in prime locations.

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  • New lifeline for sagging Rocket Internet fashion sites

    New lifeline for sagging Rocket Internet fashion sites

    Investors have injected US$339 million lifeline into GFG, which owns the struggling Rocket Internet fashion websites.

    Rocket Internet and others have sunk the euro 300 million into its Global Fashion Group, raising GFG’s valuation to €1 billion – which is about a third of what it was worth hardly a year ago, when it raised €150 million.

    Launched in Luxembourg in 2014, GFG is a holding company formed from a merger of five eCommerce fashion companies – India’s Jabong, Latin America’s Dafiti, Russia’s Lamoda, Middle East firm Namshi, and Zalora (Southeast Asia and Australia).

    GFG acting CEO Romain Voog says the financing will provide the group with the capital it needs to continue with its strategy of “building out its leading position” in the online fashion sector in emerging markets.

    Rocket claims GFG’s performance has improved in the past year, easing its losses and raising its adjusted EBITDA margin. But it has been struggling to gain market share, and pulled out of Thailand and Vietnam, one of the fastest-growing eCommerce and internet markets in Asia.

    And GFG’s Jabong business in India, considered the next big market after China, has reportedly been up for sale for months with its valuation eroded by a tenth in just a year. Meanwhile, rival eCommerce companies like Flipkart and Snapdeal have soared in value.

    Voog is optimistic the reduced losses combined with this funding round will help accelerate the GFG’s path to profitability while it expands. A third of the €300 million raised came from Rocket. Swedish investor Kinnevik was also involved, along with existing shareholders.

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  • 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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