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Tag: india

  • Foodpanda India ‘likely to close’

    Foodpanda India ‘likely to close’

    Foodpanda India appears likely to be shut down after parent Rocket Internet failed to find a buyer at a bargain basement price.

    It’s the latest chapter for the increasingly troubled Asian operations of Foodpanda which last monthgave up in Vietnam after failing to win market share off rivals and in Hong Kong axed its upmarket spinoff brand Foodora, merging the two businesses into one.

    India’s Economic Times reports Foodpanda is “desperately searching for a buyer” for the troubled Indian business, despite setting the price tag at just US$10 – $15 million.

    “Both Zomato and Swiggy have been approached for a buyout, besides one larger horizontal company. But Rocket is yet to garner keen interest from possible suitors for Foodpanda,” another source told theTimes of India.

    At the end of December, Foodpanda India laid off 300 staff , about 15 per cent of its local workforce, as it faced increasing competition from Zomato. The company said the redundancies were the result of achieving near 98 per cent automaticon of its ordering process.

    The Economic Times reports Rocket’s problems in India are not restricted to Foodpanda.

    “The Samwer brothers-led Rocket Internet’s interest in its Indian portfolio has been waning with most of its flagship firms, including FabFurnish and PrintVenue, being put on the block,” the newspaper said.

    It concluded that if a buyer for the sites cannot be found the company would simply close them.

  • Apple turns to India as Chinese market weakens

    Apple turns to India as Chinese market weakens

    As red-hot sales in China show signs of cooling, Apple Inc executives are touting India’s growing appetite for iPhones.

    In an earnings call in which the company reported meager iPhone growth and forecast its first revenue drop in 13 years, the Indian market stood out as a rare bright spot for Apple.

    Sales of the company’s flagship smartphone climbed 76% in the country from the year-ago quarter, Apple CFO Luca Maestri said on the call.

    And Apple CEO Tim Cook suggested more growth is on the horizon, noting the median age in India is just 27.

    “I see the demographics there also being incredibly great for a consumer brand, and for people that really want the best product,” Cook said. “We have been putting increasingly more energy in India.”

    Growth in India is a tantalizing prospect as Apple grapples with the economic downturn in China, its second largest market. While revenue in Greater China rose 14% in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Maestri told Reuters in an interview.

    India cannot immediately offset Apple’s woes in China, said analyst Neil Shah of Counterpoint Technology Market Research. The company averaged only about 450,000 smartphone shipments per quarter in India in 2015, compared with more than 15 million per quarter in China, Shah said.

    What’s more, nearly 70% of smartphones sell for less than $150, leaving just a sliver of the market for Apple’s high-end phones. The company’s smartphone market share stands at less than 2%, Shah said.

    But the Indian market seems to be turning in Apple’s favor. With 4G coverage spreading, Indian consumers will likely be more open to investing in smartphones, Shah said.

    Young consumers are already willing to spend heavily on the device at the center of their digital lives. As in China, Apple products are coveted status symbols.

    “The love for the iPhone is there,” said Carolina Milanesi, chief of research and head of US business at Kantar Worldpanel ComTech, a consumer research firm.

    Apple’s next task is expanding distribution in India, where its products are sold through third-party resellers. The company has filed an application with India’s Department of Industrial Policy and Promotion to open its own stores, an Indian official told Reuters earlier this month.

  • Retail in India, The opportunities and challenges retailers can expect

    Retail in India, The opportunities and challenges retailers can expect

    The country presents retailers with growth opportunities, including some advantages that can’t be found in China

    Lately there’s been much talk and worry about China’s long-term growth prospects and what that means for retailers counting on expanding in the country. Certainly, China seems to be in a time of transition, in which consumption seems destined to fall after years of strong and steady surges.

    Meanwhile, India also presents retailers with growth opportunities, including some advantages that can’t be found in China.

    Already, American brands constitute a large 35% of all foreign brands in India, followed by U.K. brands, at 12%, Italian and French brands at 8% each, and Japanese, Swiss, and German brands at 5% each, according to a 2015 Indian retail report from London-based real estate consultancy Knight Frank.

    In fact, Apple Inc. just last week confirmed that it has applied to India’s Department of Industrial Policy and Promotion to open and run its own stores there, a sign that it sees potential in the country.

    “I expect to see a lot of action in the next 10 years in India,” Venkat Viswanathan, founder-CEO of LatentView Analytics Corporation, told Retail Dive. “I believe we are still at a very early stage of realizing the potential of a market the size of India, and that it’s only a matter of time that India becomes an equally big part of the [business] ecosystem.”

    Language, just the beginning

    English is an official language in India, and serves as a common language for many of the sub-populations there. Therefore, language isn’t the barrier for businesses doing business there, including retailers selling to Indian consumers.

    Furthermore, while in China there’s a Chinese equivalent to Facebook, Twitter, and other social media platforms, the most widely used ones in India are the very ones that are widely used in the U.S. India gives Facebook its second-largest membership base, after the U.S. That means brands have one less barrier to bust through when reaching Indian consumers.

    And, while the Indian government’s official statistics aren’t quite as credible as those released by U.S. government agencies, says Viswanathan, they’re deemed by most as more solid than numbers released by the Chinese government, which are widely seen as untrustworthy and even confusing. (Something that has only served to increase the level of uncertainty and worry about China’s future.) India’s equivalent of the Federal Reserve is considered highly credible, says Viswanathan, and what he calls the “reasonably strong English press,” a strong judiciary, and the open and democratic parliamentary system that supports questioning and debate—plus the strength of the private sector—all help give companies doing business in India some solid ground to build on.

    Growth potential

    But above all, our experts say, India, with a population that includes a large young, mobile-first generation and a growing middle class, presents a lot of growth potential for retailers.

    A study from the Internet and Mobile Association of India last year found that there were 52 million new internet users there in the first six months of 2015, bringing the country’s total user base to 352 million as of June. And of those, 213 million, more than 60% accessed the web through their mobile devices.

    As internet and mobile use has exploded, not surprisingly, so has e-commerce. India’s top 25 retail websites took some 62% of all traffic there, according to digital market intelligence company SimilarWeb. While e-commerce is still a small fraction of retail in India—some 4% to 6%—it’s growing rapidly and expected to scale up exponentially in coming years.

    How Amazon is changing the game

    Amazon, as it has done here, is giving retailers in India fits. India’s best known online marketplace, Flipkart, looks like it’s being overtaken by Amazon, even though Amazon India wasn’t established there until two years ago. In December, for example, Amazon India registered 163.1 million monthly web visits (mobile plus desktop) compared to Flipkart’s 122.8 million, according to SimilarWeb. However, Flipkart still dominates via its mobile app, which is installed on 35% of mobile devices in India, according to SimilarWeb, at least for now.

    “Amazon is giving all the India players a run for their money,” says Viswanathan. “Step by step they’ve introduced all the new concepts have in the U.S., including Prime, which this year is expected to change the way all these marketplaces operate.”

    Challenges in India

    While many startups in India have garnered attention and money, Viswanathan says that some of that will ease up as investors get pickier about where they put their money (a smaller version of the tech bubble that many expect will burst before long, or at least deflate).

    But a more concrete challenge for retailers is the reality that, while mobile is well established and e-commerce is growing, the physical infrastructure needed to get goods from point A to point B is in need of further development, says Viswanathan.

    While retailers are used to being able to offer two-day shipping to just about anywhere in the U.S. or Europe, he says, that’s just not possible in many parts of India.

    “Many retailers assume such things exist in India and then have to completely reinvent their logistics,” he says. “Anyone with physical goods will encounter the real India, and have to adapt to the logistics realities in India.”

    However, that could also mean that state-of-the-art fulfillment capabilities like drones could do well there, especially as demand for such goods heats up.

  • Mumbai has highest potential for modern retail in India

    Mumbai has highest potential for modern retail in India

    Mumbai Metropolitan Metro has the highest potential for modern retail in the country at Rs 1.05 lakh crore, followed by Delhi-National Capital Region, which has total potential of Rs 77,900 crore, according to Knight Frank & Retailers Association of India’s ‘Think India. Think Retail. 2016’ report.

    Bengaluru is third in the list, with potential of Rs 48,600 crore.

    As part of the city-level analysis, the report has identified zone level supply-demand gap for apparel, F&B, entertainment and grocery across India’s top markets.

    It says the penetration of modern retail is set to increase from the current 13.5% to 50% by 2036 in Mumbai, from 26% to 50% by 2028 in NCR and from 24% to 50% in 2026 in Bengaluru.

    While the market potential of daily needs supermarkets and hypermarkets is pegged at Rs 58,800 crore in Mumbai and Rs 51,200 crore in NCR, it stands at Rs 24,300 crore in Bengaluru.

    The report says that modern retail penetration in India is extremely low at 19% compared to US, Singapore and China, where the figures are 84%, 71% and 63% respectively.

    According to the report, 69% of the total retail spending comes from Mumbai Metropolitan Region, NCR and Bengaluru out of the top seven cities in the country.

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  • Indonesia lures Indians with free visas

    Indonesia lures Indians with free visas

    Indonesia may be attracting almost double the number of global tourists than India but visitors from here are few and the southeast Asian country has decided to grant free visas to Indians to attract more travelers from India which is a “big market” for them.

    Vinsensius Jemadu, Indonesia’s tourism director, was in India to promote Indonesian tourism and attract more Indians. He says Indonesia and India enjoy very good relations which will help in attracting more tourists. Indonesia is also participating in the South Asian Tourism and Travel Expo (SATTE) 2016.

    Jemadu said that more than 10 million people from across the globe visit Indonesia every year – but only 270,000 from India. Indonesia attracts the highest number of tourists from Singapore, followed by Malaysia, Australia, China, Japan, South Korea and then India.

    “Realising that India is a big market, the Indonesian government decided to grant free visas to Indians. We have set a target to attract 350,000 tourists from India this year, which is a big challenge for us,” he said. “Most of the people from India visit Bali. May be it is because they do not know about other places there. We want them to explore other places of the country as well,” he said.

    Indonesia’s tourism industry contributes nine percent to the country’s GDP. “Our plans are to boost tourism industry and increase it to 15 percent of the GDP by the end of 2019.”

    “As many as 60 percent of the total tourists visit Indonesia because of its rich cultural heritage while 35 percent come to the country to see its natural beauty. Five percent tourists come here to enjoy manmade activities,” Jemadu told IANS.

    Expressing concern over lack of direct connectivity between India and Indonesia, Jemadu said: “So far there is no direct flight between the two countries. People from India reach Indonesia via Singapore or Malaysia which is not good for tourism because people have to spend more time and money in travelling.”

    He, however, added that this issue will be sorted out soon as both the governments have agreed to start direct flight between the two nations.

    “I am hopeful that the direct flight between Mumbai and Bali will start by March or April. Garuda Indonesian airline had agreed to operate flights between the two countries,” he said.

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  • Hong Kong Indian entrepreneur out to build ‘the next Alibaba’ in Mumbai

    Hong Kong Indian entrepreneur out to build ‘the next Alibaba’ in Mumbai

    Akanksha Hazari’s parents were relieved when she announced in 2013 that she was moving to Mumbai on her own.

    “After Palestine, India was fine,” says her mother, Anjali. “Akanksha wanted to go to Africa originally, but her father and I managed to convince her that it was probably not a good idea.”

    Home for the 32-year-old former Middle East strategist turned star technology entrepreneur is Hong Kong, the city she moved to with her Indian parents when she was eight. She attended West Island School,and became so good at squash she was selected to play for Hong Kong in her teens.

    “For me, Hong Kong is very much home … I am an Indian-Hong Kong girl,” she says.

    Hazari is the founder of m.Paani, a phone-based customer loyalty platform that helps to bring together small retailers andconsumers in emerging markets.

    It may sound esoteric, but as she explains in her parents’ Mount Davis flat, this is just the first step in building a global business that can help the world’s underserved “offline” population access important services from which they have been excluded. In short, she wants m.Paani to be the next Alibaba.

    Her ambition is matched by an iron will that has seen her take on a large American charity co-founded by Hollywood star Matt Damon, and win.

    In 2010, Hazari was studying for an MBA at Cambridge University and formed a team to enter an annual competition for business students run by the Hult Prize Foundation. That year, participants were asked to submit business plans that could help address water scarcity issues, and Damon’s Water.org was brought in as an adviser. Hazari’s team came up with m.Paani (paani means water in Hindi), a mobile phone-based customer loyalty programme that encourages the supply of clean water to low-income families in India. When they won, Hazari – the only team member who wanted to launch the start-up for real – asked for the US$1 million prize money she believed they had been promised. Water.org, however, was under the impression that the US$1 million was going to its own projects.

    Our goal was to support Hult in its efforts to teach about the urgency of this issue among students and the need for innovation,” writes Rosemary Gudelj, the charity’s senior manager, global advocacy and office of the CEO, in an email. “However, we also knew that these students only had two months to develop ideas. While we were hopeful that the winning case or other cases would be actionable by Water.org, we clearly were not comfortable committing to implementing the winning idea.

    “When [Hazari’s] team won, we offered to have her and her team work with Water.org on looking into and developing the group’s idea to probe further, and see how this concept could be applied to local needs and circumstances. However, her request was to receive the full US$1 million grant to fund the organisation she launched.”

    In the end, Water.org kept the US$1 million and the Hult family gave Hazari a separate grant of US$300,000 that allowed her to widen m.Paani’s business.

    “At the time, Hult Prize thought it a better strategy to partner with a non-government organisation to help the winners manage and deploy the prize capital, rather than to directly give the money to a young student team. But once the US$1 million was transferred to Water.org, they kept it. That’s why I couldn’t start m.Paani straight away. It took me two years to get the money, which Philip Hult privately gave me,” says Hazari.

    That tenacity helped her secure most of the funding she needed to set up the business in Mumbai around 18 months ago. Today, the loyalty point network has around 200 merchants and 10,000 customers.

    “Think of it as something like air miles or credit card points. You earn points when you buy your groceries at your neighbourhood m.Paani corner shop. The shopkeeper taps in your mobile phone number – that’s your m.Paani account number – and your point balance is updated in real time,” says Hazari. The points can be used to pay for items or to redeem practical gifts from the m.Paani gift shop: water filters, English language textbooks or small appliances, for example.

    While m.Paani has a social agenda – to leverage the often-neglected purchasing power of lower-income households and to boost the competitiveness of small, independent retailers that make up about 70 per cent of India’s US$600 billion a year retail market – it is very much a for-profit business.

    It makes money by charging shop owners a commission for each transaction recorded. In return, previously offline mom-and-pop shops get a customised website, mobile app and digital transaction histories, and a consumer database.

    The latter is key to Hazari’s ultimate goal: for m.Paani to become a “big data” player. The idea of data collection may be anathema to many internet users concerned with privacy, but she says those who do not have any data to offer get left behind.

    “These shopkeepers tend to write everything down in a notebook. They can’t get insured, or apply for a bank loan, because there is no data about their business,” she says.

    The same goes for the customers. Without any credit history, they are not likely to get bank loans or access other financial services. From this year, m.Paani will start scoring individuals and businesses on their creditworthiness, a first step in utilising their shopping records.

    Hazari says small retailers with no online presence will struggle to compete against the growing presence of international chains such as Wal-Mart and Tesco as India gradually liberalises its retail sector. Online giants such as Amazon are also expanding aggressively in India. Issuing loyalty points helps rope in their customers.

    The next step for m.Paani is to go national, and eventually spread to Africa and Southeast Asia.

    “I want to build an Indian company that’s international,” she says. “For me there’s a lot of pride in that. Why can’t the next Google come out of India? That’s why Alibaba is such an exciting company. It’s the first company to do that out of our market.”

    After earning a degree in politics and Middle Eastern studies from Princeton, Hazari worked for the Aspen Institute, encouraging Israeli and Palestinian joint business ventures as a way to promote peace. It meant living in Jerusalem and crossing the border every day to manage operations such as a hospital and a power plant in Gaza.

    “Her time in the Middle East meant months of sleeplessness for me,” says her mother. “But I’m very proud of her.”

    After two years,Hazari decided that business had a lot of power to change people’s lives and immersed herself in the corporate world, becoming a consultant in clean energy at Booz & Co. in the US and Dubai. That was followed by a year of designing environmentally sustainable services and information technology applications to help rural Indian families, and then the MBA in Cambridge.

    Hazari’s parents had settled in Hong Kong so that their children could have access to better education, and a better quality of life (dad Ajay is a director in a shipping company, and mum Anjali teaches at an international school). But for her, the opportunities lie in India and beyond.

    I think we have a desire to be a part of that story, of building our country and taking it forward.

    Akanksha Hazari

    “For my parents, or people like them in India and mainland China, the dream was to get their kids to go out. That’s not the case for us any more. These countries are no longer the same. We see so much opportunity to do something bigger than just go the West and get a job. If we come home we can actually build something of our own. And also, I think we have a desire to be a part of that story, of building our country and taking it forward. We are shaping the future of that country, and that’s a huge opportunity,” says Hazari.

    The start-up in India has yet to make her a billionaire (“We’ve been surviving by bootstrapping, she says). But it has already earned her valuable international recognition. On March 9, she is receiving an award from the Vital Voices Global Partnership, the NGO set up by Hillary Clinton and former secretary of state Madeleine Albright, at a gala celebrating women leaders around the world.

    Investors are also beginning to see m.Paani’s potential. “We’ve just closed series A [funding]. Our user numbers are growing 20-40 per cent month-on-month and investors are starting to see this as a proper business,” Hazari says. Their backers include an Indian venture capital firm and a select group of Indian angel investors.

    She is not surprised that Hong Kong – once known as a breeding ground for entrepreneurship – has failed to produce many start-ups that grab the world’s attention.

    “There’s a lot of pushback here for those who want to set up their own business. You have to be a very strong personality to do it anyway. I didn’t take any money from my parents. I knew the decision I was making meant I would not have a great lifestyle but I was OK with that. You need to be ready to deal with the negative pushbacks… and work a lot harder to prove your point and make sacrifices,” she says.

    Besides, Hong Kong is fundamentally a very small economy and very focused on financial services, which means that young people who want to pursue big ideas tend to have to go abroad, or to China. And she expects more people will.

    “Our generation is more purpose-driven than it is pay-cheque driven. The time is right – we are very educated and have the luxury of thinking about what values we want in life and not just how much money we want to make. I think it’s a fundamental shift,” she says.

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  • Reliance retail business thrives

    Reliance retail business thrives

    Indian retailer Reliance Industries has reported a 50 per cent growth in sales in its consumer electronics category for the quarter to December 31.

    Reliance Retail also consolidated its leadership in the grocery category, optimising its network to enhance profitability. Several private-label products were launched in the grocery and general merchandise categories during the quarter. The contribution of private-label sales to overall sales increased to 14.6 per cent from 8.6 per cent in the same period the previous year.

    There are now more than 2 million registered members across 37 countries for Reliance Mart stores. These 1537 outlets specialise in consumer electronics. Strong year-on-year growth in this category was helped by Digital Express Mini rapidly scaling up during the quarter to reach more than 1250 outlets across the country in a short time since launch.

    Also delivering a strong performance, the fashion and lifestyle category was 16 stores opened byReliance Trends during the quarter.

    A Reliance Retail joint venture with Marks & Spencer continued to grow with new store openings, whileReliance Brands launched Dutch lingerie brand Hunkemöller, and also opened the first airport store in India for UK games and toys retailer Hamleys, in Delhi.

    Initiatives encompassing fashion and lifestyle e-commerce are also proceeding through beta testing. The development of a marketplace platform and distribution ecosystem for 4G devices are on track and being rolled out. It will be the largest distribution reach for devices in India, says the company.

    Meanwhile, the company is training 4G sales specialists while integrating supply chain and service centres. Reliance Retail also launched its own brand of 4G LTE smartphones, under the brand LYF, during the quarter.

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  • Direct flights between Indonesia, India likely this year

    Direct flights between Indonesia, India likely this year

    Direct flights between India and Indonesia are likely to begin this year to facilitate tourism, Indonesian ambassador Rizali W. Indrakesuma said on Wednesday.”The Indian government has already given permission; it is a matter of how Indonesia responds. We are hoping that direct flights between the two countries begin by this year or by next year at the latest,” said Indrakesuma said.The first flights both governments plan to launch initially are between Delhi and Jakarta and Mumbai and Bali. Garuda Indonesia and Air India will operate flights between the two countries.

    The ambassador said a deal on the matter could be finalised in March when the transport minister of Indonesia will participate in an event organised by the civil aviation ministry in India.”This is an opportunity for our minister to engage with the Indian civil aviation minister (Ashok Gajapathi Raju Pusapati) at an event organised in Hyderabad in March,” the ambassador said.”The consulate general of Indonesia in Mumbai will push the ministry of tourism to open direct flights for the first time between Delhi and Jakarta and Mumbai and Bali.

    Last year, 262,000 tourists from India visited Indonesia; we expect the figure to go up to 350,000 this year. First it’ll be a government-to-government engagement and later we can engage private airlines,” said Taufik Nurhidayat, deputy director, ministry of tourism, Republic of Indonesia.Indonesia attracts the highest number of tourists from Singapore, followed by Malaysia, Australia, China, Japan, Korea and India.

  • Xiaomi keen on single brand retail license

    Xiaomi keen on single brand retail license

    Xiaomi is keen on applying for a single-brand retail licence in India and will take a final call on the matter in a couple of weeks after more consultations as the Chinese company strives to deepen its presence in the world’s fastest-growing smartphone market, where it just recorded its best-ever quarter by sales.

    As part of its India strategy for 2016, Xiaomi will locally manufacture most of the phones it will sell in the country, begin investing in startups and expand its offline presence, Manu Jain, the company’s head of India operations.

    “We would be very keen (on applying for single-brand retail) but we would want to understand this better. We are talking to multiple people who are subject matter experts on this to understand everything about it before we go ahead,” Jain said. “Overall, this looks very positive from our perspective.”

    Once it applies, Xiaomi would join Apple as among the top foreign brands opting for a direct presence in India, which eased foreign direct investment rules for single-brand retailing in November. The South Asian nation relaxed mandatory local procurement conditions for high-tech companies and allowed single-brand licence holders to sell their products directly online.

    Xiaomi currently sells 90% of its products through online portals Flipkart, Amazon, Snapdeal and its own store, Mi.com, and has ventured into the offline market with outlets of Airtel and The Mobile Store selling about 10% of its devices. The company will forge more partnerships to expand its offline presence in 2016 and will focus equally on revving up sales through its own portal.

    Jain said the aim would be to achieve a balance between online and offline sales, similar to what it has in China, where one-third of its sales comes from offline channels.

    Through a combination of online and offline sales in India, Xiaomi clocked its best-ever three months yet, selling between 1 million and 1.5 million smartphones in the quarter ended December. “This is the second consecutive quarter that we’ve crossed 1 million…despite the competition, we continue to grow aggressively,” Jain said. In the September-ended quarter, sales were up 45% on-quarter.

    “One of our targets for 2016 is to invest in startups,” Jain said, which would replicate the model followed by the company in China. Though Jain didn’t specify the amount, he said the company would be flexible and investments would depend on the startup and the stage it has reached.

    India will continue to be a critical market and Xiaomi will reduce the time gap between China and India product launches and also introduce more models in 2016. Separately, it will scale up local manufacturing to make a majority of the phones that it sells in the country.

    Jain did not share the present manufacturing capacity at Sri City in Andhra Pradesh, where Foxconn manufactures phones for Xiaomi, but said that the scale-up will be “significant.”

  • India And Southeast Asia Could Be The ‘New China’ For Apple

    India And Southeast Asia Could Be The ‘New China’ For Apple

    I first wrote about the potential of Asia for Apple in September 2014. My article, titled “Asian Growth sends strong bull message for Apple” met with a lot of critical comments that the Apple brand would never catch on in China. The people were too poor, the local competition was too strong, the political and legal hurdles were an insurmountable barrier, etc. Of course, such critics have been proved very wrong. In the company’s 2012 annual report, China was not even listed as a specific operating segment. China is now second behind the US in terms of operating income. Now everyone writes articles about how vital China is to the company.

    Apple’s Q1 2016 results showed the importance of international sales (66% of revenue) to Apple, and specifically the importance of Asia.

    The Americas: revenue decline of 4% to US$29.3 billion.

    Europe: revenue increase of 4% to US$17.9 billion.

    Japan: revenue decline of 12% to US$4.8 billion.

    Asia-Pacific: revenue increase of 4% to US$5.4 billion.

    Greater China: revenue increase of 14% to US$18.4 billion (and + 47% sequentially).

    India specifically, and Asia in general, now offer the same future potential for Apple as did China. Indeed, Asia is already realizing that potential for the company.

    India

    Of course, India is not exactly the same challenge as was China, but the similarities are very apparent. Again, the naysayers state the people are too poor, the local competition is too strong, and the political and legal hurdles (including rampant corruption at every level of society) are insurmountable. For the same reason this was a false argument in regard to China, it is a false argument in regard to India.

    China’s economic growth is indeed slowing. However, consumer demand is strong as China transitions from an industrial economy to a consumer-driven one. Apple will continue to grow there, but more slowly than the 84% growth in revenue it enjoyed last year. Despite all the talk of gloom and doom, in Q1 2016 iPhone unit sales in China did increase by 19%. Mac sales increased 27% year-on-year as the Apple “ecosystem” increasingly embeds itself in the country.

    The country forecast by the IMF to have the fastest growth of any major economy this year is India, at 7.5%.

    Of course India has the negative of a much lower GDP per head than China or of many other Asian countries. The IMF assesses Chinese GDP per head in 2015 at US$8,280. For India it has a figure of US$1,688. What this misses out though is the incredible wealth inequality in India. The middle class there is growing fast and has a strong culture of showing off brand affordability. General estimates are that by 2025 the country will have over 500 million people who can be called “middle class.” As Tim Cook commented in the Q1 2016 conference call, the median age of the country is only 27, the kind of demographic that economists love.

    As my October 2015 article pointed out, India is forecast to have 314 million mobile users by 2017, which would be the second-highest total of any country.

    Retail in India

    Despite the headlining and highly-paid Angela Ahrendts coming on board, Apple has been slow to ramp up its retail presence in Asia. Only about 10% of Apple’s worldwide total of stores are in Asia and Australia. Only in China has the pace of new stores been quickened. In total, 26 new stores are planned for China this year, doubling their current number. The latest of these, the 33rd, opened in Qingdao this week. Apple targets to have 40 stores open in China by the middle of this year. This still compares poorly with the 53 retail stores, for instance, in California alone.

    In India, retail could be vital for success. So far Apple has been handling the retail market in India through sub-distributors, but this has put their brand image in the hands of often not very competent third parties. Historically, retail has been difficult for foreign companies in India, but the Modi Government is relaxing the rules.

    Previously, single-brand retailers which were foreign-owned had to source 30% of their product locally. Additionally, there were heavy restrictions on the use by such companies of e-commerce. With these restrictions being loosened, in mid-January, Apple filed an application to open the first real Apple Store in the country. Just as Tim Cook personally led the political dance to get Apple established in China, so he has reportedly met twice with Indian Prime Minister Modi in the past six months.

    The India Market

    Almost identically to when Apple entered the China market, the smartphone market in India is dominated at present by Samsung (OTC:SSNLF) and by local manufacturers. We all know what happened in China when that was the case a couple of years ago.

    IDC estimates that in the third quarter of 2015, Samsung had 24% of the market and Lenovo held second place among imported phones. Apart from them, it was local manufacturers such as Micromax, Lava and Intex. This is ripe for Apple to follow their China strategy. That means supplying current new models to the wealthier middle-classes and their older models at a strongly discounted price to those who cannot afford the current model. Apple is already doing this in fact. As an example, the 6S originally sold for 62,000 rupees, while the 5S price was cut in early December to 24,999 rupees. This put it in a similar price bracket to the Samsung “A” and “E” series phones. Now the 16GB 6S has been further reduced to 48,499 rupees.

    Up to March 2015, Apple increased sales by 44% to over US$1 billion. It is expected that this figure will double in the year to March 2016. In Q1 2016, revenue increased 38% (or 48% in constant currency terms). iPhone unit sales increased 76%.

    Sales are growing from a small base, but retail expansion and a new concentration on India by Tim Cook should see sales take off in the next couple of years. An accelerated planned roll-out of 4G in India, just as we saw in China, will also help the company’s expansion. Interestingly in the Q1 2016 conference call, Tim Cook made specific reference to rising 4G penetration in China as a boost to Apple sales. No doubt the same is equally true of India.

    He also stressed the importance of emerging markets in general and LTE penetration to the future. He commented:

    “If you go outside of China into the other emerging markets, our share is much lower and the LTE penetration is so low…. it indicates to me that there is still a lot of people, a tremendous number of people in the world, that will buy smartphones.”

    The GDP per head differential with China will mean that India takes longer to reach the stratospheric sales figures we saw in China. Equally, the Apple ecosystem is not as strong in India and it will take time for iTunes and the App Store to become a way of life there.

    One potentially very bullish factor for Apple is the fact that their biggest manufacturing partner, Foxconn, has applied for manufacturing approvals in the country. This has led to obvious speculation that iPhones will be manufactured in the country, with all the myriad advantages that would bring. Foxconn is proposing to have 20 facilities operating in India by 2020 at an investment cost of US$5 billion.

    Elsewhere in Asia

    China may have a population of 1.4 billion and India 1.25 billion, but elsewhere in Asia the sheer mass of the addressable market is substantial. Figures of population of other Asian countries for 2015 and World Bank details of GDP per capita for 2014 illustrate the often-overlooked potential in Asia outside of China and India. In the Q4 2015 conference call, the company had stated that revenue increased 27% in that period for this region.

    There are over 1.8 billion people in Asia outside the behemoths of China and India. This potential is reinforced by the fact that these countries have the demographics that economists look for. That is to say, young growing populations with improving educational levels in countries with strong growth rates. This group of countries alone far exceeds the populations of US or of Western Europe.

    Below, I summarize just a few of the Asian countries where Apple’s footprint has grown strongly.

    Japan (population 127 million and GDP per capita of US$36,194) is the market in the world where the Apple ecosystem is generally considered at its strongest. In the Q4 2015 conference call, Apple had stated that Japan revenue increased 9%, not bad for a mature market. However in Q1 2016, revenue declined 12%, although in constant currency terms it was a decline of only 4%. This is still of some concern for Apple, and the figures seem to reinforce market rumors that the iPhone 6 and 6S were not so well received there in what is already a mature market for Apple.

    Indonesia (population 255 million and GDP per capita of US$3,491) and the Philippines (population 101 million and GDP per capita of US$2,872) are both seeing Apple sales grow strongly. Both have very young populations and the Philippines was the strongest growing economy in Asia last year. Apple is planning to invest in R & D facilities in Indonesia following new government regulations to come into effect in 2017. These will require overseas suppliers to include 30% of import value in their products from either local manufacturing or from software input. Official figures show that Indonesia imported US$5 billion worth of mobile phones in 2015. The real figure would be higher as it does not include parallel imports through Singapore.

    In Korea (population 49 million and GDP per capita of US$27,970), Apple has made significant inroads. This is despite Korea being the home market of the formerly all-powerful Samsung. At the Q1 2016 conference call, it was reported that iPhone sales increased 45% there.

    Thailand (population 67 million and GDP per capita of US$5,977) and Malaysia (population 30 million and GDP per capita of US$11,307) are seeing significant growth for Apple. Exact growth rates have not though been released by Apple.

    Vietnam (population 93 million and GDP per capita of 2,052) is an interesting study. The country was a long-time foe of the US and has a low GDP per capita of US$2,052. Yet, Apple opened a subsidiary there in October last year on the back of sales that had tripled in the first half of 2015. This will allow them to open their own store and sell directly to Vietnamese consumers. There are a startling 124 million cellphone subscribers in the country which shows the fast development in the country.

    Singapore (population of 5.6 million and GDP per head of US$56,284) will be seeing its first Apple store opening in 2016. With a GDP per capita higher than the US and a large re-export business, this is a strong market for the company. Apple Pay will be launched here in 2016. The other Asian destinations for Apple Pay this year will be China and Hong Kong.

    Different commentators may argue as to what extent these countries can have a substantial effect on Apple’s bottom line. There seems little doubt to me as to the strongly accretive effect on the company in the medium to long term.

    For 2016, the ADB (Asian Development Bank) has forecast GDP growth of 7.3% for South Asia, 4.9% for S-E Asia and 6.7% for China. Though lower than in some previous years, this is a lot stronger than likely growth rates in developed countries and will further narrow the gap between the two.

    Conclusion

    It should be only a matter of time before China is the single biggest market for Apple in terms of revenue. As Tim Cook said on the earnings call, the company is “maintaining our investment plans for China.”

    It is probably only a matter of time and demographics before the rest of Asia is Apple’s third biggest market in terms of revenue. This makes it false to argue that growth for the iPhone and other Apple products is limited because of the company’s high market share in its mature markets. Short term, currency fluctuations somewhat tempered Apple’s still healthy growth in the region, but that will not be a continuing long-term issue.

    These immature markets signify that Apple has very significant growth opportunities for years to come, as Tim Cook pointed out. The company may have been somewhat slow to roll out its retail footprint around Asia, but this now seems to be on the way. At the Q1 2016 results call, it was revealed that the company has US$215.7 billion in cash. US$200 billion of this is stashed off-shore. Retail expansion in Asia could well be the best use Apple has for a portion of this huge cash pile. This will help set up Apple’s long-term continuing growth in the region.

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  • Retail-tech start-up SnapBizz raises $7.2 million

    Retail-tech start-up SnapBizz raises $7.2 million

    SnapBizz Cloudtech Pvt Ltd, a start-up that devises technology for corner grocery stores, has raised $7.2 million in an investment round led by venture capital firms Jungle Ventures, Taurus Value Creation, Konly Venture and Blume Ventures to expand across cities.

    The Bengaluru-based company, which was started in 2013, had earlier received seed funding of $1.7 million from Qualcomm, Jungle Ventures, National Research Foundation of Singapore, Taurus Value Creation and Blume Ventures.

    SnapBizz provides grocery stores an Android-based, cloud-connected business platform in the form of a tablet, barcode scanner, printer and a consumer-facing LED display, with the technology enabling merchants to manage their billing, inventory and customer engagement.

    “We are convinced with the SnapBizz business model, which brings a tailored technology solution to kirana stores and believe that it will play a large role in India’s retail growth story,” said David Gowdey, managing partner, Jungle Ventures.

    SnapBizz is one of a small but growing number of start-ups like IPay Tech India Pvt. and StoreKing that aim to help small businesses like grocery stores to bridge the digital gap by targeting specific uses like payments or enabling e-commerce.

    “We are thrilled that all ecosystem players have shown confidence in our solution and that our existing investors have reiterated their support to us,” Prem Kumar, chief executive officer, SnapBizz, said in a statement.

    “Large retail and online players account for only 10-15% of any brand’s business. The remaining 90% happens through traditional trade and there is zero or minimal last mile connectivity between brands, consumers and retailers. We are on a mission to address this big gap while addressing the pain points of the kirana stores,” he added.

  • H&M India plans largest store yet

    H&M India plans largest store yet

    H&M India says it will soon open its first flagship store in the country – its largest yet.

    The new shop is under construction at the DLF Mall of India, the company said in a statement. It will comprise 37,000 sqft (3440 sqm) spanning four floors in the mall, and is expected to open in Spring.

    This year, the Swedish retailer also plans to open stores in Bengaluru, Gurgaon and Mumbai.

    H&M opened its first store in India on October 2  last year in New Delhi’s Select Citywalk mall.

    “After successful store launches last year, we continue the trend by expanding to some of the most exciting retail destinations across the country with H&M’s business concept of fashion and quality at the best price in a sustainable way.” said Janne Einola, country manager, H&M India.

    The company says it plans to open 50 stores in India after  gaining Foreign Investment Promotion Board approval to open mono brand stores in december 2013.

  • Tesco Thailand wins record market share

    Tesco Thailand wins record market share

    Embattled Tesco achieved a record market share in Thailand in the latest quarter – as Asia shined in a mixed set of financials.

    Analysts appeared in agreement that the UK’s largest supermarket operator delivered patchy results overnight, despite the solid Asian performance.

    “Foreign adventuring hasn’t been all bad,” observed David Gray, retail analyst at Planet Retail.

    “Asian expansion did deliver a big windfall last autumn with a sale raising some £4 billion,” he said, referring to the divestment of the Korean business

    “And Tesco still holds valuable assets in Asia – the Tesco Thailand business (which has long-term growth potential), plus Malaysia (though potential here is less obvious), while India (though not valuable at the moment) is set to receive more attention,” Gray concluded.

    Conlumino senior consultant George Scott added: “In Asia, improvement in its food offer helped Tesco achieved positive like for likes across the region.”

    But the majority of Tesco’s business is still the UK, where its market share is under attack by super discounters Aldi and Lidl from Germany. Like-for-like sales in the UK slipped 1.5 per cent, despite a 1.3 per cent increase in the Christmas period.

    “Tesco showed signs of a fightback against discounters Aldi and Lidl over the festive period, delivering a UK Christmas like-for-like performance well ahead of market expectations and comfortably beating the comparable trading of rivals Morrisons (+0.2 per cent) and Waitrose (down 1.4 per cent),” said Scott.

    Planet Retail said it saw the third quarter domestic decline as indicative of the wider challenges hitting the UK grocery market.

    “With growth of Aldi/Lidl at the value end, M&S Food lording over the premium segment and Sainsbury’s holding its own in the mid-market, this comes as little surprise,” said Gray.

    “As anticipated, Tesco’s Q3 domestic recovery has slowed, with like-for-like declines widening on Q2, even if the shorter Christmas period delivered a more positive number,” said Gray

    “This was to be expected considering Dave Lewis has always said recovery would be choppy. Even so, a slowdown is a slowdown. The difficulty for Tesco is that, by being the UK’s largest retailer, it has most to lose from wider food price deflation and structural shifts.

    “With Aldi/Lidl gaining share at the value end, M&S Food ruling premium and Sainsbury’s holding the middle ground, Tesco is stuck between a rock and a hard place,” Gray concluded.

    Scott says despite the patchy figures, Tesco has shown a marked improvement in putting the customer back at the heart of its proposition, particularly over Christmas.

    “To this end, a further shift away from give-away promotions to deeper investment in base price cuts and its brand match, coupled with improved availability were particularly key. The introduction of 4000 additional ‘Here to Help’ in-store colleagues, will have undoubtedly boosted in-store standards. Elsewhere, demand for online grocery home grocery shopping led to a record number of orders on December 22, which was certainly helped by an improved price and service reputation.”

    Tesco CEO Dave Lewis was upbeat about the figures, especially for the festive trading season.

    “Our Christmas performance was strong, benefiting from lower prices on an outstanding range of products. Our customer service improved materially and our colleagues went the extra mile.  Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco.”

    Lewis said Tesco would continue to focus its efforts to serve its customers “a little better every day”.

    “There is plenty more to do, but we are making good progress and are trading in line with profit expectations for the full year.”  

  • Apple seeks nod to open India stores amid concerns of slowing sales growth

    Apple seeks nod to open India stores amid concerns of slowing sales growth

    Apple Inc has applied to set up its own stores in India, one of the world’s fastest growing smartphone markets, as the iPhone-maker looks to tap new opportunities amid worries of slowing growth in its main markets.

    Apple sells its iPhones, iPads and Macs in India through third party resellers, and industry analysts estimate that the Cupertino, California-based company has less than a 2 percent share in India’s smartphone market, dominated by cheaper brands.

    The company has filed an application with India’s Department of Industrial Policy and Promotion to open its own stores, Amitabh Kant, secretary at the federal trade ministry unit told Reuters.

    Apple also confirmed the application filing, but declined to give details.

    Its expansion plans in India come at a time when concerns about slowing growth in the United States and China, the world’s most important market for smartphones, have weighed on the company’s stock in the last few months.

    Shares in Apple, the world’s most valuable company by market value, are down 28 percent from their peak in April last year.

    The company operates more than 450 stores in 18 countries. Chief Financial Officer Luca Maestri told Reuters in October that Apple had 25 stores in China and was opening a new one roughly every month.

    Its plans for India have been held back due to restrictions on foreign investment in the retail industry, which require single brand overseas retailers to buy close to a third of the goods sold at their stores from local producers.

    Apple representatives held talks with Indian government officials about a relaxation of the 30 percent local-sourcing norms before filing the application, said a source familiar with the company’s plans.

    Apple’s plans come against the backdrop of initiatives unveiled by Indian Prime Minister Narendra Modi, who met with Apple chief Tim Cook during his U.S. visit last year, to boost foreign investments in India.

    In November, the government eased foreign investment norms in 15 major sectors, including relaxing the mandatory local-sourcing rule for foreign single-brand retailers in the case of “cutting-edge technology” products.

    Kant said his department would examine Apple’s application in view of the changes made for local sourcing.

    For years, India has been a low priority market for Apple as spending power is weaker than in China, where the company’s iPhones swiftly became must-have devices after their 2007 launch.

    But Apple is now looking to boost its market share in India’s rapidly growing market, and the company’s recent growing spend on advertising in the country has indicated an aggressive campaign to sell more.

    India is likely to overtake the United States to become the world’s No. 2 smartphone market in 2017, according to research firm Strategy Analytics. The local smartphone segment is dominated by Samsung Electronics and India’s Micromax.

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  • Fabi launches first retail store in India

    Fabi launches first retail store in India

    Designed by Alessandro Germini, the store decor is in line with contemporary stores across Europe and the rest of the world. The store exhibits class and its décor is pristine with a touch of the latest global trends. The store’s cordial staff, international feel and strategic location in the city of Delhi will ensure the ultimate shopping experience for its customers.

    Sameer Singh, director, Mescos Shoes Ltd., was born and brought up in Delhi. He always had a burning desire to make it big in life. He completed his Mussorie Modern in 1998. Later on, he moved to Italy where he got his first job as director Vanilla Fashion. After working with the international fashion brand Vogue in Dubai, he finally joined the renowned Mescos group as director in 2014. His eye for detail, focused approach, eagerness to learn ‘something new’ and ability to seamlessly bring together the necessary resources to ‘get a job done’ gained him a lot of appreciation. As the director of Mescos, Singh has made his mark as a dynamic professional and has many responsibilities under his hat, from business expansion to charting a future growth path for the Mescos brand. With 5 years of total work experience in India and abroad, he has garnered thorough and superior skills and knowledge of the Indian market and has become the driving force of the company. His vision is to expand Mescos’s base in India and to transform it as a brand of choice for the discerning customers. When not working, Singh enjoys travelling and spending time with family and friends. His interests include theatre, music, reading and sports like tennis, squash and cricket. A bundle of energy, he is creative, goal-oriented and certainly an inspiration for the younger lot.

    Founded by Enrico Fabi in 1965, Fabi is a premium Italian brand with its headquarters in Monte San Giusto, Italy. The company has three hundred sixty five employees including master shoemakers and artisans who work closely with specialists in IT technology and state-of-the-art machinery. The brand’s first set of samples was 12 hand-stitched tubular models which instantly became hit among people. After getting success in such a short span of time, Fabi expanded its horizons and established its reputation as a dynamic brand. It has now become a perfect beacon of Italian made designs, a promoter of elegant style and an astute observer of trends who always anticipate new ways of life.