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#GreyhoundInMedia @BWorldOnline: Retail Chains Lobby Minister Against 100% #FDI In #ECommerce

#MEDIA

As many as 12 big retailers, including Future Group, Landmark, Shoppers Stop and Globus, met Commerce Minister Nirmala Sitharaman in New Delhi on Wednesday and pitched strongly against the Union government’s proposal to grant 100 per cent foreign direct investment (FDI) status to e-commerce and e-tailing companies.

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#Online #Travel #StartUps join #eCommerce fray #Press #Media @FinancialXpress


India is in the throes of an entrepreneurship revolution with online start-ups getting the support of both consumers and venture capitalists. Over the years a large number of online travel start-ups have entered the fray to cash in on the e-commerce boom that has to a large extent been driven by travel segment in the country. One of the biggest challenges in the online travel space is competition, both from other online service providers and from traditional travel agencies. The travel industry, especially luxury travel, is the first to suffer in times of recession or downward economic trend. Both these situations are more challenging for start-ups than they are for established companies. Start-ups do not have any additional capital or reserves to fall back on, and during an economic downturn, if people spend on travel they prefer to go to a service provider where service satisfaction is guaranteed and not experiment with a new entrant in the market.

For instance, in the year 2000 when online travel bookings were still relatively unknown to India, MakeMyTrip entered into the travel domain and today it is one of India’s leading travel companies. “Our comprehensive offerings coupled with the convenience of online transactions supported with great-value prices have revolutionised the way Indians purchased travel services. We continue to lead the market with innovative products and services. Today, MakeMyTrip is much more than just a travel portal- it is a one-stop-travel-shop that offers the broadest selection of travel products and services in India,” says Rajesh Magow, co-founder and India CEO, MakeMyTrip.

Presently, there are around 80 online travel start-ups in India, generating a revenue of approximately US$ 9.7 billion and a growth of 31 per cent year on year. “The January-April 2015 quarter has seen the segment receive a funding of approximately US$ 40 million (source Venture Intelligence data). This is a significant increase when compared to US$14.8 million invested in the online space during January-April 2014. Further, till December 2014, the segment had received a total of US$ 115.69 million spread across 13 deals. If we go by this trend, it is quite possible that the travel industry will continue to receive investor support in the current fiscal as well,” opines Rajat Tandon, senior director, NASSCOM 10,000 startups Program.

While Sharat Dhall, president, Yatra.com adds, “The rising internet (over 300 million users; 170 million via the mobile) and smartphone (126 million users) penetration in India has phenomenally changed the way we communicate and do business. Rising disposable incomes are further fuelling a surge in consumerism in India. E-commerce operates in a very large retail market so there is tremendous scope for future growth as online buying penetration increases. Therefore, valuations of these companies have sky-rocketed in a short span of time, and a great idea that is well executed will always find a long list of investors vying to support it. All of this has culminated in a huge opportunity in e-commerce in India.”

Changing ecosystems

Even though e-commerce is a booming sector, it has only reached three per cent of the overall transactions that happen offline. Consumers are now curating their own experiences using online, mobile, and social media, interchangeably, along their non-linear paths to purchase. The financial package and personalised deals offered by online travel companies is helping the industry grow both in terms of value and volume. Some of the aspects that are driving growth in the segment are- tie-ups with hotels and lodges to provide a complete travel package and out-of-the-box solutions offered by new entrants. Apart from this, use of innovative technology –like mobile apps to help customers connect with the portal, has become a major differentiating factor when selecting long-term association with a travel company.

“There are no direct head-on competitor as of now of iTraveller.com, but as far as discovery of the destinations is concerned we have Triphobo and Tripoto. For transactions we have Travel Triangle. For hotel bookings we have Oyorooms and Stayzilla. For package booking without the scope of much customisation we have SOTC and Thomas Cook, etc. For package booking with moderate customisation we have MakeMyTrip and cleartrip, etc. But there are none for customised package discovery, creation and booking that too online,” highlights Shiju Radhakrishnan, founder and CEO iTraveller.com.

Over the last couple of years, online shopping has become very popular due to cost and convenience for a consumer, this in itself is a major reason for start-ups to go the e-commerce way, as their customer is online. “The e-commerce boom has also helped widen the reach of the seller to a national or even a global level, a boundary-less market is every business’s dream. Another benefit of e-commerce purely for the business is that set-up cost has decreased drastically, with no investment required for renting/leasing high-end retail space for display/showrooms funds can be diverted to activities that will help generate business,” points out Tandon.

“E-commerce is becoming one of the most exciting spaces for today’s online community, and India’s young start-up economy is along for the ride. The huge potential that the market has to offer has given the space to the start-ups to venture. They are pertaining to the growing demand from the consumer. The trusted relationship with an e-commerce brand, the convenience and reliability of e-commerce businesses have to outweigh the benefits of traditional retail outlets for the consumers. One other reason is the increasing penetration of the internet which allows them to reach out to the wider consumer. The flow of venture capital investments turning into a storm is also one reason that can be attributed for this boom,” opines Vikram Malhi, managing director-Asia, Expedia.

Investment opportunities

SAIF Partners has been active in the space for a long time starting with investment in MakeMyTrip. “We also invested in iXigo.com, and more recently we invested in TravelTriangle that is a platform for connecting travellers to service providers in all parts of the world to book their trips,” says Rohit Jain, principal, SAIF Partners, adding that, for his company the investment parameters revolve around aspects such as the start-up’s ability to being able to build great mobile products and going beoynd just providing information towards helping in the fulfillment. Travel being extremely competitive, a start-up’s ability to crack the product distribution is also critical.

Interestingly, there are many areas that are interesting for start-ups to tackle – from solving information gap, to build-out of supply using asset light approach like AirBnB in sectors like travel, stay, and dining. Also, the service providers need a lot of technology solutions for them to participate in these platforms.

Maninder Gulati, principal, Lightspeed Advisory Services India states that venture capitalist firms generally look at large markets, disruptive business models and exceptional teams while funding start-ups. “Our principal goal is to provide early-stage capital to talented entrepreneurs solving a core consumer problem through technology. The investment size for such start-ups in a seed or Series A stage could range from US$ 0.5 million to US$ five million,” points out Gulati, adding that the market pie for travel start-ups is increasing with consumers booking a large part of their travel online. “While unlikely to displace aggregators such as MakeMyTrip, there is a lot of room for start-ups to create large and valuable businesses by solving problems that traditional aggregators cannot. For example, OyoRooms which has created India’s largest network of technology enabled budget hotels,” he adds.

According to Amit Somani, partner, AngelPrime, some of the recent sectors that have been popular with investors include alternative accommodations, last minute hotels, travel research and planning and travel services marketplaces. “Travel as a sector has a lot of opportunities and hence continues to be a highly competitive area. In addition to domestic players, lot of foreign players have started to make inroads into India. It is imperative that the cost of customer aquisition is in line with the ‘lifetime’ value of customer over a modest time period – year or two years,” mentions Somani.

A UBS Securities India report states that India’s ecommerce market is estimated to grow 10 times by 2020 to US$ 50 billion from current levels. At a micro level, ease and variety of access to products (more so in smaller cities), and the widespread prevalence of the cash on delivery (COD) payment model have been vital e-commerce adoption triggers. “E-commerce valuations are currently being driven by the significant growth expected in the size of the ecommerce market in India. Growing revenues and a mounting user base combined with significant headroom for growth (as consumer behaviour changes in favour of online consumption), are driving individual business valuations. However, there are concerns with the continuing rise in valuations especially given high customer acquisition costs, continuing cash burn and unclear roadmap to profitability,”mentions Girish Menon, director, deal advisory, KPMG in India.

Greyhound Research believes that it’s important to first understand why investors are willing to invest enormous amounts in e-commerce companies. “Investors who have invested an enormous amount in e-commerce companies expect a huge profit in return. The truth is that e-commerce players make a huge loss and raising funds is the only viable option to stay in the business and ahead of competition. While the cost of creating mobile and web commerce has declined considerably in the last few years, the key to survival of e-commerce model is customer acceptability and quick adaptability to changing market dynamics,” elaborates Sanchit Vir Gogia, chief analyst and group CEO, Greyhound Research. “Rising valuations can be considered as a herd mentality as there are more than enough investors willing to invest in e-commerce players. E-commerce has been a flavour for a lot of investors and thus the push to create a demand for such investments,” adds Gogia.  Twitter_logo_blue

Learning curve

The market is now flooded with start-ups like Tripoto.com, TravelTriangle, StayZilla.com, WeAreHolidays.com, iTraveller.com, TripHobo.com, Railyatri.com and Seeksherpa.com, who have got a solid funding from various investors to expand and strengthen their operations. “The real value in online travel is much more in the hotels and holidays category compared to transportation. The former has good margins; however, leisure travel in India is discretionary in nature and hence infrequent. Transportation affords higher frequency of use but has lower margins. Given the overall market is highly competitive, the cost of customer acquisition from the traditional online channels is quite high. Also, non-transactional business models such as advertising, affiliates, SaaS, etc. are just beginning to gain some traction,” says Somani.

Asked about the growing competition in the market, Magow states, “We welcome strong competition since it is good for the marketplace and the customer. We are well-funded, have a clear focus on technology-led innovation and creating customer delight. Hence what a competitor or a new entrant does is not a threat. Beyond price-advantage and Tech-robustness, what creates a differentiator is user-experience and service. Those are the key attributes we are focused on.”

Highliting on certain importance business aspects, he asserts, “Generating financial revenue is the most critical step because that is what differentiates how sturdy your business plan is from your competitors. The second and yet critical element is to get the right funding. Now, you would ask as to what right funding would mean since start-ups can hardly choose where they get their money from, but we think otherwise. One must be selective and smart when seeking money for one’s start-up or it could turn your dream business into a nightmare.”

Holding another strong base in the online travel segment, Dhall shares, “Start-ups in the online travel segment need to be thinking about how they can come up with a very differentiated offering or target specific niches, to have a reasonable chance of success. We have always envisioned Yatra as a one-stop-shop for travel. We are focussed on growing and expanding our non-air segment (hotels and holiday packages) to add to our strength in the air section (flight bookings). This is progressing with our non-air business more than doubling over the last one year. Our mobile offering is also a key area of focus for us. Currently, close to 30 per cent of Yatra’s business is sold via the mobile and we see this increasing quickly to 50 per cent going forward.”

From a new start-up company’s perspective, Radhakrishnan points, “The biggest challenge is to get customers to transact online without any manual intervention. Start-ups have to struggle with getting the pricing right in order to be attractive as Indian consumers are wary of companies which do not have a huge brand value and might not go for a relatively unknown name for marginal monetary benefit.”

Cautious approach

Even though the segment is a lucrative business, the success percentage for start-ups is very low and the reasons for that are many. Dhall cautions by saying, “These are related to either the market opportunity or the problem they are addressing, the competitive landscape, or the ability of the team to execute. A failure in any one or more of these areas is typically the root cause of most start-up failures.”

While Magow adds, “Most of the start-ups tend to burn before they take their flights and one of the reasons for this is the inability to differentiate in the market. It might not be an extremely different product but you need to make a mark on the customer’s memory when they come to experience your product for the first time. You need to embed your brand with the customers with your range of product offering and the convenience that you bring with your product or service.”

Some of the other main reasons that lead to failure of start-ups in the online space are not knowing how to allocate funds, over promising and under delivering, not providing adequate customer service support, with heavy blanket spends on online advertising and an unclear marketing strategy or a complete lack of/ very less marketing of the company. Recruiting talent, especially experienced mobile product managers remains a challenge for such early stage travel start-ups.

Commenting on the issue, Menon highlights, “Indian consumers are price sensitive. This, coupled with high competition levels, has resulted in high customer acquisition costs and pricing pressures. Further, this also places significant challenges in developing subscription based business models and also rolling out premium products and services. Other challenges include uncertain and evolving regulatory environment, infrastructure challenges, limited payment ecosystem etc. From an online travel perspective, some of the specific challenges are declining airline commissions, comparatively lower growth rate given the relatively mature online travel market, and the entry of international players with their global supplier networks.”

From a new entrant perspective, Radhakrishnan points out that the biggest challenge is to get customers to transact online without any manual intervention, “Start-ups have to struggle with getting the pricing right in order to be attractive as Indian consumers are wary of companies which do not have a huge brand value and might not go for a relatively unknown name for marginal monetary benefit.”

Survival tactics

To ensure survival in a competitive industry like travel, it is critical to focus on building sustainable competitive advantages.”For instance user community participation, deeper supplier engagement by providing them with right tools to mange and grow their business, etc,” states Jain.

On a concluding note, Tandon emphasises on the need for start-ups to ensure top class customer service at all times, irrespective of the size/value of the customer. “They need to constantly innovate and gauge what the new-age customer is looking for with respect to value-added services at competitive rates. The start-ups should aim to become one-stop points for their customer’s travel needs and they need to cultivate tie-ups with forex providers, hotels, trusted tourist guides, car rental services, insurance, etc. And most importantly, as for a start-up company the product should be best fitted and designed to the needs of a consumer,” mentions Tandon.

Source: Financial Express

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With one login, @Snapdeal wants to do a @Facebook #eCommerce @1kunalbahl @FinancialXpress


Snapdeal is seeking to emulate social media giant Facebook in the commercial media space as it looks to expand its footprint. Kunal Bahl, CEO & co-founder, Snapdeal, is creating a clan of apps, just the way Facebook did with FB, Whatsapp, Instagram and Messenger. “Facebook had become a monolithic platform; now, they have a bunch of popular apps,” said Bahl.

Facebook bought Whatsapp and Instagram to complete the social media family. Likewise, Snapdeal has bought Freecharge, Rupeepower and Exclusively. “The e-commerce world will follow the same hierarchy as the social media,” said Bahl.

Bahl said it is critical for all apps to be accessed through a single-user account, which does not exist now, and that is what he’s working on. This is similar to what Facebook has done — providing access to its family of apps through a single-user account.

Freecharge is a mobile commerce platform where users can make DTH and utility payments through their mobile, across most major operators. “Every day, 75 million mobile recharges are done in India, but only 2.5 million are conducted online,” said Bahl.

Also, by taking a majority stake in Rupeepower, Snapdeal made its foray into financial services, such as distributing loans, instant loan approvals, credit cards and other personal finance products. Exclusively, on the other hand, deals in luxury fashion. “India is a $15-million luxury market, and a Jimmy Choo might not sell on Snapdeal,” said Bahl.

Analysts believe that Snapdeal is trying to build an ecosystem of apps for the commercial space. “Once a consumer enters the ecosystem of apps, he won’t need to go to other apps for his requirements,” said Sanchit Vir Gogia, chief analyst, Greyhound ResearchTwitter_logo_blue

Talk about ecosystem, and it’s evident that Bahl does not want to leave any stone unturned. Through Capital Assist, a platform for sellers who give loans, Snapdeal has distributed R100 crore to create online entrepreneurs, typically sellers on Snapdeal.

Once the platforms are connected, Bahl expects a huge spurt in sales. For this, he has invested in GoJavas, a logistics company. Bahl said that GoJavas will build the captive capacity for Snapdeal at cheaper delivery rates. “When we have surge in orders, we know that we have built the capacity to furnish them,” said Bahl. Already, Snapdeal and GoJavas are trying services like three-hour delivery and try-and-buy services.

Snapdeal has already earmarked $1 billion for acquisitions. After financial services, luxury and mobile payments, Bahl will go for travel, healthcare and education. However, all investments will be towards building marketplaces, even in new businesses. “Why can’t we do healthcare consultation over mobile? The same applies for eduction — there are more students than teachers in this country,” he said.

The idea is to move away from pure-play e-commerce and look at consumption. While the consumption economy in the country is $1.3 trillion, retail is $500 billion, said Bahl. “Competitive advantage can’t last long in this market. We have to create a network.”

Mapping apps
* Creating a clan of apps as Facebook did with Whatsapp, FB, Instagram and Messenger
* Snapdeal has bought Freecharge, Rupeepower and Exclusively
* Once the platforms are connected, CEO Bahl expects a huge spurt in sales

Source: Financial Express

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In #India, @Microsoft Starts #Global #Rebranding of #Mobile Outlets #Press #Media #CommunicationsToday


Redmond, US-based Microsoft Corp., which acquired Finnish firm Nokia Oyj’s mobile handset business for $7.2 billion last year, has started a global rebranding of its retail outlets, starting with India, which hosts nearly half of all such outlets.

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In #India, @Microsoft Starts Global #Rebranding of #Mobile Outlets #Press #Media @livemint


Redmond, US-based Microsoft Corp., which acquired Finnish firm Nokia Oyj’s mobile handset business for $7.2 billion last year, has started a global rebranding of its retail outlets, starting with India, which hosts nearly half of all such outlets.

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Offline vendors using e-comm sites for bulk buying #Press #Media #HBL


Taking advantage of huge discounts available on online retail portals.

Products, especially those that are not available in these cities, are a major draw. The businessmen buy these products from various e-commerce sites and sell it to consumers through physical shops.

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Wipro Q1 profit up 29.5% as IT spending returns in North America #Press #Media #ZeeBiz


IT services major Wipro today reported a 29.5 percent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space. The city-headquartered firm had posted a net profit of Rs 1,623.3 crore in the year-ago period, it said in a BSE filing.

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Wipro Q1 profit rises 29.5 per cent to Rs 2,103 crore #Press #Media #IBNLive


For the July-September quarter, the IT services revenue is forecast to be in the range of $1.77 billion-$1.81 billion. IT services major Wipro today reported a 29.5 percent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space.

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Wipro Q1 IT svcs sales at $1.74 bn; guides $1.77-1.81 bn Q2 #Press #Media #MoneyControl


IT services major Wipro today reported a 29.5 per cent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space. The Bangalore -headquartered firm had posted a net profit of Rs 1,623.3 crore in the year-ago period, it said in a BSE filing.

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Wipro Q1 Profit Up 29.6%, Lags Estimates #Press #Media #BusinessWorld


For the July-September quarter, the IT services revenue is forecast to be in the range of $1.77 billion-$1.81 billion. IT services major Wipro today reported a 29.5 percent growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space.