Today, we’ve got a news roundup on the India e-commerce scene. It’s fast, furious and ultra competitive and we’ll help you get a grip on it. The biggest news is Microsoft’s cloud services deal with e-commerce leader Flipkart. It’s a big win for Microsoft against Google and Amazon, the other large competitors in that space. New Flipkart CEO Kalyan Krishnamurthy has the company pointed in the right direction, concentrating on aggressive promotions, more profitable products and efficiencies.
Retailers Association of India and Boston Consulting Group predict India’s e-commerce market will grow from $6-8 billion today to $50-55 billion by 2021. With 56% of the population under age of 30, e-commerce is certain to grow to more than $45 billion according to Paul Ruban, General Manager of Fossil Group. He said 80% of traffic is now generated by mobile phones.
Could Amazon be planning to introduce retail stores to India? According to reports it’s exploring the possibility as well as seeking approvals for permits for increased warehouse and distribution facilities in many locations to support its $500 million investment in the food sector. Amazon is also expanding its regional Matrubhasha Bookstore group which saw an 80% sales increase.
Rumors are circulating again on potential merger of Paytm and Snapdeal with Alibaba’s critical support needed. Snapdeal’s no-interest EMI purchase promotion proved popular with the upscale young consumers, increasing sales in December by 100%. but the company needs to regain its focus and work on profitability to survive and Alibaba could help. India also has its share of struggling entrepreneurs who find success with some help from online sales. WeaverStory sells high-end hand-woven Banarasi saris at an average cost of $300 to customers in more than 20 countries. It’s Facebook page has more than 130,000 followers.
Microsoft strikes exclusive cloud deal with Flipkart, Amazon’s biggest online retail rival in India
Flipkart’s Bansal & Microsoft’s Nadella
Flipkart, the top online marketplace in India, has agreed to adopt Microsoft Azure as its exclusive public cloud platform, augmenting its own data centers with the Redmond company’s technologies as it tries to fend off an aggressive push by Amazon’s e-commerce business in the country.
It’s the first step in what the companies are calling a broader strategic partnership. The deal was announced by Microsoft CEO Satya Nadella and Flipkart Group co-founder and CEO Binny Bansal at an event in India this morning. Microsoft and Flipkart say they will start with computing infrastructure and “ultimately add a layer of advanced cloud technologies and analytics to Flipkart’s existing data centers.”
Nadella, a native of Hyderabad, India, said at the event that he’s “always been an admirer of what Flipkart has done,” starting with e-commerce and moving into other areas such as logistics. Via geekwire.com
With New CEO in Control, Flipkart Maintains Its Lead Over Amazon in India
Last month Flipkart promoted former Tiger Global Management executive Kalyan Krishnamurthy as the CEO of India’s largest online retailer. Mr. Krishnamurthy replaced co-founder Binny Bansal, who has been elevated to Group CEO, and Flipkart’s other co-founder Sachin Bansal was retained as the executive chairman.
The trigger for this reshuffle was repeated mark-downs in its valuation by the fund units of Morgan Stanley and Fidelity. The write downs not only stung early investors who bought in at higher valuations, but made it harder for Flipkart to tap the market and raise fresh capital. Investors, led by Tiger Global, were getting increasingly edgy. Adding to the investor’s concerns was the fact that over the past few years Flipkart has seen its lead in the online market space eaten into by Amazon in India.
In the fight to maintain its leadership position in India’s e-commerce market, Krishnamurthy has been credited with outmaneuvering Amazon during the festive sales push from October onwards. Via forbes.com
Study: India’s E-Commerce Market to Reach USD 50-55 Billion by 2021
India’s e-commerce market is expected to reach USD 50-55 billion by 2021 from the current USD 6-8 billion, according to a recent report by Retailers Association of India and Boston Consulting Group. The e-commerce penetration would be maximum in sectors such as consumer electronics, apparel, homeware and furniture, luxury, health, FMCG and food and grocery.
By 2025, consumer electronics would see maximum penetration of e-commerce between 38-42 percent compared to 13-15 percent currently, while food and grocery could see the least growth with 1-3 percent of e-commerce penetration from under 1 percent currently, the PTI report published on The Week. In the last three years alone digital buying has increased from 3 percent in 2013, to 23 percent in 2016. The overall digital influence on consumers has increased from 9 percent to 30 percent during the same period.
The report notes that convenience has overtaken discounts as a key driver for buying online. From 40 percent in 2014, the report notes that more than 55 percent purchase online due to convenience. The digital purchasing has been catalysed by progress in infrastructure, including falling smartphone prices, reducing data charges, and rising smartphone penetration. Via cxotoday.com
‘India currently home to a booming e-commerce business’
“The Indian e-commerce business is projecting a jump of up to $45 billion by 2021. And this is only the start,” said Paul Ruban, General Manager of Fossil Group.
Close to 240 million people are forecast to purchase products online by 2019. He also feels that there is dramatic shift in the rise of digital influence. Also, 56 per cent of the population is under 30 years of age and 80 percent of the online traffic is purely generated from mobile phones. Via economictimes.indiatimes.com
India May Soon Get Amazon Offline Retail Stores, 2nd Country After US
Amazon has invested $500 million in India to enter the online packaged food delivery business, which will sell more of the local produce as compared to other packaged items. The company doesn’t have a retail store in India yet, and is planning to open one quite soon.
The Seattle-based company unveiled ‘Amazon Go’ which was touted to be the future of shopping. From new reports and tips, it seems like Amazon is going to launch the next chain of similar retail stores in India this year or next year.
Amazon has also sought approval from Department of Industrial Policy and Promotion(DIPP) to develop infrastructure, including warehouses and distribution facilities. The company is planning to sell locally produced items as well, since it will keep the costs down and help the Indian economy. Via trak.in
Amazon India’s Matrubhasha Bookstore Aims at Promoting Regional Literature
With the Centre declaring February 21 to be celebrated as ‘Matrubhasha Divas’, e-commerce portal Amazon.in has launched the Matrubhasha Bookstore wherein book lovers and reading enthusiasts can lay their hands on a wide selection of books in Indian languages.
Amazon India is offering great prices and discounts on their favourite vernacular titles, on February 20 and 21, to celebrate Matrubhumi Divas. This is aimed at promoting titles in regional languages and literature and also giving a boost to budding Indian authors and publishers.
Noor Patel, Director Category Management of Amazon India said: We launched our first regional book store in 2014. Regional books have retained their popularity with customers and the regional books category has grown over 80 per cent year-on-year, with over 60 per cent demand coming in from tier II and tier III cities, towns across India. Via news18.com
Paytm: Early talks on merger of Paytm and Snapdeal, with Alibaba and SoftBank as key players
About a month back, exploratory talks had been held on merging Paytm’s marketplace with Snapdeal in an all-stock transaction. People familiar with this development told ET that whether the deal will happen is not certain and that if all stakeholders agree, talks may resume again.
The key player here is Alibaba, the world’s largest ecommerce company, which has a 40% stake in Paytm and around 3% in Snapdeal. Paytm has spun off the marketplace business into an entity called Paytm E-commerce Private Limited, which is raising capital from Alibaba and SAIF Partners.
In the event of a merger between Snapdeal and Paytm’s marketplace, Alibaba will emerge as the new entity’s largest shareholder, assuming no other big, new investor comes on the scene. The other important player will be Japanese major SoftBank, which is a major investor in Snapdeal, and also has a substantial stake in Alibaba. Via economictimes.indiatimes.com
Zero cost EMI purchases on Snapdeal grow by 100 percent
New Delhi: Largest online marketplace Snapdeal on Monday revealed interesting statistics around its zero cost EMI offering, launched in December 2016.
The offering has stuck a chord with India’s upwardly mobile consumers, and sales through zero cost EMIs have registered a 100 percent month on month growth, and is now a significant contributor to Snapdeal’s overall sales in mobiles and electronics.
Launched in December 2016 in partnership with all major credit card issuing banks, the zero cost EMI option offers Snapdeal consumers another convenient and affordable way to meet their needs. The consumers don’t have to pay any interests or down payments and neither are burdened by any hidden costs. Via india.com
Meet the young Indian e-commerce startup that makes a profit out of every sale
In the autumn of 2015, master weaver Shamim Ansari* was on the verge of quitting his ancestral profession. In their tiny home in Varanasi town, he and his brothers had forever seen their father bent over the loom, churning out lustrous Banarasi silk saris. It was a skill Shamim loved. But he was not earning enough.
Today he runs WeaverStory, which sells hand-loom Banarasi saris online to clients across 20 countries. With an average transaction value of US$300, it has a Facebook following of 130,000.
The young, bootstrapped startup is already breaking even. “We make a profit on every sale,” Nishant tells Tech in Asia. Their saris sell in the range of US$105 and US$1,500. “I doubt if you can get authentic hand-loom Banarasi from a branded outlet for less than this,” he says. Via techinasia.com