Gen Z and Millennials Increasingly Willing to Buy Directly from Brands, Bypassing Traditional Retail Channels?
Gen Z and Millennials Increasingly Willing to Buy Directly from Brands, Bypassing Traditional Retail Channels?

Gen Z and Millennial shoppers are now more likely to order products directly from brands, and 72 percent of all shoppers expect to have significant interactions with physical stores once the pandemic subsides – up from 60 percent pre-Covid. 

More than two-thirds (68 percent) of Gen Z and over half (58 percent) of Millennials have ordered products directly from brands in the past six months, compared to 41 percent on average across all age groups. Only 37 percent of Gen X and 21 percent of Boomer shoppers have ordered directly from a brand in the last six months, according to a new Capgemini Research Institute report.

Also, for those who have bought directly from brands, almost two thirds (60 percent) cite a better buying experience as a reason for purchasing directly, and 59 percent cite access to brand loyalty programs.

Moreover, in return for these benefits, consumers are willing to share their data. Currently, almost half (45 percent) of all shoppers say they are willing to share data on how they consume or use products and more than a third (39 percent) say they are willing to share personal data such as demographic information or product preferences. However, 54 percent of all shoppers say that offers, deals, and/or discounts would make it more likely for them to share their data directly with brands.

Tim Bridges, Global Head of Consumer Goods and Retail, Capgemini said, “Younger consumers’ willingness to go straight to brands when purchasing goods presents a real opportunity for consumer product companies. This enables them to collect consumer data and helps create a more mature direct-to-consumer channel. Being data-powered enables the consumer product and retail organizations to translate supply and demand trends into intelligent decisions on where best to stock their products, customize products and services and enhance customer experience.” 

Also, despite the growth in the e-commerce channels of shopping, it is not likely to replace in-store shopping entirely, experts believe. 

The surge in e-commerce over the last two years due to safety concerns and the desire to avoid physical stores has now plateaued. The notion that online may replace in-store entirely has been disproven, and the majority of consumers (72 percent) expect to have significant interactions with physical stores after the pandemic subsides – exceeding pre-Covid numbers (60 percent). 

Globally, all age groups expect their level of in-store interactions post-pandemic to be higher than their online interactions. Boomers are the most likely to interact in-store (76 percent), and Gen Z is the least likely (66 percent). 

However, the nature of these interactions is changing as the distinction between online and in-store continues to blur. For instance, post-pandemic, 22 percent of shoppers expect to have a high level of interactions with click-and-collect orders. This trend is highest for Millennials (33 percent) and lowest for Boomers (11 percent).

Delivery and fulfilment services gain importance in certain segments 

With convenience remaining a key priority for consumers, delivery and fulfilment are increasingly being transformed from a cost centre to a growth driver for many organizations. In the health and beauty and grocery segments, shoppers place greater importance on delivery and fulfilment than in-store experiences. This is especially true for groceries shoppers across all age groups, where 42 percent of shoppers say that delivery and fulfilment are the most important service attributes. 

 
Stay on top – Get the daily news from Indian Retailer in your inbox
How E-tailers Can Work Towards Building a Better Circular Economy Involving Plastics
How E-tailers Can Work Towards Building a Better Circular Economy Involving Plastics
 

Despite the increased awareness of sustainability among people in general, much of the plastic is still falling out of the “recycling chain”. The e-commerce industry which is heavily dependent on plastic packaging in its supply chain has a huge potential to raise sustainability standards by many points. 

In fact, greater participation by private stakeholders and other members of the value chain is crucial to building a holistic, circular plastic ecosystem to reduce plastic leakage into nature, according to a case study developed in collaboration with WWF (World Wide Fund for Nature India) India and India’s top e-commerce firm Flipkart. 

Mahesh Pratap Singh, Head of Sustainability and Social Responsibility, Flipkart said, “As a homegrown e-commerce organisation, the Flipkart Group is committed to building a sustainable business while playing the role of a catalyst in the creation of a thriving sustainable ecosystem. We are excited to have achieved a milestone of eliminating 100 percent single-use plastic packaging in our supply chain in a short span of time and look to aggressively work towards pushing the goal for our sellers and brand partners. We’ve also committed to sourcing from environmentally sustainable sources by working with various partners and becoming a proactive force for a better good."

Flipkart shared that its approach towards Sustainable Packaging relies on four pillars: Engage, Innovation, Capacity Building and Compliance. 

Flipkart

Reportedly, Flipkart Group companies, including e-commerce marketplace Flipkart and leading fashion destination Myntra have eliminated 100 percent single-use plastic packaging in their own supply chain by working with several stakeholders across traceability, plastic reduction and brands and universities to name a few. It is also working towards adopting circularity in its plastics value chain in collaboration with sellers and brand partners.

E-commerce ecosystem can rely on this model and build their organization that aids in fulfilling the sustainability targets. 

Varun Aggarwal, Associate Director - Sustainable Business at WWF India said, “A coordinated approach between e-commerce companies and all the other stakeholders in the plastics value chain is crucial to attaining a circular economy for plastics , Flipkart has a large secondary packaging footprint, making plastic waste management a key lever in its commitment to sustainability. The best practices adopted by Flipkart can be replicated by players in the same space to contribute to the mitigation of plastic waste”.

The study further mentions that companies need to customize interventions to influence consumer behavior and collaborate for improving and innovating the existing collection and recovery infrastructure and grow it further. Market leaders need to set up goals for their supply chain who wish to similarly engage and bring about a better plastics waste response to ultimately contribute towards a circular plastics economy and greater good of the society.
 
Through this case study, WWF has highlighted the need for active participation by the private stakeholders to ensure a holistic, circular plastic ecosystem to reduce plastic leakage into nature. As a leading digital platform engaging in online commerce of goods and services, Flipkart has a large secondary packaging footprint, making plastic waste management a key lever in its commitment to sustainability.
 
Some of the next steps identified include data-based goal setting to ensure a data-driven approach to waste management and regularly track the impact of alternatives, creating an ecosystem view of the entire waste management journey for packaging. It also includes creating a state-by-state playbook for training and working with sellers partners across different states to optimally implement the transition to sustainable packaging solutions. The best practices adopted by Flipkart can be replicated by other players in the same space for greater uptake to contribute to the mitigation of plastic waste and move towards a more circular system in e-commerce packaging.  

READ MORE: More Than 50 pc Consumers Globally are More Likely to Purchase Products with Sustainability Claims

 

Next Story
Indian Digital-first Brands have $250 Billion Opportunity by 2030
Indian Digital-first Brands have $250 Billion Opportunity by 2030
 

Online shoppers in India are seeking new experiences in the age of social and video commerce and this has given digital-first brands a massive $250 billion market opportunity by 2030.

India's e-tailing gross merchandise value (GMV) reached $53 billion in 2021, demonstrating post-Covid acceleration, according to a report by Bengaluru-based market research firm RedSeer. 

"Additionally, Indian e-tailing showed impressive growth (on-quarter) in 2021 while other global players struggled to maintain the momentum," the report stated. 

"The current B2C retail landscape is evolving rapidly with the emergence of new consumer behaviours and expectations. The rise of new retail channels, particularly video and social commerce, is further changing the way consumers shop and what they expect from brands, said Mrigank Gutgutia, Associate Partner, RedSeer.

As a result, digital-first brands are finding it increasingly rewarding to engage with consumers in these channels and offer them a seamless, omnichannel experience.

"The success of such brands will depend on how effectively they leverage these new retail channels and how they innovate on the digital front to offer a superior omnichannel experience," Gutgutia added.

The findings suggest that consumers opt for these new-age brands for their quality (and not only price) with significantly high repurchase willingness.

Multiple $100 million revenue technology-first brands have been created already across the categories in just the past few years, with each having a unique winning playbook and first-of-their-kind business model.

"Over the 2021-30 period, we expect many more digital-first brands to scale exponentially, supported and incubated by roll-up platforms that are building the next wave of digital-first brands for India," the report noted.

READ MORE: Unlocking E-shopping: Decrypting the Future of E-commerce

 

Next Story
More Than 50 pc Consumers Globally are More Likely to Purchase Products with Sustainability Claims
More Than 50 pc Consumers Globally are More Likely to Purchase Products with Sustainability Claims
 

Sustainability considerations now influence the majority of the world’s grocery shoppers, particularly when buying packaged foods such as potato chips and cookies. About 67 percent of Indian consumers are more likely to purchase packaged food with sustainability claims up 11 points from 2019. 

Compared globally, U.S. consumers were also more attuned to sustainability claims: 37 percent indicated they were more likely to purchase packaged food with a sustainability claim, a 6 point increase compared to 2019 results, according to a survey by Cargill. Whereas Brazil and Mexico saw 13 point increases in the purchase impact of sustainability claims between 2019 and 2021.

“Our latest findings clearly demonstrate that messages surrounding sustainability are having an impact on consumers,” said Nese Tagma, Managing Director of Strategy and Innovation, Cargill’s global edible oils business. “Insights like these help guide our consumer-focused approach to innovation, enabling us to partner with customers to co-create new products and solutions that reflect current consumer trends and ingredient preferences.”

In the case of the U.K., 51 percent of consumers now say they place a greater emphasis on sustainability, an 8 point jump in just two years. 

“These insights further affirm our commitment to embed sustainable practices into every aspect of our operations,” said Florian Schattenmann, Chief Technology Officer and Vice President - Innovation and R&D, Cargill. “This includes everything from our sourcing practices to processing facilities, and even extends to new product development, where decisions to commercialize innovations now consider sustainability alongside performance and cost.”

READ MORE: Changing Consumer Trends and Shift Towards Sustainable Products

Cargill also provides sustainable solutions to meet consumer and customer needs for oils, from regenerative agriculture programs for row crop oilseeds to palm oil certified responsibly sourced by the Roundtable on Sustainable Palm Oil (RSPO). 

 

 

Next Story
FMCG Market Expands 10 pc in January
FMCG Market Expands 10 pc in January
 

India's fast-moving consumer goods (FMCG) market has expanded 10 percent in January year-on-year from 2021.

Experts believe that this indicates that the third Covid wave buoyed consumption for daily essentials and groceries.

Even in discretionary products like televisions, refrigerators, and smartphones, leading companies said they have grown sales at a double-digit percentage pace in January despite initial hiccups, according to retail intelligence platform Bizom. 

READ MORE: 4 Key FMCG Trends to Watch Out For in 2022

"We are seeing a significantly lower impact even on a month-on-month sales basis compared to earlier waves. Commodity products continue to grow sales despite an easing of prices for key products like edible oils, indicating strong consumption," said Akshay D'Souza, Chief of Growth and Insights at Mobisy Technologies, which owns Bizom.

Also, despite restrictions on store timings and mobility in certain markets, the impact on business has been the least in the third Omicron wave compared to the previous two.

Moreover, commodity and packaged foods grew 43 percent and 38 percent each while sales of home and personal care products fell.

 

 

Next Story
Samsung Leads Global Smartphone Shipments in 2021, Market Grows for First Time Since 2017
Samsung Leads Global Smartphone Shipments in 2021, Market Grows for First Time Since 2017
 

Samsung has topped the global smartphone shipments chart in 2021 as the market grew for the first time since 2017. Total global smartphone shipments in 2021 hit 1.39 billion units — a 4 percent on-year growth — but remained below pre-pandemic levels.

The reason for lower shipments is continued disruptions caused by Covid-19 and the ongoing component shortage, according to a report by Counterpoint Research. Q4 shipments fell 6 percent on-year basis to 371 million units.

“However, China, the world’s biggest smartphone market, continued to decline due to supply-side issues caused by the ongoing component shortages, as well as demand-side issues resulting from lengthening replacement cycles,” said Harmeet Singh Walia, Senior Analyst, Counterpoint. 

Experts believe that the increased demand in Latin America, North America, and India led to the recovery in the global smartphone market. Growth in the US was driven by demand for Apple’s first 5G iPhone 12 Series, which continued throughout the year. The growth in India was attributed to higher replacement rates, attractive financing, and better availability of mid-to high-tier phones.

READ MORE: India Smartphone Market Logs 169 mn Units Shipment in 2021, Highest Till Date

"The market recovery could have been even better having the component shortage did not have the impact it did in the second half. The major brands navigated the component shortages comparatively better and hence managed to grow by gaining share from long-tail brands,” Walia further added. 

How Mobile Brands Are Performing?

Overall, Samsung shipped 271 million smartphones, up 6 percent from 2020. The report attributed the increase to higher demand for the mid-tier A and M Series devices. Apple registered an 18 percent on-year growth to a record 237.9 million units on the back of the iPhone 12 Series’ strong performance. Xiaomi’s global shipments grew 31 percent on-year to a record 190 million units.

Also, Oppo, including OnePlus shipments since Q3, recorded a 28 percent growth to 143.2 million. Sister brand Vivo grew 21 percent to 131.3 million units. Motorola, on the other hand, was the fastest-growing smartphone brand among the top 10 original equipment manufacturers based on global shipments.

And, for the first time, Realme entered the top five in global Android smartphone shipments, while Honor also entered the top 10 in its first year as an independent manufacturer. 

 

Next Story
Fashion Emerges as a Top BNPL Category in India in 2021, Sees 2.3X Increase in Transactions?
Fashion Emerges as a Top BNPL Category in India in 2021, Sees 2.3X Increase in Transactions?
 

The fashion and lifestyle category has turned out to be one of the top two segments for direct-to-consumer (D2C) brands that enabled BNPL as a payment method at the checkout.

The demand in fashion and lifestyle was also led by men and women in Tier-I and Tier-II cities. While men in Tier-I cities spruced up their wardrobes and spent heavily on fashion, their women counterparts upgraded their tech and electronics while also indulging in fashion and lifestyle retail therapy. In Tier-II too, men took to spending on fashion and lifestyle, besides travel, while women spent on EdTech courses and upskilling besides electronics and fashion, according to a report by Fintech platform ZestMoney.

While most of the customers (median) were in the 23-26 years group, BNPL emerged as the preferred option for people across age groups with the youngest customer being 18 years old and the oldest at 66. The number of millennial and GenZ customer base increased by 2X and 3X respectively, indicating that the BNPL segment has been driven by young cohorts in India in line with the global trend.

zest data

READ MORE: How India's 'Buy Now, Pay Later' Segment Poised to Reach $56 bn by FY26

Also, Bangalore, Mumbai, New Delhi, Pune, Hyderabad, Chennai, Ahmedabad, Thane, Kolkata, and Jaipur emerged as the top cities witnessing demand for BNPLin 2021, while Lucknow, Kanchipuram, Vijayawada, Visakhapatnam, Guntur, Surat, Indore, Bhopal, Tiruvallur, and Coimbatore were the other top Tier-II and Tier-III cities.

Lizzie Chapman, CEO & Co-founder, ZestMoney said, ‘2021 was an intense year, with the volatility of the pandemic coupled with its impact on the consumer we serve - from pain to recovery and then rapid demand acceleration over the last two quarters. Customers continued to lap up Pay Later because it gives them the perfect flexibility to spread out costs and plan their finances better. We've doubled our user base in the last 12 months taking our total registered user base to 15 million – almost 2X growth. It's been a well-rounded growth across categories from smartphones, electronics, travel, fashion and lifestyle, and home decor emerging as the top categories on the platform.”

zest data

“We not only added the highest number of new customers and merchants but also gained market share in an ever-growing market.   We saw a 300 percent YoY growth in BNPL transactions as people took to convenience and affordability in a big way. Owing to the solid consumer demand we saw last year, we now have a 50 percent market share in the Indian BNPL market and over 70 percent market share in the online ‘Pay in 3’ no-cost interest-free offering. On the back of the strong demand and our expansion plans, we are confident of hitting a $10 billion GMV run rate in the next 3 years and cementing our position as the market leader in the country.”  Chapman further added.

zest dataDuring the festive season last year, customer applications for BNPL went up by 10X with top categories being Smartphones, electronics, large appliances, fashion, furniture, and home decor. ZestMoney witnessed a 200 percent growth in transactions on Amazon, Flipkart, and Myntra compared to last year. While physical stores observed growth of 100 percent during the festive season compared to 2020.

 

Next Story
How Consumer Sentiments Improved in January by 3.9 pc After a Dip in December
How Consumer Sentiments Improved in January by 3.9 pc After a Dip in December
 

CMIE data shows that the average weekly index of consumer sentiments in the three weeks that ended on January 9, 16, and 23 was 59.9 and the 30-day moving average of the index of consumer sentiments as of January 23, 2022, stood at 61, higher than November 2021 when it stood at 60.3.

Consumer sentiments have improved in January by 3.9 percent after a dip in December when it fell by 4.5 percent to 57.6, though the recovery is somewhat “hesitant”.

The average weekly index of consumer sentiments in the three weeks that ended on January 9, 16, and 23 was 59.9 and the 30-day moving average of the index of consumer sentiments as of January 23, 2022, stood at 61, higher than November 2021 when it stood at 60.3, according to CMIE. 

“We call the recovery seen in the early data of January as hesitant because, after that 6.9 percent increase in the week ended January 2, the weekly growth rate fell to 2.1 percent in the next week and then by 3 percent erasing much of the gains made in the preceding two weeks,” CMIE stated. 

Further, while the level of the index in the latest week ended January 23 and also the 30-day moving average are impressive at 61.2 and 61 respectively, the week-to-week variations reflect some uncertainty of the January recovery, experts believe. 

“The index of consumer sentiments in January is expected to cross its December level of 57.6 and could possibly cross its peak level of 60.3 reached in November,” it said, adding that the index still has a long way to go before it reaches its pre-Covid levels of around 108.

The data further showed that the index of current economic conditions went up by 6.3 percent to 58.2 and the index of consumer expectations grew by a modest 2.5 percent to 60.9.

“A faster improvement in current economic conditions with slightly higher confidence in the future as is seen in the weekly sentiments data for January 2022 is a good development. Its stride needs to be bigger and a little more confident,” CMIE added.

READ MORE: Consumer Confidence Continues To Improve, Households More Optimistic about Future

 

Next Story
How India's 'Buy Now, Pay Later' segment poised to reach $56 Bn by FY26
How India's 'Buy Now, Pay Later' segment poised to reach $56 Bn by FY26
 

India's 'Buy Now, Pay Later' sector is expected to grow to $56 billion by FY26.

Also, India's BNPL is at an inflection point with rising e-commerce and digital P2M payments fuelling deferred payments, according to HDFC Securities.

BNPL GMV is poised to exhibit 74 percent CAGR and accounts for 5 percent of digital P2M payments by FY26E.

Experts believe the segment provides short-term financing to make immediate purchases and the credit can be paid back at a later date.

"The proliferation of BNPL as a mode of credit-based payment is gaining significant traction, particularly amongst the millennials and Gen-Z population within a short span of time," HDFC Securities stated.

According to the brokerage house, the growth of the BNPL segment is expected to be triggered on the back of rising e-commerce and digital payments penetration. "BNPL players are exploring multiple business models and are yet to establish economic viability with limited revenue drivers and high delinquencies."

READ MORE: Buy Now Pay Later: The New Financial Buzzword in Retail

Besides, the brokerage house's report cited that although 'FinTech BNPLs' enjoy favorable regulatory arbitrage, incumbents have an opportunity to expand their customer funnels either through in-house offerings or partnerships.

"We expect regulatory convergence on the back of the RBI's recent narrative for digital lenders although 'FinTech BNPLs' are likely to sustain their superior user experience," the company further added. "Within a bouquet of BNPL options, credit cards remain the most exhaustive and profitable and, in fact, offer an up-sell opportunity for credit-tested top-of-the-BNPL-pyramid customers."

 

Next Story
Rentals of Mall Operators Expected to Decline by 20-25 pc in Q4FY2022
Rentals of Mall Operators Expected to Decline by 20-25 pc in Q4FY2022
 

Rentals of mall operators are expected to decline by 20-25 percent in Q4FY2022 as against earlier estimates due to Omicron-led third wave. 

With impact on recovery in Q4FY2022, the rental recovery for FY2022 is expected to be up to 70 percent of pre-Covid levels, as compared to earlier estimates of up to 75 percent recovery, according to ICRA.

Overall, the majority of the store categories are expected to reach near-normalcy by Q1FY2023 as against earlier estimated Q4FY2022 with variance depending on the mall or brand-specific factors.

“The trading values are expected to decline to 60-70 percent of pre-Covid levels in Q4FY2022 due to the third wave as against recovery of over 85 percent in Q3FY2022. The rental recovery for Q4FY2022 is estimated to be at 70 percent of pre-Covid levels as against the earlier estimates of over 90 percent levels,” said Anupama Reddy, Sector Head - Corporate Ratings, ICRA.

The fact is that the Omicron-led third wave of the Covid-19 pandemic has resulted in a resurgence in fresh Covid-19 infections leading to restrictions by various state governments impacting the trading values for the retail store operators and hindering the rental recovery for mall operators.

The footfalls in the malls are witnessing a declining trend from the first week of January 2022 with restrictions in major cities such as closing dine-in for restaurants, occupancy restrictions for multiplexes, and their closure in a few cities along with weekend curfews. This is sure to impact the rental recoveries for Q4 FY2022 and thereby FY2022.

“Also, the rental recovery for FY2022 is expected to be up to 70 percent of pre-Covid levels, as compared to earlier estimates of up to 75 percent recovery. However, the recovery post third wave is expected to be faster than the previous waves with short-tenured restrictions and expected quick ramp up for major tenant – multiplexes, as content line up remains robust with several big-budget movies ready for release,” Reddy further stated.

With the estimated rental recoveries over 85 percent of the pre-covid level, Q3FY2022 was the best quarter for the mall operators since the onset of the pandemic. The recovery was driven by pent-up demand, high vaccination coverage, resumption of multiplexes which also coincided with the festive season, experts believe.

While certain store categories such as hypermarkets, electronics, fashion, and beauty have done extremely well with certain brands even exceeding the pre-Covid sales, tenants such as department stores and food and beverage are observed to have moderate recovery in line with the improvement in footfalls in Q3FY2022.

“Weaker H1FY2022 due to second wave and expected reduction in recovery in Q4FY2022 due to the third wave of a pandemic is expected to impact the full-year FY2022 debt coverage metrics. The projected DSCR is estimated to be in the range of 0.70-0.75 times as against earlier estimates of 0.80-0.85 times,” Reddy added.

The trading values for these stores would be impacted by the third wave in Q4FY2022. Multiplexes will be the most impacted segment due to deferred movie releases.

READ MORE: How Expectations of Consumers and Retailers are Changing From Malls

Overall, the majority of the categories are expected to reach near-normalcy by Q1FY2023 as against earlier estimated Q4FY2022 with variance depending on the mall or brand-specific factors.

“The support from sponsors, debt service reserve, and undrawn credit lines (for few issuers) have helped ICRA rated malls in meeting their obligations during the H1FY2022. With improvement in rental recoveries, there was no significant shortfall or major dependence on sponsors in Q3FY2022. However, with 20-25 percent reduction in rentals in Q4FY2022, the malls would again be reliant to some extent on available bank balances and undrawn lines, in the absence of which timely sponsor support will be critical,” Reddy stated.

 

Next Story
India Smartphone Market Logs 169 mn Units Shipment in 2021, Highest Till Date
India Smartphone Market Logs 169 mn Units Shipment in 2021, Highest Till Date
 

India's smartphone market has registered its highest-ever shipments at 169 million units in 2021 to register 11 percent year-on-year growth from about 152 million units in 2020.

The market showed high resilience in a year that witnessed a second and more virulent Covid-19 wave as well as supply disruptions and price increases due to the ongoing component shortages, according to a report by Counterpoint Research.

Also, the increased adoption and demand for 5G smartphones was one of the key factors for high shipments in 2021, the report added. And, 5G smartphones contributed to about 17 percent of the overall shipments in 2021, registering 6x growth compared to 2020.

"Intense competition among OEMs, availability of cheaper 5G chipsets, and declining prices of 5G devices will enable brands to push more 5G devices into the market. The price of entry-level 5G devices has come down by 40 percent in the last six months. The increase in affordability of 5G devices has been a key reason for high 5G smartphone adoption," the report stated. 

Consumer demand remained high in the premium price tiers (above Rs 30,000) in 2021 with shipments in these price bands growing 98 percent y-o-y.

The under-Rs 10,000 category -- which accounted for 30 percent market share, declined 5 percent, while Rs 10,000-20,000 segment (47 percent share) grew 8 percent. The Rs 20,000-30,000 tier (13 percent) grew 95 percent.

The retail ASP (average selling price) also showed high growth, increasing by over 13 percent y-o-y, the report added.

READ MORE: Smartphone Market Moving Towards a Steady Growth and Recovery Stage

"High installed base, as well as high replacement demand coupled with the increasing affordability of premium devices, led to the high growth of the premium segment. Going forward, we expect the market to continue to grow by double digits with a healthy contribution of the mid-to-high-end 5G smartphones. India's smartphone market continues to offer big opportunities for multiple players to grow and co-exist," the report said. 

 

Next Story
Why is Clarity on Input Tax Credit and Implementation of National Retail Policy Needed to Strengthen Consumer-Retail Ecosystem?
Why is Clarity on Input Tax Credit and Implementation of National Retail Policy Needed to Strengthen Consumer-Retail Ecosystem?
 

The consumer and retail sector showed tremendous signs of recovery in the previous year. However, with the sudden spurt in COVID-19 cases recently, concern has arisen with regards to the growth momentum of this industry. Budget 2022 holds great hope and significance for a complete revival of the sector. 

54 percent of MSMEs feel that more skill development initiatives are required to make it competitive globally, according to the survey by Grant Thornton Bharat. MSMEs are the backbone for the sector and with the right talent, they can provide exceptional results.

Also, with regards to Aatmanirbhar Bharat and to promote growth in domestic manufacturing, 41 percent of the respondents wish for rationalization of basic customs duties on certain imports, after taking into consideration the FTA benefits. This was followed by 30 percent wishing for the implementation of the National Retail Policy, to strengthen and boost the retail ecosystem and facilitate ease of doing business, the report further stated.

Naveen Malpani, Partner and Consumer Sector Leader, Grant Thornton Bharat stated, “The consumer retail sector is hoping for the implementation of a National Retail Policy, and an efficient tax refund process to prevent credit blockage. With the right government support, private sector players are willing to invest more in building efficient supply chain infrastructure as well as technology innovation to improve global competitiveness.” 

stats

Looking at the success of the PLI (production-linked incentive) schemes, the survey also hinted on the government to consider rolling it out to new sectors like toy manufacturing (20 percent), footwear (23 percent) as well as personal care and cosmetics (37 percent). Talking about GST law, almost half the respondents said that they needed more clarity on the input tax credit, followed by supply and value of supply. 50 percent also wish for Income Tax special exemptions to enhance and boost the spending capacity of the people in the current fiscal.  More liquidity in the hands of consumers has a direct positive impact on the consumer and retail sector since it increases the consumer’s propensity to spend.

 

Next Story
Budget 2022: What Do Start-ups Expect from The Government??
Budget 2022: What Do Start-ups Expect from The Government??
 

India’s start-up ecosystem has boomed in 2021 like never before. Record $36 billion funds in 2021 were channeled to the start-up sector last year alone, with 40 start-ups entering the unicorn club. Given there is no shortage in the circulation of capital in the start-up ecosystem, what can the government bring in maybe in terms of eradicating the unique challenges faced by these companies in various sectors or bringing more start-up-friendly policies, and so on?

“The three areas that the government may focus on in the upcoming Union Budget 2022 include a) Taming inflation, b) Manufacturing incentives, and c) Cutting the export red tape. Mostly due to supply-side issues, inflation has been running high on most inputs used by the beauty and personal care industry," states Shankar Prasad, Founder and CEO, Plum. 

Inflation is indeed a major macroscopic challenge for the government which may be putting a lot of toll on the start-ups particularly those that may want to scale based on the initial successes. The issue of inflation is however not unique to India, globally over the past twelve months, the rate of inflation has shot up from under 2 percent a year ago to over 5 percent by August 2021, according to a report. 

While the Government has taken certain steps to ease supply constraints, concerted efforts in this direction are necessary to restore supply-demand balance. "The nascent and hesitant recovery needs to be nurtured through fiscal, monetary, and sectoral policy levels," said Monetary Policy Committee. 

Indeed, the sustained challenges by the pandemic and the currently rising third wave have put several halts on the recovery graph of every sector, start-ups taking the most hit. 

Abhishek Gagneja, Founder, Yoga Brands says, “Not undermining the death and devastation Covid-19 has caused, it has been a key driver for Digital and D2C Start-ups which have thrived despite the lockdowns and attracted massive funding in 2021. These disruptive business models have great potential to lead India towards economic growth, innovation, ease of living, livelihoods, and a digital economy. At the same time, it could lead to a bubble if not supported by reforms tax and administrative reforms as sooner or later Investors will expect these companies to become profitable.” 

Demand for Better Tax Slabs 

Presenting better tax slabs in the budget seems to be the common demand for the government from the start-up ecosystem. 

Kapil Bhatia, Founder, and CEO, UNIREC states, “The fashion startups are expecting the government to improve the disposable income of the consumers as well as the reduction in GST rates of readymade clothing. Current GST rates of readymade clothes that cost above Rs 1,000 fall under the category of 12 percent and the government should bring it down to 5 percent.”

On similar lines, Rohit Sahni, Co-Founder and CEO of WK Life says: "We have an immense tax burden and we are hopeful that the budget will explore opportunities in allowing startups to carry forward losses, setting off previous losses against income and unabsorbed depreciation under Section 72A of the Income Tax Act."

Praveen Chirania, Founder, Muscle and Strength India asserts, “Self-care, preventive healthcare, and holistic wellness have taken center stage with a growing awareness around nutrition and immunity among consumers. It has become an important line of defense during the pandemic proving the dietary supplements sector to be a strong economic partner to the people. Hence to give impetus to the overall industry, we hope that the government will rationalize GST on healthcare supplements from 18 to 5 percent in the upcoming Union Budget 2022.” 

Sanjay Desai, Director, Fabcurate said, "To reduce the burden, customs duties on raw materials and intermediaries should be brought down. Expectations of reduction in tax burden, to enable ease of doing business for small businesses. When tax will be reduced, it will bring in more investors and more job opportunities will arise, which will eventually help to increase the economy."

Not just direct tax reduction, the start-ups also expect to facilitate them in terms of compliances and more importantly in simplification of taxes. Just to illustrate the importance of this further, a complex unfriendly capital gains tax system is a big reason why many Indian start-ups have relocated their headquarters outside India, according to a report on direct tax administration brought out by the Bangalore Chamber of Industry & Commerce (BCIC.) 

Sahni states, "The government should also consider assisting startups through policies and support mechanisms towards domestic capital participation, favorable investment climate in Tier II and Tier III cities, tax exemptions in foreign direct investments, and a high focus on startup infrastructure development.” 

“In addition to tax rate reduction, easier compliance and simplification of taxes are two of the major expectations of the functional fashion startups in the market," Bhatia adds. 

Besides the fashion segment, personal care, technology, e-commerce, healthcare, are some of the most thriving sectors of recent times and will surely be looking up to the budget to further their growth prospects. 

Push For Local Manufacturing

With many start-up players holding huge capital that they do, it wouldn't be fair on the part of the government to not take advantage of that and foster the growth in the local manufacturing. It wouldn't be in the country's interest if those startup companies continue to rely on foreign manufacturing units to grow their business. 

Lalit Arora, Co-Founder of India's leading Consumer Electronics brand VingaJoy states, “We hope that the upcoming budget will have provisions for strengthening the entire system and take progressive initiatives such as ‘Make in India’ and ‘Digital India’. We are hopeful that the Government would continue extending its valuable support as initiated in the first term with the implementation of uniform GST, 'Make in India', besides offering a host of other initiatives that would help industries to come back to the platforms."

Priyanka Salot, Co-founder of popular Indian mattress brand The Sleep Company also said, "With its expected focus on economic recovery, we can expect a further push towards boosting the startup ecosystem in the Union Budget 2022-23, particularly for companies that are working under the 'Make in India' initiative. Manufacturing startups have made a headstart in exports, but need critical support in areas like obtaining international patents and a renewed focus on the logistics sector. The focus on encouraging growth must be encouraged incentivizing business deployment along with building a robust forward-looking business ecosystem."

Bala Sarda, Founder, and CEO of VAHDAM India added: "The budget can look into widening the ambit of Special Startup manufacturing zones for companies or startups which want to foray into manufacturing. This would give the government's "Vocal for Local" initiative a timely fillip"

In the previous budget, the government in its bid to benefit the D2C sector took a number of steps, such as the extension of tax holiday for startups, an extension of eligibility period of claiming capital gains, and pushing the paid-up capital of small firms from Rs 50 lakh to Rs 2.50 crore. Experts believe that the government needs to up the game in the same spirit to further foster growth in the start-up ecosystem. 

Himanshu Gandhi, Co-founder, and CEO of Personal care brand Mother Sparsh said, "We expect the Finance Minister to extend the purview of Start-up India Seed Fund Scheme to promote startups that achieved remarkable feats during the pandemic. In this budget, the government should provide financial assistance to growth-oriented startups with proven capabilities to enhance their R&D, product trials, prototype development, and proof of concept.

Truly, the government can provide specialized funds, which many industry experts would agree, depending upon the type of work the start-up is doing and the assistance needed by them. Also, more transparency in terms of the schemes and programs brought under the government’s flagship Start-up India program so that start-ups can avail the rightful benefits from the same.  

 

Next Story
How Indian Textile Exports can Hit $65 bn if Industry Majors Take the Right Steps
How Indian Textile Exports can Hit $65 bn if Industry Majors Take the Right Steps
 

India’s trade performance has improved a lot in recent times. In fact, it can hit $65 billion if the industry majors take the right steps and there is proper execution of government schemes. 

Exports declined by 3 percent during 2015–2019 and by 18.7 percent in 2020, according to a joint report by global consulting firm Kearney and The Confederation of Indian Industry (CII) said. Also, during the same period, other low-cost countries such as Bangladesh and Vietnam have gained a share.

“We believe with the right actions from the industry majors and robust execution of government schemes, India can hit $65 billion in exports (implying 9-10 percent CAGR) by 2026. This, coupled with growth in domestic consumption, could propel domestic production to reach $160 billion. Given the labor-intensive nature of this industry, this growth could add 7.5 million direct jobs in textile manufacturing,” said Siddharth Jain, Partner, Kearney.

There are in fact a variety of factors that have contributed to India’s recent trade performance. India has factor cost disadvantages (for example, power costs 30 to 40 percent more in India than it does in Bangladesh). Lack of free or preferential trade agreements with key importers, such as the European Union, United Kingdom, and Canada for apparel as well as Bangladesh for fabrics also put pricing pressure on exporters.

"The high cost of capital and high reliance on imports for almost all textiles machinery makes it difficult to earn the right return on invested capital, especially given India’s slight cost disadvantage. Longer lead times than for Chinese manufacturers make India uncompetitive, especially in the fashion segment. For example, India’s lead time is 15 to 25 percent longer than the competition in fabrics. Limited presence in the global trade of man-made fiber products. The trend of nearshoring in western economies has not helped either," the report further added.

Textile products hold a key position in the global value chain, with India being the world’s fifth-largest exporter for apparel, home, and technical products. The Textile industry employs almost 45 million people in the farming and manufacturing sectors. However, many experts say that the country’s recent performance in global trade has not been commensurate with its abilities.

“Covid-19 has triggered the redistribution of global trade shares and a recalibration of sourcing patterns (“China plus one” sourcing), providing a golden opportunity for Indian textiles to stage a turnaround and regain a leadership position as a top exporting economy. We believe India’s textile industry should target 8 to 9 percent CAGR during 2019–2026, driven by domestic demand growth and significant growth in annual exports (reaching $65 billion by 2026),” Neelesh Hundekari, Partner and APAC Head - Lifestyle Practice, Kearney said.

Achieving the $65 billion export target up from $36 billion in 2019 will require India to double down in the five key areas - apparel, fabrics, home textiles, man-made fiber and yarn, and technical textiles, experts believe. And, the path to achieving these targets will entail both government and industry taking crucial steps. And the government seems geared up for the challenge. 

“The recent launches of multiple schemes such as MITRA, PLI, RoDTEP highlights the strong government focus on this sector. It will be critical for the government to follow up these launches with efficient implementation and even more critical for industry players to leverage these schemes effectively,” Jain added.

 

Next Story
Soaps, Candies, Snacks, Beauty Products, Sanitary Pads, and Electrical Products are Most Sold Products in Rural India
Soaps, Candies, Snacks, Beauty Products, Sanitary Pads, and Electrical Products are Most Sold Products in Rural India
 

Given a lot of retail markets in Tier-I cities have reached close to a saturation point, businesses have started to explore and expand into rural markets and non-metro cities. Consequently, these businesses have been eyeing to understand consumer trends and stats that will help them build their strategies to thrive in the market. 

Soaps, candies, snacks, beauty products, sanitary pads, and electrical products happen to be the front runner for sales, according to a report by B2B aggregator platform Xpand. The company itself has been growing 46 percent MoM growth since August in rural markets. 

With hygiene being of importance due to the pandemic, soaps and antiseptics have been the best-selling products. Additionally, house cleaning solutions have contributed a significant 68 percent to the business, the report added. It also dissects the geographical representation of the total business contribution. While the North of India contributes 54 percent of the total sales, the West and the South stood at 16.4 percent each. The East, however, comes at the lower end with a contribution of 12.3 percent.

Another observation is with growing aspirations, many suburbanites/rural Consumers do not seem to be minding paying more for premium products that may provide value Vs its price. In the smaller SKUs, this choice has been more evident. Cheese crackers and digestive biscuits have had more buyers than the regular glucose ones.

Sanjay Kaul, Founder, and CEO, Xpand, said, “There is significant untapped potential in the commercial space in the suburban areas and a great opportunity for brands to establish themselves in one of India’s big markets segments. While our recent report highlights many insights, but one key observation has been the growing aspirations of the villagers. As the Euromonitor International lifestyle survey suggested, many suburbanites are looking to elevate their lifestyle standards. We will keep ingressing towards the market in the rural space and support with a consistent flow of relevant categories to help them simplify their daily lives.”

 

Next Story
How Third-wave will Push Revenue Recovery for Multiplexes by Five Months
How Third-wave will Push Revenue Recovery for Multiplexes by Five Months
 

The third wave is expected to push the recovery in multiplexes by up to five months as governments resort to the temporary closure of movie halls to contain the spread of the Covid wave.

Also, the full revenue recovery of the multiplexes will be pushed back to the second half of the next fiscal as against the first quarter earlier, according to a report by Crisil Ratings.

However, once the restrictions are lifted, the pace of recovery is expected to be sharp - as was witnessed after the second wave - and should limit further downside in the credit profiles of multiplex operators along with healthy balance sheets, experts believe.

"The temporary closure of operations in New Delhi/ National Capital Region, Bihar, Haryana, and restrictions in other key states, such as Maharashtra, will push back new film releases," said Nitesh Jain, Director, Crisil Ratings.

Stating that a few big-ticket films such as 'RRR' and 'Jersey' have already been postponed indefinitely, Jain said in his base case, he assumes the third wave to peak in February and bottom out by the end of March, which will mean the release of big-ticket content to resume in the first quarter of fiscal 2023.

In fact, occupancy doubled to 20 percent in December 2021 from 10 percent in September, indicating healthy demand, and could have improved to over 25 percent this quarter compared to 30 percent pre-pandemic as several big-ticket films were scheduled for release, the report further added.

Right now, there will be operating losses because of the third wave but healthy liquidity of Rs 880 crore as of September 2021 would comfortably cover operating expenses and debt obligations for the next 4-6 months, many experts believe. 

"Theatre releases will also bolster revenue from the food and beverages (F&B) segment, which accounts for 25-30 percent of the topline of multiplex operators," said Rakshit Kachhal, Associate Director, Crisil Ratings.

Downside risks for the industry, which need to be watched include sustainability of cost-control measures and the prolonged impact of the pandemic.

 

Next Story
How More Women-led DTC Businesses Came into Spotlight in Recent Times
How More Women-led DTC Businesses Came into Spotlight in Recent Times
 

Over 40 percent of the total online businesses at present are run by women entrepreneurs. Also, more women-led DTC businesses have come to light in recent times given the phenomenal success they've experienced. 
 
Also, looking forward, the year 2022 is expected to be ruled by consumer sentiment. As e-commerce grows, brands will be conscious of the product they are selling, and also how they are selling it, according to a report by full-stack digital solutions provider Instamojo. And, there will be a heightened focus on sustainability, not just for the product but for the entire supply chain. 

Sampad Swain, CEO, and Co-Founder, Instamojo, said, “As entrepreneurs and small businesses increasingly learn the benefits of selling independently online, we can expect the DTC model to catalyze business growth significantly in the coming quarters. In the last couple of years, both digitization and changing consumer behaviors have made it imperative for small businesses to move and/or expand online."

In fact, last year, we have seen several D2C businesses becoming unicorns. 

"To this front, in the post-pandemic world, the DTC model can be an effective solution to accelerate business recovery. It is heartening to see the digital growth of this sector which has mostly been defined by traditional business models. As we witness the shift of DTC businesses to the online medium, we aim to support the growth journey of more than 250,000 small business owners as they strive towards becoming digitally independent,” Swain further said. 

Secondly, another major important trend that has become hugely popular is social commerce. It is likely to be the preferred channel for e-commerce from a consumer PoV, according to the report.  

To share some figures, 40 percent of the entrepreneurs on Instamojo that signed up in 2021 had a business profile on social media. Also, to replicate the mall experience, people are hopping on social media LIVE streams to shop while feeling like a part of a community.

Thirdly, revenue-based financing takes center stage. "As homegrown and independent businesses rise in number, there will also be a significant shift to revenue-based financing over traditional venture capital," the report further stated. 

And lastly, SEO (Search Engine Optimisation) is expected to become the most important marketing channel. Moreover, SEO to become the biggest free acquisition channel for DTC brands in India in 2022, the report added. 

 

Next Story
Consumer Durables Prices to go Up 5-10 pc as Makers Feel Heat of Rising Input Costs
Consumer Durables Prices to go Up 5-10 pc as Makers Feel Heat of Rising Input Costs
 

Prices of air conditioners and refrigerators have shot up in the new year as consumer durables makers pass on the impact of rising raw material costs and higher freight charges to customers, while home appliances like washing machines may witness 5-10 percent price hike later this month or by March. 

Several companies including Panasonic, LG, Haier have already reviewed prices upwards, while other makers such as Sony, Hitachi, Godrej Appliances may take a call by the end of this quarter.

Moreover, the industry makes hike prices from January to March in the range of 5-7 percent, according to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), 

"With an unprecedented surge in the cost of commodities, global freight and raw materials, we have taken steps to increase prices of our products by 3 to 5 percent in the refrigerator, washing machines, and air conditioner categories," said Satish N S, President, Haier Appliances India. 

Similarly, Panasonic, which has already increased prices up to 8 percent for ACs, is considering hikes further. It is also mulling a similar move for home appliances.

"Air conditioners have already seen a price hike of around 8 percent and this may further go up depending on rising costs of commodities and supply chain. We can also see a reflection of price hike for home appliances too in near future," stated Fumiyasu Fujimori, Divisional Director, Consumer Electronics, Panasonic India.

South Korean consumer electronics major LG, which has also increased prices in the home appliances category, said a constant hike in input raw material costs and logistics cost has been a concern.

"We have tried best to absorb the same through cost innovations but prices need to increase for business sustainability," said Deepak Bansal, Vice President - Home Appliances and Air Conditioner Business, LG Electronics India. 

Other industry leaders have similar views on the matter. 

Eric Braganza, President of, CEAMA said, "The industry had postponed the price increase due to the festive season. However, currently, manufacturers have no other option but to pass on the price hike to customers. We expect the industry to do a round of price hike from January to March in the range of 5-7 percent."

Implementation To Vary

However, experts believe that the implementation would vary from company to company as some of the manufacturers have already hiked prices and some are in the process of doing it.

Companies such as Sony and Godrej Appliances said they are yet to take a call.

"Price correction is not on the cards at the moment," said Sunil Nayyar, Managing Director, Sony India.

And, Kamal Nand, Business Head & Executive Vice President, Godrej Appliance  has said, "I said going forward, the company will evaluate taking any further hike, given the current drop in demand due to increasing coronavirus infection rate."

Super Plastronics Pvt Ltd (SPPL), which has a branding license for international brands, including Thomson, and White-Westinghouse, said the consumer electronics industry has been observing price hikes on various levels at the backend of things.

"We are assuming that in the last quarter of this financial year, consumer electronics' prices will be hiked on all levels across most categories," Avneet Singh Marwah, CEO, SPPL added.

Gurmeet Singh, Chairman and Managing Director, Johnson Controls-Hitachi Air Conditioning India added, "Increase in input costs - raw material prices, taxes, and transportation fares are pushing brands to increase prices of air conditioners. In a phased manner, upto April, prices will go up by at least 8-10 percent. Prices have gone up from around the same time last year December to this year by nearly 6-7 percent."

"The onslaught of Cost Up is continuing and now with Anti Dumping Duties being imposed on Aluminium and Refrigerants, we see another increase by 2-3 percent. This will be over and above the actual commodity increase on these items and is inevitable. We rationalise the price as much as possible at our end. We make sure that the consumer gets the best cutting-edge technology good quality products at the price they are paying," Singh further added. 

 

Next Story
What Lies Ahead For India's Luxury Sector in 2022?
What Lies Ahead For India's Luxury Sector in 2022?
 

Last year’s figures for the luxury segment have shown several positive signs, despite the slow growth since the post-pandemic period. For instance, in the first nine months of 2021-22, the value of gold imports exceeded the last full year’s number of $34.60 billion to reach $37.98 billion. Given the pent up demand and revenge buying, the luxury fashion segment has also seen noticeable growth in recent times. 

For the gems and jewelry industry, specifically, due to the period of festivities in the last couple of months, spending on luxury goods has seen an unprecedented hike. 

Pankaj Khanna, Chairman of Khanna Gems shared, “With the festivities being celebrated with full fervor and people’s inclination towards investment, people came with a higher purchasing power which has benefitted us.” 

Given the demand, Delhi-based Khanna Gems has shifted focus from sales to expansion and launched 8 stores in different states, thereby expanding its reach. The company further plans to launch more stores based on the positive response from the various newly opened stores in Bengaluru, Delhi/ NCR, Lucknow, and Mumbai. 

“We witnessed record demand for Astrological gemstones in the post-Covid era, to ease out the rising scenario of anxiety and depression in the country. For the further expansion of the business, we plan on investing heavily in traditional forms of advertising like hoardings, etc. in addition to the investment in digital marketing," Khanna further added. 

In fact, more than 80 percent of companies in the top 100 reported lower luxury goods sales in FY2020, which reflected the adverse impact of the pandemic, according to a report by Deloitte. However, despite a fall in luxury goods sales growth, more than half of the top 100 companies were profitable in FY2020. 

"We have definitely seen an increase in sales during the festive and end of year season. Most people saved a lot with smaller weddings and are investing that in buying jewelry. There is a lot more money that has now been kept aside for big jewelry purchases, both for celebrations and as investments. This rise in purchasing power has also allowed people to look favorably towards luxury minimal jewelry," said Vastupal Ranka, Director, Rare Jewels - A Ranka Legacy. 

However, with the third wave coming in, the slow but steady trajectory of the sector is now expected to be affected, yet again. However, with the country being hit by the pandemic majorly twice, this time the industry is expected to be more prepared than earlier. 

Rohan Gupta, Managing Director, Gargee Designer's shared his views on the matter: “The luxury sector has been on a slow yet steady recovery, but not up to its full potential. If the impact of the expected 3rd wave of the pandemic does not turn to be as harsh as it was the last time, and if things are under control, then the luxury sector will rise back and flourish." 

Founded in 1980, Gargee Designer’s is a popular name in the men’s designer wear space and has a long experience working in the luxury space. 

Possibilities In 2022


Despite the ups and downs in the luxury goods market, the sector holds massive potential for growth. According to Euromonitor International, India's luxury goods market will be worth $8.5 billion in 2022, against $6 billion in 2021. 

And, like other sectors, technology is going to play a major role in the growth of the luxury sector. A report by McKinsey stated that nearly 80 percent of luxury sales today are digitally influenced - whether it is asking a friend on social media or checking out an influencer’s recommendation on Instagram. Also, it forecasts nearly one-fifth of global luxury sales will take place online by 2025.

Not only that, looking at the possibility that the sector holds, businesses are expanding their portfolio to include luxury goods. 

For instance, B2B fashion marketplace Louoj is planning to open its luxury vertical of customized clothing B2C platform in the coming months. 

Bibhuti Bhusan Dash, Founder and CEO, Louoj commented on the growth in the luxury sector, saying, "Established or new fashion brands - all share similar concerns of keeping up with the technology, dealing with a lean budget and taking a downward trend retail outlets sale."

Thus luxury firms are optimistic and are adopting new technologies and strategies to upgrade their processes, and when the situation gets better, they are going to implement all the necessary means to get their business in action. 

"Going ahead we are only expecting this demand and shift in luxury jewelry to rise. We plan on introducing a new range of luxury minimal jewelry and a range of special bridal jewelry too," Ranka further stated. 

Khanna of Khanna Gems too echoed similar thoughts, stating, "We expect 2022 to be even more favourable for the gems and jewelry industry as the pent-up demand in the national market and export markets also needs to overcome.” 

 

Next Story
Why Global Social Commerce Industry is Expected to Grow 3x as Compared to Traditional E-commerce
Why Global Social Commerce Industry is Expected to Grow 3x as Compared to Traditional E-commerce
 

The $492 billion global social commerce industry is expected to grow three times as fast as traditional e-commerce to $1.2 trillion by 2025. 

The growth is predicted to be driven primarily by Gen Z and Millennial social media users, accounting for 62 percent of global social commerce spending by 2025, experts believe. 

Social commerce means a person’s entire shopping experience — from product discovery to the check-out process — takes place on a social media platform. Also, it uses networking websites such as Facebook, Instagram, and Twitter as vehicles to promote and sell products and services.

Just under two-thirds (64 percent) of social media users said they made a social commerce purchase in the last year, which reflects nearly 2 billion social buyers globally, according to a report by Accenture. 

“Driven by mobile-first consumer preferences and the launch of new hyperlocal social commerce platforms, the emerging success of social commerce in India is a testimony to the power of people and communities,” said Anurag Gupta, Managing Director and Lead - Strategy & Consulting, Accenture in India. 

“To take advantage of this growing opportunity, it will be crucial that these social commerce platforms offer consumers the right experience built around trust and satisfaction, and broaden their appeal through the use of local languages and video interfaces. Furthermore, brands need to work with a thriving ecosystem comprising platforms, creators, influencers, resellers that helps users discover and evaluate potential purchases,” Gupta further stated.  

How Shopping on Social Media Platforms is expected to reach $1.2 Trillion globally by 2025

While the opportunity is significant for large businesses, individuals and smaller brands also stand to benefit. More than half (59 percent) of social buyers surveyed said they are more likely to support small and medium-sized businesses through social commerce than when shopping through e-commerce websites, Furthermore, 63 percent said they are more likely to buy from the same seller again, showing the benefits of social commerce in building loyalty and driving repeat purchases, the report further said. 

Also, half of social media users surveyed, however, indicate they are concerned that social commerce purchases will not be protected or refunded properly, making trust the biggest barrier to adoption, as it was for e-commerce at its beginning. 

Understanding Consumer Demand

By 2025 the highest number of social commerce purchases globally are expected in clothing (18 percent of all social commerce by 2025), consumer electronics (13 percent), and home décor (7 percent), the report further added. 

Fresh food and snack items also represent a large product category (13 percent) although sales are nearly exclusive to China. Beauty and personal care, although smaller in terms of total social commerce sales, is predicted to quickly gain ground on e-commerce and capture over 40 percent of digital spend on average for this category in key markets by 2025.

If we look at it globally, consumers in developing countries are more likely to use social commerce and do so often. Eight out of ten social media users in China use social commerce to make purchases for a given category, while the majority of social media users in the U.K. and the U.S. have yet to make a purchase via social commerce.

 

Next Story
Why People Are Switching from Renting to Owning Assets as an Investment and Lifestyle choice
Why People Are Switching from Renting to Owning Assets as an Investment and Lifestyle choice
 

Three out of every four Indians now prefer asset owning over renting to secure their future in the post-pandemic world. Also, one in four Indians feels purchasing a home of their own is crucial in securing their future, second to securing a career. 

Moreover, one in two Indians reveal that they have started looking for a new house for themselves; almost one in every third Indian believes buying a new house is the best investment option at present, according to the latest study, Post 'Generation-Rent' commissioned by Godrej Housing Finance (GHF). 

Manish Shah, MD and CEO, Godrej Housing Finance, said on the matter: "The pandemic has brought about a clear shift in preference amongst Indian consumers. They are gravitating towards future-proofing through long-term investments. With affordability at an all-time high, there has probably never been a better time to buy a house, which is both an important element of asset allocation and a key pillar of financial security. That said, customers believe that this change requires enhanced support from their financial partner to advise and guide them through this long-term commitment." 

Industry experts predict a continued uptick in the coming months, easing the long period of pent-up demand across sectors. The survey validates the sentiments as most of those surveyed stated they are now more open to investing in a property of their own divagating from the earlier notion of being labelled as the 'Generation-Rent'. 
 
Specifically, around 62 percent of Indians highlighted that they now preferred purchasing their furniture, car, home, and wedding apparel rather than renting them as this provides them with greater stability in future.
 

The study also found that 25.5 percent of the Indians consider owning a home the second-most important aspect defining 'personal security', with job security leading the chart with 40.6 percent voting for it.  
 
Flexibility on policy, credibility and transparency of the brand, digital offerings, and relative turnaround time for processing are the top factors that drive the selection of financing partner. This can be attributed to consumers becoming accustomed to the on-demand gratification of their requirements aided by digital technology, experts believe. 
 
Also, digital-first and frictionless processes are perceived as both an advantage and a starting point for consumers while choosing today's financing brands. Companies and services that offer end-to-end digital solutions gain an edge in consumer preference over more traditional financing models. 

 

Next Story
72 pc of Consumers Spent More on Fashion in 2021 Than The Previous Year
72 pc of Consumers Spent More on Fashion in 2021 Than The Previous Year
 

72 percent of consumers have spent more on fashion in 2021 than the previous year, indicating a resurgence in consumer spending and demand in the segment. Customers in the age group of 18-30 drove the demand for online fashion with 71 percent of them spending on the category.

The average ticket size of transactions by women shoppers is 20 percent higher than that of male transactions, according to a consumer survey authored by fintech firm ZestMoney.

58 percent of the respondents have said they have spent more than Rs 5,000 on their fashion needs over the last 3 months. About 54 percent said they would prefer BNPL to finance their fashion purchases. Debit, credit cards, and cash were the other popular options.

The top Tier I cities driving demand for fashion and beauty are Delhi, Bangalore, Mumbai, Hyderabad, and Pune. Top Tier II and III markets fuelling demand included Assam, Anantapur, Haridwar, and Kanchipuram.

E-commerce platforms remained the preferred means of buying for the majority of customers, with 72 percent preferring online shopping due to the enhanced convenience and hassle-free experience it provides. However, 76 percent said they were also comfortable purchasing in person at physical stores

“Globally, fashion and beauty are the biggest categories for BNPL. In India, fashion and lifestyle are emerging as one of the largest categories for us. Consumers love the flexibility and convenience of paying later for their fashion purchases and we expect the category to see increasing adoption,” said  Lizzie Chapman, CEO and Co-Founder ZestMoney.

Today’s digitally-savvy millennials and Gen Z are increasingly taking to pay later to fund their fashion needs. In fact, we have seen a 100 percent growth in transactions for the category with the merchant base doubling over the last three months. We are adding the largest merchants in the space, especially direct-to-consumer (D2C) brands who want to enable affordability for their customers. This is a category that will see a lot of action in the coming year too.”

Among other trends, observable 73 percent said they are environmentally conscious and prioritize sustainability while shopping for fashion. This indicates the rising trend of customers making eco-friendly choices and supporting brands that endorse ethical fashion. 75 percent of respondents preferred supporting local, home-grown brands over International brands to push made in India. 88 percent of respondents stated that comfort continues to drive their sense of style and fashion purchases. Fashion influencers were the go-to for 51 percent of respondents while opting for a particular brand or style.

 

Next Story
Retail Sales In November Up 9 pc Over Pre-pandemic Levels
Retail Sales In November Up 9 pc Over Pre-pandemic Levels
 

The retail sales in November 2021 showed 9 percent growth over the pre-pandemic levels (November 2019) and 16 percent (YoY) growth (compared to November 2020). 
 
Also, across regions, retail businesses have indicated growth in sales as compared to pre-pandemic levels with West India signaling the growth of 11 percent, followed by East and South India at 9 percent while North India indicated a growth of 6 percent each as compared to sales levels in November 2019, according to a recent survey by the Retailers Association of India (RAI). 

Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said, “Business is improving and we do hope that this will sustain. However, there are still worries around Omicron and the third wave, leading to a feeling of cautious optimism.” 
 
In categories, CDIT (Consumer Electronics, Durables, IT, and Telecom) which did not show great growth in October showed good growth (32 percent as compared to November 2019) in November since customers ended Diwali with some CDIT product purchases. 
 
Furthermore, Sports Good category reported a growth of 18 percent and the Apparel category indicated a consistent growth at 6 percent compared to November 2019. While Food and Groceries and Quick Service Restaurants (QSR) continue to indicate growth, categories such as Footwear, Beauty, Wellness & Personal Care, and Furniture are inching towards recovery. 

Experts believe with a firm focus on digital transformation, the industry has set a steady pace of recovery, which the industry hopes will accelerate in the coming year.

 

Next Story
Indians More Inclined to Send Gifts to Help Others and Give Back to Causes This Year-End Holiday Season
Indians More Inclined to Send Gifts to Help Others and Give Back to Causes This Year-End Holiday Season
 

Despite the uniquely unpredictable situations in the last 2 years, the year-end holiday gifting ritual has remained a constant amongst Indian shoppers. Consumers’ approach towards traditional gifting has significantly shifted, however, with 68 percent of shoppers willing to purchase gift cards that give back to causes and 91 percent intending to send gifts to people who’ve experienced hardships. 

Consumers will purchase an average of 22 gift cards, the Indians are expected to spend 89 percent of their holiday gifting budget on gift cards, with fashion and health and beauty being the most popular gift card categories, as per the forecast by Global branded payments provider Blackhawk Network.

Additionally, 84 percent of Indian shoppers said they do not want to deal with the hassle of returns or exchange of gifts. Interestingly, 62 percent acknowledged that they receive at least one bad gift every year. 

This changing perspective towards gifting presents a new opportunity for retailers to connect with their consumers, as both retailers and shoppers seek newer ways to navigate the challenges that the 2021 year-end holiday season has to present. The report also stated that almost 96 percent of Indian respondents want to gift digitally in the upcoming holiday season.
 
 “In India, year-end gifting has become a big trend as it is an occasion to gift friends and family. The past year, we’ve seen a growing preference for gift cards among Indian shoppers owing to convenience, choice, and safety. Our research reveals that consumers are planning to spend more money on buying gifts this year than they did in 2020," said Theresa McEndree, Head of Global Marketing and Corporate Brand, Blackhawk Network. 

"However, consumers’ preferences and priorities have notably changed. This shift has posed unique challenges for retailers and businesses to engage and delight customers. Year-end 2021 opens new windows for retailers to align their strategy to meet the expectations of shoppers,” McEndree further said. 

 

Next Story
How E-tailers Can Succeed In The Intensified Competition For Tier II, III Consumer Base
How E-tailers Can Succeed In The Intensified Competition For Tier II, III Consumer Base
 

As some areas of the globe become over-farmed, over-populated, or otherwise reach their maximum potential, opportunities in Tier II, III cities, and rural areas emerge for brands to explore. Cross-border logistics, broader network coverage, and ease of connectivity will further support the increasing penetration of e-commerce players across untapped regions. 

Winners will be those who move first and build a deep-rooted, broad reach across customers, experts believe. In fact, to face the increasing competition, conventional retailers and mom-and-pop stores are now connecting with customers via business-to-business (B2B) e-commerce platforms and selling products online both domestically and internationally. 

Benefiting from advanced digital and transportation infrastructure, together with the rising middle classes in tier-II cities, China, Asia-Pacific (APAC) and the Middle East are spearheading a revival in conventional retail and mom-and-pop stores through digital commerce, according to a recent study 'E-commerce megatrends to watch’ by transportation firm FedEx Express. 

“The Asia Pacific, Middle East, and Africa (AMEA) region will be at the forefront of e-commerce growth for many years to come. With rising disposable incomes, growing internet penetration, and emerging cross-border e-commerce markets, there is a huge amount of growth yet to be realized here,” said Kawal Preet, President of the Asia Pacific, Middle East, and Africa (AMEA) region, FedEx Express.

“Logistics is the backbone of the e-commerce ecosystem. The simplicity of click to buy must be matched by the speed and convenience of delivery. We continue to build robust networks that offer smart supply chain solutions as well as highly personalized delivery services to help businesses unlock new opportunities as the frontiers of e-commerce advance,” Preet further added. 

Reportedly, e-commerce is expected to grow at an average of 47 percent in the next five years globally. The Asian market leads the field at 51 percent, followed by Europe (42 percent) and North America (35 percent). 

In the Middle East and Africa, the combined e-commerce market value is expected to reach $73 billion by 2025. However, growth in China, in particular, has eclipsed the rest of Asia, with e-commerce sales in 2020 that reached $1.3 trillion with a projected increase to nearly $2 trillion by 2025. 

 

Next Story
FMCG Consumption Slips In July-Sep but Industry Logs Price-led Growth Of 13 pc
FMCG Consumption Slips In July-Sep but Industry Logs Price-led Growth Of 13 pc
 

India's FMCG industry has seen a decline in volume in the September quarter this year, though it registered a value-led growth of 12.6 percent.

While the metro market saw an upswing, rural markets slowed down due to consumption decline, according to a report by data analytics firm Nielsen. Earlier, rural was ahead of urban in terms of growth, after quickly recovering from the first wave of the pandemic.

The slowdown is also because of the fact macro-economic factors such as high commodity prices continued to impact consumption growth during the quarter. 

The price-led growth is largely driven by the food basket, which contributes 59 percent to the FMCG industry. This was seen especially in staple foods like cooking mediums (edible oils), habit-forming foods like hot beverages such as tea, and impulse foods like salty snacks and confectionery. Volume growth is driven by packaged rice, breakfast cereals, butter margarine, and chocolates.

Moreover, small players were impacted the most while large players consolidated, the report said.

Of the total value growth of the FCMG industry in the September quarter, as compared to a year ago, 76 percent contribution came from large manufacturers, while small players had just 2 percent, the rest coming from mid-size players.

Moreover, brick-and-mortar was back in focus, as modern trade stores grew 17 percent in the quarter, registering double-digit growth as compared to the year-ago period.

The e-commerce channel growth remained steady during the quarter on account of the base effect, given the high growth of foods in e-commerce post the first wave of COVID-19 in the country.

According to the report, urban markets led by metros including Kolkata, Hyderabad, Mumbai and Pune led this growth.

 

Next Story
Indian Diary Segment to Grow by 9-11 pc in FY22
Indian Diary Segment to Grow by 9-11 pc in FY22
 

Indian milk production is gauged to increase by 5-6 percent in the financial year 2021-22, aided by normal monsoon and early onset of the flush season in some regions of the country.

According to Icra’s report, the industry-wide demand to grow by 9-11 percent in the financial year 2021-22. 

The report stated that the dairy industry is expected to grow by 9-11 percent in 2021-22, driven by a revival in economic activities, increasing per capita consumption of milk and milk products, changing dietary preferences due to rising urbanization. 

"Demand recovery was stunted by the resurgence in COVID-19 cases in the first quarter FY22, and the impact was severe in institutional segments. However, there has been a healthy revival in demand in recent months with a sharp fall in fresh COVID cases and resumption in business activities. The organized dairy segment, which accounts for 26-30 percent of the industry has seen faster growth compared to the unorganized segment and we expect the trend to continue," Sheetal Sharad, Vice President and Sector Head at Icra, said.

Revival of Diary Industry 

After the impact of the epidemic, the industry has seen a steady recovery in consumption throughout end segments. The report informed that revival in economic activities, increasing per capita consumption of milk and milk products, changing dietary preferences due to rising urbanization, and continued government support to the dairy industry will drive demand.  

"With the expected recovery in demand during the festive season, skimmed milk powder (SMP) prices are likely to improve and lead to the liquidation of stocks in FY22. Raw milk procurement prices, which were subdued in FY21 due to weak demand, have increased in the current fiscal supported by a recovery in demand. Nevertheless, the higher procurement costs are not compensated by an equivalent increase in selling prices, which coupled with elevated fuel costs will result in contraction of 150 bps margins for dairy players in FY22," Sharad added. 

Growth over the medium term would continue to be driven by demand from stable liquid milk consumption growth and steady recovery in institutional demand for the VADPs segment.

Government Supporting the Sector 

Most industry players continue to maintain high SMP inventory levels as the procurement remained high in H1 FY22. As per the report, besides this, many soft SMP prices are expected to result in additional working capital debt requirements, though inventory levels are expected to decline from FY23 onwards as demand-supply dynamics normalize, it added.

The rating agency also expects private players to continue their capital expenditure on the VADPs segment, given its better margins.

The report stated that the financial risk profiles of pure-play ice-cream manufacturers are expected to be under pressure in the near term given the slow pace of recovery, it added. Further, the industry will remain supported by the government's continued support and favorable cost of funds leading to growing processing capabilities. Despite moderation in margins and increase in long-term debt and working capital debt (mainly due to SMP stocks), coverage indicators for integrated players are expected to be comfortable, it said. 
 

 

Next Story
Demand for Logistics Space Remains Resilient
Demand for Logistics Space Remains Resilient
 

The demand for logistics space in India remained resilient in the July-September quarter. Online retailers and related third-party logistics (3PL) firms led the leasing demand, in turn, preparing for year-end sales promotions. According to a report, net absorption of nine million sq ft occurred in the September quarter. 

Going by CBRE's Asia Pacific report, the net absorption reached 27.4 million sq ft in Asia, a record quarterly high, despite disruption to manufacturing and container shipping. 

"During the quarter, several occupiers were seen extending their distribution networks, particularly last-mile facilities, to shorten delivery times for consumers," the report said. 

Around 172 million sq ft of new logistics supply is scheduled to be completed in Asia Pacific's primary and secondary markets in 2022, the highest annual total on record.

Strong Demand in Warehousing Segment

Warehousing demand from India was especially robust. Almost 78 percent of warehousing occupiers in the Asia Pacific intend to expand their real estate footprint in the next three years as continued strong market sentiment ensures occupiers remain in expansion mode, as per CBRE's Asia Pacific Logistics Occupier Survey.  

"It is evident the demand for Grade A warehousing is only going to grow exponentially from here," Abhijit Verma, Chief Executive of Avigna Group, said. 

The strong supply pipeline reflects landlords' eagerness to capture surging demand from occupiers for space as they look to extend their logistics networks.  

A substantial portion of new supply due to come on stream next year will be in emerging logistics hubs near transportation nodes, providing more convenience to occupiers seeking stronger delivery network connectivity.

"Avigna has expanded its warehouses from four locations to seven locations in the last two years and now we are looking at expanding across North and East India," Verma added.

As per the survey, 84 percent of occupiers expect the operating environment to improve in the next three years, while 78 percent plan to add to their logistics footprint in the next three years, and 61 percent view cost as the top barrier to expansion. 

E-commerce to Shore Up the Indian Logistics Space

Coverage of e-commerce in India is expected to rise from its pre-pandemic figure of 6.5 percent to 11.7 percent by 2025. Recent major expansions include Indian platform Flipkart's announcement that it would add four new warehouses to its current 12-facility Indian network in Q3 2021, representing a 43 percent increase in square footage.

"There is absolutely no doubt that warehousing is poised to continue its good demand trajectory in the next couple of years. Ecommerce and industrial (segments) occupy the biggest space in this market and these, along with 3PL, are expected to continue to grow at a 25-30 percent per annum trajectory," Gagan Randev, Executive Director-India at Sotheby's International Realty, said.  

As per the report, occupiers are already displaying a strong appetite for new, high-quality logistics space. Net absorption in major Asia markets reached 35.6 million sq ft in the January-June 2021 period, the highest first-half figure on record.

CBRE expects occupiers to continue to adopt an aggressive approach to space take-up in the short-to-medium term. Asia's rapidly growing population and increasing urbanization rate are creating business opportunities in lower-tier cities and emerging areas. In recent years, developing markets such as Southeast Asia and India have seen strong expansionary demand from occupiers, along with a wave of demand for upgrading to newer and more efficient facilities.

 

Next Story
India's Online Furniture & Home Market To Reach $40 bn by 2026
India's Online Furniture & Home Market To Reach $40 bn by 2026
 

Driven by pent-up and deferred demand, India's online furniture and the home market are geared up to reach $40 billion in the next five years, a new report showed on Monday.

Over the next five years, an online furniture and home sales are expected to be growing at a strong 39 percent CAGR. The online home category includes home decor, furnishings, mattresses, and lighting.

The online furniture category will foresee 3X growth in shoppers in the next five years with a 1.8X jump in annual spending per shopper. This will enable 5X GMV (gross merchandise value) growth for the category over FY21-26, according to data provided by Bengaluru-based market research firm RedSeer.

The online furniture category is seeing a steep growth with more and more shoppers putting trust in online for-high ticket furniture purchases.

"Similarly, the online home category is expected to see a growth of 2.5X in shoppers in the next 5 years with a 1.3 jump in the annual spending per shopper to indicate 4X GMV growth," the report forecast.

Within the furniture category, verticals have crafted a niche for themselves.

Verticals dominate the premium 'Solid Wood' market whereas horizontals dominate the budget "plastic/metal and engineered wood" market.

"The average selling price (ASP) on verticals is 10X higher for furniture and 2X higher for decor than horizontals, indicating the difference in target customer base," said the report.

It added that verticals are focused on a set of customers who are experience conscious, look for choices and quality of the product rather than just price, and willingness to pay and for the online channels is high.

"Verticals with superior omnichannel presence, customer experience, product innovation, specialized supply chain, and technology capabilities are well-positioned to scale," the findings showed.

 

Next Story
Demand For Gold At All-time High, Stands At 3X Of Silver
Demand For Gold At All-time High, Stands At 3X Of Silver
 

A significant 20 percent QoQ (Quarter on quarter) jump in demand has been observed for precious metals with demand for gold remaining high, almost at 3X of silver during the festive season. 

Gold prices have fallen since reaching the peak in August 2020 and this festive season has remained the most searched precious metal, as per the data shared by local search platform Just Dial. While demand for gold was 3X of silver, the latter saw the highest QoQ growth in demand of 30 percent while demand for both gold and diamond saw a growth of 18 percent. 

“Correction in gold prices and strong demand triggered by the festive season across the country have made the yellow metal the most sought after. With volatility in the market, we will see more and more consumers investing in gold for security reasons,” said Prasun Kumar, CMO, Just Dial. 

The demand for gold in Tier I cities remained high, but it was also interesting to witness faster growth in demand in Tier II cities led by Lucknow, Jaipur and Coimbatore.

In terms of demand volume (searches) for gold, Mumbai, Delhi and Hyderabad were the top-3 Tier I cities followed by Bangalore, Chennai, Kolkata, Pune, and Ahmedabad. Among Tier II cities, Lucknow, Jaipur, and Coimbatore were the top-3 with maximum demand followed by Vijayawada, Surat, Rajkot, Visakhapatnam, Patna, Chandigarh, and Thrissur. Most of the demand for gold was for jewellery, coins, and bars. Demand for gold jewellery has picked up by 20 percent QoQ with chain, necklace and nose ring are the most sought after. 
 

 

Next Story
Why Buyers Are Still Wary Of Physical Shopping
Why Buyers Are Still Wary Of Physical Shopping
 

Two in three Indian shoppers have not started buying this season yet. Moreover, 53 percent of millennial shoppers from non-metros have displayed a strong preference to shop online. 

Despite increased vaccinations, consumers seem to be wary of physical/offline shopping and in-person interactions. Pandemic-induced changes are here to stay, signifying a shift in consumer behavior, which will decide where the Indian retail sector is likely to be headed, according to a study by e-commerce platform Shopify India. 

Online: Better Alternative

Multiple factors such as increased mobile penetration, brands opting to shift to a direct-to-consumer model, enhanced last-mile delivery and customer-friendly return policies have been contributory towards encouraging shoppers to buy online.

Convenience, value-for-money, and personalization offered by some online companies have enhanced purchasing appeal. Consumers will likely prefer involving families even when shopping online during the festive season, the survey stated. 

Additionally, convenient choices of last-minute discount deals, express delivery advantages offered by e-commerce players have been instrumental in gaining consumer confidence.

In terms of gifting for the festival season, a big change was apparent that customers are now preferring to give high functionality and utility value items, as opposed to the standard festive sweets or dry fruit tokens. Home décor and furnishings topped this year’s festive shopping lists with over 50 percent of respondents saying they'd give gifts in this category.

 

Next Story
Smartphone Shipment Dips 2 pc to 52 Million Units In September Quarter
Smartphone Shipment Dips 2 pc to 52 Million Units In September Quarter
 

India's smartphone shipments declined 2 percent YoY to reach over 52 million units in the September quarter 2021. India's overall mobile handset market declined 5 percent year-on-year in the quarter. 

The component shortages that escalated during the quarter is the reason behind the decline, experts speculate. 

Apple was the highest growing brand in Q3 2021 with 212 percent y-o-y growth and led the premium smartphone market (above Rs 30,000) with a 44 percent share, as per a report by Counterpoint. Strong demand for the iPhone 12 and iPhone 11 were the major factors in Apple's growth.

Xiaomi led the smartphone tally with 22 percent market share, followed by Samsung (19 percent), Vivo (15 percent), Realme (14 percent) and Oppo (10 percent) in the September 2021 quarter. Vivo became the top 5G smartphone brand for the first time, followed by Samsung, OnePlus and Realme.

"The consumer demand outweighed the supply due to the high pent-up demand. Keeping in mind the global component shortage, most of the brands were aggressively working to secure enough stock for the festive season. The demand in the online channels remained strong and reached highest-ever shipments in Q3 2021," said Prachir Singh, Senior Research Analyst, Counterpoint.
 
Online channels captured around 55 percent of the smartphone shipments during the quarter. Chinese brands captured 74 percent share in the Indian smartphone market in the September 2021 quarter. 5G smartphone shipments crossed the 10-million mark for the first time in the September quarter. 

 

Next Story
Demand For Furniture, Beauty Parlours And Restaurants Soar This Festive Season
Demand For Furniture, Beauty Parlours And Restaurants Soar This Festive Season
 

A surge in demand for furniture, beauty parlours and restaurants is observed for this year’s Diwali period. The Tier-I cities are witnessing the most of the traction. 
 
In terms of volumes of searches, furniture was the most searched category with a YOY growth rate of 54 percent, as per a report by India’s local search engine Just Dial. Beauty parlours were the second most searched category with a YOY demand growth rate of 73 percent while restaurants were third with a growth rate of 76 percent. The fastest-growing category was that of car rentals at 100 percent but the volumes of searches were considerably lower compared to that for furniture, beauty parlours, and restaurants, the report stated. 
 
“We are witnessing a cumulative 69 percent YOY demand growth across all these seven most popular categories during this festive season on Just Dial,” said Prasun Kumar, CMO, Just Dial. “This augurs well for the economy, which is gradually recovering from the impact of Covid-19. Achieving the milestone of one billion Covid-19 vaccine doses has uplifted the consumer sentiment and it couldn’t have come any time better than this festive season,” he added. 
 
Diwali Demand Soars For Furniture, Beauty Parlours And Restaurants

 

For furniture, maximum YOY demand drive was witnessed among Tier-1 cities as compared to Tier-II. Most of the demand was for beds, followed by sofas and chairs. Almost 53 percent of the demand for furniture in Tier-I cities was from Mumbai and Delhi. Among Tier-2 cities, Madurai, Chandigarh, and Nagpur were the top-3 with maximum demand.
 
“It is encouraging to see that demand is booming across Tier-I cities while the demand growth rate in Tier-II cities also remains encouraging,” Kumar further said. 

Car rentals were the fourth most searched category on Just Dial with a 100 percent YOY growth rate. Demand in Tier-I cities grew by 136 percent with Mumbai alone generating 53 percent of the demand followed by Delhi and Hyderabad in the second and third place respectively. Tier-II cities also saw searches grow YOY by 68 percent with maximum demand emanating from Goa, Surat, and Patna.

 

Next Story
FMCG Sector: 36 pc Increase In Sales In The Second Quarter
FMCG Sector: 36 pc Increase In Sales In The Second Quarter
 

The FMCG sector in India has reported 36 percent increased sales in Q2’21 as compared to Q2’20. The packaged foods category has seen a significant decline in sales consistently, while the packaged staples segment saw an increase in the Q2 of 2021 as compared to 2020.
 
After a heavily impacted pandemic period last year and early this year, the ongoing festive period has allowed retailers to recover from the losses and put the sector back on track. In fact, Kirana outlets have been offering customer discounts, reward points to improve upon the sales. The seasonal offer packs are also being sold a lot which increases the store's sales by 5-10 percent.
 
The Q1 of 2021 has shown a rapid decrease in the sales of both personal care items and household items. However, data from Q2 of 2021 has demonstrated a slow increase in the sales of personal care items, while it has continued to decrease for household items, according to a study by Snapbizz
 
Prem Kumar, Founder, and CEO, Snapbizz, said, “The pandemic has affected all of us in some way or the other and unfortunately it has affected small businesses very badly. But I am glad to see that they have picked up the speed of recovery from losses because of the festive season where they have seen an increase in their sales.”
 
Products from the categories like household cleaning, Health drinks & food grocery like Atta, Rice Masala, Oil, Fast Food, and Ready to Eat, dry fruits have seen spike sales. An increase in the sales of Beverages in Q2 of 2021 has been recorded as compared to Q2 of 2020, the study showed. Beauty products sales have reduced as the events and functions have reduced and hence retailers are stocking less. 
 
More commonly, the pandemic has affected the customer’s buying habits as people are staying mostly at home and doing shopping online from Kirana stores through Whatsapp and other customized apps and websites.

 

Next Story
E-commerce Exports In Singapore Have Massive Potential for Growth in Next Five Years
E-commerce Exports In Singapore Have Massive Potential for Growth in Next Five Years
 

The B2B e-commerce exports in Singapore are expected to reach $3.5 billion in 2026 from  $1.4 billion in 2021, provided the micro, small and medium enterprises (MSMEs) accelerate their pace of using e-commerce to sell overseas. Currently, MSMEs are estimated to contribute 45 percent of Singapore's B2C value of e-commerce exports in 2021.

Among the key challenges currently faced by MSMEs in Singapore that need to be addressed are cost, regulation, information and capabilities. Over three-fourth (78 percent) of MSMEs surveyed cited a lack of clarity in import regulations as a major hindrance, as per a report by Amazon. 

Bernard Tay, Head of Amazon – Global Selling, Southeast Asia stated, “We are on a mission to help MSMEs start local, grow global. Not only can MSMEs learn from Amazon, but they can also connect with Enterprise Singapore and our key partners to glean insights, additional support and an expanded network to grow globally.”

Amazon has conducted a 3-day virtual bootcamp event from 11-13 October, 2021 for SMEs from Singapore, Malaysia, and the Philippines to equip them with tools, resources and resources to seize cross-border opportunities.

Enterprise Singapore's (ESG) Executive Director (ICM & Digitalisation), Lee Yee Fung, also shared how the Singapore government and industry experts are working together to help local businesses unlock opportunities with e-commerce. (Enterprise Singapore is a government agency for enterprise development)

“Key players in the e-commerce landscape, such as Amazon, have an established ecosystem of solution providers and suite of resources to assist sellers in deepening their digital capabilities for market expansion,” said Yee Fung.

“We look forward to partnering more Singapore businesses to grow their sales avenues and international footprint through e-commerce," he further added.  

Growth Possibilities

Singapore MSMEs surveyed anticipate greater sales growth prospects overseas (35 percent) than at home (13 percent), with Asia Pacific countries – Malaysia, China, Australia, Indonesia and Thailand – seen as the top e-commerce export markets in five years by 2026. 

87 percent of those surveyed locally agreed that e-commerce is critical for their ability to export, with top motivations including the ability to reach overseas customers, access to sales and marketing tools that are available on e-commerce marketplaces, and support for logistics and payments provided by these marketplaces. For 35 percent of surveyed Singapore MSMEs that export via e-commerce, more than half of their annual e-commerce sales were generated from abroad. 

The growth opportunities will further accelerate if the other global e-commerce players like Amazon come to the fore to build a stronger SMEs ecosystem for the country. 
 

 

Next Story
India's Festive Spirit Bounces Back in the New Normal
India's Festive Spirit Bounces Back in the New Normal
 

The top three most searched services this year’s festive season are beauty, parlour services, catering services and cleaning services. For the last year 2020, pest control, services and cleaning, and beauty parlour services were most searched. 

For the Delhi region, the top three most searched services in 2021 during the festive season are beauty parlour services, dance classes and pest control services. Similarly, for the eastern zone (Kolkata), the top three most searched services in 2021 during the festive season are Beauty Parlour Services, Pest Control services and Dance classes," according to a study conducted by the tech-AI platform for expert services, Sulekha.

And, for the south region (Chennai, Bangalore, Hyderabad), the top three most searched services in 2021 during the festive season are Beauty Parlour Services, Architects and Cleaning services. Lastly, for the western region (Mumbai, Pune, Hyderabad), the top three most searched services in 2021 during the festive season are Beauty Parlour Services, Interior design and decorators and Event Organizers. 

Satya Prabhakar, Founder & CEO, Sulekha, said, “The study is indicative of how Indians love spending during the festive season. Services under home improvement have seen a surge in searches as people want to beautify their homes ahead of the festive season.

“People are also extensively looking out for cleanliness and hygiene-related services owing to the pandemic,” Prabhakar said. “Interestingly, services such as dance classes and photographers are also seeing an increase. This could be attributed to the Navratri season,” he added. 
 

 

Next Story
E-commerce Firms Clock $2.7 bn Sales in First 4 Days of Festive Sale
E-commerce Firms Clock $2.7 bn Sales in First 4 Days of Festive Sale
 

Indian e-commerce platforms have clocked $2.7 billion in the first four days of the festive week sale that started on October 3. The Redseer report stated the e-commerce were on track to achieve $4.8 billion gross merchandise value (GMV).  
 
Last year, the first four days of the festive week accounted for 63 percent of the overall festive week sales which compared to this year is 57 percent of the projected sales. 
 
Currently, Flipkart’s annual sale event is going on which kicked off on October 3, 2021, and will continue till October 10, 2021. Snapdeal’s ‘Toofani’ sale is also on the run from October 3 to 10. Amazon’s Great Indian Film Festival, which started on the same date, is going to last for a month. Tata CLiQ Luxury, the Tata Cliq’s vertical for luxury brands, is hosting its annual sale from October 6 to October 15. Similar sale events are being conducted by other e-commerce players like Myntra, Snapdeal, Meesho, etc.
 
How Various Categories Are Performing?
Among all the categories, that is most in-demand is smartphones. It contributed 50 per cent of GMV during the first four days of sales. This year, as per the report, customers are planning to buy equivalent to or more across categories like fashion, beauty, large appliances and mobiles.

The increasingly popular scheme of BNPL (buy now pay later) is also getting a lot of traction this time. Last year, it account for 4-7 percent of sales but is poised to command a higher 10-15 percent share of sales this year.

From the sellers perspective, there is equal amount of optimism this year. Sellers are planning to offer 10-30 percent discounts on platforms.


Final Predictions
The Redseer report predicts the e-commerce platforms likely to clock over $9 billion gross merchandise value (GMV) during the festive season (October – December period) – a growth of 23 percent from last year. 

While the overall online GMV this year is expected to touch $49-52 billion which is around 37 percent growth from last year. 

Experts believe pandemic-accelerated adoption of online channels of shopping and strong consumer funnel expansion could be the reason for such growth.  

 

Next Story
India's Organized Retail Stock to Cross 82 mn sq. ft by 2023
India's Organized Retail Stock to Cross 82 mn sq. ft by 2023
 

India’s organized retail stock has reached 64.3 mn sq. ft as of H1 2021 and is expected to cross 82 mn sq. ft by 2023. 

According to the ‘India Retail Reboot 2021’ by CBRE, “Delhi and Bengaluru are leading the sectors’ growth with the expected addition of over 5 mn sq. ft of the overall organized retail stock respectively followed by Hyderabad expected to add over 3 mn sq. ft.

The report further highlights that with the onset of the pandemic, consumer behavior shifted towards ‘conscious buying’, leading to a significant shift in consumer purchase behavior both across physical retail and e-commerce. The F&B, e-commerce, pharmaceuticals, and the traditional grocery retailers as the top-performing sectors witnessed steady growth despite the pandemic. 

Commenting on the announcement, Anshuman Magazine, Chairman, India & South-East Asia, Middle East & Africa, CBRE, said, “The overall outlook for the Indian retail real estate market continues to be positive at the back of an accelerated vaccination drive, policy reforms, and increasing urbanization. Moreover, with more investors looking at REITs and fractional ownership for the commercial segment, the sector is embarked on a growth trajectory.”

Bimal Sharma, Head, Retail Services, CBRE said, “The Indian retail sector stands at a chance of transformation as retailers continue to adapt their store formats to address the needs of different customers across markets and geographies. The pandemic has led retailers to explore newer trends like digitally-enhanced experiences, pop-ups, omnichannel retailing, etc. While we expect brick & mortar stores on hi-streets and in shopping centers will continue to flourish, retailers will have to rethink and realign their business strategies to meet the demand of the customer that is constantly exposed to the evolving online shopping experience.”

“With the renewed demand and bounce back of retail, we are seeing a number of international brands both in the retail & the F&B sectors showing interest in the country and we expect to see them enter India starting early 2022 which would contribute to the overall sectors’ growth going forward,” he added.

Future Trends for Sectorial Growth:

Apparel and Footwear: 
•    Pent up demand is likely to lead to a strong rebound
•    Retailers are expected to continue ramping up their digital/ online capabilities
•    Store-based retailers will focus on unique shopping experiences
•    Malls focussed brands are likely to expand in standalone/ mixed-use developments to widen their footprint. 
•    A few brands are altering their store sizes and layouts as well

Health & Beauty: 
•    As purchasing patterns normalize, beauty specialist retailers are anticipated to make a strong comeback
•    A number of new multi-brand formats are evolving and growing, both online and offline

Electronics and Appliances:
•    All national retailers have significantly improved their online presence and have tried to address all the customer demands. 
•    Multi-brand outlets are likely to become a preferred choice among consumers and retailers such as Croma and Reliance Digital are expected to continue expanding

Department Stores:
•    One-stop shopping experience format is likely to remain popular among consumers
•    All department stores are finding innovative ways to engage with their customers, and some have also used personalized/ online platforms to improve sales. 

Hypermarkets, Supermarkets, and Traditional Grocery Retailers:
•    Consumers will continue to remain value-conscious 
•    Comeback of non-essential sales is likely to aid recovery and growth across supermarkets
•    Low penetration of modern grocery retailers, lower real estate costs, and availability of larger spaces offer tremendous expansion opportunities in tier II and tier III cities

E-commerce and F&B E-commerce:
•    E-commerce is expected to witness high growth going forward as well and but would co-exist well with store-based retail channels. Integration of the two is likely to increase. 
•    Dark kitchens/ stores in partnerships with online & other store-based retailers will be the key to offset logistical challenges in the future
•    Expansion into tier II and tier III cities is likely to be the next stage of development in the F&B e-commerce category as well

Retail Outlook:

The pandemic created an urgent need for the retail sector to adapt to the evolving market landscape. Trends that were on a multiyear trajectory saw dramatic acceleration and the retail industry witnessed more innovation in the past year than it did in the prior decade. 

CBRE has identified six imperatives that are expected to help retail stakeholders adapt to a changing consumer landscape while pursuing new opportunities. 

•    Restructuring Retailer-Landlord Relationships – Post the pandemic, more partnership-like agreements started to surface between landlords and retailers. Landlords provided several relief measures to accommodate retailers, ranging from temporary rental rebates, rent reductions, and deferments with some also exploring lease restructuring and fit-out subsides.

•    Navigating the Digital Shifts –Technology in retail is rapidly evolving; especially post the pandemic. Virtual fitting-room technology will help to synchronize the store’s inventory and point-of-sale systems, enabling stores to catch up to data-rich e-commerce by providing insights on data points such as time spent in fitting rooms and conversion rates.

•    Tapping the Altering Consumer Behavior – Consumers today are extremely agile, volatile, demanding, and tech-savvy. Given their preferences and the pandemic-related disruption, retailers should focus on reinventing their marketing strategies and think of innovative ways to know their consumers better. 

•    Omnichannel to be the New Omnipotent - Online shopping has enabled customers with this convenience in a safe environment. The change in consumer shopping patterns has ensured that retailers consider omnipresence. Omnichannel is expected to be the fallback plan for businesses during uncertainties/ lean economic cycles.

•    Reshaping the Idea of a ‘Store’, Free Standing Stores to Proliferate – With inventory management already being optimized with the aid of predictive demand analytics, brick and mortar stores may eventually become inventory free as purchases would be dispatched from warehouses to consumers’ homes upon payment. CBRE foresees the redistribution of space between the various areas of retail stores such as fitting rooms, product testing zones, pick-up counters, and stockrooms. 

•    Rethinking Retail Asset Management Strategies, Health, and Safety to Remain Paramount – Physical spaces are likely to be re-thought and social distancing may remain in effect going forward as well – attention will be paid to vaccinated staff Developments that are currently under construction/ planned are expected to make provisions for more open and green spaces in their design layouts. In addition, the adoption of PropTech is likely to take center stage in the maintenance across the retail-built environments.
 

 

Next Story
E-commerce Sales for 2021 Expected to Clock $67-84 bn
E-commerce Sales for 2021 Expected to Clock $67-84 bn
 

The e-commerce space has witnessed rapid growth in the last 18 months. The total e-commerce sales for the year 2021 are estimated to clock anywhere in the range of $67-$84 billion, a significant increase from the total e-commerce sales of last calendar year (2020), 

The total e-commerce sales touched a mark of $52.57 billion in 2020, a significant 30 percent jump from the sales in 2019 that registered a total value of $40.44 billion, as per the findings of the EasyEcom report. 

According to the report, e-commerce sales during the festive season have been following a consistent upward trend for the last few years and this year will be no different. Despite a multi-month lockdown, the growth has been persistent and it is expected that the e-commerce retail sales will clock between $11-14 billion during this festive season. Compared to last year, online sales during this festive season are likely to grow anywhere between 32-68 percent.

“We believe that e-commerce retail will continue to rise for the festive season of 2021, owing to the swiftly changing customer preferences and digital adoption by masses in the aftermath of a global pandemic. The numbers predict that revenue for digital commerce will continue to register a colossal YoY growth till 2026 and beyond. The festive season this year will contribute significantly towards this revenue growth enabling D2C brands to make up for any losses they might have incurred during the pandemic,” Swati Jindal, Co-founder, EasyEcom, said.

With a global pandemic looming at large, e-commerce saw a whopping 66 percent retail hike during the festive season last year. In 2019, the total e-commerce festive sales accounted for $5 billion, which escalated to $8.3 billion in 2020, owing to limited offline services during the first series of nationwide lockdowns.

Furthermore, in recent years, electronics has emerged as the leading e-commerce category with maximum GMV share in total e-commerce sales for years 2019 and 2020. This is followed by fashion and apparel, food and groceries, furniture and appliances with an ever-increasing user base from tier II and tier III cities. In 2021, electronics will remain the category champion followed by other major lifestyle segments.
 

 

Next Story
Beauty & Personal Care and Health & Pharma Segment Registering Maximum E-Commerce Growth in 2021
Beauty & Personal Care and Health & Pharma Segment Registering Maximum E-Commerce Growth in 2021
 

The pandemic caused by Covid-19 has led to emergence of varied categories that had a negligible online presence before this ongoing crisis, changing the dynamics of the e-commerce retail industry.

FMCG is one segment that started making news right from the beginning of lockdown in March 2020. The FMCG e-commerce sector saw a major spike at the beginning of lockdown and it was considered as a temporary phenomenon given the conventional nature of the industry, and consumers were expected to go back to old ways of shopping after some time. The changing consumer behavior supported with increasing e-commerce adoption across the country has led to an exorbitant order volume growth of 74% for the FMCG segment for the period of January-August 2021, over the corresponding period a year ago. The Food and beverages segment reported 72% order volume growth in January-August 2021 as compared to the same period last year, while the organic food segment reported a 74% rise in order volume during the same period.

The beauty and personal care segment was growing rapidly even before the pandemic. The pandemic further accelerated the growth of the industry and the new age digital companies were able to efficiently meet the rising consumer demand. An increasing number of consumers are now buying beauty and personal care products online, the segment reported 143% order volume growth, highest amongst all the emerging segments. The segment can be broadly divided into three key segments: The first one is Face care is the real growth driver for the segment with 179% order volume growth in January-August  2021 as compared to the same period last year. The second segment is Haircare, which has reported a strong order volume growth of 91% during the above-mentioned time frame. The third segment is Body care, while it’s an important segment it reported a slower order volume growth of 48% in January-August 2021 vs January-August 2020. Beauty and personal care is an interesting category where marketplaces are the real growth drivers with 163% order volume growth for the period of January-August 2021 as compared to the same period last year.

Health and pharma sector continues to grow and reported 119% order volume growth in Jan-Aug 2021 as compared to the same period last year.

Nutraceutical is a sub-segment in Health and Pharma that has garnered a lot of attention with its strong growth in the last one year. The nutraceutical segment reported 143% order volume growth from January-August  2021 as compared to the same period last year.

The home decor industry growth reported an order volume growth of 51% with a significant GMV growth of 108% leading to the highest average order value growth of 38%.

Sports goods is a small industry and at a nascent stage of the e-commerce business and it holds immense growth potential with 66% order volume growth, along with muted GMV growth of 18%.

The findings are part of an industry trends report, unveiled by supply-chain SaaS technology platform Unicommerce, titled ‘Emerging e-commerce segments 2021’.

Speaking on the launch of the report, Kapil Makhija, CEO, Unicommerce, said, “The pandemic has altered consumer buying patterns and accelerated the adoption of technology amongst brands at a faster pace. Rising e-commerce adoption has led to the birth of many new segments in the e-commerce industry that were insignificant until last year. Our aim with this report is to showcase the evolving trends in these emerging categories along with detailing the growth trends of sub-segments under each category. An important finding from the report is the phenomenal growth of brand websites and marketplaces and how it's impacting all these emerging segments. We received an overwhelming response to our previous reports and we are confident that this report will also help e-tailers in understanding the emerging segments and adapt well to the changing dynamics of the e-commerce industry. We are committed to helping e-tailers in their e-commerce journey and this report helps in furthering our mission.”

Furthermore, the report also maintained that in the first eight months of 2020, tier-I cities contributed 39% market share, followed by 38% share of tier-III cities and 23% of tier-II cities.  However, the market shares changed significantly in 2021, with 161% growth of tier-I cities contributing 52% of the overall market share of the emerging segments, followed by 85% growth of tier-II cities contributing 19% of the market share and 75% growth of tier-III cities with 29% market share.

 

Next Story
Online Retail Market in India to Reach US$ 350 by 2030
Online Retail Market in India to Reach US$ 350 by 2030
 

The online retail market in India is slated to reach US$ 350 billion by 2030 from the current US$ 45-50 billion.

And in terms of post-Covid revenue growth, Indian e-commerce would become the third-largest market, eclipsing the more mature markets such as the UK and South Korea over the next decade.

The findings are a part of a report released by management consulting firm RedSeer Consulting.

“What it really means is that a lot of this growth is coming from the significant expansion of the user funnel. From about 150 million shoppers in CY20, we expect it to reach about 500-600 million shoppers. So that is sort of secondary to China in terms of the overall volume of the shopper base. And that is the massive expansion of the funnel which is going to lead to many more opportunities. We expect tier-II cities to be the engine of e-commerce’s rapid growth over the next decade,” said Abhishek Gupta, Engagement Manager, RedSeer Consulting.

Over the last five years, innovation and spending were driven more by urban people and rich cohorts residing in metropolitan cities. Now, the share of spending in tier-II cities would increase significantly and open up new business opportunities.

Gupta said India was now in the most exciting groundwork phase to create a fertile ground for a digital economy. Speaking about this in the context of smartphones, he said the next wave of growth would see more affordable smartphones reaching a wider set of unpenetrated audiences.

Smartphone shipments in the country grew 82 percent YoY to reach over 33 million units in Q2 2021, according to the latest research from Counterpoint’s Market Monitor service.

Gupta added that the growth in smartphone shipments was over 42 percent now when compared with 2015-2019. Globally, this growth has started to flatten out.  India currently has the youngest population cohort across all the major economies.

 

Next Story
Fashion Retailers to Close the Year with 25 pc Revenue Growth
Fashion Retailers to Close the Year with 25 pc Revenue Growth
 

Fashion retail, one of the worst COVID-19 hit sectors, is beginning to breathe again on the back of rising vaccination and normalization of economic activities and may close the year with 23-25 percent revenue growth if there is no third wave. 

The sector was badly affected since the beginning of the pandemic last March as high-street malls and other outlets remained shuttered.

Two other reasons for the optimism is the massive 55 percent fall in rentals in Q1 of FY2022 and more adoption of online retailing to the tune of over 50 percent jump in volume on-year, says Icra Ratings in a report, adding expecting better recovery retailers are also likely to increase Capex by at least 45 percent this fiscal. 

Therefore, the agency maintains its negative outlook on the sector and expects full recovery only from the second quarter of the next fiscal.

However, the report warns that if there is a third wave, which virologists still do not rule out, it can potentially shave off up to 40 percent of revenue. And even if the sector closes the year with a 25 percent growth, it will still be 20 percent lower than the pre-pandemic volumes.

The fashion retail segment is expected to clip at 15-17 percent year-on-year during July 2021-March 2022, translating into annual revenue growth of 23-25 percent for FY22, provided there is no third wave, Icra said.

Our channel checks suggest that during July-August, the segment saw a healthy recovery to the tune of 70-85 percent of the pre-pandemic level sales. Though the average ticket size has moderated from FY21 levels yet remained higher than the pre-pandemic levels, footfalls have increased, suggesting that this time around consumers are more comfortable in making repeat visits, the report said.

This ongoing recovery is in contrast to a relatively muted recovery (up to 48-50 percent of pre-pandemic sales) in Q2 of FY21 following the reopening after the first wave, as per the report.

According to Sakshi Suneja, the Sector Head at the agency, “With an improvement in the vaccination coverage, the fashion retail is expected to clip at 15-17 percent from Q2 onwards, translating into annual revenue growth of 23-25 percent in the year to March 2022.”

This shall, however, remain lower by up to 20 percent from the pre-pandemic sales, and thus the agency maintains its negative outlook on the segment and expects it to revert to pre-pandemic sales only by Q2 of FY23, she added.

Besides material costs, retailers typically have three key main cost components -rentals, salaries, and marketing/ promotional expenses - which account for around 30 percent of the total cost.

Though operating profit margins are expected to improve in FY22 on account of revenue growth, it will still be lower by around 450 bps from pre-pandemic levels, she said.

The pandemic spurred online retailing with most retailers reporting over a 50 percent jump in sales over FY21.

 

Next Story
E-commerce Companies to Log 23 pc Rise in Gross GMV During Festive Sales?
E-commerce Companies to Log 23 pc Rise in Gross GMV During Festive Sales?
 

E-commerce platforms are expected to potentially clock over US$ 9 billion gross GMV (Gross Merchandise Value) during the festive season this year as against US$ 7.4 billion last year - a growth of 23 percent.

For the full year, the overall online gross GMV is expected to touch US$ 49-52 billion, which is around 37 percent higher than last year (US$ 38.2 billion), primarily driven by strong consumer funnel expansion and the high adoption of online shopping post-COVID across the categories, RedSeer said in its E-commerce Festive Season Report.

During the first week of the festive season, online platforms are expected to register 30 percent year-on-year growth in gross GMV to US$ 4.8 billion, it added.

"The growth will be mostly driven by the accelerated online adoption which has been witnessed as an effect of COVID. Secondly, tier-II cities and beyond will continue to drive growth as they are 55-60 percent of the total shopper base this year, similar or higher than 57 percent in 2020 festive days," Mrigank Gutgutia, Associate Partner at RedSeer said.

On the other hand, as offline retail and mobility is recovering almost up to pre-COVID levels, this will impact the online festive sale as customers may opt for offline shopping as well, he added.

In terms of categories, mobile will continue to dominate - driven by new launches - and account for 11 percent of the gross GMV (US$ 4.8 billion) in the first week of the festive sale.

The electronics and appliances category will continue to grow (from 14 percent share festive sale last year to 16 percent this year), driven by ever-expanding selection and reach, and consumers holding back their purchases (earlier in the year) in anticipation of new launches and attractive pricing, Redseer said.

Affordability constructs, including EMIs and Buy Now, Pay Later (BNPL) are expected to be a strong growth lever in this category, it added.

Fashion, as a category, is also expected to see a steady recovery this festive season - in line with greater outdoor mobility of consumers and steady rebound of fashion/office wear, RedSeer said.

The report found that sellers are very bullish on this year's sales and are looking to recover the losses suffered due to COVID.

Nearly 80 percent of the sellers surveyed said festive sales will play a key role in recovery from COVID losses.

"We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption supported by an increasingly positive macro and consumption sentiment post the COVID second wave has passed. At the same time, we see strong bullishness in sellers towards online festive sales as about 80 percent of them believe that the festive sales will enable them to drive strong sales growth and make up for the losses during the COVID period," Ujjwal Chaudhry, RedSeer Consulting Associate Partner, said.

RedSeer expects strong 30 percent y-o-y growth in festive sale week in 2021 to reach US$ 4.8 billion in gross GMV with growth across categories, and setting the stage for a strong year for e-commerce in 2021, he added. 
 

 

Next Story
India Cautiously Returning to a State of ?Business as Usual'
India Cautiously Returning to a State of ?Business as Usual'
 

With decreasing number of Covid-19 cases as well as an aggressive vaccination drive, there has been a new wave of confidence among Indian consumers and a latest finding has reflected that Indian consumer is ready to spend more on discretionary items, are feeling safe about returning to work place, willing to spend on travel and is less hesitant about in-person events and activities—all of which are positive trends for India’s economic revival.

The latest findings are a part of the latest 30-day analysis of Global State of the Consumer Tracker by Deloitte Touche Tohmatsu India LLP (DTTILLP).

According to the report, only 34% Indian respondents showed anxiety, 84% consumers felt safe to return to their workplaces, 60% consumers showed willingness to attend in-person events, 59% consumers felt comfortable taking a flight and 30% consumers showed willingness to use public transport.

With reduced anxiety, coupled with several countries lifting travel restrictions for India, the Indian consumer is all set for international travel. 57% Indians surveyed are planning international travel for leisure in the next three months. This has given the travel and hospitality sector a glimmer of hope.

The analysis also showed that savings are up by 4% (50% in the current wave compared with 46% in the previous wave). This could be in preparation of future purchases and seasonal deals during the festive season.

Financial confidence also seems to gain momentum as the tracker shows Indian consumers’ intent in making large purchases.

 

 

Next Story
Revenue of Gold Jewelry Retailers Poised to Grow 12-14 pc
Revenue of Gold Jewelry Retailers Poised to Grow 12-14 pc
 

After two consecutive years of decline, the revenue of gold jewelry retailers is poised to grow 12-14 percent on-year this fiscal, driven by stable gold prices and recovery in discretionary spending, including on wedding and festive jewelry.

The operating margin, though, will be restored to the pre-pandemic level of 6.5-7.0 percent with the moderation of 100-120 basis points given a stabilization of gold prices and limited scope for further cost optimization, Crisil said in a statement.

An analysis of 86 jewelry retailers rated by Crisil Ratings showed recovery in revenue, along with improved accrual, continued inventory rationalization and healthy capital structure will keep the credit outlook stable.

"This fiscal, revenue of organized jewelers is also set to benefit from lower import duty, and introduction of mandatory hallmarking, which will make them more competitive compared with unorganized players.

"Lockdowns in many states were localized and less stringent, and hence store closures were lower compared to the first wave. Besides, pent-up demand from weddings (55-60 percent of overall jewelry sales) and festivals in later quarters will help resurrect revenue, just as they did last fiscal," Anuj Sethi, Senior Director, CRISIL Ratings said.

A net reduction of 213 basis points in import duty to 10.75 percent this fiscal has also helped bring down domestic gold prices, making it more affordable for consumers.

"Despite a slight moderation in operating margin, debt metrics will continue to improve this fiscal, supported by higher accruals and prudent debt levels following rationalization of inventory last fiscal," officials said.
 

 

Next Story
80 pc of Brands to Maintain or Increase Their Marketing Budgets This Festive Season?
80 pc of Brands to Maintain or Increase Their Marketing Budgets This Festive Season?
 

With the onset of the festive season, brands are looking to stand out and capture the mindshare of the new-age digital consumers, amidst a positive consumer sentiment. In fact, 50 percent of consumers are likely to increase their festive spending this year.

According to the playbook ‘Decoding Consumer Behavior and Winning the 2021 Festive season’ by MMA, GroupM, and Amazon Advertising, 62 percent of consumers are currently undecided about the product/ brand choice and would start researching products one or two months before Diwali. 

Moreover, 80 percent of consumers will research or purchase products online and 50 percent of consumer journeys will be digital-only. 77 percent of consumers’ journeys will involve Amazon while 84 percent are likely to buy on the platform.

On the part of brands, 80 percent of brands are looking to maintain or increase their marketing budgets for the festive season. 76 percent of brands will be allocating more spending for digital as compared to last year with the preferred platforms being Facebook, Amazon, and Google. 

The playbook stated that brands should leverage multiple touch-points - be visible across touch-points leveraging connected TV, video, search advertising, among others to drive active/passive discovery and leverage efficiency-related metrics to assess performance holistically. 

“76 percent of marketers mentioned they will be allocating more spending for digital as compared to last year. Hence it’s key to understand omnichannel users better in the changing times as we continue to drive the narrative of shaping the future of marketing,” Moneka Khurana, Country Head, MMA India, said.

According to Tushar Vyas, President – Growth and Transformation, GroupM South Asia, digital influence in consumer journeys has increased significantly while e-commerce adoption has accelerated in the last 18 months. 

“Digital is no more a support media platform but is core to media plans. Ecommerce platforms offer brands the opportunity to hand-hold consumers across the purchase funnel by not only aiding in active/passive brand discovery but also in closing the loop by measuring performance objectively. This playbook contains several key insights and is a must-read for any marketer who is planning for the festive season,” he added.

“Digital is a part of our lives now like never before and the influence is only increasing. Ecommerce portals act as gateways to this world that we are so quickly embracing and are playing a crucial role in brand and product discovery. For marketers, this presents an unprecedented opportunity – to be able to identify and leverage customer intent at an unprecedented scale,” Vijay Iyer, Director- Ad Sales, Amazon Advertising India stated.
 

 

Next Story
3 Reasons Why SEA's E-Commerce is Set to Explode
3 Reasons Why SEA's E-Commerce is Set to Explode
 

The latest report from Facebook & Bain Company has proven that the ‘new normal’ resulted in new purchasing habits which boosted digital consumption. The e-commerce sales in Southeast Asia are estimated to nearly double to US$254 billion at the end of 2026.  
While it is expected that digital spending will continue to expand amidst the pandemic, how much will SEA’s e-commerce companies grow as we’re entering the year-end sales period? 

An e-commerce aggregator, iPrice Group, analyzed the most visited e-commerce platforms in Southeast Asia to predict where the market is heading towards and what exciting developments we can expect from the year-end shopping frenzy.

Here are 3 key predictions on the success of Southeast Asia’s e-commerce industry for the rest of the year:

Online Growth will be Off the Charts

The pandemic-induced digital shift is enhancing online consumption even more than last year. Data shows that the overall web visits of online shopping platforms across Southeast Asian countries remained positive in the 1H 2021. 

With more than an average of 4 million web visits from January to June in 2021, the number has increased by 31 percent compared to the same period in 2020. 

The Philippines experienced the most surge by 73 percent, followed by Indonesia (41 percent), Malaysia (34 percent), Singapore (10 percent), Thailand (9 percent), and Vietnam (7 percent).  

The top two Singapore-based companies, Shopee & Lazada, experienced an increase of web visits by 56 percent and 10 percent in 1H 2021 compared to the same period last year. 

The surge was probably driven by its constant marketing initiatives to supply value-driven shoppers during the new norm with flash sales, Ramadhan sales, 6.6 sales, and others.  

In 2020, iPrice Group saw that the overall web visits grew at 26 percent from 1H to 2H 2020 across all 6 countries. As such, the company forecasts that the total average web visits will grow even more for the remainder of 2021.

Therefore, online marketplaces will potentially receive an additional average of 690 thousand visitors or more across the region, given that there are many upcoming year-end sales. 

Influencers Will Continue to Drive Success to Online Sales

From footballers to Korean artists as brand ambassadors, along with recent partnerships with Jackie Chan and Hyun Bin, Shopee & Lazada sparked consumer hype as we’re entering the year-end shopping sales. 

iPrice Group tracked the social sentiments of the latest 9.9 campaigns. Using this data, the study uncovers which campaign is the most successful. 

Jackie Chan’s endorsement has the highest engagement per article. The campaign collaboration with Chanfor 9.9 sales has over 59 articles published online while there were 53 articles written about Hyun Bin’s endorsement. 

However, the number of articles doesn’t draw a full conclusion. Hence, the study also investigates consumers’ reactions towards these partnerships. Who seems to be the more loved brand ambassador? 

Observing the 3.8k social reactions that were recorded, Hyun Bin has the highest number of ‘love’ reactions (79 percent), along with 19 percent ‘haha’ reactions, and 2 percent ‘wow’ reactions from its partnership with the giant e-commerce company, Lazada. 

Similar success was seen with the kung fu legend’s collaboration. Jackie Chan’s endorsement was received with 62 percent ‘love’ reactions, 21 percent ‘haha’ reactions, and 17 percent ‘wow’ reactions. It looks like the social sentiments towards these two ambassadors have been positively received by people, according to the data.

It’s clear to see that influencers play an important role in driving excitement for the upcoming sales period. Thus, key e-commerce companies have enough incentive to involve influencers in their campaigns. But does this mean that they will increase the amount of consumer spending during year-end sales?  

Steady Increase of Consumer Spending Year-Over-Year

Given the uncertain COVID infection rates, consumers will continue to stay at home and consequently forego holiday travels and family get-togethers. 

More time spent at home means more opportunities for online shopping. iPrice foresees that Southeast Asian consumers would probably spend an average of US$ 40 on e-commerce by the end of the year. 

The prediction is made by examining the average consumer spending across online marketplaces in the 1H 2020 and 1H 2019. iPrice found that there was an increase of 26 percent in average consumer spending in 2020 when consumers spent about US$ 32. 

Most purchases will be directed towards the categories of sports and outdoor, home improvements, and electronics. 

Lastly, even if consumer spending won’t increase as predicted, online retailers can still expect far more online web visits to their platforms this year.
 

 

Next Story
Consumer Sentiments Improve?Ahead of the Festive Season
Consumer Sentiments Improve?Ahead of the Festive Season
 

With the beginning of the festive season in India, consumer sentiment in the country is also improving. 42 percent of families will shop more or the same this year as compared to 2020.

As per a report by Axis My India, the expected increase in spends is higher among private and government service employees. 

Moreover, overall household spending has also increased for 56 percent of the families in August, compared to 54 percent in July. The increase is higher in the north, at 61 percent. 

“As the festive season approaches, consumers are slowly stepping out – as proven by increased numbers for non-essential spending and mobility,” Pradeep Gupta, CMD, Axis My India, said.

“This should have a positive effect on the hospitality industry which has been severely affected due to the pandemic. Tourism, however, continues to be a concern as 83 percent of the respondents are still averse to traveling. Economic sentiment is looking buoyant with 64 percent of the respondents expecting the Sensex to cross 60,000 before the end of this year,” Gupta added.

As part of the other key findings, spends have increased on essentials like personal and household care by 47 percent. However, the consumers are still being cautious about spending on non-essential and discretionary products. Only 21 percent of families surveyed have mentioned an increase in non-essential spending.

The consumption of health-related items has increased or remained the same for 79 percent of families and decreased by 21 percent. The health score has a net score value of -24, the report added. 

On the other hand, media consumption has increased for 25 percent of families and remained the same for 47 percent. The media consumption increase is highest in the 18-25 year age group at 32 percent, the study revealed.

The overall mobility score has reached -8 from -24 last month, while 93 percent of families are going out the same or less on short vacations or visiting malls or restaurants. Meanwhile, the net Consumer Sentiment Index (CSI) score has been recorded at +6, rising at the fastest pace over the last month, the company said in a statement.

 

Next Story
The Impact of Empathy in Social Media for Indian E-commerce Sector in 2021
The Impact of Empathy in Social Media for Indian E-commerce Sector in 2021
 

Human behavior is highly dictated by emotions and experience. This trait is also perceived as the principal concept in consumer decision-making. 

To understand how emotions are tied with consumer responses in the post-pandemic world, Instoried decided to examine the impact of emotions in the digital marketing space in their new report.

According to the report, the golden age of digital marketing in India started with the launch of Flipkart in 2007. The e-commerce giant paved a way for marketers to explore and push boundaries. Yet, for a long time, digital marketing communications in Indian e-commerce have revolved around deals and discounts. The equations are changing now and people have started associating products with emotions rather than just affordability or convenience.

Observations on Overall Performance

These observations are a summary of the performance of posts in the e-commerce sector as a whole. According to which, the dominant tone in most Instagram posts was positive and the dominant tone in most Twitter posts was positive. The dominant emotion in the Instagram posts was Joy (avg 74.4 percent) followed by fear (avg 11.8 percent), anger (avg 8.0 percent), sadness, and the least amount of surprise. 

The best performing company on Instagram as well as Twitter is Zomato. While the dominant tone on Zomato’s Instagram posts is neutral, with an average of 37 percent the same tonality is negative on Twitter. Furthermore, companies like Grofers and Lenskart were seen performing exceptionally well on Instagram but performed mediocrely on Twitter.

Observations About Empathy in Instagram Campaigns

These observations deal with Instagram posts in particular. This section looks at how tonality and emotions affect the performance of posts on Instagram. 

Positive Tone Vs Likes: The overall performance of posts is higher for higher positive tonality.

Negative Tone Vs Likes: The concentration of likes is higher when the percentage is lower than 25 and beyond that, the likes start disappearing.

Joy Vs Likes: A higher concentration of likes after 50 percent clearly emphasizing that higher intensity of joy in content is more likely to attract the audience’s attention.

Anger Vs Likes: With an increase in the percentage of anger, the number of likes drops drastically. This demonstrates that anger is not appreciated well by the Instagram audience.

Fear Vs Likes: The usage of fear beyond 50 percent has resulted in the decline of likes. Fear can have mixed results. While some may get reasonable success on Instagram, some tend to do poorly.

Sadness Vs Likes: Since the e-commerce sector is supposed to bring happiness to people, sadness is not a primary emotion for digital communication. In some cases, sadness does tend to result in more likes, however, extremely sad posts tend to have low likes.

Surprise Vs Likes: The little concentration of surprise is an emotion. However, the few posts which do have surprises tend to do reasonably well. Surprise is an under-utilized emotion in Instagram Posts.

Observations About Empathy in Twitter Campaigns

Positive tone Vs Likes: 25-30 percent of positive tone gives around 550 likes on Twitter. This indicates a positive tone is a default for most digital communication for e-commerce sites.

Negative Tone Vs Likes: Negative is a big no for Twitter. A very low percentage of negative tone results in less engagement.
Joy Vs Likes: With more than 600 likes on posts that implicate joy, the Twitter audience seems to appreciate joy and happiness in the tweets.

Anger Vs Likes: Just like a negative tone, even anger is not appreciated on Twitter. There will be a steep decline in the number of likes as the percentage of anger is increased.

Fear Vs Likes: People on Twitter do not seem to appreciate Fear.

Sadness Vs Likes: When the percentage of posts with sadness tonality is increased there is a steep decline in likes percentage.

Surprise Vs Likes: Surprise is an under-utilized emotion on Twitter and there should be more posts to conclude the negative correlation.

Conclusion

Digital marketers use a positive tone and joy by default in most social media communication. In Instagram, a positive tone, however minimal present in the texts, will result in a higher number of likes. Instagram posts that radiate joy will get higher likes and bring in more engagement. 

We saw Zomato’s example, Zomato is using a combination of joy and a neutral tone to impress the audience on Instagram. For their Twitter audience, Zomato uses a balanced combination of positive, negative, and neutral tones with joy as the dominant emotion. 

Fear is used by digital marketers but the effects of using fear are highly unpredictable. Fear of Missing Out (FOMO) can be used to attract audiences when it comes to deals and discounts. Surprise and Sadness are not used a lot in social media marketing communications. But even a small usage has also resulted in an above-average performance.

Not every company succeeding in Instagram can succeed in Twitter. Similarly, not every company performing well on Twitter can win the audience on Instagram. Unlike the usual notion of Twitter being a negative platform, it seems to appreciate positivity and happiness more than negativity.

Key Takeaway

Companies performing brilliantly on Instagram may not always win the hearts of Twitteratis. FOMO is the best-kept secret of the e-commerce industry. Marketers can use fear to get reasonable success in social media. Most e-commerce companies don’t focus on Twitter and have lesser success due to this.
 

 

Next Story
Online Retail Market to Grow 3-fold in Next 4-5 years
Online Retail Market to Grow 3-fold in Next 4-5 years
 

The accelerated adoption of online channels by consumers has brought about a shift in purchase behavior. Today, 62 percent of urban users are researching products online before making any purchase either online or offline.

Moreover, 50 percent of offline shopping across categories involves online product research, the report titled ‘Modern Marketers Guide to Connected Consumer Journeys’ by MMA India along with the AMMP Council and GroupM India, revealed. 

India today has 622 million internet users (8 percent growth over 2019) and is expected to touch 900 million users by 2025. With affordable data prices, consumers are increasingly becoming more digital, the online retail market is set to become three folds in the next four to five years, majorly driven by under-penetrated categories such as grocery, education, and health, the report added.

According to the report, though the voice is at a nascent stage, Indians are leapfrogging on voice adoption; the market is expected to grow by 40 percent by 2022. Not just on Google Assistant, voice is rapidly growing as a preferred medium of input across Search and YouTube. 

Furthermore, online video spends have seen the highest growth rate of 46 percent in 2020, as compared to other media channels. Online content consumption grew 35 percent post-Covid, with a total growth of 13 percent in time spent on OTT from January 2020 to January 2021.

Interestingly, vernacular internet users find voice a more natural way of interacting with technology which helps reduces friction. Hindi on voice assistants is the second biggest language globally after English, while Hindi voice search queries have seen 400 percent growth y-o-y.

According to Moneka Khurana, MMA India Board Member; Country Head – India, MMA, consistent digital exposure, combined with the presence of available omnichannel touchpoints, has resulted in the development of a new consumer purchasing process. 

“MMA through its e-commerce council aims to build an overall understanding of the ecosystem and address cluster-specific issues improving capability in the omnichannel marketing. We hope this playbook will assist marketers and brands to effectively re-strategize their market approach – from the customers they target to the channels they sell through,” she added.

To be noted, Indians value quality the most when it comes to purchasing decisions. The report added that 73 percent of customers have purchased through online shopping platforms in the past 12 months - the deciding factors are — 63 percent on product quality, 55 percent on price, and 55 percent on product information, return and cancellation policy, and product warranty. 

When it comes to the choice of channels, the biggest retail trend is the increasing popularity of the direct-to-consumer or DTC model. Hence, brands with a DTC model can leverage direct relationships through loyalty programs, special discounting and promotions, and unique and category-specific shopping experiences.

There has been an interesting purchase pattern in the consumer journey in the last three months where Amazon, Flipkart, and Myntra were the top three online shopping destinations, and groceries, fashion and health, beauty and personal care were the most searched product categories.

“Consumers now have multiple sources for discovery and information research and today, it consists of highly connected non-linear moments. The growth in internet users, reduction in data prices, and changing consumer behavior are the key growth drivers for the evolution of e-commerce in India. We understand the changing online retail market and how it is set to grow 3x in the next four to five years mainly driven by underpenetrated categories like grocery, education, health. Considering the emergence and growth of e-commerce platforms, this handbook provides A-Z solutions on how marketers can use e-commerce as a platform to enhance a brand’s reach in these rapidly evolving times,” Tushar Vyas, President – Growth, and Transformation, GroupM South Asia said.
 

 

Next Story
Global Smartphone Sales Grew 10.2 pc in Q2 2021
Global Smartphone Sales Grew 10.2 pc in Q2 2021
 

Global smartphone sales to end users totaled 328.8 million in the second quarter of 2021, an increase of 10.8 percent year over year.

According to a report by Gartner, overall global mobile phone sales grew 10.2 percent despite supply constraints due to Covid-19 related production disruption and component shortages.

"Reinforced shelter-in-place instructions and factory shut-downs in India and Vietnam due to the second wave of Covid-19, along with the closure of retail businesses and restrictions on online deliveries affected smartphone sales negatively in the second quarter after a strong start at the beginning of 2021," said Anshul Gupta, Senior Research Director at Gartner said in a statement.

Samsung expanded its 5G smartphone lineup at entry and midrange prices to target growth opportunities in 5G segments in the second quarter of 2021. The company maintained the number position among the top five global smartphone vendors.

Xiaomi's worldwide smartphone sales overtook Apple in the second quarter, placing Xiaomi at the number 2 position for the first time. Xiaomi registered an 80.5 percent growth in its smartphone sales owing to a stronger online presence and fast expansion in the global markets beyond Asia/Pacific led by investments in retail channels and partnerships with communication service providers (CSPs).

While Apple sales grew 28.3 percent year over year and its market share increased 2.1 percent year-over-year.

Other Chinese smartphone vendors Oppo and Vivo grew 42.4 percent and 41.6 percent respectively, in the second quarter of 2021. Aggressively priced mid-tier smartphones, a wider distribution network, and robust marketing campaigns in Western Europe boosted the growth of Oppo.
 

 

Next Story
MSMEs Favor Daily EMIs, Ease of Repayment Process through Automatic Deduction for Credit Repayment
MSMEs Favor Daily EMIs, Ease of Repayment Process through Automatic Deduction for Credit Repayment
 

The majority of MSMEs today favor daily EMIs, automatic deduction from bank accounts for credit repayment, according to a survey conducted by Solv, a B2B e-commerce platform for micro, small and medium enterprises (MSMEs),

Credit Demand

In terms of demand for credit, the survey found that 90 percent of retailer touchpoints across categories have seen higher sales in the last 3 months vis-a-vis 2020, implying a need for easy access to small ticket size collateral-free loans to improve working capital and sales. It also found that 90 percent of supply chain participants in high-volume commodity segments are actively seeking collateral-free loans of up to Rs 3 lakh.

Repayment Preferences

The survey also uncovered interesting insights about MSMEs’ preferences for repayment. More than 50 percent of retailers and wholesalers said they are willing to pay in 7-15 days' installments. More than 95 percent of respondents indicated they would pay back loans within 30 days if given the option of daily repayment or daily EMIs. Most small retailers willing to pay daily EMI are comfortable paying Rs 500 or Rs 2,000 daily to ease their repayment burden and help them get better access to revolving credit. Interestingly, more than 50 percent of micro and small businesses said they would like to ease the repayment process through automatic deduction from their bank accounts.

Collection of Payments

On collection of payments from customers, the survey found that while cash is still the most preferred mode, there has been a sharp 3X rise in collections through UPI vis-à-vis debit and credit card payments. More than 90 percent of small and micro businesses have a UPI QR code, while only 20 percent have a PO machine for debit/credit card acceptance in their shops.

Online B2B Platforms

More than 90% of small retailers, wholesalers, and traders felt that online B2B e-commerce platforms customized for MSMEs would help them grow their business faster in terms of getting better rates to procure goods, accessing cheaper and faster credit, and increasing sales.

Solv has already launched Buy-Now-Pay-Later (BNPL) facility for the MSME sector. With the alternate data on its B2B e-commerce platform, Solv provides segment analysis to match financier and borrower requirements. New-age fintechs and traditional lenders that are a part of Solv’s network of financial service providers have been offering invoice financing through BNPL to small businesses via the platform. At a time when traditional lenders have been relatively risk-averse due to a weak economy, the BNPL facility has helped small businesses to service their immediate requirements without feeling severe financial strain, with more time at their disposal to make payments.

 

Next Story
How has Going Omnichannel Helped Tupperware to Meet the Changing Needs of Consumers
How has Going Omnichannel Helped Tupperware to Meet the Changing Needs of Consumers
 

Tupperware is a US-based brand, headquartered in Orlando. It is present in India for the past 25 years. Tupperware was earlier considered as a kitchenware brand but it is transitioning from kitchenware to homeware brand as it is adding lot more product categories beyond the kitchen.

“We support women empowerment. All our partners are women and we have been doing this for the last 25 years. Also, 90 percent of our products are made in India, and in fact, we export to around 13 plus countries from our manufacturing plant in Dehradun,” states Deepak Chhabra, Managing Director, Tupperware India.

Getting Ready for Omnichannel Retail

The retail business became almost zero overnight in the first wave of COVID. During the first month of the lockdown, Tupperware became busy on how it can digitally start selling and connect the sellers digitally with the consumers. In lieu of this, the brand launched its exclusive web store. Through this web store, the brand has also introduced Social Selling channel.

“We have built this social platform with advanced technologies which manages customer purchase patterns, intelligently suggest products according to their next best action and other benefits as well. We gave our sales team the tools to interact digitally on social platforms like Facebook, Instagram, WhatsApp, video platforms, etc. Every direct seller (DS) gets an URL, which they can circulate among their peer group on social platforms. Once clicked, the URL takes buyers to the company’s web store. All the product offerings and promotions are linked to this URL and customers can choose, select and buy. We delivered directly to the customers and the salesforce got paid based on the sale. This way, our sales force got continuity of business without going out physically and the decisions made are based on insights generated from the digital platform and analysis,” Chhabra emphasizes.

“We integrated our stores and direct sellers with our web store, with the help of three solutions. The first one is TAB, a tech solution. Through this, if consumers wish to purchase our product that is not available in the store, they can click the TAB and go through our entire offering and order there itself. The second tool that we used is Social Selling. With this, our store manager shares a unique link with the consumers, which helps them to land on our web store and make their purchases. Another solution that we provided is Quick Sell, a solution for WhatsApp commerce. We have a huge consumer database and when stores were closed and consumers still wanted to purchase, our franchisees and direct sellers started sending links through Quick Sell to all their consumer bases. Through this link, consumers can see the entire catalog pricing and conclude the transaction on WhatsApp itself,” Chhabra further adds.

Tupperware became one of the first brands to strengthen its Direct Selling channel through Social Selling during the first wave of COVID.

Training the Franchisee Partners

The biggest worry that Tupperware’s franchisees had during the COVID was that if the customer knows there is a web store where they can buy anything at a click of a button, then the store might lose the customer permanently in the future.

“Due to these apprehensions, we launched training programs for our franchisees. We explained to them that the touch and feel the experience that is provided by a store would never come from a web store but during this situation, it is essential for your business continuity to launch via web store; you will get commission or profit via the web store,” Chhabra asserts.

Delivering Same Experience Across All Touchpoints

Tupperware works in various categories and there is a standardized fitting initiative across all channels whether it is stores, direct selling, marketplaces, or its website. The key products are highlighted at the same time at all the channels to give them visibility.

“90 percent of Tupperware products are available across the country but about 10 percent are based on the regional preferences. For instance, South works more on bulk storage so they need larger storage, similarly East needs more serving, so these 10 percent are unique by region based on consumption pattern,” Chhabra says.

Providing Perfect Consumer Experience

The COVID has fastened up the omnichannel entry for Tupperware. And if you really want to make your brand omnichannel, you have to have the same price and same experience.

“Going omnichannel helped in business continuity for our stores. I think that was the biggest benefit and utilization of omnichannel. Omnichannel made business continuity for our brand and made product availability convenient for our consumer,” Chhabra avers.

“Apart from this, we have a subscription model called Tupclub, a cardless loyalty program. Consumers can give their mobile numbers and email ids and they can register. On every purchase, the consumer gets 2 percent value influence points, which they can use whenever they feel like from any store,” Chhabra adds.

Tupperware also has a referral program, which is unique to the brand. It’s like if you recommend some customer and that customer comes to the store and purchases, you get 10 percent equivalent points of the purchase the customer made. That also gives a lot of footfall without advertising.

“We have an in-house content creation set up to ensure the same message goes across all platforms. The brand’s active social media presence and a niche network of influencers boost this support system. Further, exclusive retail stores have an active digital presence to ensure easy discoverability,” asserts Vivek Chaturvedi, Brand Marketing Head, Tupperware India.

“We have made digital an integral part of Tupperware's marketing strategy, over 80 percent of our marketing efforts are online. We utilize digital tools. We are also quite active on modern social selling platforms like WhatsApp. We have also partnered with Swiggy Genie, Dunzo for express delivery of products once ordered through our stores,” Chaturvedi adds.

The brand is also relying heavily on performance and influencer marketing.

Collaborating with Tech Partners

Tupperware being a global company uses a mix of local and global solutions to provide the best experience to its customers and salesforce. This includes leveraging tech solutions from giants like Oracle, Microsoft, IBM, etc. to local partners like ETP, BrownTape, Clarisity, etc. to completely outsource/ custom solutions. Its partners in its journey to becoming a true omnichannel company have matched the agility that is needed to meet its business needs.

For Warehousing & Inventory Management Tupperware uses Oracle ERP solutions coupled with 3rd party WMS system adopted by its 3PL partner Nippon. The complete process from procurement, manufacturing, QA, warehousing, and distribution is fully integrated with all its sales channels, be it direct selling, retail stores, e-commerce, e-tailing, B2B, or social selling. 

“Traditionally, Tupperware has been a direct selling company where its salesforce used to be the face to its consumers and this is one area where the company has heavily invested in terms of deploying its energies, budgets, and resources. We have partnered with ND Commerce to run our web store, using Magento leveraging the latest tech and UI / UX. SocialKonnekt support us as its partner to ensure that it keeps the website alive to not just provide information to the world-class products and life-changing opportunity but to also help customers join it or buy Tupperware,” says Amit Jain, IT Head, Tupperware India

Apart from this, Tupperware has about 90+ stores in the country now. It has leveraged digital and has equipped its store owners to sell digitally. The brand takes orders from customers, leveraging social media tools, and also does home delivery. Its Point of Sales system ETP not just tracks the billing and manage promotions but also helps it to run the loyalty, referral programs, which customers can use for their benefit. The brand’s Tab app in stores keeps the consumer engaged in finding the best products along with the features. A new addition is a QuickSell app which digitizes the catalog and helps them take online orders.

Data Analytics: The Game Changer

The biggest data source for Tupperware is POS as it captures complete detail, complete transactions, what a customer bought, did they buy on discount, and did they buy a premium product or a massive product. That’s one tool where the brand can bucket the customer into various buckets based on their actual purchase history.

“Secondly, we do have a loyalty program. It gives the duration for which the customer has been with us, frequency of purchase, what they purchased, and during what time they purchased. Then we have a feedback system on our tab. Anybody can give us feedback by scanning a QR code at the store,” Chhabra further explains.

Impact of Omnichannel Strategy

Initially, when the stores were closed, 100 percent of the business of Tupperware was coming from digital tools and omnichannel. Even when the stores were open, 50 percent of its business is coming from omnichannel because people were shying away from coming out of homes.

“This would not have happened if we didn’t go omnichannel and gave our customers a lot of options to purchase from rather than visiting the store. Our 50 percent of the total business is coming from the omnichannel,” asserts Chhabra.

The brand is also selling on the leading marketplaces, including Flipkart, Amazon, Paytm, Tata Cliq, and Snapdeal. It also sells through its web store and this web store is linked to its omnichannel initiatives. Tupperware’s online business contributes 12 percent of its total sales.

“The online purchasing is becoming strong, people habits are changing and once COVID settles down, the online purchase pattern is going to improve and grow further. I personally feel this 12 percent online share will go to 20 percent next year,” Chhabra shares.

“I think, going forward, omnichannel is the way ahead. If you selling only through your stores, then you are letting go of a part of customers that are tech-savvy and want to shop at their own convenience. So when you go omnichannel and give them the option to purchase your brand online, you are expanding your consumer base and building the brand value,” Chhabra adds.

Going ahead, the brand is planning to expand to 500 more stores in the next three years. It is also expanding with few more online players like Big Basket, Grofers, and similar other portals.

 

Next Story
Consumer Values and Buying Motivations Shifting Away from Price and Quality
Consumer Values and Buying Motivations Shifting Away from Price and Quality
 

A majority of consumers - across demographics and geographies - are reimagining their values and basing purchasing decisions on factors beyond price and quality.

According to a report, ‘Life Reimagined: Mapping the motivations that matter for today’s consumers’ by Accenture, “71 percent of those surveyed in India are coming out of the pandemic having reimagined their behaviors and values as consumers. They have reevaluated what is important to them in life and are increasingly focused on their personal purpose. This is having a direct impact on what, how, and why they buy. An additional 22 percent of consumers in India seem to have evolving values and purchasing mindsets while the unprecedented experience of the pandemic has had no impact on the buyer values of only 7 percent of respondents.”

“Driving innovation and growth in a post-pandemic economy will require the C-Suite to structure the entire organization around experience and ensure all aspects of operations including marketing, sales, innovation, R&D and customer service, understand new consumer motivations,” said be Vineet R. Ahuja, Managing Director and Lead - Consumer, Sales and Service, Accenture in India. “It is extremely important to become a listening organization and invest continuously in data and analytics to understand changing consumer preferences.”

The research highlights five distinct areas that are increasingly driving consumers’ purchasing decisions. The five factors extend beyond price and quality to include health and safety; service and personal care; ease and convenience; product origin; and trust and reputation. Perhaps even more notable is that these five factors, which have been historically important to the specific demographic groups of Gen Z and Millennials, have now hit a tipping point and are considered critical across the full breadth of consumer demographics.

Health and Safety are Paramount

Consumers are asking: Are you keeping my neighbors and me safe? What about your employees?

-    Health and safety ranked high in importance for reimagined consumers, with 79 percent in India believing it is crucial that companies prioritize health considerations for consumers and employees in all operations. 
-    78 percent of reimagined consumers in India believe that companies/ brands are just as responsible as governments for the health of societies.

Customer Service and Personal Care are Top of Mind

Consumers are asking: Do you remember me? Are you making my experience with your brand as personal as it can be? Are you there for me when I need you? 

-    More than half of reimagined consumers in India say they would switch brands if a brand doesn’t create clear and easy options for contacting customer service or provide clear responses about service levels related to a pandemic or economic/ societal issues.
-    Moreover, 68 percent of reimagined consumers in India say that many companies disappointed them by not providing enough support and understanding of their needs during challenging times.

Ease and Convenience must be Table Stakes

Consumers are asking: Are you meeting me where I am, in the digital world, the physical world, and through a blend of the two? And are you able to deliver what I need, when I need it, across all channels?

-    A substantial 59 percent of reimagined consumers in India would switch retailers if they did not ‘offer new fast and flexible delivery options of goods such as click-and-collect and curbside pickup.’
-    In the healthcare industry, reimagined consumers appreciate the convenience of virtual health appointments as well, with a significant number of consumers saying they would change providers if they did not offer online appointments instead of physical visits when appropriate.

Product Origin is Increasingly Important

Consumers are asking: What about the environment, and societal and corporate responsibility? Can you help me make sustainable choices? Can you help me support my local community?

-    Reimagined consumers want to know what goes into a product, how it’s produced, and how far it’s been transported. 81 percent in India say they are attracted to brands that source services and materials in highly ethical ways.
-    Additionally, 78 percent of reimagined consumers in India are attracted to doing business with brands that are environment-friendly.

Trust and Reputation Influence Buying Decisions

Consumers are asking: Can I trust you to do the right thing for me and not just for your business? Can I trust you to be who you say you are and stand for the things you say you stand for?

-        Across a wide swath of industries, a majority of reimagined consumers said they would switch providers if they did not ‘take visible actions for a positive social impact - e.g., related to inclusion and diversity, environmental protection, or protecting the health of the population.’
 

 

Next Story
Value E-Commerce in India to Grow to US$ 40 bn Market by 2030
Value E-Commerce in India to Grow to US$ 40 bn Market by 2030
 

As retail in India bounces back from Covid, the growing number of value-conscious online shoppers is reshaping India’s e-commerce landscape. This value segment is pegged to grow rapidly and emerge as a US$ 215 bn+ market by 2030. While only 4 percent of this demand is today served by online channels, this will rise to 19 percent by 2030 creating a US$ 40 billion market for value e-commerce in India.

As more Indian buyers embrace online shopping, the contours of India’s e-commerce are also changing to reflect the needs and aspirations of newer cohorts of Indian online buyers. The preferences and distinctive buying behavior of value-conscious online buyers have led to the emergence of value e-commerce, a differentiated business model, optimized to serve value-conscious buyers’ demand online. Currently valued at US$ 4 billion, value e-commerce is expected to grow rapidly to reach US$ 20 billion by 2026 and to US$ 40 billion by 2030, which is a 10X growth in 10 years.

The findings are part of a report published by global consulting firm Kearney published titled 'Value E-commerce: The Next Big Leap in India’s Retail Market' that outlines a US$ 40 billion market opportunity that is shaping up as India’s value-conscious buyers go online.

Manoj Muthu Kumar, Principal, Kearney, highlights, “Value-conscious consumers are shifting to online buying, driven by huge adoption in mobile internet – we estimate 350 million active internet users by 2026, of which nearly 90 million will be from rural India. These value-conscious consumers from Tier-II and rural areas will contribute to 38 percent of India’s value e-commerce market demand by 2026. As these value consumers increase online buying, they tend to replicate their offline buying behaviour. Hence, there is a tremendous opportunity for players to craft a sharp value proposition around desirable quality at affordable price.”

After a pandemic-caused disruption in 2020, India’s retail market has started to grow again. Over the next ten years, it will grow at 8.5 percent CAGR to reach nearly US$ 2 trillion by 2030. Amidst overall retail growth, the lifestyle retail consisting of discretionary categories like apparel, footwear, fashion accessories, cosmetics and home décor & furnishing will recover faster. It will grow at a faster clip of 9 percent CAGR to reach US$ 374 billion by 2030. Nearly 70 percent of this demand is driven by value-conscious consumers buying affordable, small ticket items. Known as value lifestyle retail, this is slated to be a US$ 215 billion market by 2030, driven by households earning less than Rs 10 lakh per annum, and predominantly from Tier-II cities.

While the value lifestyle market is growing fast, it is also rapidly going online. Today only 4 percent of this demand is served online through value e-commerce. However, this is expected to gain channel share rapidly and by 2030, 19 percent of the value lifestyle demand is expected to be served through value e-commerce. The number of online shoppers is expected to grow at 17 percent CAGR to nearly 350 million by 2030, the rate of growth being faster in Tier-II cities.

“Value Lifestyle retail is pegged to grow to US$ 215 billion markets driven by India-2 (mainly, mid to low income in Tier-II towns) – their online purchase behavior is set to increase the value e-commerce from a 4 to 40 billion market. Online players that craft a sharp value proposition around relevance, convenience, and trust, focused on needs of India-2 will emerge strong contenders to capture this 40 billion market,” says Karan Dhall, Partner, Kearney.

Several factors driving value e-commerce growth are:

•   The growth in the number of online users (1.1 billion users) & 350 million online buyers by 2026.

•   The emergence of India-2 (low-income groups, predominantly from Tier-II / rural cities) will drive most of this demand.

•    With the increase in overall household income and relatively stable levels of savings, this segment is expected to spend more on the value lifestyle segment. A lack of adequate brick-and-mortar options could lead them to rely more on e-commerce.

•   India-2 drives 70 percent of value lifestyle demand, but only 16 percent is online due to lack of trust, resistance to online and to so extent due to limited access to the Internet). Pandemic has whittled away at this resistance towards online buying.

•   Gen Z will be joining millennials as independent shoppers over the next five years; their preferences towards online buying are higher

 

 

Next Story
Indian E-tail Market to Touch $140 bn by FY26
Indian E-tail Market to Touch $140 bn by FY26
 

India’s e-retail market is expected to grow by 25-30 percent annually over the next five years to touch $120-$140 billion by FY26, surpassing modern trade. Much of this growth will be fuelled by small-town India which accounts for four of every five new shoppers.

In addition to small towns, women and older shoppers have gained prominence in the online shopper base over the last year, and this trend is expected to continue, reveals ‘How India Shops Online 2021’ report by Bain & Company in association with Flipkart.

So far, India’s retail market has rested largely with more unorganized smaller players, followed by large-format chains and only then e-commerce. Online sales have had a smaller share of the retail market as consumers are just warming to buying goods online. However, the pandemic has shifted the market and consumer behavior to favor online sales.

According to the report, India already has the third-largest online shopper base globally, with 140 million e-retail shoppers in 2020, only behind China (702 million) and the US (211 million). Even as the total retail market shrunk by 5 percent at the end of FY21 on the back of the Covid-induced operational restrictions, the online segment surged by a considerable 25 percent to reach $38 billion.

Fashion, electronics, general merchandise, and mobiles continue to be “key gateway categories” for new online shoppers. As brands set their eyes on the next batch of users, investments in voice and vernacular capabilities as well as incorporating the convenience of social commerce will be imperative. One in 10 users has tried voice search while one in three new users avail a vernacular platform interface.

“Growing popularity of online shopping has pushed established and digitally native brands to opt for a D2C (direct to consumer) channel via their websites. The growing relevance of the online channel has made it a must-play and must-win frontier for brands. Winning an outsized share of online consumer spending requires a series of investments. This includes investments in visibility, supply chain, merchandising, conversion, and key capabilities,” analysts said.
 

 

Next Story
Indian FMCG Industry Registers 36.9 pc Growth in April-June 2021
Indian FMCG Industry Registers 36.9 pc Growth in April-June 2021
 

Indian FMCG industry recorded a 36.9 percent value-based growth in April-June 2021, the quarter hit by the second wave of the pandemic, over the corresponding period a year ago.

However, when compared with this year’s January-March quarter, the industry saw a 2 percent drop, data analytics firm Nielsen has said.

E-commerce grew in the double-digit in the April-June quarter and traditional trade channels like grocers and chemists remained buoyant in the quarter, according to FMCG Snapshot released by NielsenIQ’s Retail Intelligence team.

Indian FMCG firms were largely immune to the second wave of the Covid pandemic, the report said.

In the comparative April-June quarter last year, the market faced a nationwide lockdown imposed by the government to tackle the spread of Covid-19, and then subsequent easing of restrictions happened in phases.

According to the report, during April-June of 2021, “Rural markets continued growth buoyancy with strong tailwinds on the back of good monsoon and affirmative actions from the government. The metropolitan (top 52) cities also saw a significantly lesser impact in wave two, as compared to what was witnessed in the COVID-19 wave last year.”

“Traditional trade channels like grocers and chemists remained buoyant in the quarter; metros, in particular, had a strong ally in e-commerce to sail through the troubled waters,” it added.

Moreover, prioritization of the assortment of brands and SKU range was a clear trend that emerged in the quarter.

“We see that trend intensify in AMJ’21 (April-June),” it said.

Moreover, during the quarter as the supply chain was facing constraints, retailers continue to respond with evolved and optimized stocking behavior.

“Two trends were observed in terms of the retail stocking – one, expansion of assortment width (number of categories per outlet) continues. Secondly, assortment depth (number of variants and associated quantities in stock) is being optimized,” it said.

This signifies that retail shelf space is getting more competitive and the call for action for manufacturers is to identify the right variants, by markets, and finding optimum frequency for servicing retail outlets.

Sourcing the Consumer Confidence Survey by the RBI, the report said due to the strained macroeconomic indicators, the consumer confidence indicated by the future spending index hit an all-time low — close to May’20 of last year when wave one was at its peak.

“However, the growth momentum in India’s FMCG industry that was building up in the preceding quarters did not see any major setback with the sudden onset of wave two. When indexed to pre-Covid times (Q1’20) the industry largely continued to remain at similar levels,” it said.
 

 

Next Story
Indian Offline Smartphone MBOs Dominate Smartphone Buying Market?
Indian Offline Smartphone MBOs Dominate Smartphone Buying Market?
 

Ensuing lockdown and tough competition from online sales during the pandemic had no damaging impact on the Indian offline smartphone MBOs. 

Acting as influencers and guiding smartphone buying sentiments of consumers, offline retail emerged as the biggest sales channel in India contributing more than half of all smartphone sales despite the unprecedented pandemic triggered online boom, reveals MBO Smartphone India Overview Report 2021by PredictiVu.

Indian Offline Smartphone MBOs Dominate Smartphone Buying Market Indian Offline Smartphone MBOs Dominate Smartphone Buying Market 

The report says that strong consumer trust and constructive steps taken by the 3 key pillars of the industry – Retailers, Smartphone Brands, and the Government - will continue to fortify the intrinsic strength of MBOs in the upcoming quarters. Regardless of the pandemic crisis, lockdowns, and increasing competition from e-commerce giants, MBOs including the small and regional players, will continue to flourish. 

Indian Offline Smartphone MBOs Dominate Smartphone Buying Market 


 
Introducing the report, Kunal Sarkar, Vice President, PredictiVu, said, “Offline retail MBOs will significantly drive smartphone growth prospect in the coming quarters. It’s interesting to note under PredictiVu’s analysis that within the top 50 Indian cities that accounted for 60 percent of smartphone sales, MBOs claimed 45 percent of the total sales. The pandemic-led challenges have not mellowed down MBOs prominence in the consumer mind but instead have driven growth due to the unique nature of benefits they have offered. This influencer community is a key component in the marketing strategy and brand war of top smartphone brands who plan to expand brand reach and penetrate deeper into cities and towns now.” 

“Am happy unveiling PredictiVu’s MBO Smartphone India Overview Report: Apr-June 2021 which will aid smartphone brand marketers to set appropriate marketing goals in a post-pandemic recovery phase,” he added. 

Rajesh Kurup, Strategic Advisory Board, PredictiVu said, “Deriving near real-time analytics for a dynamic market like the offline smartphone MBO segment that holds immense potential for a brand’s success needed firstly holistic understanding and secondly, appropriate integration of diverse inputs right from consumers, ad-spends, retail and social listening.  This report prepared with the insight from PredictiVu’s dashboard, that excellently embodies all of the above, will definitely allow smartphone brand marketers to monitor and manage marketing interventions better both at an enterprise and specific segment level.” 
 

 

Next Story
Smartphone Market in India to Bounce Back in Q3
Smartphone Market in India to Bounce Back in Q3
 

After facing an 11 percent decline in the second quarter (Q2), the Indian smartphone market is expected to stay resilient and bounce back in the third quarter (Q3) and beyond.

While the overall handset market dropped by 31 percent (on-quarter), there was a significant (on-year) growth with shipments up by 72 percent in the April-June quarter, reveals a report by CMR.

"Regional lockdowns, during April and May, in response to the second pandemic wave contributed to the decline. However, shipments bounced back in June. Xiaomi replaced Samsung at the top in terms of overall shipments for the second time in the last three years," said Shipra Sinha, Analyst-Industry Intelligence Group, CMR.

"5G smartphone shipments recorded significant growth, primarily in the value for money smartphone segment (Rs 7,000-Rs 25,000)," she added.

For the entire year, CMR estimates point to a potential 5-8 percent (YoY) growth in smartphone shipments.

"We remain cautiously optimistic about the smartphone market in H2 2021. We expect smartphone shipments to be robust, driven by the early festive sales, attractive offers, and continued consumer demand for smartphones as a major life enabler amidst the pandemic," said Anand Priya Singh, Analyst-Industry Intelligence Group, CMR.

"The fragile supply chain and a potential third Covid wave are variables at play that may hurt the market recovery."

According to the CMR report, total smartphone shipments in India grew 85 percent (YoY) in the June quarter.

Driven by the strong consumer demand, 4G smartphones accounted for 87 percent market share. However, on a QoQ basis, the smartphone market dropped down by 11 percent.

Xiaomi (29 percent), Samsung (17 percent), and Vivo (15 percent) captured the top three spots in the smartphone leaderboard in Q2.

realme and OPPO shipments grew by 142 percent and 120 percent, respectively.

realme led the 5G smartphone segment with a 24 percent market share followed by OnePlus at 21 percent.

The 5G smartphone shipments accounted for 13 percent of the overall smartphone shipments in Q2 2021, the report said.
 

 

Next Story
Digital Transactions Grow 80 pc in Last 250 Days
Digital Transactions Grow 80 pc in Last 250 Days
 

Digital transactions have grown by 80 percent in the last 250 days in India and the home services industry (such as carpentry, plumbing, and more) has started to embrace digital payments, making transactions grow by a mighty 138 percent.

Businesses, especially from Tier II and III cities, have been a major boost for digital payments exhibiting a growth of 40 percent from the first 250 days (March 25, 2020, to November 29, 2020) and the next 250 days (November 30, 2020, to August 6, 2021), according to the report by Razorpay.

"What makes me really happy is the fact that not a single sector showed negative growth in the last 250 days. This was possible because businesses have recognized the crucial importance of using new payment technologies to support and improve their business growth," said Harshil Mathur, CEO, and Co-Founder of Razorpay.

While every sector and payment mode took a hit in the start and online payments declined by 30 percent in early 2020, the ecosystem of small businesses, fintech companies, and banks came together and today digital transactions have grown significantly.

Demand for payment options like Buy Now Pay Later (BNPL) has been mounting and displayed a towering growth of 220 percent.

"The digital transactions by freelancers and homepreneurs saw a growth of 69 percent during the last 250 days, showing how this time has made people give their interests a successful entrepreneurial twist," the report showed.

Direct-to-Consumer (D2C) businesses witnessed a growth of 87 percent during the last 250 days as compared to the first 250 days of the national lockdown.
 

 

Next Story
Millennial Spends Lead D2C Cross-Border E-Commerce Growth
Millennial Spends Lead D2C Cross-Border E-Commerce Growth
 

The rise in international direct-to-consumer (D2C) purchases in the last six months has been led by millennial demographics, with reduced access to stores during the pandemic prompting over half (52 percent) of 25-34-year-olds to buy direct from international online brands.

52 percent were motivated to buy online during the pandemic, rising to 58 percent on average for 25- 44-year-olds, as shuttered stores or reduced access to physical shops prompted them to digitally purchase items they would normally have validated and bought in-store. This was most keenly felt in South Africa and India (both 63 percent), followed by the UAE (56 percent), China (53 percent), and the US (52 percent), the latest data from eShopWorld (ESW) reveals.

And reduced access to stores also prompted a boost in cross-border commerce; almost half (46 percent) of global shoppers said this had prompted them to buy direct from an online international brand, rising to 52 percent of global shoppers aged 25- 34. Indian and Chinese (both 61 percent), Mexican (59 percent) and Russian (50 percent) consumers are the most likely to have made international D2C purchases direct from an international brand.

As a result, traditionally ‘high contact’ items that would have previously been validated – either by trying on or testing – in-store proved the most popular type of cross-border purchase over the past six months.  A quarter (25 percent) of global shoppers bought clothing online outside of their domestic market, while footwear (19 percent), luxury goods (18 percent), and health & beauty and skincare (17 percent) also topped the list of the most popular international e-commerce purchases. Once again, millennials and Gen Z shoppers led the way, making cross-border purchases at three times the rate of baby boomers (those aged 57–75 years old).

Of the top five most popular cross-border e-commerce categories, luxury grew the fastest over the past 6 months, up 6 percent compared to the end of 2020, followed by skincare and fragrance (+4 percent).

This boost to cross-border luxury purchases, driven mostly by younger demographics of shoppers, may also have been prompted by new international buying behaviors caused by the pandemic, ESW’s data shows.

56 percent of global shoppers admitted to spending more online as a coping mechanism, either treating themselves or rewarding themselves for getting through lockdowns or alleviating the emotional stress of the pandemic.  Meanwhile, over a quarter (28 percent) said they’d bought more online ‘gifts’ or ‘treats’ for friends and family during the pandemic to make up for not being able to see them in person.

As many countries begin to ease Covid-19 restrictions, despite 57 percent of the global shoppers surveyed saying the pandemic had opened their eyes to the convenience and choice on offer online – increasing to 63 percent among millennials - 71 percent said that post-pandemic they would continue to purchase via a mix of digital and physical channels, highlighting the importance of omnichannel capabilities in retailers’ international commerce strategies.

Patrick Bousquet-Chavanne, President and CEO, Americas at ESW, commented, “Brands that understand the evolution of traditional retailing see the importance of blending their direct international e-commerce trading with their existing omnichannel structure. Stores of the future will be experiential meccas, where brands will espouse and reinforce the brand personas and experiences they are building on social media. But the transactional engine for future growth has undoubtedly accelerated into digital channels, and it seems unlikely that trend will ever reverse.”

Martim Avillez Oliveira, Chief Commercial Officer, EMEA and APAC at ESW, added, “To succeed retailers must double down on their efforts to create a holistic, deep level of understanding of international markets – across all of their sales channels and customer touchpoints – so that they can offer localized, customer-centric and cost-competitive shopping experiences.  Only then can they truly open up the cross-border commerce opportunity, by maintaining both the loyalty of existing customers while attracting new ones.”

 

 

Next Story
Parle Emerges as Preferred FMCG brand in India
Parle Emerges as Preferred FMCG brand in India
 

Homegrown food company Parle Products has emerged as the most-chosen brand among the fast-moving consumer goods (FMCG) companies in the country.

Parle Products leads this year's rankings, as the most-chosen FMCG brands, based on Consumer Reach Points (CRPs), Kantar India said in a statement.

CRPs consider the actual purchase made by consumers and the frequency at which these purchases are made in a calendar year.

It is followed by Amul, Britannia, Clinic Plus, and Tata Consumer Products.

"With a CRP score of 5,715 (million), Parle holds the top spot for a record 9th year in a row," it said.

According to the report, the COVID-19 pandemic impacted the frequency of purchase as average trips made to purchase groceries reduced but more purchases per trip were recorded in 2020.

"Purchase frequency reduced by one percent but spend per trip grew by five percent. This resulted in a lower number of brands (50 percent) growing in terms of CRP as compared to 2019 (72 percent)," it added.

In a year dominated by health and hygiene, Dettol unsurprisingly grew a whopping 48 percent in CRP's and entered the top-25 brand list.

"Dettol was followed by Lifebuoy with a growth of 25 percent CRPs, Vim at 21 percent CRPs (1,454 million), Dabur at 14 percent CRPs (1,458 million), and Britannia at 11 percent CRPs (4,694 million)," it added.

Overall CRPs have increased from 86 billion to 89 billion. However, the rate of growth has come down to 4 percent from 18 percent in 2019.

K Ramakrishnan, Managing Director-South Asia (World Panel Division) at Kantar, said: "The biggest gainers in brand footprint 2020 were expectedly the hygiene brands. That said, the traditional leaders also held their positions by ensuring penetration growths even during the pandemic."
 

 

Next Story
FMCG Revenue Growth Seen Doubling to 10-12 pc?this Fiscal
FMCG Revenue Growth Seen Doubling to 10-12 pc?this Fiscal
 

Revenue growth of the fast-moving consumer goods (FMCG) sector will double from 5-6 percent reported for last fiscal to 10-12 percent in 2021-22. 

Accordingly, the trend is expected to be driven by price hikes effected across product categories to offset the impact of the raw material price increase and a raft of other favorable factors, said Crisil Ratings.

Besides, the agency said that operating margin, on the other hand, will be restored to the normal level of 19-20 percent with a moderation of 80-100 basis points (bps) this fiscal due to an increase in advertising expense and rise in raw material prices.

Interestingly, it cited that operating margin had improved by 100 bps last fiscal despite lower revenue growth, due to reduction in advertising and promotional expenses.

Furthermore, the agency said that the continuation of strong cash generation and healthy balance sheets, as well as sizeable cash surpluses, will ensure the credit outlook remains ‘stable'.

"Price hikes of 4-5 percent effected by the players across product categories over the past six months to pass on inflation in raw materials, together with volume growth of 5-6 percent and a revival in demand for discretionary products, will support revenue growth of 10-12 percent this fiscal," said Anuj Sethi, Senior Director, CRISIL Ratings.

"Widespread Covid-19 afflictions in the hinterland during the second wave will result in a moderation in rural growth this fiscal. However, recovery in urban demand for FMCG products will offset this and outpace rural revenue growth."

 

Next Story
Indian Consumers Showing Signs of Reduced Anxiety?
Indian Consumers Showing Signs of Reduced Anxiety?
 

There has been a 6 percent decline in the overall anxiety levels to 39 percent, as the number of new COVID-19 cases across the country continues to decrease.

Indian consumers have shown an intent to increase discretionary spending in anticipation of upcoming festivities like Raksha Bandhan, Janmashtami, and Ganesh Chaturthi. Across age groups, there continues to be a preference to spend more on convenience, highlights Deloitte Touche Tohmatsu India LLP (DTTILLP)

The following facts indicate the decrease in anxiety:
-    87 percent of consumers are willing to spend more as they prioritize convenience over price
-    61 percent of consumers have indicated that they now feel safe visiting the stores to shop
-    51 percent have shown willingness to attend in-person events

However, the concerns about physical well-being prevail: 
-    79 percent of Indian consumers are concerned about their physical well-being
-    85 percent are concerned about the health of their family

Deloitte’s Global State of Consumer Tracker indicates that young adults are saving more (47 percent) as compared with people above 55 years of age (43 percent). While corporate India is still evaluating a return to work policy, work-from-home has helped staff save significantly on transport and rent.

Porus Doctor, Partner, and Consumer Industry leader, DTTILLP said, “Our latest survey insights indicate that the Indian consumer is showing signs of reduced anxiety and is open to looking at increasing discretionary spends.  Only 20 percent of Indian consumers are concerned about returning to their workplace, but 65 percent are concerned about losing their jobs. Travel sentiments are showing positive trends; those consumers in the age group above 35 have shown interest to travel for leisure in the next three months and 58 percent of consumers have indicated they are comfortable staying at a hotel.”

Other trends:

1.    Declining use of public transport and spending cautiously on the next vehicle is a constant trend
o    79 percent of Indian consumers intend to keep their current vehicles for a longer time
o    76 percent respondents, compared with 79 percent in the previous wave, are concerned about using public transport

2.    55+ age group shows confidence in stepping out
o    People aged 55+ are feeling safer while venturing out when compared with young adults in the age group of 18-35 
-    78 percent of people aged above 55 feel safe going to a store
-    70 percent feel safe going to a restaurant
-    69 percent feel safe staying in a hotel 
-    71 percent feel safe taking a flight and only 9 percent are concerned about returning to their workplace
 

 

Next Story
Indian Retail: The fastest growing consumer base!
Indian Retail: The fastest growing consumer base!
 
India Retail story is a promising one and has gained momentum riding on increased disposable income and fueling growth in demand even from Bottom of Pyramid (BoP) consumers. As per RAI & EY Study “Globally, India is among the top 10 retail markets.
 
In 2013, the Indian retail sector was estimated at $520 billion, by 2018, the Indian retail sector is likely to grow at a CAGR of 13 per cent to reach a size of $950 billion. ”The report further adds “Organized retail penetration is expected to increase from 7.5% in 2013 to 10 per cent in 2018 at a robust CAGR of 19-20 per cent during the same period.
 
This will be driven by a combination of demand, supply and regulatory factors, which are expected to be the growth engines of the Indian consumer and retail market." It is interesting to note that India is also one of the most favored retail destinations for global retailers.
 
An analysis by CBRE, from its 2013 edition of “How global is the business of retail?” on leading retailers that entered various key markets across leading geographies around the world revealed that New Delhi was among the top 20 cities that witnessed the highest level of retailer activity.
 
Getting Ready for the Big Leap!
 
Indian Retail is steadily growing and with the largest population of youth in the world and the rise in the upwardly mobile consumers, it is poised for a big leap. Sample this: in 2012 over 160 million people in India, that is greater than the entire population of Russia, belong to the middle income group who are one of the key contributors to retail market.
 
This number is expected to increase to 267 million by next year, if National Council of Applied Economic Research (NCAER) is to be believed.
 
Indian households earning more than Rs 250,000 ($5,579) per annum are expected to grow by about 70 per cent from 2010 to 2015, while the number of households earning more than Rs 1,250,000 ($27,896) per annum are expected to double during the same period, the Council further claims. If these numbers are any indication, Indian retail story is all but begun!
 
As we see rise in disposable income, we also see rise of new territories for Retail. Growth of retail in tier II and III cities in India has been phenomenal. The purchasing power has been more democratized and consumers with high disposable income in non –metro cities crave for big brands. They not only show more inclination to shop for aspirations but demand to be treated differently from the masses.
 
With rapid market expansion and an eager consumer base hungry for more, India is a Retailer’s dream. However, no opportunity comes without its challenges.
 
Huge Market: Higher Diversity
 
Indian market is as diverse as its people and customs. The retail sector is seeing growth in both online and brick and mortar formats. While the consumer base for retail in India is expanding and share of organized retail is on the rise, the market is getting highly competitive and margins are under pressure.
 
With increased penetration of internet and mobile technology, consumers are more informed and are able to exercise the power of choice. The average consumer today has come a long way from limiting his expenses to bare essentials and is now splurging on aspirations.
 
This change in consumer behavior has brought in new unexplored opportunities for retailers promising high returns. However, with the consumer being spoilt for choice, the game belongs to one who is able to connect and engage the consumer for long, building loyalty and gaining referral.
 
Big Data for Big Gains, Sure.But, How?
 
Staying engaged with the customers is one of the biggest challenges that Retailers in India are faced with, along with the pressure to improve bottom-line. Millions of customers leave behind peta bytes of data at every touch point every minute. The challenge lies in converting this treasure trove into real profit.
 
As per a recent survey by Qilck in India, the top three reasons for adopting Big Data Technologies are:
 
1) To improve productivity across their organizations
 
2) To improve understanding of customers, their needs, and purchase patterns
 
3) To increase business revenues and profitability
 
4) It is not that Indian Retailer is new to the advantage of Big Data and Analytics (BDA), as per NASSCOM Indian Big Data market is growing at 83% annually and is expected to reach USD 1 Billion by 2015, with Retail playing a major consumer. However the ability to adopt BDA technologies by Indian retailers is challenged on many fronts.  
 
In terms of technology, the two major challenges are:
 
Accessing and analyzing large volumes of data
 
Most of the Indian retail is focused on improving bottomline with hard pressure on margins. All the effort is largely focused on investments that improve supply and sales. The IT infrastructure has not got adequate attention and the data is either not captured or captured haphazardly in various legacy systems.
 
Harmonising this disparate set of data with stored in multiple and diverse systems pose one of the biggest challenges.  Make sense of this data is another story altogether. It is an uphill task for most retailers to set up systems to access, analyze and report structured outcomes for business transformation.
 
Managing the growing variety of data
 
As per the study on Big Data and Enterprise Mobility in India, by Ernst & Young, “Over the next decade, digital information in India will grow from 40,000 petabytes of data to 2.3 million petabytes, twice as fast as the worldwide rate.
 
The diversity of data sources is also rapidly changing with data from social media, proliferation of video surveillance, audio/images and machine generated presents a technological challenge in capturing, storing and analyzing information in order to discover meaningful relationships between seemingly unrelated, large and complex data sources.” Obviously managing such a vast variety of data and making sense of it is a seemingly huge challenge to an average retailer.
 
At the enterprise level, the Retail business, no doubt is pressed to improve profitability and improve its customer base. As perThe Pulse of Indian Retail study by RAI, “There is a growing emphasis within retail organizations to assess the impact of major business decisions on cost and revenue levers, given that top agenda of retailers is to improve profitability.”
 
The Hadoop Advantage that No Retailer Can Afford to Miss!
 
Hadoop, the most agile and easy to adopt Big Data Technology is what the doctors’ prescribe for the average Indian retailer. With Hadoop the Indian retailer can hit the ground running, gain all the advantages of BDA without incurring huge investments and time. 
 
Some of the key advantages of Apache Hadoop are:
 
1) It provides easy and faster big data adoption and gets you up and running in weeks
 
2) Provides faster analysis and access to actionable insights
 
3) It is economic and scalable and is built to handle data complexity
 
4) It is a proven and tested across the globe with unmatched advantages bringing profitable business transformation
 
5) With Apache Hadoop advantage the Indian Retailer can join the league of the world’s most advanced retailers and derive benefits across all critical business aspects, such as Supply Chain, Merchandise Planning, Customer 
Engagement and Personalization as well as Detecting and Plugging fraud.
 
The article is written by Shankar Murukutla, Sales Director South Asia & India, MapR Technologies
Disclaimer: The opinions expressed in this article are the personal opinions of the author. IndianRetailer is not responsible for the accuracy, completeness, suitability, or validity of any information on this article. All information is provided on an as-is basis.
 
 

Next Story
Also Worth Reading