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Amazon vs FlipKart vs Snapdeal, their DNA and where is this eCommerce showdown headed for?

We are all familiar with Microsoft Excel as “the spreadsheet program”. However, do you know that it wasn’t Gates or his company that invented the spreadsheet programs? The first such tool (& a revolutionary one at that) was VisiCalc. VisiCalc gathered all the well-deserved hype for some years but as the spreadsheets and their utility was getting established, it was overtaken by Lotus 123. Lotus did enjoyed a bit more extended run at the top, it created thousands of spreadsheet users and perhaps millions of businesses problems were solved using it. Still, did it receive the real benefit of creating this whole new business category? NO, it was Microsoft and its more user friendly tool (although heavily deriving the main functionalities from VisiCalc & Lotus 123) that eventually established itself as the market leader. Microsoft has sold millions of its copies in last 2 & a half decades and continues to dominate the spreadsheet business.

This story clearly establishes that category inventor, category creator and category dominator could very well be three different companies.

Closer home, in online classified field, Sulekha Classified was the buzzing name some 8 years back. But then, more nimble, cash rich, focused and technically superior players came and they just pushed the early mover/incumbent out of picture.

Here also, Sulekha Classified created awareness of the possibility of such transactions for more than 5 years, and just when the business picked up and some monetization seemed possible, it had to relinquish the space to OLX & Quikrs’ of the world.

Ecommerce industry in India

A Quiz on eCommerce industry in India. What was the scene like 20 years back? How did Flipkart & Snapdeal start? What sells the most and who buys it all?

Multichannel retailing: the missing piece?

A retail channel represent a section of the value chain that connects manufacturers with the customers of its products and services. Physical store are the most common channel that we come across, but in recent years the non-store channels have also grown in prominence. Examples of such non-store channels are the Internet, direct selling, television home shopping, and a host of other smaller channels.

We usually understand the physical store channel well, but it is important to point out that in a country like India, it is important to further segment the store channel to see opportunities & put the right focus. For example the Army Canteen is a peculiar subset of such stores and should ideally be treated separately for any company that sells products in these stores. Indian Railways (IRCTC) also represents a unique channel in India. State-run PDS related channels in certain states (like Maveli Stores in Kerala) can also be considered for specific focus by FMCG (CPG) companies.

Big Bazaar Profit Club: Is it worth?

Now Big Bazaar (or let’s say future group) is known to be a pioneer in the field of retail innovation in India. There are several examples of innovations that are so specific to India that you can just marvel at the wisdom of the though leaders behind these moves. Noticeable are the very successful “The Great Exchange Offer”, the 5 day republic day sale, or the sabse sasta din concept (Wednesdays), the last one is not so ingenious, but anyways..

Now we need to add one more nugget in this list, Big Bazaar’s Profit Club.

The scheme’s punch line is that you pay 10000 upfront & then shop for 12000 in any one of the Big Bazaar stores (& certain affiliate stores of the group like Food Bazaar, EZone etc). Cool! isn’t it?

The great Indian coffee story and what's in it for Starbucks?

Coffee in India is a relatively recent but distinctly visible phenomenon. The same has got a major boost with the entry of the biggest global coffee chain in India in 2012. After years of deliberation & policy related road-blocks, world’s biggest coffee retailer, the Starbucks has finally arrived.

To call it the big fish of this business will be an understatement of sorts, to truly understand its size, we need to see that their turnover of US ~$ 13bn turnover is more than 50 times of the turnover of all the current Indian coffee chains combined.

Starbucks vs Indian coffee chainsStarbucks vs Indian coffee chains













Still, if the entry is being called significant even for Starbucks, than we must wonder about the future of Indian coffee market. What will be the scenario after say 10 years? 20 years? Will the Indian business contribute >10% of Starbucks annual revenue? We’ll try to answer the same in this post.

The Great Exchange offer of Big Bazaar

Big Bazaar is currently running their much awaited ‘The Great Exchange Offer’. Every year since 2009, they have run this offer during this time of Feb-March. In essence they offer tempting rates for your junk (Old news papers for 30 Rs/Kg for example) that are too good to resist, you get exchange coupons for your old items and the same can be redeemed against the new purchases.

Following are the rates being promised for some of the items:

Retail quiz listing

Test your retail quotient with the following of our quizzes:

FDI Policy in India: Are you well aware of the latest FDI norms? local sourcing, maximum cap, minimum investment requirement, biggest & not so big contributing segments to organized retailing.. check that all!

FMCG retailing:  Unilever, ITC, P&G like companies, their brands & brand ambadassors. Check your understanding of the Indian FMCG landscape.

Retail CRM: Test your CRM concepts

Economic Survey of India 2012-13: Retail sector

These are the snippets from the Economic Survey 2012-13, that talked about the Indian retail environment:

“The government has also taken a number of steps to revive investment and growth. These comprise …. Permitting FDI in a number of areas including multibrand retail, power exchanges, and civil aviation; increasing investment in irrigation, storage and cold storage networks; and undertaking programmes to improve the production of protein foods”

“Another critical issue is supply-chain management in agricultural marketing in India. It is necessary to evolve mechanisms for linking wholesale processing, logistics, and retailing with farm-production activities so as to generate enhanced efficiency, better farm prices, etc. Recently the government allowed FDI in retail, which can pave the way for investment in new technology and marketing of agricultural produce in India.”

“Another critical issue is supply chain management in agricultural marketing in India. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation. Many agricultural crops are perishable in nature and post-harvest handling issues and marketing problems affect the farm incomes. It is necessary that we evolve mechanisms for linking wholesale processing, logistics and retailing with farm-production activities so as to generate enhanced efficiency, better farm prices, etc. The private sector should be allowed to operate in developing these market linkages for which suitable reforms will help. Recently the government allowed foreign direct investment (FDI) in retail, which has been supported by many farmer organizations as well, and it can pave the way for investment in new technology and marketing of agricultural produce in India.”“An efficient supply chain that firmly establishes the linkage between retail demand and the farmer will be important.”

AT Kearney's Global Retail Development Index 2012

As per the current AT Kearney Global Retail Development Index (GRDI 2012) rating, India remains an attractive market for (modern) retail business for global retailers.

The rankings are dominated by Latin American countries like Brazil(has been on top of this list for 2 consecutive years now), Chile(2nd), Urugway(4th) & Peru(10th). This can be largely attributed to better political stability and a steady economic growth the region is experiencing.


GRDI ranking 2012GRDI ranking 2012

Impact of Union Budget on the Indian Retail sector

After the big bang reform of allowing up to 51% FDI in multi-brand retail, a lot of action was expected in the retail sector. Surprisingly, we have seen just interest & no concrete action on part of major global retailers; Wal-Mart & TESCOs of the world are in no hurry to enter in to the bylanes of Indian marketplace.

The economy is sluggish with projections of GDP growth slowing down to ~5% levels. In such scenario, sentiment in the retail sector is bound to be low and a lot of expectations were built around the budget.

In this backdrop let us analyze the union budget 2013-14 and what does it mean for the Indian retail sector:

The Positives first:

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