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September 16, 2015
Varun Jain, The Economic Times
New Delhi, 16 September 2015
Flipkart’s
‘Big Billion Days’ sale has yet again run into glitches this year,
and this time the ecommerce giant is tendering apologies to its
sellers in Agra whose products have been removed from the site
for almost two days now due to delivery issues.
Various vendors in the city ET spoke to complained that Flipkart
has blocked their products to be sold on its ecommerce site amid
a rush of consumers. They said the listings of their products
were not visible on the company’s website since the second day
of the mega sale event after they saw major traction on Tuesday,
the first day of sale.
"We were waiting for the Big Billion Days sale and have
kept ourselves adequately stocked to meet the consumer demands.
We got six times more order than what we usually get, on the first
day of the event. But on the second day we were surprised to see
our orders fell to zero. This is when we realised that something
is wrong," said an Agra-based vendor who sells artificial
jewellery on Flipkart.
One footwear vendor who received around 120 orders on day one said he has not been able to dispatch the whole order even on the third day because Flipkart’s logistics partner is only collecting partial orders, saying they have been asked only to collect certain orders owing to huge demand.
Experts said this reveals gaps in Flipkart’s logistics as the company has failed to cope with the huge amount of business the Big Billion Days is generating this year as well. The mega sale event had run into glitches last year when thousands of customers complained about products being sold out on the website even before they can hit buy button. There were complains of company intentionally increasing the prices of some products to make the discount look even bigger and the website also crashed several time. Eventually Flipkart’s co-founders Sachin Bansal and Binny Bansal had to apologize to the customers after the event.
Manish Maheshwari, vice president and head of sellers’ ecosystem at Flipkart, said consumer demand is around 40% more than the 3-4 times increase the company had expected "and there are implications of that".
"Being a marketplace, everything that is ordered by the consumer has to be supplied by the seller. And we have limited capacity in terms of how many people we have and how many collections we can do in a day," said Maheshwari. "So, it might be true that for a day we might have switched off the pick up from the Agra hub and therefore sellers in this region would have been impacted," he said.
"But they might have received enough demand on day one. This is a temporary block and we switch them back again once the backlog is cleared up," Maheshwari added.
According to the Agra vendors, they got an automated message from Flipkart on their seller account: "To ensure customers receive their orders on time and have a great experience buying your products, we have to temporarily restrict the order flow for sellers in your area. We will be reverting to normal order flow by tomorrow morning or as soon as the situation eases up. We apologise for the inconvenience and thank you for the continued support."
However, many vendors in Agra region said the services were not restored as of Thursday afternoon.
Some of the vendors said their listings were showing on Flipkart site/app, but consumers could not place order because either ‘Add to Cart’ option was disabled or they would be repeatedly greeted by ‘The item is currently unavailable in your pin-code’.
Devangshu Dutta, chief executive of retail consultancy Third Eyesight, said the peak capacity that Flipkart planned for Agra region might have reached and "now they were not able to pick any more orders to deliver".
"There is a very clear indication of the infrastructure gap," Dutta said. "If you are looking at rapid ramp up of business it cannot happen without the requisite infrastructure because all such infrastructure capacity planning has to be done on the basis of peak demand and if every time you are building up demand only to find it blocked by lack of capacity then obviously it is a problem," he said.
Another industry expert who did not wish to be named said it is a clear disappointment for vendors who are losing out on business, which they know is theirs as consumer orders were coming on day one. "There must be an investment made from the vendors’ side for one of the biggest sales in the ecommerce industry. That investment has essentially gone down the drain," the person said.
Maheshwari of Flipkart said that while it needs to add more capacities to meet the ever-growing demand, it is already following a scientific process to keep all stakeholders happy.
He said that when certain hubs starts getting more order than expected, the company switches off the collection hub of that particular region and the demand then gets diverted to the region where it is low. During this period, all the vendors linked to that collection centre will not be able to generate new orders. The company switches on the hub again once all the backlog has been cleared, Maheshwari said.
(Published in The Economic Times.)
admin
September 16, 2015
Ashish K Tiwari, DNA (Daily News & Analysis)
Mumbai, 16 September 2015
"Quickest
delivery! Ordered an AC frm @snapdeal #electronicsmonday ystrdy
& zoom!its thr4 me today", reads a tweet by Sonali Jagwani,
a Delhi-based HR professional, summing up the mood at the ongoing
festive mega sale of e-commerce firms.
As the sale by Amazon, Flipkart and Snapdeal entered fourth day
today, the online world was mostly praises.
@Flipkart MY #Wished_FullFilled after only 1 day wait, Flipkart
amazing" Thanks #BigBillionDays more to come, a tweet by
one of the shoppers was shared by Flipkart co-founder Binny Bansal.
This is in contrast with the last year, when e-marketplaces had
to face barrage of criticism on social media from consumers over
delayed, wrong deliveries, server crashes and pricing issues.
E-marketplace players too seem to happy with claims of millions of products sold, particularly in mobiles and consumer consumer electronics.
While Flipkart claimed to have sold half a-million mobile handsets in 10 hours, Snapdeal in its Diwali Dil Ki Deal campaign shipped five million orders so far. Amazon’s The Great Indian Festive Sale claimed categories like appliances, television, health and personal care and movies witnessed sales growth in the multiples of 3-7 times times over its previous biggest sale (The Great Indian Freedom Sale).
Calling it a blockbuster beginning for their mobile category sale, Mukesh Bansal, head of commerce platform, Flilpkart, said, "The Indian mobile revolution has truly come of age and the half a million mobile handsets sale record is truly a testament to the growing demand for smartphones in India."
P Sanjeev, director sales – Huawei & Honor Consumer products, tweeted that 1,000 units of their latest mobile handset Honor7 got sold out in less than an hour on Flipkart.
Flipkart had claimed sale of 1 million products in the first 10 hours of the sale with 25 items sold every second.
Flipkart, which is conducting the sale only on its mobile-app, said over 1.6 million mobile apps were downloaded two days prior to the sale.
SoftBank-backed Snapdeal, which saw five million app downloads on the Day One of sale, said it has set new benchmarks this time around: About 98.9% orders were dispatched within 24 hours of order placement, achieving 98.6% on-time delivery.
Jayant Sood, chief customer experience officer, Snapdeal, said the significant ramp-up in supply chain and technology capabilities has translated into superior customer value proposition. "There is a 350% increase in first-time customers and over 70,000 units of large-sized products like furniture, beds, TVs, and sofas have been shipped in just three days. The electronics sale has seen the highest demand for mobile phone with Rs 500 crore worth of phones sold on Snapdeal that day."
In view of the continuing strong demand Rs 200 crore worth phones are available today, he said.
While attractive discounts and pricing played their part, strategies like exchange offers and additional discount offers from banks YES bank, Standard Chartered and Citi Bank too help lure consumers. According to Flipkart, about 50% of customers availed the bank offers.
Commenting on the smooth execution by e-marketplaces for their respective festive sale offerings, Devangshu Dutta, chief executive, Third Eyesight – a retail consulting firm, said that e-marketplace operators have learnt their lesson from last year’s debacle. "They have been able to manage high traffic better this time around by scaling up efficiently on the server side. This has ensured a glitch-free shopping experience for customers. Having said that, I still think that challenges pertaining to physical infrastructure continues to be an issue and e-marketplaces need to address it properly and invest in," said Dutta.
But still consumers stayed sceptical.
"At Rs 675/- the price is unbelievable. Hope the material is good," read a comment below a description of an apparel posted on an e-commerce website.
(Published in DNA.)
admin
September 14, 2015
Richa
Maheshwari, The Economic Times
Bengaluru,
14 September 2015
Online
grocers are working on shortening their delivery time to less
than two hours by building more delivery points or roping in more
partner stores in a bid to attract consumers who prefer quicker
kiranas to waiting for delivery of online orders.
Companies such as BigBasket, PepperTap, ZopNow and Localbanya say time and convenience are driving more sales for online groceries, unlike deep discounting that has helped apparel or durables segment. In fact, if consumersdon’t get their orders on the same day, the order dropout rate could be as high as 50 per cent, industry experts said.
"In general ecommerce segment, the price differentiation is so high that the consumers are ready to wait as they won’t get such an option outside. But in our case, if we don’t deliver it when consumers need, they will go to the next kirana store even if there is Rs 20 discount on our site," said Mukesh Singh, cofounder of ZopNow.
Getting daily household, food and personal care products delivered at short notice needs investments and partnerships with a host of players.
ZopNow, which is present in five cities, is in talks with various supermarkets chains for tieups to shorten its delivery time while Amazon India, which started Amazon Kirana services in March, plans to rope in more kiranas to reduce its delivery time to 2-4 hours.
BigBasket, which recently acquired Bengaluru-based hyper local delivery startup Delyver, introduced one- hour delivery service in Gurgaon last week.
"There is a part of the basket that the customer buys on a higher frequency basis. These are smaller order values and these can be delivered efficiently through Express delivery," said Vipul Parekh, chief finance officer at bigbasket.com.
Gurgaon-based PepperTap, which offers two hour delivery service, plans to reduce the time to one hour by next year. "We are working on a technology which will help us crunch the whole process, from picking up to delivering the product," said Navneet Singh, CEO at PepperTap that currently operates in seven cities.
Mumbai-based Localbanya, which offers deliveries on the basis of time slots, also introduced two to three-hour delivery service in five cities two months ago. However, it does not plan to crunch the time any further.
"The issue is that most of this is done on a bike and hence, there is a limit to how much a biker can take along and how much orders we can accept for a particular time. Hence, we will not reduce the time any further for now," said Karan Gonsalves, head of marketing at Localbanya, which is present in six cities.
Despite these companies’ efforts to reduce delivery time,
some experts say replacing local grocers still remains a huge
challenge for online grocers. "Over the years, grocers have
built a relationship with their customers. All you have to do
is call them up and they will deliver the products to you in 30-35
minutes," said Devanghsu Dutta, CEO at Third Eyesight. That
kind of service would be hard for any online grocer to match.
(Published in The Economic Times.)
admin
September 9, 2015
Lace’n’Lingerie
Magazine
Mumbai,
9 September 2015
Gap,
a recent entry into the Indian apparel market, out performs other
retailers with sales of Rs. 23 lakhs per day in the first month
of its south Delhi store.
However, it has yet to cross Zara – the quickest apparel brand in India to cross $100-million sales mark – that has a store in the same location in Delhi.
The Spanish fashion brand Zara brand owner Inditex and Tata Group’s
retail arm Trent first stepped into the Indian market five years
ago. The business posted 24% annual growth in sales for the year
ended March 2015 at Rs 721 crore ($114 million), and sales of
Rs. 9 crore in the month of June from its store in south Delhi’s
Select City Walk Mall.
On other hand, the American clothing brand Gap came to India
in May 2015, in partnership with Arvind Lifestyle Brands. Gap
sold goods worth about Rs 7 Crore in June from its 9,500 sq ft
store, translating into Rs 242 per sq ft per day, mentioned two
executives from Gap India. Zara’s sales amount to Rs 180
per sq ft per day at its 16,500 sq ft first store in the country
that it opened in the mall five years ago.
J. Suresh, managing director of Arvind Lifestyle Brands said
“The response has been better than what we had anticipated
and it was spread across men, women and kids’ merchandise.
We, however, cannot divulge sales details as it is too early,”
Gap along with Arvind Brands plans to open more than 40 Gap stores
in India over the next few years.
Gap had earlier said that it was targeting Rs 500 crore of annual
sales in three years, with Rs 60 crore from just the maiden store
in Delhi in its first year.
Experts said while initial sales of Gap were substantially high by industry standards, the company’s per store sales might drop once it opens new stores in not so prime locations and the novelty factor wears off.
“Zara has set a benchmark in terms of both growth and profitability. What has helped it is the brand’s desirability and connect with consumers,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight.
(Published in Lace ‘n’ Lingerie.)
admin
September 9, 2015
Richa Maheshwari, The Economic Times
Bengaluru, 9 September 2015
Textiles major Arvind Ltd has created a new value department chain branded ‘Unlimited’ by converting large stores of its existing chain Megamart that has been struggling to shed its ‘discount format’ image.
The Ahmedabad-based firm has rebranded nearly 25 Megamart outlets of more than 10,000 square feet each as Unlimited and plans to have 125 stores under the new format in five years.
"We realised that even though we have sort of changed our proposition, still people associate the name (Megamart) with discounts," said J Suresh, managing director and CEO of Arvind Lifestyle.
Arvind will sell premium brands such as Arrow and US Polo at Unlimited stores but will focus more on mass-priced franchise brands such as Geoffrey Beene and Cherokee.
The stores will mostly stock full priced merchandise with an added focus on women and kids wear. "Space for women and kids will nearly double at our new stores compared to earlier which was mainly focussed on men’s range," Suresh said.
Megamart started as a discount outlet to liquidate old stocks in 1995. Arvind transitioned the Rs 600-crore Megamart chain into a value retailer three years ago and started optimising it to improve profitability. As a result, its store count has come down from 216 in in FY12 to about 130 at present, but it could not really get rid of the discount format tag.
Industry analysts point out that the online players have almost completely wooed away discount hunters across the country.
"If you look at the market, the whole discounting trend is owned by ecommerce sites now," said Devangshu Dutta, chief executive at retail consulting firm Third Eyesight. "For any physical retailer if there is an opportunity to review its real estate, then it’s better to look at something with better prices and better margins," he said.
Arvind now plans to halt expansion of smaller Megamart stores as they earn just 1.5% EBIDTA margins and have been a drag in sales too with 2% growth last fiscal.
Instead, the company will only open large format stores that operate with 8% margin. The existing Unlimited stores contributed nearly Rs 300 crore in annual revenues.
In India, the value department store chain format is less crowded with only three large players — Tatas’ Westside, Reliance Trendz and Landmark Group’s Max — currently operating in the segment.
"If you look at the value space, I think it is the largest market and quite unorganised today," said Suresh of Arvind Lifestyle. "But as we go forward, it will get organised," said the man who steers the traditional textile group’s efforts to shift its business focus away from ‘commoditised’ clothes business to brands and retail. Besides having its own brand such as Flying Machine and Excalibur, Arvind also partners nearly two dozen international fashion brands, including US Polo, Gap, Elle and Ed Hardy, in the country.
Market analysts are positive about the company’s potential. "Attractive revenue growth driven by the scope for growth for large brands in India, improving margins driven by the ‘power brands’ and optimisation of Megamart operations, better working capital, and asset turns higher than the company average should all fuel its financials," a recent Credit Suisse report said.
(Published in The Economic Times.)
