Also in this letter:
- Crypto firms’ pitch: Ditch
- Raghuram Rajan on
cryptocurrencies Zomatoscraps grocery deliveries again
Exclusive: Flipkart on track for 50% jump in sales from 2020
The Flipkart group clocked a gross merchandise value (GMV) of around $15 billion in calendar year 2020 and is currently on track to record a GMV of $23 billion this year, several sources told us. Of this estimated $23 billion, around $20 billion will be from its flagship platform while the rest will come from Myntra. GMV represents the total sales on a particular marketplace over a certain time frame without deducting returns.
Context: This represents more than 50% growth over last year for Flipkart, even as the ecommerce sector remains mired in uncertainty over the rules meant to govern it. Flipkart’s last publicly known GMV before that was $7.5 billion in FY18, when it was acquired by Walmart for $16 billion.
Flipkart and Myntra vs
In the past few years, the gap between Amazon India and Flipkart (alone) has narrowed, sources told us. Add Myntra to the mix and Flipkart has widened its lead over the US company. Amazon’s fashion business remains work-in-progress, though it has seen some success with private labels such as Symbol.
The latest GMV numbers throw light on the competitive landscape of Indian ecommerce when the sector continues to see increased capital flow from marquee global investors while Indian conglomerates like Reliance Industries and Tata Group have entered the space.
Top categories: The highest selling products on ecommerce platforms continue to be smartphones, electronics and appliances, and clothes. In terms of market penetration too, these categories are at the head of the pack.
For Flipkart, 49% of its gross sales in FY21 came from smartphones, while fashion contributed 32%, appliances 16% and groceries 3%, according to estimates from Bernstein.
Groceries: Flipkart is steadily building its online grocery play as demand for groceries and other essentials remains high amid the pandemic. While platforms BigBasket, Grofers, Dunzo and Swiggy’s Instamart offer 30-minute delivery of essentials, Flipkart is scaling up its 90-minute delivery offering, Quick.
Crypto firms’ festive season sales pitch: ditch gold for bitcoin
Crypto exchanges plan to use the festive season, which began with Ganesh Chaturthi on Friday, to encourage their current and potential users to invest in bitcoin as an alternative to gold.
Exchanges have increased hiring and have product launches and advertising campaigns in the pipeline to attract new users.
Currently, more than 15 million Indians trade cryptocurrency.
Quote: “The Indian market is all about saving and spending and gifting during the festive season. Approached right, bitcoin and gift vouchers can be an interesting option for users to consider as more awareness activity is expected across the industry,” said Sathvik Vishwanath, cofounder of Unocoin.
What they’re doing: Unocoin had a coupon code to give bitcoins worth Rs 200 for Ganesh Chaturthi. It has also tied up with ecommerce companies and brands to let users redeem gift vouchers bought using bitcoin.
Many crypto exchange executives said there has been a surge in demand for gifting from retail investors. “Crypto gifting is a part of our product roadmap. This will give Indians the opportunity to send crypto to their loved ones as easily as they send emails,” said Rajagopal Menon, vice president of marketing at WazirX.
Ad blitz: Crypto platforms have also planned huge ad campaigns to attract customers. “The festive season coincides with the T20 tournament so we will have a 360-degree campaign to capture the attention of audiences in the coming weeks,” said Ashish Singhal, cofounder of CoinSwitch.
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Cryptos won’t be a substitute for normal currency, says Raghuram Rajan
Former Reserve Bank of India governor Raghuram Rajan has said cryptocurrencies are a speculative asset right now, and will remain so until there are developments, and regulations emerge.
Quote: “Right now, cryptocurrencies are speculative assets. Will it stay that way? No. There will be developments. Some central banks are thinking of introducing their own cryptocurrency, backed by full faith and credit of the government,” Rajan, a professor of finance at the University of Chicago’s Booth School of Business, said at a clubhouse interaction hosted by telecom innovator Sam Pitroda on Friday.
“It is a good technology, but I don’t think it will be a substitute for normal currency,” he said, and added that crypto assets will have a market as long as there are fans who trade them with each other.
‘Startup founders need time to stabilise business before philanthropy’
Ashok Soota, executive chairman of Happiest Minds Technologies
The number of established Indian entrepreneurs getting into philanthropy is increasing, but startup founders need time to stabilise their businesses before contributing to society, Happiest Minds executive chairman Ashok Soota told us in an interview.
How does India get more of its wealthy people to engage in philanthropy?
Indian entrepreneurs and even some of the older businesses are doing a lot of philanthropy. I don’t think we see how much is being done aside from the more visible examples of Azim Premji, Shiv Nadar and Nandan Nilekani. Everybody is pouring in money and a lot of work is going on. I think it’s picking up more and more.
Do you see enough of the younger startup entrepreneurs who have created a lot of wealth recently looking to contribute to philanthropy?
The best thing they can do is to make a successful company, stabilise them and show that they can continue on a good steady path for 10 years. Then they will also get a lot of wealthy owners and promoters.
Zomato scraps grocery deliveries for the second time
Food delivery platform Zomato has cancelled its grocery delivery plans for the second time in two years.
Why now? The grocery service had moderate success and faced a few challenges, including frequent changes in the inventory and gaps in order fulfillment leading to a poor customer experience, according to an internal email.
Fill-rate — the proportion of goods ordered that a platform can actually deliver — is a critical component of the online grocery business.
Zomato first experimented with grocery delivery during the nationwide lockdown in 2020, but shut it down after it failed to scale. It re-entered the grocery delivery space this year amid intensifying competition from incumbents such as Reliance Industries-owned JioMart, Tata group’s BigBasket and Swiggy’s Instamart, besides hyperlocal delivery platforms such as Google-backed Dunzo.
U-turn: In an interview with ET in August, cofounder Deepinder Goyal had said, “We don’t have much idea (about online grocery) and are just trying to learn. We think it’s a big space, but we are not sure if we want to do it in the long term or not,” Goyal said. “The investment in Grofers is separate. We have our own grocery offering which is a marketplace model that went live in Delhi two-three days ago.”
Wipro leadership to return to office from this week
Wipro chairman Rishad Premji
Wipro will see its leaders returning to office twice a week from September 13 after one and a half years of remote working, chairman Rishad Premji said on Sunday.
“After 18 long months, our leaders @Wipro are coming back to the office starting tomorrow (twice a week). All fully vaccinated, all ready to go – safely and socially distanced,” Premji said in a tweet.
This comes as India’s IT industry is preparing to bring employees back to offices. Senior executives at TCS and Infosys have slowly begun working from office even as they finalise plans to get more employees to attend their campuses across India.
Last week, TCS CEO Rajesh Gopinathan said the country’s largest tech services firm will ask its over 500,000 strong workforce to return to office by the end of this year, as the majority of them will have been fully vaccinated, indicating some return to normalcy.
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