TECHNOLOGY AS CHANGE AGENT

Tech Drives Growth in Grocery E-tailing
Supply-chain tech helps to reduce cost & inventory and predict user behaviour

Everyday, I learn something new,” says R Rammurthy as he picks up a netbook, an Android tablet and a paper-clip file before climbing onto the driver's seat of a white Maruti van loaded with four neatly packed baskets of grocery and vegetables. As he slips into first gear, he pointed to the netbook screen which displayed a map where the vehicle’s number flashed. The on-screen status of the vehicle changed from idle to moving and the address to which the baskets needs to be delivered popped up.
Rammurthy’s trip ended nearly twenty minutes later at the doorsteps of a customer-- mother of a three-year-old who hates to spend the little spare time she gets during weekends at the supermarket. During the drive, the 28-year-old management graduate, who now handles a small team for online retailer Bigbasket.com, started explaining how his company manages to keep near-zero inventory and fulfils hundreds of orders everyday.
Online food and grocery retailing, fairly mature in the West and showing lot of potential in growth markets like China, has not been able to capture the fancy of Indian shoppers yet. Things, however, may be changing as a new generation of wellfunded online firms -- Bigbasket.com is a key example -- are using simple end-to-end technology solutions to offer deep discounts on grocery items, predict customer behaviour and keep a tight leash on expenses. With technology playing a key role, they are trying to make a dent in the estimated $343-billon food and grocery market in India.
For example, these firms use a supplychain technology that allow customers to place orders through multiple channels and later predict what a customer is likely to order. Combined with applications that track everything from the time an order is placed to delivery and devices that help during procurement, technology is helping these firms to make a compelling and convenient offer to the tech-savvy shopper. For these online retailers, the most important tech application is the ability to predict customer behaviour which lets them reduce inventory and thereby, cut costs. For instance, while a traditional retailer might have to stock his monthly offtake of atta at least three weeks in advance, an online retailer ends up stocking it for less than two days. “That is mostly analytics,” says Ambuj Jhunjhunwala, the founder of Mygrahak.com which sells food and grocery online in Delhi. Predicting customer needs helps them to plan in advance and procure based on needs. Need-based procurement works ideally well with perishable goods like food not to talk about saving expenses on storage space, which is a large part of expenditure for a traditional retailer.
Analytics also involves knowing the customer better which helps retailers to make tailor-made offers for customers and increase sales. Online retailers can also eliminate a large part of their frontline staff because customers usually help themselves. Typically, large format brickand-mortar stores spend much of their attention to figure out customer behaviour on the shopping floor and arrange goods so that they catch customer attention. This can now be automated as the platform generates enough data about individual preferences. “You have complete control over knowing what your customer is buying and great level of predictability. The stickiness of forecasting can go up as you use technology to predict,” says Anand Ramanathan, Associate Director at KPMG.
Shoppers, whose experience of buying grocery online has been good, tend to very loyal. For example, Asha Liju, a clinical research professional from Bangalore buys her grocery online. “This is the second time I’m buying online because its simple and saves me nearly 10 kilometres of travel,” she says.
Here again, technology plays a key role. Grocery buying is mostly a repetitive task something technology is known to do well. For instance, when a shopper logs into the account, a history of previously bought items makes it easier to pick instead of going through the motion all over again. “At each step, simple technology is helping us save time and money,” says Abhinay Choudhary, co-founder of Bigbasket.com. Bigbasket.com, which now has 100 people on its rolls, will supply anything from milk products to fresh fruits among 7,000 other items at your doorstep at competitive prices within a few hours of placing an e-order. “Our delivery vans even have cold storage facilities. This is very new but if we do it right, it will be big," says Choudhary. His earlier venture was shopasyoulike, a similar food and grocery store catering to residents in Whitefield, Bangalore.
25-year-old Jhunjhunwala’s Mygrahak-.com now claims that they process nearly 15,000 orders a month. “The average order size is Rs 1,250- Rs 1,300 . We can at least grow 30 times in Delhi alone,” he said. He recently introduced “card on delivery,” where a customer can swipe their cards at the time of delivery to pay for the order. Jhunjhunwala comes from a family of entrepreneurs and returned to India after graduation learning how to do business from his family, the promoters of BSE listed REI Agro. Chennaionlinegrocery.com, Town Essentials and Atmydoorsteps.com also operate in this space. Scale might not be an issue as demand from a large working population, which finds frequenting supermarkets an irritant, grows.
Investors also seem to be buying into the grocery e-tailing story. Last month, private equity firm Ascent Capital invested $10 million when Bigbasket.com co-founded by a team of eight which includes Fab-Mall co-founders Hari Menon, VS Sudhakar, Vipul Parekh, VS Ramesh and Abhinay Choudhary, raised its first round of institutional funding.
The food and grocery market accounts for over two thirds of the $505 billion Indian retail market. According to retail consultancy Technopak, the retail market is projected to touch $725 billion by 2017. The organised food and grocery retail market in India is estimated at $ 12 billion in 2012 and grow at a compounded rate of 30% over next the five years. "Though e-tailing is still a very small part of retail in India it is projected to grow at a fast pace and over the next decade its presence will be significant," said Pragya Singh, Principal Consultant, Retail & Consumer Products, Technopak. Headroom for growth comes from the fact that that e-tailing accounts for a measly. 2% or $1 billion of the overall retail market and it is expected to reach $13 billion by 2017.
But retailing food and grocery online is not an easy task. Though there are success stories, the monumental failure of Webvan in the United States back in 2000 is enough to act as a damperner.
The challenges include being able to give consumers a large number of products to choose from, achieving consistency in quality especially when it comes to perishable goods and the cost of logistics. For instance, Mygrahak’s Jhunjhunwala has already invested $1 milllon in the firm and anticipates an expense of $4 million to $5 million every time it moves to a new city. While critics often cite the example of Webvan, the story may not repeat in India. Webvan may not be the best benchmark, argues Singh. “It is an example of a company that grew too fast in middle of the dotcom boom, rapid expansion to multiple cities, gigantic infrastructure including warehouses but not enough sales to back the same,” she said.
Even as its spends Rs 150- Rs 400 to acquire each customer, Mygrahak.com will break even this Diwali, claims Jhunjunwala. Despite the rosy numbers, e-tailers looking to sell food and grocery might have to expand cautiously, suggests Technopak’s Singh.
The Challenges
Achieving standardisation
in quality and quantity when a large part of grocery items are still sold loose in India
Having a comprehensive product range that covers all possible variations
Delivery across large parts of urban and semi-urban areas
Sensory needs of consumers are not satisfied through online channels
Fulfilment and logistics costs More:http://epaper.timesofindia.com

Top 10 Trends In Indian E-commerce In 2010

2010 has been defining for the Indian e-commerce sector, which has (and some may sigh “finally”) come of age with much of the evolution being clearly visible this year. Though a fairly old industry in India, this sector has caught the fancy of investors and has generated multiple entrepreneurial avenues, riding on macro trends such as increase in broadband penetration, change in buying patterns and the success of group buying sites globally. So, what did we see this year?

Most significantly, travel site MakeMyTrip’s listing at the Nasdaq spurred the interest of many an investor as they saw a clear potential of a liquidation event. 2010 also nearly double of number of M&As (25) compared to 2009 (11), according to data compiled by our financial research platform VCCEdge. In this backdrop, VCCircle spots some key trends, including M&As and private equity fund-raising, in the e-commerce space in 2010 that will have a bearing on the way the industry evolves in 2011 and beyond.

Categories that are flying: Domestic entrepreneurs are raring to set up online stores mimicking global ecommerce sites. The top categories within e-commerce, investors say, are travel, classifieds, group buying, auto sales and luxury brands.

Travel, the big e-commerce story: The catalyst for e-commerce, one category which is largely responsible for making users more comfortable with online transactions is travel. Top players such as IRCTC, Makemytrip.com, Yatra.com and Cleartrip.com are witnessing a boom in online ticketing sales and are expanding their portfolio of services to add hotel booking and packages. Makemytrip India Pvt. Ltd. acquired online bus ticketing company Ticketvala.com from Mumbai-based Travis Internet Pvt. Ltd. in March 2010 and in August had a high profile listing on NASDAQ. In October, Yatra Online Pvt Ltd, the owners of Yatra.com, picked up a stake in Travel Services International Pvt Ltd, a wholesale ticket consolidator. B2B travel network Via and bus ticketing service Redbus.in are also making inroads and experimenting with new services.

Travel sites are also spending more online and spent a total of Rs 59 crore on display ads in fiscal 2010, according to the IAMAI.

Exclusive book retail not sustainable: Flipkart, which set out as book retailing portals, has spread out to cover other products as plain vanilla book selling is not sustainable business. “Books were a good hook to draw in users but on its own, book retailing online is not a scalable business. It will work online but can never become very big as the average book value in India is very low. That is why sites like Flipkart and Infibeam are expanding into other categories,” said Suvir Sujan, Partner, Nexus Venture Partners. The site also sells movie and music DVDs, games and consoles and mobile handsets. Infibeam has expanded similarly with used cars and bike classifieds.

Indians love discounts: Having received high valuations, deal sites and voucher-based ecommerce is the flavour of the year with domestic startups mimicking global sites, primarily Groupon.com. “Indians like deals, so daily deal sites will continue to attract users,” says Rajan Anandan, an angel investor. Sites such as Snapdeal.com, Mydala.com and Dealsandyou.com have established themselves and a slew of more daily, localised deal sites are cropping up such as DealMagic and Koovs. According to Harjiv Singh, who is exploring global markets with his Comparenbuy.co.uk rather than India, the Indian e-commerce space is not ready as yet for serious e-commerce players. He explains, “There are too many players right now in the industry and the customers are not sophisticated enough. India will be ready in 3-5 years and by then we will see only a few ones still standing - only those who build it up will get brand recall. In India, it will be a numbers game, with the ones who win getting the most number of merchants, deals and users.”

But we also like fashion: Today eBay acquired Germany’s fashion and lifestyle shopping site brands4friends.com for $200 million, to foray into the hottest sector in ecommerce – high end luxury portals. In India, sites such as 99labels.com, exclusively.in and Fashionandyou.com are competing in this segment. In November, Accel India Venture Fund and Helion Advisors Pvt. Ltd. invested $2.8 million in Exclusively.In, Inc. followed by Sequoia Capital infusing $8 million in Fashionandyou.com. Anandan warned that retailers tend to be laggards when it comes to technology – and this will prove to be an issue for e-commerce players.

Strategic shifts: General e-commerce has shifted from being a horizontal space to vertical and shopping sites such as Indiatimes Shopping and Rediff Shopping need a total makeover. On the other hand, many portals are expanding horizontally - take Yebhi for example. Bigshoebazaar was recently rebranded as Yebhi - it no longer is a shoe-only store and also sells accessories, bags and clothing.

Classifieds going strong: Jobs, real estate, matrimonial continue to see traction. Linkedin, Naukri and Monster.com have top-recall followed by TimesJobs.com and Shine.com by HT Media. Matrimonial sites such as Consim Info Pvt Ltd’s Bharatmatrimony.com, Shaadi.com and Jeevansathi.com continue to reign. Naspers Ltd infused $40 million into the Nexus-backed OLX and in July, Mid-Day
Infomedia Ltd. acquired SnatchKing Online Pvt. Ltd. In August, Naaptol Online received $7 million in venture capital funding from Canaan Advisors Pvt Ltd while Nexus India Capital Advisors Pvt Ltd invested $1.5 million in Magic Rooms Solutions, which offers an online hotel inventory distribution software. Carwale.com’s auto classifieds business was acquired by Axel Springer and India Today, and other websites such as eBay Motors, Gaadi.com, Carazoo, Zigwheels and Automartindia are players in this space.

What is in store: Large e-commerce companies in India will need to spend heavily on infrastructure over the next three years to maintain momentum. Despite shipping delays, billing errors, poor user interfaces, checkout issues, the perception of online transactions not being secure and the continued lack of bandwidth, the mood of e-commerce players is one of optimism as they wait for 3G networks to roll out.

Competition and hype: Competition will continue to be heated and only few will survive. Shailendra Singh, MD of Sequoia Capital India says, “There is too much hype around e-commerce right now and many investors will lose their money investing in e-commerce because too many companies are trying to raise capital and we already see signs of very intense competition. In such an environment, market leaders have an unfair advantage because the whole industry will educate the market and drive adoption and the market leaders will get disproportionate benefit from it. We believe the market leader in each category will generate the lion's share of value for shareholders.”

Consolidation, will it happen: Industry experts are unanimous in the view that consolidation is still a far cry in the nascent industry. Salwan said, there are no cash flows for the next 2-5 years and hence there will be no consolidation. We might not see the likes of Amazon taking over Quidsi, the operator of Diapers.com and Soap.com for $500 million in the near future, but $100-$200 million deals can be expected to take place in the next two years, according to Anandan.

Top 10 Festivals in India

Colours, songs, dance, prayers and oil lamps are typical for Indian festivals.

The large population across the vast region of India is consist of different religions that celebrate their own religious festivals. Hinduism, Islam, Christianity and Sikhism are major religions in India, among others. Some festivals are unique to local regions while there are other vibrant festivals celebrated throughout the country. The following describes some of the widely celebrated festivals in India.

Durga Puja and Dussehra

Travels during the later part of year to any Hindu region of India, will present visitors the Durga Puja, one of the biggest and most popular festivals in the country of the Hindus. This festival is in worship of the the Hindu Goddess of Power, Goddess Durga. Although the festival is a ten-day affair, observation of rituals and ceremonies are performed in the last six days. The last day of Durga Puja is known as Dashami or Dussehra.The festival takes place generally between the months of September and November and is widely celebrated in Eastern India. States from other parts such as Delhi and Karnataka also celebrate this festival. Thus, we can say that celebration of this festival takes place with great gusto all over India.

Diwali

Diwali or Deepavali for the Tamils, is the festivals of lights. Celebration of Diwali is also celebrated grandly throughout India. As India boasts of diverse cultural heritage, every region celebrates Diwali in its own special and unique ways as the visitors on different tours will witness. However, the history behind the celebration of Diwali is the same throughout all regions and is based on the legendary victory of Lord Rama over the demon Ravan. Mainly, five days are observed as Diwali. Dahnteras, Choti Diwali, Badi Diwali or Lakshmi Puja, Govardan Puja and Bhai Duj are the five days of the Diwali celebrations. Each of these days has its own significance and history related to the divine celebration.

Ramzan Eid (Id-Ul-Fitr) In Id-Ul-Fitr, the word Id means festivity and Fitr means breaking of fasting. Therefore, the term means breaking of fasting and having celebrations. Id-Ul-Fitr indicates the end of the Muslim month of fasting, Ramdan. Id-Ul-Fitr takes place when a new moon is seen after a month of fasting. The Muslims visit the mosques and offer prayers to Almighty Allah. Id-UL-Fitr is a three-day celebration. Some devotees may even choose to travel on a pilgrimage tour to Mecca, considered as the Islamic Holy Land. This festival is celebrated not only in India, but also all over the world where Muslims can be found such as Pakistan, United Kingdom, Indonesia and Sri Lanka, just to name a few.

Holi

Tours to many regions in India during March will surely include Holi, the festival of colors. It signifies the victory of good over evil and celebrations are through a carnival of colors. The main occasion takes place on the day of full moon in March every year. This popular festival is celebrated throughout India. Holi started in Mathura at Vrindavan which is the birthplace of Lord Krishna. People celebrate this day smearing each other's face with colors, known as "abir".

Janmashtami

Janmashtami signifies the day of the birth of Lord Krishna, who is the eighth incarnation of Lord Vishnu. The date of the festival is not fixed. It depends on the cycle of the moon, according to the HIndu calendar. However, it usually takes place in the month of August or September. The first day is spent on fasting and offering prayers until midnight, when Lord Krishna was believed to be born. Many Hindu devotees travel to Dwarkadhish temple in Dwarka- Gujerat as part of pilgrimage, and Shri Krishna Balaram temple, in Orissa are some of the venues, where the main celebrations are performed.

Ram Navami

Ram Navami signifies the birthday of Lord Rama. Celebrations of Ram Navami take place on the ninth day of "Sukla Paksha" in the months of March and April, determined by the Hindu calendar. The day of the festival begins with offering of prayers to the sun and then singing devotional songs during the midday, the time when Lord Rama was believed to be born. Celebrations are the most grand in Ayodhya, the place of birth of Lord Rama, and a popular tour destination especially for HIndu devotees.

Ganesh Chaturthi

The festival of Ganesh Chaturthi is dedicated to the Remover of obstacles, Lord Ganesha, son of Lord Shiva. It is a ten-day long festival. Ganesh Chaturthi is celebrated with great gusto in Maharashtra and other South Indian states. People buy Ganesh idols and worship it for ten continuous days. After the tenth day, the idol is immersed in a river or sea. During this festival, cultural programmes and feasts are also held to liven up the occasion even more and such events are interesting additions to any travel itinerary.

Guru Nanak Jayanti

Guru Nanak Jayanti is the main festival of the Sikh religion. It is the birthday of the founder of Sikh religion, Guru Nanak Dev. It is celebrated in the month October or November on the day of full moon. Sikhs celebrates this festival by visiting the Gurdwaras (Sikh temples) and offering prayers. They start the day with a morning procession from the Gurdwaras proceeding to respective localities singing hymns. There are also other practices such as distribution of Langar or common meals to everyone in the community and lighting up earthen lamps in homes are observed in this festival.

Onam

Onam is a widely celebrated festival in the state of Kerala. This ten-day festival signifies the harvest season which also corresponds with Chingam, the Malayalam new year. During the festive period, people wear new clothes, visit temples, perform traditional dances like Kaikottikkali. The main theme of this festival that one cannot miss is the rowing of boats in huge rows to the rhythm of drums. Tours to the renowned Keralan backwaters during this festive season can include the exciting boating event that is sure to enthrall any traveller.

Ooty Summer Festival

The summer festival in Ooty is held in the month of May. This festival is held at Botanical Garden. This cool region in India with greeneries all around and so it is just perfect for the Ooty Summer Festival. Many fairs and shows such as Flower Shows, Fruit Shows, Boat Races comprises of the Ooty Festival. Cultural programmes traditional classical arts are also a part of the festival. Sports such as trekking are also arranged for people who love sports.