Paytm Mall vows big push this festive season for traditional retailers

During the festive season itself, the company says it is aiming at $300 million (Rs 2,100 crore) in GMV.

Business Standard : Paytm Mall said it would generate at least Rs 500 crore in actual sales for its offline brick-and-mortar retailers this festive season. It says so at a time when trader bodies are at loggerheads with Amazon India and Flipkart over the massive discounts during such sale drives.

Paytm Mall is the online shopping platform created by Paytm, the e-commerce payment system and financial technology entity. We have, says the former, been working hard on our omni-channel model. This year, the company believes, most of the ‘leads’ it generates online would convert into sales offline.

Over the past six months, it has worked out massive discount and cashback schemes, with more than 100 brands and major offline retailers. Overall, Paytm Mall says, it is targeting not less than $2.1 billion (Rs 14,900 crore) in gross merchandise value (GMV) for the entire year.

As Amazon India has been doing, Paytm Mall has been concentrating a lot on the market outside the tier-I cities. While these metropolitan areas contribute 35 per cent of its business, the rest comes from elsewhere.

During the festive season itself, the company says it is aiming at $300 million (Rs 2,100 crore) in GMV. It has got on board over 30,000 new retailers and these stores will offer their catalogues on the Paytm Mall app, in-store pick-up, local deliveries and exclusive brand vouchers. The company has dedicated a team to address the needs of offline retailers and help their transition online.

The partnership will help it get new users, strengthen its assortment and expand its reach to the neighbourhood brand outlets. The firm does not own or operate warehouses; instead, it partners with sellers and encourages them to use local courier services for delivery. The target is to, within two years, show a positive figure on operating earnings, by addressing the issue of logistics cost.

“In preparation for the coming festive season, we are aggressively on-boarding retail stores and collaborating with new brands. We have also introduced exclusive brand vouchers...(and) are confident on achieving two-fold growth in our user base during this period,” said Srinivas Mothey, senior vice-president.

Why the festival season may not bring much cheer despite tax cuts by govt

Car sales in August fell the most on record and Maruti Suzuki India Ltd.

Poor demand from Indian consumers could dampen the mood during festivals next month, especially for automobile makers and retailers that count on the season for a sales boost, analysts predict.

Indians typically buy everything from new cars to shoes for themselves and as gifts during celebrations steeped in religion and tradition. Yet the slowest economic growth in six years, unemployment at a 45-year high and tepid private consumption may see sales fall short of recent years, even after the government’s $20 billion tax break to companies earlier this month.

“You can make the product 50% cheaper, but there has to be income to spend,” said Nitin Gupta, an analyst at SBICAP Securities Ltd. in Mumbai.

“In the short-term, I don’t see any kind of an income boost. Rather than giving cash to individuals, they have given it to companies.”

Car sales in August fell the most on record and Maruti Suzuki India Ltd. Friday reduced the price on its Baleno RS model by 100,000 rupees ($1,420) to pass on the benefit from the tax cut.

Market researcher Nielsen has lowered its 2019 growth estimate for fast-moving goods to 9%-10% from 11%-12%, while a stock gauge of consumer discretionary firms is set for its first annual back-to-back losses since at least 2005.

Even so, the industry’s fortunes beyond the approaching festival season are poised to improve, according to BNP Paribas SA. Plentiful rainfall seen this monsoon season and cash handouts to farmers will help lift rural incomes, helping sales of staples recover in the second half of the year that began April 1, the brokerage said in a recent report.

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E-commerce majors Flipkart and Amazon clock bumper sale on Day One

Flipkart saw 2x more sale; for Amazon, it was the biggest-ever in a single day.

Dispelling the fear that a slowing economy may affect consumer behaviour, e-commerce majors Flipkart and Amazon India have said they witnessed record transactions on their platforms on the first day of their annual festive sale, which started early on Sunday.

While home-grown Flipkart, which is now owned by American retail major Walmart, said it registered two times more sales on Day One of its flagship sale event Big Billion Days (BBD) over last year, rival Amazon claimed it witnessed the biggest opening day sale ever with a huge surge in participation in smaller towns.

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According to Amit Agarwal, senior vice-president and country head, Amazon India, the company also saw the single-largest day of Prime sign-ups, with 66 per cent of Prime members shopping in 24 hours coming from tier II and tier III towns. The company added that 91 per cent of new customers were from smaller cities.

“Whether it is the Diwali festival season or any other shopping event, the primary objective for us is to add as many new customers as we can and convert the existing customer into Prime members. We are relevant to customers, no matter the macroeconomic conditions,” said Agarwal.

According to Flipkart, it saw huge demand in almost all major categories, including beauty, women’s ethnic wear, kidswear, sports, fast-moving consumer goods, baby care, private labels, and furniture on the first day of the sale. The company saw 3x more transactions happening on its platform during early access (from Flipkart Plus customers), compared to last year. The number of transacting customers in tier II and smaller cities doubled over the same period.

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“We started this festive season by setting audacious targets. By all indication, this is going to be the biggest festive season that India has witnessed,” said Kalyan Krishnamurthy, chief executive officer of Flipkart. “E-commerce has not only lifted consumer sentiment but also driven the industry to set new benchmarks,” said Krishnamurthy.

Wearing a black T-shirt with the slogan Bura Na Maano BBD Hai written on it, Krishnamurthy was seen giving a pep talk during the kick-off of the BBD sale at Flipkart’s Bengaluru campus. Apart from employees, many of its sellers also attended the event. “As part of fun activities, the firm had invited a mind reader to the event.

Apple to Samsung: 75 new smartphone models to kick off festive season sales

The euphoria is clearly visible in activities of the smartphone majors.

Amid a potential slowdown, the country’s smartphone makers are gearing up for bumper sales ahead of the festival season. To draw consumers, at least 75 new smartphone models have been lined up and that may add momentum to the already growing sector.

Initial estimates — based on trends of the past two months — suggest that during the July-September quarter smartphone shipments may touch an all-time high. While last year, during the corresponding quarter, nearly 42.6 million units were shipped in, this year the number may surpass 45 million, analysts estimate.

Prabhu Ram, head of industry intelligence group, CyberMedia Research, says smartphone shipments will grow 8-10 per cent year-on-year during the quarter. “Smartphone brands have lined up many exiting launches, backed by attractive offers. Online shopping festivals will further pique customers’ interest,” he said.

The euphoria is clearly visible in activities of the smartphone majors. Market leader Xiaomi is planning to launch Redmi Note 8 and 8 Pro, extension of its flagship Note series. Second-largest player Samsung has lined up launches under its current online-only series M that directly competes with Xiaomi. The Korean giant will also launch new models under its yearly flagship Galaxy S series in September.

Samsung’s rival in the super premium segment — Apple — is not behind. New iPhone models are expected to be unveiled in the country by October — days ahead of Diwali. OnePlus, another heavyweight in the premium category that frequently beats Apple and Samsung in their own turf, is launching OnePlus 7T — replacing the bestselling OnePlus 6T this month.

Vivo, Oppo, and Realme, the third-, fourth- and fifth-largest players currently, have their own flagships lined up. Vivo Z2 Pro, Z1X Pro, and Z5, Realme XT, and Oppo Reno 2 series are in the pipeline. Other leading brands like Nokia, Huawei, and Honor are coming out with Nokia 6.2, 7.2, and 8.2, Huawei Mate 30 series, and Honor 9X series, respectively, during the festival season.

Lenovo is relaunching its mother brand after it withdrew Lenovo smartphones from the market over a year ago. The Chinese major is planning to lap up its dual-brand strategy this season — with Lenovo and Motorola — targeting different sets of consumers.

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