eCommerce Push: Shoppers Stop connects four distribution centres with Amazon.in

Company will also open assortment from 50-odd stores gradually for shopping on Jeff Bezos owned eMarketplace. Management expects double-digit revenue contribution from online sales going forward

In its effort to push online sales as part of the company's omni-channel strategy, K Raheja Corp’s listed retail arm Shoppers Stop Ltd has connected all its distribution centres and 50-odd physical retail stores with the Indian arm of global eMarketplace operator Amazon, which is owned by Jeff Bezos. The company management has been talking about this approach for a while now however the COVID-19 induced lockdown and the ensuing business challenges ensured these plans were taken up on a war footing and fast tracked to hit the market at the earliest. 

B S Nagesh, chairman and non executive director, Shoppers Stop Ltd, said the move will help the company hit a double-digit figure in terms of revenue contribution from online sales. “We have been talking about our partnership with Amazon. It's been quite a struggle for us in the last few quarters. But now I'm happy to say that, we as an organisation now are fully connected,” he Nagesh during an earnings call earlier today.

As of last week, all four distribution centres of Shoppers Stop have been connected to Amazon. This apart, the retailer will, one by one, open up the assortment from its 50-odd physical stores that are connected to Amazon. “As of now we have just opened private brands, watches and a few other brands. Over the next three to four weeks, we will add up and open up the full assortment of what Shoppers Stop has across the country onto the Amazon site,” said Nagesh. 

The COVID-19 pandemic has created havoc on apparel and lifestyle retailers over the last couple of quarters in the current fiscal. And as brick and mortar retailers come to terms with the market situation post the unlock phases, industry players are going aggressive on strengthening their eCommerce sales channel(s). As a result, all efforts are being directed to ensure online sales set the cash registers ringing thereby helping retailers make up for the loss of business in the lockdown period.

Going forward, customers looking to shop from Shoppers Stop will be able to access the product(s) and get it delivered directly from the stores. “I think this will really enhance our capability of serving customers. Our eCommerce sales have grown by more than 50%. And our share of eCommerce has increased from 2% to 8% in this quarter. The way things have gone in the first two weeks, I'm very hopeful that we should be hitting a double digit figure very soon,” said Nagesh.

In May last year, Shoppers Stop had said that it will relist and sell its products on the e-marketplace operated by Amazon India. This was in response to the new rules for foreign direct investment (FDI) in e-commerce retail disallowing investee companies from selling on emarketplace(s) operated by the investor or subsidiary firms. In September 2017, an investment firm of the global e-retail giant Amazon.com NV Investment Holdings LLC acquired a minority stake of 5% in Shoppers Stop for Rs 179.26 crore. As the new rules kicked in, the fashion and lifestyle products retailer had to withdraw from Amazon.in, in February 2019. 

In another development, the company has appointed former chief executive officer of Tata Group’s retail arm Westside, Venugopal G Nair as managing director and chief executive officer, Shoppers Stop Ltd. Nair is expected to assume office in the first week of November 2020.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

FMCG sales from eCommerce in India to touch $4 billion by 2022: Nielsen E-Trak Index

Sales of fast moving consumer goods (FMCG) from the eCommerce channel, which presently contributes 2% to the current FMCG market, is set to grow at a compounded annual growth rate (CAGR) of 44% to $4 billion by 2022, says an E-Trak Index launched recently by Nielsen India. The new introduced index has been created using aggregated ePOS (electronic point of sale) data from cooperating eCommerce players and data science backed estimation for non-cooperating eCommerce players in India.

Prasun Basu, South Asia Zone President, Nielsen Global Connect, said, “In this rapidly evolving world of commerce, India’s FMCG industry is now making its presence felt in the eComm channel - appealing to consumers’ need for convenience, and in sync with increasing smartphone and internet penetration. The E-Trak index is aimed at giving a truly complete picture of the changing marketplace. The index will measure FMCG consumer offtake in the eComm space while marrying this with trends seen in modern and traditional trade to get a read on omni-channel in the country,” he said.

Courtesy: Nielsen E-Trak Index

The E-Trak Index is a unique measurement solution that tracks the FMCG eComm industry in India. As per a company statement, the index adds a crucial element to the retail measurement services that Nielsen provides by adding a view of the FMCG eComm space for all India metros. The data comprises monthly read for total FMCG, super-categories, category level for about 20 categories and for 11 categories at a top manufacturer level. Manufacturers and marketers get data, information and insights that can be further used to hone their eComm channel sales strategy to help shape a smarter market.

“While the foundation is taking shape, eComm’s dynamic nature has made it a disruptor in the marketplace,” said Sharang Pant, head-retail measurement services and retailer vertical - South Asia, Nielsen Global Connect. eComm has seen a transformative journey and is now a $1.2 billion industry growing from 0.5% contribution in 2016 to a 2% contribution in 2019. It is now slated to be 5% in 2022.

According to Pant, this is in half the time that brick and mortar retail took to evolve. “That said, these channels are not cannibalising each other and all continue to grow with eComm outpacing modern trade and traditional trade. The view that Nielsen presents on understanding channel, category and consumer trends will directly help players understand the right strategy in terms of assortment, pricing and positioning to win with the evolving consumer,” he said.

Given the significance of the channel from both a current as well as future perspective, Nielsen has built a unique state of the art hybrid model for estimating this dynamic and growing channel. “The methodology involves leveraging data from key collaborating etailers in the FMCG space. We then use crowd sourced data coupled with machine learning techniques from a panel of 200K+ consumers to estimate the eCcommerce sales for FMCG products,” said Nitya Bhalla, head - data science - South Asia, Nielsen Global Connect.

Courtesy: Nielsen E-Trak Index

Insights from the E-Trak Index reveal that metros are leading the eComm FMCG race with a 6% contribution from the channel to total FMCG sales. Amongst these, foods is the biggest contributor with 44% followed byt personal care (40%) and household care (13%). Narrowing in on the value contribution of eComm to metro sales categories with the channel, diapers contribute 26% to the sales; followed by skin creams (12%) and shampoo (10%).
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Zivame bucks the slowdown trend with 60% revenue growth

Amisha Jain, CEO, Zivame

The intimate wear category appears to be getting a lot of traction in the market, at a time when Indian consumers are said to be shying away from spending on innerwear products.

Earlier in October, most leading brands including Dollar, Rupa and Lux Cozi among others had reported sluggish sales citing a downward trend in the market since past few quarters. However, that doesn’t seem to be the case with the intimate wear brand Zivame that’s bucking the trend.

In fact, according to the company’s financial results for fiscal 2018-19, it has witnessed 60% growth on year in net revenues at Rs 138 crore. The company’s revenues for 2017-18 had grown 56.4% at Rs 94.2 crore as compared to Rs 60.25 crore in fiscal 2016-17.

As per a statement by Actoserba Active Wholesale Pvt Ltd (owning company of Zivame), the company had a phenomenal year despite 18% decrease in marketing spends as compared to FY 2017-18. While total expenses increased marginally by 1% the company also managed to reduce losses from operations by 44% year-on-year wherein losses in FY18-19 stood at Rs 18 crore as compared to Rs 32 crore in FY17-18.

According to Amisha Jain, chief executive officer, Zivame, the company has strengthened its position across categories and deepened presence in the markets. “With tech, data and innovation at the heart of everything we do, we are set up for exponential growth over the next few years, said Jain adding that the brand is poised to grow over 75% in the next few years.

Selling 14 products every minute on a daily basis, the company is targeting an annual run rate of Rs 340 crore for fiscal 2019-20. Approximately 65% of gross sales in 2018-19 was contributed by its mobile application as compared as compared to 50% in 2017-18.

Future plans of the company include aggressive retail expansion taking the overall  store count to over 100 in the next 20-24 months. “We will also deepen presence in Tier-I towns and focus in key Tier-II and Tier-III markets. While enhancing consumer experience will be priority, we will also improve efficiencies in supply chain and operations,” said the company.

Zivame, which claims to be the largest business to consumer (b2c) brand, is also enhancing its focus on the omni-channel strategy, to ensure customers have a consistent brand experience.

“This is across channels right from Fitcode in the online portal to personalised fit sessions in the retail stores to recommend the right fit and style to consumers. We also ensure uniform prices, styles and sizes across channels and offer easy payment and delivery options,” the company said in a statement adding that it also unveiled a new brand identity earlier this year with the tagline 'Love Yourself Inside Out'.

(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)