India’s Hottest New Job segment: E-commerce Deliverymen

In India’s burgeoning e-commerce sector, hundreds of online retailers are peddling food, fashion, furniture — and everything in between. As fervent global investors set the sector ablaze, the biggest boom is in the category of deliverymen, the uniformed workers who lug bagfuls of packages to the doorstep of online shoppers.

India’s most valued e-commerce firm, Flipkart (current valuation $11 billion) for instance, currently delivers 5 million shipments every month.

According to Reuters report, shares of third-party delivery firms such as Gati and Transport Corp have risen over 80 percent this year in India’s $50-billion logistics sector.

Many of these deliverymen have 12-hour workdays and nearly all ride two-wheelers in chaotic Indian traffic in unpredictable, even extreme weather. These nameless men are fueling the dizzying dollar valuations of brands like Flipkart and Snapdeal but are the unseen face of the emerging sector. It is these reliable workers who get the goods to impatient customers who order ‘same day’ or ‘overnight’ supply. They collect cash for ‘Cash on Delivery’ shipments and pick up returns and exchanges.

A tangible and early consequence of the online retail explosion is the availability of thousands of these delivery jobs to men in their twenties with driving skills and minimal education. Barely any training is involved. In India’s ever-expanding e-commerce sector where hiring is growing speedily , delivery employees is the fastest-growing segment of workers.

Even so, finding suitable deliverymen is challenging for the sector despite half of India’s 1.3 billion people being under 25. Complaints of shortage are common. Such is the demand that there is large-scale poaching from traditional firms, such as courier delivery firms and pizza delivery chains, is rampant.
With online retail becoming competitive, many e-retailers have their own delivery staff. Some niche Indian online retailers are training their delivery workers in grooming and customer service.

In the West, pilots by the large e-retailers like Amazon are attempting to replace the deliverymen with remote-control drones who aiming for ’30 minutes or less’ deliveries. In India at least, deliverymen will keeping online retail wheels turning for some time.

Google called these ordinary workers ‘unsung heroes’ in a recent video, whose release was timed with its Great Online Shopping Festival earlier this month.

Domestic i-banks increase focus on e-commerce as deal flow picks up

Local investment banks are looking to capture a slice of the frenzied deal activity in the booming industry

In the past 10 months, investors have put in $8.5 billion across 381 deals in the country and e-commerce has contributed more than one-third of the total deal value at $2.96 billion, according to data compiled by consulting firm EY. Photo: Bloomberg
Mumbai: Local investment banks (i-banks) are setting up dedicated teams to pitch for assignments from the country’s e-commerce companies in a bid to capture a slice of the frenzied deal activity in the booming industry where companies such as Flipkart and Snapdeal are raising billions of dollars in new funds. Over the past six months, Kotak Mahindra Capital Co. Ltd, Motilal Oswal Financial Services Ltd, Equirus Capital Pvt. Ltd, Axis Capital Ltd and Edelweiss Financial Services Ltd have zeroed in on e-commerce as an area they would focus on. Some have put up new teams to target business from the sector. Some domestic investment banks including Avendus Capital have already managed some transactions including Quikr, TaxiForSure and BookMyShow. In the past 10 months, investors have put in $8.5 billion across 381 deals in the country and e-commerce has contributed more than one-third of the total deal value at $2.96 billion, according to data compiled by consulting firm EY. The money has been spread across 55 deals, even though a disproportionate amount has been invested in three firms—online retailers Flipkart and Snapdeal, and taxi services firm Ola. The relatively small size of most of these transactions means lower fees for the investment banks. “At Kotak, we have brought in internal organizational focus on the online space and have created a focused group which would look at addressing the wider digital domain across companies in the media, entertainment, financial services, logistics, cloud computing, advertising and e-commerce sector,” said Chetan Savla, senior executive director and head of corporate advisory group at Kotak Investment Banking. While capital-raising dominates activity in the e-commerce space for now, investment banks are going beyond that and also seeking mandates for capital market listings and mergers and acquisitions, said bankers. “We are running a few initial public offerings and mergers and acquisitions deals in the Internet and digital space,” Savla said, adding that they are evaluating whether to hire a dedicated resource to overlook the vertical. Others, such as Motilal Oswal and Edelweiss, have already set up specialized e-commerce teams. Motilal Oswal now has a four-member team to focus on this sector, while Edelweiss hired Ashish Tripathi as its national head for technology, media and telecommunications from EY. “Going forward, this sector will become big. A lot of these players who are turning profitable and are making money are looking at hitting capital markets to raise further growth capital,” said Ashutosh Maheshwari, chief executive officer at Motilal Oswal Investment Advisors Pvt. Ltd. Tripathi of Edelweiss expects the e-commerce segment to see significant capital-raising and deal activity. “We have hired specialists in the sector as we are seeing significant deal activity and cross-border interest in this space,” said Tripathi. Even as the volume of deals is high, the smaller ticket size of the deals means that the fee generated by an investment banks per deal is lower than in traditional sectors. Across the five investment banks Mint spoke to, most of the bankers indicated that fees range from 1.5% to 4%, depending on the size of the deal. “We don’t expect the fee structures to bring is as much as other deals do, but we propose to manage it by working with these firms through their lifecycle and raise their two-three rounds of capital,” said Vineet Toshniwal, managing director at Equirus Capital. Earlier this year, Equirus Capital hired Nitin Agarwal as a director to overlook this vertical. “Our team is focusing on firms which have a profitable business model, which have gross margins. We are restricting ourselves from mandates where companies are loss-making,” Toshniwal added. “We are doing meaningful deals and the fees meet our threshold limits as these sectors have become sizeable and deals are yielding money,” Savla added. Avendus executives were not available for comment. Online retail in India was an approximately $2 billion market in 2013 and is likely to grow at a compounded annual growth rate of 63% to $7.2 billion by 2016, according to a Motilal Oswal report released in November. Apart from e-commerce, segments such as logistics, warehousing, coupons and payment gateways are also expected to do well, the report added. “As investments in this sector increase, deal flows have gone up significantly and most of the investment banks are trying to expand their business. People are trying to do good deals and build credibility,” said Harish H.V., a partner at Grant Thornton India Llp. “We will definitely see many of the companies go public, for those who are able to post profits will look to list in the Indian markets, rest will opt for overseas market listings,” Harish said.

Early investors in Indian e-commerce book huge profits

MUMBAI: Amid all the cash burn and eye-popping valuations, early investors in India’s burgeoning e-commerce sector are beginning to book profits. TOI has learnt that Bengaluru-based venture fund Kalaari Capital may be in the process of executing a secondary sale of shares worth $100 million (Rs 610 crore) in Delhi-based Snapdeal.

The e-tailer’s bigger rival, Flipkart, saw a similar secondary transaction a few months back, revealed sources. Early backers of the country’s largest e-commerce player like Accel Partners part-sold their shares in a $150 million (Rs 910 crore) round. This round also saw some investors and employees in Myntra, which was bought out by Flipkart earlier this year and became its shareholders, selling their shares.

A secondary sale is when an existing investor sells shares to a new one or the promoter at the company’s current valuation. The money does not come into the company’s coffers. Secondary deals have been common among private equity funds in India, but are comparatively rare for venture capitalists.

Vani Kola, MD at Kalaari Capital — which is now a shareholder in Flipkart as an early Myntra investor — did not respond to a query from TOI regarding the secondary transaction at Snapdeal. Accel Partners also did not offer any comments till the time of going to press about selling shares in Flipkart.

One of the first investors in Flipkart back in 2009, Accel had put in a million dollars in the company, which is now valued at over $10 billion. Kalaari, which first invested in the e-tailer as IndoUS Ventures, has in all put $25 million (Rs 150 crore) in Snapdeal over the past five years and holds around 14% stake in the online commerce player.

“Exits of early investors via secondary transactions is a very healthy trend and fills the last mile of the investing ecosystem. Exits are the lifeblood of venture capital and have been an issue in India. So this is an encouraging development and shows maturation of the process,’ said Avnish Bajaj, MD at early-stage VC fund Matrix Partners India.

Sources privy to the matter told TOI that Kalaari, an early-stage $160 million fund, was likely to shed a small single digit stake, giving it a windfall return nearly the size of its current fund. Sources said the secondary deal was being done at a higher valuation to the SoftBank round which valued Snapdeal at around $2 billion. The Japanese telecom and internet giant, which pumped $627 million into the company, owns about 32% in Snapdeal.

The exact size of these secondary deals at Snapdeal, Flipkart and Myntra and the identity of the buyers could not be ascertained immediately.

Silicon Valley fund Bessemer Venture Partners, another early investor in Snapdeal, part liquidated its shareholding in the company, booking gains on its investment during the SoftBank round itself.

The country’s top online commerce players including Flipkart, Snapdeal and Amazon have been bleeding on account of their frenetic growth and discounting to lure customers on to their platforms. TOI carried a report last week stating that almost a billion dollars in investor money was being guzzled up by the larger e-tailers collectively on account of advertising, discounting and increasing their employee strength. Flipkart and Snapdeal alone have raised about $3 billion this year from investors.

New law may help you sue e-tailers from your city

To help customers, the government is planning to revamp the Consumer Protection Act in the forthcoming winter session of Parliament to allow ‘territory free’ legal action against any goods or service provider.

Under the current rules, a consumer can initiate legal action against a seller only in the place where transaction takes place. “The current restriction of jurisdiction cannot work in an e-commerce environment….We are looking at changes in the consumer protection act to ensure it addresses these issues,” a senior government official privy to the deliberations on the issue told ET.

The ministry of consumer affairs is working on this revamp to safeguard interest of consumers in a world where shopping is not constrained by geography. The existing law, which came into being in 1986, cannot effectively deal with challenges posed by new economic, business and technological developments.

“Technology has erased geographic boundaries… For effective consumer protection it is essential that new law addresses these challenges,” the official said. The new provisions will cover both goods and service providers but only those that operate physically from the Indian soil.

The new law would cover not just vendors in online space but also marketplace providers such as Amazon and Flipkart.

A significant chunk of India’s $10 billion and rapidly growing e-commerce business comes from outside the big cities. Snapdeal says 60% of its business comes from outside the top 15 cities and Flipkart gets half its orders from non-metros. The government aims to ensure the new law empowers consumers to take on errant e-tailers.

But e-tailers fear it may be abused. “Online shoppers are already a pampered lot,” a senior executive at a top ecommerce firm said. “Most complaints are in any case settled in the customer’s favour. Such rules are prone to get misused.”

“This is a welcome order for consumers, as they can file for damages or a compensatory suit in their local jurisdiction saving time and money,” says Sanjay Ashar, senior partner of Crawford Bailey & Co. “However, it will be difficult for e-commerce companies to fight at several courts. When a company has many cases related to similar products or services, it can go to High Court and transfer those cases to one place. Also, if two courts in different places pass contradicting orders, it will be difficult for the company to know which one to follow, until they get clarity from higher courts. This will certainly increase the legal cost of the e-commerce industry.”

Once the revamped law is in place, consumers will be able to approach their local consumer court against a service or a goods provider who may be situated anywhere in the country. Any “unfair trade practices” including a false claim could be challenged under the new law.

The department of industrial policy and promotion (DIPP) had taken up the issue of regulation of e-commerce retailers with consumer affairs ministry. Brick-andmortar retailers associations had represented to the DIPP after leading online sellers including Flipkart and Amazon offered deep discounts to promote sales.

A new inter-ministerial group has also been formed by the government chaired by consumer affairs secretary to deal with new issues in the consumer space.

Sears and Kmart struggle to survive in the era of Walmart and Amazon

Sears racked up its eighth straight year of sales declines and its fourth straight year of losses as it begins taking loans from its billionaire CEO

Edward S Lampert, CEO of Sears, combined Kmart and Sears in 2005. The struggling retailer has seen eight straight years of sales declines. Photograph: Peter Morgan/Reuters

Sears, one of the most storied US retailers, is raising cash by closing stores and taking loans from its billionaire chairman and CEO Eddie Lampert.

The struggling superstore saw its third-quarter loss widen, losing $548m, or $5.15 per share in three months ending 1 November. A year earlier, Sears lost $534m, or $5.03 per share.

The company, which also owns Kmart, has racked up eight straight year of sales declines and four straight year of losses, according to data from FactSet.

Sears, once a staple of American shopping, is facing pressure from nimbler rivals like Walmart Stores Inc and Home Depot Inc, not to mention Amazon.com.

The country’s slow economic recovery from a terrible recession is his hitting middle and low-income Americans, its core clientele, especially hard.

One bright spot: reflecting the increasing tendency of Americans to shop using the internet, Sears’s online sales climbed about 9% from a year ago.

Sales at Kmart locations open at least a year rose only 0.5% in the third quarter. Comparable-store sales at Sears stores were even weaker, dipping by 0.7%.

Those are not healthy numbers and Sears has been raising cash as it tries to reshape itself.

In addition to a $400m short-term loan from a hedge fund run by Lampert in September, the chain has undergone a dramatic contraction, from 3,523 stores five years ago to less than 2,000 today.

“Our stores are often in the wrong place and are often too large for our needs,” Lampert said in a prerecorded conference call for investors early Thursday.

Lampert combined Sears and Kmart in 2005 about two years after he helped bring Kmart out of bankruptcy protection.

Last month Sears announced that it is might sell 200 to 300 of its buildings to boost its liquidity. The maneuver would entail forming a real estate investment trust, or REIT, that would hold the stores. Sears would continue to operate the stores by leasing them back.

Sears said Thursday that its long-term debt has declined slightly to $2.8bn from $2.9bn a year earlier. To date, the company has $2.2bn in liquidity for fiscal 2014. It had approximately $1.5bn available under its credit facility as of Wednesday.

Shares of Sears shed 4 cents to $34.21 in premarket trading.

7 Drives Multi Car Shop : Renault Lodgy

7 Drives Multi Car Shop

Expected Launch Date: September 2014

 

As usual, we brings you another exclusive on Renault’s next offering for the Indian market – the Lodgy MPV from Dacia. It goes without saying that it’s raining MPV’s in the Indian market and Lodgy is another future launch in the Indian market. The MPV segment in India will see new entrants like the Maruti Ertiga and a car like the Lodgy will be a worthy competitor to it. The Lodgy is a practical and spacious MPV. The design of the car is safe but very clean. With the grille moulded around the Dacia logo and sharp lines that highlight the sculptured wheel arches, Lodgy provides a preview of Dacia’s new corporate look. In India, like the Duster, the Lodgy will wear a Renault badge.

 

 

7 Drives Multi Car Shop

 

As said earlier the interior of the Lodgy is roomy and practical. The Lodgy is a seven seater and families will certainly like the spacious seats! The third row features very good space in terms of knee and head room (144 and 866mm respectively), which is more than enough to seat two adults comfortably. In seven-seat configuration, the third-row bench seat can be removed completely or else folded up against the front seat backs which is handy Just like the Renault Duster, the interior has a practical and sturdy look.

 

7 drives multi car shop : New Toyota Camry Facelift Unveiled

 

7 Drives Multi Car Shop

Toyota, the Japanese carmaker, today unveiled the updated Camry at the 2014 Moscow International Motor Show. While the most important change in the new model is the addition of a new engine, it also receives new features and cosmetic updates.

 

The refreshed model features a new large lower grille, which tends to remind one of the Corolla. The upper grille, however, is relatively thinner. The front fascia also gets new LED-infused head-lights, large air intakes and chrome-surrounded rectangular shaped fog-lamps. Then there is also the updated bumper and a slim chrome strip running across the width of the car. Though the side profile of the car remains largely similar, the newly designed alloy wheels add to its sporty appeal.

 

The cabin also receives a handful of updates, like a new multi-functional steering wheel, a 4.2-inch colour TFT display, a new backlit instrument cluster, wireless mobile charger, automatic beams, a new infotainment system and heated rear seats among others.

7 Drives Multi Car Shop : NEW HONDA JAZZ LAUNCHED IN THE INDONESIAN MARKET

7 Drives Multi Car Shop

The new generation model of the Honda Jazz has been launch in Indonesia in just 3 trim model levels, namely – Type A, Type S and Type RS. The top end RS variant of the Jazz hatchback comes fully packed with all the bells and whistles that Honda offers in the specially design sporty looking RS variants. The new Jazz premium hatchback is the more up-market, enhanced and more spacious version of the highly reliable Jazz car which has been liked by the global car buyers for several years.

The all new 2014 Honda Jazz hatchback has been powered by the powerful 1.5 liter i-VTEC petrol mill that does duty under the hood of the all new Honda City. The petrol engine is capable of churning out a max power of 120 PS and the peak torque of 145 Nm. The new Jazz has been launched in only its petrol version in Indonesia, as it is a petrol centric market. All the variants of the all new 2014 Jazz in Indonesia have a front wheels drive system and offer a 5 speed manual transmission gearbox as standard. The new Jazz’s higher two variants, namely the S and RS variants also get an additional transmission option of a CVT automatic gearbox, while the base Type A model trim only gets the standard 5 speed manual gearbox.

The all new 2014 Honda Jazz also comes with great safety measures and offers dual front airbags as standard irrespective of the model trim of the car. The range topping RS variant of the all new Jazz comes along with a sportier body kit for a more jazzed up look. The new Jazz is a bigger and better car in every aspect and offers more interior space as well. The all new Jazz also comes packed with many world-class features including keyless entry, pushbutton engine start/stop, leather wrapped steering wheel and gearlever, cruise control and 16-inch alloy wheels among many others.

The all new 2014 Honda Jazz premium hatchback has been launched in Indonesia with a price range of 199 million IDR to 248 million IDR (approximately Rs. 9.96 lakhs to Rs. 12.31 lakhs).

Honda Cars India is presently planning the launch of the all new Jazz in India. The car is expected to go on sale within this financial year, most probably towards the end of this year or early next year. For the Indian car market, Honda would power the new Jazz with the 1.5 liter i-VTEC petrol and 1.5-liter diesel engines for superb mileage.

7 Drives Multi car shop : All New Toyota Innova to be introduced in 2015

7 Drives Multi car shop

 

7 Drives Multi Car Shop

The Indian MPV market leader Toyota Innova is getting strong market competition recently. The MPV market is really lucrative in India, and that is why a whole lot of car majors are planning to launch their new MPVs in India. The newly launched Honda Mobilio MPV is already a massive hit and it is thought to eat into the high demands of the larger Innova as well.

 

Toyota Motor thus, is preparing itself beforehand to deal with this raising competition. The MPV segment is also very hot in the international markets as well, and the Innova being one of the bestselling models from the house of Toyota has a lot of importance for the company. There had been quite recent reports about Toyota working on all new Innova as well as the all new Fortuner. However, while the next-gen Toyota Fortuner SUV which is also the bestselling premium SUV in India is expected to launch in India sometime towards the end of next year, the next-gen Innova was said to be launching sometime in the year 2016 in the Indian car market. However, now it is revealed that the all new Innova too might land up in India as soon as next year.

 

The very popular Toyota Innova MPV is now being worked on full speed by Toyota and the vehicle’s test prototype models have also been spied on several times both in India as well as on the roads of Thailand. It is now being said that the all new Toyota Innova might be introduced to the various car markets by the year 2016, while the actual market launch is expected to happen in early 2016. However going by the fast forward actions of some auto makers, Toyota too might speed up the process of bringing in the all new Innova, especially in India where the market competition will further increase within a couple of years.

 

While speaking to the media, the president of Toyota Motor Philippines Corp. Mr Michinobu Sugata, revealed that the company is contemplating to invest around a hefty 2 billion pesos to increase the parts localization of the new Innova. About 50 percent of this huge investment will be used in increasing the localization of the pressed parts now. Currently even the pressed body parts of the Innova MPV are being imported from Thailand, while Toyota is planning on increasing the localization to more than 30 percent for the upcoming version of the vehicle.

 

It is speculated that apart from completely overhauled exterior and interior designs, the all new Innova will be also housing Toyota’s newly developed range of diesel engines. Apart from this, Toyota is also expected add an automatic transmission gearbox on the diesel variants of the next-gen Innova.

 

So far the undisputed ruler of the Indian MPV segment The Toyota Innova is getting tough competition from the Maruti Ertiga compact MPV, Honda Mobilio Nissan Evalia and Chevrolet Enjoy. The next-gen Innova is expected to be priced at Rs. 9 lakh to Rs. 15 lakh.