Electronics contract manufacturer Foxconn is considering establishing an electric vehicle (EV) manufacturing facility in India, with Tamil Nadu as a potential location for the plant.

Young Liu, the chairman and chief executive officer (CEO) of the parent company Hon Hai Technology Group, said that Foxconn will have an EV factory in the country very soon while talking about the company’s decision to build EV factories in Ohio and Thailand, ET reported.

Foxconn has been engaged in talks with the Tamil Nadu government regarding its EV plans, the report added citing sources. However, whether the company intends to engage in contract manufacturing for other EV companies or plans to market and sell EV products under its brand remains unclear.

Young Liu said that India has the potential to become a significant manufacturing hub globally. He noted that while transitioning from China to India as a manufacturing hub will require some time, this shift is expected to happen more quickly compared to the three decades it took for China to establish itself as a manufacturing powerhouse.

Earlier, Foxconn’s Liu said that the company’s Indian arm achieved an annual turnover of $10 Bn at the end of the second quarter. He also noted that Foxconn India’s metrics, such as revenue, number of employees, and investments, have grown ‘exponentially’ since foraying into India.

“Foxconn annual revenue was $200 Bn. From the perspective of India’s potential market size and if we can fully implement our plans there, several billion dollars in investment is only the beginning,” said Liu.

Regarding its foray into EV manufacturing, Liu earlier said that the company was mainly engaged in the information and communication technology assembly business.

Due to geopolitical tensions between Beijing and Washington DC, India continues to be the contract manufacturer’s new focus.

In May this year, Foxconn commenced the construction of $500 Mn manufacturing facility in Telangana’s Kongar Kalaan. Shortly thereafter, discussions took place between the company and Tamil Nadu Chief Minister MK Stalin regarding establishing a potential unit in the state.

The post Foxconn Explores EV Manufacturing Hub In India Amidst Shifting Global Dynamics appeared first on Inc42 Media.

When it comes to exiting a startup, each founder finds themselves in a unique position. However, Prabhkiran Singh, the CEO & cofounder of D2C brand Bewakoof, firmly believe that founders should possess a clear understanding of their priorities when it comes to their startup and whether they align with the company’s board.

“You, as a founder, should have clarity on what you are optimising for to decide on the key value additions you seek in a future deal. It could be financial gain or the commitment to continue building, which would require patient capital,” Singh said.

Singh shared these insights during a panel discussion titled “The BIG Exit – How D2C Brands Can Develop an Exit Strategy” at the fourth edition of Inc42’s D2C Summit 2023. The session was moderated by Angshuman Bhattacharya, National Leader of the Consumer Products & Retail Sector at EY India. Joining Singh on the panel were Pranav Malhotra, the founder of Trunativ; Rishubh Satiya, the CEO & cofounder of Plix; and Mohit Sadaani of The Moms Co.

Incorporated in 2012 by Prabhkiran Singh and Siddharth Munot, the Mumbai-based D2C brand Bewakoof specialises in selling casual wear and accessories, including theme-based clothing, notebooks, and backpacks, through its website.

In December 2022, Aditya Birla Group’s house of brands business, TMRW, invested INR 200 Cr in Bewakoof.

Deliberating upon another aspect of the exit strategy, Singh said that founders must gauge the strategic value of the deal. He added that it is essential to understand whether the acquisition will genuinely benefit the company or if it’s merely a perceived benefit.

Additionally, one must consider the perspective of the D2C platform, assessing whether the other party recognises the valuable skills that the brand brings to the table.

“There must be a willingness to make the acquired entity a corporate brand custodian and delegate authority in key areas or to the founders, as the brand requires independence to thrive,” he added.

During the discussion, Singh emphasised that no founder starts a startup with a pessimistic view of getting acquired. He cited several past partnerships where acquisitions proved highly beneficial to the success of companies such as Flipkart and PhonePe, CaratLane and Tanishq, MakeMyTrip and ibibo, Disney and Pixar, and Facebook and WhatsApp, among others.

He also stressed that some truly transformative and substantial ideas require significant capital. Therefore, a startup must decide whether to pursue this path independently or collaborate with a like-minded company where both parties are mature and can create something meaningful for consumers.

The post Bewakoof’s Founder On The Checkboxes D2C Brand Ticked Before Getting Acquired By TMRW appeared first on Inc42 Media.

Furniture renting startup Furlenco on Wednesday (September 6) said it is taking the omnichannel approach for growth and has launched two offline stores in Bengaluru as part of this strategy.

Founded in 2012 by Ajith Mohan Karimpana, Furlenco operates an online subscription-based furniture rental platform in Bengaluru, Mumbai, Delhi NCR, among others. It also sells furniture through its marketplace. 

The startup said its offline stores would offer customers the opportunity to experience the products and make informed purchase decisions. Like its app and website, Furlenco’s offline stores will offer both buying and renting options. 

“While the online platform has been instrumental in building our brand, we understand the value of offline touchpoints. As Furlenco expands its horizons beyond the confines of a furniture rental brand, we are committed to seize the untapped potential of offline opportunities to scale our operations and propel growth,” Furlenco founder and CEO Karimpana said.

Calling the launch of the stores just a beginning of the startup’s offline expansion plans, the CEO said Furlenco aims to enhance the customer experience and cater to their diverse buying habits via these stores. Going ahead, the startup aims to open offline stores across major Indian cities.

The stores will have a material library displaying physical material swatches, miniature furniture designs, furniture joinery, and finished products. 

The development comes months after mattress brand Sleepwell’s parent Sheela Foam announced acquisition of a 35% stake in Furlenco’s parent House of Kieraya for INR 300 Cr.

In FY22, Furlenco’s net loss rose 71% to INR 149 Cr, while operating revenue surged 1.5X to INR 129 Cr.

Amid mounting losses, Furlenco laid off about 180 employees last year as part of a cost-cutting exercise to attain profitability. 

Furlenco competes with the likes of Rentomojo, Pepperfry, and Urban Ladder. On Tuesday, Pepperfry said it has raised $23 Mn from existing investors, including institutional investors and family offices. 

The post Furlenco Enters Offline Segment With Launch Of Two Stores In Bengaluru appeared first on Inc42 Media.

Ecommerce major Flipkart on Tuesday (September 5) announced the launch of its metaverse-powered immersive virtual shopping feature, Virtual Worlds. 

With an eye on enhancing customer experience and engagement, the new offering will be available on the Flipkart app. Virtual Worlds are 3D-rendered metaverse environments where users of the platform can engage with different brands and try out products. 

Modelled after offline stores, the new feature will allow Flipkart customers to participate in gamified web experiences while interacting with a product. 

Overall, the immersive shopping experience will be available to users in two formats. While brands will be able to create dedicated and customised Virtual Worlds on the Flipkart app for their products to attract and engage shoppers, they will also be able to simply list on a ‘co-tenancy’ basis within Flipkart’s own Virtual World called Flipverse. 

“Brands can establish 3D stores for standout discovery, inspiring purchases, and rewarding customers through gamification, thereby crafting a distinct brand image,” said Flipkat in a statement. 

Besides, the company also announced the launch of its ‘Laptops Virtual Showroom’, which enables buyers to explore laptops in an immersive setting.

Commenting on the development, Flipkart Labs’ head Ravi Krishnan said, “… Brands have the opportunity to virtually present their unique characteristics, forging closer relationships with customers. The co-tenancy feature within Flipkart’s Metaverses allows brands to present a variety of products in a shared 3D space, setting the stage for the future of shopping.”

Meanwhile, Flipkart Labs claims to have multiple new Virtual Worlds launches in the pipeline as the festive season approaches. The ecommerce major also added that brands will be offered a ‘special opportunity’ to allow users to explore products in 3D on Flipverse during the festive period. There was no further clarity on what this special opportunity was. 

Flipkart is also partnering with Bengaluru-based Web3 platform Layer-E to build these Virtual World experiences. 

“Flipkart Labs enables the Virtual World experiences in collaboration with brand-facing teams within Flipkart including the Ads & Category teams, and a key external tech partner – Layer-E. Layer-E builds immersive infrastructure for Web3 commerce with global brands and creators, as well as art, media, and entertainment IPs,” the company said. 

Flipkart claims to actively leverage emerging technologies such as 3D, augmented reality (AR), blockchain, and generative AI to enhance shopping experience for its 45 Cr users. Leading from the front, the ecommerce major has been tinkering with such technologies at least for a few years now. 

It launched the 3D and AR features back in 2021, and followed it up by the introduction of beauty and makeup try-ons on its app. It also piloted Flipverse last year, which, as per the company, achieved the largest ecommerce metaverse activation globally. During the six day trial, users from 2,300 cities streamed 20,000 hours of content on Flipverse to discover products virtually in an immersive fashion.

The post Flipkart Unveils Virtual Worlds To Offer Metaverse-Powered Shopping Experience appeared first on Inc42 Media.

Singapore-based game developer Garena has postponed the much-awaited launch of the exclusive Indian version of the popular battle royale game Free Fire by ‘a few weeks’ to fully complete its localisation.

Last week, Garena said Free Fire was set to make a comeback in India after being banned for a year-and-a-half, with the game available for download on September 5.

However, the company said it is postponing the launch of the game to offer the ‘best possible experience to all their Free Fire India Fans’.

“In addition to refining the gameplay, we are taking some time to fully complete our localisation of the Free Fire India experience,” the company said in a statement.

Garena first announced the launch of its exclusive ‘Free Fire India’ version on August 31, with former captain of the India cricket team MS Dhoni as its brand ambassador. 

The company also said that Free Fire India will be an India-exclusive app, with features and content that are specific to the local market.

The Ministry of Home Affairs banned Free Fire in India in February last year, along with 53 other apps, due to security concerns. However, Garena continued its operations in India by providing a premium version of the game, Free Fire Max, which was not banned by the Centre.

The latest version of Free Fire in India will have a verification system to enable parental supervision and gameplay limitations, among others, to address the Centre’s concerns. 

The company has also partnered Yotta, a Hiranandani Group company, for the relaunch. Yotta will provide local cloud hosting and storage infrastructure for the game.

Last week, it was also reported that South Korean gaming giant KRAFTON received full approval from the Centre to operate its battle royale game Battlegrounds Mobile India (BGMI) after a three-month long audit process.

With rising internet and smartphone penetration, India has emerged as a lucrative market for gaming companies over the last few years. The number of esports players in India surged four-fold to 6,00,000 in 2022 from 1,50,000 in 2021, according to a Lumikai report.

While BGMI has seen considerable success after its relaunch in India, Garena’s ‘Free Fire India’ version is also expected to cash-in on the country’s growing online gaming industry, which is expected to reach a market size of $8.6 Bn by FY27.

Besides BGMI, Free Fire India will compete against the Made-in-India battle royale title Indus, which is being developed by Pune-based game development startup SuperGaming.

The post Garena Postpones Launch Of Free Fire India By A Few Weeks appeared first on Inc42 Media.

B2B seafood startup Captain Fresh has raised $20 Mn in an extended Series C round led by Japan’s SBI Investments and Evolvence Capital.

The funding round also saw participation from Captain Fresh’s existing investors – Tiger Global, Accel Partners, Matrix Partners India, and Prosus Ventures. 

The Bengaluru-based startup will utilse the fresh capital to expand its operations in the European and the US markets. 

Captain Fresh also announced the appointment of Basola Valles as the CEO for the European market. 

Commenting on expansion plans for Europe, Valles said, “We aim to reduce turnaround times, invest in product innovation, and deliver on transparency and traceability needs. We will initially focus on selected European countries in partnership with local players.”

The funding round comes almost over a year after Inc42 reported that the startup raised $7.3 Mn from Evolvence Group as a part of its extended Series C round. 

Captain Fresh last announced raising $50 Mn in March 2022 to foray into Africa and Middle East. This funding round was led by Prosus Ventures and Tiger Global. Accel India, Matrix Partners India, Ankur Capital, and Incubate Fund also participated in the round.

Founded in 2019 by Utham Gowda, Captain Fresh is a farm-to-retail platform for animal protein – fish, seafood and sheep. It procures directly from agents and farmers and supplies across B2B, B2R and B2B2C channels. 

The startup indirectly competes against the likes of FreshtoHome, Licious, and Good To Go-acquired Tendercuts.

The post Captain Fresh Raises $20 Mn To Expand Operations In Europe, US appeared first on Inc42 Media.

IPO-bound D2C furniture brand Pepperfry has raised $23 Mn from its existing investors, including institutional investors and family offices. 

The fresh capital infusion will help the startup cater to its over 10 Mn customer base while strengthening its omnichannel presence, Pepperfry said in a statement.

The funding comes almost two years after the startup bagged around $45 Mn in a debt funding round from Norwest Venture and General Electric Pension Trust.  

Besides the fundraise, the startup also announced elevation of its cofounder Ashish Shah as the new CEO, after the unfortunate demise of Ambareesh Murty last month. 

The startup, which competes against the likes of Urbanladder, has been preparing for its initial public offering (IPO) since early 2022. It even converted itself into a public entity in May last year, a mandatory step before filing draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI). 

The startup is backed by the likes of Goldman Sachs, Norwest Venture Partners, Bertelsmann India Investments and State Street Global Advisors. It reported a net loss of INR 183 Cr in FY22, while total revenue stood at INR 264.1 Cr during the year. The startup’s expenses jumped 40% to INR 458.1 Cr in FY22 from INR 327.5 Cr in FY21 on the back of growing marketing expenses.

Founded in January 2012 by Murty and Shah, Pepperfry sells a wide range of furniture and other home products, including mattresses, dining and bar furniture, carpets, appliances, garden and outdoor, on its website. It also has an offline presence through its franchise model. 

Pepperfry competes against the likes of Jaipur-based Woodenstreet, which last raised $30 Mn last year, Reliance-owned Urban Ladder, Think Investments-backed Arrivae, and Upscalio-backed Green Soul.

The post Pepperfry Bags $23 Mn Funding, Appoints Cofounder Ashish Shah As CEO appeared first on Inc42 Media.

Ecommerce giant Flipkart on Monday (September 4) said it would create 1 Lakh direct and indirect seasonal jobs to strengthen its supply chain to meet the customer demand during its flagship season sale, The Big Billion Days (TBBD), this year.

The Walmart-owned ecommerce company said in a statement that it would create jobs across divisions like supply chain, sortation centres, and delivery hubs. 

Flipkart’s festive season sale will begin on September 23. Over the years, festive season sales have emerged as a big event for ecommerce companies, including Flipkart and its rival Amazon. With the rise in penetration of mobile phones and internet in the country, these companies see a spike in demand from customers during the festive season, especially in electronics and fashion segments. 

Commenting on TBBD 2023, Hemant Badri, senior vice president and head of supply chain, customer experience, and ecommerce at Flipkart, said, “The complexity and scale during TBBD require us to scale up for capacity, storage, placement, sorting, packaging, human resources, training, delivery, and the entire supply chain, and this scale is always unprecedented. This year, we are also creating over a lakh new job opportunities in our supply chain… “ 

The ecommerce major said it has also scaled its supply chain with last-mile distribution hubs and large-scale fulfilment centres to mark the 10th edition of its annual flagship event. 

Ahead of the festive sale, the company also claimed to have added more than 19 Lakh square feet of space across states like Uttar Pradesh, Gujarat, Bihar, Punjab, Rajasthan, and Telangana. 

Flipkart plans to deliver more than 40% of its shipments during the festive season through its Kirana delivery program.

Last year, Walmart said Flipkart’s flagship festive season sale in India contributed significantly to its net sales growth in Q3.

Flipkart’s archrival Amazon’s ‘Great Indian Festival Sale’ will also begin on September 23, the same day as Flipkart. Besides these two, other brands such as Meesho, Myntra, AJIO, Nykaa also make special arrangements to meet the higher demand during the festive season.

Last year, ecommerce marketplaces recorded sales worth INR 40,000 Cr during the first week of the festive season sale.

The post Flipkart To Create 1 Lakh Seasonal Jobs Ahead of Festive Season Sale appeared first on Inc42 Media.

Amid mounting losses, B2B ecommerce unicorn Udaan has carried out a significant restructuring exercise in its teams and business units.

As part of this restructuring, the startup will be merging the Essentials business, comprising FMCG, staples, and pharma categories, with the Discretionary business, which includes general merchandise, lifestyle, and electronics categories.

As part of this merger of the two divisions, Vivek Gupta, who led the Essentials business, will transition from the role but will continue to be an advisor to Udaan’s board, the startup said in a statement.

As per Gupta’s LinkedIn profile, he has worked as the chief business officer of Udaan’s Essentials business for over three years now.

Meanwhile, Uday Bhaskar, who currently heads the Discretionary business division, will now lead the unified business unit.

“The integration of these two businesses units serves the twin objectives of ‘synergy in operations’ and building ‘excellence in commercial capabilities’,” Udaan said. 

As part of the rejig, Udaan CTO Gaurav Bhalotia will leave the startup.

Among other changes, Siddharth Reddy will now lead the engineering division and Abhilash Pillai will lead product management for the customer platform for Udaan. Both Pillai and Reddy will report to Udaan’s cofounder and CEO Vaibhav Gupta and also join the executive management team.

Speaking about the restructuring, Gupta said, “Over the last two years, we have made significant strides in building a strong business with sharp focus on customer centricity, cost leadership and building long-term capabilities with the sole objective of driving sustainable growth.”

He also said that led by Udaan’s executive leadership team, the company has witnessed a “steady and durable quarter-over-quarter progress” in key performance indicators across all business verticals.

“As we move forward in our journey, we are taking various steps to further optimise synergies across businesses to be able to offer better value to our customers, which is key to leveraging the huge $100 Bn eB2B opportunity that Bharat offers,” he added.

Founded in 2016 by Gupta, Sujeet Kumar, and Amod Malviya, Udaan enables supply chain and logistics operations focused on B2B trade. It claims to enable daily delivery across over 1,000 cities and 12,500 pin codes through udaanExpress.

Udaan’s Executive Management team will now comprise Gupta, group CFO Aditya Pande, group chief human resources officer Meenakshi Priyam, head of Essentials & Discretionary Business, Bhaskar; and others.

The rejig comes on the heels of Udaan appointing Nillambaran Ganenthiran as the newest board member of its parent company Trustroot Internet. Ganenthiran will reportedly represent  Lightspeed Ventures on the board.

Udaan, which is backed by the likes of Lightspeed, Microsoft, and Tencent, has raised close to $1.8 Bn in total funding so far. The startup fired 350 full-time employees in a second round of layoff exercise last year, soon after its $120 Mn debt round, in its bid to turn profitable.

In FY22, Udaan’s net loss widened 1.2X year-on-year (YoY) to INR 3,075.80 Cr on operating revenue of INR 9,943.8 Cr, which jumped 1.7X.

With profitability now becoming the key focus, the Indian startup ecosystem is witnessing not just an increasing number of layoffs but also more business rejigs and management-level exits.

Recently, Porter restructured its leadership team and cofounder Uttam Digga assumed the role of CEO. Ahead of its impending IPO, OYO also reshuffled its top management team.

The post Rejig At Udaan: Merges Essentials & Discretionary Businesses, CTO Resigns appeared first on Inc42 Media.

Today, India has more than 50K digital-first brands. Many of these emerging brands are now exploring offline strategies. However, Chaitanya Ramalingegowda, the director & cofounder of Wakefit, believes that in today’s landscape, it’s no longer feasible for D2C brands to have separate online and offline budgets for marketing, distribution or customer acquisition costs.

“Now, it’s about sales and distribution costs, and evaluating the performance of each channel in terms of revenue,” he added.

Ramalingegowda shared his insights during the fourth edition of Inc42’s D2C Summit 2023, as part of a panel discussion featuring Harsh Modi, the cofounder & CEO of Mulmul; Shreedha Singh, the CEO & cofounder of The Ayurveda Company; and Gaurav Khatri of Noise. The session was moderated by Dipanjan Basu, the cofounder & Partner at Fireside Ventures.

The Bengaluru-based D2C furniture and mattress brand was founded in 2016 by Ankit Garg and Ramalingegowda. Initially, Wakefit focussed solely on mattresses until 2018 and then started expanding its product categories.

Presently, Wakefit offers around 500 SKUs across 15-20 sub-categories. Approximately two-thirds of its sales are generated through its website, app, and offline stores, with the remainder coming from online marketplaces such as Amazon and Flipkart.

In FY22, the company witnessed a substantial increase in total losses, which surged to INR 101.8 Cr compared to INR 37 Cr in FY21.

However, its operating revenue jumped nearly 55% YoY to INR 632.8 Cr in FY22.

In January 2023, the startup secured $40 Mn in a funding round led by Investcorp, with participation from existing investors Sequoia India, Verlinvest, and SIG. This brought Wakefit’s total funding raised to date to $145 Mn.

Ramalingegowda reminisced about Wakefit’s journey to venturing offline, noting that they always believed in establishing themselves as a digital-first brand. They saw online as a means to achieve non-linear growth and greater control over the consumer experience.

“We never had the conviction to go offline until we expanded into furniture. That’s when factors like the rent-to-revenue ratio and ROI period started making sense. When we noticed that at our pilot store, the average order value nearly doubled, and repeat customer behaviour was more prevalent, we realised that customers also craved this offline experience,” he added.

Ramalingegowda emphasised that marketing strategies across online and offline channels are progressively merging, making it challenging to calculate customer acquisition costs (CAC) differently for each channel. This shift underscores the importance of how a brand manages its business across various channels.

He also shared valuable insights and advice for D2C startups, emphasising that entering a new channel involves more than just launching products. It requires a fundamental shift in how a brand approaches product development, packaging, pricing, supply chain, and measuring outcomes.

“It’s not merely about introducing a product; it’s a profound change in how we perceive our business when entering a new channel,” he added.

Furthermore, Ramalingegowda stressed the importance of owning customer relationships and the complete customer experience. This entails engaging with customers who purchase products through various channels, ensuring their needs are met, and addressing any concerns.

“In our philosophy and belief system, it’s about taking care of the customer, regardless of where they make their purchase,” he concluded.

The post Wakefit Cofounder On Why Brands Need To Have Cohesive Online & Offline Go-To-Market Strategy appeared first on Inc42 Media.

Having secured INR 500 Cr from Warburg Pincus and Malabar Investments last October, Indian D2C electronics giant boAt is not in a rush to go for an initial public offer (IPO), according to cofounder and chief marketing officer (CMO) Aman Gupta.

Gupta said that while the D2C electronics brand will go for a public listing in India, the company does not have any plans to do so in the next couple of years, given that it has already secured the funding.

“There is no urgency [for the IPO]… [Earlier] we had decided to go for an IPO next year, but then we raised funds. We had thought of raising INR 500-900 Cr via the primary [part of the IPO] but then we raised funds from Warburg. So, we have no need for additional funds for the next two to three years,” Gupta said, speaking at Inc42’s ‘The D2C Summit 4.0’.

“We may think about the IPO next year,” Gupta added.

Incidentally, boAt filed its draft red herring prospectus (DRHP) in January last year for an INR 2,000 Cr public issue. The IPO received SEBI’s green light in May 2022 and everyone expected the Aman Gupta and Sameer Mehta-led brand to go public by the end of the year.

At the time, according to the IPO documents, both founders held 28.26% of the equity share capital on a fully diluted basis, giving them control of the company. However, the shareholding pattern in the company might have changed with the entry of Warburg and Malabar Investments.

Notably, 2022 was a difficult year for tech startup stocks on the bourses, as companies listed in 2021 saw an absolute routing during the year. The likes of Paytm, Zomato and many others recorded all-time lows on the stock market, prompting several startups, including boAt, to defer their IPO plans.

Sharing his long-term ambitions, the Shark Tank judge said the D2C brand is planning to take its revenue to INR 10,000 Cr in the next two to three years and is currently in the process of building a roadmap for the same.

“We did INR 4,000 Cr in revenue this year (FY23), we will do INR 5,000 Cr next year (FY24). While we haven’t planned what we’ll do the year after that, we will become an INR 10,000 Cr company in the next two to three years,” Gupta said at The D2C Summit 4.0.

The post Flush With Funds, No IPO Plans For At Least A Couple Of Years: Aman Gupta appeared first on Inc42 Media.

At a time when companies and the Indian government are looking at ramping up domestic manufacturing, boAt cofounder and chief marketing officer Aman Gupta has said that 70% of the audio device giant’s products are made in India as of 2023.

“Pre-Covid, 0% of our products were made in India. Cut to 2023, and 70% of our products are now made in India,” said Gupta during Inc42’s ‘The D2C Summit 4.0’.

The cofounder was in a conversation with The Moms Co cofounder Mohit Sadaani during a session titled ‘The Rhythm Of Success – How boAt Scaled To Become A $1.4 Bn Audio & Wearable Brand’.

Talking about the manufacturing ecosystem when boAt was in its initial stages, Gupta said there was no support for building audio products in India at that time. Consequently, boAt founders Gupta and Sameer Mehta had to set up a product team based in China to manufacture and import products.

However, Gupta said that the situation is rapidly changing now.

“If you look at how the government is opening up the semiconductor industry in India, how it is pushing efforts on separate parts… Right now, not everything is made in India but, like I always say, Rome was not built in a day. India will take time and everyone’s making efforts,” said Gupta on the outlook for manufacturing in India.

Following the Covid-19 pandemic and the border faceoff between India and China since 2020, boAt has been working on setting up manufacturing facilities in India to bring speed and agility to its supply chain, Gupta said.

Earlier this year, the boAt CMO took to X (then Twitter) to announce that the wearables unicorn manufactured 1 Cr products in India in 2022. This number has reached 1.5 Cr as of June 2023, Gupta said. 

boAt manufactures its products in India in partnership with players like Dixon.

In June this year, the D2C electronics brand said its net sales rose to around INR 4,000 Cr (about $500 Mn) during the financial year 2022-23 (FY23), representing a growth of about 39% from INR 2,872.9 Cr in FY22.

Founded in 2015 by Gupta and Mehta, boAt operates in the larger audio and wearables markets and sells products such as headphones, smart watches and speakers. Last year, the startup put its proposed INR 2,000 Cr initial public offering (IPO) on hold and raised INR 500 Cr in funding.

The post 70% Of boAt Products Are Now Made In India: Cofounder Aman Gupta appeared first on Inc42 Media.

Emphasising the substantial opportunities in both brand creation and platform-focused business, Adwaita Nayar, the cofounder of Nykaa and CEO of Nykaa Fashion, said that it is a really good time to build brands in the beauty and fashion space.

“We are really bullish on the kind of consumption and the kind of growth that these businesses and verticals are going to see,” Nayar said while speaking at Inc42’s fourth edition of the D2C summit.

Discussing the potential and opportunities within the Indian market, specifically in the context of D2C brands and identifying gaps in the brand ecosystem, Nayar added that there is a significant opportunity in India due to a lack of options in various product categories such as women’s fashion.

Nykaa itself is building private label brands across its fashion and beauty categories, which the company is very bullish about, Nayar added.

“We don’t actually like to call them private labels internally, we call them owned brands because private labels typically have the connotation of being cheaper and sort of undercutting on price. We are trying to identify gaps in the ecosystem. And then we’re trying to create beautiful brands in those spaces. We have entirely different teams that work on this very high focus on creativity, design quality, coming up with the positioning and coming up with the gaps,” she said.

Nykaa currently has 20 ‘owned brands’ across fashion and beauty segments. The beauty and fashion ecommerce giant sells owned brands not only on its own platforms but also on other platforms and offline channels, with some brands performing well outside their primary platforms.

In addition, Nayar said she sees a significant opportunity in the realm of teen-focussed fashion. She frequently discusses this potential with her team and believes that while Nykaa may cater to some teenagers, there remains a substantial opportunity for someone to establish a dedicated platform and a collection of brands tailored specifically for teens.

Nykaa’s net profit jumped 8.2% year-on-year (YoY) to INR 5.4 Cr in the first quarter of FY24. The Falguni Nayar-led startup’s operating revenue jumped to INR 1,421.8 Cr in Q1 FY24 from INR 1,148.4 Cr in the corresponding quarter of last fiscal.

Beauty and personal care (BPC) vertical’s GMV grew 24% YoY to INR 1,850.8 Cr in the quarter under review. It also rose 13.6% on a QoQ basis. The GMV of Nykaa’s fashion vertical rose 12% YoY to INR 653.7 Cr in Q1 FY24. However, on a QoQ basis, it declined from INR 664.1 Cr.

The post These Are Great Times To Build Brands In The Beauty & Fashion Space: Nykaa’s Adwaita Nayar appeared first on Inc42 Media.

According to the CEO of Myntra, Nandita Sinha, the Flipkart-owned ecommerce major receives nearly 40% of orders of its international brands from Tier II cities and beyond.

“I think Tier II today is one of the fastest-growing geographies. One of the interesting parts about Tier II and Tier III cities is that 40% of our international brands business comes from these cities. So, customers from Tier II and III cities are buying across brands,” Sinha said, speaking at a session during Inc42’s fourth edition of The D2C Summit 2023.

The ecommerce major has been busy launching several products and services over the past few months, including FWD and Myntra Minis, to attract GenZ customers and improve user experience on its platform.

Myntra aims to attract 10 Mn GenZ users and expand its customer base over the next two years. As of 2022, Myntra has a customer base of 8.6 Mn GenZ users. Further, the platform plans to increase the number of styles available on FWD to over 100K by 2023-end.

“So, I think the more we personalise our experience for each customer, it’s increasingly easy for us to cater to different customer types. Tier II and III cities have been a very important part of our strategy over the last few years and will continue to do so as we go forward,” Sahni said.

Talking about the larger fashion opportunity in India for D2C brands, the Myntra CEO noted that only around 30-35% of the $100 Bn industry is branded, with the rest being unbranded. 

“New brands will emerge in this country. They will, of course, be international brands, which will come. But a lot of the brands in the country will be homegrown,” Sinha added. She said that over the last few years, the Indian consumer has become far more tech-savvy, due to which the adoption of fashion brands has seen a hockey stick growth.

Myntra also has a considerable contingent of in-house private labels, including names such as Roadster, HRX, Mast & Harbour and more. Over the past few years, Myntra has launched more than 20 so-called ‘master brands’.

While the platform is yet to publish its financials for the financial year 2023 (FY23), it posted a 40.5% YoY increase in its loss to INR 597 Cr in FY22. The bottom line took a hit despite a 45% year-on-year (YoY) increase in operating revenue to INR 3,501.2 Cr in FY22.

The post Tier II and III Cities Account For 40% Of International Brand Orders On Myntra: CEO Nandita Sinha appeared first on Inc42 Media.

According to Avnish Anand, the newly appointed CEO of the jewellery startup CaratLane, data collected from customers over the past 15 years has helped the company prepare effectively during festive seasons over the years.

“We have collected a lot of data for the last 15 years. This gives us advantage and control on how we can plan for the festive season,” Anand said while speaking at the fourth edition of Inc42’s ‘The D2C Summit 2023’.

Anand added that CaratLane is a digital brand and collects customer data across all its platforms, including its stores. The CEO added that the data collection allows the startup to manage inventory effectively, given the slow-moving nature of CaratLane’s product line.

In a similar vein, Amit Dutta, the CEO of Le Marche, and Prashant Parameswaran, the MD & CEO of Tata Consumer Soulfull, outlined the importance of data in managing the unexpected demand during India’s festive season, which starts around Rakshabandhan (late August-early September) and ends after Diwali (late October-early November).

Dutta also highlighted the fact that a data-driven business can have enough guardrails to ensure profitability. “Data can help brands predict and plan ahead of time, paving the way for profitable D2C businesses,” Dutta said, speaking at a session — ‘The Great Indian Festive Rush: A Brand’s Playbook To Capitalise On High Demand’.

Anand was recently appointed the CEO of the brand after his former boss and CEO Mithun Sacheti moved on from the company, selling his stake to Titan for a massive INR 4,621 Cr, valuing CaratLane at $2 Bn (INR 17,000 Cr).

Founded in 2008, CaratLane is an omnichannel brand that manufactures and sells jewellery items in India and the US. The startup competes with other homegrown startups in the jewellery space such as GIVA, BlueStone and Melorra.

The fourth edition of Inc42’s D2C summit has brought together 70-plus leading minds in the ecommerce space, including D2C founders, ecommerce enablers and investors, to discuss the latest trends, growth drivers and challenges in the D2C ecosystem.

The post Use Data To Predict Trends, Plan Ahead To Cash In On Festive Fervour: CaratLane CEO Avnish Anand appeared first on Inc42 Media.

Even a decade after its inception, lifestyle D2C brand The Souled Store still earns 90% of its revenues from the D2C channel, the cofounder and director, Vedang Patel, said at the fourth edition of Inc42’s D2C Summit.

“About 90% of our revenues come from D2C channel, and about 10% comes from marketplaces, even at today’s scale,” Patel said, adding that the brand has built its customer base and enjoys a high retention rate.

“I think if your product is aspirational, then marketplaces become a little bit different as you don’t want people to say that they have shopped on marketplaces like Amazon but you want them to say that they have bought this on The Souled Store,” Patel added.

After establishing its brand presence through D2C, the startup is now building its presence on marketplaces, which is the next opportunity for growth. 

According to Patel, brands should offer products at homogeneous prices on marketplaces as well as from a long-term perspective.

Founded in 2013 by Patel, Rohin Samtaney, Aditya Sharma and Harsh Lal, The Souled Store started as a branded merchandise apparel brand and later morphed into its current D2C casual wear brand form. It also sells other products such as backpacks, sneakers, shoes and socks to customers ranging from kids to late adults. 

Earlier this year, The Souled Store raised INR 135 Cr in a strategic funding round led by Xponentia Capital. The round also saw participation from its current investors Elevation Capital and RPSG Capital.

Despite nearly doubling its operating revenue, the startup recorded a net loss of INR 26.72 Cr in FY22, marking a sharp year-over-year decline from a net profit of INR 51.27 Lakh. This occurred at a negative EBITDA margin of 10%, Patel revealed in a recent conversation with Inc42.

Patel also stated that the startup has achieved an annual revenue run rate (ARR) of INR 400 Cr in Gross Merchandise Value (GMV) for the current fiscal year. He anticipates a positive EBITDA margin of 2% for FY23 and is targeting a 15% EBITDA margin by FY24. The startup boasts 5 Mn registered app users and has set a goal to surpass INR 1,000 Cr in GMV within the next three years.

As per Inc42 data, omnichannel and D2C startups raised $1.7 Bn in funding in 2022 and emerged as the most funded sub-sector within the larger ecommerce arena. 

The homegrown D2C sector’s total addressable market opportunity is expected to surge to the $300 Bn mark by 2030.

The post 10 Years On, The Souled Store Still Earns 90% Revenue Via D2C: Cofounder Vedang Patel appeared first on Inc42 Media.

Product-market fit is a dynamic concept that’s never set in stone, especially in the world of direct-to-consumer (D2C) brands, said the cofounder of WOW Skin Science, Manish Chowdhary, at the fourth edition of Inc42’s D2C Summit.

Speaking with Rajiv Srivatsa, partner, Antler India, during a fireside chat, Chowdhary deliberated upon how WOW began its journey as a dietary supplement brand, but it soon recognised a shift in consumer preferences toward skincare and haircare.

“We recognised that the majority of our customers were gravitating towards skincare and haircare. This realisation prompted us to pivot and innovate. A decade ago, we could never have imagined becoming top sellers in the haircare segment,” Chowdhary said.

Founded in 2014 by Manish and Karan Chowdhary, WOW Skin Science boasts a diverse range of products spanning skin, hair, bath and body, wellness, nutrition, and health.

Competing with industry giants like Nykaa, Mamaearth, SUGAR Cosmetics, and mCaffeine, the startup secured $48 Mn in funding from Singapore’s GIC in June 2022, bringing its total funding to $125 Mn across multiple rounds.

However, it’s worth noting that WOW Skin Science reported a significant increase in its net loss, jumping to INR 135.83 Cr in the financial year 2021-22 (FY22) from INR 8.78 Cr in FY21. This surge in losses outpaced the growth in revenue.

Nevertheless, the total revenue of WOW Skin Science’s parent company, Body Cupid Private Limited, skyrocketed by 3.4 times to INR 343.94 Cr in FY22 from INR 99.83 Cr in FY21. Operating revenue also mirrored this growth, reaching INR 340.37 Cr from INR 99.83 Cr in FY21, according to Body Cupid’s filings with the Ministry of Corporate Affairs.

Chowdhary emphasised that their commitment to building a digital-first brand was clear from day one. To stand out in a crowded market, they implemented various strategies, including a unique packaging choice. While most products in India are packaged in white, WOW opted for amber and gold packaging to stand out among other products being searched by customers online.

The founders discovered that gold, in particular, held consumers’ attention for a few extra seconds, making it a valuable addition to their packaging.

“In our category, there’s no shortage of imitators who emerge within six to twelve months. Currently, there are over 5,500 skincare companies, and more brands are realising the untapped potential in this sector. Competitors may try to replicate your success, but you must stay on the constant treadmill of innovation,” he added.

Chowdhary also underscored the significance of marketing innovation as both a differentiator and a challenge for D2C brands. Many brands fail in the early stages, but even those that achieve initial success can’t rest on their laurels.

“You need to continuously recalibrate. What worked to take you from zero to 10 won’t necessarily take you from 10 to 100 or 500. Therefore, you must keep evolving your strategy along the way,” he emphasised.

The fireside chat delved further into WOW’s strategies for omnichannel and cross-border expansion, their vision for capitalising on future opportunities, and the invaluable lessons learned in the world of skincare.

The post WOW Skin Science’s Manish Chowdhary On Why Founders Need To Constantly Stay On The Innovation Treadmill appeared first on Inc42 Media.

At the Amazon SMBhav summit on Thursday (August 31), the ecommerce giant joined hands with Indian Railways and Indian Post to facilitate faster product deliveries in India.

Amit Agarwal, SVP, India and Emerging Markets, Amazon, said that the ecommerce giant will open up a dedicated corridor for its seller partners with Indian Post and Railways to expedite shipping across the country. Amazon has signed a Memorandum of Understanding (MoU) with the two agencies, Agarwal said.

“We have been partners with the Indian postal service for a while. This will create the first-of-its-kind, seamless, integrated cross-border logistics solution. Now, the idea of somebody sitting in the corner of the country (India) can ship products to customers in New York just becomes more real,” Agarwal said at the event in New Delhi.

India Post and Amazon also unveiled a commemorative postal stamp at the event.

Agarwal said the company has digitised more than 2 Mn SMEs in India and now aims to facilitate $20 Bn in exports from the country. So far, it has enabled $8 Bn in exports from India.

Manish Tiwary, country manager, India consumer business, Amazon India, said, “As we get closer to delivering on our India Pledges to digitise 10 Mn MSMEs, enable $20 Bn in cumulative exports and create 2 Mn direct and indirect jobs in India, we remain excited about the long-term opportunity in India.”

To be sure, the ecommerce giant had earlier announced its India plans for 2025, as mentioned by Tiwary at the event.

Amazon also launched multi-channel fulfilment, allowing D2C companies and other small businesses to use the Amazon infrastructure and run operations even if they’re not registered with the ecommerce company.

Congratulating the ecommerce giant, Dr Jitendra Singh Minister of State (I/C) said, “For lakhs of small businesses across India, digitisation can offer economic growth, broader customer reach, reduced marketing & distribution expenses, and access to foreign markets.”

Amazon Jumps On The GenAI Bandwagon

Jumping on the generative AI bandwagon, Amazon also announced Sahay, an AI chatbot, to help SMEs grow and scale. Sahay allows prospective businesses to ask questions to help them set up shop with Amazon.

“Whether they want to register, list items, get help, expand sales and be more successful, Sahay will help. I’m very excited to bring the power of generative AI to Indian small and medium businesses starting now and that should be pervasive going forward as well,” Agarwal said.

Amazon expects generative AI to transform its business entirely and said it is difficult to imagine what the company will look like 10 years from now, thanks to AI.

“We think in the next 10 years, there won’t be any aspect of our business that won’t be transformed in some meaningful way by this (generative AI). There won’t be any way that we do our business today that AI won’t transform,” Russell Grandinetti, SVP – International Consumer at Amazon, said at the event.

The post Eyeing $20 Bn Exports From India, Amazon Inks MoU With Indian Railways, Indian Post appeared first on Inc42 Media.

After multiple cuts, US-based asset management company (AMC) Fidelity Investments has increased the valuations of ecommerce unicorn Meesho and fintech unicorn Pine Labs, according to the monthly update filed with the US Securities and Exchange Commission (SEC).

According to the update for the month ended July 31, 2023, Fidelity said its stake in Meesho was worth $43.24 Mn, up from $41.02 Mn as of June 30, 2023. This translates to an increase of 5.41% in the ecommerce unicorn’s valuation.

At the same time, Fidelity valued its stake in Pine Labs at $34.77 Mn as of July 31, 2023, up 4.6% from $33.24 Mn as of June 30, 2023. However, the valuation of SaaS unicorn Gupshup remained unchanged.

Earlier, Fidelity cut Gupshup’s valuation thrice between April and June 2023.

Incidentally, this is the second valuation uptick for Pine Labs, as Baron Capital marked up its valuation, alongside Swiggy, earlier this week.

It must be noted that Fidelity marked down the valuations of Indian startups in the past three to four months. It cut Meesho’s valuation by 9.7% in April and Pine Labs’ valuation by more than 9% in May 2023.

Following the funding bull run of 2021 and early 2022, the Indian startup ecosystem has been hit hard by macroeconomic headwinds since mid-2022. This has dried up the capital for Indian startups. With profitability becoming the buzzword, startups have started focusing on turning profitable. Meanwhile, loss-making startups have been seeing valuation markdowns from investors.

To be sure, a valuation markdown by an investor does not immediately mean that a startup’s valuation has fallen or risen. A private company’s valuation is decided at the time of fundraising and only reduces if it raises a down round, that is a funding round at a reduced valuation.

As such, investors making changes to valuations is them reevaluating the value of their stake in a given startup, depending on factors such as financial performance and future outlook.

The post Fidelity Marks Up Meesho, Pine Labs Valuations, Gupshup’s Remains Unchanged appeared first on Inc42 Media.

Troubled quick commerce major Dunzo has reportedly yet again deferred payment of salaries to its employees by another month. 

As per an internal email seen by Moneycontrol, the startup has told employees that it will transfer their pending payments by the end the first week of October. The company had earlier told its employees that their June and July salaries would be cleared by September.

As per the report, the company has also promised to pay an interest of 12% per annum on pending dues. 

“Please note that pending salaries for the months of June and July, due to be paid on September 4th, will be paid in the first week of October. You will receive the salary dues along with a 12 percent p.a. interest, which will now be calculated for an additional month,” said the email. 

While ‘apologising’ for the delay, the company said that crediting pending compensation ‘as early as possible’ is its ‘top priority.’ Dunzo added that it is doing ‘everything’ to clear dues and is ‘confident’ that there would be no further delays. 

This is the third major delay by the quick commerce startup in releasing the salaries of its employees. Prior to the September 4 deadline, Dunzo also missed the July 20 threshold set for clearing the pending employee salaries. 

In July, Inc42 reported that the Reliance-backed startup postponed the payment of salaries to 500 employees, or 50% of its total workforce, and capped salary payouts at INR 75,000 per month per employee. As a row broke out, the company held a town hall with employees and promised them that their pending salaries would be cleared by September 4.

Amid a funding crisis and resignations of employees, the startup undertook mass layoffs and culled 30% of its total workforce, amounting to about 300 employees. 

Amid all this, the company is also facing legal notices from seven vendors for non-payment of dues to the tune of more than INR 11 Cr. It has also begun cost-cutting measures across the board, ranging from shutting most of its dark stores to pivoting to a marketplace model. 

It has also been knocking at the doors of investors seeking cash infusion. Earlier this month, Inc42 exclusively reported that the beleaguered startup was in advanced talks to raise $100 Mn as part of its Series G funding round, which would be a mix of equity and debt, from existing investors, including Lightbox and Lightrock. 

The post Dunzo Defers Employee Salaries Yet Again, Sets October As New Deadline appeared first on Inc42 Media.

Shiprocket owned retail SaaS platform Omuni has laid off around 60-70 employees, or nearly 35% of its workforce, earlier this month in a restructuring exercise, according to Inc42 sources.

The layoffs, which took place in the second week of August, impacted employees from tech, product, sales, and talent acquisition teams, the sources told Inc42.

Besides the retrenchment, Omuni will also see the exits of the senior management team. Omuni CEO and cofounder Mukul Bafna, CTO Sumeet Chandhok, among others, are also exiting the company, Inc42 has learnt.

Shiprocket, without disclosing details around the number of employees impacted, leadership exits and other related details, confirmed the development to Inc42.

“At Shiprocket, we are building a full-stack ecommerce enablement platform and are always looking for opportunities to create a much bigger business impact for our merchants through partnerships, mergers and acquisitions. As we explore synergies with acquisitions, including Omuni, it often results in the consolidation of the workforce at an organisation-wide level and we have integrated some teams across various group companies. As a company, we remain committed to our vision and, consistently delivering and upholding our employee value proposition,” a Shiprocket spokesperson said.

Founded in 2014, Omuni is an omnichannel retail enablement platform for brands and retailers. Shiprocket acquired Omuni in July last year from Arvind Internet Private Limited in a combination of stock and cash for a total consideration of INR 200 Cr. 

Back then, Shiprocket said the acquisition will facilitate quick, efficient deliveries of shipments from the nearest store or warehouse, significantly reducing delivery timelines and enhancing customer experience.

Commenting on the layoffs, one of the sources said, “Nobody anticipated this would happen. We had a town hall about the upcoming product and in the evening employees were removed from the system without any valid explanation.” 

Omuni is giving a salary of two months as severance pay to the employees who were laid off.

Top-Level Exits Amid IPO Plans

As per the sources, Vivek Kalra, the cofounder and director of Glaucus Supply Chain solutions, another company acquired by Shiprocket, will lead the Omuni team in place of Bafna.

While it is not uncommon for founders and senior management employees to leave a company post acquisition, the high-level exits at Omuni right after the layoffs have raised a few eyebrows.

“Omuni is undergoing a transition at this point. Shiprocket is preparing for a public listing, and all these restructuring activities are a part of the same,” a source said. 

Another source said that Omuni generally deals with traditional business, whereas Shiprocket’s DNA evolves around new-age D2C brands. The transition will enable them to work with SMEs and MSMEs as well. 

However, multiple sources also told Inc42 that Omuni’s performance as a business unit didn’t matched the expectations set during the acquisition.

“Omuni was struggling to close deals and was lagging behind the target that was set by Shiprocket at the time of acquisition,” one of the sources said.

Shiprocket Acquisition Spree, And Losses 

Omuni’s acquisition was part of Shiprocket’s buying spree in 2022 when it acquired a number of companies for its growth ambitions. Besides Omuni, the Zomato-backed SaaS logistics startup also acquired Pickrr, Wigzo, Glaucus, and Rocketbox last year. 

The Delhi NCR-based unicorn entered the coveted unicorn club in August last year after it raised a bridge round of $33 Mn led by Lighrock India at a valuation of around $1.2 Bn. 

To date, Shiprocket has raised over $387 Mn across multiple rounds. It counts marquee names like Temasek, Moore Strategic Ventures, Paypal, and March Capital among its backers. 

Shiprocket slipped into the red in FY22, reporting a net loss of INR 93.1 Cr as against a profit of INR 12.4 Cr in FY21. While operating revenue rose to INR 611 Cr in FY22 from INR 358 Cr in the previous year, total expense ballooned to INR 727.8 Cr from INR 350.6 Cr in FY21. 

The layoffs at Omuni is an addition to the ever-growing list of Indian startups which have fired employees amid the ongoing funding winter. As per Inc42’s layoff tracker, Indian startups have laid off over 29,000 employees since 2022.

The post Exclusive: Shiprocket-Owned Omuni Fires Nearly 35% Workforce; CEO, CTO To Exit appeared first on Inc42 Media.

Shares of the listed B2B ecommerce unicorn IndiaMART remained steady at INR 3,040.00 as of 11:39 AM on August 30 following the company’s announcement of its planned share buyback.

IndiaMART announced the buyback offer of 12.5 Lakh shares using a proportionate tender offer on August 23. The buyback is slated to open on August 31 and close on September 6. 

The quantum of the buyback represents 2.04% of the total equity shares in the listed B2B ecommerce major. The shares will be bought back at INR 4,000 apiece, a premium of around 30% from the current share price.

The B2B ecommerce startup also filed a letter of offer giving more information on the share buyback on Tuesday (August 29).

The buyback offer size represents 24.12% and 24.33% of the aggregate of IndiaMART’s paid-up equity capital and free reserves as per the latest audited condensed interim standalone and consolidated financial statements of the company for the period ended June 30, 2023. The listed B2B ecommerce startup has appointed Axis Bank as the escrow agent for the transaction.

If there is full participation in the buyback, promoters’ and related group shareholding could rise from 49.22% to 49.34%, said IndiaMART. The public and non-promoter shareholding may fall from 50.78% to 50.66% of the post-buyback equity share capital.

IndiaMART also said that the buyback won’t significantly impact profits, but it will reduce funds available for investment income. The company further said that the buyback won’t hinder growth opportunities or operational cash needs.

The steadiness in shares comes a month after IndiaMART hit a 52-week high of INR 3,207.50 during intraday trading earlier this month, days after its Q1 FY24 results.

According to the B2B unicorn’s financials, it posted consolidated revenue of INR 282.1 Cr, up 25.65% YoY compared to Q1 FY23. At the same time, IndiaMART’s EBITDA reached INR 77.35 Cr in the quarter ended June 30, 2023, up 20.59% YoY.

The post IndiaMART Shares Flat After INR 500 Cr Buyback Announcement appeared first on Inc42 Media.

The global cross-border ecommerce market is projected to surpass $2.1 Tn in sales by 2023 and cross the $7.9 Tn mark by 2030, and it is this thriving growth opportunity that the country’s direct-to-consumer (D2C) brands wish to capture.

India is now home to 50K+ digital-first brands — a mix of new-age startups and legacy retail giants going D2C with four unicorns – boAt, Mamaearth, Licious, Lenskart and several deep-pocketed players like Pepperfry, Wakefit, Sugar, Country Delight, and Bluestone, just to count a few.

Admittedly, this explosion of brands and D2C brands has created a feeling that this segment is hitting a saturation point of sorts. As a result, the country’s D2C sector, supported by more than 650 investors, is poised to expand internationally.

According to Zaiba Sarang, the founder of iThink Logistics, the sector will get a significant boost from homegrown brands exporting their products.

The Indian D2C landscape has further evolved with the introduction of dropshipping, effectively lowering entry barriers in foreign markets. Sellers can now send shipments worth up to $800 to the US without incurring taxes or duties.

The implementation of the National Logistics Policy, along with initiatives by marketplaces like Amazon, Flipkart, and Walmart, led India’s merchandise exports to achieve a record-high value of $40.38 Bn in March 2022, a 14.53% YoY jump from $35.26 Bn.

This success has motivated numerous players to explore international markets. According to Inc42’s Q2 2023 ecommerce report, over 20 notable Indian D2C brands have already established their footprints in Gulf Cooperation Council (GCC) countries, the US, the UK, Canada, and Europe. Companies like Bombay Shaving Company, Mamaearth, FreshToHome, Paper Boat, boAt, and Wakefit are some of the examples that have now crossed the Indian borders.

Industry interactions have revealed that the top three product categories Indian D2C players excel in within the aforementioned markets are artificial and fashion jewellery, beauty and personal care products, and handicrafts.

As Akshay Ghulati, the cofounder, Strategy and Global Expansion Shiprocket highlights, GCC countries are the preferred destination of many Indian D2C players, largely due to the Indian diaspora there. While the US holds greater demand, it’s notably competitive, especially in areas like beauty and personal care.

“Additionally, although ethnic fashion wear enjoys popularity, the differing sizes between India and the US pose a challenge for brands aiming to develop products solely for the US market,” he added.

Cross-Border Ecommerce Challenges

Despite securing a significant market share within India, numerous D2C brands witness hurdles while planning their international expansion.

When D2C brands venture into global markets, they encounter challenges like adhering to local regulations, managing payments, handling delivery logistics, inventory management, dealing with returns, effective marketing, and localising their offerings.

Here’s an overview of a typical cross-border ecommerce value chain:

Take the case of FreshToHome, for instance. The D2C brand’s founder Shan Kadavil took more than two years to establish a footprint in the UAE against their projections of six months.

Similarly, the founder of Bombay Shaving Company, Deepak Gupta, took 18 months to establish their presence in markets of Nepal, the UAE, Singapore, Malaysia, and Bangladesh. Each of these markets demanded a distinct strategy to navigate their unique operational intricacies.

“Obstacles like the unfamiliarity with local regulations in various countries – including packaging requirements and market-approved ingredients – coupled with the search for suitable partners capable of managing distribution and comprehending consumer preferences, have the potential to significantly delay the international debut of a D2C brand by several months,” Gupta said.

Here are some crucial challenges encountered by D2C brands:

• Opting between a marketplace strategy and establishing independent operations.
• Weighing the merits of an exclusive online presence versus venturing into omnichannel endeavours.
• Pinpointing the optimal market and ascertaining the flagship products to launch under the brand’s banner.

However, today, D2C brands benefit from a growing ecosystem of technology facilitators in India and worldwide. Here is a quick look at the cross-border enablers that are empowering startups to seamlessly manage their Indian and global operations through unified dashboards and a single point of contact.

While speaking with several D2C brands and enablers, we learned that opting for marketplaces is the easiest and most favoured strategy among D2C players. It serves as a platform for gauging consumer preferences and generating brand buzz. Similarly, it’s advised that D2C brands should venture into offline operations once they’ve built brand recall and generated demand in the region.

However, the most pressing challenges lie in logistics and payments for D2C brands, highlighting the crucial role of the growing cross-border ecommerce enablers ecosystem in addressing these issues.

Cross-Border Logistics Challenges

Two critical challenges for D2C brands in cross-border ecommerce are rapid and affordable deliveries and managing returns.

Traditional players like India Post usually take 15-20 days to deliver to the US. For a small 50 grammes packet, India Post charges INR 139. On the other hand, established courier services like DHL and FedEx may take 5-7 days, but they require a minimum package size of 500 grammes and could charge 10X more than India Post to deliver the same product.

New-generation players like Locus, iThink Logistics, and Shiprocket are bridging this gap while tackling other logistics challenges for D2C brands.

For example, iThink Logistics allows shipments starting at 50 grammes, delivering products to the US in under 7 days at competitive pricing. Shiprocket, on the other hand, may ship 50 grammes to the US at a cost of approximately INR 300 in 8 to 10 days.

Another challenge is that, Presently, many D2C platforms are struggling to provide cross-border returns due to high import duties. Sometimes, sellers refund customers to maintain relationships, yet this results in a loss for the seller. Furthermore, most D2C players are hesitant to store inventory at foreign locations due to uncertain sales projections. Consequently, products are shipped directly from India upon order.

As Shiprocket’s Ghulati points out, setting up warehouses is a pivotal strategy to address these challenges. Shiprocket, for instance, operates a warehouse in the US. In the case of returns, products are directed to the warehouse, enabling swift delivery to other customers within 2-3 days without import duties.

Cross Border Payment Challenges

Just like in the realm of logistics, D2C brands encounter three pivotal challenges in the payments domain when going cross border. These challenges are transaction speed, payment gateway costs, and compliance requirements for international transactions.

In earlier times, players such as PayPal held an advantage in cross-border payment transactions due to their global network and ability to facilitate seamless foreign currency exchange.

Nonetheless, recent years have witnessed a surge in digitalisation and the emergence of numerous fintech startups from India like Cashfree, Razorpay, and PhonePe, among others. These players have been offering an array of features and facilities at affordable rates to support cross-border ecommerce.

“Today, nearly 15% of our overall revenues, and likewise, 15% of our businesses, rely on cross-border payment services. As pioneers in domestic payment services with a substantial network of connected merchants, we’ve come to understand and address a multitude of challenges that merchants face when opting for cross-border sales of goods,” shared Reeju Datta, the cofounder of Cashfree.

Here are key initiatives within the payment ecosystem to alleviate cross-border payment challenges for D2C brands:

Joining Hands With Local Payment Providers: The primary task is to maximise the availability of payment methods even before considering costs. This cultivates global acceptance and reduces payment decline rates. Moreover, ensuring seamless interoperability among payment partners enables merchants to view payments on a single dashboard, irrespective of the chosen payment platform by the customer. Various regions have their own local payment methods that tend to be more cost-effective compared to cards or PayPal.

Reducing Costs: Cost sensitivity is paramount for Indian businesses. While India’s merchant discount rate (MDR) ranges around 1-2% for domestic payments, it could be nearly three times as much or even higher in international markets. Digital payment evolution has also alleviated costs. For instance, earlier wire transfers from the US to Indian banks incurred $30-$40 per transaction. While global players might charge around 10-12% per transaction, Indian payment providers have optimised costs to 7%-8%. ACH transfers are 75%-80% cheaper, and card transactions are around 30%-50% cheaper.

Compliance Solution: International transactions necessitate a foreign remittance advice or certificate for reporting, compliance, and tax purposes. Payment platforms like Cashfree have integrated this into the payment flow, offering real-time foreign remittance advice. Streamlining compliance around the Foreign Contribution Regulation Act (FCRA), documentation, and GST is also a priority. Automation has transformed what used to take months into a process that happens within seconds.

Merchant Safeguarding: Cross-border transactions entail risks like fraudulent activities and currency fluctuations that can severely impact D2C sellers, especially concerning refunds. International transactions often see higher levels of fraud and disputes than domestic ones. Payment platforms like Razorpay have developed sophisticated tools and controls to mitigate these risks and safeguard merchants’ interests.

“As we scale up and expand to a larger audience, managing risks on both ends – consumer and merchants – is crucial,” said Rahul Kothari, chief business officer, Razorpay.

The Global Road Ahead For D2C Brands

The emergence of the cross-border tech enablers ecosystem has facilitated the global expansion of even small-scale companies.

“What was previously achievable only by a handful of large companies has now been democratised, enabling even small businesses to engage. This transformation is primarily driven by automation and a customer service mindset,” Kothari of Razorpay pointed out.

Nonetheless, challenges persist. Shiprocket’s Ghulati underscores that the Indian government could enhance the establishment of bilateral trade corridors to alleviate dropshipping and import duties.

The payment ecosystem is concurrently working on reducing transaction costs, minimising decline rates, and simplifying regulatory complexities. Also, noteworthy fintech brands have an advantage in their respective regions. Building a mutual sense of trust represents a pivotal challenge as we venture into new territories.

Nevertheless, Indian D2C brands have already embarked on their cross-border journeys. With the growing demand for Indian products and technology enablers propelling D2C brands, the trajectory of cross-border ecommerce is poised for growth that will know no bounds.

The post How Indian D2C Brands Can Fix Cross-Border Pains Points To Enter Uncharted Territories  appeared first on Inc42 Media.

Swedish furniture major Ikea has put plans in place to start ecommerce operations in the NCR region ahead of opening two shopping centres over the next two years.

According to Susanne Pulverer, chief executive and chief sustainability officer at Ikea India, the company will start selling online in NCR by the end of 2024. For now, the Swedish company is busy marking its presence across major metros and scaling up local sourcing.

In an interview with Mint, Pulverer said Ikea has already invested INR 10,500 Cr to build five stores in India so far, alongside investments in two large shopping centres with Ikea stores. 

According to Pulverer, Ikea is planning an omnichannel store, opening at the end of 2024, alongside its first Ingka centres. The latter is a shopping centre concept in Gurugram with an integrated Ikea store that will happen two years from now. 

Ikea’s parent company is also setting up its investment arm in the country to invest in businesses outside retail. Ingka Investments, the investment arm, has picked up stakes in solar farms in Australia and logistics centres in Denmark in the past. 

Pulverer said the investment arm could invest in sustainability-linked businesses in India.

“It’s a little bit early, so I have no concrete things to say except that one of their key focuses is within the area of sustainability, and I believe that will be the first area, they will come in and invest in India,” she told the publication.

India is a priority growth market for long-term investment for the parent company, she said.

Ikea made its debut in India in 2018, opening its first retail store in Hyderabad. Currently, the Swedish furniture company has an online presence in Mumbai, Pune, Hyderabad, Gujarat and Bengaluru. Three big-format Ikea stores are operational in Hyderabad, Navi Mumbai and Bengaluru, apart from two smaller stores in Mumbai.

With its continued expansion into the omnichannel space, Ikea is set to be more competitive against Indian startups such as Pepperfry, Furlenco, LivSpace and Urban Ladder, among others. According to a report by Research and Markets, India’s overall furniture market is set to reach a size of $37.72 Bn by the end of 2026.

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