Category Archives: India

FirstCry Acquires BabyOye from Mahindra Retail!

The recent stock filings by Mahindra Retail confirm that it has “sold” its BabyOye business to FirstCry.com. With this acquisition, FirstCry.com seems to be the only original baby products business in India to survive and even thrive.

Here is a chronology of events in this industry

  • 2009: Hushbabies.com is founded
  • 2010: FirstCry.com is founded. BabyOye.com is founded
  • 2011: Hoopos.com is founded.
  • Apr 2013 : Babyoye.com acquires Hoopos.com. Hoopos name is eventually dropped
  • Sep 2013: Hushbabies.com shuts down.
  • Feb 2015 Mahindra Acquires BabyOye and drops its own brand Mom&Me. Expands retail stores to 120 stores
  • Jan 2016: Ratan Tata invests in FirstCry.
  • Oct 2016: Firstcry acquires BabyOye from Mahindra in an all-stock deal. Mahindra also invests an additional amount in FirstCry.

With this acquisition, FirstCry.com is arguably the largest online and offline (300 stores) baby products company in India. It is a great story of a vertical e-commerce business that grew to become a successful omni-channel business. This is also a defining moment in the Indian ecommerce industry!

This article also appeared here

Last Man Standing – The Indian Ecommerce Story

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(Image Source)

There’s an interesting game being played in India for a few years now.  It’s called the “Last Man Standing” game.  Some of the players playing this game include Flipkart, Snapdeal and more recently Amazon.

Since the second innings of e-commerce which started in India around  2007-08, several e-commerce companies have already shut shop. This has been especially so in the last 2-3 years where smaller players with shallow pockets could not sustain the deep discounting offered by the bigger players.   There are others which have been forcefully merged with another company with common investors.

Simple trading logic tells us that if you buy something for Rs. 100 (including all associated costs) and Sell it for Rs. 110, you make a profit of Rs. 10.

E-commerce  in India works differently.   Let’s take the example of Flipkart.  In the Financial year 2013-14 (Source VCCircle) , Flipkart had losses of Rs. 400 Crores on a Revenue of Rs. 179 Crores.  Since Flipkart is a marketplace, Revenue refers to the actual Revenue and not the Gross Merchandise Value which is the price of products sold.  So for every Rs. 1 in Flipkart revenue, the company actually lost Rs. 2.23.

Flipkart is not alone in this game.  Amazon lost 321 Crores on a revenue of 169 Crores.  Snapdeal lost 265 Crores on a Revenue of 154 Crores.  That’s Rs. 1.9 (Amazon) and Rs. 1.7 (Snapdeal) loss per Rs. 1 in Revenue

The bottom line is that every e-commerce player in India continues to lose money and justifies that ( I believe) as a customer acquisition cost.

Nice Game! How does this continue and when does this end?  Well, to continue the game, the investors need to keep pumping in more and more money till you are the only company left and then you don’t need to do it any more and can start dictating terms and hopefully make profits.

Look at how much money Flipkart has raised till now – $2 Billion.

Also notice how desperate Flipkart has been to raise more money in 2014.  This game is not over yet.  Those lines are going to get steeper in 2015.  The amount of money that needs to be pumped into Flipkart will be several billion dollars more before we reach a stage where Flipkart can confidently say that they are the last man (or 1 of 2-3 men) standing.

While there is something fundamentally wrong with the way e-commerce is being approached in India, it is the consumer who is laughing all the way to the bank right now!!

Passengers revolt against Indigo flight delay, demand apology and compensation

I witnessed an interesting incident while transiting through the Rajiv Gandhi International Airport at Shamshabad in Hyderabad today.  Indigo flight 6E 319 scheduled to take off at 6:00 am for Mumbai had not taken off till 10:30 am.  The passengers revolted against the cavalier attitude of the staff and extremely poor customer service and demanded an apology and a written confirmation that they will be compensated accordingly.
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Passengers gheraoed Indigo airline staff demanding an apology and compensation for the severe delay

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Indigo Flight Captain trying to pacify the customers

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Indigo flight 6E 319 which could not take off atleast till 10:30 am as the passengers refused to board

I had to leave at 10:30 to board my connecting flight but will be keen to know what happened after that.

Sports Betting to be legalised in India

This is the news punters in India have been waiting for a long time.  It finally looks like sports betting will be legalised in India.  The Indian government is looking at a proposal to legalise sports betting and is carefully studying UK and US laws regarding sports betting.

Needless to say, this will have several benefits

1. There is currently a multi million dollar underground sports betting already happening in India (remember the scandal Azharuddin was involved in about a decade back  and the Pakistani trio more recently).  Legalising sports betting will make it easier for people to bet legally and will curb illegal sports betting.

2. Tackle Money laundering – a lot of money is laundered through illegal sports betting.  Money such laundered often finds its way into terrorism and other criminal activities or could even be the proceeds of such activities.

3. This is a huge source of revenue for the government.  Just like Cigarettes and Alcohol, there is a taboo regarding sports betting in India and the government can impose a “sin tax” profiting from this multi-million dollar industry.

4. Future Development – Money collected in taxes from sports betting can be used in general for the development of the country or specifically speaking, this could be used to develop state of the art sports facilities

These are early days but I believe that the Indian government is thinking in the right direction.  It will be very important to ensure that the government considers all aspects of sports betting and only isssues licenses to responsible operators.

I Could Have Died!

3rd December 1984. Bhopal. 7 am.

It was a chilly Monday morning. The school bus, which was actually an improvised Shaktiman truck, was parked in its usual place in Sultania Infantry Lines.  The kids, including me, had boarded the bus and it was ready to go.   The driver counted the number of school kids who had boarded, quickly checked his list and closed the door.  It was just another day with the school bus heading towards Kendriya Vidyalaya near Flour Mills.

…except it wasn’t just another day. This was different.  There was nobody on the streets, not even one person.  It was cold but it was unusual not to see anybody at all.  After a while, I saw a cow sleeping on the pavement.  And then another one.  But not a single human soul.  The bus kept going and reached our school.  We all got down from the bus only to be told that the school was closed.  We didn’t know why but there was a sense of childish euphoria about it.  Indira Gandhi, the then Prime Minister of India had been assassinated only a  few weeks ago and the school was closed for a couple of weeks before it was reopened.  Nobody complained about another day off though.  It was always welcome.

We were all huddled back into the bus and were brought back home and I saw a bunch of parents discussing something seriously. I was told that there was a gas leak in the night. It didn’t make much sense immediately but within a few hours, TV and radio stations were abuzz with talk about the Bhopal Gas Tragedy.  The Union Carbide factory leaked Methyl Isocyanate gas overnight which led to over 15,000 deaths and hundreds of thousands of people were affected ( see this ).  It was the biggest industrial catastrophe mankind had ever seen.

Thousands died.  Several others were suffocating, vomiting, had burning eyes or even went blind.  Trains coming into Bhopal station were bringing dead bodies as the passengers had died.  It was hell.

Fast forward 26 years.  June 7, 2010.

Seven ex-employees including the former chairman of Union Carbide India were convicted in Bhopal of causing death by negligence and sentenced to two years imprisonment each.  They were all released on bail within a few hours.  Reacting to the judgment, the U.S.-based company said neither it nor its officials were subject to the jurisdiction of the Indian court as they were not involved in the operation of the plant, which was owned and operated by the Union Carbide India Limited.  Warren Anderson, chairman of the U.S.-based Union Carbide group, who was named an ‘accused’ in the tragedy, was absconding throughout the trial period. Interestingly, the court did not mention his name on Monday.

I almost cried as it brought back memories from 26 years ago.  People are still suffering in the streets of Bhopal from the aftermath of the disaster. What kind of justice is this?  Would the judgment have been the same if this had happened in USA?  Why is the cost of a life in India considered so cheap?

My thoughts are with all those who lost a loved one.

I realized that the cows on the pavement were actually not sleeping.  They had died.  I lived only a mile away from the Union Carbide factory.  I could have died!