Category — Market Entry

Online Grocery Market Grows in India

With incomes rising and Internet connections spreading across India’s urban centers, an online food retail channel is developing with a mix of  brick-and-mortar retailers (setting up e-commerce sites with offering home delivery) and with pure-play online grocers emerging. The latter category includes Bangalore-based BigBasket and Mumbai-based retailers LocalBanya and EkStop. All three have been part of the early development of the online grocery channel in India.

Brick and mortar grocers Reliance Fresh and Godrej’s Nature’s Basket have been offering free delivery of groceries and fresh vegetables and fruits to homes and offices within a limited radius of the location of their stores. Amazon India has started delivering foods and beverages too.

However, debates continue on the subject of the efficacy of e-commerce for food items with some analysts asserting that promotions and deals are a common tactic by manufacturers looking to build an online presence in India — a tactic which should only be used occasionally. Amnish Aggarwal, senior VP for research at stockbroker Prabhudas Lilladher, feels “If your premium consumers are going in for your online retailing where you are offering discounts, then it is detrimental for your brand value.”

Road infrastructure  is considered in delivery schedules, and many companies have bicyclists delivering orders. LocalBanya allows customers to enter three delivery addresses; while EkStop offers six, two-hour delivery time slots. BigBasket’s delivery routes are managed by GPS technology.

Himanshu Bajaj, principal at A.T. Kearney‘s consumer industries and retail practice in India, believes “major investments” can be expected over the next few years.

 

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March 17, 2015   No Comments

Zeelandia of Holland To Bake in India

The Dutch family-owned baking company Zeelandia, has entered into a joint venture with Fine Organics which has been Zeelandia’s distributor in India since 2001. Fine Zeelandia will be based in Mumbai and it will cater to customers throughout the country, as well as in Sri Lanka, Bangladesh and Nepal.

The company plans to  produce locally using local ingredients wherever possible. Within its first year of operation, Fine Zeelandia will also prepare a fully equipped production site for bread and patisserie mixes, Carlo release agents, Finagel cake gel and Paletta jellies.

According to Zeelandia CEO Roelof Krist, the joint venture fits seamlessly into Zeelandia’s strategy. “We want to strengthen our global position through local partnerships and local production. We’ve already established a permanent local presence in China, Brazil, Russia, South Africa and Turkey. India is a logical next step: it’s a huge growth market, especially for confectionery but increasingly for bread as well.”

Matthijs Spiering, Zeelandia’s international commercial manager said, “Because Indian consumers have become more internationally influenced, a number of Western-style bakery ingredients have become popular among Indian, including multi-cereal bread mixes, muffin mixes, fondant and special fruit fillings and glazes.”

Zeelandia Pastries

Zeelandia pastries
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March 17, 2015   No Comments

PepsiCo to Leverage e-Commerce in India

Economic Times reports that PepsiCo India is planning to break into retail by selling selected premium snacks and drinks exclusively through e-commerce platforms in India.

Vipul Prakash, VP for marketing at PepsiCo India, said, “We have a significant portfolio of high-end global brands which many Indian consumers are already familiar with. We are working out plans to make these brands available exclusively through e-commerce in India.” He also said that details of the e-commerce strategy, including which portals PepsiCo would tie up with, are expected to be finalized in the next couple of months. Brands to be offered online might include Lays Max chips which sell at a premium and high end versions of Tropicana juices.

PepsiCo India

PepsiCo India

The U.S. multinational’s move comes at a time when online shopping is growing exponentially in India. Online e-grocers too have reported a significant upswing in sales in recent months, prompting big FMCG players to raise their online presence.

A report released by Google and consulting firm Bain this month estimated that the Internet will influence $35 billion of FMCG sales in India by 2020 when there will be more than 250 million online shoppers in India.

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March 17, 2015   No Comments

Lowe’s Inaugurates Global Innovation Center in India

On February 11, Lowe’s Services India Private Limited, a subsidiary of U.S.-based home improvement retailer Lowe’s Companies, opened its Global Innovation Center (GIC) in Bangalore, India. The GIC will work on technology and analytics that will focus on the next-generation customer requirements and provide customers with a more personalized shopping experience. This center will support Lowe’s efforts to become an omni-channel home improvement company.

Lowe's Store

Lowe’s Store

The GIC will be headed by Narayan Ram and it will provide Lowe’s with a strategic footprint to leverage Bangalore’s potential for technology. The facility is spread over 110,000 sq. ft., and expects to employ approximately 500 people by the end of 2015.

Robert Niblock, chairman, president & CEO of Lowe’s Companies Inc., said on the occasion, “We feel confident that with this strengthening of our presence in India, we will be able to provide more personalized experiences to customers, helping us continue our pace of strategic growth.”

Narayan Ram, managing director, Lowe’s India said, “The Bangalore Global Innovation Center will employ the concept of ‘one team, multiple locations,’ as we work across our global organization to apply the power of analytics and technology to the Lowe’s business, so customers can engage with us whenever and however they need support.”

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March 17, 2015   No Comments

4 Indian Startups in Billion Dollar Club

The Wall Street Journal’s and the Dow Jones VentureSource’s Billion Dollar Club includes startups that venture-capital investors believe are worth at least $1 billion and have raised money in the past three years, and four Indian startups make the list.

Ranked 5th of 73 companies listed is Flipkart Internet Private Ltd., India’s largest e-commerce company by sales valued at $11 billion. Snapdeal, a rival online marketplace, ranks 30th with a value of $2 billion. Online-ad company InMobi, valued at $2.5 billion, and Ola Cabs valued at $1 billion are also included in the club.

India is expected to become home to the world’s second-largest number of startups, after the U.S., in the next couple of years as investors pipe in cash to new companies.

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February 27, 2015   No Comments