Category — Retail

India Approves Amazon’s $500 Million Investment in Food Retail

India’s Department of Industrial Policy and Promotion approved e-commerce major Amazon‘s proposed $500 million investment in retailing of food products in the country. The company will launch a wholly-owned subsidiary in India to stock food products and sell online.

Last year the government allowed 100 percent foreign direct investment for trading, including through e-commerce, in food products manufactured and produced in India. In 2016-17 (December to April) the food processing sector in the country received FDIs of $663.23 million, reports the Economic Times.

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July 13, 2017   No Comments

U.K.’s Triumph Motorcycles Will Be Made in India

Britain’s Triumph Motorcycles will accelerate assembly operations in India, and by 2018, 90 percent of the products it sells in the country will be produced at its Manesar plant situated in the National Capital Region of Delhi.

The company sells 16 models across five different categories and it recently launched its all-new Street Triple S motorcycle priced at $13,175. The model is powered by a 765-cc engine and comes with switchable traction control and DRL headlights. It is also equipped with ABS, various riding modes and an LCD instrument pack, reports BGR.

Triumph Motorcycle Street Triple S

Currently the company imports most of its motorcycles from Thailand and the U.K. and only 20 percent of its products are assembled in India.


June 26, 2017   No Comments

Private Consumer Companies Outpace Listed Peers

Privately-held companies in the consumer goods (“FMCG or Fast Moving Consumer Goods)  sector in India have outpaced their peers in the public domain, highlighting an opportunity for private equity investors.

For example, listed cookie maker Britannia Industries Ltd., which owns popular brands such as Good Day and Tiger, grew at a CAGR of 14.4% between 2010 and 2016. Anmol Biscuits, a private entity whose net sales are less than a tenth of Britannia’s, recorded growth of 20% for the same period.

Highlights from a joint study by VCCircle’s data research arm VCCEdge and management consultancy AT Kearney:

  • Though smaller in terms of revenues, private companies grew at a CAGR of 11% compared with 6% for listed firms from 2010 – 2016. This disparity in growth was due to better consumer connect, inorganic growth strategy, and entry into global markets, the report said.
  • The study found that margins have fallen across the spectrum as companies have invested in infrastructure development for tapping new markets, and product innovation.
  • Return on capital employed improved to 13.4% during FY16 against 10.4% in FY09, due to better capital utilization, reinvestment of profits in optimization of manufacturing facilities and supply chain networks.
  • The report suggests that risk-averse investors should focus on large private FMCG firms, while risk-seeking investors should cherry-pick by targeting mid-sized firms.                                                                                                                     Anmol Biscuits

June 22, 2017   No Comments

Amazon Considers Inorganic Growth in India

After buying Whole Foods in the United States, Amazon is targeting groceres in India. Bangalore, India-based BigBasket, a five-year-old e-grocer, has signed a 60 day exclusivity agreement with Amazon India  during which time Amazon will conduct a due diligence on the company’s assets with a view to acquisition

Valued at $450 million since its last round of funding, BigBasket’s asking price of  $700 million stalled the transaction, reports ET Retail. A final value will be decided once the inquiry is completed successfully. It is uncertain whether Amazon will go ahead with the final deal and so BigBasket is also on the lookout for fresh capital.

BigBasket Logo

Acquiring BigBasket, which has created a supply chain and back end infrastructure, will add to Amazon’s e-commerce growth; it will also enable Amazon’s entry into the hugely untapped grocery and food market in India. Technopak pegs the grocery and food market in India at $400 billion of which organized retail contributes $12 billion to the industry, while online e-grocers have a 4% share, its report said, outlining viable prospects for the players.

June 21, 2017   No Comments

Over 50 Global Retailers to Set Up Shop in India

More than 50 mid-rung global retailers are planning to enter India within the next six months, according to data compiled by Franchise India. The majority of the brands are from the United States and Singapore, and they will invest $300-500 million in India.
The Economic Times reports that the latest brands are mostly smaller ones that rely on the franchise system for global expansion. These companies want to focus on smaller and untapped markets such as Tier 2 and 3 cities. Of the incoming brands, 18 are in the food and beverage space followed by 13 each in apparel and lifestyle products and education products.
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Recently, India replaced China as the most promising retail market in the world, according to an AT Kearney report. The report said, “Government efforts to boost cashless payments and reform indirect taxation with a nationwide goods and services tax are expected to accelerate adoption of modern retail.”

The Indian retail market is expected to reach $1.6 trillion by 2026, growing at a compounded annual growth rate of 10%, according to the India Business of Fashion 2017 report. With food and grocery retail just 3% of the overall market, several global food chains sense an opportunity in India.

June 19, 2017   No Comments