Author: Suhani T

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From ₹4 lakh to ₹7,000Cr: The Story of Bisleri

Water is essential for all life on Earth and is a valuable natural resource. It is all we want during a long day of work or travel. When we need a bottle of water, we often ask shopkeepers, “Bhaiya, Ek Bisleri Dena”: it’s almost instinctive. In fact, some of us may have received an alternate brand when we asked for a Bisleri.

But have you ever wondered what went behind the success of Bisleri? How did it secure a 60% market share in the Indian water bottle industry and dared to be synonymous with water? Well, we’ve got you covered. Here’s everything you need to know about Bisleri, one of the most well-known brands of bottled water.

Bisleri’s Origin

Bisleri was originally an Italian brand created by Felice Bisleri. In 1965, Italian doctor Cesari Rossi and Indian businessman Khushroo Suntook introduced Bisleri bottled water to India by setting up a factory in Thane. It was initially sold only in luxury hotels and restaurants in Mumbai in glass bottles in two varieties— bubbly and still. By 1969, the brand was struggling. It wanted to exit the Indian market and was bought out by Parle Group’s Jayantilal Chauhan for ₹4 lakh (~$50,000 at the time).

Bisleri expanded after 1969 when Parle and Bisleri produced beverages, soft drinks, and soda at the same time. The brand became renowned across India and proposed to expand overseas. The company came up with a unique concept of selling soda in two categories: carbonated and non-carbonated mineral water. This led to a surge in the production of mineral water in India and made it a necessity for the common man.

Bisleri’s Consumer-Friendly Marketing Strategy

  • Product Strategy: Over the years, the company has developed new products in response to growing demand. Bisleri initially started with its packaged water brand. It ran successfully and gave scope to the launch of many other products in the line. Bisleri’s main product (packaged water) has undergone numerous changes and modifications. Later, the company introduced carbonated and non-carbonated soft drinks, energy drinks, soda, iceboxes, etc. Bisleri is also well-known for offering high-quality facial wipes.
  • Pricing Strategy: Bisleri aims to produce safe and affordable products and make them available to all. Its packaged water is priced similarly to its competitors. The differential pricing strategy has been used for the package of larger volumes. The larger the volume, the lesser the price. If the price of the 1L bottle is ₹20 in a specific area, 2L bottle costs ₹30. On the other hand, the company also uses a location-based pricing technique. The prices of products in theatres, restaurants, and shopping malls are higher than in a typical retail shop.
  • Positioning Strategy: Since 1965, the company has been expanding and spreading its reach throughout India. However, not all of its products are available in all regions. The ‘Vedica’ brand is sold in every region apart from Eastern India. This packaged water series is made available in the most remote villages in India.

Promotional Strategy:

Bisleri has adopted several forms of promotional activities such as advertising on television, print forms, personal selling, billboards, and posters. The brand also has a complete website detailing its various products. 

The famous one-liner ‘Biasleri is veri veri extraordinari’ in Bisleri’s first advertisement gave the brand a great deal of exposure. Other notable campaigns include the ‘one nation, one water’, where labelling was done in different languages to connect with people from different regions. ‘Har Pani ki bottle Bisleri Nahi’ promoted the idea that not all water is pure and hygienic like Bisleri.

Challenges Faced

  • Bisleri water bottles are the most popular in the country right now. As a result of its enormous success, several other companies have cloned the water bottle and put it on the market. You can find “Belsri”, “Bilseri”, “Brislei”, or “Bislaar” in local shops. So, be alert when you buy a Bisleri! Bisleri has launched a new integrated 360-degree campaign called ‘Samajhdaar Bisleri Peete Hai‘. It aims to boost customer confidence and promote consumer knowledge about the difference between genuine Bisleri and counterfeit alternatives on the market.
  • Intense competition and new entrants: The Indian market is becoming crowded in the packaged drinking water segment. Many consumer giants monitoring this lucrative industry (such as Tata, Nestle, and HUL) will influence Bisleri’s market share, earnings, and sales. 
  • Repacking Bisleri Bottles: Many locals collect Bisleri bottles and refill them with local unclean water and sell them. This decreases Bisleri’s brand value and can be dangerous for consumption.
  • Local Players: Since there are few barriers to entry in the market for bottled water, there are several competitors who were born and raised in various regions. They are able to give consumers better costs and increase demand since they operate a smaller business than Bisleri.
  • Water Purifiers: The rise in sales of water filters, purifiers, and ROs in the nation can directly affect the business of Bisleri. 
  • Government Rules and Regulations: Government norms for packaged drinking water and the use of plastics can severely impact Bisleri.

Recent Developments

  • Bisleri brand’s turnover for FY23 is estimated at ₹2,500 crore with a profit of ₹220 crore! 
  • On the occasion of Children’s Day, Bisleri International Pvt. Ltd. collaborated with youth changemakers of Delhi to drive the cause of appropriate plastic segregation, disposal, and recycling under its flagship sustainable program— ‘Bottles For Change’.
  • Bisleri International partnered with Ghaziabad Nagar Nigam and IPCA to launch Gazab Street last month, a distinctive street made using recycled plastic waste. The street has been conceptualised to beautify the abandoned street that was once covered in dirt and filth. 
  • Tata Consumer Products Ltd reportedly plans to acquire packaged water giant Bisleri for about ₹7,000 crore! TCPL is aggressive in the fast-moving consumer goods (FMCG) space and aims to be at the top. It also sells packaged mineral water under the Himalayan, Tata Copper Plus Water, and Tata Gluco+ brands. Acquiring Bisleri will help them attain the No. 1 position in the segment. 

Bisleri’s Mission

With the idea that was once called madness, Bisleri has gained a 60% stake in India’s sealed water bottle industry. It has been able to grow its customer base and maintain its lead in the industry.

Today, Bisleri has dominated the Indian market for bottled drinking water for over two decades with a large product line. It has 122 operational plants (13 owned) and a strong distribution network of 4,500 distributors & 5,000 distribution trucks across India and neighbouring countries, Bisleri stands true to its promise of providing safe, pure & healthy mineral water to consumers for the last 50 years.

Almost every shop in India sells Bisleri’s green-capped bottles and has become a trademark of every wholesaler. With TATA taking over, will it be a sweet farewell to the legacy and rule of Bisleri, or will TATA nurture it and help attain new heights? Let us know your views in the comments section of the marketfeed app!

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A Deep Dive Into Relaxo Footwear Ltd

The footwear industry in India contributes nearly 2% to India’s overall GDP. It employs over 25 lakh workers, making the sector one of the top employment generators in our country. It is also an engine of growth for the entire Indian leather industry. 

India is only behind China as the largest producer of footwear globally, with 9% of the annual global production of 22 billion pairs. As per Invest India, India’s contribution to global footwear production is 10.7%. Nearly 90% of the footwear produced in India is consumed by the domestic market, and the rest is exported. The revenue in the footwear market in India stood at $23.73 billion in 2022, and the market is estimated to grow annually at a 6.77% CAGR between 2022-2027.

Having said that, let’s talk of an iconic brand synonymous with rubber slippers. It offers some of the most versatile footwear for all segments of society and reflects the attitude, style, dynamism, and spirit of young India. Yes, you guessed it right: it’s none other than Relaxo!

In today’s article, we throw light on how Relaxo monopolised the footwear industry in India and how it remains a trademark brand for most Indian households. 

Relaxo’s Origin Story

In the 1970s, two brothers, Mukand Lal Dua and Ramesh Kumar Dua, aspired to grow their father’s footwear business. With an initial deposit of ₹10,000, they established the venture in Delhi and gave birth to what Relaxo is today— one of the largest and most popular footwear manufacturers in India.

Relaxo initially manufactured both footwear and cycle components. However, it discarded the second segment in 1976 and decided to concentrate solely on footwear. Its most popular brands— Relaxo, Sparx, Flite & Bahamas are a leader in their respective categories. Relaxo’s range of footwear boasts a fine combination of comfort, style, and quality workmanship. The company offers a wide collection of fashionable, colorful, comfortable, and durable footwear. They have products for every age group and more than 6,000 Stock Keeping Units (SKUs).

With eight manufacturing units, Relaxo has the capacity to produce over 7.25 lakh pairs of footwear every day! It has a pan-India distribution footprint and a network of more than 50,500 stores. The company operates 50,000 multi-brand outlets (MBOs), and 402 exclusive brand outlets (EBOs). The company exports its products primarily to China and Sri Lanka.

Financial Performance

Over the years, Relaxo has consistently performed in a superior way. Even though Covid-19 restrictions severely impacted the sales of most footwear companies, Relaxo’s sales declined by just 2.13%. The company sold around 19 crore pairs in FY21! Coming to most recent figures, it sold 3.9 crore pairs in Q2 FY23, down from 4.6 crore pairs sold in Q2 FY22.

Relaxo’s sales have expanded remarkably faster than those of its competitors in terms of CAGR. The 3-year and 5-year sales CAGR growth of Relaxo Footwears was 6.7% and 6.6%, respectively. Meanwhile, CAGR sales growth was in the range of 1-3% for competitors Mirza International and Khadim India. Even in the past three years, Bata India, Liberty Shoes, and Sreeleather’s sales growth had fallen to negative double digits.

Relaxo Footwears has also posted healthy double-digit margins over the years, while other footwear manufacturers have struggled in maintaining healthy and constant EBITDA margins. 

In the quarter ended Sept (Q2 FY23), revenue stood at ₹670 crore, compared to ₹714 crore in Q2 FY22. There was a decline in volumes of categories serving the mass segment, which was experiencing inflationary pressures with reduced affordability. EBITDA stood at ₹59 crore as compared to ₹117 crore in the corresponding period of the previous year. EBITDA was under pressure due to high raw material prices.

Peer Analysis 

Apart from organised and unorganised players, the market is now seeing listed players such as Metro Brands Ltd., Bata India, and Mirza International.

Regardless of high competition, Relaxo Footwears is able to maintain both quality and reasonable pricing. The organisation can sustain high profits because of a persistent focus on healthy margins, operational optimization, and capacity utilisation. This isn’t necessarily true for its competitors that utilise an asset-light model or a hybrid approach that combines asset-light and in-house manufacturing. Due to its substantial dependence on outside manufacturers, Relaxo had an advantage during the Covid-19 disruptions, while others were more negatively affected.

The Challenges

  • Intense competition: In addition to developed and developing competitors, the market also includes unlisted competitors. We can anticipate initial public offerings from these firms in the upcoming months/years. In this circumstance, Relaxo can experience price undercutting, which might impact its profitability and margins.
  • Volatility in Commodity Prices: The production of footwear requires several important raw materials, including ethylene vinyl acetate (EVA), polyurethane (PU), and natural and synthetic rubber. The company’s expenses are greatly impacted by the supply, volatility, and movements of prices of crude oil and its derivatives.  EVA and PU are typically imported by Relaxo for the manufacture of footwear products. As a result, the company also runs the risk of fluctuations in the exchange rate.
  • High MBO Dependency: Relaxo Footwears is highly dependent on its 50,000 MBOs or retailers. The MBOs channel is under significant liquidity stress, which might harm the company’s revenue trajectory.

The Way Ahead

The footwear industry is recognized by the Indian government as a priority sector under the Make In India mission. The Indian footwear industry expects to reach $27.84 billion by 2027, with the potential to grow 10-fold! Without a doubt, there is scope for footwear brands to flourish and strengthen leadership.

Relaxo Footwears seems to be ahead of its peers in this race. The firm has outperformed its competitors in terms of operational and capital efficiency as a result of strong internal manufacturing facilities, successful addition of higher value-added categories, and a solid distribution network. The company may benefit from these aspects in the years to come as well.

Do you think this multinational footwear manufacturer can continue to expand its market share and dominate the industry? Have you invested in Relaxo? Let us know your views in the comments section of the marketfeed app!

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The Rise of B2B E-Commerce Startup Udaan

E-commerce marketplaces in India are witnessing a transformational boom after the pandemic. The digital transition from offline to online or e-commerce marketplaces has been a real game-changer. While business-to-consumer (B2C) firms like Amazon and Flipkart have flourished, business-to-business (B2B) e-commerce takes the lead in revenue generation due to its large order size and sheer volume.

According to a report by IndianRetailer.com, the B2B sector is witnessing a doubling of valuations every 3-4 months. It brings in an investment of more than $100 million and is expected to reach over $1 trillion by 2024! 

The unprecedented growth of B2B marketplaces can be credited to several startups that leveraged critical technology. These e-commerce players created a ready-to-go ecosystem to help the B2B sector grow and develop to where it is today. In today’s article, we analyse one such B2B marketplace— Udaan, and how they envisioned changing trading functions in India by merging with new-age technology.

Udaan’s Origin 

Ex-Flipkart executives Sujeet Kumar, Amod Malviya, and Vaibhav Gupta established Udaan in 2016 with a unique vision to transform merchandise trading in India. They initially registered the firm as Hiveloop Technology. 

The Bengaluru-based startup gathers and unites all producers, traders, wholesalers, and retailers under a common network. This streamlines the whole B2B procedures in the nation and allows manufacturers to display their items through the online platform. Prospective traders have the liberty to choose and purchase a variety of items. Likewise, wholesalers and retailers hold the same flexibility to promote and purchase an item. Udaan’s platform features a variety of categories, including electronics, home & kitchen supplies, stationery, toys, fruits, vegetables, and other household items. 

Udaan has a network of over 30 lakh registered users and 25,000-30,000 sellers across 900+ cities in India. It covers more than 12,000 pin codes. The platform has over 17 lakh retailers, chemists, Kirana shops, farmers, etc, that conduct over 4.5 million transactions per month. This makes Udaan one of the leading players in the B2B e-commerce segment. 

Funding and Investors 

In October 2022, Udaan raised $120 million in convertible notes and debt from shareholders and bondholders. This is despite a general decline in startup funding.

According to an internal corporate document, Udaan intends to launch an IPO in the next 12-18 months. It has raised $350 million over the last four quarters, making it one of the largest structured instrument fundraisers in the nation.

Udaan’s valuation stood at $3.1 billion in a previous funding round of $280 million in January 2021. According to industry sources, they will estimate the company’s latest valuation at the time of the IPO or during the pre-IPO funding rounds.

The startup’s existing investors include Microsoft, Lightspeed Venture Partners, M&G Prudential, Kaiser Permanente, and Nomura.

Recent Developments 

  • Udaan is booming. There are many people associated with Udaan, including traders, farmers, retailers, proprietors, restaurants, pharmacies, and street sellers. To fulfill more than half of the orders placed on its platform, it has a sizable supply chain network spread all over India. Udaan’s platform presently claims to have more than 5 lakh products.
  • Over the last year, Udaan claimed it has significantly improved its unit economics by a total of over 1000 basis points (bps) with strong improvements in both gross margins and operating costs.
  • The company has reportedly laid off 300-350 on-roll employees and a significant chunk of its contract workforce for a total layoff count of over 1,000 people. This is the second round of layoffs after it dismissed 180–200 employees (5% of its workforce) in June. With these layoffs, the startup aims to improve its efficiency and achieve profitability.
  • UdaanCapital (which helps businesses manage their accounting and get credit) enabled credit of ₹2,200 crore to over one lakh retailers.
  • The company has started delivering stocks to pharmacies four times a day across six cities. It plans to scale up the service to other places after 6-8 months. 
  • Udaan said that the gross margin percentage has gone up almost three-fold year-on-year (YoY) in FY22. The company’s revenue is now at about ₹10,000 crore for FY22, a 1.6X increase compared to FY21.

Udaan’s Key Challenges

  • Udaan’s main struggle was to find the right product and market mix. Though the company has already carved its own niche in the B2B marketplace, it is difficult to stand in its current market position.
  • The businesses listed on Udaan must focus on integrating technology and setting up intricate logistical fulfilment procedures. Convincing retailers and wholesalers to go online with their business is another challenge.
  • The execution of operations will always be a challenge, which the company has to deal with as it grows bigger.
  • Establishing a proper supply chain network is a hassle for B2B e-commerce firms like Udaan.
  • Even as well-funded firms like Flipkart Wholesale, Amazon Business, and Jiomart Partners continue to retain a presence in the sector, Elastic Run and Shop Kirana are emerging as rivals.

Udaan’s Mission

According to US-based research powerhouse  Bernstein, B2B e-commerce players like Udaan are likely to disrupt the $1 trillion consumer retail market in India.

Udaan continues to be a trusted partner to small businesses by equipping them with technology, financial inclusion, and supply chain capabilities to compete and prevail in an increasingly tech-driven world. The company will focus on using fresh capital to expand its supply chain network in India. It also aims to grow the marketplace in both new and existing categories. The founder trio believes that they are creating a better platform for small enterprises in India. They are also aiming towards generating more revenue and cutting down on their losses. [Net loss was reported to be around ₹2,482.3 crore in FY21.]

Udaan has served as a model for several other startup companies seeking to succeed in the e-commerce sector. It is one of the few companies that has occupied a dominant position in the sector in a relatively short time, making its success story rather interesting.

As Udaan’s tagline reads ‘Khole Munafe Ka Shutter’ (open the profit shutter), it will be exciting to witness how competently they achieve and stand by it. What are your views on this startup? Share your thoughts in the comments section of the marketfeed app!

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Meet the Top 5 Succesful Investors in India!

The Indian stock market has evolved into one of the most dynamic business environments, with all parties involved sharing the same hopes and aspirations. The way it operates and reaps losses & gains has always always been a site of great interest for all budding investors. In fact, the market capitalisation of all listed firms on BSE hit a new record high of ₹280.5 lakh crore this August!

With the proper strategy and tactics, a ₹10,000 investment per month can turn into a portfolio worth crores over a few years. 

The above statement might seem unbelievable or absurd, but superstar investors like Rakesh Jhunjhunwala, Vijay Kedia, and R.K. Damani have truly turned the tide and have created phenomenal fortunes from the market. 

In today’s article, we will highlight some of the most successful stock market investors in India, in addition to their overall merits and investment strategies!

Rakesh Jhunjhunwala 

  • The late Rakesh Jhunjhunwala, known as the Warren Buffet of India, was admired as a market god. He mastered the art of beating the markets consistently.
  • This billionaire business magnate started investing with merely ₹5,000 in 1985.
  • In 1999, he launched Hungama Digital Media with four other partners. As of 2021, Hungama Music and Hungama Play are available in the OTT market.
  • He held several positions of authority as the chairman and a member of the board of directors of numerous reputable firms.
  • His Titan holdings alone are valued at ₹11,000 crore as of 2022. 
  • Rakesh Jhunjhunwala & Associates (Rare Enterprises) publicly hold 30 stocks with a net worth of over ₹34,320.2 crore.
  • Jhunjhunwala invested $35 million in 2021 for a nearly 40% stake in Akasa Air. He was the co-founder of this new ultra-low-cost Indian airline. 
StocksHolding Value (in ₹ crore)Shareholding (%)
Titan Company Ltd1,3047.105.5
Star Health & Allied Insurance Company Ltd6,982.8017.4
Metro Brands Ltd3,130.5014.4
Tata Motors Ltd1,556.401.1
Crisil Ltd1,193.405.5
(Source: Trendlyne. Holdings as of Q2 FY23)

Radhakishan Damani

  • Radhakishan Shivkishan Damani is a billionaire investor hailing from Bikaner, Rajasthan. He is also the founder of Avenue Supermarts, which operates the DMart chain of supermarkets.
  • He is an astute investor in the Indian stock market with 13 stocks and a portfolio net worth running up to ₹185,782.4 crore. 
  • He manages his portfolio through his investment firm called Bright Star Investments Ltd.
  • In 2022, he was ranked the 98th richest person in the world.
  • His prudence as an investor is evident in the way his stocks have grown over the years. In the previous year, the value of his stocks increased from ₹157.65 crores to ₹322.65 crores.
  • This doubling occurred right after the Russia-Ukraine war when the Indian stock market was at its lowest point. 
  • As per Forbes, Damani has held stakes in an array of businesses, including the 156-room Radisson Blu Resort in Alibag, tobacco firm VST Industries, beer maker United Breweries, and others like India Cements, Sundaram Finance, Blue Dart, and Spencer’s Retail.
StocksHolding Value (in ₹ crore)Shareholding (%)
Avenue Supermarts Ltd1,80,592.5067.5
VST Industries Ltd1,760.4032.3
India Cements Ltd1,566.8020.8
Trent Ltd769.301.5
Sundaram Finance Ltd610.702.4
(Source: Trendlyne. Holdings as of Q2 FY23)

Mohnish Pabrai

  • An ardent follower of Warren Buffet, Mohnish Pabrai is an Indian-American investor.
  • He founded an investment firm named Pabrai Investment Funds in 1999.
  • His firm has generated a staggering 517% return till now.
  • The focus of Pabrai’s investing strategies is considered to be on low-risk, high-certainty stocks, and well-managed businesses with minimal downsides.
  • Mohnish Pabrai publicly holds 3 stocks with a net worth of over ₹1,260.3 crore.
  • With the goal of giving back to society, Monish Pabrai and his wife started the Dakshana Foundation. It helps poor students from rural and semi-urban government schools to crack competitive exams.
StocksHolding Value (in ₹ crore)Shareholding (%)
Rain Industries Ltd517.608.8
Sunteck Realty Ltd379.706.7
Edelweiss Financial Services Ltd3636.4
(Source: Trendlyne. Holdings as of Q2 FY23)

Vijay Kedia 

  • Popularly known as the “Market Master”, Vijay Kishanlal Kedia is an Indian investor hailing from Kolkata.
  • He has been in the market since he was 19 years old. 
  • The commonly used acronym SMILE, which stands for Small in size, Medium in experience, Large in aspiration, and Extra-large in market potential, refers to Kedia’s investment strategy. 
  • As per the latest corporate filings, Vijay Kedia publicly holds 16 stocks with a net worth of over ₹765.9 crore.
  • He invests only after doing a deep study of the management of the respective company and how it functions. 
  • Kedia believes that in order to reap greater rewards, it is crucial to wait and invest for a long period. 
  • From 2000 to 2022, some of his shares have grown by over 47,150%, which shows the vision with which he invests in every stock. 
StocksHolding Value (in ₹ crore)Shareholding (%)
Tejas Networks Ltd246.102.6
Vaibhav Global Ltd103.302
Elecon Engineering Company Ltd97.401.9
Cera Sanitaryware Ltd72.201
Mahindra Holidays & Resorts India Ltd55.501
(Source: Trendlyne. Holdings as of Q2 FY23)

Ashish Kacholia

  • Ashish Kacholia is one of the most prudent investors in the Indian stock market and has built a reputation for being the “whiz-kid” of stocks.
  • The media refers to Kacholia as the “Big Whale”. He began his career with Prime Securities and Edelweiss. Kacholia established his own broking firm, Lucky Investment Managers, in 1995.
  • His investment strategy includes investing in small and mid-size companies.
  • In 1999, he co-founded Hungama Digital (along with Rakesh Jhunjhunwala) and began assembling his portfolio in 2003.
  • Ashish Kacholia publicly holds 41 stocks with a net worth of over ₹1,900.3 crore.
  • Recently, he bought a multi-bagger stock named Best Agrolife that has had a 6000% increase in just five years!
StocksHolding Value (in ₹ crore)Shareholding (%)
Safari Industries (India) Ltd1152.6
Fineotex Chemical Ltd97.202.6
Shaily Engineering Plastics Ltd96.906.5
NIIT Ltd91.202.2
PCBL Ltd91.101.9
(Source: Trendlyne. Holdings as of Q2 FY23)

The stock market is a volatile platform that can swing in either direction at any time. It is not the place to make a rash, uninformed choice. Many people keep a close eye on prominent investors, their investment strategies, and the performance of each stock they own. The methods used by these investors to profit from the equity market provide immense inspiration to aspiring investors.

The tales of wealthy investors convey many vital messages. First and foremost, it’s critical to have a solid investing plan built on thorough observation, and secondly, diversification is key. It is also important to acknowledge the possibility of losses. Keeping that in mind, there is absolutely no doubt that the Indian equity market is a fantastic sector to learn, grow and develop. 

Happy Investing!

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The RBI’s E-Rupee Explained

On November 1, the Reserve Bank of India (RBI) launched the first trial of the Digital Rupee (e-rupee or e₹) in the wholesale segment for government securities. The central bank will also launch a similar trial of e₹ in the retail segment later this month. 

The RBI has selected nine banks to engage in the pilot project— State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank, and HSBC.

India’s central bank published a concept note on the Central Bank Digital Currency (CBDC) on Oct. 7, outlining its characteristics and intent. The concept note addresses the objectives, alternatives, benefits, and drawbacks of introducing the Digital Rupee in India. 

In today’s article, we discuss what the e-rupee is and what the RBI aims to achieve with its launch.

What is Digital Rupee?

e-rupee is a digital version of currency notes issued by the RBI, a type of digital money that can be used in contactless transactions. According to the concept note, the Digital Rupee or Central Bank Digital Currency (CBDC) will be a legal tender issued by the RBI. We’ll be able to exchange digital currency with fiat currency/cash (notes).

The digital rupee will serve as the settlement amount for the purchase and sale of government securities such as bonds. Additionally, RBI said e-rupee will soon be available for regular transactions by consumers and businesses.

“A CBDC would vary from present digital money available to the public because it would be a liability of the Reserve Bank, and not of a commercial bank,” the RBI said in a statement.

How Will it Function?

While RBI will be the sole issuer of e₹, its distribution will be handled entirely by commercial banks. One can examine the balance in their e₹ wallet in a manner similar to checking their bank balance. The foundation of CBDC will be blockchain technology.

A blockchain is essentially a collection of blocks. Each block would contain a group of transactions. Specific computers will run the CBDC’s code and store its blockchain. A token-based system would provide universal access to e-rupee while also providing privacy by default. Thus, individuals will be able to pay Digital Rupee to whoever they want to via apps.

CBDCs are of two types: 

  1. Central Bank Digital Currency Wholesale: Used for large-scale transactions. It will be used by large financial institutions, including banks, and large non-banking finance companies.
  1. Central Bank Digital Currency Retail: Used for retail transactions in the second phase. CBDC can be utilised by people for everyday/regular transactions. It will be initially launched at select locations and banks first. The retail project will involve participants of all ages. The features will be modified based on their experiences.

Features of the Digital Rupee

  • CBDC will be the official digital token of the nation. It is a sovereign currency that RBI will issue based on its monetary policies. 
  • CBDC is freely convertible against commercial bank money and cash. 
  • It will simplify commercial dealings. 
  • CBDC is a fungible legal tender for which holders need not have a bank account. 
  • It is expected to lower the govt’s cost of issuing/printing currency. 
  • Money transfers from smartphones will be quick and hassle-free.
  • All individuals, businesses, and government organisations must acknowledge e₹ as a form of payment, legal tender, and a secure store of value. 

Objectives of Launching Digital Rupee

  • CBDC offers an additional payment avenue, and will not replace the current payment systems.
  • RBI is certain that the introduction of the digital rupee will boost India’s digital economy, expand financial inclusion, and improve the efficiency of the monetary & payment systems.
  • e₹ could help resolve the issue of counterfeit money in the nation.
  • To explore the application of CBDC to enhance cross-border transactions.
  • Encourage financial inclusion.
  • Promoting competition, effectiveness, and innovation in payments.
  • Reduction in cost associated with physical cash management.
  • Protect the public’s confidence in the national currency against the growth of crypto assets.
  • The rise in popularity of cryptocurrencies is another justification for this launch. The digital rupee will boost efficiency and transparency owing to blockchain technology.
  • The steady growth of digital payments throughout the Covid-19 pandemic has been a glaring sign of the rising need for acceptable digital substitutes for the Indian currency. The launch of the e-rupee will assist RBI in reducing costs connected with paper money, including slowing down the loss of damaged notes.

Challenges:

  • Weaker banks could find it difficult to retain low-cost deposits if e-rupee becomes popular and RBI does not impose any restrictions on the amount that can be stored in mobile wallets.
  • Unlike perfectly anonymous cash, the RBI will be able to trace the spending patterns of citizens who use CBDC. Moreover, transactions conducted with e₹ may not be accessible to payment apps. Fintech firms may lose access to big data they use for building products and services. 
  • India is already dealing with several cyber security threats. The introduction of digital currency may lead to an increase in cyberattacks and provide a risk of digital theft.
  • There will be many operational issues for the implementation of CBDC, including the Know your Customer (KYC) norms and privacy of data.

The e-rupee will help India progress in the race for digital currencies. The RBI has hailed CBDC’s debut as a landmark milestone in the history of the nation’s currencies. It could fundamentally alter how people do business. What are your views: will the Indian Rupee be propelled into the global arena via RBI’s Central Bank Digital Currency? Let us know in the comments section of the marketfeed app!

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Editorial

The Success Story of Razorpay

The payment gateway ecosystem in India is a huge market to capitalise upon. The firms participating in this industry require a reliable system and robust mechanism of logistics and financial compliance at every stage. Today, Razorpay is one of the leading internet-based financial solution providers revolutionising the fintech space with groundbreaking innovations.

From days of justifying every payment the company made for essential items from its college seed fund to raising millions and becoming members of the coveted unicorn club, Harshil Mathur and Shashank Kumar of Razorpay have come a long way.

In today’s article, we throw light on how Razorpay has been rising up the charts to emerge as a dominant name in the Indian fintech space. 

Razorpay’s Origin 

In 2014,  Kumar and Mathur met at IIT Roorkee when the duo decided to work on a crowdfunding platform. However, they realised that online payment was a problem for small & medium-sized (SME) businesses, especially e-commerce platforms. Thus, they created Razorpay to address this issue. The idea of Razorpay was to offer a simple payment gateway platform for startups/SMEs.

The platform provides access to several online payment methods for business entities, including credit & debit cards, net banking, and UPI. They charge just 2-3% for each transaction. It also supports many leading wallets in India, including JioMoney, Mobikwik, Airtel Money, FreeCharge, OlaMoney, and PayZapp. Razorpay provides a comprehensive dashboard for handling payments for users and is applicable for both web and mobile applications.

The dashboard has various products, namely Razorpay Route, Razorpay Smart Collect, Razorpay Subscriptions, Razorpay Invoices and Razorpay Capital. These products handle tasks such as cash flows, disbursement of money, and automating electronic fund transfers. Razorpay also collects scheduled payments and supports businesses with instant loans to help them resolve cash flow issues. They also offer smart payroll software to manage and automate employee salaries.

Oyo, Cred, Facebook, Flipkart, Zomato and Swiggy, Byju’s, Zilingo, Yatra, Goibibo, and Airtel are some of Razorpay’s most prominent clients! Even marketfeed has been using its payment gateway and payroll services since 2020!

Razorpay’s Latest Funding Rounds

In October 2020, Razorpay obtained $100 million in a funding round headed by Singapore’s sovereign wealth fund GIC and Sequoia India. With this funding, Razorpay joined the exclusive batch of unicorn startups from India. It raised $375 million in a Series F round in December 2021. In May 2022, the firm announced its fourth liquidity event for Employee Stock Ownership Plan (ESOP) for $75 million.

Ribbit Capital, Tiger Global, Y Combinator, Matrix Partners, Singapore’s GIC, and Sequoia India are the platform’s leading investors.

At $7.5 billion, Razorpay is currently India’s most valuable fintech firm!

Razorpay’s Acquisitions 

  • In 2019, Razorpay announced its first acquisition of Thirdwatch, an AI-powered company specialising in big data to reduce return-to-origin and fraud orders for e-commerce businesses.
  • It also acquired cloud-based payroll management startup Opfin in 2019. The acquisition allowed Razorpay to roll out a new HR automation product, primarily for the payroll process. It also complemented RazorpayX’s B2B banking product, which is a neo-banking platform targeted at businesses and corporates.
  • 2021 – Acquired TERA Finlabs to strengthen its B2B Credit Infrastructure.
  • 2022 – The company made an international foray and acquired leading Malaysian fintech startup Curlec to transform the payments ecosystem in Southeast Asia.
  • Purchased a stake in payments tech startup IZealiant Technologies to build industry-first solutions for banks to create a world-class payments experience for their businesses and customers. 
  • Razorpay acquired Ezetap to build a full-stack omnichannel payments solution.
  • Ventured into Loyalty and Rewards Management with the acquisition of PoshVine. The acquisition was made to enhance the offline shopping experience for customers by integrating PoshVine’s loyalty and reward offerings on its point-of-sale network. 

Peer Analysis

Razorpay faces heavy competition from PayU, Paytm, PayPal India, CCAvenue, BillDesk, Instamojo, and many more. These firms aim to increase their market share by forming multiple partnerships, investing in projects, and launching new products. The market is highly concentrated with various small and large players.

(Razorpay’s market share in the Banking category. Source: Slintel Report, Oct 2022)

Razorpay’s Strong Growth 

  • The platform has close to 80 lakh merchants who are primarily small & medium enterprises (SMEs). This figure is expected to reach 90 crores1 crores as the industry matures.
  • With an annual payment processing volume of roughly $80 billion, the business has a solid opportunity to overtake rival PayU as the leading online payment processing platform.
  • The company clocked revenue of ₹1,484.4 crore in FY22 along with a profit (undisclosed) as per unaudited financial reports. 
  • Over the past years, Razorpay has expanded beyond digital payments. In just four years of its launch, RazorpayX and Razorpay Capital, the company’s lending arm and neo-banking division, have already contributed 30% to its total revenue.
  • With the Curlec acquisition, Razorpay is looking to expand its core payments services to markets in Malaysia, Indonesia, Thailand, the Philippines, etc. 
  • As a result of its strong product and technology stack, Razorpay was also voted as The Economic Times Startup of the Year 2022. 

Razorpay’s Mission

India’s payments space has seen increased activity over the last few years. Consumers are changing their preferences for making online payments as a result of increasing internet penetration and awareness about the ease of online transactions. Razorpay’s mission and vision lie in the objective of making payments easier; making it super-simple for businesses to accept and receive payments. By strengthening its focus on the web and consumer categories through additional acquisitions, Razorpay has been working to establish itself as an omnichannel payments operator. 

The company’s razor-sharp focus on creating start-up offerings has helped them grow substantially. Its focus now lies on increasing market share in India and building a base in the South Asian payments market. 

With larger offerings like upgrading neo-banking platforms and smaller ones like introducing multilingual checkout pages, do you think Razorpay looks ready to dominate the global payments space? Let us know in the comments section of the marketfeed app!

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Editorial

An Overview of India’s Booming OTT Market

India is a complex market when it comes to paying for entertainment. Digital content consumption is rapidly growing as a result of easy access to smart devices and affordable mobile data plans. Since the transition from Doordarshan to Direct-to-Home (D2H) to OTT platforms, the content consumption behaviour of Indians has undeniably evolved. According to an Eros Now-KPMG report, an over-the-top (OTT) viewer in India spends approximately 70 minutes per day on video streaming platforms, with a consumption frequency of 12.5 times a week!

In this article, we examine how OTT is continuously altering the dynamics of the media & entertainment industry in the Indian scenario.

Origin of OTT Platforms in India

OTT stands for “over-the-top,” as in going above and beyond streaming cable networks or YouTube. BIGFlix was the first independent Indian OTT platform in India, launched by Reliance Entertainment in 2008. 

In 2010, Gurugram-based Digivive launched the first OTT mobile app in India, nexGTv. It offers live TV and on-demand content. nexGTV was the first app to stream live Indian Premier League matches on mobile devices in 2013 and 2014. Hotstar has seen significant growth in India since acquiring IPL live-streaming rights in 2015.

When DittoTV (Zee) and SonyLiv both debuted in the Indian market around 2013, OTT experienced substantial momentum in India. DittoTV was an aggregator platform containing shows across popular media channels, including Star, Sony, Viacom, Zee, etc.

There are currently about 46 providers of over-the-top media services in India that distribute content over the internet.

How Big is the OTT Market in India?

In the 1980s, the rapid growth of video cassette recorders and players (VCRs/VCPs) challenged the established modes of viewing cinema. However, the rise of multiplexes in large cities in the early 2000s effectively killed the DVD industry and single screens. Now, the popularity of OTT platforms is wreaking havoc on multiplexes.

According to a report published by Media Partners Asia (MPA), the Indian OTT streaming video market is currently in its second growth phase with total revenues of $3 billion in 2022. So far, OTT has captured 7-9% of the entertainment industry’s share and revenue. With over 40-odd players offering original content in all languages, the industry is expanding quickly and consistently. There are currently over 45 million OTT subscribers in India. This figure is expected to reach 50 million by the end of 2023.

The OTT market is set to become a ₹12,000-crore industry by 2023 at a compound annual growth (CAGR) of 36% (from ₹2,590 crore in 2018).

Reasons Behind Strong Growth of OTT Platforms 

  • The rapid adoption and evolution of internet infrastructure have contributed to the enormous popularity of OTT in India. These factors enable OTT platforms to deliver content directly to the viewers, bypassing traditional distribution and media networks.
  • As people were confined to their homes due to the Covid-19 pandemic, OTT platforms gained acceptance and popularity. It has helped people overcome boredom.
  • OTT platforms offer more than just the ability to stream media on the go. One can stream ad-free services at a low cost and download videos in multiple languages to watch offline on their devices.
  • Several television shows and films are available on streaming platforms much before they are broadcast on television. It is an ideal medium for first-time film or web series fans to take their enthusiasm to new heights.
  • A seamless viewing experience across multiple devices is a must-have feature for OTT platform owners looking to build a loyal fan base and subscriber base. Another important factor that has contributed to the streaming industry’s ever-growing customer base is the multi-screen OTT experience. 
  • Quality and Fresh Content— People are drawn to these platforms since they are tired of conventional Indian TV serials, which seem to go on forever.
  • OTT provided opportunities for creators and artists who had lost their relevance due to a shift in cinema or entertainment. Many have reclaimed their place in the spotlight.

Challenges Faced by OTT Platforms 

  • Security and privacy are the two most pressing issues for OTT platforms. User information saved on their platforms during sign-in or search history should not be exploited for illegal purposes.
  • The lack of censorship is another issue with OTT services. Children can be exposed to a wide range of inappropriate content.
  • People with poor internet connections will not be able to enjoy a smooth viewing experience.
  • Viewers may quickly become addicted to OTT platforms due to the wide range of content offered, resulting in a limited social life. Password sharing is another major issue hurting OTT platforms’ revenues.
  • As more individuals access digital platforms to stream content, OTT platforms are losing up to 30% of their annual revenue to piracy. These pirated websites provide all forms of digital content as soon as they are released in OTT.
  • The ad-free content available on OTT platforms is a significant benefit for viewers. However, this appears to be changing, as Netflix is now looking to include ads to increase revenue. This will be concerning for viewers because they are paying for premium services and won’t have the choice to skip ads.

Different OTT Platforms Available in India: 

Indians now have a variety of options when it comes to OTT services. Netflix, Amazon Prime Video, Disney+ Hotstar, ALTBalaji,  Zee 5, Aha, Voot, SonyLIV, Viu, Hoichoi, etc are the prominent OTT providers. All these platforms differ in terms of subscription plans and compatible devices. 

(Figures as of August 2022)

Despite Hotstar and Amazon Prime Video dominating the sphere of OTT platforms, there has been exponential growth in aggregated OTT services such as TATA Play Binge. It provides access to more than 16 apps, including Disney+ Hotstar, MX Player, Voot, Zee5, and SonyLIV. The mergers of ZEEL and Sony, as well as Jio Cinema OTT and Viacom 18 Media, may pose a threat to Netflix and Amazon Prime’s dominant positions.

Future of OTT Platforms in India 

Media & entertainment is one of the fastest-growing industries in India. However, keeping up with evolving content trends and ever-changing consumer demands is quite a challenging task.

Consumers are more likely to watch a variety of content whenever and wherever they want. According to a survey conducted by Ascent Group India, 68.9% of people prefer watching OTT over traditional forms of entertainment. OTT platform consumption subsequently increased during the pandemic as people preferred to stay at home. The impressive marketing strategies used by OTT platforms have helped them attract subscribers.

The diversity of India provides enough room for almost every existing OTT player as well as those looking to enter the space beyond entertainment. As a result, OTT platforms are just getting started, while traditional content creators and platforms are dying slowly.

It will be interesting to see how OTT platforms respond to changing consumer behaviour and demands and whether they’ll also experience a decline. Which OTT platforms have you signed up for? Let us know in the comments section of the marketfeed app!

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Editorial

How Adani Group Became India’s Largest Airport Operator

Adani Group is one of the biggest diversified conglomerates in India with a market cap of over ₹19.75 lakh crore. It has established a world-class transportation and utility infrastructure portfolio across our country. 

The group has spent the past few years expanding its businesses and even venturing into the data centers, cement, telecom, and media segments. It now owns India’s largest city-gas distributor, coal miner, private-sector port, and airport operator. 

Moreover, Adani’s airport business became the second-largest revenue generator for the group. In today’s article, we dive into how the Adani Group aims to transform India’s transit gateways into world-class destinations.

Adani Airport’s Origin

The Adani Group entered the airports industry in 2019 as part of its mission to become a recognised leader in the integrated infrastructure and transportation industries. The group is dedicated to providing travellers with the greatest airport infrastructure possible by delivering seamless and secure airport experiences.

Through Adani Airports Ltd (AAL), the group envisions redefining the city-airport relationship. It aims to build shared facilities that cater to the ever-evolving global travel, life, and work requirements. AAL is a 100% wholly-owned subsidiary of Adani Enterprises Ltd (AEL).

Source: AEL’s Investor Presentation

Adani Airport Holdings

Adani Airport Holdings is the airport management and operations subsidiary of the group. It holds controlling ownership in Mumbai International Airport Ltd (MIAL), which operates the Chhatrapati Shivaji Maharaj International Airport. It also holds a majority stake in Navi Mumbai International Airport (currently under construction). Additionally, the company has a 50-year lease on the international airports of Ahmedabad, Guwahati, Jaipur, Lucknow, Mangalore, and Thiruvananthapuram since January 2021. 

In February 2020, the company signed the Concession Agreement (CA) for three airports and subsequently commenced operations at Mangalore International Airport on October 31, 2020, Chaudhary Charan Singh International Airport (Lucknow) on November 2, 2020, and Sardar Vallabhbhai Patel International Airport (Ahmedabad) on Nov 7, 2020. Furthermore, it will operate, oversee, and expand each of the six airports for the next 50 years. 

Adani Airport’s Strong Growth 

Adani Enterprises Ltd’s (AEL) expansion and growth initiatives for its airports business are paying off! Its airport operations were the conglomerate’s second-highest revenue producer in the past financial year (FY22). 

The integrated resources management (IRM), solar, and mining businesses of the Adani Group are considered “established businesses”. Meanwhile, its airports segment is considered “emerging”. The airport business has grown substantially over the past year, contributing to strong revenue creation. However, the IRM division continues to contribute the most in terms of revenues and profits.

Financial Performance in FY22:

So far, the group has acquired management rights for at least eight airports, including four international and four regional airports. Together, these airports generated revenue of ₹1,165.58 crore in Q4 FY22, compared to ₹89.80 crore in Q4 of FY21. 

The airport business’ net profit stood at ₹75.37 crore in Q4 FY22. It incurred a loss of ₹87.78 crore in the same period last year (Q4 FY21).

As of Q4 FY22, Adani Airports Holdings’ total assets stood at ₹30,937.47 crore, compared to ₹2,062.23 in Q4 FY21. On the other hand, liabilities increased multifold to ₹8,266.30 crore in Q4 FY22, compared to ₹928.16 crore in Q4 FY21.

The group had to borrow huge funds to finance its airport projects.

Recent Developments 

  • AEL’s established businesses have been enhancing their performance, while new businesses like networked airport ecosystems, road & water infrastructure, and green data centres are expected to have a promising future. 
  • Out of the eight airports under AAL, at least seven are operational. Together, the airports handled 36.9 million passengers in FY22, accounting for at least 20% of the overall passenger traffic in India.
  • The company claimed that the next generation of its strategic business investments is centered around airport management and roads.
  • Adani Group is also aiming to build aerotropolises around airports. They plan to develop real estate projects alongside its airports in the country. These “aero cities” will include a variety of accommodations, conference centres, shopping, entertainment, healthcare facilities, logistics units, and business offices. The company is in preliminary talks with hospitality chains such as Marriott International, InterContinental Hotels Group (IHG), and Hilton for developing hotels under this plan. 
  • The company is looking to create ‘lifestyle destinations’ for customers both inside and outside the airport. Adani strives “to dominate the airports’ space with 300 million+ consumer base leveraging network effect and consumer mindset”.

Acquisitions:

  • Adani Airport Holdings acquired AirWorks, the oldest Maintenance, Repair, and Operations (MRO) firm in India, for an enterprise value of ₹400 crore. 
  • According to sources, the group is negotiating to buy a 30% share in a joint venture between US-based MRO provider AAR Corp. and Prajay Patel-owned Indamer Aviation. AAR holds 40% of the MRO business. The Adani Group is in negotiations to acquire half the stake held by Patel. 
  • The company is also poised to make a competitive offer for AI Engineering Services (AIESL), which is the MRO unit of Air India that the government is looking to sell in the first quarter of the next financial year (FY23).

Adani’s Mission 

From a college dropout to a business tycoon, Gautam Adani’s story is nothing short of remarkable. Adani Group, which focuses on large-scale infrastructure development in India, has established itself as the market leader in its transportation logistics and energy utility portfolio industries. 

Adani Group owes its success and leadership position to its core philosophy of ‘Nation Building’ driven by ‘Growth with Goodness’ – a guiding principle for sustainable growth. It is committed to increasing its environmental, social, and governance (ESG) footprint by realigning its businesses with an emphasis on climate protection. The group is also increasing community outreach based on the principles of sustainability, diversity, and shared values.

Adani is a prominent global infrastructure operator with a diversified portfolio of operations, including coal mining, coal trading, ports, power generation, multi-model logistics, renewable energy, and gas transmission and distribution. The group has long been renowned for its capacity for expansion and national-building aspirations. But will it continue to thrive or will it perish with the ‘emerging’ airport sector? 

Will a single entity be able to operate airports more efficiently or is there a danger of a monopoly arising in India’s airport space? Let us know your views in the comments section of the marketfeed app! 

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Editorial

Vedant Fashions: Leading India’s Ethnic Wear Market

The festive and wedding season is upon us! 

Festivals and weddings are an integral part of Indian culture. They represent our core values and traditions. While each community has its own style of festivals and weddings, all religious groups are welcome to participate in these celebrations, which binds us together in a multicultural space. 

Both events are intricately planned, vibrant, culturally rich, and full of tradition and celebration. They have a profound influence on the clothing industry in India and form customer purchasing patterns and design concepts. 

When we think of the ethnic apparel industry, one name pops up in our mind: Manyavar. But did you know that Vedant Fashions Ltd (VFL), the company that owns Manyavar, dominates the market? In today’s article, we dive into Vedant Fashions and its strong growth. 

Vedant Fashions’ Origin 

Vedant Fashions was established by lifestyle tycoon Ravi Modi in 2002. It offers a one-stop destination for a wide range of product offerings for every celebratory occasion in India. The Kolkata-based company is primarily engaged in manufacturing, trading, and sale of readymade ethnic wear for men, women, and children. The company has an extensive retail network of 546 exclusive brand outlets (EBOs), including 58 shop-in-shops globally, and 11 overseas EBOs across the United States, Canada, and the UAE. 

VFL’s ‘Manyavar’ is a category leader in the branded Indian wedding and celebration wear market with a pan-India presence. The company also owns and operates four other brands— Mohey (women’s ethnic wear), Mebaz, Manthan, and Twamev. Vedant Fashions focuses on spreading India’s vibrant culture and traditions through these brands.

You might have come across their impressive ads starring brand ambassadors Amitabh Bachchan, Virat Kohli, Ranveer Singh, and Alia Bhat.

Financial Performance

Big fat weddings and pent-up desire to party after easing Covid-19 restrictions are boosting Vedant Fashions’ numbers: 

(Values in ₹ crore)

Vedant Fashions’ financial performance should give Ravi Modi and its shareholders cause for celebration. In the financial year ended March 31, 2022 (FY22), its total income grew by 84% YoY to ₹1040 crore, and net profit more than doubled to ₹310 crore. The strong results reflect a low base in 2021, hurt by Covid-19-related restrictions that put a lid on celebrations. Nevertheless, the latest revenue was 30% higher than in FY19, while profit was up 79%. 

Over the next two financial years, both revenue and profit are expected to expand at a compound annual growth rate (CAGRs) of almost 30%, according to an Axis Capital report. In the upcoming years, Ravi Modi intends to nearly double the total retail space to 2.4 million square feet.

A “big fat Indian wedding” can last several days. It includes not only the wedding ceremony and reception, but also welcoming parties, religious rites, and other celebrations. Such trends are helping Vedant Fashions to record robust revenues. According to analytics firm CRISIL, weddings are becoming larger, more elaborate, and longer. This trend can be attributed to rising disposable incomes and an increase in discretionary expenditure. CRISIL expects the ethnic clothing industry to expand 15-17% to reach nearly ₹1.38 lakh crore by 2025, driven by an increase in Indians’ preference for traditional attire over Western attire during important events.

Major Competitors 

Vedant Fashions does not have any direct listed rivals in India. However, it faces competition from companies like Tata-owned Trent Ltd., Metro Brands, TCNS Clothing Company, Aditya Birla Fashion & Retail, and others that have a presence in the Indian wedding and celebration wear categories. Brands such as Biba and Soch also predominantly operate in this segment. 

(Values in ₹ crore)

The Challenges

Vedant Fashions has only experienced gains since its IPO in February 2022. Its shares have soared by more than 60%, exceeding brokerages’ estimates. However, the company faces many challenges:

  • High reliance on one type of discretionary goods— wedding and celebration apparel. The number and frequency of marriages determine the demand for Indian wedding and celebration attire. Additionally, this industry is characterised by rapidly-changing customer preferences.
  • The concentration risk comes next. Despite having over 600 exclusive brand shops, 30% of sales are generated by the top five franchisees.
  • VFL engages with third-party manufacturers (generally known as jobbers) for a significant portion of its apparel and accessories. A slowdown or disruption in the operations and performance of third parties (or inability to retain them) could severely impact its business. 
  • The company’s warehouse, factory, and a majority of its jobbers are mainly based in a single geographical region: Kolkata. Vedant Fashions’ operations are more susceptible to regional risks.

Vedant Fashions’ Mission

Amid a growing demand to wear ethnic apparel on special occasions and as the post-Covid climate fuels a desire to party, Ravi Modi amassed a ₹375 crore fortune through his traditional Indian wear design company. In February, VFL listed 15% of its total equity shares on the Indian stock exchanges— the basis of Modi’s fortune that added him to the ranks of India’s richest for the first time in 2022.

The company aims to lead the category toward a global perspective, beyond cultural or ethnic sensibilities. It intends to be a dominant player in Indian wear, across genre, price, and gender. VFL is driven by a collective mission: to be an authority in celebration wear. 

Vedant Fashions is indeed well-positioned to increase its footprint in the domestic and international markets in the near term. The company plans to penetrate deeper into the existing markets and identify inorganic growth opportunities.

Will it continue to enjoy its haven or perish due to its regional risks? Let us know your views in the comments section of the marketfeed app!

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Editorial

Why Did Reliance Shelve its E-Commerce Marketplace Plans?

Reliance Industries Ltd (RIL) is reportedly postponing its plans to launch a standalone e-commerce platform for third-party sellers and compete with Amazon and Flipkart. The company aimed to create a mega online platform for users to buy groceries, clothes, electronics, home, appliances, and more. Meanwhile, thousands of independent sellers have been integrated into its existing platform (JioMart) already. 

In this article, we explain why the Mumbai-based multinational conglomerate decided to halt its plans to develop its e-commerce platform.

Reliance’s Entry Into the E-Commerce Space:

India’s biggest retailer, Reliance Retail Ventures Ltd, has more than 12,000 stores across India. The company expanded its e-commerce operations in recent years with ventures including Ajio, JioMart, and the webstore of Reliance Digital. Ajio, launched in 2016, is Reliance’s fashion e-commerce venture. JioMart (launched in 2019) is the umbrella marketplace for grocery, value fashion, electronics, and a few other categories. The electronics retail chain, Reliance Digital, operates its own app and webstore. 

Despite the bleak conditions of the pandemic, JioMart, Ajio, and Reliance Digital’s webstore performed well when consumers heavily relied on online channels to make purchases. Reliance Retail also hired more than 65,000 people during the pandemic, out of which more than 53,000 were freshers. Reliance attained e-commerce sales of around ₹3,496 crore in 2021, yet it still lags market leaders (and key rivals) Amazon and Flipkart.

RIL’s Further Expansion in E-Commerce 

In order to compete with industry giants Amazon and Flipkart, the Mukesh Ambani-led business is now developing JioMart as a full-fledged marketplace with a strong presence across all categories. According to reports that surfaced in August 2022, RIL was building a separate online marketplace called JioMarket and onboarding third-party sellers to the platform. This would have allowed Reliance to comply with the Indian government’s draft e-commerce policy. Let’s learn what this policy entails:

The policy proposes to ban marketplace operators from having related parties or associated enterprises as sellers on their platforms. The companies or brands associated with e-market organisations will not be listed in their marketplaces. Only third-party sales are to be permitted. The government is promoting “algorithm fairness,” which forbids e-marketplaces from giving certain sellers preferential consideration. Such a policy would ensure that independent sellers receive fair treatment. E-market organisations are also frequently accused of sharing consumer data and purchasing habits with some preferred sellers. Thus, strict laws will be pushed to safeguard consumer rights.

Now, the government has put the proposed e-commerce policy on hold. So Reliance Industries has abandoned its plan to create a separate e-commerce marketplace for third-party sellers. Instead, it has integrated thousands of independent sellers into its prevailing platform, JioMart. 

JioMarket was designed to adhere to the suggested e-commerce policy standards. RIL intends to establish a single platform, JioMart, which it will construct to the scale of Amazon and Flipkart to compete against them. Now that the policy is taking a backseat, it would have been challenging to grow two platforms to fight against these formidable competitors.

The Way Ahead

JioMart has already onboarded more than 15,000 third-party independent sellers and direct-to-consumer (D2C) brands that Reliance Retail had roped in over the last 3-4 months for JioMarket. The total collection on the platform has gone up 80 times as compared to last year’s Diwali. It has also begun a month-long festive sale with discounts comparable to those offered by Amazon and Flipkart, with some undertaken by third-party sellers and D2C brands.  

E-commerce has revolutionised how businesses operate in India. As per an IBEF report, the Indian e-commerce market is predicted to grow by 21.5% to reach $74.8 billion by the end of 2022! Amazon is hailed as the  #1 e-commerce company in India, while Flipkart is neck-to-neck in competition for supremacy. 

Will JioMart face an uphill task to compete with Amazon and Flipkart, or will it give a tough fight to e-commerce giants like Amazon and Flipkart? Let us know your views in the comments section of the marketfeed app!

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Nykaa: The Evolution of India’s Leading Cosmetics Retail Platform

India is undoubtedly evolving as a global centre for entrepreneurs. With over 77,000 startups, India has emerged as the third-largest ecosystem for startups globally.  India is home to 107 unicorns (startups with $1 billion valuation) as of September 2022! PayTM, OYO Rooms, BYJU’s, Ola Cabs, and Zomato are all examples of companies you may know that are unicorns. 

In today’s article, we dive into India’s first women-led profitable unicorn, which has now emerged as one of the leading e-commerce enterprises— Nykaa! 

Nykaa’s Origin

Falguni Nayar established FSN E-Commerce Ventures (the parent company of Nykaa) in 2012. The e-commerce platform housed only 3 employees and received a mere 60 orders when it was launched initially. With very little experience in the retail industry, technology, or even manufacturing, Nayar built Nykaa into one of India’s leading companies in the cosmetics and personal care market. 

It was the inconsistencies she witnessed in the beauty products market that gave an initial boost to Falguni Nayar to launch her company. Despite the massive demand, the beauty and cosmetics market in India could not match the product range compared to those in other countries like France and Japan. Many products were unavailable in several locations across our nation— all of which contributed to the creation of Nykaa. 

Currently, Nykaa sells beauty, wellness, and fashion products across websites, mobile apps, and 100+ offline stores. It offers products that are manufactured in India as well as internationally. Nykaa aims to create a world where its consumers have access to a finely curated and authentic assortment of products & services.

Recent Acquisitions

Up until this point, Nykaa has successfully acquired six companies. The company recently bought digital content delivery platform Little Black Book (LBB) in an all-cash transaction. On April 22, 2022, it procured New Delhi-based Nudge Wellness and Kica. Nykaa also secured an 18.5% stake in Earth Rhythm (a beauty brand) for ₹44.83 crore and also acquired Dot & Key (a skincare brand).

Nykaa’s IPO

FSN E-Commerce Ventures launched its initial public offering (IPO) on October 28, 2021. Shares of Nykaa made an amazing debut in the Indian stock markets and its market cap surged to almost ₹1,06,942 crore in November! The IPO made Falguni Nayar richer by almost $7 billion (₹52,315.55 crore), and she was crowned India’s wealthiest self-made female billionaire. As of October 2022, Nykaa has a market cap of nearly ₹57,310 crore.

Financial Performance 

Values in ₹ crore

Nykaa is one among the few profitable e-tailers in India. It posted its first net profit of ₹61.94 crore in FY21. The profit after tax stood at ₹41.3 crore in FY22, a decline of 33% year-on-year (YoY). Revenue from operations soared 55% YoY to ₹3,773.9 crore during the same period. Nykaa also grew its store count by 43% YoY to 105 physical stores.

A key indicator in the e-commerce space is the Gross Merchandise Value or GMV. For Nykaa, the GMV is the monetary value of orders inclusive of taxes and gross of discounts. The company’s GMV grew 71% YoY to ₹6,933.2 crore in FY22.

During the quarter ended June 2022 (Q1 FY23), Nykaa’s net profit rose 42% YoY (or 18% QoQ) to ₹5 crore. Revenue stood at ₹1,157 crore, up 41% YoY. It posted a GMV growth of 47% YoY to ₹2,156 crore in Q1.

The Challenges

Over the past few years, Nykaa has launched a range of new products that also incorporate celebrity endorsements. Alongside this, they have also launched fresh collections to include in their personal brand. The platform provides a large selection of beauty products, but its fashion business is not performing too well.

Analysts and industry observers consider Nykaa’s fashion business the greatest distraction. Having entered the business in 2018, Nykaa is clearly a latecomer. It will have to battle it out with the likes of Myntra and Ajio, which have already made considerable inroads. It will also need to create a unique selling proposition (USP) in fashion. According to analysts, many customers say they are not aware that Nykaa has fashion offerings, or that there is anything different that the unicorn offers in fashion that others don’t.

Cosmetics e-commerce company Purplle is Nykaa’s biggest competitor. It is now valued at over a billion dollars after its $33 million fundraising round. With this, Purplle became the 102nd unicorn in India.

The Cosmetics Industry: An Overview

The global cosmetics segment is valued at $5.60 billion in 2022 according to a Statista report. The market is expected to grow at a CAGR of 5.22% during 2022-2026. This astounding expansion of the cosmetic industry is a result of both the industry’s quick digitalization and the rising demand for cosmetic products, mostly driven by young adults. 

One of the major companies in the cosmetics sector is Nykaa, which boasts of its extensive selection of items for beauty, fashion, and health that it offers to both physical and digital customers. Nykaa stands as a leading company in the cosmetics and personal care market with a revenue of ~₹3,800 crore in 2022. It estimates turnover to reach ₹2,74,185 crore by 2027. Its valuation is higher than some of the oldest and the largest Indian businesses like Coal India, Bharat Petroleum, SBI Card, and Godrej Industries.

The company is aiming to expand its offline business. An alliance between Nykaa and Dubai’s Apparel Group too has been formed. The two entities will work together to develop a multi-brand beauty retail company within countries in the Gulf Cooperation Council. Nykaa will hold a 55% stake in the firm, while Apparel Group will hold 45%.

It plans to establish 180 outlets across India by 2024. To improve client experience, Nykaa is now eager to extend its fulfilment centres around the nation. Additionally, it intends to increase its warehousing capacity by 40%.

Nykaa’s Mission!

Since its debut, Nykaa has not only revolutionised and redefined the art of e-retailing beauty and personal care in India, but it has also played a significant role in promoting the development of a still-emerging ecosystem. Nykaa wants all its customer to discover their unique identity and personal style. 

Nykaa’s founder, Falguni Nayar, is the richest self-made woman in India. She served with Kotak Mahindra bank for 18 long years. At the age of 50, she resigned to follow her entrepreneurial dream: Nykaa.com. Nayar’s passion for her business, attention to detail, and engagement in every aspect of the firm can be defined as some of the qualities that made her an excellent leader. She has also set a big example for the entire world and validated the saying, “age is just a number” when it comes to entrepreneurship. 

Nayar is a source of inspiration to everyone in Nykaa and beyond as she continues to strive hard and break stereotypes. Will this omnichannel consumer-tech company further smash all records and secure a prominent space in international markets, or will it be confined to its regional presence? Let us know your views in the comments section of the marketfeed app! 

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Editorial

Can BluSmart EV Cabs be a Threat to Ola, Uber?

An electric vehicle (EV) ride-hailing platform has made a grand entrance at a time when Ola and Uber (who have largely enjoyed a duopoly) are facing the rage of customers over numerous concerns, particularly with how surge pricing is determined. 

In this article, we discuss the challenges faced by online cab service providers and how BluSmart, the newest entrant in the ride-hailing segment, seems to be checking off all the right boxes. 

Transformation of the Indian Taxi Industry 

We have all witnessed a major transition in the Indian taxi industry. Around 2010, we experienced a shift from radio cabs or conventional taxis to online cab services from OLA and Uber.

Before the OLAs and Ubers took over the Indian market, there was a scarcity of good cab services. There was a time when getting a taxi in places like Mumbai and Delhi required a 40-minute wait. Owing to high demand and betterment in the quality of cabs, the organised taxi market grew. The online players were responsible for changing the customer perception of taxi services in India.

“Customer is god”. We all know that, but these online players also strived to keep their driver-partners content. Bonuses, incentives, free training, and health check-ups were provided. These companies knew that if they kept their drivers satisfied, then the riding experience would improve, and that would translate into higher brand value. 

Challenges Faced by Online Cab Service Providers

With rising fuel prices over the years, driver incentives were eliminated and the earlier no-cancellation policy was now a major curse.

  • App-based taxi aggregator companies had promised their drivers high monetary incentives. However, incentives were drastically cut, resulting in increased driver dissatisfaction.
  • The average wait time for the cab was 2-4 minutes, which has now been increased to 12-15 minutes. 
  • Fare prices have also increased, which is driving customers away.
  • Users have been complaining about the high rates of cancellations and the drivers’ insistence on cash payments.
  • The drivers work 14-16 hours shifts a day to make ends meet.

BluSmart: Disrupting the Disruptors

These shortcomings are exactly what Gurugram-based BluSmart is attempting to address and eradicate!

BluSmart is an electric shared smart mobility platform that offers intelligent, economical, sustainable, and efficient transportation. It was established in 2019 with sustainability being the core foundation of its operations. They have the vision to bring positive environmental changes to Indian cities by establishing a holistic and comprehensive electric on-demand mobility platform. 

As of July 2022, the company announced it had saved 4300+ tonnes of CO2 over 1.8 million rides in Delhi NCR and received Verra accreditation (a standard for certifying carbon emissions reductions) on carbon emissions.  

BluSmart’s drivers don’t have a cancel button in their app! It has also onboarded women drivers. In that sense, it seems to be checking off all the right boxes— spanning higher service levels, environmental awareness, and women empowerment. 

Challenges in Growth

BluSmart’s expansion faces several hindrances. It accepts reservations/bookings for its automobiles and works in accordance with the availability of slots. Since the rider already has a set itinerary, this will not pose a problem. However, it may lose out on rides where spontaneous travel decisions are made. On the same right, BluSmart users have reported that their vehicle usually arrives at the pickup location well before the allotted time frame. 

Also, their vehicles are not driver-owned assets, unlike Ola or Uber. BluSmart possesses ownership of all its vehicles. Its entire fleet is electric and consists of Tata Tigor EVs. This also implies that these vehicles require a location to recharge their batteries. The lack of charging infrastructure in India poses a significant hurdle to the company’s expansion. However, BluSmart has partnered with Jio-BP to set up charging infrastructure across India. 

The Way Ahead 

BluSmart is dedicated to expanding its substantial and competitive presence throughout all of the nation’s megacities. After being Delhi NCR-focused, it has started operations in certain areas in Bengaluru, including Indiranagar, Koramangala, Wilson Garden, Domlur, HSR Layout, Bellandur, and a few more. 

The ride-sharing company also aims to grow its fleet size from 2,200 cars to more than 5,000 by the end of this year. It plans to operate 30,000 EV cabs by the end of 2023!

BluSmart is creating inclusive and equitable economic opportunities for driver-partners who can drive and earn without the hassles of asset ownership. The startup’s goal is to provide economical and environmentally friendly transportation options for metropolitan India.

Will BluSmart outsmart Ola and Uber, or will it face the heat and pressure of the veterans? Let us know your views in the comments section of the marketfeed app!