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<ul><li>Competition heats up after <keyword id="80487" type="COMPANY" weightage="20" keywordseo="walmart">Walmart</keyword> closes its $16 billion acquisition of <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>.</li><li>Alibaba and <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword> are said to be eyeing large investments of their own.</li><li>Conventional retail and <keyword id="35621" type="PERSON" weightage="20" keywordseo="e-commerce">e-commerce</keyword> players are coming together for a hybrid online-offline business model.</li></ul>A turf war is about to break out among Walmart, Amazon Inc. and <keyword id="163405" type="COMPANY" weightage="20" keywordseo="Alibaba-Group">Alibaba Group</keyword> as the retail giants make aggressive moves to expand into <keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword>. And it is highly likely that this will lead to a massive shakeup of the Indian retail space. Last week, Walmart said it had <a href="https://www.businessinsider.in/indias-competition-regulator-has-given-the-walmart-flipkart-deal-a-greenlight/articleshow/65337242.cms">closed</a> the $16 billion (₹1,118 billion) deal to buy the majority (77%) of Flipkart, India’s largest e-commerce company, following regulatory approval. This is Walmart’s biggest acquisition till date. In its aftermath, Alibaba and Amazon are said to be eyeing large investments of their own, according to media reports. Alibaba is said to be <a href="https://www.livemint.com/Companies/1mvbhDUjZd9khrSUroW5MM/Alibaba-may-invest-5-billion-in-JV-with-Reliance-Retail.html">considering</a> a $5 billion (₹350 billion) investment into a joint venture with <keyword id="58448" type="COMPANY" weightage="20" keywordseo="Reliance-Retail">Reliance Retail</keyword>, India’s largest retailer in terms of sales, in part to take on competition from Amazon and Flipkart. While Amazon, along with co-investors, is mulling an investment in the Aditya Birla Group-owned grocery chain, More, for an enterprise valuation between ₹45 billion and ₹50 billion. Alibaba has reportedly also held talks with other Indian retail chains including Future Retail. In the past few years, Amazon has pumped in over $5 billion into India, its fastest growing market. Amazon and Walmart have been in fierce competition in their home market, the US, for quite some time, while Alibaba and Amazon are head-to-head in China. Some fear that Walmart’s push into India could potentially have an adverse impact on the larger Indian retail space in the long term, particularly on the small brick and mortar retailers in the country. A nation-wide trade lobby group plans to protest the Flipkart acquisition by going on a nationwide strike in the coming months. Currently, over 95% of India’s consumer retail market remains unorganised, representing a huge untapped opportunity for organised retail chains. India has long restricted <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> in multi-brand retail to protect local grocers but allows 100% foreign direct investment in e-commerce companies that use the “marketplace” model. It is currently considering bringing in regulation for the e-commerce space and according to a recent draft proposal, may allow 49% foreign investment in e-commerce companies that use the inventory model. Walmart in its recent statement said its future investments into India will be directed at supporting farmers, supply chain development and reducing food waste. Strategy shift: Going hybrid Walmart’s acquisition of Flipkart and Amazon’s interest in More are the latest examples of large retailers adopting a hybrid business model of offline and online after years of experts predicting the disruption of traditional retail by e-commerce companies. Alibaba and Amazon have recently been focusing heavily on offline and online in their home markets – Amazon with its acquisition of grocery chain Whole Foods and Alibaba’s ‘New Retail’ strategy, which combines e-commerce and conventional retail in China. That rationale appears to be flowing down into their India strategy as well, points out Mrigank Gutgutia, engagement manager with RedSeer Management Consulting. Amazon also owns a 5% stake in Indian brick and mortar retail chain Shoppers Stop. While the Walmart-Flipkart deal is certainly encouraging for e-commerce players, even after 10 years and 100 million shoppers, Indian e-tailers have thus far managed to penetrate only about 2.7% of the overall Indian retail market, indicating the pressure to diversify their reach, notes Gutgutia. “While e-tailers have got their growth mojo back, everyone is starting to realise that pure online models will only let them capture limited pie,” said Gutgutia. “There is a need for change,” he added. Overall, as Indian e-commerce market matures further, e-tailers are realising that pure discount-driven models are no longer going to work. “What is needed is genuine innovation to cater to specific traits and needs of Indian buyers -- especially in offline-heavy categories like fashion and grocery,” said Gutgutia. According to RedSeer, this multi-channel approach will become dominant among organised retail players in the coming years, particularly for e-commerce players. Other e-tailers who have ventured into offline include furniture retailer Pepperfry with its studios and fashion retailer Myntra's Roadster stores. Regardless of how the investment landscape pans out and who buys whom, and as competition gets more intense for existing e-commerce and offline retailers, ultimately shoppers and customers are expected to win. As for small retailers, Gutgutia says they could see a positive impact if they work on a partnership model with organised retailers.

Clash of the titans: Amazon, Walmart and Alibaba to battle it out in India

<keyword id="2085190" type="UNKNOWN" weightage="100" keywordseo="Online-grocery-stores">Online grocery stores</keyword> are gaining popularity in India due to sheer convenience, ease of shopping and a fast-growing market. Globally, <keyword id="2085193" type="UNKNOWN" weightage="100" keywordseo="Online-grocery-retail">online grocery retail</keyword> is growing nearly 7 times faster than on-ground formats and the <keyword id="47445" type="UNKNOWN" weightage="100" keywordseo="Indian-market">Indian market</keyword> may soon catch up. For one, the <keyword id="156795" type="UNKNOWN" weightage="100" keywordseo="indian-retail-industry">Indian retail industry</keyword> is estimated to be worth over $500 billion (one of the world’s top 5 markets) and 30-40% of the businesses will be in the online retail space over the next 7 years., This presents a great opportunity for any form of e-tailing, especially the <keyword id="2085203" type="UNKNOWN" weightage="100" keywordseo="E-grocery-space">e-grocery space</keyword>. 
 As of now, <keyword id="2085207" type="UNKNOWN" weightage="100" keywordseo="Grocery-e-tailing-in-India">grocery e-tailing in India</keyword> is a largely unorganised space and poses a big challenge in terms of stiff <keyword id="2085206" type="UNKNOWN" weightage="100" keywordseo="Entry-barriers">entry barriers</keyword>. The traditional methods of inventory and <keyword id="2085212" type="UNKNOWN" weightage="100" keywordseo="Logistics-management">logistics management</keyword> call for intense cash-burning – a business condition most of the bootstrapped Indian start-ups fail to meet. Moreover, a <keyword id="2085209" type="UNKNOWN" weightage="100" keywordseo="Series-A-funding-crunch">Series A funding crunch</keyword> also compelled companies like Mumbai-based <keyword id="2048780" type="UNKNOWN" weightage="100" keywordseo="ShopVeg">ShopVeg</keyword> to shut down operations. Therefore, when another Mumbai-based start-up decided to start grocery e-tailing in the same year, things were not looking too exciting for the newcomer. But 22 months later, <keyword id="2009014" type="UNKNOWN" weightage="100" keywordseo="LocalBanya-com">LocalBanya.com</keyword> has managed to set up Mumbai’s first online supermarket and also raised <keyword id="6793689" type="UNKNOWN" weightage="100" keywordseo="Series-A-funding">Series A funding</keyword> for the next level of expansion. 
 Although there were predecessors that attempted various models of grocery retail in the digital space and failed, <keyword id="2047523" type="UNKNOWN" weightage="100" keywordseo="LocalBanya">LocalBanya</keyword> has adapted a <keyword id="2085214" type="UNKNOWN" weightage="100" keywordseo="Lean-business-model">lean business model</keyword> that relies on a convenient mix of <keyword id="96173" type="PERSON" weightage="100" keywordseo="warehousing">warehousing</keyword> and <keyword id="512818" type="UNKNOWN" weightage="100" keywordseo="cash-and-carry">cash-and-carry</keyword>. This has reduced the start-up’s dependence on capital-intensive operations and enabled it to put in place a thoroughly efficient <keyword id="118965" type="PERSON" weightage="100" keywordseo="Supply-chain">supply chain</keyword>. In addition, the company has adopted some unique measures to take <keyword id="2085217" type="UNKNOWN" weightage="100" keywordseo="Customer-convenience">customer convenience</keyword> to the next level. Want to know more about LocalBanya and how it works? Here is a snapshot that captures the start-up’s vision and viability. 
 
Who runs LocalBanya (www.localbanya.com): A team of three co-founders – <keyword id="2085179" type="UNKNOWN" weightage="100" keywordseo="Karan-Mehrotra">Karan Mehrotra</keyword> (<keyword id="5645" type="POSITION" weightage="100" keywordseo="CEO">CEO</keyword>), <keyword id="2085180" type="UNKNOWN" weightage="100" keywordseo="Rashi-Choudhary">Rashi Choudhary</keyword> (COO) and <keyword id="1251820" type="PERSON" weightage="100" keywordseo="Amit-Naik">Amit Naik</keyword> (<keyword id="238078" type="POSITION" weightage="100" keywordseo="CTO">CTO</keyword>). Karan is the brain behind LocalBanya and set up the entire infrastructure with just 14 employees. He is a <keyword id="163598" type="POSITION" weightage="60" keywordseo="computer-engineer">computer engineer</keyword> and prior to starting up, worked for his family business as a distributor for <keyword id="123278" type="UNKNOWN" weightage="100" keywordseo="FMCG-firms">FMCG firms</keyword>. He has 11 years of work experience in varied fields – from turning around a chain of restaurants to setting up metal fabrication plants to building a food distribution network. 
 Amit holds an MBA from IIM-Lucknow and he is also a Six Sigma Black Belt from the American Society for Quality. He had six years of top tier experience in ad-tech and earlier worked for <keyword id="1076906" type="ORGANIZATION" weightage="80" keywordseo="Directi">Directi</keyword> and <keyword id="45475" type="CITY" weightage="80" keywordseo="Larsen-Toubro">Larsen &amp; Toubro</keyword>. Rashi holds a Global MBA from <keyword id="1433263" type="UNKNOWN" weightage="60" keywordseo="SP-Jain-School-of-Global-Management">SP Jain School of Global Management</keyword> and brings four years of experience in <keyword id="6553136" type="UNKNOWN" weightage="100" keywordseo="retailing">retailing</keyword>, consulting and <keyword id="169305" type="ORGANIZATION" weightage="100" keywordseo="customer-service">customer service</keyword>. Prior to joining LocalBanya, she worked with the <keyword id="244481" type="COMPANY" weightage="60" keywordseo="Raymond-Group">Raymond Group</keyword>. 
 The trio had been working on the concept for some time and the site went live in May 2012. LocalBanya is now in beta and the e-grocer has over 130 employees operating across Mumbai, Thane and <keyword id="57321" type="PERSON" weightage="100" keywordseo="Navi-Mumbai">Navi Mumbai</keyword>. 
 
What inspired the venture: The desire to go one step ahead of your <keyword id="2085220" type="UNKNOWN" weightage="100" keywordseo="Local-grocer">local grocer</keyword> who accepts orders on phone. “Apparently, it was convenient but there was something lacking. You can’t browse the inventory when ordering on phone; the choices are not many (after all, a kirana or <keyword id="2085221" type="UNKNOWN" weightage="100" keywordseo="Mom-and-pop-store">mom-and-pop store</keyword> won’t keep exotic or imported items as those are a bit expensive) and finally, there’s no organised system (accountable, responsible and prompt),” says Karan. So up came LocalBanya, an online supermarket selling around 12,000 products across 17 categories and adding more every day. 
 
What’s the pitch: LocalBanya.com is an <keyword id="2085223" type="UNKNOWN" weightage="100" keywordseo="Online-convenience-store">online convenience store</keyword> dedicated to YOU (customers). The e-grocer offers high quality products and hassle-free delivery that save time, energy and money. “If you are <keyword id="62452" type="UNKNOWN" weightage="100" keywordseo="grocery-shopping">grocery shopping</keyword> 4-5 times a month or looking for something special, imagine the kind of supermarket trips you have to make and how you have to run from shop to shop,” points out Karan. “But having the entire bulk procured for you and delivered to your place, at the time you want it, would make things extremely convenient and lure the customers,” he adds. Karan, however, feels that the industry is huge enough to allow kirana stores, large-format retailers and e-retailers to survive and grow in the same marketplace. 
 
How it works: As of now, LocalBanya is targeting the <keyword id="6756404" type="UNKNOWN" weightage="100" keywordseo="urban-population">urban population</keyword> and the customer base varies from <keyword id="2085227" type="UNKNOWN" weightage="100" keywordseo="Single-professionals">single professionals</keyword>, <keyword id="632195" type="UNKNOWN" weightage="100" keywordseo="working-couples">working couples</keyword>, <keyword id="168112" type="UNKNOWN" weightage="100" keywordseo="Nuclear-families">nuclear families</keyword> and <keyword id="3216" type="ORGANIZATION" weightage="100" keywordseo="students">students</keyword> fending for themselves to <keyword id="1400200" type="UNKNOWN" weightage="100" keywordseo="new-mothers">new mothers</keyword>, <keyword id="20566" type="UNKNOWN" weightage="100" keywordseo="senior-citizens">senior citizens</keyword> and even <keyword id="2085229" type="UNKNOWN" weightage="100" keywordseo="Large-families">large families</keyword>. 
 “People come to us for a wide selection of goods (otherwise, they will have to visit 2-3 stores to make a purchase), convenience and great pricing. We deliver that convenience with exceptional levels of customer service, <keyword id="2085230" type="UNKNOWN" weightage="100" keywordseo="Preferred-delivery-times">preferred delivery times</keyword>, same-day deliveries, fresh produce and efficient &amp; reliable suppliers. We also take product suggestions from our customers and ensure that the products are online in a fortnight,” details the LocalBanya team. The <keyword id="2085232" type="UNKNOWN" weightage="100" keywordseo="Procurement-model">procurement model</keyword> includes a convenient mix of warehousing and just-in-time (<keyword id="377986" type="ORGANIZATION" weightage="100" keywordseo="JIT">JIT</keyword>) deliveries from a host of suppliers including <keyword id="34523" type="CITY" weightage="80" keywordseo="fmcg">FMCG</keyword> companies, cash-and-carry outlets and other distributors. 
 Shopping for groceries on the LocalBanya platform is also kept simple. You just have to register or connect through Facebook before browsing the categories and the products. Once you make the purchase, the order is processed and ready for delivery within 6 hours. Delivery is done as per your time slot selection. The company offers 6 slots (of 2 hours each), from 7 in the morning until midnight, and one can choose any of those. Customers also enjoy <keyword id="2085234" type="UNKNOWN" weightage="100" keywordseo="Banya-Points-rewards-programme">Banya Points rewards programme</keyword> and these points are redeemed for cash discounts on every purchase. 
 
Claim to fame: <keyword id="900658" type="UNKNOWN" weightage="100" keywordseo="traction">Traction</keyword> and <keyword id="232730" type="POSITION" weightage="100" keywordseo="business-model">business model</keyword>. The start-up claims that it currently reaches over 10,000 homes a month and delivers 500-plus orders a day. Interestingly, nearly one-third of its orders are from <keyword id="1189616" type="UNKNOWN" weightage="100" keywordseo="institutional-clients">institutional clients</keyword> while senior citizens and <keyword id="58225" type="ORGANIZATION" weightage="100" keywordseo="NRIs">NRIs</keyword> constitute over 16% of the customer base. But what matters most is the <keyword id="2085235" type="UNKNOWN" weightage="100" keywordseo="Lean-infrastructure">lean infrastructure</keyword> set-up for reducing asset liabilities. 
 
Show me the money: Since its <keyword id="85080" type="ENTERTAINMENT" weightage="100" keywordseo="Inception">inception</keyword> in May 2012, LocalBanya has done around Rs 15 crore in gross revenues. The start-up is projected to grow 40% month on month over the next 15-18 months and eyes <keyword id="486782" type="UNKNOWN" weightage="100" keywordseo="break-even">break-even</keyword> in the existing markets (Mumbai, Thane and Navi Mumbai) by June this year. 
 LocalBanya was initially bootstrapped, but has already raised two rounds of <keyword id="6357455" type="EVENT" weightage="100" keywordseo="Funding">funding</keyword>. It is now in talks with investors to raise a Series B round by March 2014. In January this year, the start-up secured an undisclosed amount in Series A funding from <keyword id="2009015" type="UNKNOWN" weightage="80" keywordseo="Karmvir-Avant-Group">Karmvir Avant Group</keyword>, a real estate developer in Mumbai. Earlier, it had raised funding from <keyword id="2085241" type="UNKNOWN" weightage="100" keywordseo="Times-Groups-Brand-Capital-Springboard">Times Group’s Brand Capital Springboard</keyword> platform. “The Series A round will last us for a year and help fuel our growth at a faster rate as we scale up operations, hiring and marketing. We are also looking to start operations in a new city within a quarter,” says Karan. 
 
Biggest challenge: Competition abounds in online grocery retail space but containing cash-burning is most crucial when it comes to inventory, supply chain and logistics. Streamlining the supply chain and <keyword id="2085210" type="UNKNOWN" weightage="100" keywordseo="Inventory-management">inventory management</keyword> is an uphill task but a lean procurement set-up, use of <keyword id="2085238" type="UNKNOWN" weightage="100" keywordseo="Leased-delivery-vehicles">leased delivery vehicles</keyword>, <keyword id="2085242" type="UNKNOWN" weightage="100" keywordseo="In-house-delivery-personnel">in-house delivery personnel</keyword> (for ease of management) and a well-structured <keyword id="2085243" type="UNKNOWN" weightage="100" keywordseo="Region-mapping">region mapping</keyword> that enables effective coverage of the city have helped the start-up cut down on costs. 
 
Five takeaways: In nearly 2 years of operation, LocalBanya has seen some interesting trends in <keyword id="2085200" type="UNKNOWN" weightage="100" keywordseo="Online-grocery-shopping">online grocery shopping</keyword> behaviour and Karan &amp; his team want to share it with the budding wannapreneurs and all our readers. So here we go: 
 
59% of the transactions on the site are done by women. 
 
Senior citizens are a sizeable 14% of the customer base due to the convenience of online retail. 
 
A sizeable 2.1% of transactions are done by NRIs to have groceries delivered to their relatives in Mumbai. 
 
Institutional clients including restaurants, corporate houses, co-operative societies and any other organisation requiring groceries in bulk have seen the advantage of e-grocery and 29% of the business comes from these channels. 
 
Around 11% of LocalBanya’s deliveries are done during the 10 pm-12 midnight slot. And the last trend brings us back to the convenience factor. How many e-grocers or physical retail stores in India would be doing that in a bid to break out of the pack?

This E-grocery Start-up Uses A Lean Model For Its Online Supermarket; In Talks To Raise Series B
Funding

<ul><li><keyword id="1640900" type="PERSON" weightage="20" keywordseo="Online-grocery">Online grocery</keyword> segment will grow by 55% to reach 1.2% of the market by 2023, said a report by RedSeer and <keyword id="964794" type="COMPANY" weightage="20" keywordseo="BigBasket">BigBasket</keyword>. </li><li>Today online grocery startups account for 40% of total e-commerce funding in India. </li><li>Startups in the online grocery sector have raised $665.70 million in funding in 2019 so far.</li></ul>The Indian online grocery segment is growing fast and how. Currently the online food and grocery retail holds a miniscule part of online retail with only 0.2% penetration. But it is predicted to grow by 55% to reach 1.2% of the market by 2023, said a report by RedSeer and BigBasket. The market size of this segment will also expand to $10.5 billion, the report predicts. The customers’ trust on online shopping along with the growing presence of e-grocery players will drive this growth in the sector, added the report. “The online grocery segment has been one of the fastest-growing e-commerce verticals in India and will continue to flourish in both metro and non-metro cities in the years to come,” said Hari Menon, Co-Founder and CEO, bigbasket. Online grocery vs E-commerce in India As Indians are used to visiting the kirana store in the next lane, online grocery has been growing slowly since onset in 2010. In the past few years however it picked up speed. As the number of e-commerce users grew it had a slow but steady effect on online grocery purchases. From a barely any presence in 2010, today online grocery startups account for 40% of total e-commerce funding in India. 
 
 
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 So, what led to this growth? “The online grocery space in India has accelerated due to the increasing penetration of internet in millions of households across the country, rise in smartphone usage, enhanced customer comfort and trust in e-tailing and a better value for money for customers in online vs offline stores. Besides, availability of value for money products, better savings vs offline stores and cashback led by subscription-based programmes further ensure affordable pricing and scheduled delivery to make this space exciting,” said Albinder Dhindsa, Co-founder, <keyword id="2466939" type="PERSON" weightage="20" keywordseo="Grofers">Grofers</keyword>. Startups in the online grocery sector have raised $665.7 million in funding in 2019 so far, with Bigbasket turning a unicorn. Grofers, a soonicorn (soon to turn unicorn) made a comeback with a $200 million funding led by Softbank. Here are the top 20 funded startups in the e-grocery segment. 
 
 
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 Tier 2 &amp; 3 cities to lead the next phase of e-grocery Online grocery’s dream to reach $10.5 billion by 2023 will not be fuelled solely by urban growth. A big share of this will come from Tier 2 and 3 cities. Grofers co-founder Dhindsa believes that the next big thing in e-grocery is increasing penetration of e-commerce in tier-2 markets and amongst lower SECs (socio-economic classification) in metros. “E-grocery will bring more shoppers into e-commerce as a whole and already 15% of our new users every month are first time online shoppers. Growing disposable income of the consumers in Tier II markets and the adoption of 4G has already laid a strong foundation for the next wave of growth for e-commerce,” he said.

Online grocery may become a $10 billion industry by 2023 but even then only one in 100 Indians will be buying

<ul class="summary-list"><li>This is an excerpt from a story delivered exclusively to Business Insider Intelligence Payments &amp; Commerce subscribers. </li><li>To receive the full story plus other insights each morning, <a href="https://www.businessinsider.com/intelligence?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=briefing_post&amp;itm_content=top_text&amp;itm_term=bundle_subscription_text_link-amazon-makes-brick-and-mortar-play-in-india-2019-8">click here.</a></li></ul>The Seattle-based e-tailer has acquired a 49% share of Future Coupons, which handles digital payments for Indian <keyword id="6354851" type="UNKNOWN" weightage="100" keywordseo="retail">retail</keyword> operator Future Retail, per <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cud3NqLmNvbS9hcnRpY2xlcy9hbWF6b24tZGVhbC1vcGVucy1kb29yLXRvLWJpZ2dlci1mb290cHJpbnQtaW4taW5kaWEtMTE1NjY1NDQwODA/5d233c18f730436f2414784fBf71f8e00" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cud3NqLmNvbS9hcnRpY2xlcy9hbWF6b24tZGVhbC1vcGVucy1kb29yLXRvLWJpZ2dlci1mb290cHJpbnQtaW4taW5kaWEtMTE1NjY1NDQwODA/5d233c18f730436f2414784fBf71f8e00&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNE1cpoofz9Z7PlMSupW8CcCFgAZRw">The Wall Street Journal</a>. <div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div>Future Coupons is "developing innovative value-added payment products and solutions such as corporate gift cards, loyalty cards, and reward cards primarily for corporate and institutional customers," an Amazon spokesperson told <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly90ZWNoY3J1bmNoLmNvbS8yMDE5LzA4LzIyL2FtYXpvbi1mdXR1cmUtY291cG9ucy8/5d233c18f730436f2414784fB25d25e3d" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly90ZWNoY3J1bmNoLmNvbS8yMDE5LzA4LzIyL2FtYXpvbi1mdXR1cmUtY291cG9ucy8/5d233c18f730436f2414784fB25d25e3d&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNH3H4qHdz9u7RWWfcNkyMGyHYWnSw">TechCrunch</a>, but the acquisition may serve as a stepping stone to a greater investment in Future Retail.The deal gives Amazon around half of Future Coupons' 7.3% stake in Future Retail and, after three years, the opportunity to acquire part or all of the share currently owned by Future Retail's founding family, which is worth over 40% of the company. Future Retail is likely an appealing investment for Amazon as it operates over 2,000 stores, including hypermarkets and supermarkets, in more than 400 cities in India.Here's what it means: Investing in Future Retail enables Amazon to work with its brick-and-mortar network, which could help it boost its performance in India.<ul><li>The deal will reportedly see Amazon sell Future Retail's brands on its marketplace and use its stores for grocery deliveries. Adding brands familiar to Indian consumers to its marketplace could convince some shoppers to come to Amazon for the first time. And utilizing Future Retail's sprawling brick-and-mortar network for grocery delivery could speed up the delivery times of Amazon's offerings, potentially attracting new users.</li><li>Building a stronger brick-and-mortar connection could help Amazon build Indian consumers' trust in e-commerce, allowing the e-tailer to capitalize on the market's potential. Just 25% of Indian internet users had purchased a product online in the previous three months according to a 2018 <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cub21pZHlhci5jb20vc2l0ZXMvZGVmYXVsdC9maWxlcy9VbmxvY2tpbmclMjBEaWdpdGFsJTIwRm9yJTIwQmhhcmF0X0ZpbmFsLnBkZg/5d233c18f730436f2414784fB3c7e89b5" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cub21pZHlhci5jb20vc2l0ZXMvZGVmYXVsdC9maWxlcy9VbmxvY2tpbmclMjBEaWdpdGFsJTIwRm9yJTIwQmhhcmF0X0ZpbmFsLnBkZg/5d233c18f730436f2414784fB3c7e89b5&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNG6gag-9fTuZp_CHKIX-9PZ6kyiIg">report</a> from Bain &amp; Company, Google, and Omidyar Network. Even if e-commerce has grown more popular in the past year in India, internet users' top reasons for not shopping online - a lack of trust and no opportunity to touch and feel products - likely remain. To alleviate some of these concerns, Amazon could offer buy online, pickup in-store (BOPIS) services at Future Retail locations. This could encourage customer loyalty and enable Amazon to capture more of the Indian e-commerce market, which is <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cuaWJlZi5vcmcvaW5kdXN0cnkvZWNvbW1lcmNlLmFzcHg/5d233c18f730436f2414784fB4b79740a" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cuaWJlZi5vcmcvaW5kdXN0cnkvZWNvbW1lcmNlLmFzcHg/5d233c18f730436f2414784fB4b79740a&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNHAqk6tOzyi-7ah_9_sab-t6EVCfQ">projected</a> to surge from $38.5 billion in 2017 to $200 billion in 2026.</li></ul>The bigger picture: The Indian government's <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L3dhbG1hcnQtZmFjaW5nLW9ic3RhY2xlcy1vdmVyc2Vhcy0yMDE5LTI/5d233c18f730436f2414784fB9edf6948" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L3dhbG1hcnQtZmFjaW5nLW9ic3RhY2xlcy1vdmVyc2Vhcy0yMDE5LTI/5d233c18f730436f2414784fB9edf6948&amp;source=gmail&amp;ust=1566994887691000&amp;usg=AFQjCNE_C5mPhgueenALniF3MRvp3PxX0w">rules</a> regarding companies with foreign investment complicate the future of this investment.India's federal direct investment regulations restrict the actions foreign companies can take in the country, likely limiting what actions Amazon can take with Future Retail. The regulations impact firms' abilities to sell products through other companies they own, which could be a problem for Amazon as it adds a stake in Future Retail.Once the initial three years have passed, Amazon has a seven-year window to acquire a significant share of Future Retail, and it may be hoping to wait out these regulations before pushing forward with Future Retail.Interested in getting the full story? 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As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. &gt;&gt;<a href="https://www.businessinsider.com/intelligence?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=briefing_post&amp;itm_content=learn_more_text&amp;itm_term=bundle_subscription_text_link-amazon-makes-brick-and-mortar-play-in-india-2019-8">Learn More Now</a></li><li>Current subscribers can read the full briefing <a href="https://intelligence.businessinsider.com/post/amazon-eyes-physical-retail-in-india-grab-to-invest-several-hundred-million-dollars-in-vietnam-key-us-congressperson-still-concerned-about-facebooks-libra-2019-8">here.</a></li></ol><a href="https://www.businessinsider.com/intelligence/payments-and-commerce-pro?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_subscription&amp;itm_content=ecommerce&amp;itm_campaign=payments-and-commerce-pro"></a>

Amazon is aligning itself with Indian retail operator Future Retail

A few weeks ago Ronnie Screwvala ⁠— the media baron who founded the edtech unicorn Upgrad ⁠— was astounded by the amount of money flowing into to fill up empty fridges of <keyword id="12794222" type="General" weightage="20" keywordseo="bachelors/maidens" source="Orion">bachelors/maidens</keyword> who can’t plan their purchases. Now, blaming bachelors/maidens may be an unnecessary cliche, but they don’t care and you get the point. There are 20 million households in 2020, which bought items online and wanted them delivered by the time one could find the missing sock in a pair. <div type="image" title="Quick commerce" msid="88438835" hostid="261"></div> This is called <keyword id="12724312" type="General" weightage="20" keywordseo="quick-commerce" source="Orion">quick commerce</keyword>, the latest buzzword in Indian e-tail used to describe super fast deliveries within 15-20 minutes of the order being placed. Earlier in 2020, <keyword id="2591679" type="General" weightage="20" keywordseo="ronny-chieng" source="Orion">Ronny Chieng</keyword>, the Malaysian comic and a regular at The Daily Show, came up with this hilarious act describing the growing impatience of Americans. “Send it to me before I want it,” he declared before the audience roared in laughter. <div type="image" title="Ronny Chieng on Netflix Is A Joke" msid="88438940" hostid="261"></div> Now, less than 24 months since, more than a billion dollars have been invested in Indian startups chasing quick commerce, this year alone. While you were laughing at Ronny Chieng’s joke. A company like <keyword id="2466939" type="General" weightage="20" keywordseo="grofers" source="Orion">Grofers</keyword>, which <a href="https://www.businessinsider.in/business/startups/news/after-giving-up-on-90-minute-delivery-five-years-ago-due-to-lack-of-profitability-grofers-is-now-chasing-10-minute-delivery/articleshow/88253221.cms">couldn’t make a success story</a> out of delivering groceries in 90 minutes five years ago, has now made an <a href="https://www.businessinsider.in/business/startups/news/grofers-founder-explains-why-he-rushed-to-rebrand-the-startup-and-his-plans-seem-ambitious/articleshow/88320706.cms">ambitious</a> bet on delivering the same within 10 minutes. <div type="image" title="Investment in quick commerce" msid="88438986" hostid="261"></div> So much so that <a href="https://www.businessinsider.in/business/startups/news/zepto-raised-100-million-at-570-va[%E2%80%A6]to-deliver-product-in-10-minutes/articleshow/88394937.cms">two teenage Stanford dropouts</a> started a quick commerce seven months ago and it’s already worth half a billion dollars. These are only the numbers we know so far. If one considers the 20 million homes that are already customers for such quick deliveries, the total investment would amount to $60 (₹4,500) per home. Hope floats that more people in India get lazier and order things just when they want it and pay more for the stuff in delivery cost. Time for a chart! <div type="image" title="RedSeer estimate on growth of quick commerce" msid="88439084" hostid="261"></div> <div type="image" title="Quick Commerce" msid="88439520" hostid="261"></div>

SIMPLY PUT: This billion dollar business model was a Netflix joke in 2020

After missing out the all-time favorite noodles <a href="http://www.businessinsider.in/searchresult.cms?query=Maggi+">Maggi </a>in our menu, it’s the king of the kitchen, <a href="http://www.businessinsider.in/searchresult.cms?query=onion">onion</a>, which makes us cry now. With soaring prices of onion, sellers are now finding newer ways to woo the customers. And the best they can think of is to sell this key ingredient to prepare Indian meals at a lesser price. 
 
As per an Economic Times report, <a href="http://www.businessinsider.in/searchresult.cms?query=online+grocery">online grocery stores</a> like <a href="http://www.businessinsider.in/searchresult.cms?query=Localbanya">Localbanya</a>, MeraGrocer, <keyword id="3020147" type="UNKNOWN" weightage="20" keywordseo="Freshfalsabzi">Freshfalsabzi</keyword>.com and <keyword id="2817480" type="UNKNOWN" weightage="20" keywordseo="GrocerMax">GrocerMax</keyword> are offering onions at Rs 40-69 per kilogram against Rs 80 or more per kg in the retail market. 
 
If experts are to be believed, these online platforms are able to sell onions at such a low price because they’ve cut-out the middlemen. 
 <keyword id="2047523" type="UNKNOWN" weightage="20" keywordseo="LocalBanya">Localbanya</keyword> CEO Karan Mehrotra cleared the air by saying that they could make it because of a mix marketing strategy and procurement. He said, "We do take a hit on margins at times for the benefit of customers.” 
 
The eCommerce platform, which is partly inventory-led, also uses just-in-time procurement, thus gets very good deals at times and it passes on the benefits to the customers. Localbanya started a grocery subscription plan this week. 
 
Another Delhi-based online fruits and vegetable retailer FreshFalSabzi too is selling onions at Rs 40 per kg. "We are selling onions at a loss but have reduced marketing spends, including spends on local ads and sponsorships," said Rajesh Gupta, chairman of the RSND Group-promoted FreshFalSabzi, which has hired TV actress Sakshi Tanwar to promote the site. The e-tailer gets vegetables directly from farms and is selling them on a no-profit-no-loss model at least for now, said Gupta. 
 
The price rise is not just limited to onions. After unseasonal rains hit the country this year, prices of other essential fruits and vegetables like potato, brinjal, radish and carrot are also going up in the markets. On the other hand, the online prices are said to be at least 10% cheaper. 
 
In a similar move, Gurgaon-based online store MeraGrocer ran a 30% discount promotion from Wednesday to Sunday and it offered onions for Rs 42 per kg. The company has extended the campaign to this week as well, but this time only for vegetables. 
 
"The whole campaign was around the concept of cheaper than wholesale price. Cheaper than Azadpur mandi," said Saurabh Chadha, co-founder of MeraGrocer. The company has also decided to offer daily discount deals, he added. 
 The online grocers, as per the industry insiders, aren’t making money and are running short of money as most of them have already spent a lot on marketing and promotions. A recent report by researcher Kantar Worldpanel, eCommerce for fast-moving consumer goods (<keyword id="34523" type="CITY" weightage="20" keywordseo="fmcg">FMCG</keyword>) will increase 47% to $53 billion by 2016, up from $36 billion in 2014. 
 
As per K Radhakrishnan, co-founder Grocermax.com, "We have driven the selling price down to Rs 69.50 per kg for 45-55 mm diameter onions, whereas similar quality is selling at Rs 80 to 85 (in the open market). Customers are sometimes unaware that traders mix small-sized onions which they end up buying." 
 Fresh FalSabzi.com's Gupta said, the minimum order value is Rs 249 and it doesn't sell more than 2 kg of onions to a customer on a given day to prevent hoarding. "For other vegetables, we ensure at least 10% discount compared to the retail price elsewhere," he said. Some sites engage in cross-subsidies. The founder of one <keyword id="1640900" type="UNKNOWN" weightage="20" keywordseo="Online-grocery">online grocery</keyword> said prices of lemon, beetroot and lettuce have been raised to keep onion rates down. 
 
<a href="http://www.chilloutpoint.com/images/2010/05/naughty-mischievous-baby-boys/naughty-mischievous-baby-boys-11.jpg">Image source</a>

Now, you can buy Onions at Rs 40 per kg at the most unlikely market place

<ul><li>The customer may bear the ultimate brunt of new regulations implemented by the Indian government on the e-commerce giants, <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword> and <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>. </li><li>One of the main perks of shopping online has been that items were generally more affordable, especially during the sales — which may not be the case anymore with the negation of deep discounts. </li><li>Products will no longer be ‘exclusive’ to any platform, potentially making it difficult for sellers to set up marketing budgets with the e-commerce companies. </li><li>There still may be one loophole that the companies can take advantage of, but the official statement is that they’re still evaluating what the new directives entail.</li></ul>E-commerce business have become a part our day-to-day lives. When you’re not in the mood to brave the holiday crowd — or maybe you’re just feeling lazy — online shopping offers an easy, not to mention efficient, reprieve. The <a href="https://www.businessinsider.in/indian-government-tightens-rules-e-tailers-like-flipkart-and-amazon-wont-be-allowed-to-sell-products-by-companies-they-back/articleshow/67266013.cms">new directives</a> issued by the Indian government aren’t just about how it’s going to affect Walmart’s bottom line after it’s expensive Flipkart acquisition or how either company is going to re-align its supply chain — it’s about how it’s going to affect your shopping experience come February 1, 2019, when the changes come into effect. Ultimately, it’s not the sellers or the e-commerce platforms that are going to bear the brunt. It’s going to be online shoppers, like you and me, who are now accustomed to deep discounts, who may end up paying the price — quite literally — at least in the short run. No more deep discounts Diwali, Holi and Christmas — even Republic Day and Independence Day — were joyous occasions with Flipkart (including its subsidiaries Jabong and Myntra) and Amazon offering huge discounts of up to 80%. Even the average rate of discounts leveled out is at somewhere around 60%. Those discounts may be not be around anymore. Until and unless the e-commerce giants can find a way around the new policy implemented by the Indian government, shopping online may not be as affordable. On the other hand, it’s also possible that a neutral marketplace could encourage more competition that could ultimately benefit the consumer. But online retail only accounts for 2.9% of all retail sales in India, so e-commerce penetration is pretty limited to begin with and not an immediate threat to traditional retail. No more ‘exclusive’ launches Initially you may think that it’s not a bad thing that products will be available on all platforms rather than just being a ‘Flipkart-exclusive’ or an ‘Amazon-exclusive’, but being exclusive is what played a big part in allowing products to bundle in special offers. For example, the ASUS Max Pro M2 is a ‘Flipkart exclusive’ phone and it’s able to offer Flipkart’s ‘Complete Mobile Protection’ at just ₹99, which is costs ₹999 otherwise. Being an exclusive vendor will Amazon and Flipkart has its own perks like asking for a commitment on their marketing budget allowing them price their product accordingly. That being said, the next Xiaomi or OnePlus launch is probably not going to be a Amazon or Flipkart ‘exclusive’. The business of affiliate companies So the main crux of the Indian government’s new policy is that ‘American companies are barred from selling products supplied by affiliate companies on their Indian shopping sites’. As a consumer, you’re hardly paying attention to the ownership of the company — if it talks like Amazon, walks like Amazon, then it’s probably Amazon. Unfortunately, that’s not quite the case. Under the law, these companies are barred from selling any products directly. That means they have to set up local companies to be able to sell all the products we see on the site — that includes everything from books, groceries to electronics — not just the Echo etc. Kishore Biyani, owner of the Future Group, <a href="https://www.ft.com/content/0c65e79e-0996-11e9-9fe8-acdb36967cfc">told local media</a> that a move like this would force the e-commerce companies to become ‘genuine marketplaces’. But, experts <a href="https://www.nytimes.com/2018/12/26/technology/india-amazon-walmart-online-retail.html">argue</a> that it’s going to be the customer that’s ultimately going to suffer because traditional Indian sellers aren’t in a position to offer a customers an experience that’s at par with what e-commerce companies were able to accomplish. Some have even termed the new regulations as being ‘regressive’. But, there’s still a loophole. Flipkart and Amazon can still buy whatever they want to buy, and buy as much as they want to buy. Since they can’t sell to consumers — they can sell the products to their affiliates. Now, the affiliates can’t sell on the platform either — but they can sell to other companies, or directly to consumers in some way, at whatever price they want. The impact of the new regulations will only play out once the deadline of February 1, 2019 hits. As of now Amazon and Flipkart have stated that they’re still evaluating the new regulations. The Indian government seems to have a taken a turn from rolling out the red carpet for foreign investors, to pulling it out from under their feet — at the behest of protests put up by the local retailers. See also: <a href="https://www.businessinsider.in/indian-government-tightens-rules-e-tailers-like-flipkart-and-amazon-wont-be-allowed-to-sell-products-by-companies-they-back/articleshow/67266013.cms">Indian government tightens rules: E-tailers like Flipkart and Amazon won't be allowed to sell products by companies they back</a> <a href="https://www.businessinsider.in/amazon-wants-to-sell-insurance-policies-to-indians/articleshow/65856480.cms">Amazon wants to sell insurance policies to Indians</a> <a href="https://www.businessinsider.in/clash-of-the-titans-amazon-walmart-and-alibaba-to-battle-it-out-in-india/articleshow/65491805.cms">Clash of the titans: Amazon, Walmart and Alibaba to battle it out in India</a>

The Indian government just dealt a serious surprise to Amazon and Flipkart — Here’s what that means for online shoppers

The Start up scenario in India is maturing everyday and innovative, new concepts are redefining the ecommerce business on a daily basis. While, ecommerce initially was all about shopping online, without wasting time going to a brick-mortar store, things have evolved pretty quickly since then. Well, for one, consumers aren’t willing to wait over 2-3 days to have their products delivered. 
 
And this has prompted a new kind of startup, which can deliver within a couple of hours of the order being placed. And with the rise of such companies like Grofers and Zopper, the veterans including Flipkart and Snapdeal are feeling uncomfortable , if not threatened. 
 
Grofers, focussed on groceries, is targeting an ambitious climb to 10 lakh orders in August, encouraged by weekend orders that crossed 15,000 a day in July, as per a news report by The Economic Times. "We will go up to 30,000 orders a day by August, definitely crossing 25,000. The challenge for us right now is to resolve operational issues like how to deliver in the rains," Albinder Dhindsa, cofounder and CEO of Grofers, which partners with neighborhood stores for delivery of goods has told ET. 
 
Other on-demand startups, too, are chasing ambitious goals in a country where people increasingly have less time for domestic chores and prefer being served. This, say investors, makes the nascent on-demand economy an ideal fix for the Indian psyche and the segment most likely to throw up the next few billion-dollar valuation startups. 
 
"The on-demand category hit an inflection point in India a few months ago and it will always trump scheduled orders because it is more convenient," Niren Shah, managing partner at Norwest Venture Partners, which has invested in food delivery startup Swiggy told the financial daily. 
 
Increasing use of affordable smartphones - and their ability to show precise locations - has made the ondemand business model more feasible and executable in the past year, say investors. 
 
"To build a large and highly valuable hyper-local business you need super-efficient logistics play that is better than what momand-pop stores have," Alok Goel, managing director at SAIFPartners, which has backed on-demand delivery companies like PepperTap, Swiggy and Spoonjoy told the financial daily. The rapid rise in demand has taken even some founders by surprise. 
 
Online-first restaurant Faasos, which makes and delivers food, handles around 4,500 orders a day through its mobile application and a total of 1.5 lakh a month. The company aims to increase this to 3 lakh monthly orders by September and 10 lakh by March, according to Revant Bhate, entrepreneur-in-residence at Faasos. 
 
Flipkart said it handles about 80 lakh shipments a month, an average of more than 2.6 lakh deliveries a day. The number of venture capital investments in on-demand startups has increased from 22 in all of 2014 to 55 till date this year. The capital deployed has more than doubled to $556 million, according to startup research firm Tracxn. 
 
The proliferation of the on-demand economy is likely to incentivise consumers still reluctant to transact on the internet, and open another channel that marketplaces such as Flipkart and Snapdeal will have to address, experts told the ET. 
 
"This will make etailers stand on their feet and execute at a faster pace, where they will also look to mimic the real offline shop experience where goods are delivered in 4 hours," said Goel, former CEO at mobile recharge and couponing firm Freecharge. 
 
Hyper-local startups such as Zopper are already creating marketplaces in segments like mobile and electronics by tying up with local stores.

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