Happy Friday!
India may soon make it mandatory for e-commerce marketplaces like Amazon and Flipkart to display the origin of the product sold on their platforms. Social media users have been calling for a boycott of Chinese goods after 20 Indian soldiers were killed in a border skirmish earlier this week.
Wearing origin on sleeve
The clause is likely to be part of the ecommerce policy that the commerce and industry ministry is drafting. The Draft National Ecommerce Policy, which the Department for Promotion of Industry and Internal Trade had floated last year, mandated ecommerce companies to make seller details available on the marketplace website for all products. It had proposed that the full name of the legal entity, its address and contact details be provided.
Why it matters
China had a trade surplus of about $47 billion with India in the first 11 months of the fiscal year ended on March 31, 2020.
Experts said the move to have clearly labelled goods on emarketplaces was a positive one and would support Atmanirbhar Bharat mission, besides giving consumers the option of buying locally made products upfront. Read more.
CEOs on the frontline
Nykaa, an omni-channel retailer, which runs 70 stores, had plans to expand its physical footprint by adding 40 more outlets this year. But all that will be delayed as the Covid-19 pandemic has severely affected the offline retail segment. Malls that house Nykaa stores have yet to open in many cities, although standalone shops are operational.
The silver lining
The beauty and fashion e-tailer, however, expects online sales to recover nearly 85% from February levels by month-end. In an exclusive chat for ET’s CEOs on the Frontline series, Falguni Nayar, founder & chief executive officer at Nykaa, said offline retail business is a couple of months behind its e-commerce sales. Read more.
Quote of the day
“We believe our physical retail business is about a couple of months behind ecommerce. In May we clawed back 20% of physical sales compared to pre-lockdown and in June, we will expect to be at 50% of business as usual.”
– Falguni Nayar, founder & chief executive officer, Nykaa
Read the full interview here.
Bullish on Indian startups
Season Two Ventures, a business-to-business focused early-stage fund, has made five fresh investments in the country, at a time when deal-making has slowed due to the Covid-19 pandemic.
Founded by former UST Global’s CEO Sajan Pillai, the fund has backed digital payments startup Uvik Technologies, air quality intelligence startup Ambee, data privacy company Ozone.ai, and two healthcare businesses Svast and Hilabs. Season Two scouts for startups in the enterprise healthcare, fintech, logistics, energy, and utility space. The fund typically cuts a first cheque size of between $500,000 and $1 million, with a $2-$3 million quick follow-on. Read more.
Giving up office space
IBM is planning to discontinue lease agreements at nearly half of its offices in major cities across India, as the US-based technology firm expects the work-from-home model to become mainstream and a significant number of employees to continue working remotely.
Why is it significant?
As India imposed a lockdown late in March to stem the spread of the Covid-19 pandemic, Indian IT firms shifted more than 4 million employees to work from home. Since then, the industry has been able to effectively deliver services to clients remotely and has ruled out a return to normal of all employees staffing offices.
IBM has over 10 million square feet of leased office space across Bengaluru, Hyderabad, Noida, Gurugram and Kolkata. The company employs more than 100,000 people in the country and also has temporary workers through staffing firms. Read more.
Lying low
Chinese smartphone and electronic companies have decided to scale down marketing and pull back advertisements at least for a week to 10 days until the border tension eases, fearing that such activity right now may backfire as #BoycottChineseProduct trends in the country.
What next?
Companies such as Xiaomi, Vivo, Oppo, OnePlus, TCL and a few others have decided to curb promotions and will review the situation after a few days. These companies have withdrawn ads from television, and reduced those on billboards, traffic signals and lamp posts, besides stopping campaigns featuring Indian celebrities on digital, social media and ecommerce sites. Chinese brands control 81% of the Indian smartphone market while in smart televisions it is over 35% with Xiaomi in the lead for both, according to Counterpoint Research. Read more.
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