Happy Monday!
The Covid-19 pandemic has changed the way consumers think about essentials. Prior to the coronavirus outbreak, essentials were mostly grocery items and consumables. But with everyone spending most of their time at home, people have moved to a new definition of essentials. That’s according to Kalyan Krishnamurthy, group chief executive at Flipkart.
In an interview to ET’s Aditi Shrivastava & Samidha Sharma, Krishnamurthy said family members in a household want to watch content on different screens, so the demand for televisions and tablets is going up. People are taking to home fitness, leading to higher orders of exercise gear and workout equipment. Similarly, loungewear and innerwear sales are up too.
Value-conscious customers
Indian customers, according to Krishnamurthy, are becoming more value-conscious. Earlier the concept of value was associated primarily with the middle-income group, but it is now moving into the upper middle class, he said.
Krishnamurthy added that calling Flipkart a competitor of kiranas is completely unfounded.
Quote of the day
“India has roughly 60-65 million small and medium enterprises, of which roughly 20-23 million are in the trade sector. Another 20 million are in the service sector, and about 30 million of these in the manufacturing sector. Now, of the 20 million SMEs, close to 10 million are part of what we call the kirana ecosystem—mostly dry grocery and fruits and vegetables. The grocery retail and commerce market in India is probably $500-600 billion. I can tell you that grocery on Flipkart’s marketplace is less than 0.1% of that number.”
– Kalyan Krishnamurthy, group chief executive, Flipkart
Read the full interview here.
First close
Arkam Ventures has marked the first close of its maiden Rs 700-crore early-stage fund. Formerly known as Unitary Helion, Arkam has raised Rs 325 crore anchored by US-based Impact investor Capria. Other investors include Small Industries Development Bank of India (Sidbi) and prominent family offices in the US and India. Flipkart cofounder Binny Bansal, Paytm founder Vijay Shekhar Sharma and MakeMyTrip cofounder Rajesh Magow have also come on board as investors.
The fund will invest in 15 to 18 companies with a focus on Series A and Series B investments in the financial services, healthcare, food, agriculture, and mobility space. The company’s average cheque size for series A will be Rs 10-15 crore and Rs 20-25 crore for Series B. Read more.
Swiggy will shut down its premium service Scootsy in Mumbai and integrate its operations on the Swiggy app. The food ordering platform had acquired Scootsy in 2018 for an estimated Rs 50 crore, but continued to let it operate as an independent entity. It aggregates dining options in Mumbai, catering to niche, premium, high-ticket-size food delivery, as well as high-end bakeries, stores and gifting services.
Why it matters?
The move to combine the operations is expected to help Swiggy tap into Scootsy’s high-end customer and restaurant base, as it seeks to set up a premium category within the app at a time when retaining premium users is increasingly becoming the company’s top priority. Even though Scootsy only operates in Mumbai, Swiggy’s prioritisation for premium will be national. Read more.
Thrifty consumers
India’s consumer companies are rethinking their strategies to focus on tight-fisted buyers. As foods and groceries are the only categories reporting stable sales, companies are focusing on the value end of the spectrum for most product lines, assuming that cuts in discretionary spend will gravitate toward staples.
According to a BCG consumer sentiment report, buyers are likely to trade down (buying cheaper brands or lower variants) in discretionary categories and trade up (expensive brands) for staples and household care. This document is based on responses from about 1,300 SEC A and B respondents in metros, tier 1 & tier 2 cities. Read more.
Delayed onboarding
Technology and consulting services companies such as Wipro and Deloitte have delayed induction of new employees due to disruptions caused by the Covid-19 pandemic. Wipro had earlier said that it would honour all job offers made early in 2020, though the new hiring numbers would be low this year.
Employees from Cognizant have volunteered to provide informal counselling and advice to campus hires through an over 37,000-member closed Facebook group called ‘Cognizant Freshers’. The information technology firm said e-onboarding continued for lateral hires, but the start date for trainees in India had been deferred to the third quarter as it would be dependent on academic schedules, which were also affected due to the pandemic. Read more.
(Illustrations and graphics by Rahul Awasthi)
Leave a Reply