“Amazon to Partner” with “Narayana Murthy of Infosys”, for E-commerce Business in India | The Economic Times

We had recommended a similar venture-structure to some of our clients that we work with, within the Indian Modern/New-age Retail brands..

This JV announced between Catamaran Ventures (Family Office of N.R. Narayana Murthy) & Amazon-Asia, is a testimony of the business-model & concept of the J.V we had recommended early this year….wish they had put some serious thoughts behind that recommendations..?? I am positive, they would realize what, opportunity they missed..!!……M.P

Narayana Murthy to partner with Amazon for e-commerce business in India – The Economic Times.

 

“Demographics, Reforms, Globalisation” can make “India a $5-trillion Economy” by 2025 |by: Chetan Ahya | The Economic Times

( The writer is chief Asia economist and MD, Morgan Stanley, Hong Kong)…!!

Propelled by the THREE ” Success Factors “ of favourable Demographics, Globalisation and Productivity-Boosting Reforms…India’s Trend #GrowthRates, have been rising since the 1980s…

Over the last decade, India’s GDP growth has averaged 7.6%, compared with 6.1% in ’90s and 4.6% in ’80s…!!

However, this structural uptrend had been Disrupted since the credit crisis in 2008…An adverse #GlobalEnvironment and, more importantly, poor #MacroPolicy-choices of pursuing #HighFiscalDeficit, strong Rural-wage growth and Policy inaction adversely affecting #InvestmentSentiment, have led to slower-growth and #HigherInflation…!!

Over the last 12-18 months, #PolicyMakers have ” recognised the adverse impact of past policies and begun to take corrective actions”..

The effects of adjustments in the real effective exchange rate and real interest rates, and steps to improve the business environment alongside the improvement in the external environment, are beginning to show in improving macro stability indicators..

Indeed, we expect India to transition out of the current stagflation environment over the next eight quarters, with GDP growth accelerating from 4.6% in Q1, 2014, to 6.8% in Q1, 2016, and CPI inflation to head towards RBI’s comfort zone of 6%…!!

#CyclicalChallenges will give way to more structural ones… Over the next decade, the interplay of #Demographics (strong growth in the working-age population), #Reforms (that can help improve productivity) and #Globalisation (accelerating productive job opportunities, income and saving) will support India’s #GrowthTrend…

Improvement in demographics — as measured by the decline in Age-dependency — has been a major source of higher potential growth… #FavourableDemographics, provide a platform of surplus labour that the economy could mobilise…!!

Labour Gains:

Throughout the region, there has been a #VirtuousCycle of falling Age-dependencies, Improving-savings and Investment, and Long phases of Strong #GDPGrowth….Indeed, India will continue to benefit from declining age dependency and increasing labour supply till 2040…

The quality mix of the fresh additions to the workforce is also likely to improve dramatically with rising literacy levels and focus on skill development, providing uplift to potential growth. Globalisation supplies two growth enablers: external demand and financing…

A growing #SkilledLabourPool and steady #LiberalisationPolicy have helped India harness the benefits of globalisation…India’s integration with the global economy started in the early 1990s, but accelerated meaningfully only in the 2000’s…

While the last few years have seen a bit of disruption in the #GlobalisationTrend, the improving global growth environment should support India’s integration. As the government takes more steps to improve the business environment, removes #SupplysideConstraints and maintains external competitiveness by #TacklingInflation, India’s integration with the global economy will deepen. This will be supportive of the medium-term growth trend…

The demographic and globalisation-linked merits are well understood and are, to some extent, a given in the context of today’s India. However, the key driver that will push higher sustainable growth is the implementation of productivity-boosting reforms…#EconomicReforms — when undertaken — incentivise the corporate-sector to invest, in turn utilising the surplus labour and unleashing faster productivity growth…!!

Clear Mandate for Change :

The recent election outcome has given the present government a clear mandate and boosted its ability to implement productivity-boosting reforms at a fast pace. The government would must focus on improving the business environment to kick-start the #InvestmentCycle, contain the less effective re-distributive #FiscalPolicies and improve #Infrastructure…

Moreover, the #RisingMiddleClass and Young, Literate and Well-connected population will demand greater Accountability of policymakers to deliver on reforms that revive the virtuous dynamic of productive jobs income growth-savings-investment..

Hi-Five for India :

We expect a steady  pace of implementation of policy reforms, which will lay the foundations for India’s real GDP growth to move higher to an average of 6.75% over the next 10 years….If our projections were to come to fruition, India’s economy would pass the $5-trillion mark by 2025, a feat that has been achieved by only the US and China thus far, and would lift India to be the fifth-largest economy (from 10th currently)….!!

There are hurdles to achieving the near-7 % growth rate, but the confluence of positive #StructuralFactors should yield strong #EconomicPerformance ,over the next 10 years…

That this structural story is playing out in a region where many other countries are experiencing headwinds to their potential growth imposed by declines in their working-age population and debt-deleveraging dynamics makes the case for India all that more compelling….!!

 

“Legislative issues, Lack of Quality Retail space are impediments”, to spread of Organised Retail in India | CBRE

“High Rentals  and “poor Mall-Management” are deterrents to Entry & Expansion of #InternationalRetailers in the country”, says a study by the real estate services firm..!!

Almost 60% of global retailers have a presence in India, but legislative issues and lack of quality space continue to impede the growth of organised retail in the country, CBRE Research has said in a study titled ‘Expanding Horizons of Global Retailers in India’.

The multinational #RealEstateServices firm analysed more than 300 prominent global retailers in the study to identify Operating-trends, #ExpansionStrategies and extent of #MarketPenetration across Leading cities in the country..

The firm undertook this project in an effort to map and analyse the spread of international retailers in India, where the expansion of global retailers has been a major driver of real estate demand..The study analysed Brands across Luxury, Premium & High-end Categories, and judged their presence in the country on the basis of #StandaloneStores within Malls as well as Traditional Marketplaces / #HighStreets…

Although India has emerged as a prominent destination for #RetailSegments, such as Food and Beverages (F&B), #FashionApparel and BigBox / #HypermarketChains, almost FOUR out of TEN #GlobalRetailers, are yet to set up shop in the country…the study found..

Nearly 80% of the retailers that have entered India are present in New Delhi while the figure is 70% for Mumbai and nearly 50% for Bangalore. This signifies the significance of the metropolitan cities as the preferred entry points for international retail chains..

The retailers chose tier II cities such as Pune, Hyderabad, Kolkata, Ahmedabad, Chandigarh and Jaipur next, the study shows….” India is still a largely untapped and #unorganisedRetail Market as a large number of prominent #GlobalRetailers are yet to commence operations here…The country holds a considerable advantage over other #EmergingRetailDestinations due to its strong Domestic-consumption and Low-rate of #MarketPenetration by #InternationalRetailers…

India’s new middle class is increasingly becoming brand conscious and willing to spend on quality goods, a trend which is creating numerous business opportunities for mid-range international brands. With political and economic sentiments already showing signs of improvement, we believe this is the right time for international retailers to look at India for expansion into the region,” said chairman and managing director of CBRE, South Asia..

American brands account for the bulk of retailers covered in the CBRE study, comprising 30% of the total…Most US retailers are present in the mass market F&B category while retailers from Italy and the UK account for about 19% and 16%, respectively, and are largely concentrated in the luxury segment..

The study also points to the lack of Quality #RetailRealEstate supply, coupled with prohibitive-legislation that has acted as an impediment to the spread of organised retail in India..

Compounding the problem of limited investment-grade supply of #RetailSpace are high-rentals and lack of professional #Mall-management, all of which make for a challenging operating environment for Global Retailers, the study says…!!

“Department of Industrial Policy & Promotion (DIPP)” for “simplification of Land Acquisition Act”, in India | ET Retail

The Department of Industrial Policy and Promotion (#DIPP) will pitch for simplification of the #LandAcquisitionAct to facilitate investment and manufacturing in the economy by doing away with the cumbersome rules and procedures in the legislation..

Commerce and industry minister Nirmala Sitharaman, will likely take the matter up with her rural development counterpart Gopinath Munde…DIPP will likely propose ” doing away with the social impact assessment process in the Act, which is a pre-requisite for public-private partnership (PPP) and private entities to acquire land”.

” Land Act in the present form has stalled industrial activity and suitable amendments are urgently needed to spur manufacturing in the economy…. There is no land acquisition taking place. We have taken up the matter with the minister,” said an official…

 

 

Act stipulates establishment of a state social impact assessment unit, the office of a commissioner, rehabilitation and resettlement, and a state-level monitoring committee by each state government. The Act has nearly brought acquiring land to a halt, impacting large projects hitting manufacturing growth, which contracted by 0.7% in 2013-14.

Besides, the commerce and industry ministry may also recommend empowering of district collectors of each state to authorise providing of up to 500 acres for small-scale industrial projects. Investment and infrastructure reforms are one of the 10 point agenda of Prime Minister Narendra Modi unveiled on Thursday… Rural development minister Gopinath Munde ruled out scrapping of the land acquisition act, however, called for a need to amend it….

Ms. Sitharaman has emphasised on bolstering manufacturing in the economy. Munde was recently reported as saying that the rules of the Act have made the implementation difficult. “There is no question of repealing the Act, as we supported it in Parliament; it is a good law. I have taken up the Act as my first issue with officials in this ministry… I must say I agree with the rates of compensation in the Act,” he said.

Any amendment the Act will need to go through the Parliament. The Act has made it mandatory to get the consent of at least 70% of the affected people for acquiring land for PPP projects and 80% for acquiring land for private companies.

DIPP secretary Amitabh Kant had said in his interview to ET last month that the law had to be redrafted and simplified keeping in mind that a fair price is paid to the farmer.

“We need to un-shackle controls. It provides for too many committees and too many approvals. It will be too time-consuming a process,” he had said..

The ” New Law provides compensation FOUR Times the Market-price for Rural-Land and up-to TWICE the value of Urban-land for acquiring for public works or industrial activities”…!!

“E-commerce Logistics firm “Delhivery” to raise up to Rs.175 crore”: “PE’s interest in Ancillary Service providers” | ET Retail

E-commerce Logistics services company ” Delhivery “ is in the final stages of negotiations to raise up to Rs 175 crore in fresh funding, a development that comes at a time when a number of India’s Top Private Equity funds are betting big on the country’s Digital-commerce sector….!!

The company has had discussions with a number of blue-chip private-equity firms, a list that also includes marquee growth-stage risk capital investor Warburg Pincus, and a deal is expected to be finalised by mid-June, according to sources with direct knowledge of the talks…

If successful, this will be Delhivery’s third round of equity funding….In September last year, it raised about Rs 35 crore from Nexus Venture Partners, having raised an undisclosed sum from Times Internet Ltd earlier in 2012….The existing venture capital backers are also expected to participate in the new round…

Warburg Pincus recently made the news when it led a Rs 550 crore round of funding in online and mobile classifieds company Quikr in March. Avendus Capital, a leading investment bank, has been given the mandate to structure the transaction. While Sahil Barua, co-founder of Delhivery, and Warburg Pincus refused to comment, emails sent to Avendus Capital did not elicit any response…!!

A potential transaction could value Delhivery at over Rs 500 crore. A number of India’s top private equity firms with a consumer #BusinessFocus but are yet to invest in E-commerce have highlighted their interest in investing in companies that provide services such as Payments, Logistics, #Reverse-Logistics, #Packaging and #SupplyChainManagement…

“We don’t have a preference for businesses that focus on core merchandising…We would rather look at Logistics and Payment-related businesses, which go right across the space,” said managing partner, Tata Capital Growth Fund (TCGF)…!!

The shift is largely driven by the relatively lower valuations and smaller amounts of capital required by #AncillaryServiceProviders, with average deal sizes of Rs 50 crore to Rs 150 crore…!!

“We will consider investments in E-commerce. We haven’t so far, because a number of those businesses are yet to mature to a point where we, as a late stage investor, are comfortable investing in them…

BillDesk, where we have invested, is a classic example of a company that has been a direct beneficiary of what’s happening in the broader consumer internet space,” said.. India head of global private equity firm TA Associates…!!

“Reshaping the #Retail-Store” as A “Powerful Weapon” in Today’s “Highly Competitive #Omni-channelWorld” | by: Gary Lee | Retail Touchpoints

” Claims of Brick-and-Mortar’s looming ” demise “ are definitely more than a bit exaggerated…”, Despite the exponential growth of E-Commerce, a variety of new shopping options and even the advent of the dreaded “ Show-rooming ” trend, #PhysicalRetailStores still amass more than 90% of overall sales, and #Brick-and-Mortar continues to be the channel of choice for consumers of all ages and income levels….!!

That said, however, the retail world has definitely been knocked off balance by evolving and shifting #ConsumerShoppingBehaviors…Today’s connected consumer controls when, how, where and how often he or she visits, buys, interacts and even recommends brands to others across Brick-and-Mortar and Online channels..

And with consumers being more and more constantly “connected” to the web across their phones, tablets, eye-wear and other devices, it’s critical to break through their online world and give them a reason to come into #PhysicalRetailSpaces…!!

Customer Experience ( CX ) : The Differential :

To do this, retailers must rediscover the “why, how and wow” of their physical stores for consumers —why their physical store positively impacts consumers, how it helps move them along the buying process, and what the unique “ wow ” is that cannot be replicated in an online world.

These THREE Factors can be summarized as the #CustomerExperience (CX) a consumer has in the #RetailStore, which uniquely allows them to physically interact with and experience the product or service before they buy. It represents the last and perhaps most critical chance for a brand to make a positive impact before the purchase, and it is uniquely a part of the Physical #RetailExperience…!!

It’s therefore critical that both large and small retailers find a way to create these customer experiences. In this fiercely competitive market, intentional CX may be the only remaining way to differentiate, compete and win..

Here, I outline at a high level the vital tactics for successfully implementing an impactful retail CX project through the right balance of strategy, design, execution and continuous measurement and improvement…

Tactic 1: ” Leverage Your CX Project As A Strategic Move”, Not As Just Another Marketing Ploy :

There are many reasons to develop a new customer experience, but which ones make the most sense for your company? Simply implementing a new solution as a direct response to market competition and trends is not enough. You must dig deeper… Think in terms of what you want your customers to know, believe, feel or do before, during and after this experience. Then, begin your best first tactic — a plan, or better yet, a CX strategy…!!

The core of a CX (customer experience) strategy hinges on THREE Key things :

Stakeholder Collaboration — Bringing relevant stakeholders together to define business goals and measures of success is key to moving forward with your project. An important step here is differentiating your business needs from your requirements. This clarity will make it easier to benchmark the performance of your CX down the road..

Research — A key decision you will need to make is whether to conduct new research beyond your current reservoir, and if so, what kind. Whatever your decision, research is key to developing empathy for your customer. Without that, products and solutions can end up being uninteresting and even useless. Use this data to develop a 360-degree view of your customers and their needs and expectations. This will also help define the parameters of your CX.

Team Formation — Early in the process, form your team and clearly outline goals, expectations, roles and responsibilities. While team formation depends on the specific needs of the project, the team will usually include a project manager, strategist, design team and solutions management team..

The output of the strategy phase will be a CX Requirements Document—similar to a Design Brief, but a lot more comprehensive — detailing overall objectives, a project overview, design objectives, expectations, considerations and measures of success.

Tactic 2 : Design Intentionally, Practically And Impactfully :

The design team works to create something tangible OR visible, and formulates everything from how the experience looks and feels to how users will interact with the new experience. As you move into the design phase, much of the information your design team will need should already be captured in your CX Requirements Document..

Begin by mapping out the entire #CustomerJourney…. This means looking at all the #TouchPoints your customers encounter while interacting with your Brand—Pre-, During and Post-purchase — and understanding what your customers are thinking and feeling at each touch point. Consider what kinds of interactions are you wanting to elicit, what senses you want to activate and what you want customers to do. The most #EngagingExperiences are intentional — carefully planned and built to address specific user needs…

As you move further through design, I recommend prototyping fast and early. The quicker you can get a sketch off paper, the quicker you can start acting out how people might use the solution and thinking of ways to improve it. This also keeps your design grounded in practicality so you aren’t left with a vision that never leaves the paper. This process allows you to see how all the components are working together from a production standpoint and to explore different material and assembly options.

Another important consideration during the design phase is using digital or technology. These elements create impactful experiences by layering elements that improve effective customer engagement and delight the customer…

Tactic 3 : “Measure, Measure Then Measure again”:

After successfully implementing your CX project, it might seem like it is time to move on to the next project… But then you would be forgetting a key part of this process : ” Ongoing Measurement”… Measurement is its own priority, and project leaders commonly underestimate the value of measuring the solution’s ongoing effectiveness. To make any progress, a company must be able to monitor whether or not it is actually delivering what it intended, as well as calculate the return on investment. Collecting data consistently and regularly puts a company in a much better position to understand its customers, the effectiveness of its CX solution and how the solution impacts its business…

For our clients, we like to conduct a reality gap analysis before and after implementation to really gauge the effectiveness of the solution for all stakeholders — the customer, the brand and the sales associate, if applicable — and determine metrics for improvement. However, measurement does not end there. Ongoing measurement connects a project from implementation back to strategy and helps to continuously improve the existing solution so that it always aligns with meeting customer needs and expectations..

Following Steps To Success :

The #RetailLandscape is morphing before our very eyes…. To survive, companies must adapt and ramp up their CX arsenal or accept defeat…!!

This will require a hard look at the traditional retail customer experience and an altered way of thinking. They must be able to track and understand the customer’s entire journey, from realizing a need to the post-purchase relationship.

It demands collaboration and a heightened awareness of strategy, design and implementation to craft truly relevant and meaningful customer experiences that effectively engage the customer…

It means looking at each channel, including the physical store, and determining what role it should play in the overall experience to facilitate a seamless continuity of the experience in True Omni-channel Fashion….!!

Expect “more Mid-Market Divestitures in 2014” : “Strategic-sales OR Acquisitions for growth-momentum” | Chief Executive

The report, conducted in late 2013 and the THIRD such endeavor by RBS Citizens, surveyed 460 Executives, ” who are open to OR currently engaged in some sort of corporate development activity, including Mergers, Acquisitions and Raising-capital…”

With a sense of stability returning to the economy middle market companies remain open to buying or selling but are prioritizing opportunities to Re-invest in their existing operations..

“ Our latest survey indicates that the appetite for acquisitions and sales remains strong, but businesses are taking a more strategic, less urgent approach, which reflects a strengthening economy,” said Bob Rubino, EVP and head of corporate banking and capital markets for RBS Citizens.

“As more Middle -Market companies see Top-line growth, Owners are looking for Strategic-Sales or Acquisitions that can augment their Re-investment Strategy and help keep their Growth momentum going ..”

These findings mirror other reports that suggest that critical sectors of the U.S. economy such as healthcare, retail food and energy will see continued or renewed M&A activity in 2014, according to business leaders at CIT Group. .

The middle market is ripe for a more fruitful M&A environment in 2014, according to Thomson Reuters LPC. The persistent fog of economic and political uncertainty that has stymied investment is lifting, giving way to improved visibility for lenders, borrowers and private equity sponsors alike.

Increased Economic confidence, more certainty with respect to Fed tapering, and fewer concerns about future government budget stalemates are paving the way for greater willingness to buy, sell and invest in middle market companies…

If in recent quarters companies were primarily focused on cost savings, they are shifting their attention to strategic growth opportunities. There is an abundance of capital – in the hands of both debt and equity investors – waiting on the sidelines, which will help buoy M&A activity…

Key findings from this year’s RBS Citizens survey include :

Sellers are more interested in selling part of their business than the whole.

While interest in raising capital remains steady, companies are less likely to take on debt and are more likely to accumulate earnings, sell a business unit or divest significant assets to make investments.

Executives believe both this year and next will be a ” Buyer’s market”..!!

Nine of Ten survey respondents intend to engage a ” Friend in the deal ” – an outside partner – to provide guidance throughout the M&A process ; half of all buyers and 40% of sellers are considering partnering with a commercial bank…!!

In late 2013, RBS Citizens conducted a survey of 460 U.S.-based middle market business executives that are open to or currently engaged in some form of corporate development activity, including mergers, acquisitions, and raising capital in the New England, Mid-Atlantic and Mid-West regions. For the purposes of this survey, middle market businesses have annual revenues of between $5 million and $2 billion.

The Sellers’ Perspective :

  • Based on this year’s survey results, the proportion of current and potential sellers in the market remains unchanged since 2012, but their motivations and intentions have shifted.
  • Although just 6% of middle market executives are currently involved in a sale, more than one-third indicate they would be open to a deal if approached by a buyer with a strategic fit.
  • While sellers were willing to ‘sell it all’ a year ago, a partial sale – selling an operating asset or division – has become more appealing than selling off the entire organization.
  • Being undervalued and underpaid by acquiring firms remains sellers’ primary concern; partial sellers are increasingly concerned about meeting post-acquisition revenue targets.

The Buyers’ Perspective :

While fewer acquisitions were in process at the end of 2013 than in the year before, deals this year are expected to be ” Larger and more Strategic” :

  • Less urgency in the market has translated into fewer current deals in process in early 2014 and more potential buyers are ‘on the sidelines’: open to but not actively seeking buying opportunities.
  • Buyers are less reliant on M&A as a means of growing; their goals are now more likely to be expanding geographic reach, increasing production and product capabilities and accelerating organic growth.
  • Respondents plan to make fewer purchases in 2014 but expect to spend more on each; the majority of executives anticipate spending between $10 million and $25 million.

Given the complexity of an M&A transaction, from ensuring proper valuation to identifying the best strategic buyers OR acquisition targets, the process has become more labour-intensive.

Most companies  without an “experienced Internal-Team” are “relying on an Outside Advisor”…!!

  • Of organizations who intend to engage external support for their deal-related corporate development needs, commercial banks are the most popular choice, followed by investment banks and business brokers.
  • Nearly half (47%) of respondents rate commercial banks as ‘excellent’ in regards to their corporate development capabilities, compared to 35% for investment banks and 26% for both private equity and venture capital firms.
  • Valuation, financing, opportunity assessment and due diligence are the areas where these companies are looking for the most help.