Category — Consumer Goods

Amazon India’s Revenue Growth Over 105% in 2017

Amazon India reported over 105 percent growth in revenue in Fiscal Year 2017. Per filings with the Registrar of Companies, Amazon Seller Services posted a 41% increase in earning to $485.4 Million during the year ended on March 31, 2017. Amazon Seller Services currently earns through commissions, advertisements and shipping fees. It also earns revenue from its Seattle-headquartered parent by way of advertising fees, royalty on sales of Kindle, and other transactions.

According to Inc42, industry experts said that the e-commerce giant’s impressive growth can be attributed, in part, to the November 2016 exercise when India removed two large value currency denominations from circulation. Speaking on Amazon’s phenomenal growth in India, an online seller on Amazon requesting anonymity said, “Last fiscal, the impact on Amazon was across categories — smartphones to electronics to apparel. These are the largest selling and fastest growing segments in e-commerce.”

Aiming to get ahead of rival e-commerce companies in India, Amazon India is doubling its efforts to diversify its business.  It is getting ready to enter the online food retail and grocery market, and is additionally eyeing a piece of the Indian digital payments pie with Amazon Pay.

December 11, 2017   No Comments

Ten Most Significant Changes in India in the Last Decade

Forbes documents the top ten most significant changes that India has witnessed from 2010 to 2017. Read a lightly edited summary of these below:

1) Emerging as one of the largest economies

The recent economic expansion noted in India has brought a record number of people out of poverty. A growing middle class fuels its impressive consumer growth. Today, India is the world’s third largest market for smart phones and the sixth largest for cars; its software industry employs more than four million people directly and more than ten million indirectly.

With almost fifty percent of India’s population under the age of twenty-six, the country faces the challenge of finding jobs for one million citizens who enter the employment market every month.

2) Gaining diplomatic clout

With economic prosperity, India gained strategic importance. India’s Civil Nuclear Treaty with the U.S. in 2008 ushered India into the global nuclear elite. For the last three years, India has given more aid than it has received, with neighbors Bhutan, Afghanistan and Nepal topping the list of recipients. All of this has added up to give India much more power in diplomatic negotiations.

The current Indian government is the first one to consistently conduct diplomacy in the language of international business. Prime Minister Narendra Modi has undertaken more than 70 foreign trips since taking office in May 2014. Given his focus on trade and investment, Modi is widely promoting the fact that India jumped 30 places on the World Bank’s Ease of Doing Business list for 2018 to the 100th place.

3) Evolving federalism

Cooperative federalism of India’s 29 states has now morphed into a competitive federalism in which states – many with the populations of large countries – vie with each other for investment. Foreign investors need to assess the political and regulatory scenarios at both the federal and state levels and pay attention to the state-wise ease of doing business rankings that are published every year.

In the middle of 2017, India replaced dozens of state and federal taxes with a national one, called the Goods and Services Tax or GST. The federal government created a more unified national market which is expected to lead to greater efficiencies and a more attractive business environment.

4) Fighting corruption and “black” money

Prime Minister Modi’s government was elected on an anti-corruption manifesto, and in November 2016, Modi announced the immediate withdrawal of two high-value currency notes. In one stunning move, 86% of the currency was sucked out of circulation, to be gradually replaced by new bills. The declared aim of the move was to fight black money and counterfeiting.

The Prevention of Money Laundering Act, has recently been bolstered by an expanded Enforcement Directorate, the federal agency tasked with fighting money laundering. Between April and August of 2017, the Enforcement Directorate and the Securities and Exchange Board of India, the stock market regulator, acted against at least 331 fake companies and 100 brokerages charged with facilitating money laundering. This government has implemented Aadhaar, the world’s largest biometric identification system, to root out duplication of identities and safeguard welfare plans from corruption-related leakages. Aadhaar was conceived during the previous government of Dr. Manmohan Singh but Modi’s team has fully embraced its power.

5) Forging a stricter compliance regime

The Reserve Bank of India, the country’s central bank, has been given more power in 2017 to act against loan defaulter. The Companies Act of 2013, despite many problems, also brought clearer accountability to corporate anti-corruption and anti-fraud measures.

6) Emergence of the modern Indian  and Indian led multinational

Indian business groups began to extend their international footprint in this decade – India’s Tata Group bought Britain’s Corus Steel for $13 billion in January 2007. The next month, the Aditya Birla Group, announced the acquisition of Canada’s Novelis for $6 billion. The year after that, Tata Motors bought the Jaguar Land Rover car businesses from Ford Motor for $2.3 billion. These acquisitions have helped change the culture of corporate India, embedding international best practices in some of India’s top companies. During the same period, executives of Indian origin were appointed to lead Pepsico, Google. Adobe, Microsoft, Deutsche Bank and Reckitt Benckiser.

7) Tilting to the political right

India’s growing right-wing nationalism concerns business leaders who feel that a sense of nationalism is in the way of business decisions and policies. As the most populous democracy in the world heads towards another national election in the first half of 2019, this position is unlikely to soften anytime soon (“according to Forbes”)

8) Growing wealth of “godmen”

The fastest growing consumer company in the country today is Patanjali, which was founded just a decade ago by Baba Ramdev, a yoga evangelist whose religious sermons on his own television channel are watched by tens of millions every day. His diet-biscuit-to-dish-washer company is now a $1.6 billion behemoth whose success has forced several multinational giants to rethink their market strategies.

9) Changing security challenges

In  the November 2008 terrorist attacks, when Pakistani terrorists attacked four locations across Mumbai, India resolved to fight terrorism in a more coordinated way.

10) Leaping into a digital future

The Modi government has launched Digital India, a campaign to improve the country’s digital infrastructure and offer more government services online. Many Indian companies are leveraging artificial intelligence, data analytics and machine learning to disrupt their markets and deliver a competitive edge.

Indian flag

December 5, 2017   No Comments

S. Korea’s Lotte Acquires Ice Cream Maker in India

South Korea’s Lotte Confectionery bought Ahmedabad, Gujarat-headquartered ice cream maker Havmor Ice Cream Ltd for $150 million  in an all cash deal. Privately held Havmor, worked with KPMG, Veritas Legal and Dhruva Tax Consultants, to seal the deal. It is the first time that a South Korean company has entered the food space in IndiaAnkit Chona, managing director, Havmor, said that he would continue to manage the company for Lotte for the foreseeable future.

Havmor was founded in Karachi – then part of India –  by Satish Chona in 1944. Immediately after partition in 1947, Havmor moved operations to India and set up its base in Ahmedabad. In 1951, it started as a handcart venture, and by 1953  the company’s first shop was set up, reports the Business Standard.
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Havmor has a 3.5-4 percent share of the  $1 billion (Rs 6,000 crore) Indian ice cream market, which is growing at 10 percent annually. 

November 24, 2017   No Comments

India’s Mahindra Opens Michigan’s First new Auto Factory in 25 Years

Already with a large presence in the U.S. tractor market, Mahindra and Mahindra, an Indian multinational car manufacturing corporation headquartered in Mumbai, launched a new manufacturing facility in Auburn, Michigan, where the company plans to build off-road vehicles. The new facility is part of the company’s expansion plans, and becomes a part of its $230 million investment in Southeast Michigan.

“This is an exciting day for Mahindra, our terrific employees and Detroit. I couldn’t be prouder to be here to help open this new facility today,” said Anand Mahindra, chairman, Mahindra Group at the launch. He explained that the company had increased its workforce to three times the original number in the past 18 months and was committed to growing the Mahindra brand in North America and Michigan.

M&M Off-Roader 'Thar'

M&M Off-Roader ‘Thar’

The off-road vehicle will be limited to 45 miles an hour, and will cater to people needing an off-roader for tasks on private property or on lightly traveled public roads, reports the Wall Street Journal.

“It is a great day for my district and my State as this is the first automotive manufacturing facility in 25 years. This comeback is real and exciting,” said Congressman Dave Trott adding that Southeast Michigan is the birthplace of automotive industry.

“We are serious about courting Asian investment, global investment in Michigan,” Tracie Tillinger, an official with the Michigan Economic Development Corp., said.

 

 

 

November 22, 2017   No Comments

iPhone Assembler to Expand Operations in India

With Apple‘s earnings in India doubling year-on-year, Taiwanese manufacturer Wistron, primary iPhone assembler in India, is scouting for 100 acres of land in Bangalore to expand its facilities.

Though Apple is currently a minor player in India, its potential is huge. CEO Tim Cook said on the earnings call in early November that there was much work to be done to fulfill this potential.

He said he’s confident the company can gain ground, but it will take work on many fronts.”It’s building stores. It’s building channels. It’s building markets. It’s building the developer ecosystem,” he said. “It’s having the right product lineup for the market. And I feel like we’re making good progress there and are gaining understanding of the market, but we still have a long way to go.”

Picture of PM Modi and Tim Cook

The India government’s Department of Industrial Policy & Promotion wrote to the firm saying it was “actively involved in resolving issues raised by Apple” and the various key departments in charge of vetting these concessions are “positively inclined to the proposal,” according to a document from an official to Apple that was reviewed by Bloomberg News.

November 12, 2017   No Comments