Coming as it did on the heels of the festive sale frenzy, last week was another hectic one for India’s e-commerce companies. While homegrown e-tailer Flipkart and arch-rival Amazon traded barbs over sales numbers and market share, ShopClues’ co-founders found themselves in a legal soup after founder and former CEO Sandeep Aggarwal filed a police complaint against them. In another development, leading Internet companies including Flipkart and Ola came together to launch a lobby group to combat global rivals. Take a look.
Flipkart, Amazon slug it out over festive sales numbers
Data from research firm RedSeer showed that Flipkart stole the show, accounting for 58% of overall sales by gross merchandise value during the period, up from 50% in 2016. Amazon’s share, it said, dipped to 26% from 32% last year. Flipkart, however, wasn’t one to be satisfied with 58%. It tom-tommed a different set of numbers—a more than 70% share in overall sales, 70% in smartphones, and 80% in fashion.
Amazon, however, was quick to dismiss the third-party report, with category management head Manish Tiwary telling VCCircle that “there were no credible, recognised research reports in India with a robust methodology and significant sample size to provide objective market share”. The Great Indian Festival Sale, it claimed, marked its biggest-ever shopping event where it saw “tremendous growth across… smartphones, large appliances and kitchen to dining products, beauty and fashion”.
Guess the jury will be out on this next year as well!
ShopClues co-founders in legal tangle
On Tuesday, ShopClues founder and former CEO Sandeep Aggarwal filed a police complaint against his estranged wife and co-founder Radhika Ghai Aggarwal and co-founder and CEO Sanjay Sethi, accusing them of criminal conspiracy, cheating and forgery. He alleged that Sethi and Radhika Aggarwal fabricated several documents to take control of the company, and hatched a conspiracy to oust him. About six months ago, Sandeep Aggarwal had, via a series of Facebook posts, accused Radhika Aggarwal of stripping him of his voting rights and having an illicit relationship with Sethi.
However, just two days after the FIR, the Delhi High Court passed an order forbidding any coercive action against Radhika Aggarwal and Sethi.
Why India’s top business houses keep failing at e-commerce
The Aditya Birla Group recently announced its decision to shutter its e-commerce store Abof.com within merely two years of launch. Abof is not the first online venture from an Indian conglomerate to have a dismal run. In early 2015, Godrej Group bought online grocer EkStop to shore up its offline gourmet food retail chain Nature’s Basket, only to shut it down in less than a month. Then there are Reliance Industries’ Ajio and TataCLiQ.com, which continue to operate on the forgettable end of the e-commerce spectrum. What’s preventing these well-entrenched, decades-old businesses from capturing a slice of the digital pie? Is it because of an uncompromising fixation with profitability, a flawed understanding of the market, or plain complacency?
Flipkart, Ola, others float lobby group for Indian e-commerce
India’s top Internet companies have come together to form an industry body to represent local ventures, seeking protection from mighty global rivals. Christened Indiatech.org, the group wants to be the NASSCOM of the startup space. The primary objective of the association would be to convey to the government that homegrown companies should dominate the local Internet market.
Amazon rolls out B2B marketplace for small businesses
Amazon India has launched Amazon Business, a marketplace catering to the procurement needs of small and medium businesses. The sellers will provide small and medium-sized businesses access to over 10 crore products, including network storage solutions, electronics and office supplies, with GST-compliant invoices. “With this launch, we now have a fully functional business-to-business marketplace alongside our thriving business-to-consumer marketplace,” Amazon said.
Ola, Uber’s onslaught claims cab aggregator Roder
Unicorn India Ventures-backed cab aggregator Roder has shut down operations due to rising acquisition costs and low repeat rate for outstation travel. Founded by IIT Kharagpur alumni Abhishek Negi, Ashish Rajput, and Siddhant Matre, the startup was initially a marketplace for cabs. The outstation cab service was launched in January 2015. Anil Joshi, managing director at Unicorn India Ventures, said “the the startup was doing well in terms of revenues at its peak, but the entry of new competition, especially from Ola and Uber, made things difficult.”
Paytm Mall looks to raise over $600 mn
Paytm Mall, operated by Paytm E-Commerce Pvt. Ltd, has initiated discussions to raise Rs 3,000-4,000 crore ($456-608 million) in fresh funding. The company, which expects to close the funding round by the end of the year, is talking to financial investors from Asia and the US. The Alibaba-backed firm—widely expected to take the third spot in the country’s e-commerce market following Snapdeal’s debacle—has been aggressively scouting for buyouts and investments.
In a separate development, online baby products retailer FirstCry is in talks to raise Rs 666 crore ($101 million) from multiple investors, including Singapore’s state investment firm Temasek Holdings. The round, which will likely see secondary transactions to purchase stockholdings from existing investors, will be raised at a valuation of $400-500 million.
That’s all for this week. Until next.
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