“Last year, we had nearly 3,000 food orders during the month of Holi, with less than 100 orders on the actual day of Holi. According to Shireesh Joshi, ONDC’s chief business officer, more than 30,000 orders were placed everyday through the Open Network for Digital Commerce (ONDC) throughout this year’s Holi extended weekend (Saturday, Sunday, and the holiday).
He further mentioned that the network is nearing the milestone of 600,000 food delivery orders for March, marking a staggering 200-fold increase compared to the previous month.
Speaking about the role of the food delivery category, Joshi remarked, “A year ago, food was the sole category on ONDC. Now, food constitutes only a small portion of our sales. This is positive news as we have expanded into numerous other categories and regions.”
In recent months, prominent food brands like McDonald’s North and East, Domino’s, Rebel Foods, and Biryani By Kilo became part of the ONDC.
ONDC saw approximately 7 million transactions in February.
Delhi-based Mr Makhana is gearing up to broaden its retail footprint in the UK with its healthy popped lotus seed snacks.
Founder Rishab Jain mentioned that the brand is “in discussions with several distributors” to introduce its products to major UK retailers.
When questioned about the retailers, Jain mentioned Tesco and Sainsbury’s.
He anticipates finalizing the discussions “hopefully within the next two to three days.”
A select range of Mr Makhana products has been available for purchase in the UK via Amazon since January.
Jain stated that the goal for 2024 is to “secure a distributor, introduce the product to retail stores, establish a network of outlets, and assess the product’s performance and feedback.”
Elaborating on the reasoning for expanding into the UK, Jain said, “There’s a perception that the product is only for the Indian or ethnic market, but I believe the taste is quite universal. We can cater to everyone.”
As part of its strategy, the company is creating new flavors tailored for the UK market to help consumers “adjust to the taste,” Jain noted, introducing options such as cheddar cheese, truffle, and smoky barbecue.
Mr Makhana offers a variety of makhana snacks, also known as popped fox nuts or lotus seeds from the water lily plant.
The company’s selection features chocolate-coated makhana, along with savory flavors like Pudina Party, Piri Piri Paradise, Butter Tomato, and Lime & Chilli.
Apart from India, Mr Makhana’s primary markets are in the GCC countries like Oman, Saudi Arabia, and the UAE, as well as Canada. The brand also has sales in Japan and the US.
Established in 2015, the company relied on outsourcing until 2019 when it established its first local production facility in Ahmedabad. It continues to use this site to supply the domestic market.
Last April, the company established a facility in Dubai to cater to customers outside of India.
The Indian plant produces approximately 50 tonnes of makhana snacks per month, whereas the Dubai facility has an annual capacity of 24 tonnes.
Last year, the company’s total annual production capacity was approximately 600 tonnes, with plans to increase it to 800 tonnes annually in the future, according to Jain.
Mr Makhana recorded a total annual turnover of around $43 million in 2023, with approximately $40 million generated within India.
Simpl, India’s leading Checkout Network, has strengthened its partnership with the food ordering and delivery platform, Zomato. The collaboration will integrate Simpl’s 1-Tap Checkout with Zomato Gold, Intercity Legends, and Zomato Everyday. This initiative aims to enhance convenience for millions of customers nationwide, improve conversion rates, increase the average order value, and promote user retention among other platform benefits.
This integration aligns with Zomato’s broader vision of providing customers with superior food options conveniently. With these integrations, millions of new and existing customers are anticipated to utilize Simpl’s 1-Tap Checkout on Zomato for various needs, thereby broadening the user base for both companies. This is particularly noteworthy as Simpl has surpassed 100 million checkouts on Zomato within six years since 2017, underscoring a strong consumer preference for streamlined checkout experiences.
Additionally, the expansion will be fueled by the rising influx of customers from tier-3 cities and beyond transitioning to online platforms, alongside a surge in order frequency from customers in metropolitan and tier-1, 2 cities. With an increasing number of customers opting for online convenience through Simpl’s 1-Tap Checkout, both companies anticipate a substantial enhancement of their customer base in the coming years.
Nitya Sharma, Founder and CEO of Simpl, remarked, “In today’s e-commerce landscape, convenience is emerging as a significant differentiator, following selection and affordability. This is especially true for food ordering and delivery, where transactions are more frequent than any other category. It highlights the importance of a seamless checkout solution that minimizes transaction failures and provides a one-tap experience. These core principles have facilitated over 100 million transactions on Zomato to date. We are enthusiastic about expanding our reach with offerings like Zomato Gold, Intercity Legends, and Zomato Everyday, further strengthening our presence in this sector.”
The success rate for checkout using Simpl’s 1-Tap on Zomato is an impressive 99%, showcasing customers’ growing preference for the added convenience of 1-Tap Checkout. Simpl’s contribution to the platform has seen substantial growth over the past five years, with per-user spending via 1-Tap checkout increasing by almost 27 times since 2018. The platform recorded its highest-ever single transaction on New Year’s Eve 2024, which was INR 18,807 through Simpl’s 1-Tap Checkout on Zomato.
“Our goal is to consistently provide outstanding and convenient customer experiences. Simpl has been a trusted partner for a long time, and integrating their services has enabled us to offer our customers 1-Tap access. This enhances their interaction with our platform, making it seamless and hassle-free,” stated Rakesh Ranjan, CEO of Food Delivery at Zomato.
Simpl’s 1-Tap Checkout, accessible at 26,000 merchants, provides the ease of completing a purchase with just one tap, boasting near-zero transaction failures and is favored by millions of consumers. Presently, numerous major enterprises and emerging Direct-to-Customer (D2C) merchants in the food and hyperlocal delivery sectors offer Simpl’s 1-Tap Checkout to millions of customers nationwide.
Consumers could soon see higher prices for their favorite Cadbury bars and chocolate cookies. The increase in cocoa prices, due to a global supply shortage, is raising production costs for companies. As a result, these companies might pass some of these additional expenses onto customers.
Major chocolate producers such as Mondelez, Hershey’s, and Nestle, along with local artisanal chocolate makers and biscuit manufacturers, are expected to feel the impact. As cocoa prices surpass $10,000 per ton for the first time, companies are encountering substantial challenges in controlling their expenses.
Industry experts caution that companies, particularly those targeting price-conscious consumers, will face difficulties in preserving their profit margins due to the higher cost of sourcing cocoa. This challenge is intensified by an anticipated 8% reduction in cocoa supply for the 2023-24 season, mainly because of supply disruptions in major cocoa-producing countries like Cote d’Ivoire and Ghana.
Some companies are already considering raising prices to counter the rising costs. Others are exploring alternative approaches, like reducing package sizes and using cocoa butter substitutes approved by the Food Safety and Standards Authority of India (FSSAI). Nevertheless, these strategies may offer only short-term relief.
For artisanal chocolate makers who depend on fine flavor cocoa, the situation is especially tough. The diminishing price gap between fine flavor cocoa and bulk cocoa, combined with supply challenges, jeopardizes their pricing strategies and profitability.
In light of these challenges, companies are exploring different solutions, such as looking for more affordable alternatives and renegotiating contracts with suppliers. However, the ongoing uncertainty surrounding cocoa prices continues to be a major worry for the industry.
The allure of the ‘bottom of the pyramid’ appears to be waning for major consumer goods manufacturers. Over the past two years, they’ve introduced a greater number of premium products compared to those aimed at the mass market across various categories, as indicated by data from companies and market researchers.
Experts have pointed out that inflation in the last financial year significantly impacted sales in the mass segment. As prices rose across various products, economic strain persisted among low to middle-income groups, showing little improvement since the onset of the pandemic.
Over the past two years, more than 70% of the new products introduced by India’s leading consumer goods manufacturer, Hindustan Unilever, were in the premium category. Similarly, ITC Ltd saw approximately 65% of its new personal care products launched in the premium segment, doubling the segment’s contribution to the division’s sales to 38% over the last four years. For Parle Products, the country’s largest biscuit maker, around 60-65% of new product launches were in the premium segment, up from 40% before the Covid pandemic.
According to the electronics industry market researcher GfK, the number of new smartphone models priced below INR 12,000 introduced in 2019 was about 370, which decreased to 175 in the calendar year 2023.
Conversely, the introduction of new models priced above INR 20,000 increased from 120 in 2019 to 175 last year. It’s worth noting that many smartphone manufacturers had exited the sub-INR 10,000 market during the peak inflation of 2022 but returned to this price segment the following year.
In terms of sheer numbers, the introduction of new mass-segment televisions with screens of 43 inches and below is still increasing, but at a slower rate compared to more expensive models. The segment witnessed 70 more models launched in 2023 than in 2019. In contrast, the number of new premium televisions with 44 inches and larger screens increased by 110 models during the same period, according to GfK.
Due to the ongoing impact of the pandemic on mass-market product sales, companies like Dabur, Emami, Samsung, LG, Xiaomi, Vivo Mobiles, and Haier have also launched more premium versions than entry-level ones.
“Large FMCG companies are ramping up their focus on premiumisation due to higher profit margins, particularly since the costs of product placement in both modern and general trade, as well as selling fees in e-commerce, has increased,” stated Mayank Shah, Vice President of Parle Products. “Additionally, the competition in the mass-market segment has intensified, with smaller regional players re-entering the market aggressively following a decrease in input costs last year. In the premium segment, competition remains relatively low, prompting bigger companies to primarily launch premium products. Manufacturing packs priced at INR 5 in large quantities has become less profitable due to rising packaging costs, leading to a natural shift towards INR 10 packs.”
Driven by consumer willingness to pay more for convenience, quality, and advanced features, manufacturers are increasingly expanding their premium offerings, according to Anant Jain, Head of Customer Success, India, at GfK. “This trend is being propelled by promotions, discounts, consumer financing, and the PLI scheme,” he added.
Data from FMCG market researcher NielsenIQ reveals that in 2022, four out of 10 new biscuit launches were packs priced above INR 20, promoting premiumisation. This proportion increased to five out of 10 in 2023. In the skincare sector, premium pack launches were even more predominant, constituting half of the total offerings.
The trend seems to contradict the bottom-of-the-pyramid theory advocated by management guru CK Prahalad and others, which was previously popular among Indian companies.
The growth of online platforms is also contributing to this trend.
“Premiumisation is also on the rise due to the convenience of reaching consumers through e-commerce. Value-added products are gaining more traction because of this,” noted social commentator and brand specialist Santosh Desai. “Although the bottom-of-the-pyramid and mass market segments do exist, they are widely scattered, making profitability a challenge for companies at the mass-market end.”
Premium skincare brands led the way in new launches, increasing their value contribution from 67% to 75% between 2022 and 2023, while also boosting volume contribution from 36% to 43% during the same period, according to Roosevelt Dsouza, Head of Customer Success, India, at NielsenIQ.
Industry executives noted that the emphasis on premium launches is a response to the evolving business landscape post-Covid and does not necessarily overlook consumers at the bottom of the pyramid.
Angshu Mallick, the Chief Executive of Adani Wilmar, stated that all companies aim to enhance margins, hence the push towards premiumisation.
“However, accomplishing top-line and volume growth will be challenging without mass-segment goods, as the contribution of premium products to sales in most categories continues to be in single digits,” he said.
Rajat Nanda, Business Head at CavinKare, mentioned that with evolving lifestyles and the growth of channels like e-commerce and modern trade, consumers are increasingly willing to pay more. CavinKare is recognized for pioneering the introduction of sachets.
“Consumers are shifting towards purchasing shampoo in bottles, so we are now focusing on bottles as well. We offer entry-level bottles of 80 ml at an average price of INR 55, which has been performing very well. While sachet sales have declined by a few percentage points over the past year, bottle sales for shampoos have seen faster growth,” Nanda explained. “There is a deliberate effort to upgrade consumers in e-commerce and modern trade channels. We are also targeting consumer upgrades and have introduced premium variants of Meera and Nyle shampoo.”
However, in the general trade sector, consumers are still opting for entry-level packs and even downgrading their purchases. “Sachets make up 70% of our shampoo sales, and this has remained consistent over the past two years,” he noted.
According to a report by ICICI Securities released on March 26, unlisted FMCG multinationals that focus on premium products and digital-first brands are gaining market share over their listed counterparts. This trend is particularly pronounced in the beauty and personal care sector, the report noted.
Ace Turtle, a retail tech company, has inaugurated the third Toys“R”Us store in India, located in Bengaluru at Bhartiya Mall near Hebbal. The new store spans 6,200 sq. ft. of retail space.
“We are excited to introduce Toys“R”Us to Bengaluru with our new store at Bhartiya Mall,” said Nitin Chhabra, CEO of Ace Turtle. “More than just a shopping venue, this expansive store will also serve as a holistic recreational area for children and families, featuring a diverse range of toys tailored to different interests and age groups.”
Toys“R”Us currently operates two stores in India: the retail outlet in Hyderabad, marking the brand’s comeback to the country, and the newly opened flagship store in Mumbai, spanning 12,000 sq. ft. and being India’s largest high-street toy store.
The company plans to launch 12 Toys“R”Us stores in 2024.
“Given the rapidly growing client base, we see tremendous opportunity for organised toy commerce in India. By encouraging toy manufacture domestically, Toys“R”Us’ growth will boost the Government of India’s ‘Make in India’ drive, Chhabra added.
In addition to several Indian brands like Playshifu, Funskool, and Winmagic, the store offers a variety of foreign brands like Lego, Hasbro, and Mattel.
“We are happy to welcome Toys”R”Us’ first Bengaluru location at Bhartiya Mall,” Bhartiya Urban Vice Chairman Arjun Aggarwal remarked. “This well-known brand offers kids and families a fantastic shopping experience. We anticipate that parents and kids will come to love this place.”
Founded in 1957, Toys”R”Us is an American retailer specializing in toys, clothing, and baby products. The brand achieves over $2 billion in global retail sales each year through its 1,350 stores and e-commerce operations across more than 30 countries.
Toys“R”Us entered the Indian market in 2017 in collaboration with Tablez India, a division of Abu Dhabi’s Lulu Group International, under an exclusive master franchise agreement. Although initially planning to open over 200 stores after launching the global toy brand in India in October 2017, the company only managed to open 14 stores, which closed within three years of operation.
In June 2021, Bengaluru’s Ace Turtle partnered with Flipkart Group’s Wholesale Entity in India to secure the license for Toys“R”Us and Babies”R”Us in India through a strategic agreement with WHP Global.
Established in 2013, Ace Turtle is the exclusive licensee for global retail brands like Lee, Wrangler, and Dockers in India and other South Asian markets.
Hotelogix, a leading cloud-based hospitality technology provider, announced that India’s Suba Group of Hotels has implemented its multi-property management system. Hotelogix will equip the Suba Group of Hotels with a powerful and integrated platform to automate and optimize operations across its properties. This will enable centralized control over group-wide activities, enhancing growth, revenue, and the overall guest experience.
The Suba Group of Hotels, which serves both business and leisure travellers, is a leading hospitality provider with over 100 hotels spread across 60 locations in India. It is dedicated to providing its customers with outstanding experiences and services. The group ensures a comprehensive offering with contactless check-in, banquet facilities, well-appointed business centres, and sophisticated in-house dining alternatives with menus.
In 2022, the Suba Group acquired the master franchise rights for Choice Hotels India, allowing it to expand the Clarion, Quality, and Comfort brands throughout the country. Choice Hotels India operates as a wholly-owned subsidiary of Choice Hotels International, a prominent global hotel franchisor with a portfolio of more than 7,000 properties worldwide.
For over a decade, the Suba Group of Hotels managed its operations using an on-premises solution. As the group expanded and acquired brands like Choice Hotels, its portfolio strengthened to include over 100 properties. However, managing group-wide operations from the corporate office with centralized control posed a significant challenge due to the disparate on-premises solutions used across member hotels. As the group continued to grow rapidly, these on-premises systems limited their ability to gain visibility into group-wide operations, access essential operational reports and guest data, manage distribution effectively, and ensure real-time collaboration between member properties for enhanced efficiency.
“As a growing brand with over 100 properties, multiple restaurants, banquets, various room types, guest profiles, and numerous other revenue streams, efficient and centralized management of operations is crucial for our success. That’s why we chose to transition to Hotelogix’s multi-property cloud PMS platform,” stated Mubeen Mehta, CEO of Suba Group of Hotels.
Hotelogix has provided the Suba Group of Hotels with a Mobile Hotel PMS App, enabling them to monitor group and property-level operations on the move. Additionally, Hotelogix has integrated its PMS with a Channel Manager to support the group with real-time OTA distribution, enhancing sales opportunities. With the use of the Hotelogix Point of Sale (POS) system, the firm will be able to effectively oversee all of its properties’ non-room revenue-generating outlets. Additionally, the Hotelogix PMS is connected with guest communication, materials management, and third-party accounting programmes.
Apart from centrally overseeing group operations, the Suba Group of Hotels intends to leverage Hotelogix in support of its expansion and growth objectives. “We are now better prepared for the future thanks to the Hotelogix cloud. Their solid platform is the perfect starting point for us to quicken our expansion plan, allowing us to onboard new properties with the least amount of IT overhead possible,” said Mubeen.
Aditya Sanghi, CEO of Hotelogix, said, “The integration of Hotelogix marks a significant leap in the Suba Group of Hotels’ digital transformation journey.” “Made for hotel groups, our PMS provides the flexibility, usability, and scalability required for streamlined centralised operations across member properties, allowing rapid growth while offering a distinct competitive edge.”
Varun Beverages Ltd, the largest franchise bottler for PepsiCo, has announced the successful completion of its acquisition of the South Africa-based Beverage Company (BevCo) and its wholly-owned subsidiaries. The acquisition received the necessary approvals from PepsiCo Inc and the Competition Commission of South Africa. As of March 26, BevCo is now a subsidiary of Varun Beverages Ltd (VBL), as stated in a regulatory filing.
Additionally, VBL has provided a corporate guarantee of ZAR 1,500 million (equivalent to approximately INR 660 crore) to ensure credit facilities granted to BevCo by the FirstRand Bank in the region, the statement further noted.
Nevertheless, it also stated, “This corporate guarantee does not affect the company in any way.”
VBL announced in December 2023 that it would acquire all of BevCo’s stakes, including its wholly-owned subsidiaries, for an enterprise value of roughly ZAR 3 billion (about INR 1,320 crore).
BevCo holds distribution rights for Namibia and Botswana in addition to franchise rights from PepsiCo in South Africa, Lesotho, and Eswatini. It also owns beverage brands like JIVE, a bubbly lemonade, Coo-ee, a carbonated drink with classic flavours, Reboost, an energy drink, and Refreshhh, a drink with a high caffeine concentration.
BevCo operates five manufacturing facilities: two in Johannesburg, and one each in Durban, East London, and Cape Town. These facilities boast a combined installed capacity of 3,600 BPM (bottles per minute).
In a previous regulatory disclosure, VBL stated that the acquisition would facilitate the expansion of its geographical presence in Africa.
South Africa is recognised as the continent’s largest soft drinks market. Projections indicate that it is expected to grow at a CAGR of 5.3% over the next four years until 2027.
VBL, which follows the calendar as a financial year, saw its net revenue rise to INR 16,042.58 crore in 2023, marking a notable increase of 21.8 percent.
With a partnership spanning over three decades with PepsiCo, VBL is expanding its business by increasing the number of licensed territories and sub-territories.
Myntra, a leading fashion e-commerce platform, announced that its marketplace division has achieved positive EBITDA (earnings before interest, taxes, depreciation, and amortisation) since the fourth quarter (Q4) of 2023.
“Myntra’s robust presence in the market, bolstered by its growing consumer base, collaborations with domestic as well as global brands, cutting-edge tech innovations, and its solid standing among premium fashion-forward consumers, has enabled its marketplace division to report positive EBITDA since the final quarter of CY 2023,” the business said.
As the first quarter of 2024 has not concluded, it remains unclear whether the entity maintains EBITDA positivity in the current quarter as well. Additionally, Myntra provides logistics, advertising, and consultancy services.
The fashion e-commerce platform owned by Flipkart experienced a net loss increase of over 30% year-on-year (YoY) to INR 782.4 Cr in the financial year 2022-23 (FY23). However, the operating revenue rose by 25% to INR 4,375.3 Cr in FY23, up from INR 3,501.2 Cr in FY22.
“We are proud to lead the way in fashion, beauty, and lifestyle in India, achieving market-leading growth. Achieving this while maintaining profitability speaks volumes about our dedication to addressing the country’s beauty and fashion requirements. It also underscores the success of our customer-centric approach, our capability to invest in the right growth strategies, and our financial resilience, which has consistently served us well,” stated Myntra CEO, Nandita Sinha.
Meanwhile, the firm announced that monthly active users (MAUs) had increased by 33% to 60 million by the end of 2023 from roughly 45 million in 2021. It also reported a gross merchandise volume (GMV) growth that was almost twice as high as the general growth observed in the Indian online fashion business throughout the most recent holiday season.
Myntra additionally emphasized its dedication to expanding into non-metro areas, providing unique products tailored to GenZs and premium fashion enthusiasts, and increasing its share of wallet in non-apparel categories. The company highlighted its aim to promote premiumization in sectors such as fashion, beauty, and direct-to-consumer (D2C) brands.
The leading e-commerce platform also provided insights into the performance of its various segments.
Myntra’s platform witnessed substantial growth across various segments, with its catalogue size expanding by more than 50% in the past year. The Direct-to-Consumer (D2C) segment recorded an impressive year-on-year (YoY) Gross Merchandise Volume (GMV) growth of over 80%.
Moreover, Myntra’s beauty segment demonstrated rapid growth, outpacing the online beauty market in India. In February 2024, the home category experienced noteworthy GMV growth of nearly 50% YoY.
Myntra’s reach extended globally, with over 400 international brands featured across fashion and beauty segments. The demand for products from Myntra’s GenZ fashion brand, FWD, surged, registering over 150% YoY growth in GMV in CY23.
Additionally, the introduction of new features such as MyFashionGPT, Maya, and AI Stylist attracted nearly 2 million monthly users at its peak.
The announcement came days after Myntra revealed its acquisition of the franchise rights for the United Kingdom’s largest fashion brand, NEXT. As a subsidiary of Flipkart, Myntra competes with other prominent players such as AJIO, owned by Reliance, Nykaa Fashion, and Tata CLiQ.
Several days after Zomato announced its plans to introduce a ‘pure veg fleet,’ sparking controversy online, the foodtech giant’s co-founder and CEO, Deepinder Goyal, expressed surprise at the negative response. He clarified that the decision was made based on survey results.
“We conducted an extensive survey among individuals aged over 50. A significant majority expressed a need for a vegetarian-only option and a preference for vegetarian restaurants… So, we proceeded with the launch. We hadn’t anticipated such a strong reaction… It was only after the launch that we realized, ‘Oh! This could also happen,'” Goyal explained to the Economic Times during an interview.
The Zomato cofounder stated that the survey involved 1,600 participants, with an impressive 72% expressing support for “veg only” deliveries.
Goyal also mentioned that approximately 80% of the responses to the introduction of their green fleet were favorable, with the remaining 20% being negative.
Earlier this month, Zomato revealed its ‘Pure Veg Fleet’ adorned in green uniforms, targeting customers with a ‘100% vegetarian dietary preference’. Additionally, it introduced a ‘Pure Veg Mode’, enabling users to filter out all restaurants serving non-vegetarian food items.
The initiative sparked controversy online, with many users questioning the implementation of a fleet with distinct uniforms. Concerns were raised regarding the possibility that various resident welfare associations (RWAs) might enforce a complete ban on Zomato delivery partners not wearing the green-colored uniform.
The company ultimately reversed its decision to introduce a green uniform for delivery partners.
“We will maintain a fleet for vegetarians, but we’ve opted to eliminate the on-ground segregation of this fleet by using the color green. Both our regular fleet and our vegetarian fleet riders will now wear the color red,” Goyal explained at the time.
In the meantime, the foodtech giant remains highly favored by retail investors, with its stock consistently reaching new highs on the stock exchanges. Zomato shares surged to an unprecedented level of INR 188.95 on the BSE during Wednesday’s intraday trading (March 27). Nevertheless, the stock relinquished these gains, ending the session 1.7% lower at INR 179.50 on the BSE.
Brokerage ICICI Securities increased Zomato’s price target (PT) to INR 300, noting the company’s steady growth trajectory and projected increase in profitability in the near future.
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