Zepto experiments with platform fees to boost profitability

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March 14, 2024

Zepto, a quick-commerce firm, has been experimenting with platform fees alongside handling charges and delivery fees in order to enhance its profitability.

The company is implementing a platform fee of INR 2 per order, in addition to handling charges that can vary between INR 5-20 depending on factors such as order size, location, and time of day. This sets it apart from competing quick-commerce platforms like Zomato-owned Blinkit and Swiggy Instamart, which solely charge handling fees.

Conversely, Zomato and Swiggy‘s primary food delivery services impose platform fees. These fees, along with advertising opportunities, serve as revenue-boosting avenues for food delivery companies. However, increasing commissions from restaurant partners often encounter resistance from the latter.

In January, Swiggy hinted at a platform fee of INR 10 for select users, significantly higher than the INR 3 charged to most users currently. On New Year’s Eve, Zomato temporarily raised the platform fee to as much as INR 9 per order in specific markets, compared to its usual INR 3-4 per order.

Continue Exploring: Quick commerce platforms Blinkit and Zepto expand into e-commerce, targeting fashion, beauty, electronics, and more

Zepto is presently the only standalone quick commerce firm operating in India.

“We don’t believe in being over dependent on delivery fees to be profitable. We believe in core operating efficiency and cost reduction to be profitable. We are on track to achieve the Ebitda positive milestone even with much lower delivery fees,” a spokesperson for the firm said, without giving details on the plans around platform fees.

In addition to platform, delivery, and handling fees, Zepto also imposes a “small cart” fee for orders under INR 100 and implements a surge fee during peak demand periods.

On February 19, the company launched a membership program called Zepto Pass. It provides free delivery for orders exceeding INR 99 and discounts for orders above INR 399 for the majority of customers. Initially priced between INR 149 and INR 299 per month, it is currently being sold at a heavily discounted rate of INR 19.

Continue Exploring: Zepto launches Zepto Pass membership program for all users, offering exclusive benefits

In a post on X (formerly Twitter), cofounder and CEO Aadit Palicha announced that Zepto reached 1 million Pass subscribers within just one week of its launch.

Continue Exploring: Zepto Pass hits 1 Million subscribers within a week of launch

In a statement, brokerage firm JM Financial highlighted that customer fees such as platform and handling fees were a key factor driving the “enhanced profitability” of quick commerce firms.

Palicha had previously mentioned that Zepto aims to achieve profitability at the earnings before interest, taxes, depreciation, and amortization (EBITDA) level within the next two and a half quarters. He also stated that Zepto’s monthly cash burn remained in the single-digit million dollars range and confirmed that the firm had surpassed $1 billion in annualized gross merchandise value.

Nestle to exit dairy sector in Ecuador, strikes deal with Grupo Gloria

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March 13, 2024

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Nestle has decided to exit the dairy sector in Ecuador by striking a deal with the Latin American food company Grupo Gloria.

As part of the agreement, Nestlé will divest a factory and distribution center situated in Cayambe, to the north of the capital city, Quito.

Grupo Gloria is set to acquire the indigenous brands La Vaquita, Yogu Yogu, Natura, Cereavena, and Huesitos in the region.

The deal also includes the licensing of additional international brands such as La Lechera and Svelty.

Continue Exploring: Nestle unveils irresistible ice cream-inspired confectionery lineup!

The deal is contingent upon approval from Ecuador’s competition watchdog.

Nestlé revealed in February its intention to shut down a dairy facility in Nicaragua, citing “current global dynamics for efficient and productive operations” as the reason.

Josué De la Maza, the executive president of Nestlé’s operations in Ecuador, affirmed that the company would maintain its presence in sectors such as culinary products, confectionery, coffee, and infant formula.

He added, “It should be noted that in 2018 we acquired Terrafertil, an Ecuadorian company that has grown throughout Latin America with a leading portfolio in the plant-based category, which strengthens our product offering to Ecuadorian consumers. We are confident that Gloria Foods will continue to develop the dairy business in Ecuador based on its regional trajectory.”

Continue Exploring: Nestle India ramps up investments, sets sights on robust growth with INR 6,000-6,500 Crore expansion plan

Peru-based Grupo Gloria operates in various countries, including Ecuador, Bolivia, Colombia, Argentina, and Puerto Rico.

“With this purchase, we renew our commitment to the Ecuadorian market as a relevant player in the food sector and we enthusiastically welcome the excellent workforce and the important brands that the acquisition of the operation brings with it,” Gloria Foods president Claudio Rodríguez said.

“We are sure that this transaction will strengthen our portfolio in Latin America and will allow us to continue bringing our quality and experience to the countries where we are present.”

In 2022, Grupo Gloria acquired a set of dairy assets in Chile from Fonterra, the New Zealand-based dairy giant.

Adidas faces annual loss of $82 million following Kanye West partnership termination, eyes sales recovery in 2024

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March 13, 2024

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Adidas, the renowned German sportswear brand, announced on Wednesday that it incurred an annual loss for the year 2023, attributing it partly to the repercussions stemming from the termination of its partnership with the controversial rapper Kanye West.

The company experienced a loss of 75 million euros ($82 million), a stark contrast to the profit of 612 million euros recorded in the previous year.

Revenue dropped by five percent to 21.4 billion euros, with significant impact felt in the United States, primarily due to the cessation of sales of Yeezy trainers, which were designed in collaboration with West.

Continue Exploring: Decathlon sets sights on India as a ‘top priority’ market, eyes top five global position

Sales saw a slight decline in the fourth quarter, with a notable decrease in North America as Adidas scaled back wholesale transactions in efforts to mitigate excess inventory.

In 2022, Adidas terminated its partnership with West following a string of anti-Semitic comments, leaving the company with thousands of unsold Yeezy shoes that they had collaborated on developing.

The revenue from two Yeezy sales in 2023 totaled 750 million euros, significantly lower than the 1.2 billion euros generated by the brand in 2022.

Adidas is donating the profits from the sales to charitable organizations.

In 2024, Adidas anticipates a “mid-single-digit rate” growth in sales. The company intends to sell the remaining Yeezy revenue at cost, projecting sales to reach approximately 250 million euros.

Continue Exploring: Nike to cut over 1,600 jobs, streamline operations amid weaker profits

High streets emerge as prime location for luxury brands in India during 2023: CBRE

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March 13, 2024

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According to a report released on Wednesday by CBRE South Asia, high streets emerged as the preferred location for luxury brands in India’s leading eight cities in 2023.

The eight cities tracked for leasing include Delhi-NCR, Mumbai, Bangalore, Kolkata, Pune, Ahmedabad, Chennai, and Hyderabad.

In 2023, High Streets accounted for approximately 45 percent of the total luxury retail leasing, while luxury brand stores in malls comprised 40 percent, with standalone stores making up the remaining 15 percent.

Continue Exploring: Malabar Gold, Titan, and 4 other Indian brands secure spots in global top 100 luxury goods makers list

“The luxury sector, which saw a significant increase in leasing in 2023, shows a promising trend with the entry and expansion of international brands,” said Anshuman Magazine, chairman and CEO, India, Southeast Asia, Middle East & Africa, CBRE.

In 2023, luxury brands collectively leased 0.6 million square feet of space. This comprised 0.24 million square feet in malls, 0.3 million square feet across high streets, and 0.1 million square feet in standalone stores.

The report attributed the surge in luxury retail to several factors, including rising demand for premium and luxury goods, heightened exposure to luxury brands via social media, and the expansion strategies of luxury brands in metropolitan areas.

Continue Exploring: Indian retail sector set for 10-13% growth in 2024: Luxury, value purchases, and demand uptick on the horizon

India’s vegetable oil imports decline 13% in February to 9.75 Lakh Tonne: SEA

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March 13, 2024

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India’s vegetable oils import fell 13 per cent year-on-year in February to nearly 9.75 lakh tonne, according to industry data. In a statement on Wednesday, Solvent Extractors’ Association of India (SEA) said the import of vegetable oils (comprising edible oils and non-edible oils) during February stood at 9,74,85 tonne as compared to 11,14,481 tonne in the year-ago period.

Out of the total imports, the edible oil shipments fell to 9,67,852 tonne last month from 10,98,475 tonne in February 2023.

Non-edible oils imports too fell to 7,000 tonne from 16,006 tonne in the year-ago period.

During November 2023-February 2024 period, the overall import of vegetable oils declined 21 per cent to 46,47,963 tonne from 58,87,900 tonne in the corresponding period of the previous oil year.

Continue Exploring: India set to boost soyoil imports in 2024, palm oil purchases expected to decline

Oil marketing year runs from November to October.

Edible oils import fell to 46,15,551 tonne during the first four months of 2023-24 oil year from 58,44,765 tonne in the year-ago period.

Non-edible oils import dropped to 32,412 tonne during November-February period of 2023-24 oil year from 43,135 tonne in the corresponding period of the previous year.

India meets more than 50 per cent of its domestic requirements of edible oils through imports.

The country imports palm oil from Indonesia and Malaysia. It imports soyabean oil from Argentina and Brazil.

“The decline of vegetable oil imports continued in February 2024. The availability of palm oil for edible oil requirements has come down as the main two producers Malaysia and Indonesia are diverting it for the production of biodiesel,” SEA said.

This might result in an increase in prices this year, it added.

Continue Exploring: India’s vegetable oil imports drop 28% in January 2024; prices may surge amid global supply constraints, says SEA

“Palm oil output in Indonesia and Malaysia, which account for a bulk of global production is likely to either rise marginally in 2024 or decline from last year’s level, as ageing plantations and lack of expansion cap output,” SEA said.

Import of soyabean oil from Argentina increased sharply in February 2024, while import from Brazil declined due to growing requirements of the domestic biofuel industry.

Meesho announces its largest ever ESOP buyback, allocating INR 200 Cr for employees

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March 13, 2024

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Meesho has announced an Employee Stock Ownership Plan (ESOP) buyback program of INR 200 crore (approximately $25 million), marking it as the company’s largest ESOP buyback pool to date.

This signifies the fourth buyback event at the horizontal e-commerce unicorn. In February 2020, the company repurchased shares valued at $1 million, followed by $5 million in November 2020, and $5.5 million in October 2021.

Continue Exploring: Meesho fastest growing e-commerce player; GMV tops $5 Billion: Alliance Bernstein Report

The fresh buyback program will extend benefits to approximately 1,700 current and former employees spanning from junior-level executives to senior leadership positions.

Meesho offers small businesses, including SMBs, MSMEs, and individual entrepreneurs, access to millions of customers, a diverse selection from over 30 categories, nationwide logistics, payment services, and customer support capabilities.

The Vidit Aatrey-led company recently announced the launch of Valmo, a full fledged logistics marketplace that allows the network of micro-entrepreneurs to become Meesho logistics partners.

Continue Exploring: Meesho unveils Valmo platform to boost efficiency in e-commerce deliveries

In July 2023, Meesho claimed to be the first horizontal Indian e-commerce company to turn profitable. Since announcing profitability in July 2023, the company continues to remain profitable and cash flow positive. The company also reduced its losses in FY23 by 48%, but its revenue spiked 77% year-on-year to INR 5,735 crore in the last fiscal year.

Manga Srinivas Foods and Nutrihub collaborate to revolutionize millet-based cuisine

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March 13, 2024

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Manga Srinivas Foods has partnered with Nutrihub, the Indian Institute of Millets Research (IIMR), and signed an MoU, marking a pivotal moment for innovation in millet-based products. This collaboration promises a fresh wave underscoring the commitment to advancing millet-based cuisines in the coming year. The signing ceremony took place at Nutrihub, IIMR in Hyderabad.

Dr. B. Dayakar Rao, the CEO and principal scientist at Nutrihub, ICAR- Indian Institute of Millets Research (IIMR), and Manideep Kavali, CEO and managing director of Manga Srinivas Foods, signed the MoU officially, with the aim of advancing product development in the realm of millet-based offerings. The event also saw the presence of Telugu Mallesh, director of Manga Srinivas Foods International, showcasing the company’s dedication to culinary innovation from its Hyderabad headquarters.

Continue Exploring: Health-conscious trend surges in Bengaluru and Hyderabad: Simpli Namdhari’s study reveals shift towards nutrient-rich foods in 2024

On this partnership, Manideep Kavali said, “This partnership paves the way for unprecedented advancements in millet-based cuisine, leveraging cutting-edge technology to elevate product quality and nutritional value. With the imminent launch of Millet Factory outlets, we are excited to bring the goodness of millets to consumers across the nation.”

Manga Srinivas Foods, renowned for its dedication to millet-based cuisine, is unveiling an innovative dining venture called “Millet Factory.” This Quick Service Restaurant (QSR) offers a diverse range of millet-packaged foods, including Millet Cookies, Millet Muffins, Nutribars, and various Millet Noodles options, both ready-to-eat and ready-to-cook. In addition to physical locations, the company is expanding its digital presence, making its products available for purchase on mangasrinivas.com and Milletfactory.in. With a steadfast dedication to promoting healthier eating habits, Manga Srinivas Foods continues to lead the way in innovating millet-based offerings.

Continue Exploring: FMCG players shift focus to millets as demand for healthier options grows

Chalu Aapna Desi Chinese to launch three new outlets in Punjab, eyes aggressive expansion in North India and overseas

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March 13, 2024

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Bhopal-based restaurant chain Chalu Aapna Desi Chinese plans to enter Punjab with the launch of three new outlets on March 15, as stated by its CEO and founder Vibhanshu Mishra.

The brand, which boasts more than 158 outlets across various formats like Chalu Chinese, The Indian Momo Co., and Wh-eat Burger, is set to open stores at Celebration Mall on the Ambala-Chandigarh highway, Mohali Walk (Shopping Mall) in Mohali, and Urban Hatt, a food street located in Amritsar.

“We are planning to open 15 outlets in Punjab and over 25 in North by the end of 2024 including all 3 brands,” said Mishra.

The planned expansion in Punjab will encompass cities such as Ludhiana, Gurdaspur, Mohali, Bathinda, Jalandhar, Pathankot, and Barnala.

Continue Exploring: Tim Hortons strengthens presence in Punjab with the opening of its 25th outlet

Mishra shared that with each store requiring approximately INR 25 lakh for setup, the brand has allocated INR 10 crore for expanding in Punjab and INR 50 crore for broader expansion in the North region.

Reports indicate that the brand is planning a global expansion, aiming to inaugurate more than 25 outlets in Canada. The initial launch is scheduled for June at Trafalgar Crossing, 2481 Taunton Road, Oakville, Ontario, followed by an additional 24 outlets by the end of 2025.

Following its global expansion spree, the chain also plans to expand to Arizona, US, with an additional 10 outlets.

Last year, the company clocked a revenue of INR 29 crore with plans to wrap up 2024 with over INR 50 crore, an increase of over 70%. It now plans to open and reach 250 outlets, a 58% increase by the financial year (FY) 2024-25, as stated by Mishra in an earlier interview.

Continue Exploring: Starbucks expands in India with opening of 6th drive-through store in Punjab

Blue Tokai Coffee Roasters marks milestone with inauguration of 100th cafe in Kolkata

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March 13, 2024

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After leading the entire nation on an exceptional coffee odyssey and elevating Indian specialty coffee to global recognition, Blue Tokai Coffee Roasters, the largest specialty coffee brand in India, has inaugurated its 100th café in the country.

With the opening of its newest café in Kolkata, the company has successfully reached its milestone ahead of schedule, aiming to create a nationwide coffee experience that fosters community and shared interests.

“With the increasing affinity for high-quality coffee, consumers are now actively seeking out-of-home coffee experiences that extend beyond just transactions and focus on the need for inclusive, safe spaces. Such experiences, when paired with a thoughtfully curated food menu and experiential offerings like workshops, have transformed the way people see coffee shops. Our growth in the last 12 months reflects the impending demand for go-to coffee spots and increasing brand loyalty. Our aim is to take this count closer to 200 by the end of the coming fiscal year,” shared Shivam Shahi, Co-Founder and COO, Blue Tokai Coffee Roasters.

Continue Exploring: Indian specialty coffee brand Blue Tokai eyes 130 outlets and new overseas markets

For Blue Tokai, what began as a modest roastery experience center in the lesser-known neighborhood of Said-ul-ajaib in Delhi has evolved into instrumental channels shaping India’s coffee preferences across all demographics. The brand has experienced a twofold increase in its café presence since FY23, reflecting the escalating demand for specialty coffee, a segment pioneered by Blue Tokai since its inception in 2013.

Blue Tokai’s cafés are strategically positioned in convenient locations such as premium markets, corporate parks, malls, and residential neighborhoods, seamlessly integrating into consumers’ daily routines. In line with the goal of making exquisite Indian coffee readily available nationwide, Blue Tokai’s 100th café is strategically situated in the vibrant Ballygunge neighborhood. It offers the enchanting scent of freshly brewed coffee, a diverse selection of artisanal bakes, delightful culinary choices, and an inviting space for readers, complemented by a bookstore hosted by Bahrisons Booksellers on the first floor.

The Ballygunge outlet will offer an array of both hot and cold brews, including Espresso, Pourover, Americano, Cappuccino, Flat White, Trioccino, and Vietnamese-style iced coffee, among others, all crafted using Blue Tokai’s premium roasted beans. Patrons can indulge in a diverse range of food options, spanning from wholesome to decadent, featuring a wide assortment of sweet and savory delights meticulously baked by Suchali’s Artisan Bakehouse. Additionally, this café will showcase a captivating selection of roasted coffee beans, freshly baked breads, and an array of other coffee and bakery retail offerings.

Continue Exploring: Bollywood star Deepika Padukone invests in specialty coffee brand Blue Tokai

Decathlon sets sights on India as a ‘top priority’ market, eyes top five global position

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March 13, 2024

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Decathlon, the French sports retailer, views India as a “top priority” market. According to a top company official, they expect the country to be among its top five global markets within the next five years, aided by the expansion of the store network and increased local sourcing efforts.

Steve Dykes, Chief Retail & Countries Officer at Decathlon, revealed that as part of its growth strategy, the company aims to incorporate 10 new stores annually in India. Additionally, Decathlon intends to expedite online sales and elevate local sourcing to over 90 percent within the next five years, a significant surge from the current average of 60 percent.

According to him, this initiative will enhance Decathlon’s competitiveness within the rapidly expanding Indian sports and athleisure sector. Furthermore, it will facilitate increased exports to global markets from its manufacturing facility in India.

Continue Exploring: India tops Ikea’s investment priority list, says CEO Jesper Brodin, highlighting rapid development and market potential

India “is a top priority for us. We have five countries, which we call as leapfrog jump countries and one of them is India,” Dykes said, while speaking at a Decathlon global event here.

For Decathlon, India is already among the top ten (markets globally in revenue terms). “We wanted to get it into the top five,” Dykes said, adding that this would happen within the next five years.

For the financial year ended March 31, 2023, Decathlon India’s sales were at INR 3,995 crore, registering a 37 per cent growth.

“We want a good rhythm of (opening) 10 stores per year. We are really accelerating online at the moment and positioning ourselves digitally because of the convenience element,” he said, adding besides large format stores, Decathlon is also working on small stores in big cities.

These new stores could be smaller stores between 1,000 to 2,000 square meters or could also be large experience stores spread across 4,000 square meters, with a bigger play area and other amenities.

“We have two in Bengaluru at the moment but we feel that in cities like Mumbai and Delhi, we should follow that kind of concept,” he added.

The leading sports retailer also believes it has a role to play by encouraging more people towards sports and creating a market in India.

Decathlon, which competes with leading athleisure brands such as Nike, Adidas, Reebok, Puma and Asics in the Indian market, is currently operating around 100 stores across formats.

Regarding the potential of the Indian market, Dykes said India has a high number of young people in its demography, who are looking at sports as a career option.

Moreover, there are some big Indian cities such as Mumbai, whose GDP is expected to be broadly equal to countries like Romania. “We would like to treat these cities like a country,” he said.

Moreover, cities like Bengaluru, Delhi, Hyderabad, Kolkata etc follow different kinds of sports passions. For example, in cities like Hyderabad Badminton is popular, while running is picking up in Delhi. Similarly, Mumbai and Kolkata have different sports passions.

Continue Exploring: California lifestyle apparel brand Dockers makes big bet on Indian market, plans five store openings in first year

Over domestic sourcing, Dykes said Decathlon plans to increase it to 90 to 95 per cent.

“We put a vision to get there in about five years by 2028,” said Dykes, who earlier led the India business of Decathlon as its CEO there.

The company is increasing its accessibility and working on the value chain with more “sustainable components” for the Indian market, which is price-sensitive.

On Tuesday, Decathlon launched a brand new identity and said it is deploying a new strategy steeped in its new purpose, “Move People Through the Wonders of Sport”.

Speaking at the press meet, Barbara Martin Coppola, Global CEO, Decathlon said, “Anchored to this new purpose, we have created a new strategy to concretely evolve many aspects of our business. This includes recreating our customer experience, accelerating the movement towards sustainability, and modernising our company end-to-end.”

She added that the brand structure is also evolving to reflect its new identity as a global, multi-specialist sports brand.

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