The global tea market is facing a surplus of 100 million kilograms of tea, which could have repercussions on Indian tea prices and exports in 2024, as noted by industry executives. In 2023, global tea production reached nearly 6,500 million kilograms, surpassing the 6,400 million kilograms recorded in 2022, with Sri Lanka and Africa driving this increase in output.
CK Dhanuka, chairman of Dhunseri Tea & Industries, said, “The excess tea in the global markets that has been carried over from last year will impact the prices and exports of Indian tea.”
The global tea markets in 2023 have been influenced by geopolitical tensions and escalating concerns about an economic downturn.
In the calendar year 2023, Indian tea exports totaled 227.91 million kilograms, marking a decrease of 1.37% compared to 2022. Additionally, the unit price realization also experienced a decline, dropping by 3.5% to INR 265.58 per kilogram in 2023 compared to the previous year.
Liquor maker United Spirits, now Diageo India, on Wednesday said it has received a tax demand of INR 4.47 crore from the Maharashtra state tax authorities for non-submission of statutory declaration forms. The assessment order dated March 5, 2024, is for FY 2018-19 for CST (Central Sales tax) and MVAT (Maharashtra Value Added Tax), the company said in a regulatory filing.
The state tax authority has demanded INR 1.21 crore as MVAT, including a penalty of INR 1 lakh, and INR 3.26 crore as CST.
“Deputy Commissioner, State Tax has levied demand on non-submission of statutory declaration forms and disallowed an element of input tax credit,” it said.
The company said it will be contesting the matter by filing a rectification application or appeal before the higher authorities.
Based on the company’s risk-assessment process, it believes to have a good case and does not expect any material financial implication, it added.
The quick commerce sector is all set to heat up once again as India’s e-commerce giant is now eyeing the segment. Flipkart has started ramping up infrastructure for its quick commerce play, according to a report by Entrackr, citing three sources aware of the details of the plan.
“Flipkart will launch 10-15 minutes delivery in at least a dozen cities in the next six to eight weeks,” said one of the sources requesting anonymity. “It’s building up a chain of dark stores across several cities including Bengaluru, Delhi (NCR) and Hyderabad among others.”
As Flipkart ventures into quick commerce, experts foresee its rapid growth potentially overshadowing traditional e-commerce in India. A 2022 Redseer report estimates the total addressable market for quick commerce in India to be nearly valued at $45 billion. Notably, quick commerce has displayed remarkable resilience in recent years, with the success of platforms like Zepto and Zomato’s Blinkit convincing investors of its promising future in the Indian market.
Zepto secured a unicorn round, whereas Blinkit (formerly Grofers) witnessed a notable turnaround, and Swiggy Instamart experienced significant growth, highlighting their ability to scale up while enhancing margins for their stakeholders.
“If you look at Flipkart’s recent launches, it hints at the firm’s foray into quick commerce. It launched same-day delivery in 20 cities a couple of weeks ago… the company began delivering flowers and cakes around the Valentine season (February 2024),” shared an analyst specializing in e-commerce and quick commerce sectors, who preferred to remain anonymous.
Reports suggest that Flipkart’s catalog is expected to be broader compared to incumbents like Zepto and Blinkit.
“The company will have a sharp focus on FMCG, grocery and daily essentials but it would also push categories such as electronics, fashion,” added the person quoted above.
It’s noteworthy that existing quick commerce players have been consistently broadening and diversifying their product offerings as well.
Responding to queries, a Flipkart spokesperson said they are working towards delivering a wide range of products with speed. “Over the past few months, we have made several investments to enhance our delivery capabilities, including adding same-day delivery in 20 cities. This covers mobiles, essential items, electronics, home appliances, fashion, books and lifestyle products,” said the spokesperson. “We are committed to meeting evolving customer expectations and delivering excellence in value, selection and speed, with more initiatives expected on this front in the coming months.”
Over the past three years, quick commerce has made substantial strides in the top 15 Indian cities, with the top three players in the segment—Blinkit, Swiggy Instamart, and Zepto—successfully expanding their operations. According to sources, BlinkIt fulfills approximately 600,000 orders daily, while Swiggy InstaMart and Zepto manage around 500,000 and 300,000 orders per day, respectively.
According to sources and publicly available data, Blinkit has an average revenue run rate of INR 12,000 crore in the ongoing fiscal year, while Swiggy Instamart’s ARR (read as GMV) stands at around INR 8,000-8,500 crore. Zepto’s gross merchandise value has neared INR 7,000 crore.
Following its recent funding round, Zepto has emerged notably more assertive, boasting a expanded catalog and intensified marketing efforts.
In contrast, Dunzo, backed by Reliance and Google, experienced a decline in momentum. Failing to secure a new funding round in the past two years, the company reported revenue of only INR 226 crore in FY23, coupled with losses amounting to INR 1,801 crore. Reports suggest that Flipkart has entered discussions regarding a potential acquisition of the Kabeer Biswas-led firm.
While these developments may appear positive, the undeniable reality is that the market lacks sufficient size to accommodate numerous players, turning this into a battle for survival for most. Alternatively, exploring new operational models that guarantee sustainable growth might be imperative. The overarching trend of expanding catalogs and focusing on higher-value transactions, such as electronics, suggests that the competition will likely persist unabated.
Sales of ice creams and dairy products are set to see a notable uptick this summer, with a projected 15-20% increase on the horizon owing to expected above-normal temperatures. Consequently, companies are preparing for a potential exponential surge in sales.
Consumers may not need to pay more to enjoy their favorite ice cream and dairy product brands, as milk procurement prices have fallen and dairies have surplus stocks.
The India Meteorological Department (IMD) predicts higher-than-average summer temperatures this year, accompanied by an increase in the number of heat-wave days. This has led to a surge in demand for leading ice-cream brands.
“Summer is the most anticipated season for our business, especially for categories like ice creams, curd and beverages. We are expecting exponential growth in demand for dairy products in the coming months. Over the last 15 days, ice creams alone have witnessed a significant surge in demand versus the same period last year,” said Manish Bandlish, managing director, Mother Dairy.
‘Amul‘, the renowned dairy product brand under the Gujarat Cooperative Milk Marketing Federation (GCMMF), commanding over 50% of India’s ice cream market, anticipates maintaining its strong sales momentum through the upcoming summer season.
“We have already seen a growth of 25% to 30% in the ice cream segment in the FY24. The growth in ice cream sales in the summer of 2024 is expected to be 30-40% more than last year’s summer season sale,” said Jayen Mehta, managing director, GCMMF.
Businesses have also allocated funds for expanding their capacity and launching new products to cater to the anticipated increase in demand.
“We are fully prepared to match this growing demand and have already augmented our production capacities as well as our distribution infrastructure. As we get into the season, we are all geared up to excite consumers with our delightful offerings of over 30 new products. Overall, we are confident of delivering robust growth in our dairy products portfolio this year,” said Bandlish.
Meanwhile, decreased raw material costs and abundant stocks may enable dairy companies to control production expenses and refrain from hiking product prices. Milk prices have remained consistent over the year, with a decline noted in Maharashtra, one of the leading milk-producing states.
“The dairy companies are offering various schemes to increase ice cream sales. Prices of dairy products are not likely to increase much as milk prices have not increased during this year,” said RS Sodhi, president, Indian Dairy Association.
“The demand is also expected to be more, which can lead to an increase in the overall summer season sale of dairy products by at least 15% to 20% over the previous year,” he said.
Premium products in the personal care business at ITC have seen a significant surge in contribution to sales, doubling in the last four years to 38%, as highlighted by Sameer Satpathy, the divisional chief executive for the business. Moreover, these premium offerings account for about two-thirds of all the new products launched in the past two years, indicating a strategic emphasis on premiumization within the sector.
According to analysts, the emphasis on premium products has not only aided ITC in achieving break-even in the personal care sector but has also led to consistent quarterly profits in the business.
While Satpathy declined to comment directly on this matter, he noted that the emphasis on premiumization has positively affected the bottom line by enhancing margins.
“Premium products sales have moved up exponentially from pre-pandemic period and doubled to around 38% of our sales. With growing opportunities in the Indian market, we will continue to strengthen our focus on premiumisation. Companies with capabilities to marry technology, innovation, supply chains and sustainability concerns together will gain much more in premium play,” said Satpathy.
He mentioned that 65% of the recent personal care product introductions belonged to the premium category, contributing to doubling the segment’s prominence from pre-pandemic levels.
Through this business, ITC operates in categories such as body wash, deodorant, skincare, and floor cleanser, constituting the second crucial element of its strategy to expand the non-cigarette fast-moving consumer goods (FMCG) segment. However, the foods business remains the primary revenue and profit driver within ITC’s non-cigarette FMCG business, boasting market leadership across various categories.
ITC holds the position of the second largest player in the shower gel and women’s deodorant segments within the personal care business. Additionally, its herbal floor cleanser has emerged as the market leader in certain regions like the East. In the October-December quarter, ITC saw a year-on-year expansion of 100 basis points in the EBITDA margins of its non-cigarette FMCG business, reaching 11%. Despite facing challenges such as high input costs and subdued demand, ITC has witnessed an upward trend in EBITDA over the past few quarters.
“Non-cigarette FMCG segment Ebitda margin stood at 11% backed by premiumisation, supply chain optimisation, cost management, digital initiatives and judicious pricing actions,” BNP Paribas said in a recent report.
Satpathy mentioned that premium consumers became more consolidated during the pandemic, especially with the emergence of numerous digital channels.
“We jumped a decade as far as digitalisation is concerned. This boosted sales of premium brands and larger packs since such consumers tend to consume more. The cherry on the cake has been quick commerce,” he said.
ITC has downsized its mass-market brand Superia, primarily operating in the soaps segment, due to its limited market share and low margins. The brand is currently available in select rural markets such as the Hindi heartland and Odisha.
Clensta, a personal care products start-up backed by actress Parineeti Chopra, has reached an annual run rate (ARR) of INR 100 crore in FY24, as reported by company executives on Wednesday. They anticipate this figure to soar to INR 1,000 crore within the next three years.
Puneet Gupta, the founder of Clensta, mentioned that the brand is currently focusing on further penetrating its presence in its existing 57 cities through same-store, same-city growth strategies. Additionally, Gupta highlighted Clensta’s efforts in expanding its global reach through strategic partnerships with prominent players such as the Lulu group in the GCC and UAE, as well as Carrefour in Africa.
Actor-turned-entrepreneur Chopra invested in the sustainable personal care products maker last year, acquiring a minority stake in the company. This direct-to-consumer player sells a range of personal care products, with some utilizing waterless technology.
The startup further unveiled the second phase of its Buy1Give1 initiative. For every Clensta product purchased, the company pledges to donate one bottle of drinking water to the underprivileged. This endeavor aligns with their commitment to “ensuring water security for all.
Last year, Clensta secured INR 75 crore in a pre-Series B funding round, spearheaded by TradeCred and co-led by the Royal Family of the UAE and Chopra, among other investors.
The Gurgaon-headquartered company was founded in 2016 by Gupta and began selling the products three years later. In addition to its own platform, Clensta sells its products through ecommerce channels as well as in offline chains including Health and Glow and Tata 1 MG.
Antfin Singapore, a subsidiary of the Chinese tech giant Ant Group, divested a 2% stake in foodtech major Zomato via bulk deals for INR 2,827 Cr on Wednesday.
According to BSE data, Antfin sold 9.7 crore shares of Zomato at a price of INR 160.40 per share, along with an additional 7.93 crore shares at INR 160.11 each.
Together, these two transactions amounted to a total value of more than INR 2,827 Cr.
Morgan Stanley Asia (Singapore) took the chance to acquire some of the offloaded shares. It purchased over 5.68 crore shares of the foodtech giant at INR 160.1 apiece, amounting to a total deal of INR 909.5 Cr.
At the close of the December quarter in 2023, the Chinese investment firm maintained a 6.42% ownership stake in the company.
This development comes as Zomato shares continue to scale new heights, hitting a record peak of INR 175.5 during intraday trading on Monday (March 4). With this surge, Antfin could be contemplating profit booking, as the startup gains popularity among investors amid sustained profitability and revenue growth.
Zomato witnessed a remarkable surge in its profit after tax (PAT), jumping by 283% quarter-on-quarter (QoQ) to INR 138 Cr in the quarter concluding December 2023. Furthermore, operating revenue grew to INR 3,288 Cr from INR 2,848 Cr in Q2 FY24.
Fueled by strong financial performance, Zomato’s shares have skyrocketed by almost 200% over the last 12 months. Additionally, the stock has experienced a surge of more than 30% on a year-to-date (YTD) basis.
As a result, several prominent investors have divested their holdings in the company in recent months to capitalize on profits. In January, Societe Generale sold more than 86.5 lakh shares of Zomato in a block deal worth INR 117 Cr, while Motilal Oswal Mutual Fund executed a block deal valued at INR 621.6 Cr.
Before that, SoftBank sold 9.35 crore shares of Zomato in a block deal worth INR 1,127 Cr in December 2023.
Meanwhile, Zomato shares concluded Wednesday’s trading session down by 2.68% at INR 161.60 on the BSE.
Westside, a retail establishment under Tata’s Trent, is poised to broaden its beauty offerings while simultaneously boosting its presence in the e-commerce sphere, according to Shailina Parti, COO at Trent Ltd.
Out of the 300 stores the brand operates, it has refurbished approximately 15-20 so far, with plans to expand the area dedicated to beauty by three times in its revamped stores. This expansion aligns with the brand’s average of opening 30 new stores annually.
“To capture the beauty market, we’re investing in R&D, along with launching many new ranges. We’ve gone into fragrance in a big way. We are also launching skincare. Our objective is to develop affordable quality products. So, we are building beauty and we see beauty very much in the forefront of our strategy,” she said.
“Westside.com has grown 150 percent on last year. We want to further build our online proposition. Currently, e-commerce contributes to 7 per cent of our overall revenue and is profitable. There lies an opportunity to grow it by another 30-40 percent on the current base over the next 2 years,” she further added.
Currently, 65 percent of the brand’s revenue originates from women’s wear, with men’s wear contributing 30 percent, while the remaining 5 percent is distributed across other categories.
“There are 3 pillars of our strategy in terms of our platform – ethnic women’s fashion, women’s western wear, and men’s wear. These are the three fastest-moving and highest revenue categories,” she said.
The brand is also considering housing the home segment exclusively in stores with ample space.
“We’ve realized doing a little bit of home in all our stores all over the country, may not be what we want. We should find the right stores with lots of space and do it well. So that’s what we’re doing and we will keep it to limited stores,” she explained.
In addition to this, the brand is also heavily investing in other categories such as lingerie and accessories.
Presently, the 25-year-old brand operates in 86 cities, including 8 metro and tier I cities, and 78 tier II cities. It maintains 109 stores in metro and tier I cities, and 121 in tier II cities.
“We are betting big on tier II cities as aspirations and purchasing power of the consumers is improving. Apart from this, there’s less competition in those cities for fashion. So, the less competition gives us the advantage as well” she asserted.
The brand, which has 25 to 30 percent of its stores located in malls and the rest on high streets or in out-of-town areas, is experiencing a 17 percent year-on-year growth.
“We are not in the business of above-the-line marketing and advertising as we’re building a community. We’re building experiential marketing that connects people with Westside, not on a brand level, but on a community level and we see that as a very much long-term strategy,” she said.
She further added, “Westside as a brand in India is evolving every year. It’s not a revolution and it’s not going to have super fast growth. So, going ahead, I see 10-15 per cent growth each year.”
Patanjali Ayurved Ltd., a Haridwar-based multinational conglomerate, has collaborated with New Delhi-based digital payments brand Ongo to introduce open-loop co-branded prepaid cards, as announced by the company on Wednesday.
As per the release, an open-loop prepaid card features a network logo and can be utilized across the Rupay network nationwide on any compatible device.
Acharya Balkrishna, co-founder and managing director, of Patanjali Ayurved Ltd., said, “We are delighted to provide an elevated shopping experience to our esteemed clientele by introducing the open-loop co-branded cards in collaboration with Ongo. With Patanjali-Ongo cards, our valued customers will gain access to exclusive benefits spanning a diverse range of Patanjali’s products and services across Patanjali stores.”
Users of the Patanjali-Ongo co-branded card will accrue rewards for buying Patanjali products through the card. Moreover, they can utilize the card for a multitude of transactions, including shopping, dining, fueling, and e-commerce. Additionally, the card is equipped with a National Common Mobility Card (NCMC) feature, facilitating seamless use of transit services such as NCMC-enabled Metro, buses, tolls, and parking nationwide.
Customers can enroll for this service by registering through the Ongo app, which is accessible on both the Play Store and the App Store, or by visiting their nearest Patanjali stores.
“We are thrilled to partner with Patanjali Ayurved, the country’s leading conglomerate to introduce open-loop cobranded prepaid cards on our Ongo platform. Through this partnership, we aim to provide unparalleled convenience to Patanjali’s extensive customer base, ensuring every transaction is enriched with seamless efficiency and ease,” said Ravi B Goyal, Chairman & MD.
The initial public offer of Gopal Snacks was subscribed 56 per cent on the first day of bidding on Wednesday.
The Initial Public Offer (IPO) received bids for 66,61,628 shares against 1,19,79,993 shares on offer, as per NSE data.
The portion for Retail Individual Investors (RIIs) fetched 88 per cent subscription, while the quota for non-institutional investors got subscribed 49 per cent.
The IPO has an Offer For Sale (OFS) aggregating up to INR 650 crore. The proposed IPO is entirely an OFS of equity shares by promoters and other selling shareholders.
The IPO comes in a price range of INR 381-401 a share.
Gopal Snacks Ltd on Tuesday said it has garnered INR 194 crore from anchor investors.
The Rajkot-based company’s IPO would conclude on March 11.
Founded in 1999, Gopal Snacks is a fast-moving consumer goods company in India, offering namkeen, western snacks, and other products across India and internationally. As of September 2023, the namkeen makers’ products were sold in 10 states and 2 Union Territories. It has a network of 3 depots and 617 distributors.
The company operates three manufacturing facilities — Rajkot and Modasa in Gujarat, and Nagpur in Maharashtra. Furthermore, it runs three ancillary manufacturing facilities that mostly produce ‘besan’, raw snack pellets, seasoning, and spices. These are mainly used internally to make finished products like namkeen, gathiya, and snack pellets.
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