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Ajio set to hit profitability this month, marking first online venture within Reliance Retail to attain financial success

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Ajio

Ajio, the online fashion arm of Reliance Retail, is set to become profitable this month, marking it as the first online venture within the country’s largest retail group to achieve this milestone, as stated by two senior industry executives familiar with the matter.

According to the executives, Ajio is anticipated to report earnings before interest, tax, depreciation, and amortization (EBITDA) in the range of INR 6-8 crore for the month of December.

The company’s attainment of profitability can be attributed to several factors. The prevailing premiumization trend in the market, coupled with Reliance’s extensive international brand portfolio, contributed to an enhancement in the average billing value. Additionally, the strategic approach of fulfilling a significant portion of orders from physical stores in close proximity to the delivery point helped reduce logistic costs. This approach also contributed to a decrease in return rates, further bolstering the company’s financial performance.

“Reliance wanted profitability in Ajio by this fiscal year and it is achieving it in December itself. The focus going forward will be on profitable growth since Reliance doesn’t want to burn money when the business has achieved scale,” one of the executives said.

As of the time of publication, there was no response to an email seeking comment from Reliance Retail.

Reliance launched Ajio in 2017.

Ajio streamlined its marketing expenses by implementing five distinct storefronts tailored for each consumer class. The company established 4,000 stock points to facilitate last-mile fulfillment, utilizing Reliance Retail’s nearby stores for delivery and thereby lowering operational logistic costs. This strategic approach not only improved efficiency but also contributed to a reduction in return rates, dropping from the earlier range of 35-36% to approximately 28% of orders.

Ajio has achieved an annual gross merchandise value of $2 billion, with 51% of its revenue attributed to the Reliance Retail portfolio and the remaining 49% generated from its proprietary and exclusive brands. In the online fashion sector, Ajio competes with Myntra, Amazon, and Flipkart.

Around 15 million people shop for fashion online, while another 30 million make purchases from both online and offline stores.

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Planning a boozy bash in Noida? Don’t forget your occasional bar license!

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alcohol
(Representative Image)

If you live in Noida or Greater Noida and plan to host a party at home or a community hall where alcohol will be served, it’s recommended to apply for an occasional bar license to stay in accordance with the law. Not having a liquor license for gatherings, even at home or community events, is a violation of regulations and may lead to legal actions, including fines, warned Subodh Kumar Srivastava, District Excise Officer (DEO) for Gautam Buddh Nagar.

To address people’s poor awareness of excise-related rules, authorities have started reaching out to residents’ welfare associations (RWAs) and citizens, informing them about guidelines for procuring occasional licences.

“If anyone is serving liquor with a licence, whether it is liquor meant for sale in Uttar Pradesh or outside the state, it is totally illegal. It will attract action (from the excise department),” Srivastava said.

Occasional licenses for serving alcohol at gatherings are offered in two categories. The first, priced at INR 4,000, is intended for individuals hosting small gatherings such as house parties. The second category, priced at INR 11,000, permits serving alcohol to larger crowds at events held in community halls, restaurants, banquets, and similar venues, according to the information provided.

“Both these occasional licences are valid for one day. Applicants can apply for them on the website — upexciseportal.in — under the category of useful public services,” the DEO said.

He further mentioned that the public outreach efforts by the excise department are yielding positive results, with an increasing number of individuals now applying for occasional bar licenses.

Official statistics reveal that from April 1 to November 30, 2022, a total of 5,820 such licenses were issued. In contrast, during the corresponding period in the current fiscal year, 8,770 licenses were issued, reflecting a 40% increase.

“The department issued 900 occasional bar licences in November alone, which is the highest in recent times for a single month. This also led to huge revenue earning for the government,” Srivastava said.

On the objective behind the policy covering even private celebrations at home, the excise officer said its advantages are multifold.

“First, when you take a licence, it will ensure that the liquor served in a party would be authentic and not illicit. This will also make sure that the applicant buys liquor locally which is meant for consumption only within the state and is not procured from other states, which would cause a revenue loss to the government,” he explained.

The officer added that the department has also issued a helpline number 8882120733 where residents can share information on the consumption of illegal narcotics or drugs, or any other tip-off related to liquor use.

Asked how would excise officials come to know if liquor is being served at someone’s private party at home, Srivastava said the excise department has a widespread network of informers across the district and also gets information through liquor vends and outlets, which notice abnormally high sales.

“Moreover, sometimes neighbours get annoyed and raise an alarm about nuisance at such parties which leads to offenders landing in the excise net,” the officer added.

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Beauty brand Plum’s FY23 revenue soars 71%, reaching INR 322 Crore

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Plum

Pureplay Skin Sciences Ltd, the maker of beauty products under the brand name Plum, reported a significant 71.3% year-on-year growth in its total revenue for the 2022-23 fiscal year, amounting to INR 322.3 crore. Despite this positive revenue trend, the company also reported a widening net loss at a comparable rate.

In the financial year 2022-23, the net loss rose by 66% to INR 52.9 crore, compared to INR 31.8 crore in the previous year.

The Mumbai-headquartered company registered a total revenue of INR 188.1 crore for the fiscal year 2021-22, primarily driven by product sales on its platform. Demonstrating a substantial growth, its operating revenue surged by 67.8% year-on-year, reaching INR 309 crore.

The expenses for the fiscal year 2022-23 totaled INR 375.5 crore, marking an increase from INR 218.7 crore in the previous year.

Advertising and promotional activities constituted 42.7% of the overall expenses, totaling INR 160.5 crore. Additionally, noteworthy expenditures encompassed employee benefits at INR 31.2 crore, information technology expenses at INR 20.8 crore, and transportation costs amounting to INR 13.0 crore.

The company’s revenue growth aligns with a comparable pattern observed in direct-to-consumer beauty and personal care enterprises. For example, Sugar Cosmetics, an omnichannel beauty company, experienced a remarkable 90% increase in revenue, reaching INR 428.4 crore in the fiscal year 2022-23. Pilgrim, a beauty and personal care company, saw a more than fourfold surge in operating revenue to INR 76.46 crore. Platforms dedicated to selling such products also thrived, as evidenced by Purplle, an online beauty products retailer, which reported a substantial 116% rise in revenue from operations, reaching INR 475 crore in 2022-23.

The industry is capitalizing on a surge in the adoption and demand for beauty and personal care products throughout the nation. As per a collaborative study conducted by Redseer Strategy Consultants and Peak XV Partners, the beauty and personal care market in India is anticipated to achieve a compound annual growth rate of 10% from 2022 to 2027, outpacing global markets and reaching a valuation of $30 billion.

This year, the industry experienced notable funding events, with Pilgrim securing $20 million in a funding round led by Vertex Ventures Southeast Asia and India. Additionally, Purplle successfully concluded a funding round of $40-50 million, comprising both primary and secondary transactions, maintaining a consistent valuation of $1.1 billion, with participation from entities such as Abu Dhabi Investment Authority.

The strong also come at a time when Honasa Consumer Ltd, the parent company of the personal care brand MamaEarth, listed following an initial public offering on October 31. The firm reported a 93% growth in its net profit to INR 29.4 crore for the quarter ended September, on operating revenue of INR 496 crore.

Continue Exploring: Mamaearth IPO Set for October 31, Price Band at INR 308-324/Share

Plum secured its latest funding of $35 million in a round led by A91 Partners, with ongoing support from existing investors Unilever Ventures and Faering Capital. Established in 2013 by Shankar Prasad, the company specializes in offering vegan, toxin-free beauty products spanning skincare, haircare, personal care, and makeup.

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Walmart invests $600 Million in Flipkart as e-commerce giant gears up for $1 Billion funding round

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Flipkart
Flipkart

Flipkart, a prominent e-commerce platform supported by Walmart, is reportedly in the process of raising a new funding round of $1 billion, with a substantial commitment of $600 million from the US retail giant.

According to sources cited by ET, the anticipated new funding is expected to value Flipkart at a premium of approximately 5-10% over its last valuation of $33 billion.

The report indicates that in addition to Walmart and current stakeholders, new investors are set to participate in the funding round of the Bengaluru-based e-commerce major.

While Flipkart confirmed Walmart’s investment of $600 million in the company, it emphasized that the remaining details are speculative. Walmart also officially disclosed its new investment in a regulatory filing.

In 2018, Walmart acquired a 77% stake in Flipkart for $16 billion, establishing the company’s valuation at $22 billion. Following the separation of PhonePe from the group last year, Flipkart’s valuation reached $33 billion.

During the six months concluding on July 31, 2023, Walmart invested $3.5 billion to acquire shares of Flipkart from non-controlling stakeholders, including Tiger Global and Accel.

Flipkart significantly contributes to the quarterly earnings performance of the US-based ecommerce giant. According to Walmart’s Q3 2023 earnings statement, its operations in India were affected by the delayed arrival of the festive season and the shift of Flipkart Big Billion Days sales from Q3 last year to Q4 this year.

Continue Exploring: Walmart’s Q3 performance takes a hit as Flipkart’s Big Billion Day sale shifts to Q4

“The timing of Flipkart’s Big Billion Days pressured International sales growth, as the event moved from Q3 last year to Q4 last year. So we expect the timing to be a benefit to Q4’s growth rate for the segment,” Walmart had said.

Meanwhile, Flipkart continues to experience financial losses. In FY23, Flipkart India, the B2B arm of the company, witnessed a standalone net loss widening by over 42% year-on-year, reaching INR 4,845.7 crore. Despite this, its operating revenue saw a 9.7% increase, reaching INR 55,923.9 crore.

In the fiscal year 2022, Flipkart Internet, the marketplace division of the e-commerce giant, also recorded an increase in losses.

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Zomato refutes $2 Billion acquisition offer for Shiprocket, asserts focus on existing business amidst market speculation

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Zomato
Zomato

Zomato, a major player in the foodtech industry, has dismissed reports suggesting a $2 billion acquisition offer for the logistics startup Shiprocket.

Continue Exploring: Foodtech giant Zomato makes strategic bid for Shiprocket, valuing logistics unicorn at $2 Billion

In a stock exchange filing, the company issued a “caution” to investors regarding inaccurate reports circulating in the market about potential acquisitions. The statement clarified that the company currently has no intentions of pursuing any acquisitions.

“We have noticed that there are certain news articles circulating in the mainstream media with the subject “Zomato offers to acquire Shiprocket for $2 billion”. We deny this statement and would like to caution investors against such incorrect news floating in the market. We remain focused on our existing businesses with no plans for any acquisition at this moment,” said Zomato in a filing with the BSE.

The company provided the clarification as a measure of “abundant caution,” expressing concern about the potential uncertainty that the reports could generate in the market.

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South Korea hits all-time high in seaweed exports, breaking export records

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Seaweed

This year, South Korea achieved its highest-ever performance in seaweed (Gim) exports, reaching 1 trillion won ($770 million), as announced by the Ministry of Oceans and Fisheries on Wednesday. This marks a historic milestone as the most successful single seafood export to date.

Since 2019, Gim has maintained its leading position in seafood exports. Over the last decade, Gim’s exports have experienced an average annual growth of 8%. The export destinations have significantly expanded from 64 countries in 2010 to 124 countries this year. The primary forms of export include seasoned (67%) and dried (33%) varieties.

The global market size for Gim was $918 million as of last year, with South Korea leading with a 70.6% market share. The top five countries importing South Korean Gim are the US, Japan, China, Thailand, and Russia. As of last year, these countries accounted for 61.4% of Gim exports.

“By actively pursuing brand marketing and new product development, we will solidify (South) Korea’s leading position in the global Gim market,” the Minister of Oceans and Fisheries Cho Seung-Hwan mentioned.

The South Korean government aims to reach $1 billion (1.3 trillion won) in seaweed exports by the year 2027.

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From Pink Velvet Macchiato to Frosty Red Velvet Donut: Dunkin’ unveils exciting winter menu

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Dunkin

Dunkin’, the US-based coffee and doughnut brand, is gearing up to launch a new winter menu featuring festive treats in the United States.

The upcoming winter menu comprises offerings such as the Pancake Wake-Up Wrap, White Hazelnut Bark Coffee, the Frosty Red Velvet Donut, and Pink Velvet Macchiato.

The Pink Velvet Macchiato, a fusion of espresso with red velvet cake flavor and subtle cream cheese frosting undertones, is set to make a comeback at all Dunkin’ outlets nationwide, available in both hot and iced variations until the end of February 2024. This beverage made its initial debut in January 2020.

In addition to the Pink Velvet Macchiato, Dunkin’ will introduce the Frosty Red Velvet Specialty Donut, featuring a foundation of red velvet cake, topped with vanilla-flavored icing, and adorned with cream cheese-flavored sprinkles.

The winter menu will introduce the Pancake Wake-Up Wrap, featuring a light and fluffy pancake enveloping bacon or sausage, egg, and melted cheese. It is accompanied by a side of maple syrup for dipping.

The return of the Sweet Black Pepper Seasoned Bacon includes its availability in both the Sweet Black Pepper Seasoned Bacon Sandwich and Snackin’ Bacon versions.

Dunkin’ is set to release the White Hazelnut Bark Coffee, a beverage blending the rich flavors of toasted hazelnut and creamy white chocolate. This delectable option will be offered in both hot and iced variations.

Dunkin’ asserts that these festive additions provide customers with a cozy winter experience.

Moreover, participants in the Dunkin’ Rewards program will have access to new promotions in 2024.

These offerings encompass a $2 Medium Hot or Iced Coffee, limited to one per member per day; triple points for Boosted status members ordering via the app on Wednesdays; and a bonus of 100 points for all members placing app orders on Mondays.

In August 2023, Dunkin’ relaunched its pumpkin line-up in the US market, re-introducing Pumpkin Spice Signature Latte, Nutty Pumpkin Coffee and the pumpkin bakery range.

Part of the Inspire Brands company, Dunkin’ currently operates more than 13,200 restaurants in 40 global markets.

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Salad Station aims for exponential growth: Plans to triple U.S. store footprint by 2026 through franchise expansion

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Salad Station

Salad Station, a U.S.-based quick-service salad restaurant chain, is set to triple its store network in the country by 2026 through a franchise model.

The Quick-Service Restaurant (QSR) chain is actively searching for franchisees in the Orlando/Daytona Beach region of Florida.

Recently, the brand finalized franchise agreements in Altamonte Springs/Apopka, Winter Park, and Lakeland.

Salad Station has expanded its footprint in the southern U.S. states, including Texas, Louisiana, Mississippi, Alabama, and Arkansas, and is soon set to establish its presence in Tennessee.

Last month, Salad Station announced its intention to triple its footprint in the southeast region of the United States. By year-end, the plan is to launch 30 new locations, with an additional 17 slated to open by the close of 2024.

With a current presence of 30 locations nationwide, Salad Station expanded its reach this month by opening restaurants in Monroe, Louisiana, and Madison, Mississippi.

The Quick-Service Restaurant (QSR) brand plans to open its first drive-through location in Ocean Springs, Mississippi, early next year.

Renowned for its pay-by-the-pound approach, the brand provides over 100 fresh, farm-inspired ingredients, allowing patrons to craft a swift and wholesome meal.

The menu comprises daily chopped produce, high-quality proteins, freshly prepared salads from scratch, prepped fruit, gourmet toppings, a selection of 16 dressings, and soups.

Salad Station founder and CEO Scott Henderson said, “Central Florida is an important area for us. Our Tampa location has been a tremendous success and we’d like to build off that along the I-4 corridor.

“Franchising a Salad Station is a unique opportunity to be a local hero. My mom and I opened the first Salad Station simply because we identified that our community was lacking a quick and easy way to eat a fresh and customisable meal, large or small.

“When leaving one of our locations, we hope our guest’s day is just a little brighter and they crave to have the same feeling the next day.”

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Diageo unveils $5.8 Million investment plan for sustainable water management in tequila production

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Diageo

Diageo has announced a planned investment of MXN 100 million (approx. $5.8 million) in water preservation schemes for its tequila brands in the state of Jalisco, Mexico.

The investment aligns with the company’s objective to replenish more than 100% of the water utilized in its operations in water-scarce regions by the end of 2025.

Diageo plans to utilize the investment to finance six projects throughout 2024, focusing on enhancing water quality in three towns within Jalisco. These initiatives involve implementing wastewater treatment measures and enhancing accessibility for nearby residents.

In August, the owner of the Don Julio, Casamigos, and DeLeon brands concluded the first project funded by this investment. This entailed constructing two artificial wetlands and a municipal nursery with 10,000 trees in the San Diego de Alejandría township.

Diageo has stated that the artificial wetlands are projected to purify 268 million liters of wastewater, improving the quality of irrigation in the region. This will empower local farmers to cultivate a greater quantity of crops for the benefit of the community.

Moreover, Diageo is dedicating investments to collaborative initiatives aimed at conserving vital water basins.

Alan Loredo, Diageo’s corporate relations director for Mexico and tequila, said, “As leaders in tequila and in the spirits industry, we have an environmental and social responsibility that we bring to life in each of the actions we take to protect the resources upon which life depends and to promote the prosperity of the communities in which we operate”.

“The MXN 100 million investment will focus on projects oriented towards preservation and access to water across the next two years, a crucial step towards achieving our sustainability objectives and contributing to mitigate climate change.”

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British retailer Frasers expands luxury footprint, seals £52M deal for MATCHES

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MATCHES

Frasers, the British sportswear and apparel retailer under the ownership of Mike Ashley, has expanded its footprint in the luxury market with the acquisition of the struggling online platform MATCHES from Apax Partners. The transaction amounted to approximately 52 million pounds ($66 million).

MATCHES provides products from over 450 designers and primarily generates its revenue from international sources. The company serves customers in 150 countries beyond the borders of the UK.

On Wednesday, Frasers announced that the agreement will advance its “elevation strategy,” aimed at moving the business into a more upscale market segment.

The strategy entails making investments in flagship stores and online operations, as well as fortifying partnerships with renowned brands like Nike, Adidas, The North Face, and On Running.

Earlier this month, Frasers reported a 12.6% rise in first-half profit, though it did caution that the global luxury market had softened.

Frasers’ shares saw a 0.5% increase in late morning trading, extending the gains for 2023 to 31.5%. Mike Ashley holds a 73% stake in the equity.

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