Flipkart says Big Billion Days will create 70,000 direct jobs in festivals

 E-commerce giant Flipkart said it will help generate over 70,000 direct and lakhs of indirect seasonal jobs as the country gears up for the upcoming festive season and Flipkart's Big Billion Days (BBD).

This would create direct job opportunities across the Walmart-owned company’s supply chain, that include delivery executives, pickers, packers and sorters. There will also be additional indirect jobs created at Flipkart's seller partner locations and kiranas. This will be further supplemented by job creation in ancillary industries including vendor locations, and freight partners, as the entire ecosystem scales up for the festive season.

The expansion and strengthening of the supply chain will help create a robust system enabling millions of new e-commerce users to shop online seamlessly as lakhs of ecosystem players gear up for the festive season.

"We are focused on creating impactful partnerships that offer great consumer experience while creating additional opportunities for progress of the entire ecosystem as it scales for the Big Billion Days (BBD),” said Amitesh Jha, senior vice-president, Ekart and Marketplace, Flipkart. “As a front runner in e-commerce, our training and investment in the workforce is widely recognised, and contributes to skill development and enhances employability. By generating employment and enabling our sellers to scale their businesses during this time, we're doing our part to drive growth in the industry and the economy."

ALSO READ: Flipkart partners with over 50,000 kiranas ahead of Big Billion Day sales

The complexity and scale of Big Billion Days require investments for capacity, storage, sorting, packaging, human resources, training and delivery, which helps generate additional employment during the festive season. The onboarding of more than 50,000 kiranas by Flipkart for last-mile delivery will also create thousands of seasonal jobs to deliver millions of packages this festive season.

Flipkart is undertaking training programmes for its direct hires in various aspects of the supply chain through a mix of classroom and digital training, enhancing their understanding of supply chain management. These include customer service, delivery, installation and safety and sanitisation measures along with the handling of hand-held devices, PoS Machines, scanners, various mobile applications and ERPs. The training during this period will help impart future-ready skills for the participating workforce, enabling career progression in the fast-growing e-commerce industry in India.

ALSO READ: Flipkart resolves to transition to EVs by 2030, make them locally

For hundreds of thousands of seller partners, MSMEs (micro, small and medium enterprises) and artisans, who also start preparing for the festive season months in advance, Flipkart provides separate training in the area of warehouse management and packaging. The entire process of hiring and upskilling is being done following the government's National Skill Development Mission.

Flipkart said it has a tech-enabled robust supply chain, delivering millions of shipments across 100 per cent serviceable pin codes serving millions of consumers--from Nangaon in Assam and Hadaspur in Maharashtra to Kannur in Kerala. Over the years, the company said that it has created millions of local job opportunities through its supply chain along with entrepreneurial and festive job opportunities across the country with The Big Billion Days.

Flipkart acquires Walmart India's wholesale biz to help transform kiranas

E-commerce company Flipkart has acquired 100 per cent stake in Walmart India Private Limited, which operates the Best Price cash-and-carry business.
Flipkart said it would leverage the strong wholesale capabilities of the company and enable growth for kiranas and MSMEs (micro, small and medium enterprises).

With this acquisition, the Bengaluru-based firm announced the launch of Flipkart Wholesale, a new digital marketplace that will help transform the kirana retail ecosystem in India by leveraging cutting-edge and locally developed technology.
“As the e-commerce pioneer in India, the Flipkart Group has transformed the shopping experience for millions of Indian consumers. With the launch of Flipkart Wholesale, we will now extend our capabilities across technology, logistics and finance to small businesses across the country,” said Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group.
“The acquisition of Walmart India adds a strong talent pool with deep expertise in the wholesale business that will strengthen our position to address the needs of kiranas and MSMEs uniquely. With this development, the Flipkart Group will further build upon the synergies across its businesses to drive greater value and choice for end-consumers and businesses alike.”
In 2018, Walmart, the world’s largest retailer, invested $16 billion for a majority stake in Flipkart. This month it led a $1.2-billion investment in Flipkart, valuing the e-commerce firm at $24.9 billion.
Flipkart Wholesale will launch its operations in August 2020 and will pilot services for the grocery and fashion categories. It will be headed by Adarsh Menon, a veteran at Flipkart. Sameer Aggarwal, CEO at Walmart India, will remain with the company to ensure a smooth transition, after which time he will move to another role within Walmart.
With the acquisition of the Walmart India business, its employees will join the Flipkart Group and the home office teams will integrate over the next year. The Best Price brand will continue to serve its 1.5 million members via its omnichannel network of 28 stores and e-commerce operations.
The acquisition would help Flipkart take on rivals such as Amazon and The Mukesh Ambani-led company’s e-commerce venture JioMart, which are also bringing Kiranas and local shops on their platform and merging online and offline retail.
Flipkart said the small businesses would get attractive schemes and incentives, supplemented with data-driven recommendations for stock selection, delivered through a fast and reliable network to drive greater efficiencies and better margins.
In addition, kiranas and MSMEs will benefit from access to easy credit options and opportunities for new income generation through various Flipkart initiatives, creating new ways to catalyse growth. These opportunities are especially relevant at this time as kiranas and MSMEs work towards achieving scale and profitability following the impact on business due to the Covid-19 pandemic.

Flipkart invests Rs 260 cr in Arvind Fashions' arm, picks minority stake

Arvind Fashions (AFL) on Thursday said Flipkart Group has invested Rs 260 crore to pick a minority stake in its subsidiary Arvind Youth Brands.
Arvind Youth Brands is Arvind Fashions' recently-formed subsidiary which will own the Flying Machine brand.

"The Flipkart Group and Arvind Fashions (AFL) strengthened their partnership, through an investment of Rs 260 crore by Flipkart Group to purchase a significant minority stake in... Arvind Youth Brands which will own the Flying Machine brand," AFL said in a regulatory filing.
Arvind Fashions said Flying Machine has been retailing on the group's platforms of Flipkart and Myntra for more than six years.
"Through this investment, the Flipkart Group and Arvind Fashions will work collaboratively to identify opportunities and synergies to innovate and develop products with strong value propositions at attractive price points," the company added.
Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group, said, "Through this investment, we look forward to partnering with the team at Arvind Youth Brands to continue to grow the market for its portfolio of products and enhance the strong brand equity that has been built over the last few decades."
The transaction is subject to customary conditions precedent. Metta Capital Advisors acted as the financial advisors to AFL for this transaction.
J Suresh, Managing Director and Chief Executive Officer of Arvind Fashions, said, "The partnership with the Flipkart Group will help us accelerate our online growth strategy as we focus our efforts on developing an omni-channel retail approach for Arvind Youth Brands and Flying Machine.

Amazon, Flipkart fight artificial price surge amid Coronavirus outbreak

Amid the coronavirus outbreak, e-commerce giants are fighting a challenge of another kind -- artificial price rise. As the demand for kitchen staples and consumer sanitary products rise, both the online platforms are witnessing surge prices.
While Amazon India has blocked several products those were selling at a price higher than the MRP, Walmart-owned Flipkart said it is removing products with fake claims and inflated prices on an ongoing basis.

“We are working to ensure that no one artificially raises prices on basic needs products during this pandemic and have blocked or removed tens of thousands of items, in line with our long-standing policy,” said Amazon India in a blogpost on Tuesday. Globally, Amazon has removed over one million products for making false claims related to coronavirus.
Flipkart on the other hand said while it does not control prices of products on its marketplace platform, it is working closely with sellers to urge responsible pricing and behaviour.
Both the companies are also working towards making essential items available on the platform which are currently out of stock. Flipkart is working with marketplace partners to ensure adequate availability of consumer sanitary products like hand sanitisers, gloves and masks on the platform. “Our sellers have been advised to dispatch these products on priority. To ensure faster delivery, they have been advised to inward these products to smart warehouses and Flipkart warehouses,” said the Bengaluru-headquartered company.
According to Himalaya Drug Company, there has been a 10 times rise in the demand for hand sanitisers in the past one month. Amazon India too has some products in the household staples category which are out of stock as it has witnessed an increase in people shopping online due to the Covid-19 spread. “You will also notice that some of our delivery promises are (taking) longer than usual. We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders,” said Amazon India.
Flipkart Travel, through its partner ixigo, is also offering full refund including convenience fee on cancellation and rescheduling of air tickets booked on the portal to selected countries up to month end.

E-commerce firms shouldn't offer steep discounts: CCI ahead of Bezos' visit

Big e-commerce firms should not offer steep discounts, must disclose discounting policies and ensure they do not drive brick-and-mortar rivals out of business, India's antitrust chief said as his commission launched a probe into Amazon.com and Walmart's Flipkart.
The remarks come ahead of a visit by Amazon's CEO Jeff Bezos to India this week - one likely to marked by much tension with the country's small business owners planning protests in 300 cities as they step up their campaign against what they see as unfair business practices.

In particular, the shopkeepers accuse the two U.S. giants of indulging in heavy discounts and giving preferential treatment to select sellers.
Openness about discounting policies and how companies use customers' data is essential, said Ashok Kumar Gupta, chairman of the Competition Commission of India (CCI).
"If you are absolutely clean, come out, put it (details) on your website. So that everybody knows and there is nothing opaque," he told Reuters in an interview.
"Otherwise there will be complaints, we will inquire - why do you want to subject yourself to this type of investigation if you are open about it."
He did not refer to the companies by name. But just hours after his comments, the commission on Monday said it would be investigating Amazon and Flipkart, noting allegations of deep discounting and promoting "preferred sellers".
Bezos will likely participate in an Amazon event in New Delhi, sources have said. He has also sought meetings with the prime minister and other government officials, according to one source.
Amazon has committed $5.5 billion in India investments, while Walmart in 2018 pumped in $16 billion to buy a majority stake in Flipkart, its biggest deal.
Groups representing more than 70 million brick-and-mortar retailers say both firms violate India's foreign investment rules which were aimed at preventing sharp online discounts. The companies deny the allegations.
Gupta said there was nothing wrong in giving discounts if you were an insignificant player, but "once you acquire market power, you cannot continue with these practices because you will start hurting the incumbent players."
The CCI has said India is the world's fastest growing e-commerce market, expected to grow at an annual rate of 51% between 2017 and 2020. It estimates the sector will generate revenues of $120 billion this year.
"This sector has got us a lot of benefits ... We want this sector to grow, no doubt about it," Gupta said.
The CCI has asked its investigations arm to complete the probe within 60 days but typically such probes take much longer.

Flipkart's FY19 group revenue up 42% at $6 bn; losses decline 63%

E-commerce major Flipkart witnessed a 63 per cent decline in losses and a 42 per cent jump in consolidated revenue in the 2018-19 financial year (FY19), according to a regulatory filing by the Singapore holding company that was accessed by business intelligence platform Paper.vc. The Bengaluru-headquartered company has reported revenue of Rs 43,615 crore ($6.14 billion) in FY19.
FY19 numbers assume significance because, baring the first four months of the financial year, Flipkart was owned by American retail major Walmart.


The company’s losses fell from Rs 46,895 crore ($6.6 billion) in FY18 to Rs 17,231 crore ($2.42 billion) for the financial year ended March 2019, owing to a sharp decline in expenditure.

Expenses came down to Rs 60,897 crore ($8.55 billion), as against Rs 77,539 crore ($10.89 billion) in the previous year, though it was mainly because of reduction in financing cost after the company got acquired by Walmart, said Vivek Durai, founder of Paper.vc.

“The decline in expenditure is attributable to a steep decline in finance costs, rather than any overall optimisation in operating expenses. Financing cost comprised a large part of Flipkart’s FY18 expenditure, largely attributed to the accounting treatment of convertible securities. If one were to exclude the finance costs, overall group expenditure actually went up by 118 per cent,” said Durai.

For example, just the employee benefit expenses of Flipkart have shot up by 58 per cent to Rs 4,254 crore ($600 million) since Walmart took over the company.

According to Satish Meena, a senior forecast analyst at Forrester Research, excluding the finance costs, Flipkart’s losses were increasing because the company was spending more on employee benefits, marketing, and brand promotions.

chart“Last year, its (Flipkart’s) growth in revenue was 50 per cent. This time, it is 42 per cent. It is healthy growth and not something one should not be happy with. But, its losses are still a cause of concern,” said Meena.
The filings also reveal details such as those relating to Flipkart's new, more aggressive acquisition strategy since Group Chief Executive Officer Kalyan Krishnamurthy took over the helm.

The group spent $46.8 million on acquisition in FY19, including $21.4 million for buying Israel-based Upstream Commerce in September 2018, and $10.5 million for Bengaluru-based artificial intelligence company Liv.ai.

E-commerce companies are facing huge losses in their pursuit to dominate the country’s growing online commerce market, which is expected to touch $200 billion by 2028, from about $30 billion last year. They are working hard to reduce losses.

Paytm E-commerce (Paytm Mall) has narrowed the losses in FY19, even as it expanded revenue by 25 per cent to Rs 968 crore. In the period under review, the e-commerce firm owned by Paytm Group reported a net loss of Rs 1,171 crore, which is 34 per cent lower than the financial year, by bringing tighter control into expenses.

Amazon Seller Services, online marketplace arm of the e-commerce giant in India, has narrowed its loss to Rs 5,685 crore for 2018-19, according to the data accessed by business intelligence platform Tofler. This is a 9.5 per cent decrease from last financial year, even as revenue has jumped 55 per cent during the period to Rs 7,778 crore.

Flipkart forays into original video content, takes on Amazon and Netflix

Walmart-owned e-commerce major Flipkart is foraying into offering original video content with the launch of Flipkart Video Originals.
Integrated within the Flipkart Video platform, launched in August, Flipkart Video Originals will be produced by well-known industry figures. Flipkart said it will produce “bespoke snackable content” that is both mobile-first and interactive.

“All the main players are primarily anchored around fictional content,” said Prakash Sikaria, vice-president, growth and monetisation at Flipkart, adding that while other over-the-top (OTT) platforms are focused on metropolitan centres, Flipkart would look at Tier-II and –II cities.
Sikaria said, “More than half our content is from Tier-III towns.”
This take the Flipkart vs Amazon fight beyond online retail to video as well. Amazon had launched its video platform, Amazon Prime in December 2016, and has since built up a strong fan base with popular shows such as Made in Heaven, Mirzapur, and the recent Manoj Bajpayee-starrer The Family Man.
The first creator to join Flipkart’s initiative is Academy Award-winner Guneet Monga, who has come on board as the official creator and curator of short stories for the platform.
In the months to come, Flipkart will work with renowned industry talent and production houses such as Studio Next, Frames and Sikhya Productions, to bring forth first-of-its-kind content across genres and languages.
The first original series Backbenchers hosted by Farah Khan goes live later this month and will feature an array of India’s most-loved celebrities, engaging in nostalgic banter, which will have the audience coming back for more.
“Flipkart Video is offering a great platform for content creators to engage with a customer base of over 160 million people across India, through a unique storytelling format,” said Guneet Monga. “I am excited to be collaborating with Flipkart to cater to today's demand for short-form content, at the convenience of mobile phones. It's great to witness that Flipkart Video Originals is enabling filmmakers to share their stories,” said Monga.
Sikaria of Flipkart said when the company unveiled Video platform earlier this year, the aim was to play a role in on-boarding new customers who are not necessarily new to the internet but are new to e-commerce. Within the first two months of the launch of Flipkart Video, the firm said it was overwhelmed with the positive response it received from consumers. “We saw an opportunity to create great video content which is easier for people to consume and is mobile-first,” said Sikaria.

Flipkart India's most preferred workplace; Amazon, Oyo come next: LinkedIn

Walmart-owned Flipkart is the most preferred workplace in India, followed by Amazon and Oyo in the second and third places, respectively, according to a list compiled by professional social media network LinkedIn.
Internet companies dominate the top 10 spots in LinkedIn's fourth edition of the '2019 Top Companies' list for India.

IT giant Tata Consultancy Services (TCS) made its debut at the seventh place, new entrants and homegrown internet and consumer services companies Swiggy and Zomato were ranked sixth and eighth, respectively.
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Uber, another new entrant, took the fifth spot, while, One97 Communications was at the fourth rank and Oil and Energy conglomerate Reliance Industries was at the 10th place.
Others on the list include consulting firm Boston Consulting Group (BCG) at 13th, Yes Bank (14), IBM (15), Daimler AG (16), Freshworks (17), Accenture (18), Ola (19), ICICI Bank (20), PwC India (21), KPMG India (22), Larsen & Toubro (23), Oracle (24), and Qualcomm (25).
"This year, half the companies are new entrants on the list, including IT giants such as TCS and IBM that showcase the changing job and hiring landscape," said LinkedIn India Managing Editor Adith Charlie.
Charlie further said that "the presence of more blue chip Indian companies such as Larsen & Toubro and Reliance Industries, among others emphasises the fact that these large firms are getting better at attracting millennials employees".
The report further noted that majority of companies on the list made maximum new hiring for engineering jobs followed by operations and business development.
The list analysed billions of data points generated by LinkedIn's over 610 million members around the world to come up with a blended score used to rank the winners in each geography.
LinkedIn ranked the companies based on four criteria -- interest in the company, engagement with employees, job demand and employee retention.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Flipkart seeks 6-month delay in e-commerce rules, cites customer disruption

Walmart Inc's online retailer Flipkart has told the government the company faces the risk of "significant customer disruption" if the implementation of new curbs for e-commerce is not delayed by six months, a source told Reuters.
India's new foreign investment restrictions will, from February 1, bar e-commerce companies from selling products from firms in which they have an equity interest and also ban them from reaching deals with sellers to only sell on one platform.

In a letter to India's industries department earlier this month, Flipkart Chief Executive Kalyan Krishnamurthy said the rules required the company to assess "all elements" of its business operations, according to a person privy to the communication.
"Redesigning numerous elements of our technology systems to ensure that we can validate and evidence our compliance, in such a compressed period of time, has caused us to divert significant resources," Krishnamurthy wrote in the letter. The new curbs were only announced on December 26.
ALSO READ: Amazon, Walmart push hard to extend FDI guidelines in e-commerce
He also said the regulations could cause "significant customer disruption" if the deadline for compliance wasn't extended. He asked for a six-month delay.
The contents of Flipkart's letter have not been previously reported. Flipkart declined to comment.
Indian officials have said the government is unlikely to change the policy's implementation date. The industries department declined to comment for this article.
The policy move has jolted Walmart, which last year invested $16 billion in Flipkart in its biggest ever deal, and Amazon, which has committed $5.5 billion in India investments.
ALSO READ: Snapdeal, ShopClues support govt's Feb 1 deadline for e-commerce FDI norms
Industry sources have said the new policy would raise compliance costs and force Amazon and Flipkart to review their business arrangements in the country.
Flipkart and Amazon have both started working on approaching thousands of sellers on their platforms to ensure the companies comply with the regulations, three sources aware of the matter said, even as they seek a deadline extension.
For Flipkart, the process would take five-to-six months, said one of the sources, who told Reuters: "the company is right now focusing on working with sellers (for compliance), all rest is on the back burner".
Unfair marketplace?
India's small traders had complained that large e-commerce companies used their control over inventory from their affiliates to create an unfair marketplace that allowed them to offer deep discounts on some products. Such arrangements would be barred under the new policy.
Amazon told Reuters last week it had written to the Indian government to seek an extension of four months. With more than 400,000 sellers and "hundreds of thousands of transactions" daily, Amazon said it needed the time to understand the policy.
Flipkart, in its letter, said the group has more than 80,000 employees and contractors and the number of shipments and packages which move daily were between 500,000 and 600,000.
ALSO READ: Govt's e-commerce curbs could hit online sales by $46 bn by 2022: PwC
The new policy "imposes several new conditions, which we believe could potentially have undesirable impacts on the continued growth of e-commerce in India", Krishnamurthy wrote.
The company added that it wanted to work with the federal government to promote "pro-growth policies" which can help develop the e-commerce sector. Before the policy change, Morgan Stanley estimated India's e-commerce market would grow 30 per cent a year to $200 billion in the 10 years up to 2027.
The US government has been concerned and earlier this month told Indian officials to protect Walmart and Amazon's investments in the country, citing "good relations" between the two countries, Reuters reported on Thursday. 

Amazon's deal with Future Retail stuck on new e-commerce FDI norms

Shares of Kishore Biyani-promoted Future Retail have fallen over 11 per cent in the past four trading sessions after the government announced changes to foreign direct investment (FDI) norms for e-commerce companies.
ALSO READ: Amazon, Flipkart may feel the pinch after govt bars exclusive deals
The Centre last week announced changes to e-commerce policy to check predatory pricing and deep discounting. According to the new policy, e-commerce portals can’t force vendors to have exclusive deals, and will give uniform terms to all sellers. The government also aims to put a cap of 25 per cent on the inventory that a marketplace entity or its group companies can purchase from a vendor.
According to market buzz, Amazon’s deal with Future Retail is not progressing in the wake of policy changes. But Kishore Biyani, chairman and managing director of Future Retail, denied such development. An Amazon spokesperson said: “We do not comment on speculations of what we may or may not do.”

ALSO READ: E-commerce firms Amazon, Flipkart, others pad up to save private labels biz
Amazon is in talks to pick up a 10 per cent stake in Future Retail for Rs 2,000 crore through foreign portfolio investor (FPI) route. “The Future Retail stock ran on the premise of Amazon-Future Retail deal. Hence, the stock is correcting as the deal has not happened yet. Amazon must be studying the new policy changes,” said the research head of a Mumbai-based brokerage wishing not to be quoted.
Future’s stock rose 32 per cent between October 8 and December 24 this year. Abneesh Roy, senior vice-president at Edelweiss Securities, said: “The FDI rules in e-commerce have been changed. That’s why retail stocks have turned volatile.”

E-commerce firms Amazon, Flipkart, others pad up to save private labels biz

E-commerce majors such as Flipkart and Amazon are working overtime to figure out how to continue with the business of their private labels after a recent Department of Industrial Policy and Promotion (DIPP) diktat has thrown a shadow on their future.
Between the two of them, Amazon India and Flikart have 30 private labels coverinmg 200 different categories. They have together invested $1.5 billion in the country, and have major expansion plans. Under the new guidelines, issued by the DIPP on Wednesday, online marketplaces will not be allowed to sell products of companies in which they have equity.

“If we go by the guidelines, we might have to shut down the private labels. We are on the verge of suffering huge losses as a lot of capital has been spent on infrastructure, staff, and marketing. We need to have a clear dialogue with the DIPP to see what can be done to prevent this,” said a senior vice-president of an e-commerce major.
‘Unfair deal’
E-commerce firms are being targeted as offline retails have traditionally owned private labels, said industry experts.
“Physical retailers also have private labels — not only in India but all over the world. This is a legitimate business practice. These are not publicly held firms. So they have every right to run with their business plans. Let the Competition Commission of India (CCI) look into issues if there are any,” said Arvind Singhal, chairman, Technopak Advisors.
Sources in the know said Amazon India and Flipkart are planning to approach the government together.
The companies believe if they have to shut down or cut the amount of business they do from their private labels it would have an impact on the number of direct and indirect jobs they provide. This might also make them rethink of their expansion plans in the country.
Big business
At present, private labels comprise almost 15 per cent of the total business of e-commerce firms. Over the past year, these companies have been expanding their operations in this space.
The Kalyan Krishnamurthy-run Flipkart has been bullish of the growth of its six private labels comprising 160 categories and is planning to concentrate more on sales of its private label brands in 2019.
It claims to have seen a 550 per cent in the sales of its private labels in the festive season. “Seventeen private brand products sold every minute this festive sale,” said Adarsh Menon, vice-president, PL and Electronics, Flipkart.
Flipkart has been planning a major expansion and plans to bring out more products in under the six brands next year.
The company has witnessed a major traction for its private labels in tier-II, tier-III and rest-of-India markets. With the products being almost 20 per cent cheaper than the competition and the company improving its after-sales services, Flipkart has managed to increases sales on the back of price-sensitive customers.
Amazon has also been expanding its various in-house brands, including AmazonBasics.

Amazon, Flipkart may feel the pinch after govt bars exclusive deals

Tightening norms for e-commerce firms like Flipkart and Amazon, the government Wednesday took host of steps and barred them from selling products of the companies in which they have stake.
The commerce and industry ministry also prohibited e-commerce companies from entering into an agreement for exclusive sale of products.

"An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity," the ministry said.
Besides, the revised policy on foreign direct investment in online retail firms said that services should be provided by e-commerce marketplace entity or other firms in which e-retail company has a direct or indirect equity participation or common control to vendors on the platform at arms length and in fair and non-discriminatory manner.
"Cash back provided by the group companies of marketplace entity to buyers shall be fair and non-discriminatory," the ministry's notification said.
It further said that these companies will have to file a certificate along with a report of statutory auditor to the RBI, confirming compliance of guidelines by September 30th of every year for the preceding fiscal.
These changes will come into effect from February 1.
The decision comes in the backdrop of several complaints being flagged by domestic traders on heavy discounts being given by e-commerce players to consumers.
As per the current policy, 100 per cent FDI is permitted in marketplace e-commerce activities. It is prohibited in inventory-based activities.

E-tailers' war: Amazon's gross sales in India 21% higher than Flipkart's

Five years after setting foot on Indian soil, US online retail giant Amazon has emerged as the leader in the domestic e-commerce market, zipping past homegrown rival Flipkart in gross merchandise value (GMV), or gross sales, on its platform.
Amazon’s India unit clocked gross sales of $7.5 billion in the year ended March 31, 2018, while rival Flipkart’s sales stood at $6.2 billion, according to report by Barclays published on Monday. The report, however, did not include sales of Flipkart’s subsidiaries Myntra and Jabong. “While Amazon and Flipkart were neck and neck on GMV (gross merchandise value) in FY17, Amazon took the clear lead in FY18. The company (Amazon) generated $7.5 billion on GMV versus $6.2 billion for Flipkart, driven by its B2C unit which continues to grow its lead over Flipkart’s B2C unit,” said the Barclays report, reviewed by Business Standard.
At the time of announcing the Flipkart deal in May, Walmart had said the consolidated GMV of the Flipkart Group (including subsidiaries Myntra and Jabong) stood at $7.5 billion in FY18.
India, the last large open market globally, is witnessing a fierce battle for dominance in the e-commerce space, driven by the huge number of people flocking to online shopping sites. The world’s largest retailer (by revenue), Walmart, also jumped into the market earlier this year by acquiring 77 per cent in Flipkart for $16 billion.
Walmart’s move has pitted it directly against Amazon, which has almost exhausted its $5 billion investment commitment for India.
Flipkart and Amazon make up a majority of India’s online retail, which, Barclays predicts, would grow two-fold to $40-45 billion by 2020.
ALSO READ: Amazon to buy 9.5% stake in Biyani's Future Retail; deal likely in 10 days
The report added growth in Amazon India’s sales continues to be higher than that of Flipkart in this financial year, estimating that the company would touch $11.2 billion in gross sales in FY19. Given its current pace of growth, Flipkart is estimated to close FY19 with gross sales of $8.7 billion, giving its rival a lead of about 28 per cent in terms of GMV.
However, Flipkart continued to hold the lead over Amazon in terms of revenue. In FY18, Flipkart posted revenues of $3.7 billion, while Amazon India’s e-commerce revenue stood at $3.1 billion, according to Barclays.
But Flipkart might not be able to keep its lead here for long, the report said, citing Amazon’s revenue growth, 82 per cent in FY18, as compared to Flipkart’s 47 per cent, as the reason.
“Flipkart continues to be bigger than Amazon in terms of revenue, although Amazon is catching up quickly and continues to grow much faster,” the report added.
But the fight is far from over. Barclays predicts that Flipkart and Amazon could burn more than $1.5 billion each in the calendar year 2019 as they continue to pump in funds.
ALSO READ: Netflix, Amazon slug it out in India's competitive video streaming market
The report also said that India’s online shopper base is estimated to touch 180-200 million by 2020 from 80-90 million in 2017.
According to the Barclays report, Amazon Web Services (AWS) revenues in India grew by over three times to $192 million in FY18, while Amazon Pay, launched at the end of FY17, saw 53X growth to rake in $61 million in FY18.

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Myntra-Jabong merger to affect 10% of combined workforce; Narayanan to leadFlipkart

With the news of Flipkart Group’s fashion portal Jabong being completely merged into Myntra trickling in, the environment at the e-commerce arm's Gurgaon office was tense and full of anxiety on Friday.
While Flipkart employees were not informed about a town hall, Myntra and Jabong Chief Executive Officer Ananth Narayanan who was present at Jabong’s Gurgaon office addressed all the employees directly, sources in the company said. Narayanan will continue to lead the team, said a Myntra spokesperson.
Narayanan is learnt to have told the employees that all the roles at Jabong will be merged with that of Myntra. Sources said that about 10 per cent of Myntra-Jabong roles will be affected by this restructuring.
ALSO READ: Twists and turns at Flipkart: Ananth Narayanan to continue as Myntra CEO
Sources added that one-on-one discussions will also be held with each Jabong employee as the company gears up for one of its biggest transformations post US retail giant Walmart acquiring a 77 per cent stake in India’s largest e-commerce marketplace Flipkart in May this year with an investment of $16 billion.
The Myntra spokesperson, however, said in an e-mail response that the fashion arm’s independence as a business will be preserved and the Jabong brand will remain.
“Since Myntra’s purchase of Jabong in mid-2016, the two brands have been steadily integrating key business functions and streamlining processes. This has resulted in revenue growth and a significant improvement in the customer experience. Myntra and Jabong will now fully integrate all the remaining functions, including technology, marketing, category, revenue, finance and creative teams,” said the spokesperson. “The closer integration of Myntra and Jabong is a necessary step in our continuing development."
ALSO READ: Flipkart helps Walmart dodge revenue headwind from stake sale in Brazil
A former senior Jabong employee said: “November has always been a month of big changes at Jabong, along with some unpleasant ones. But somehow, Jabong has always bounced back in a newer and stronger version. However, we are waiting to see what happens this time as it’s not going to be Jabong anymore."
HR experts said following such a restructuring, people will not be out of jobs for long since other e-commerce companies are also hiring majorly and it is just an outcome of location change, skill requirement or the changing DNA of the organisation.

ALSO READ: Binny Bansal holds enough ownership threshold to retain Flipkart board seat
“This move is just an indication and outcome of any merger or acquisition happening in the industry, and the rationale is to get rid of the duplicity. This does not mean that exodus of e-commerce would start happening. However, there may be a rationalisation of manpower which will happen and since e-commerce companies are growing exponentially, a lot of inside opportunities must be available,” said Mayur Saraswat, head of digital, IT and telecom vertical, TeamLease Services.

Binny Bansal's shock exit prompts Flipkart to calm employees' nerves

A day after Binny Bansal stepped down as Group CEO following personal misconduct allegations, Flipkart team heads are engaging with staff to address their concerns and queries arising in view of the surprising development.
According to sources, various heads at the e-commerce giant have been engaging with their teams to answer any queries and address concerns related to business and operations after Bansal's exit.

Walmart -- Flipkart's parent entity -- Tuesday issued a statement saying Flipkart co-founder Binny Bansal had resigned as the group chief executive officer.
The cryptic statement said an independent investigation had been conducted against Bansal following allegations of "serious personal misconduct" but gave no details about the nature of the misconduct and findings of the probe for which a global law firm had been engaged.
ALSO READ: Who is Binny Bansal? 10 facts to know about Flipkart's former CEO
It gave a clean chit to Bansal stating that the probe "did not find evidence to corroborate the complainant's assertions" against him.
According to multiple sources, this was the second time that the issue had against Bansal had been raised. They said the matter was first flagged three years ago. However, it wasn't clear if any action was taken back then.
In July this year, the complainant -- an associate engaged with Flipkart and now working independently -- reached out to Walmart, following which the investigation was set up, they said.
The sources said Walmart -- which had picked up 77 per cent stake in the Bengaluru-based firm for a whopping USD 16 billion -- was upset that this development had not been disclosed when the deal discussions were on.
ALSO READ: Binny Bansal, Flipkart's 'execution man', who delivered and kept low
Binny, 37, has also strongly denied the charges and said he was "stunned" by the allegations.
He had added that while had stepped down from the lead role, he would continue to remain a large shareholder and board member of the company that he co-founded 11 years ago with Sachin Bansal (who exited Flipkart having sold his entire shares as part of the deal).
Binny had been appointed group CEO in January last year. In his email to employees Tuesday, Binny had said he had been mulling over the right time to step away from an operating role at Flipkart Group for some time.
"My plan was to continue in my current role for a few more quarters to continue the transition after closing the deal with Walmart. However, my decision to step down has been accelerated by certain personal events that have taken place in the recent past," he wrote in his email.
ALSO READ: Binny Bansal resigns from Flipkart over allegation of 'personal misconduct'
Binny's exit after that of co-founder Sachin Bansal (not related) has raised questions around leadership and the course of action over the next few months for the company that is locked in an intense battle with American rival, Amazon.
Walmart has stated that Kalyan Krishnamurthy, currently chief executive of the Flipkart division and PhonePe (Flipkart's payments arm) Sameer Nigam will report directly to the board.
Also, Flipkart's operations will now include fashion portals, Myntra and Jabong even though they would continue to operate as separate platforms. Ananth Narayanan will continue as CEO of Myntra and Jabong and will report to Krishnamurthy. The sources indicated that further rejig of roles could be on the cards soon.

Binny Bansal out of Flipkart over allegation of sexual assault

Flipkart co-founder Binny Bansal on Tuesday resigned as chairman and group CEO of the Walmart-backed e-commerce company with immediate effect, following an investigation into an allegation of “serious personal misconduct” against him. A Reuters report said the resignation stemmed from an allegation of sexual assault that dated back a few years. It quoted a person familiar with the matter saying the complainant was a former Flipkart associate who was not with the company at the time of making the allegation. The news agency could not reach Bansal for comment.
While the investigation, which was conducted by an independent law firm, could not corroborate the complainant’s assertions against Bansal, it found serious lapses in his judgement and a lack of transparency in how he dealt with the situation, Walmart disclosed to the US Securities and Exchange Commission (SEC).
The Bentonville-headquartered company, which acquired a 77 per cent stake in Flipkart in May for $16 billion, said it had accepted Bansal’s decision to resign, though the global retail major did not give the exact details of the allegation.
Separately, in a mail sent to Flipkart group employees, Bansal said he would have liked to stay on as CEO for a few more quarters to ease the transition after closing the deal with Walmart. However, he added, the allegation “stunned” him while he continued to strongly deny them.
“These have been the challenging times for my family and me. I am concerned that this may become a distraction for the company and the team. In light of these circumstances, I feel, it is best to step away as chairman and group CEO,” Bansal wrote in the email, which was reviewed by Business Standard.
Bansal will, however, continue to hold his stake in Flipkart, which stands at around 5 per cent. He would also remain on the company’s board, he said.
According to Walmart’s filing with the SEC, Bansal was mulling stepping down from running the company for a while, but his decision was accelerated by the findings of the investigation.
Kalyan Krishnamurthy, CEO of Flipkart, will continue to lead the company with the added responsibility of overseeing the two subsidiaries -- Myntra and Jabong -- and will report directly to the board. Ananth Narayanan, CEO of Myntra and Jabong, will now report to Krishnamurthy, while Sameer Nigam, CEO of payments subsidiary PhonePe, will report to the board.
“As we look ahead, we have full confidence in the strength and depth of leadership across the company. We remain committed to investing for the long-term and are supportive of the leadership team’s desire to evolve into a publicly-traded company in the future,” the Walmart statement added. It, however, did not outline any succession plan to fill the post of group CEO.
The stepping down of Binny Bansal comes after the unceremonious exit of Flipkart co-founder Sachin Bansal soon after Walmart announced it was coming on board as an investor in May. Sachin Bansal is said to have received in excess of $1 billion in return for his 5.5 per cent stake in the company.
Sachin Bansal and Binny Bansal founded Flipkart in 2007 after quitting their jobs at US online retail giant Amazon. The two have gone on to become the poster boys of India’s start-up sector, having built the country’s most valuable private e-commerce firm, last valued at over $20 billion when Walmart backed it.
ALSO READ: Full Text: Walmart's statement on Flipkart CEO Binny Bansal's resignation
ALSO READ: Flipkart's Binny Bansal steps down over 'personal misconduct' allegations

Flipkart acquisition likely to impact net income this fiscal, FY20: Walmart

The acquisition of Flipkart by Walmart may negatively impact the net income of the latter this fiscal and also the next, said Walmart in its recent regulatory filing.
The US retail giant had last month said it completed the acquisition of 77 per cent stake in Flipkart Group, an Indian-based eCommerce marketplace, for approximately $ 16 billion.
"We also expect the ongoing operations of Flipkart to negatively impact fiscal 2019 and 2020 net income, including additional interest expense due to the long-term debt issuance in the second quarter of fiscal 2019," Walmart said.
Beginning in the third quarter of fiscal 2018, Walmart will consolidate the financial statements of Flipkart using a one-month lag, it added.
Speaking in investors meet in US recently, Douglas McMillon President, CEO and Director Walmart Inc said they are learning about retail ecosystems and how they work around the world.
ALSO READ: NCLAT asks Walmart to submit details of its merger with Flipkart
We're learning a lot from China. We'll be learning even more from India. And we basically want to be in places that have a tremendous opportunity, which is what led us to Flipkart in India," he said in response to a query.
According to him, Flipkart, which has a strong management team, was built out of an ecosystem.
ALSO READ: Tencent has first right to buy Flipkart share sale in future: Walmart
In the case of India, it's worth it. If it had been a smaller market, we may have passed. But this is a unique opportunity.
And when you look out 5, 10, 20 years from now, time will tell," McMillon had said.
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As Flipkart is expected to generate meaningful losses for at least the next few years, this is clearly an investment for Walmart for the future," Moody's Vice President Charlie O'Shea had earlier said in a report commenting on the acquisition.

Flipkart acquires AI startup Liv.ai to compete with rival Amazon's Alexa

Indian e-commerce major Flipkart has augmented its capability to roll out voice-based shopping on its platform to compete with rival Amazon’s Alexa by acquiring Bengaluru-based artificial intelligence startup Liv.ai.
The startup, which set up shop in 2015, has built capabilities in speech recognition and translation in 10 different Indian languages. Flipkart says it will use Liv.ai’s voice technologies to reach out to the next 100-200 million non-English speaking shoppers in the country.

The acquisition is Flipkart’s first after US retail giant Walmart acquired a 77 per cent stake in the e-commerce firm for $16 billion. The deal is the largest transaction of its kind in the world and gives Walmart a foothold in the fast-growing Indian e-commerce and retail markets.
In an interview, Flipkart CEO Kalyan Krishnamurthy said the voice solutions would not be restricted to a particular form factor such as smartphone or Amazon Echo-style smart speaker. Instead, the acquisition would provide the company with the much-needed capabilities to understand customer queries through voice and in local Indian languages.
Flipkart did not reveal the terms of the acquihire, only saying that the Liv.ai team will form a “centre of excellence” in voice solutions within the e-commerce company. The new team, headed by Subodh Kumar, will now report to Ravish Sinha, who is a Vice-President at Flipkart.
“The next wave of growth of Internet users is coming from Tier 2 cities and beyond, and 70 per cent of these current internet users are vernacular language speakers and this proportion is only increasing. Given the complexities in typing on vernacular keyboards, voice will become a preferred interface for new shoppers,” said Krishnamurthy, in a statement.
While a Flipkart-powered smart speaker isn’t out of the question, the company says it will at first focus on making shopping on its platform easier for non-English speakers. Further, it says it can expand the voice capabilities to its large base of sellers as well as delivery executives who work for its subsidiary eKart.
Krishnamurthy said that Liv.ai was the first company, not just in India but globally, outside of the top technology firms in the world to have built such a capability in voice.
“Building a voice interface is complex, and is especially challenging in Indian context given multiple languages and accents. We are excited with the opportunity that is being presented to scale this up further and make it available to millions of consumers,” said Subodh Kumar, Co-Founder and CEO of Liv.ai.

Flipkart deal: CBDT seeks tax details from US retail giant Walmart

To avoid the imbroglio seen during the Vodafone retrospective tax affair, the Central Board of Direct Taxes (CBDT) has written to the India arm of US retailing giant Walmart, seeking details of their due-diligence on tax liabilities arising from the $16-billion acquisition of e-commerce major Flipkart. And, has offered to help the company on the issue, if needed.
“CBDT has written to sensitise Walmart on the tax liability implications of the acquisition. It is not a notice. The idea is to help Walmart follow due process and pay tax as per the law. This is the first time the department has taken such a pro-active step,” said an official.

ALSO READ: After Walmart deal, start-up ecosystem to cash in on Flipkart millionaires
The content of the letter, sent on Tuesday, has been viewed by Business Standard. “It is hoped that the due-diligence with regard to tax liability in India of the proposed acquisition of a stake in Flipkart has been carried out,” the letter states, while seeking details on this.
The letter lists three sections of the Income Tax Act under which the deal is liable to be taxed. These are sections 5 (2), 9 (1) and 195 (2). The first sub-section deals with taxation of income which a non-resident entity has derived in India. Section 9 (1)(i), sometimes termed the ‘Vodafone section’ among tax experts, deals with income arising from indirect transfers of Indian assets in foreign deals and includes capital gains tax. Section 195 (2) pertains to withholding tax.
“The shares of Flipkart would substantially derive their value from the assets of Flipkart in India,” the letter, sent from CBDT’s Bengaluru office, stated.
ALSO READ: Won't run Flipkart from US, says Walmart CEO Doug McMillon
Tax officials and experts say estimating how much tax each stakeholder of the deal would have to pay will depend upon a number of factors. These cannot be determined until all provisions are looked at, including cost of acquisition, country of origin and country of registration of investors like SoftBank, Naspers and Tiger Global, the time at which they had a stake in Flipkart before the Walmart acquisition, whether that stake was acquired in one go, whether they exit Flipkart completely and which double taxation avoidance agreement will be applicable in their cases.
The government official quoted above said the assessment year for which Walmart, SoftBank, Sachin Bansal, Naspers, Tiger Global and others have to pay would depend on when the deal is completed. “If the acquisition is completed in fiscal year 2018-19, then it will be applicable for assessment year 2019-20,” the person said.
It is still not certain if SoftBank, largest shareholder in Flipkart at a little over 20 per cent equity, will completely exit through the deal. Masayoshi Son, chief executive of SoftBank, had in a webinar with investors on Tuesday committed a gaffe by confirming that the deal was done, prior to it being announced officially. He said SoftBank’s stake would be worth about $4 billion, for the $2.5 billion it had invested in Flipkart last August.
ALSO READ: SoftBank dilly-dallies on Flipkart stake sale after Walmart acquisition
While it is not certain, Naspers might completely exit from the deal and earn around $2 bn. Tiger Global’s stake would be worth around $4 bn but it is not clear how much equity it would have on completion of the deal.
Sachin Bansal’s stake in the company after the $350-million buyback of shares in Flipkart’s Singapore-based parent entity late last month stands at 5.96 per cent. This amounts to $1.23 billion, at a $20.8 billion valuation for the Flipkart group, a nearly 75 per cent increase over its previous valuation of $12 bn reported in August 2017. Of the amount Walmart has earmarked to invest in Flipkart, $2 billion will be new equity funding. The rest will be utilised to acquire stakes of existing investors in the Bengaluru-based company.

Flipkart-Walmart deal: We need a level playing field, say retailers

While on the one side the government is allowing marketplace companies like Flipkart to access foreign capital, on the other hand, it is not allowing the Indian retailers to access foreign capital to grow better. This is pointing towards lack of a level playing field and it does not make any difference whether Tiger Global owns Flipkart or Walmart has it, alleges Retailers Association of India (RAI)
Kumar Rajagopalan, CEO, RAI said that the Flipkart-Walmart deal doesn’t make any big difference or impact on the country’s Retail industry as the ownership is getting changed only. The damage is being done for the last four to five years ever since marketplace companies like Flipkart were allowed to access foreign capital.

"While we have been telling that there is no level playing field, they are still not being taken care of. The real war is not about online and offline; our belief is that the real issue is about FDI in multi-brand retail is allowed or not," he said.
"We have been telling the government to allow Indian Retail to access global capital, but that has not happened yet. We have been curtailing ourselves though there is more room for growth. We are allowing one or two people come in and indulge in FDI trading," added Rajagopalan.
The RAI represents the retail industry in the country, with members such as Aditya Birla Retail Ltd, Arvind Lifestyle Brands Ltd, Madura Fashion and Lifestyle Ltd, Mahindra Retail Private Limited, Reliance Industries Ltd, Reliance Retail Ltd, Shoppers Stop Ltd, Titan Company Ltd, Timex Group India Ltd, eBay India Pvt Ltd, Ikea India Pvt.Ltd and Jasper Infotech Pvt.Ltd. (Snapdeal.com).
India is known as the best market to be in, currently in Retail, with the income levels and GDP growing and with a huge consumer base. While India has been looked at as the best market for almost all the companies out there for more than five years now, the FDI norms in the country did not allow for Indian retailers to access global capital and grow fast, and also the international multi-brand majors were not able to come in because of this.
However, the marketplace companies have been able to access foreign capital stating they are technology companies. RAI's stand has been that while the marketplaces have been telling that they are technology companies, they are also indulging themselves into pricing, selling to the end customer and offering discounts.
"There is trading happening in this country, which can get huge value and valuation. But because of the vague norms, the valuations are not necessarily captured in India," he alleges.
The government should open up the industry for foreign capital, at least step by step.
“It is good to see an Indian company is attracting global player like Walmart. But the question is, does the Indian retailer has level playing field?” he averred.
According to RAI, the Indian retail industry is estimated to grow at around 10 per cent on the backdrop of growing income level and GDP. Besides the GST has also accelerated the growth for the modern retailers and many global chains want to be part of this growth.