NOVEMBER
Cheap Online Shopping
May Soon End As Government Looks To Make A Strong Case FOR 'Indian Enterprise'
Consumers looking for good
online deals may soon be disappointed, as the government is proposing a policy
that makes a strong case for championing 'Indian' online enterprise. The policy
aims at ensuring a level playing field to local businesses in a market where
deep-pocketed foreign companies are investing heavily.
The draft e-commerce policy has proposed that 'deep discount' be stopped from a specified date to regulate the e-commerce sector. Deep discounting policy is a practice to lower prices on e-commerce platforms like Amazon and Flipkart.
A special policy is also envisaged for companies set up by Indians and selling 100% made-in-India goods. Unlike the present regime where e-commerce is done through a “marketplace” or a platform where others sell, the new dispensation will allow an “inventory-based” model where the companies will be directly selling to consumers with up to 49% FDI all.
The draft e-commerce policy has proposed that 'deep discount' be stopped from a specified date to regulate the e-commerce sector. Deep discounting policy is a practice to lower prices on e-commerce platforms like Amazon and Flipkart.
A special policy is also envisaged for companies set up by Indians and selling 100% made-in-India goods. Unlike the present regime where e-commerce is done through a “marketplace” or a platform where others sell, the new dispensation will allow an “inventory-based” model where the companies will be directly selling to consumers with up to 49% FDI all.
RISE OF ONLINE SHOPPING MAKES WAREHOUSES HOT PROPERTY IN INDIA
by
Pooja Thakur and Dhwani Pandya
India’s burgeoning logistics sector is gaining favor with property developers and investors, boosted by a growing consumer class’s embrace of online shopping.
With the nation’s residential market in the doldrums and good quality office space in short supply, logistics assets are attracting global players such as Brookfield Asset Management Inc., Canada Pension Plan Investment Board and Warburg Pincus LLC.
“India’s logistics sector is coming of age,” said Rushabh Desai, Asia-Pacific chief executive officer at Allianz Real Estate. The firm recently partnered with ESR Group for an initial $225 million investment targeting logistics properties in cities including Mumbai, Bangalore and Hyderabad, with a goal of growing to $1 billion in assets.
The introduction last year of a uniform national goods and services tax, replacing a plethora of state and federal levies, has helped unify India’s 29 states into a single market. That’s brought a structural shift to the logistics sector as small, fragmented networks are consolidated into large distribution chains with centralized hubs. The rise of e-commerce giants Amazon Inc. and Flipkart Online Services Pvt. has also stoked the need for seamless, last-mile delivery of goods in cities and the ..
India’s burgeoning logistics sector is gaining favor with property developers and investors, boosted by a growing consumer class’s embrace of online shopping.
With the nation’s residential market in the doldrums and good quality office space in short supply, logistics assets are attracting global players such as Brookfield Asset Management Inc., Canada Pension Plan Investment Board and Warburg Pincus LLC.
“India’s logistics sector is coming of age,” said Rushabh Desai, Asia-Pacific chief executive officer at Allianz Real Estate. The firm recently partnered with ESR Group for an initial $225 million investment targeting logistics properties in cities including Mumbai, Bangalore and Hyderabad, with a goal of growing to $1 billion in assets.
The introduction last year of a uniform national goods and services tax, replacing a plethora of state and federal levies, has helped unify India’s 29 states into a single market. That’s brought a structural shift to the logistics sector as small, fragmented networks are consolidated into large distribution chains with centralized hubs. The rise of e-commerce giants Amazon Inc. and Flipkart Online Services Pvt. has also stoked the need for seamless, last-mile delivery of goods in cities and the ..
Warehouses accounted for about $3.4 billion, or 26 percent, of private equity real-estate investments between 2014 and 2017, according to Knight Frank LLP. Returns for a warehouse development can reach 28 percent, and exceed 20 percent in most major markets, according to Knight Frank estimates.
The government has also given infrastructure status to the logistics industry, allowing developers to access lower-cost funding for developments.
“Over the next decade, we envisage a pot .. “Over the next decade, we envisage a potent mix of drivers to transform the large yet inefficient, logistics sector,” Alok Deshpande, an analyst at Edelweiss Securities Ltd., said in a note this week.
The rosy outlook is even encouraging some developers to shift their focus from housing to warehouses.
Panchshil Realty, which built one of India’s Trump-branded towers, is one. While it will complete existing residential projects, it won’t take on any new housing developments, and instead concentrate on logistics facilities and its existing hotel and office assets.
“The introduction of the goods and service tax has meant the advent of ‘One-Nation, One-Tax,’ and this has given a big impetus to the logistics sector,” said Prakash Mirpuri, a spokesman at Panchshil Realty. “So far the sector has not been institutionalized and this is a promising opportunity.”
FUTURE GROUP TO TAKE BRAND FACTORY ONLINE
Future
group will take online its fashion discount retail chain Brand Factory in
February next year, its Group CEO Kishore Biyani said.
This would be a major online project of the Future Group in the ecommerce space after it had closed its online furniture store business FabFurnish.
"In February, we would be launching one of our own online site brandfactory.in in February, which would be our biggest launch in ecommerce and online business," Biyani said.
He further said, "We are investing in the online business and trying to understand the space again."
According to Biyani, the group was one of the pioneers in the online sales in India with futurebazar.com, which was probably even earlier than Flipkart.
The company's effort on fabfurnish and tablet driven sales also did not worked and "lost lot of money in that business,"he said.
This would be a major online project of the Future Group in the ecommerce space after it had closed its online furniture store business FabFurnish.
"In February, we would be launching one of our own online site brandfactory.in in February, which would be our biggest launch in ecommerce and online business," Biyani said.
He further said, "We are investing in the online business and trying to understand the space again."
According to Biyani, the group was one of the pioneers in the online sales in India with futurebazar.com, which was probably even earlier than Flipkart.
The company's effort on fabfurnish and tablet driven sales also did not worked and "lost lot of money in that business,"he said.
He further said that the money which he lost on ventures like fabfurnish was "compensated" as the company learned "enough" from that.
"Today, if you look at our Hometown as a business, online business for us, which we are selling on other's site, this year we should be doing close to sell around Rs 100 crore," he said adding "we have learned something out of it".
However, on being asked about the reports over probable sale of around 9.5 per cent stake in Future Retail to the US-based online major Amazon, Biyani declined to comment.
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