PepsiCo to invest Rs 514 crore for UP snacks plant, Retail News, ET Retail

PepsiCo to invest Rs 514 crore for UP snacks plant NEW DELHI: PepsiCo India on Sunday said it will invest Rs 514 crore over three years, to set up a greenfield snacks manufacturing plant in Uttar Pradesh.

The new investment plan is in line with PepsiCo’s goal to double its snacks business in the country by 2022 and is expected to help create over 1500 jobs (direct and indirect), the company said in a statement.

“PepsiCo is committed to growing its food and beverage business sustainably in India. As we expand our operations, we will look forward to a fruitful association that will not only help create jobs and enable ancillary industries, but also ensure the socio-economic progress of potato farmers in the state,” said PepsiCo India president & CEO, Ahmed ElSheikh.

As part of this project, PepsiCo India would expand its backward integration with local farmers and the company will set up a cold storage facility to enable the supply chain.

PepsiCo India currently sources all the potato used in Lay’s and Uncle Chips from local farmers under its agri program for which it works with 24,000 farmers across 13 states through various agri and sourcing initiatives.

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QR Codes Help Payments Firms Up Offline Play, Retail News, ET Retail

QR Codes Help Payments Firms Up Offline Play Pratik.Bhakta

Bengaluru: Digital payments companies are increasingly looking at offline payments and trying to capture a larger share of this market by means of QR (Quick Response) codes.

While Paytm, PhonePe and Google Pay offer QR codes and acquire their own merchants as well, entities like BharatPe act as aggregators, onboarding merchants for all forms of Unified Payments Interface (UPI)-based payments.

Out of the transactions seen on the BharatPe platform, PhonePe had over 54% share in UPI transactions, while Google Pay had 30% and Paytm 12% in June.

On QR codes deployed by BharatPe, the share of PhonePe has increased steadily from 44% in January, a jump of 10 percentage points. Paytm may have a smaller share, but the company dominates the overall QR code-based transactions, since it has a chunk of offline payments through a proprietary QR code base of its own. Paytm recorded around 250 million transactions on Paytm QR through 12 million merchants, it said. Paytm QR accepts UPI payments made from any bank account through the Paytm app.

“We launched our innovative Paytm QR in 2015 and millions of people adopted it across the country, from the local kirana stores, autorickshaws and fast-food joints to top-end hotels and restaurants,” said Deepak Abbot, senior vice president at Paytm. “We have witnessed three times growth in the last one year, including both online and offline payments.”

PhonePe, on the other hand, did not comment on the exact number of transactions taking place through its QR codes, but said, it has 5.5 million offline merchants overall who exclusively accept UPI payments through PhonePe.

There is increased adoption of UPI payments through BharatPe, with 10 million transactions reported in June compared to 6 million in April, said Ashneer Grover, chief executive officer at BharatPe. “We are seeing average transaction value on our platform hovering around Rs 250, which I believe is a healthy sign,” he said.

The National Payments Corporation of India does not share details of transactions happening on BharatQR, the bank-led QR code programme that has all the payment railroads such as Visa, Mastercard, RuPay and American Express. NPCI has onboarded 28 banks to acquire merchants for such transactions.

Offline payments have emerged as a major area of debate as the government has proposed zero charges on all forms of digital payments to encourage adoption.

While a section of payment companies have raised concerns, most smartphone-based payment players have supported it. “Removal of MDR is a welcome step, no more tolling in the name of payments, everyone has to play a simple credit game now,” said Grover.

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Flipkart CEO sees UP becoming India’s first trillion-dollar state economy, Retail News, ET Retail

Flipkart CEO sees UP becoming India's first trillion-dollar state economy LUCKNOW: Projects that formed part of the second Ground Breaking Ceremony will help in Uttar Pradesh‘s quest to be first trillion-dollar state economy in India, Flipkart Group Chief Executive Officer Kalyan Krishnamurthy said here Sunday.

“The groundbreaking ceremony will play a key role in propelling Uttar Pradesh as an industrial and innovation hub in the country and help in the state’s quest to be India’s first trillion-dollar state economy,” he said on the sidelines of the event for groundbreaking of industrial projects worth around Rs 65,000 crore, for which memoranda of understanding were signed during the UP Investors’ Summit last year.

Krishnamurthy also said Chief Minister Yogi Adityanath’s “vision and enabling initiatives will boost investor confidence in the state” as ease of doing business is expected to improve.

“UP is an important state for us at Flipkart. We not only have many sellers and local MSME (micro, small and medium enterprise) manufacturers who are accessing the nationwide market to sell their products more efficiently and in a cost effective way, but we are also encouraging local handicrafts to market their products.

“Thousands of artisans, small businesses and women entrepreneurs are finding partnership with Flipkart beneficial as they grow and connect with a pan-India market,” he said.

Using homegrown technology and innovation, Flipkart is proud of making a difference in the lives of millions of people, he said, adding that through Myntra, a fashion platform, “we are excited to give market access to artisans/weavers across the state”.

Krishnamurthy lauded the chief minister’s efforts to partner with the industry to drive inclusive growth in the state.

“We are looking forward to partner with UP as we bring in the next 200-300 million customers to experience e-commerce and connect lakhs of MSME suppliers, small farmers and farmer-producer organisations to the marketplace while creating lakhs of new livelihood opportunities,” the Flipkart Group CEO added.

Flipkart, which was acquired by the US retail firm Walmart last year, is equally keen on promoting MSMEs and one-district-one-product (ODOP) in Uttar Pradesh, its Chief Corporate Affairs Officer Rajneesh Kumar told .

The ODOP project is one of the key initiatives of the Adityanath government which seeks to promote traditional industries synonymous with their respective districts to spur the local economy and create jobs, Kumar said.

There are specific products in Uttar Pradesh that are found nowhere else, such as ancient and nutritious ‘Kala namak’ rice, the rare and intriguing wheat-stalk craft, world-famous chikankari, zari-zardozi work on clothes, and also the exquisite Banarasi silk work.

The state government during the investor meet in February 2018 had signed 1,047 initial agreements entailing proposed investment of Rs 4.68 lakh crore by private and public sector companies.

The state in July last year organised the first ground-breaking ceremony to mark the launch of industrial proposals worth Rs 60,000 crore.

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Paytm Money to get Rs 250 crore, eyes low-cost broking business, Retail News, ET Retail

Paytm Money to get Rs 250 crore, eyes low-cost broking business One97 Communications-promoted Paytm Money will put an additional Rs 250 crore in its investment platform in 12-18 months.

This will be on top of a Rs 80-crore investment made by the promoter in the first year of business. After building a retail base of nearly one million active users through its direct mutual fund distribution platform, the company plans to disrupt the low-cost broking model. It has already received approvals for providing stockbroking and depository services.

What sets Paytm Money apart from other distributors is that it is registered as an investment adviser with Sebi and does not receive any commission and investors can choose to put money in any of the direct schemes of all 40 mutual funds in the country. Since the entire process of on-boarding the customer to investment and redemption is done through a mobile app without human intervention, the company can enable systematic investment plans (SIPs) for as low as Rs 100.

Speaking to TOI, Paytm Money director Pravin Jadhav said that within a year of launch, the firm has become the largest platform for direct SIP investment plans. “Of the total number of SIP registrations in the country, 40% of accounts go through Paytm Money. We are expanding the market as 80% of our users are first-time investors in the capital markets and come from beyond the top 30 cities in the country,” said Jadhav.

According to Jadhav, enabling the micro-SIPs will expand the mutual fund investor market to 50 million in four-five years from 19 million at present. “Our focus is on the simplicity of investing for common people. Instead of complex features, we plan to have in the app short videos of fund managers, which will help the investors understand the scheme,” he said.

The company has been able to create a straight-through platform by incorporating UPI for drawing payments from bank accounts and has now introduced net banking-based electronic mandates for SIP plans. Investors can view the performance of every scheme and compare it with others. “Of the total investors in mutual funds, 20% have chosen to park money in instant redemption schemes. Of the rest, 60% of investors have chosen equity, while another 25% have gone for tax-saving schemes, and remaining in debt schemes,” said Jadhav.

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E-market Udaan plans new round at $2.7 billion valuation, Retail News, ET Retail

E-market Udaan plans new round at $2.7 billion valuation BENGALURU: Udaan, an online marketplace that supplies products and gives loans to small merchants, is in talks to raise a new round of funding of around $500 million.

This will be at a post-money valuation of close to $2.7 billion, as business-to-business (B2B) startups continue to be high on investors’ radar. The three-year-old entity had become the fastest startup in the country to reach unicorn status last year.

Udaan is in talks with existing backers DST Global and Lightspeed Venture Partners — besides new investors, including hedge funds like US-based Altimeter Capital and China’s Hillhouse Capital — to invest in the latest round, said two sources briefed on the matter. “The capital is being raised to build out the supply chain network for the company besides scaling up the NBFC business,” said one of the sources.

Udaan is looking to scale up its expansion in the market where players like US retail giants Walmart and Amazon, Chinese e-commerce major Alibaba and homegrown giant Reliance Industries are also expected to make an aggressive push.

E-market Udaan plans new round at $2.7 billion valuation

The funding round is expected to be finalised in the coming months. Since inception, Udaan has raised three rounds, taking total capital raised to $285 million. While Lightspeed and DST Global are existing backers, Altimeter Capital has backed companies like Practo and Pine Labs in India, while Hillhouse has backed Swiggy, CarDekho and Paper Boat.

Emailed queries sent to Lightspeed, DST Global, Hillhouse and Altimeter did not elicit a response till the time of going to press. Udaan co-founder Sujeet Kumar declined to comment.

The company has been doing annualised gross sales of over $2 billion across categories — from fruits & vegetables, smartphones, fast moving consumer goods (FMCG), fashion & apparel, staples to electronics — said the sources. Udaan is also investing heavily to build out its network, losing over $10 million a month.

The startup was founded in June 2016 by three former top Flipkart executives — Vaibhav Gupta, Amod Malviya and Sujeet Kumar. While Gupta was SVP of business finance and analytics at Flipkart, Malviya was chief technology officer. Kumar was one of the earliest employees responsible for building logistics unit Ekart and was also looking after WS Retail, the main seller on Flipkart.

Udaan started out by building a marketplace for merchants to buy and sell goods from distributors and manufacturers. It has a network of 2 million retailers or kiranas across 900 cities and towns in the country and has over 25,000 sellers on the platform, including small manufacturers, wholesalers and companies like Reckitt Benckiser, Marico and Motorola. Besides offering supply chain solutions, it has also started disbursing loans in the range of Rs 10,000 to Rs 2 lakh to about 1 lakh buyers on the platform after setting up an NBFC last year.

Overall, the B2B commerce space has been attracting money in the last few months as Tiger Global Management led a $90-million round in vegetables supply chain player NinjaCart. Tiger Global, along with Sequoia, also backed industrial goods marketplace Moglix with a $60-million round.

The interest in the space is being driven by investors’ belief that companies can build more profitable models. Last month, one of the country’s oldest B2B classifieds and commerce platform IndiaMart also went public in a Rs 475-crore IPO with share prices shooting up 50% on its listing day.

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Rural India has to progress for country to progress, says HUL chairman Sanjiv Mehta, Retail News, ET Retail

Rural India has to progress for country to progress, says HUL chairman Sanjiv MehtaHindustan Unilever chairman Sanjiv Mehta expects government measures such as rural infrastructure, housing, electricity, water and healthcare will benefit the country. “These are all the right steps to benefit a large section of our population. It is extremely important that the rewards of progress be shared with our people who have not had the opportunity to get the benefit from our country’s development,” Mehta told ET’s Sagar Malviya in an interview. Mehta’s optimism comes against a backdrop of slowing consumer demand over the past few quarters. The local unit of the Anglo-Dutch company said the fast-moving consumer market is an important contributor to growth and reflects the state of the economy. Edited excerpts:

HUL posted a seven-quarter low sales and Nielsen has lowered the market’s projected growth rate. How bad is the situation, especially in rural markets?
Nothing moves in a linear fashion. There will be moments where you will be in the classical S curve, then you start to plateau and then you have to create another S curve. That is how we build the categories in our business. A company like HUL is in many ways a microcosm of India’s economy. There is so much scope to grow in rural (markets) because our penetration and consumption levels are so low. While our average FMCG consumption in the country is just about $30-35, in rural India it is half this amount. If India has to progress, rural has to progress.

Most companies argue that the five years of PM Narendra Modi were spent on strengthening infrastructure. With his return to power with a stronger mandate, will anything change in the near future?
India is slowly coming closer to becoming a $3 trillion economy. And when a $3-trillion economy grows at 5-6%, it is significant… If we play our cards well as a country, we should be having a $10 trillion economy by around 2032. It could always be plus-minus a couple of years, but this is the trajectory the country has to aspire for. We are at a very sweet spot today and the real power of compounding comes in when you get the benefit of scale… Our ability to lift people out of the poverty trap and take them to the lower middle class, and at the same time, move people from the lower middle class to the higher middle class is the big shift that is happening. I remain very optimistic about India and Unilever as a company is very optimistic about India and the prospects for HUL in India.

What should be the government’s focus to revive demand?
In the longer-term horizon, the country needs to focus on a few key areas. One is rural. We all agree that the equation of over 60% of the population living primarily on 16% of the GDP is not sustainable… The bottom 50% of the population has a very small share of consumption and India cannot progress unless we are able to lift these people and make a substantial difference to their quality of living. The other important bit is the country’s growth can’t be dependent only on large corporations. …equally important are micro, small and medium enterprises. So, whether it is provision of Mudra scheme, or subvention of interest rates, or steps to reduce corporate tax for enterprises with a turnover up to Rs 400 crore, these are the right steps the government has taken.

How fair are budget measures such as higher surcharge on the super-rich?
While our economy is nearly $3 trillion, we are not yet a rich nation. Our average per capita income is just a little over $2,000… When the finance minister talks about the rich having to contribute more, there is merit in the argument. That’s one side of it. On the other side, if you look at the number of taxpayers, especially the statistics of those who declare income of over Rs 5 crore, they are just a handful in a big country like India. It is essential for us to bring more people into the tax net, raise compliance significantly.

For how long can such a ‘Robin Hood tax’ work in India?
At the end of the day, it is all about balancing. The country needs revenue for development. You have the constraints of the fiscal deficit, which, if not contained, could impact the country’s rating. We have massive needs with big money to be put in for development programmes and infrastructure. So, it’s a tightrope walk. As an individual, I don’t mind contributing higher amount of taxes… We also need to create a climate where there is a pride in contributing to the nation’s development by paying taxes…

What is the one crucial thing that the government should do to trigger growth?
The 75-bps reduction in interest rates by the monetary policy committee in last six months, moving from to neutral to accommodative stance, planned Rs 70,000 crore infusion in the banking system, should also give confidence to the banks to start opening their loan books. In a company, there is never one thing but several things which, when done well, result in the virtuous cycle of growth. Similarly, for an economy, it’s not one big reform but a series of actions are required to kickstart the next level of higher growth trajectory.

Why hasn’t GST helped HUL gain share from smaller or non-compliant rivals?
When GST happened, we thought it will become a level playing field because the people who were not paying taxes will come into the tax net. But that really required full implementation of e-way bill the way it was originally envisaged. Then it got a bit diluted. I believe, now, the government will go after compliance on a much stronger note. So, in the first two years of GST, I don’t think there was much impact on the small, local brands.

What really changed, especially after GST?
Today, as a company, we have significantly enhanced speed and flexibility in the business… In the last 5-6 years we have seen slowdown happening because of drought, we have seen the impact on consumption because of demonetisation and we saw the disruption which happened because of introduction of GST. We have seen oil prices at $30 and we have seen oil prices at near $100. We have seen rapid devaluation of Indian rupee and have seen sudden advent of new competitors. In all these changes, HUL has demonstrated immense amount of resilience and has come out stronger.

Should we expect GSK Consumer Healthcare team to shift to Mumbai headquarters upon completion of merger with HUL? Will there be job losses?
We would like a vertical take-off on Day 1, so preparation is under way for that and it’s not easy. In this era of technology, we have operations spread all over the country, so we are not in any rush to physically sit together. For the time being, we are not even thinking of bringing them to Mumbai. Our whole idea is to integrate the operations, make the people feel comfortable, get the business growing and boost the innovation pipeline. We want to make this a very successful integration of two large businesses.

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Dabur regains market share, looks at boosting rural reach, Retail News, ET Retail

Dabur regains market share, looks at boosting rural reach New Delhi: Dabur India has regained lost market share, with the threat posed by Patanjali having receded, chairman Amit Burman told ET in his first interview after being elevated to the post this month.

“It (Patanjali’s) was a disruptive strategy to kill competition by price, like it happens in many industries. But after the disrupting, things settle down and ultimately product quality and depth of distribution are what matter,” he said.

Amid a slowing economy, intensifying competition and volatile markets, the Rs 8,500 crore-plus Dabur has identified eight power brands including Vatika shampoo, Red toothpaste, Real juice and Amla hair oil and is investing disproportionately to push them, said Burman, 50.

The youngest chairman of Dabur and a fifth-generation member of the founder family, Burman said his focus would be to enhance science-based ayurveda products, premiumisation, rural distribution and e-commerce.

“We have different products which are helping us. Our strength has been in healthcare, where we have seen good growth. That’s where newer products will come in,” said Burman, who is also promoter of independent food retailing company Lite Bite Foods.

Inskincare, where Dabur has had a relatively smaller presence, it plans to step up premiumisation and high-margin launches. It is creating products only for e-commerce in spaces such as babycare to leverage on the scale opportunity it presents. Online grocery sales for the fast-moving consumer goods sector are only 2% of the overall Rs 3 lakh crore-plus category presently but projected to increase 11% by 2030.

Another target, Burman said, would be expansion of the company’s rural reach to 55,000 villages by March 2020, up from 48,000 presently. Citing a sharp rural slowdown, market research company Nielsen revised its growth forecast for the fast-moving consumer goods (FMCG) sector to 9-10% in 2019 from its previous outlook of 11-12%.

“For rural markets, we will expand the footprint to new villages, while in urban centres we will leverage rapidly growing channels such as e-commerce and cash-and-carry,” Burman said.

Baba Ramdev-led Patanjali Ayurved, which sells staples, personal care and packaged foods, had forced almost all consumer goods companies to accelerate their presence in the ayurveda and natural products space over the past four years.

In the Rs 1,200 crore organised honey market, Dabur Honey’s market share dropped to almost 40% a year after Patanjali’s entry from about 60% three years ago. It has since recovered to about 54% now. In chyawanprash, Dabur’s share, which had slipped to 58% in 2016, has returned to over 60% now.

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Government plans e-commerce boost for 200 rural products, Retail News, ET Retail

Government plans e-commerce boost for 200 rural products New Delhi: Rural artisans may soon be able to sell their products through e-commerce platforms as part of a facilitation plan envisaged by the government that includes setting up of producer companies in select clusters.

The rural development ministry has drawn up a list of 200 products that will be sold on e-commerce platforms, including the Government e-Marketplace (GeM), said officials. The ministry has joined hands with Tata Trusts to set up a not-for-profit company under Section 25 of Companies Act to provide professional support to rural artisans to sell their products globally, they said.

“We are in the process of setting up clusters or producer companies by bringing in people making similar products,” a senior government official told ET.

Some handicrafts and handloom products, such as Madhubani paintings from Bihar, tribal paintings from Jharkhand, terracotta items from Rajasthan and tussar silk wear from Bhagalpur, made by rural artisans, mainly women entrepreneurs, are already being sold online via Amazon and Flipkart.

The govt is now keen to expand the initiative as part of the 100-day plan in the second term of the Narendra Modi government. The products identified by the government could include stationery items such as folders, pen holders and gift items, according to those in the know.

Government plans e-commerce boost for 200 rural products
The official cited earlier said the government’s initiative will help rural artisans legally qualify to be on e-commerce platforms and cater to a larger market.

A dedicated value chain development centre, with four-five regional offices, is being set up by the government to provide complete value chain solutions to rural artisans. This will provide artisans technical assistance as well as help in designing and packaging of products to enhance their global appeal.

The plan includes engaging professional photographers and content writers to ensure products featured on e-commerce platforms have a story to tell to make them more attractive to buyers.

“Coming on to the e-commerce platform will help artisans get larger volumes and better prices for their products even after parting with at least 40% (of revenue) to these sites as seller charges,” said G Vinod Nair, manager-non-farm livelihood products, National Rural Livelihood Mission.

At present, rural artisans sell their products through central and state exhibitions organised by the ministry or directly through traders, besides catering to local demand restricted to their own districts.

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