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  • Airtel Success Story – How is it Winning Customers for Life?

    Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Airtel.

    Airtel is a name that unites large numbers of people in India with billions of people all over the world. This telecom giant is currently one of the most reputable brands in the industry. Nothing short of remarkable can be said about the company’s journey from being a modest regional operator restricted to the city of Delhi to sclaing to become the second biggest mobile provider in the Asia Pacific region.

    The second-largest service provider in India, Airtel, said that the organisation has emerged “quite firmly” from the five-year tornado and is now highly solid, adding that it is under tremendous circumstances that an organization’s real institutions and character are tested.

    According to Sunil Mittal, Airtel’s chairman, telecom is among the most “professionalised” businesses in the nation and its solid organisational framework has helped the company weather wave after wave of adversity. He said that best-in-class personnel handle Airtel, which makes Airtel what it is today.

    An international provider of telecom services with headquarters in New Delhi is Bharti Airtel Limited, popularly known as Airtel.

    Know more about Airtel, its company history, the founder of Airtel, its business model, investments, etc., by reading this article further.

    Airtel – Company Highlights

    Startup Name Airtel
    Full Name Bharti Airtel Limited
    Headquarters Nelson Mandela Road, New Delhi, India
    Industry Telecommunications
    Founders Sunil Bharti Mittal
    Founded 7 July 1995
    Key people Sunil Bharti Mittal (Chairman), and Gopal Vittal ( CEO)
    Website airtel.com

    About Airtel and How it Works?
    Airtel – Industry
    Airtel – Name, Logo, and Tagline
    Airtel – Founders
    Airtel – Startup Story
    Airtel – Mission, and Vision Statement
    Airtel – Business Model
    Airtel – Growth
    Airtel – Joint Ventures
    Airtel – Sponsorships
    Airtel – Funding, and Investors
    Airtel – Investments
    Airtel – Acquisitions
    Airtel – Competitors
    Airtel – Challenges Faced
    Airtel – Future Plans

    About Airtel and How it Works?

    Bharti Airtel Ltd. does business in the provision of direct-to-home solutions, communications systems and services, and passive infrastructure services, The following business segments make up how the firm conducts its operations:

    Mobile services for Africa, India, and South Asia, as well as for Airtel Business, Tower Infrastructure Services, and Digital TV Services. The segment for mobile services in India and South Asia includes voice and data telecom services delivered through wireless technologies in those regions. The distribution of data and voice telecommunication solutions to customers in the African continent is covered under the Mobile Services Africa section.

    The voice and data communications based on fixed-network and broadband technologies are covered by the Telemedia Services category.

    The sector for digital broadcasting services offered over the direct-to-home network is called “Digital TV Services.” By acting as a single point of contact for all communications requirements spanning data and voice, network integration, and managed services, the Airtel Business sector encompasses end-to-end telecom solutions being delivered to big Indian and international organisations.

    Installing, running, and maintaining wireless communication towers in India are all included in the category called Tower Infrastructure Services.

    Mobile commerce services are included in the other’s section, along with administrative and support services.

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    Airtel – Industry

    Information may be transmitted using a variety of methods through the wire, radio, optical, or other electromagnetic systems. This is known as telecommunication. As a result, slower systems (like postal mail) are not included in the field. It has its roots in humans’ need for communication at a distance greater than what is possible with the human voice, but with a similar level of expediency.

    The volume of the worldwide telecom services industry, which was estimated at USD 1,657.7 billion in 2021, is anticipated to rise at a CAGR of 5.4% from 2022 to 2028. One of the main drivers propelling this business is the increase in expenditure on the installation of 5G infrastructures as a result of the shift in consumer preference toward smartphone devices and next-generation technology.

    Other possible drivers of market expansion include an increase in mobile subscribers, skyrocketing high-speed data connectivity demand, and increased demand for value-added managed services.

    Unquestionably, one of the main areas for ongoing technical developments over the past few decades has been the worldwide communication network.

    Airtel – Name, Logo, and Tagline

    Company Logo of Airtel
    Company Logo of Airtel

    Airtel’s full name is Bharti Airtel.

    Bharti Tele-Ventures Ltd, the original name of Bharti Airtel Ltd, was formed in 1995. Bharti Telecom Ltd., an Indian firm that was formed, pushed the business.

    The company claims that its distinctive symbol is an interpretation of the letter “a” from its name Airtel. It is warm and inviting, almost like a living thing, thanks to its curved shape and the soft accents on the red colour. It stands for an unstoppable dynamic force of energy that strengthens our relationship with our clients.

    Bharti Airtel’s tagline says, “Express Yourself.”

    Airtel – Founders

    Airtel was founded by Sunil Bharti Mittal in 1995.

    Founder of Airtel - Sunil Mittal
    Founder of Airtel – Sunil Mittal

    Sunil Bharti Mittal

    Bharti Enterprises, which includes holdings in telecom, retail, real estate, financial services, agri-products, and renewable energy, was founded and is led by Sunil Bharti Mittal. With more than 300 million users in South Asia and Africa, Bharti Airtel, the group’s core business, ranks third among all telecom providers globally.

    Presently, Sunil serves as the International Chamber of Commerce’s First Vice-Chairman (ICC). He also sits on the International Telecommunication Union (ITU) Telecom Board, the Broadband Commission, the Prime Minister of Singapore’s Research, Innovation, and Enterprise Council, the Prime Minister of India’s Council on Trade and Industry, and the Chairman of the Telecom Steering Committee of the World Economic Forum (WEF).

    He is a member of the India-US, India-UK, and India-Japan CEO Forums and serves as co-chair of the India-Africa Business Council and the India-Sri Lanka CEO Forum. He formerly held the position of President of India’s leading business association, the Confederation of Indian Industry.

    One of India’s highest civilian honours, the Padma Bhushan, was given to Sunil. Sunil, a graduate of Harvard Business School, serves on the Governing Board of the Indian School of Business, the Board of Dean’s Advisors of Harvard Business School, and the Global Advisory Council of Harvard University. He is on the board of directors of the Qatar Foundation Endowment and the Carnegie Endowment for International Peace, respectively.

    Airtel – Startup Story

    Bharti Telecom Limited, which had its humble origins in the Indian telecom sector in 1986, is where Airtel got its start. When most of India was still using rotary phones in 1986, Sunil Bharti Mittal’s firm was the first to sell push-button phones in that nation. In their first joint venture, Siemens AG of Germany, they switched from importing push-button landlines from Taiwan to manufacturing them in India.

    To replace the outdated, clumsy telephones that were in use at the time, Sunil Mittal began making push-button phones in India in 1984. Previously, he had imported them from a Singaporean business, Singtel.

    To produce electronic push-button phones, Bharti Telecom Limited (BTL) was established and a technological partnership with Siemens AG of Germany was established. Bharti began producing fax machines, cordless phones, and other telecom equipment in the early 1990s. He gave the name “Mitbrau” to his first push-button phone.

    He acquired one of the four licences for mobile phone networks that were available for auction in India in 1992. With the French telecom company Vivendi, Mittal successfully closed a transaction. He was one of the first business people in India to see the mobile telecom industry as a key growth sector.

    When Bharti Cellular Limited was established to provide cellular services under the brand name Airtel, his plans were ultimately authorised by the government in 1994, and he debuted services in Delhi in 1995.

    Bharti was the first telecom provider to surpass the 2 million mobile subscriber threshold in a short period. Under the brand name “India one,” Bharti has reduced the STD cellular charges in India.

    Later, with innovation at its core, the business introduced several telecom technologies to the Indian market. Bharti Telecom Limited established the foundation for the business’ mobile activities in 1992 by acquiring a licence to construct a cellular network in Delhi.

    As Bharti Tele-Ventures, it started operating in Delhi in 1995. Through different collaborations and acquisitions, the service was expanded to several additional states.

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    Airtel – Mission, and Vision Statement

    Airtel’s vision statement says, “Our vision is to enrich the lives of our customers. Our obsession is to win customers for life through an exceptional experience. “

    Airtel’s mission statement says, “Hunger to win customers for life.”

    Airtel – Business Model

    The two primary areas of concentration for Airtel are company growth or expansion and client acquisition and servicing (retention). Their mission and vision clearly express that their ultimate objective is to become a telecom service that is appreciated across the world, with a primary focus on customer pleasure and the provision of cutting-edge services that are frequently more affordable than traditional offerings.

    Technology, network administration, backend programs, and other services are among the numerous tasks that are outsourced. Airtel was the first to use this business model, and it serves as an example for many new players.

    Apart from their advertising, marketing, and substantial funding, Airtel believes in contracting everything else and follows the “minutes factory” strategy of low price and high quantity.

    As the innovator of such a strategy, Airtel is well known for motivating tens of thousands of other businesses and entrepreneurs. In addition to Ericsson, Huawei, and Nokia Networks providing and maintaining Airtel’s equipment, Amdocs, a US-based company, offers Airtel the IT help the company needs.

    In addition to a B2B model registered under Airtel Business that supports entrepreneurs and SMEs, it also employs a B2C strategy to generate revenue from its clients. Airtel differentiates itself apart because of its distinctive business strategy, which tries to offer clients the greatest services at reasonable pricing.

    It is important to keep in mind that Airtel is not one of the businesses that have seen rapid expansion, but rather one that has established itself as the industry leader by innovating and deserving of that position.

    Further easing its path was the fact that it is one of the few telecom service providers to have understood the significance of value-added services (VAS) from the beginning.

    Airtel – Growth

    Airtel is not a startup that is unknown to growth. Being one of the market leaders, commanding the telecommunications industry of India, Airtel has seen a world of growth since it was founded back in 1995.

    Some of the major growth highlights of Airtel at a glance are:

    • Airtel is recognised as the 2nd largest mobile network operator in India and the 2nd largest in the world as well.
    • Airtel operates in 18+ countries across South Asia and Africa, and in the Channel Islands.
    • The company was chosen as the 2nd most valuable brand from India in the first-ever Brandz ranking
    • Airtel pioneered outsourcing all of its business operations as a business strategy. Yes, it outsources all of the operations except marketing, sales and finance
    • Airtel is credited for building the ‘minutes factory’ model of low cost and high volumes

    Airtel 5G Services

    Airtel has declared that it will be launching its 5G services later this month, as per reports dated August 10, 2022. The company CEO and MD, Gopal Vittal stated that the company will “extend to a pan-India rollout very soon” after starting the 5G services. These services will be further extended to 5000+ Indian towns and the key rural areas of the country by 2024. This will make it the biggest rollout in history.    

    Airtel – Joint Ventures

    Airtel-Vodafone

    Following the signing of a contract with Vodafone, Jersey Airtel, and Guernsey Airtel, two wholly-owned companies of the Bharti Group, announced on May 1 that they will begin offering mobile services in the British Crown Dependency islands of Jersey and Guernsey under the name Airtel-Vodafone. In Jersey and Guernsey, a 3G network is run by Airtel-Vodafone.

    Airtel-Ericsson

    Airtel’s mobile networks throughout Africa were managed and optimised by Ericsson under a five-year contract that Bharti and Ericsson inked in July 2011. With the most recent technologies, including its multi-standard RBS 6000 base station, Ericsson modernised and improved Airtel’s mobile networks throughout Africa.

    Ericsson also offered technology consultancy, network planning & design, and network implementation as part of the modernisation. In Asian operations, Ericsson has served as the managed services and network technology partner.

    Airtel – Sponsorships

    • Airtel and Manchester United struck a significant agreement on May 9, 2009. As a consequence of the agreement, Airtel was granted the right to broadcast the team’s games to its subscribers.
    • The Champions League Twenty20 cricket competition will now be sponsored by Bharti Airtel thanks to a five-year agreement they made with ESPN Star Sports.
    • Additionally, Airtel agreed to serve as the Indian Grand Prix’s headline sponsor.
    • The FIA GT World Cup for 2018–21 is sponsored by Airtel.
    • To serve as the I-title League’s sponsor for the 2013–14 season, Airtel inked a contract.
    • Since 2006, Airtel has been the primary sponsor of the Vijay TV shows Airtel Super Singer and Airtel Super Singer Junior.

    Airtel – Funding, and Investors

    Airtel has raised over $4.4 bn in over 7 funding rounds that the company has seen to date. The last funding round was led by Google, a part of which was completed on July 1, 2022, and allotment of shares part of the deal was completed on July 14, 2022. It was earmarked that Google would be picking up a minority stake of 1.28% then, from the telecom service provider. This deal was made after 5 months since it was proposed. It was on July 14th, 2022, that the telecom giant approved the allotment of more than 71.17 crore shares to the tech behemoth, Google, at an issue price of Rs 734 per equity share, which includes a premium of Rs 729.

    It was at a meeting of the ‘Special Committee of Directors for Preferential Allotment’ that this decision of the allotment of shares was taken. After this, now the stakes of Google in Airtel stand at 1.20% of the total post-equity shares or 1.17% of the telecom company on a fully-diluted basis.

    Date Round Amount lead Investors
    July 14, 2022 Post-IPO Equity $700M Google
    Jan 28, 2022 Corporate Round $300M Google
    Feb 25, 2021 Post-IPO Debt $1.3B –
    Oct 9, 2019 Post-IPO Debt $750M –
    Feb 5, 2018 Post-IPO Equity ₹26.5B Singtel
    Dec 13, 2017 Post-IPO Equity $350M Warburg Pincus
    Aug 22, 2016 Post-IPO Equity $659M –

    Airtel – Investments

    Airtel has made 15 investments to date. The last Airtel investment was in Avaada Energy, where the company invested close to $1 mn on March 10, 2022. Here are the details of the recent Airtel investments:

    Date Organization Name Round Amount
    Mar 10, 2022 Avaada Energy Corporate Round $986.20K
    Feb 25, 2022 Indus Towers Post-IPO Secondary $299.09 mn
    Jan 31, 2022 Lavelle Networks Corporate Round –
    Dec 18, 2021 Vahan Corporate Round –
    Sep 15, 2021 Vahan Series A $7.38 mn
    Nov 21, 2020 Avaada MHBuldhana Private Equity Round $569.34K
    Sep 23, 2020 Waybeo Corporate Round –
    Jun 17, 2020 Lattu kids Corporate Round –
    Jun 9, 2020 Robi Axiata Corporate Round –
    Oct 25, 2019 Vahan Seed Round –

    Airtel – Acquisitions

    Quikmile was the last acquisition of Airtel that happened on November 26, 2019. There are a total of 7 acquisitions made by Airtel to date.

    Acquiree Name About Acquiree Date Amount
    Quikmile Integrated SaaS product for logistics. Nov 26, 2019 –
    AuthMe Id Services AuthMe Id Services develops and offers artificial intelligence (AI) solutions to resolve customer complaints and queries. Oct 3, 2018 –
    Telenor India Telenor, an Indian mobile network operator. Aug 3, 2017 –
    Tikona- 4G Tikona 4G Home Broadband is faster than fast, one can stream a video. Mar 24, 2017 ₹1.6B
    Telenor (India) Communications Pvt. Ltd. Telenor (India) Communications Pvt. Ltd. is a mobile network operator company. Feb 23, 2017 –
    MENA Submarine Cable Systems MENA Submarine Cable Systems is a carrier neutral cable operator. Dec 22, 2016 $100M
    Augere Augere is a wireless broadband business founded in 2007. Dec 31, 2015 –

    Airtel – Competitors

    Top competitors in the competitive list of Airtel are:

    • Reliance Jio
    • Vodafone (Europe, Africa, India, Australia, New Zealand)
    • Verizon Wireless (USA)
    • AT&T Mobility
    • Dialog Axiata Mobile Services
    • Tigo
    • TELUS Mobility
    • TIM
    • Grameenphone

    Airtel – Challenges Faced

    A code employed by the business was allegedly responsible for violating users’ privacy in June 2015.

    Even though India’s global telecom sector is one of the fastest-growing in the world, the Indian telecom market is overheated with 14 contenders and overcapacity.

    Additionally, the metro and other major cities have at least a 100% penetration rate, while rural India, which accounts for more than 60% of new subscribers, only has a 20% penetration rate.

    Rural super-stockists and Rural Distributors were included in the two-tiered structure that Airtel planned to construct. Young business owners assigned regions around a few cell towers, and the rural distributors were in charge of bringing in new clients.

    Consumers had a dread of technology, which added to the difficulties presented by distance in terms of service expectations. They refused to work with call centres. In rural India, Airtel established 25,000 Service Centers.

    In order to address service requests in addition to selling new connections and recharges, a specialised retailer in the village was trained. The retailer got more trust, which improved walk-in business, while Airtel offered in-person support contacts. Each circle has a hotline or call centre that offered this real-time backup support.

    Received concerns from consumers that their accounts were being established without their authorization, the Unique Identification Authority of India (UIDAI) suspended Bharti Airtel and Airtel Payments Bank Limited’s licence for eKYC of Aadhar on December 16, 2017. In certain cases, LPG subsidies were even deposited into Airtel Payments Bank accounts.

    Airtel – Future Plans

    In order to meet the demands of India’s rapidly expanding digital economy, Bharti Airtel Limited (“Airtel”) launched a redesigned brand identity for its data centre business under the name “Nxtra by Airtel” and detailed investment plans. The largest network of data centres in India belongs to Nxtra by Airtel.

    Currently, it administers crucial submarine landing sites and runs 10 big and 120 edge data centres spread strategically across India. It provides a safe and scalable integrated solution to global hyperscalers, major Indian corporations, startups, SMEs, and governments when combined with Airtel’s global network.

    With the advent of 5G, a rapidly expanding digital economy, businesses moving to the cloud, and regional data storage laws, India is seeing a significant need for dependable data centre solutions. By 2023, the installed capacity of the Indian data centre market is anticipated to more than double, rising from around 450 MW to 1074 MW.

    In order to further expand its network of hyperscale and edge data centres, which is already the best in the business, Nxtra by Airtel expects to invest Rs 5,000 crores by 2025. New data centre parks will be added in significant metro areas. To address the soaring demand and solidify its network leadership, the investment would increase Nxtra by Airtel’s installed capacity to over 400 MW.

    Ajay Chitkara, Director and CEO, Airtel Business said “Airtel has built the largest data centre network in India and we are now doubling down on this business to scale up our network that will be at the core of 5G and Digital India. Our experience of operating secure data centres, deep brand trust in the enterprise segment and the ability to deliver end-to-end digital transformation solutions positions us well to serve the emerging requirements of India’s connected economy. The new brand identity embodies this vision and ambition.”

    Given the enormous energy demands of data centres, sustainability will continue to be a top priority. As part of Airtel’s overall GHG emission reduction ambitions, Nxtra by Airtel is already aggressively increasing the usage of green energy for its data centres and seeks to source 50% of the power requirements of these centres from renewable sources.

    Additionally, captive solar power plants owned by Nxtra by Airtel were recently put online in the states of Uttar Pradesh and Maharashtra, with more on the way.

    As India’s top ICT service provider, Airtel Business, the B2B division of Airtel, offers a wide range of products and services in a variety of fields, including voice, data, collaboration, work-from-home solutions, cloud, data centres, cybersecurity, Internet of Things, network integration, managed services, enterprise mobility, and digital media.

    FAQs

    Who is the founder of Airtel?

    Sunil Bharti Mittal is the founder of Airtel.

    Where is the Airtel headquarters?

    Airtel is headquartered in New Delhi, India.

    What is the revenue of Airtel?

    The revenue of Airtel is $15 billion as of 2022.

    Who is the CEO of Airtel?

    Gopal Vittal is the current CEO and MD of Airtel.

    What is Airtel Payments Bank?

    Airtel Payments Bank is a digital banking initiative from Airtel, which led the reputed telecommunications service provider to roll out a digital bank on January 12, 2017. The Airtel Payments Bank is currently billed as India’s first true digital bank and the largest bank for the underbanked.  

  • BOFU – Why you should focus on Bottom of Funnel Users?

    No matter what service or product you offer: Well-placed content helps attract customers.

    It makes sense to target those who are ready to buy, especially during the current inflation. After all, the ever-increasing everyday spending is having a detrimental effect on overall buying behavior. Consumers all around the world are beginning to count pennies. BOFU Marketing helps you with this. Because it focuses on people who already have the intention to buy.

    BOFU – What is it?

    The abbreviation BOFU stands for Bottom of Funnel but is also called Lower Funnel Marketing. With this marketing strategy, you focus on consumers who are already advanced in their decision-making. According to the AIDA model, they are at the bottom of the funnel in the sales process – where the “action” takes place. With the BOFU Funnel, you do not focus on the broad masses. The focus is on a very narrow range of interested customers.

    TOFU, MOFU, BOFU – What is the difference?

    Stages of Funnel

    There are different marketing strategies that focus on different areas of the funnel. TOFU, MOFU and BOFU are the most common among them.

    • TOFU: Top of Funnel focuses on all possible prospects.
    • MOFU: In the Middle of Funnel, prospects are aware of their problem or desire. However, they are not yet ready to engage with your offer.
    • BOFU: In the lower funnel, your leads are highly qualified and ready to buy. They may just lack the final incentive.

    What makes BOFU so attractive? BOFU Visitors vs. “Upper Funnel” Visitors

    What makes the Lower Funnel so interesting is that you’re not aiming at generating countless leads. Instead, you focus on prospective buyers only. This area of marketing deserves your full attention – as this is where sales are coming from.

    Which Traffic Sources can be used to get BOFU Visitors?

    Lower Funnel Users look for offers. “Sign up now”, “Claim your discount”, “Book a consultation” or “Get the demo” might be exactly what someone in the lower funnel is looking for.

    Your prospective customers know their problem and know how to solve it – All they’re missing is the right offer.

    Key BOFU traffic sources include:

    • Emails
    • SEO content
    • PPC campaigns such as Facebook and Google Ads
    • Decision aid such as guides, coupons and ranking lists

    Collaboration with Specialized Vendors

    Want to acquire new customers for your lower funnel marketing? Then working with a specialized provider like Intent-Marketing Specialist Compado may be something worth considering.

    Vendors like Compado analyze which people are interested in your offer and recommend it to those exact people. Compado matches attractive offers and brands with the right visitors and thereby puts you in front of prospective customers. The result is that exactly the people who are in the mood to buy become aware of your offer. Working with specialists like Compado may pose a shortcut to identifying BOFU users with a high purchase motivation.

    How Compado works to convert leads at BOFU?
    How Compado works to convert leads at BOFU?

    While Compado is one of the absolute experts in the field of BOFU customer acquisition, their Pay-Per-Customer approach is what really stands out. If Compado presents your brand or offers to their purchase-motivated audiences, they are charging you only in case of success, when a new customer is won.

    How do they do it?

    From rankings of the best products to quizzes to shopping guides, Compado puts content pieces in place that speak directly to the needs of BOFU users. They know better than others what shoppers like to read and consult before their purchase.

    While specialized firms like Compado may be skilled in providing guidance to shoppers that are ready to buy, for many advertisers their go-to destination is advertising giants like Google or Facebook.

    Attracting BOFU Users with Google & Facebook Ads

    For many, marketing via Google Ads and Facebook Ads comes to mind first when thinking about digital customer acquisition. In fact, it gives you a very high number of active users per month and practically unlimited reach. Facebook alone registers 1.4 billion monthly active users. The advantage here is that the interests of users are known in detail thanks to their profiles. That’s why targeted ads work very well here, as long as you make them appealing. Present your ads to people who showed interest in what you offer and cut the line, going straight for purchase-motivated users.

    Next to Facebook Ads, which offers immense reach and targeting capabilities, Google Ads gives you the possibility to advertise on Google’s search engine. You can show your ads to users that have googled certain words, so-called keywords. By specifying what a user has googled before, you can show your offer only to users who are in the market to buy something.

    While working with specialists or with the big advertising players are both proven ways to reach BOFU audiences, there’s things you can do on your own.

    What about Discount Codes?

    Discounts, for example on the first purchase, are a popular strategy to capture the attention of BOFU users. They make your offer even more interesting and help buyers familiarize themselves with your product. Ideally, this creates a long-term relationship that pays off. Of course, demos, free trials or easy-entry products for starters can also help you convince new customers. Once trust has been built, further purchases are much more likely.

    Conclusion

    Make BOFU Users a priority!

    Winning new BOFU visitors is one of the most important tasks in your business – as they convert into sales. Your customer base is fed from the lower funnel. At the same time, you can be sure that this group of prospects is ready to take action.

    To achieve this goal, you can use different methods, from hiring a BOFU specialist, like Compado, to buying your way into BOFU audiences on Facebook and Google Ads.

    Each approach has its advantages and disadvantages. Nevertheless, during the current economy, where every penny counts, your focus should be on buyers. Reach out to those with an intention to buy – BOFU is the way to go.

  • What is ONDC? How will ONDC Impact the Ecommerce Industry of India?

    Open Network for Digital Commerce (ONDC) was formed on 31st December 2021. However, the initial pilot phase of this program was launched on 29th April 2022. The target behind the introduction of this platform in India is to bring scalability and accessibility to the field of e-commerce.

    The initial idea of ONDC came from the Piyush Goyal-led Department for Promotion of Industry and Internal Trade (DPIIT).

    The project is moving forward under the leadership of T Koshy (CEO), who was a former partner at the consulting firm EY, along with a 9-member advisory council that consists of names like Nandan Nilekani, the co-founder of software powerhouse Infosys Ltd, National Health Authority’s RS Sharma and more.

    It is aimed to provide equal opportunity to the small retailers and merchants in the e-commerce market alongside big players like Amazon and Flipkart.

    Nilekani has also earlier helped the Indian government in developing Aadhar biometric ID system. As per him, ONDC is meant to democratize digital commerce in India.

    As per a survey, India in 2021 had around 289.1 million digital buyers. This number is expected to increase and reach around 377.6 million in 2025.

    Number of Digital Buyers in India
    Number of Digital Buyers in India

    To date, the maximum share of eCommerce in India is in the hands of a few big companies. However, the growing number of buyers invokes the need of including small sellers from remote places to become a part of this huge market.

    To help resolve this issue with the aim of bringing more retailers and sellers online government brought forward the concept of Open Network for Digital Commerce (ONDC).

    What is ONDC?
    UPI and ONDC | What’s the Difference?
    Why is ONDC needed?
    How will ONDC impact the e-commerce industry in India?
    ONDC Funding
    Tracing the Growth of ONDC
    ONDC Challenges

    Impact of ONDC on the E-commerce Industry of India

    What is ONDC?

    ONDC Logo
    ONDC Logo

    Before understanding how the government will implement this and what are its benefits, let us first understand clearly what ONDC is.

    Until now, digital commerce across India is abiding by the platform-centric model. This means there are different platforms available online through which a seller can sell his product and a buyer can purchase them by registering on the same platform.

    This means that the buyer and seller have to be on the same platform for an online deal to occur.

    The idea behind ONDC is to bring e-commerce to the open network model instead of the platform-centric model. This will make e-commerce approachable for all types of buyers and sellers.

    The idea is to bring the buyers and sellers from different platforms into each other’s approach without any of them having to register on the platform on which the other exists.

    It will allow the buyers and sellers from different platforms to connect with each other, provided that both the platforms are linked to ONDC. This is similar to the role UPI plays in terms of transactions. UPI is a fitting example of the concept that ONDC is working on. This is because where UPI united the banking partners and the merchants/users, via a single unified platform connected through the mobile number, ONDC is pivoting on a similar concept that will unite the buyers, sellers, logistics providers aggregators, payment gateways, and more on a single platform, which will make buying and selling easier for everyone in the ecosystem.

    Therefore, the ONDC network allows the buyer to connect with the seller and make transactions to settle the deal irrespective of which applications they are using for buying or selling the products.

    UPI and ONDC | What’s the Difference?

    Often during the ideation and the development of the ONDC product, we have heard people, businesses, and media placing ONDC and UPI systems side by side. While both the systems are based on a similar idea, which is to link people and make things in the Indian market easier, they are poles apart really in terms of the functionality, complexity, magnitude, people, segments and markets involved, and more.

    For example, the UPI system was involved in the secure transfer of finances, the main objective of which was to facilitate the transfer of funds, and keep the same secure between banks, merchants and customers. However, when it comes to ONDC, the concept of ONDC does not involve a direct transfer of goods and services but is related to the same.

    Besides, ONDC also has a list of subjective variables, which the UPI doesn’t have. For instance, ONDC has to look after the quality of the products being sold, onboarding sellers and shops, making the communication between them easier, overlook the reliability of both the sellers and the buyers, looking after the speed of delivery and more.

    Also, when it comes to the UPI system, nothing was dependent on physical interaction, which stands in sharp contrast to the ONDC system, where the latter is significantly dependent on the offline steps after the matchmaking is done online.  

    Why is ONDC needed?

    Presently, if a retailer or merchant wishes to take his business online, there are only two options available for them.

    The first option is to create its own website. This might require some technical support. Further, this is a cost-intensive process as it involves a lot of extra charges such as website creation and management costs, logistic charges, etc.

    Also, even after the website is built and functional, the seller will have to invest a lot of money in advertising for his website in order to attract buyers.

    The second option is to sell the products on aggregator platforms or so-called online marketplaces. Although this system appears quite convenient in comparison to building a website, it has its own issues.

    The two top players in this field i.e. Amazon and Flipkart are both US-based companies. They keep a large share of profit in return for displaying and selling your products on their platform. In addition, sometimes, there have been complaints of brand preferences where these platforms are said to exhibit favoritism towards a few brands.

    Moreover, sometimes these marketplaces collect data from the sellers and depending on the market inclination, introduce their own products, to stay ahead of the curve.

    Another main concern associated with e-commerce is the lagging of small retailers, merchants, MSMEs, etc. Owing to the limited reach of e-commerce in small towns and villages, these small businessmen are deprived of the benefits associated with e-commerce.

    Most of them have not been able to begin their online journey on these digital selling platforms due to restricted technical knowledge and the small number of options available.

    To counter these problems and take digital commerce to a whole new level, ONDC has been formed. The aim is to make e-commerce reachable even for small retailers and merchants.

    The ONDC platform is an idea that is focused on increasing 3 major things that most buyers and sellers dream of:

    • Discoverability – The ONDC platform will help both the buyers and the sellers maximise their discoverability.
    • Transparency – ONDC will offer clear visibility and the benefits of comparing everyone and everything that is listed on it. This will make things transparent enough for everyone and everything related to eCommerce.  
    • Interoperability – The ONDC network will have the buyers, sellers, aggregators, delivery partners, logistics providers, and more, and all of them will be operating freely with each other, forming a stable and trustworthy network for maximum benefits.

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    How will ONDC impact the e-commerce industry in India?

    The introduction of ONDC will encourage small retailers to step foot into e-commerce. ONDC will result in bringing separate buyer-centric and seller-centric apps that will be beneficial for anyone who is invested in e-commerce.

    The new apps that may appear in the market can help resolve other issues for buyers as well as sellers. For example, it may help the sellers with logistics solutions while the buyers may be benefitted by shopping from the nearest available or cheapest store in town.

    The main benefits expected out of ONDC are as follows:

    • Formalization and democratization of e-commerce.
    • Large scope for discovering prices and comparing them.
    • Growth of local retail businesses especially MSMEs.
    • Increased number of choices for buyers.
    • Auxiliary support and services for both buyers and sellers.
    • Enhanced business opportunities owing to the open platform.
    • Option to outsource for both buyers and sellers.
    • Reducing the monopoly of big shots in e-commerce.
    • Rational process of business.

    Some of the areas/industries that ONDC is expected to disrupt are:

    • Cab services – Two major players driving the cab services in India are Ola and Uber. However, whether it is their drivers or the Indian customers, all are dissatisfied with the policies and the management of the companies. Here, the ONDC platform can come as a respite for the users, who can get the services they ask for at lower costs, while on the other hand, the cab drivers can freely sign in with ONDC to get a bigger and better reach.
    • Food delivery – The food delivery ecosystem of India has been largely controlled by Zomato and Swiggy, where both the customers and the restaurant providers are at the mercy of these two foodtech giants. Many restaurant partners have earlier thought of delivering directly, but they failed. The ONDC can now empower them better to bring in the change!  
    • Quick commerce – Quick commerce, which is looked up to as the next big thing in India, was earlier in the hands of the Kirana stores, who were the original quick commerce players. However, they seemed to have lost the battle against the able quick commerce players like Zepto, Dunzo, Instamart, Blinkit, and more. This new initiative of ONDC can, therefore, gear up the Kirana stores and their owners to serve their customers faster and better.  

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    ONDC Funding

    For the first couple of years, ONDC has set a budget of Rs 150-200 crore, mentioned by T Koshy, in a report dated July 2, 2022. CEO Koshy said that it has already raised 85% of its funding for the first phase of the operation. The platform had earlier chosen 20 institutions and asked them to put Rs 10 crore each from their funds. It has been earlier reported that the ONDC platform has raised over Rs 155 crore with the help of some of the largest banks of India – SBI, Axis, PNB, HDFC, Bank of Baroda, and Kotak Mahindra Bank, and some of the financial institutions like NSE, NPCI, NABARD, and SIDBI. T Koshy has further specified that ONDC has got 17 such investors to fund them with Rs 10 crore each by March 31, 2022, while the remaining organisations will extend their funds to ONDC by August 2022.

    Speaking about the ownership of ONDC, T Koshy mentioned that no investor would be allowed to hold more than 50% of the ONDC stakes.

    Tracing the Growth of ONDC

    The ONDC platform is on the brink of completion and pilot have already started in a selected list of Indian cities. A trial run of ONDC has been conducted in 6 cities in India including Bengaluru, Shillong, Lucknow, and Coimbatore.

    ONDC Onboarding Grows!

    With players like Walmart-owned Flipkart, Reliance Retail-backed Dunzo, Alibaba-backed Paytm, and more already joining the revolutionary platform, and Amazon willing to join it ahead, ONDC is already creating waves. Many other seller platforms, buyer platforms, logistics providers, and payment gateways are also signing up with the ONDC concept. As per the latest news, nearly 24 startups, like Meesho, and numerous other subsidiaries of Flipkart have joined ONDC. The ONDC platform is looking to onboard around 200 companies ahead, as per reports dated July 19, 2022. Snapdeal has already signed the agreement with ONDC earlier in July 2022, and will likely be integrating with the platform by the end of August 2022.

    After Dunzo, another Reliance Retail-owned startup Grab joined the ONDC platform, as per reports dated August 1, 2022. 80% of Grab shares are currently owned by Reliance Retail. Grab is a 9+ years old startup that offers a wide range of services including on-demand, reverse deliveries services, and first and last-mile logistics to clients including FedEx, Blinkit, Paytm, BigBasket, Myntra, Amazon, and Swiggy.

    Dunzo’s B2B logistics arm, Dunzo for Business (D4B) has collaborated with ONDC with an aim to provide last-mile delivery services to local enterprises on the ONDC network, as per reports dated August 5, 2022.

    Microsoft has become the first international company to join the ONDC platform. The American software giant will reportedly bring a social commerce platform or one that will allow a group buying feature for its Indian users. This association would enable Microsoft to connect with Indian users without depending on any e-commerce platforms. This partnership with Microsoft reveals the credibility attached to the ONDC platform of India, mentioned T Koshy.

    ONDC Inked MoU with the Small Industries Development Bank of India (SIDBI)

    ONDC inked a Memorandum of Understanding with SIDBI to onboard small and medium-sized businesses on the ONDC platform, which would help ONDC improve ecommerce participation. Signed between the CMD of SIDBI Sivasubramanian Ramann, and the Managing Director and CEO of ONDC, T Koshy, this agreement would lead both the entities to encourage the MSMEs access the open network ecommerce platform.

    The ONDC platform is not here to challenge the big players like Flipkart and Amazon. The ONDC CBO Shireesh Joshi confirmed that the platform will stay essentially as “eCommerce enablers helping the small retailers leverage the digitisation of commerce through our network.”

    The penetration of the eCommerce industry has only been 4-5% so far, as per July 2022 reports. To boost the same by increasing the number of retailers is one of the main objectives of the ONDC network. Joshi further revealed that the bigger players like Flipkart and Amazon will reap major benefits if this objective is fulfilled.  

    The ONDC platform will be launched in 75-100 more cities in India by August-September and will be open to the public during the same time in 2022, mentioned T Koshy, the CEO of ONDC, as per the reports dated July 2, 2022.

    Koshy has added that the ONDC will be opened to be public whenever it will find that there are enough sellers in a pin code area. Launching the service in these cities ahead will help the initiative lay a foundation on which the network can grow in the times upcoming, organically. The ONDC platform is expected to see a “hockey stick-like growth”. The CEO of the platform also pointed out that if it gains the support of the CSC SPVs (common service centre – special purpose vehicles), which are designed to spread the government’s e-services to rural areas and remote places, then that can help ONDC reach at least half of the Indian villages.

    Marquee investors like Sequoia India and SoftBank have advised their portfolio companies to join the Open Network for Digital Commerce (ONDC), as per reports dated July 20, 2022.    

    ONDC Challenges

    ONDC has come up as a revolutionary product that will transform the Indian market in the times upcoming. However, due to the complex design of the product, it has already started to face numerous implementation challenges. In comparison to the UPI system, ONDC is way tougher to both design and implement.  

    Conclusion

    With the schemes like digital India, no doubt e-commerce is the future of the Indian market. This is also clear from the fact that the Indian e-commerce industry is expected to rise from $46.20 billion in 2020 to $200 billion in 2026. Here, the ONDC can easily be identified as a new-age idea that has a huge market ahead.

    At this stage, the e-commerce platforms, being totally captured by a few large companies can certainly impact the small businessmen from the remote areas of the country, who still are unable to utilize this amazing platform.

    This is sure to have an adverse effect on the economy with these small retailers losing their business to a few big players.

    The introduction of the Open Network for Digital Commerce (ONDC) at this point is certainly a great initiative by the government to help these small businessmen to maintain their position in the race.

    This will also give them the opportunity to escalate their businesses to a larger scale by making their products reach a larger audience.

    FAQs

    What is ONDC?

    Open Network for Digital Commerce (ONDC) is a non-profit organisation in collaboration with the Government of India that brings e-commerce to the open network model instead of the platform-centric model. This will make e-commerce approachable for all types of buyers and sellers.

    Who owns ONDC?

    ONDC is owned by the Department for Promotion of Industry and Internal Trade.

    Who is developing ONDC Project?

    T Koshy of EY is leading the Open Network for Digital Commerce (ONDC) project, supported by a 9-member advisory council consisting of names like Nandan Nilekani, the co-founder of Infosys Ltd., and others.

  • Redefining Air Travel – Case Study on Akasa Air by Rakesh Jhunjhunwala

    India’s aviation industry has embraced a new wave in airline travel as India’s Warren Buffet, Rakesh Jhunjhunwala has finally launched an Ultra-Low-Cost Carrier, Akasa Air.

    The aviation industry in India is in fact an untapped market with only a few companies making all of the profit. It also has to be read along with the multiple events where companies like Kingfisher and Jet Airways had to suspend their operations as they run on a loss.

    The pandemic has not spared this industry as air travel is still struggling to make an actual comeback out of the larger travel restrictions that were imposed on it.

    Companies like Indigo, which is India’s largest airline, have already confirmed that their losses have been wider than they expected. This is despite the quick reinstatement of the operating services across India as soon as the restrictions were lifted.

    The fact that the industry is an unexplored arena and yet a very risky platform makes the new initiative of Mr. Jhunjhunwala more unpredictable and yet attractive. It cannot be denied that this investment is going to alter the airline industry for good. This article will analyse all sides of this ambitious plan.

    The Plan of Rakesh Jhunjhunwala
    Will Air Travel Become Economical?
    Better Air Carriers
    Concerns about Akasa Air
    The Present State and Growth of Akasa Air
    How to Book Akasa Air Flights?
    Akasa Air – Logo, Symbol, and Tagline
    Akasa Air – Future Plans

    The Plan of Rakesh Jhunjhunwala

    The successful investor Rakesh Jhunjhunwala has clarified his plans on investing $35 million in Akasa airlines where he would own 40% of carriers, which means 70 aircraft within a span of four years. After he invested $35 mn on Akasa, the airline company was quick to receive the no objection certificate (NOC) from the Ministry of Civil Aviation of India in October 2021.

    The Akasa airline company, “Akasa Air”, is designed to serve as an ultra-low-cost carrier that is led by a very enviable team that one could imagine. It includes former CEOs of successful airline companies like Indigo, Delta airlines et cetera.

    The current leadership team of Akasa has Vinay Dube, who was the ex-CEO of Jet Airways and Go First as the Founder, CEO, and MD of the company. Praveen Iyer, the former GoFirst Chief Commercial Officer (CCO), and GoFirst Head of Flight Operations, Nikhil Ved, are some others who are leading the Mumbai-headquartered, low-cost Indian airline company.

    Their focus will be more on air carriers that can accommodate 180 passengers. In the face of exclusive expensive fare wars and the high cost of maintenance and operations, Rakesh Jhunjhunwala’s initiatives will be a game-changer.

    If materialised properly Akasa Air could be the golden feather in the fastest-growing aviation market in the world.

    Will Air Travel Become Economical?

    Rakesh Jhunjhunwala with his confident proposal has made it clear that his intention is to capture the mass market. The ULCC or ultra-low-cost carrier will democratise the hitherto expensive transportation method.

    The initiatives by earlier companies like Air Deccan have significantly helped in bringing down the ticket fares of aeroplanes. It is expected that Akasa Air’s initiatives will further bring down the prices.

    This will also align with the UDAN scheme of the Government of India, which aims to make air travel well-furnished, available, and affordable. However, it will heavily depend upon the slots that they will get in airports.

    The fact that even vendors and lessors are also in a very battered state after the pandemic, will enable the airline company to renegotiate its terms and costs so as to raise fresh funds and trim costs, which will in turn, help them to afford lower ticket fares.

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    Better Air Carriers

    Akasa Air will alter the market of plane makers into a very competitive sector as the industry is trying to wriggle out of the burdening losses that it had to incur as the pandemic struck them hard.

    It is anticipated that there will be heavy competition between plane makers like Boeing and Airbus. As far as Boeing is concerned, it is indeed a valuable opportunity for them to make a comeback to the Indian industry since the only operator for their 737 aircraft in India is SpiceJet.

    As per the statistics, Indian carriers own more than 900 planes of which more than 700 are owned by Airbus and only 100 by Boeing. The latter is also losing its position in the wide-body aircraft market as well. This means that the plane makers will be ready to give competitive rates if Akasha wants to lease an aircraft from them.

    These rates are expected to be better than the pre-Covid rates, according to Nithin Sarin who is a managing partner at a law firm that functions as an advisory to airlines and lessors. Such a competition is highly beneficial as far as the air travellers are concerned since it will assure them quality travelling at affordable prices.

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    Concerns about Akasa Air

    The vision of Rakesh Jhunjhunwala through Akasa Air, will be a hard nut to crack. Out of all the industries it can be said without any doubt that the aviation industry is one of the riskiest and most unpredictable markets.

    Lack of The First Comers Benefit

    In India, 50% of the low-cost air carrier market is held by just one player – Indigo. When a new airline with an ambitious mission like Akasa is entering the market, it not only has to compete with the wide network of Indigo but also its potential.

    Akasa should calculate the ways in which Indigo can scale up its game as they attempt to do the same. At least, initially, it will be very difficult for Akasa Air to get attractive time slots in important metro airports like Delhi, Mumbai, Bangalore, etc., which will have a direct impact on its revenue.

    The Contrast between High Cost and Low Price

    One of the trademarks of Akasa Air, as proposed by Jhunjhunwala, is its low ticket fare. However, the reason why air travel is expensive is widely known. During the pandemic, turbine fuel charges have further increased along with other Covid related uncertainties.

    The ground handling charges and labour costs also constitute a large part of the operational cost of an airline. The former holds 75% of the whole non-fixed cost that an airline operation should incur.

    Amidst other expenses like airport fees, taxes, luggage et cetera the aim to democratise airline travel might cost a fortune for Akasa Air. Here, high cost is contrasted with low price, which if handled carelessly can even lead to the failure of the entire endeavour.

    Rising Competition

    Apart from the first-comer advantage that it lacks, the timeline of its entry into the airline industry is also marked by the rise of other companies who had lost their strategic position in between.

    Along with Jhunjhunwala, the Kalrock Capital-Murari Lal Jalan consortium is all set to revive Jet Airways which had suspended its operation earlier. They have also got approval from the National Company Law Tribunal as well.

    At the same time, Air India is also likely to find a buyer which will further alter the nature of competition in the sector itself. GoAir can also be an important competitor if it successfully gains investor interest during its listing.

    The Present State and Growth of Akasa Air

    Akasa Air has finally commenced its commercial operations. The airline company has last announced that it will be starting its flights from August, 7, 2022, onwards, which it did on the mentioned date. In its first flight Akasa Air flew from Mumbai to Ahmedabad after it received the Boeing 737 MAX aircraft.

    Akasa Air witnessed an inaugural ceremony conducted at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, where the Co-founder of the airline company Vinay Dubey gave a speech. Besides, Rakesh Jhunjhunwala joined the other passengers onboard in the maiden flight of the company. The passengers of Akasa Air, elated as they were on the first flight, shared numerous photos and videos of the iconic Akasa Air flight.

    Akasa Air has also disclosed that it will offer 28 weekly flights between Mumbai and Ahmedabad.

    Akasa Air has already revealed the destinations and has started bookings for the same as well. Some of the destinations along with their starting dates are:

    State in India City Airport Dates
    Gujarat Ahmedabad Sardar Vallabhbhai Patel International Airport August 7, 2022
    Karnataka Bengaluru Kempegowda International Airport August 13, 2022
    Kerala Kochi Cochin International Airport August 13, 2022
    Maharashtra Mumbai Chhatrapati Shivaji Maharaj International Airport August 7, 2022

    The company got its Air Operator Certificate (AOC) from DGCA after it completed the proving flights that were required to be done, on July 7, 2022. Akasa Air started taking flight bookings on its website on July 22, 2022.

    Akasa Air Crew Members’ Dress


    The Akasa Air dresses for the crew members are designed keeping in mind the all-around comfort of the airline’s crew. Akasa Air is the first Indian airline that introduced customer trousers and jackets.

    The clothes of Akasa Air were specially made for the airline service provider. The fabric of the jackets and the trousers are weaved out of recycled polyester fabric, made from pet plastic bottles salvaged from marine waste. The uniforms are stretchable.

    Beauty and comfort were kept in mind while designing these clothes. Rajesh Pratap Singh designed the uniform of Akasa Air. Akasa Air uniforms have combined soft colour combos that include black, white, and blue for the pilots, and orange and black for the crew, which ooze class and comfort. The sneakers that the crew members will sport are designed by Vanilla Moon. These shoes will be light and are lined with an extra wall of cushion from heel to toe. The sneakers are made out of recycled rubber and don’t use plastic in any way.

    How to Book Akasa Air Flights?

    If you are wondering how to book Akasa Air flights, then booking your seat in the next Akasa Air flight is a cakewalk. Here are some simple steps you need to follow to do it successfully:

    • First, you need to visit the Akasa Air website and log in to your account through the mobile app of the airline operator using your mobile number.
    • Then, you need to add the details of your travel which would include whether it is a one-way or a round trip and more. After entering these details, you would get all the information about the flights and their fares.
    • Next, you would have the option to enter add-ons including your favourite meals and more.
    • Then, update your passenger information
    • In the last step, you need to choose your preferred payment option to complete the process.

    Akasa Air – Logo, Symbol, and Tagline

    Akasa Air - Logo
    Akasa Air – Logo

    Akasa Air chose “Sunrise Orange” and “Passionate Purple” for its branding, which reflects warmth and energy. The company announced its symbol and tagline on December 22, 2021, and mentioned that they were inspired by the elements of the sky.

    The airline, which is operated by SNV Aviation and backed by billionaire Rakesh Jhunjhunwala, mentioned that the symbol, which resembles ‘The Rising A’, reflects “the warmth of the rising sun, the effortless flight of a bird, and the dependability of an aircraft wing”.

    The logo of Akasa Air and its tagline helps in “translating our purpose to serve every traveller with an innovative yet simple alternative required a modern and confident symbol”, said Vinay Dube, Founder, MD, and CEO of Akasa Air.

    “It’s Your Sky”, says the Akasa Air Tagline.

    The brand symbol and tagline of Akasa were weaved in by 26FIVE India Lab, which is a brand engagement firm headquartered in Mumbai, Maharastra.

    Akasa Air – Future Plans

    Akasa Air has planned to have 18 aircraft by the end of 2022, as confirmed by Vinay Dube, the CEO, Founder, and MD of the airline company. Furthermore, it looks to add 12-14 aircrafts per year. Within the next 5 years, Akasa Air is planning to possess nearly 72 aircraft, added Dube.

    Dube further announced that Akasa Air will initially have services from metro cities to tier-2 and tier-3 cities, and will also operate flights to major cities across India.

    Conclusion

    Even with its risks and unpredictability, the foundation set by Rakesh Jhunjhunwala through Akasa Air is revolutionary without any doubt. The changes it can bring to air travel by democratising prices can be phenomenal.

    They have a very efficient and talented team to fall back on, which further increases the probability of a successful materialisation of their idea. There is absolutely no doubt about the anxiety that the loss of Kingfisher Airlines, Jet Airways, and SpiceJet brings to the table.

    However, it will be rather interesting to learn the ways in which Akasa Air with heavy support from a brilliant investor like Rakesh Jhunjhunwala will make his dream of ULCC come true for the good of all!

    FAQs

    What is Akasa airline?

    Akasa airline company, Akasa Air, belongs to SNV Aviation Private Limited, and is an airline company, headquartered in Mumbai, Maharashtra, and is created to serve as an Indian low-cost airline service operator.

    Who is the founder of the Akasa airline company, Akasa Air?

    Akasa Air is an ultra-low-cost carrier backed by Rakesh Jhunjhunwala.

    Who are the competitors of Akasa Air?

    Jet Airways, Air India, and Indigo are some of the competitors of Akasa Air.

    When will the Akasa Air flights commence?

    The flights of Akasa Air are expected to start on August 7, 2022, and will begin to be operational between the Mumbai-Ahmedabad route.

    What is the Rakesh Jhunjhunwala airlines company called?

    The Rakesh Jhunjhunwala airlines company is named Akasa Air.

    What are the Akasa Air destinations?

    Akasa Air is expected to operate in the Indian states of Gujarat, Karnataka, Kerala, and Maharashtra.

  • Amazon – The Success Story of the Jeff Bezos-Founded Company

    Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Amazon.

    Online shopping has become a part of daily life for most of us today. A recent survey in 2022 reveals that over 2.14 billion people worldwide shops online, which makes 27.6% of the people out of 7.74 billion people in the world. Thus, it can be concluded that more than one out of four people shops online now.  

    While the number of e-commerce companies worldwide is growing fast, there are a few pioneer companies that have established themselves as the market leader in the sector, and one of them is Amazon.

    Starting in the year 1994 from the founder Jeff Bezos’ garage, Amazon is one of the few companies that joined the 1 trillion valuation club.

    Let’s have a look into the startup story of the e-commerce giant, Amazon along with it, discover Amazon’s Revenue, Funding, History, Growth, Competitors and more.

    Amazon – Company Highlights

    Startup Name Amazon
    Headquarters Seattle, Washington (USA)
    Sector E-Commerce
    Founder Jeff Bezos
    CEO Andy Jassy
    Founded 1994
    Amazon India Founded June 2013
    Revenue 460.82 Billion (2021)
    Funding $108 Million (went public in 1997)
    Valuation $1.56 Trillion+
    Parent Organization Amazon.com, Inc.
    Website www.amazon.in

    Amazon – About
    Amazon – Founder & Team
    Amazon – Startup Story
    Amazon – Name & Logo
    Amazon – Growth & Revenue
    Amazon – Funding & Investors
    Amazon – Investments
    Amazon – Acquisitions
    Amazon – Business & Revenue Model
    Amazon – Competitors
    Amazon – Future Plans

    Amazon – About

    Amazon.com, Inc was launched in 1994 by Jeff Bezos in the United States. Later, it stepped into other countries to increase its market. Amazon India was started in June 2013, and sooner it became one of the biggest eCommerce platforms in India. Initially, the company started by selling books and it expanded to sell electronics, households, software, food, jewellery, and a lot more.

    Amazon India Website
    Amazon India Website

    Currently, other than being an e-commerce company, Amazon has diversified into a number of domains including cloud computing, Publishing, on-demand music, video streaming, AI, consumer electronics, etc and the company is constantly on the lookout to enter new segments.

    Amazon Studios, Amazon Publishing, Amazon Music, and Amazon Web Services are some of its other subsidiaries. In its bid to grow, Amazon has acquired over 100 companies to date.Apart from being the biggest E-Commerce platform, Amazon also offers some pretty exciting and good services and they are:

    Amazon Web Services (AWS)

    AWS is the web services platform of Amazon, which offers IT infrastructure services to businesses in the form of web services, which is commonly referred to as cloud computing. AWS was launched in 2006, and on March 2, 2021, it was selected by PGA TOUR as its official cloud provider.

    Amazon Go

    Amazon Go Logo
    Amazon Go Logo

    Amazon Go is a chain of convenience stores that is run under Amazon which was started in the year 2018. The stores are mainly present in the United States and the United Kingdom, the main concept of these stores is that there are no cashiers in the store with whom customers have to deal. Everything is automated there and they have self-checkout stations where customers can pay for their supplies after picking them up from the store. As of now, there are 42+ Amazon Go stores.

    Amazon Prime

    Amazon Prime Logo
    Amazon Prime Logo

    This is the OTT video streaming platform offered by Amazon, it is a subscription-based platform where movies, television series, web series, and other video content are provided for the audience to watch. Amazon Prime was launched worldwide in 2016, however, some countries were excluded then, like North Korea, Mainland China, Syria, Cuba, and Iran. Amazon Prime Video made history as the first streaming service to secure an Exclusive National Broadcast Package from the NFL on March 18, 2021.

    “We recognize the need for in-game content by mobile gamers to enhance their playing experience and are delighted to provide access to this content free to Prime members. We will continue to add new in-game content for other popular games, with frequent content refreshes.” – Akshay Sahi, Director and Head of Prime, Amazon India

    Amazon Pay

    Amazon Pay Logo
    Amazon Pay Logo

    This is the online payment processing service provided by Amazon. It was launched in the year 2007. Through this payment service, one can pay from their Amazon account, for goods and services. The payment service is supported by fraud protection technology through which you can complete any transaction securely. Amazon Pay launched Smart Stores on June 26, 2020. The Smart Stores of Amazon Pay is an India-specific programme that would enable the physical stores to serve the customers with a wide range of products that they can easily avail of and pay for just by scanning the QR codes.

    “Amazon Pay is already accepted at millions of local shops, we are trying to make customers buying experience at local shops more convenient and safe through Smart Stores.” -Mahendra Nerukar, Amazon Pay CEO

    Smart Stores is also coming up with a feature in which a digital store will be available for the customers in which customers can go through the products that the shop is having, can read and update the reviews of the product, and avail many offers which can provide them benefits, and a new type of shopping experience. Many shops have signed up for Amazon Pay Smart Stores and came forward as they have found a new hope to bring their business back on track. Big brands such as Big Bazaar and MedPlus have come forward and have taken a part in this new initiative.

    Smart Commerce Initiative

    Amazon has announced its Smart Commerce initiative in India, as far as May 18, 2022 reports go. With this initiative, Amazon India has plans to transform the local stores into “Digital Dukaans“. Amazon announced during the 3rd edition of Amazon Smbhav that the company will be fuelling its plans to digitise 1 crore small businesses by 2025 via the launch of its Smart Commerce.  

    Amazon – Founder & Team

    Jeff Bezos (Founder & Former CEO, Amazon)

    Jeff Bezos
    Jeff Bezos

    Amazon was founded by Jeff Bezos (Jeffrey Preston Bezos) in 1994. He is an American entrepreneur and industrialist. After graduating from Princeton University with a degree in electrical engineering and computer science in 1986, Bezos worked for ‘Fitel’ ( a fintech telecommunication startup), where he was working on building a network for international trade. Later Bezos was promoted to head of development and director of customer service at ‘Fitel’.

    Jeff Bezos- Amazon Founder

    Jeff Bezos stepped down as CEO of Amazon and will be the executive chairman of Amazon. Andy Jassy -The Cloud Computing Chief has been appointed as the new CEO of Amazon.

    Andy Jassy (Cloud Computing Chief & CEO of Amazon)

    Andy Jassy
    Andy Jassy

    Jassy joined Amazon in 1997. He has an MBA from Harvard Business School. It was Andy Jassy who founded Amazon Web Services (AWS), a cloud platform with millions of users. Andy Jassy’s promotion from being a Cloud Computing Chief to the CEO (Chief Executive Officer) of Amazon is remarkable and highlights the importance of web services to Amazon’s future. Andy Jassy has taken over the position of Amazon CEO.

    Andy Jassy- Amazon CEO

    Amazon – Startup Story

    Jeff Bezos jokingly describes founding Amazon as a ‘Regret Minimization Framework’. Jeff did not want to regret not taking advantage of the internet boom that had then started to slowly take the world by storm. Hence in 1994, Jeff left his job as vice president of D.E Shaw & Co. to start his own venture.

    Jeff Bezos wrote his company’s first business plan on a cross-country drive from New York to Seattle. Initially, Amazon was registered as Cadabra, Inc. However, when Jeff found out that people misheard the name Cadabra as ‘cadaver’ (cadaver means corpse), he decided to change the name and bought the domain name relentless.com. But that too was changed as his friends did not quite like the name and finally named his company ‘Amazon’.

    Jeff listed 20 products that can be sold online, out of which he decided to start with selling books. The first to invest in Amazon was Jeff Bezos’ parents, who invested $250,000 in the venture. By 1997, Amazon had 2.5 million titles.

    In 1998, Amazon acquired Junglee Corporation ( provider of database technology to help consumers find products on the Internet) and ‘Planet All’ a social networking, calendaring, and address book site, and with it, the company also started expanding its offerings beyond books.

    In 2005 Amazon also entered the crowd-sourcing business with ‘Amazon Mechanical Turk’.

    In 2006, Amazon entered the cloud computing sector with ‘Amazon Web Services (AWS) realizing the great scope that the sector holds. In 2006, Amazon entered the video-on-demand sector with ‘Amazon Unbox’.

    In November 2007, Amazon released Kindle, its first e-reader, which became quite popular among users. In 2007, Amazon launched Amazon Music.

    Another Amazon product that has gained popularity is ‘Alexa’, which is a virtual assistant AI technology developed by Amazon.

    Amazon being the largest river in the world, the company was named ‘Amazon’ as Jeff Bezos envisioned his company to be the largest.

    Amazon Logo
    Amazon Logo

    Amazon’s current logo which the company has been using since the year 2000, has an arrow leading from A to Z, which reflects the company’s goal to provide every product a customer needs. The arrow forms a smile, which represents customer satisfaction.

    Amazon – Growth & Revenue

    What started as a small online book store has become the world’s largest online marketplace today. Ever since Amazon was launched, it simply grew from strength to strength. The company diversified and explored many horizons, and most importantly, it cemented its position regardless of where it went.    

    Amazon India marketplace, which is run by Amazon Seller Services, has posted a 49% rise in its revenue from operations that have been recorded at Rs 16,200 crore during FY21 and was last recorded at Rs 10,847.6 crore. The eCommerce giant in India also witnessed a decrease in its losses, which declined from Rs 5849 crore to Rs 4748 crore. However, another unit of Amazon called Amazon Wholesale (India), has scaled down during FY21, posting a 7% drop in its revenue from operations, which decreased from Rs 3384 crore (FY20) to Rs 3131 crore (FY21).    

    Looking at the sales, Amazon’s sales also skyrocketed at an unimaginable pace, which has significantly contributed to the growth of the business. One another thing is the diversification of its products and the realization of the future of the online shopping and eCommerce businesses at an early stage, which helped Amazon scale leaps and bounds.

    Amazon Net Sales Revenue Growth
    Amazon Net Sales Revenue Growth

    Amazon might get affected by tighter FDI Rules by the Indian government, as per reports dated February 27, 2021.

    Amazon – Funding & Investors

    Let’s take a detailed look at the Amazon’s funding history. The company has received a total funding amount of $108 million over two rounds. Amazon went public in 1997. Amazon is funded by 2 investors, AOL and Kleiner Perkins.

    Investors

    Date Stage Amount Investors
    July 2001 Funding Round $100M –
    June 1996 Series A $8M Kleiner Perkins

    Amazon – Investments

    Amazon invested in numerous organisations, keeping a track of which is really difficult if not impossible. The Bezos-founded company has over 118 investments to date.

    The Andy Jassy-led company is looking to buy majority stakes in Ecom Express for $500-600 mn. Amazon doesn’t own an in-house logistics and delivery system unlike its rival Flipkart, and to match the Walmart-backed company, Amazon is planning to own an ecommerce logistics and delivery unit. Though both Amazon and Ecom Express are in the preliminary stages of talks, the ecommerce behemoth will likely pick up 51% stakes in the latter, thereby leading Warburg Pincus to quit.            

    Here we have managed to present to you some of the recent investments of Amazon. Check them out below:

    Date of Investment Name of the Company Funding Round Lead Investor
    April 22, 2022 Agility Robotics Series B –
    April 21, 2022 Modjoul Venture Round Yes
    April 21, 2022 BionicHive Venture Round Yes
    April 21, 2022 Mantis Robotics Seed Round Yes
    April 21, 2022 VIMAAN Venture Round Yes
    January 6, 2022 LeedPay Pre-Seed Round –
    December 14, 2021 Amogy Series A –
    December 3, 2021 Dibbs Corporate Round Yes
    November 9, 2021 MyGlamm Series D –
    October 19, 2021 Pismo Series B Yes

    Amazon – Acquisitions

    Amazon has had a list of acquisitions since 1994 when it started. The tech giant boasts of 94+ acquisitions and counting. Here’s a list of some of the prominent acquisitions that Amazon made recently:

    Date Name of the Company Deal Value
    April 22, 2022 GlowRoad –
    March 7, 2022 Veeqo –
    December 22, 2021 Prione –
    May 26, 2021 MGM Studios $8.5 bn
    March 30, 2021 Perpule $14.36 mn
    February 16, 2021 Selz –
    June 26, 2020 Zoox $1.2 bn
    October 24, 2019 Health Navigator –
    September 25, 2019 INLT –
    July 31, 2019 E8 Storage –

    Amazon – Business & Revenue Model

    Amazon primarily runs an E-commerce business, which runs on an E-commerce business model. The company also has other wings, which run on an array of business models. Besides, Amazon also manufactures numerous products that are sold online and via retail stores across the world.  

    Amazon Customer Segment

    Amazon customers can be divided into:

    • Sellers – They sell their products to a wide audience using the Amazon platform.
    • Buyers – They buy from a wide selection of Amazon products and services.
    • Developers – There are numerous communities involved with the Amazon Web Services (AWS), which include both Amazon customers, partners, businesses, and individuals.        

    Amazon Value Proposition

    The business model of the company, as per the founder of Amazon, Jeff Bezos, depends on 3 value propositions:

    • Low price
    • Fast delivery
    • Wide selection of products

    Amazon Channels

    The most important channel of Amazon is the Amazon website itself. Some other notable channels of Amazon include Amazon Prime, the Amazon app, and more.

    A major portion of Amazon’s revenue comes from its E-commerce business. Besides, Amazon also has 526+ brick and mortar retail outlets, which forms a good source of revenue.

    It also makes a huge revenue through Kindle, an electronic device to read books, subscription fee of ‘Amazon Prime’, third-party seller services, advertising revenues, and revenue from Amazon Web Services.

    Here are the prominent revenue channels of Amazon:

    • Sales for one-time
    • Sales commissions
    • Advertising
    • Subscriptions like that of Amazon Prime and the app itself
    • Web Services (AWS)
    • Licenses
    • Patents
    • Pay-Per-Use and Support Subscription

    Amazon – Competitors

    Amazon has a lot of competitors in segments such as merchandise, web services, electronics, and media. some of the main competitors of Amazon in its different fields.

    Amazon – Future Plans

    Amazon plans to expand in the areas of Machine Learning, Home Automation, Robotics, and Space Exploration (termed ‘MARS’).

    Amazon is planning to venture into the health-tech and food delivery business soon. Amazon CEO Jeff Bezos has revealed plans to introduce ‘Amazon Prime Air Drone Delivery Service’, whereby lighter packages will be delivered to customers through drones. The company is also making efforts to make its delivery system more eco-friendly, by including electric vehicles in its delivery services.

    Regarding Amazon’s plan in India, the company is planning to create 1 million new jobs in India by 2025. In January 2020, Jeff Bezos announced that Amazon will invest $1 billion in India to help 10 million traders and MSMEs businesses in India to go online. The company is envisioning to enable exports worth $10 billion via Amazon by 2025.

    Amazon has announced to facilitate $20 billion worth of exports of Indian goods in the next 3 years, as per Amazon Exports Digest 2022. On average, it makes the company exported Indian goods would have to be $2 billion a year since 2015.    

    FAQs

    What is Amazon’s Funding History?

    Amazon received a total funding of $108 million over two rounds. Amazon went public in 1997.

    When was Amazon Founded in India?

    Amazon launched its operations in India in June 2013. Amazon was founded in July 1994.

    Who is Amazon’s CEO?

    Andy Jassy is the CEO of Amazon. Jeff Bezos was the former CEO of Amazon.

    How much is Amazon’s Revenue?

    Amazon India marketplace posted Rs 16,200 crore as its revenue from operations in FY21, which was a 49% increase from Rs 10,847.6, which it saw in FY20. On the other hand, the Amazon Wholesale business of India has witnessed a 7% drop in its operational revenue, which was recorded at Rs 3384 crore in FY20 and became Rs 3131 crore during FY21.  

    What are Amazon’s keys to success?

    A huge number of SKUs, Table of Contents, Free Shipping and Returns, Overnight Delivery, Incredible Customer Service, and Talented Management is the Amazon’s keys to success.

    How long did it take Amazon to make a profit?

    It took Amazon more than 14 years—58 quarters after its initial public offering to make, as much profit as it produced in the latest quarter.

    What is Amazon’s launch year?

    Amazon was launched in 1994.

    Who is the founder of Amazon?

    The founder of Amazon is Jeff Bezos, who is also known as the creator of Amazon.

  • How to Manage International Shipping for Your Ecommerce?

    E-commerce is the new wave for the present era! And you being a businessman must focus on international shipping. Fame comes with effort and that is exactly what this article is all about. Well, keep reading till you read the last sentence of this content as it conveys the exact strategies you need to follow to manage international shipping for your e-commerce.

    International Ecommerce Shipping from India

    Strategies for Maintaining Regular International Shipping for Your E-commerce

    Indian Ecommerce Market Growth Forecast by ibef.org
    Indian Ecommerce Market Growth Forecast by ibef.org

    International shipping needs a lot of strategies to become successful. Transaction of your goods does not only need good communication with your customers but also a lot more other than that. You have to do research work on duties and taxes that will apply to your shipment, the type of carriers that will fit your product the most, and also whether you will add on insurance to your transaction or not.

    It is better to pen down the strategies you are going to opt for your international shipping and then go for the final call.  Therefore, the given points are the most preferred policies you need to research for managing your shipments to international countries.

    How To Be A Pro In International Shipping

    At first, you need to recognize what products you are willing to ship and to which place on earth. The following strategies are some of the steps you must keep in mind before trusting your supporting franchise.

    • Shop’s Traffic Analytics- Online traffic can be your inspiration for expanding your marketing establishment all across the world. So always keep track of the regular traffic analytics of your online shop.
    Online Ecommerce Shopify Store Analytics
    Online Ecommerce Store Analytics

    This gives you an idea of the number of insights your website faced for the given period. However, you can also opt for sending direct customer requests to sell your goods in their markets. Always remember that high online traffic implies growth! So congratulations as your efforts are paying off now!

    • Identify Which Domestic Market is Fit For Your Business-  Are you interested in some of the domestic markets across the world, which you feel can be a good catalyst for your business growth? Well, you need to do good research on this before going for the final call. Going through e-commerce penetration is always an impressive step. Dig into the information which includes the trends and tastes, those markets prefer and sell the most.
    • Start Shipping Smaller Goods- If you are a beginner in international shipments, then you must first ship goods that have an amazing appeal to the international market. This will increase the public’s demand for your products. Also, lightweight goods are easier to ship and are also cost-effective. And if you are shipping a durable product then it is going to be a satisfactory delivery to your customers.
    • Marketing Language for Expansion- Dealing with customers worldwide is not a matter of joke! Therefore, you need to inherit some strong communication skills to mark progress toward your goal of market expansion. Moreover, if you are good at certain languages, then try to approach those countries that speak such languages to increase the reach of your business. Remember to make the best result out of your weapon, even if you have only a few of them!
    • Nearer transactions can be a great first step- You can fulfill the realistic expectations of your customers if you start preferring shipments to closer franchises. Small distance shipments at first give you a grip on the concept of domestic shipping. And smaller steps are always the most essential step to success. So go on and hunt behind near targets!

    The Four Factors You Need to Consider for Shipping Goods

    • Delivery Options- The more delivery options you provide to your customers, the more good reviews you get. So why don’t you offer them the choice to select their delivery preferences? Like some are interested in instant delivery and the others on a little delay! So you give them the options and work on their choice.
    Different International Shipping Delivery Options
    International Shipping Delivery Options
    • Insurance and Tracking- Shipment tracking is an amazing chance to keep an eye on the shipment progress of your goods. You being the sender can stay updated with the shipment progress and the concerned customers are also eligible to have a tracking report. And this strategy gives you the chance to stay tension free as you can easily find out when your goods are lost or destroyed. Well when you are shipping goods under an express agency, they provide insurance to keep your transaction hindrance free.
    Shipment tracking of an Order
    Shipment tracking of an Order

    Most of the global express companies do not include the “insurance” option but there is always an add-on for this option and it’s quite affordable. Therefore, whatever you are shipping, try to add proper “insurance” to it for staying tension free in the long run.

    • Cost Issues- Are you planning to save up money on shipping costs? Well in this case there are a lot of carrier types like- Postal carriers and Express Carriers. Postal Carriers are always the cheapest option you can go for. Of course cheaper the price, the less the service.
    International Postal Carrier Service Provider Companies
    Postal Carrier Service Provider Companies
    • These type of carriers does not promise you a specific time or date for shipment, rather the transaction process takes a long time. On the other hand, Express carriers ensure a speedy delivery and automatic add-on insurance for the goods, but they charge an expensive price.

    Therefore, it’s always best to do brief research and choose between postal, regional, and express carriers according to your plans and products. And it is always to know what is available for the international shipment process.

    • Shipping costs are the most essential thing to deal with when you are sending goods from your side to the customer’s reach. Talk to your customers about the extra charges required to keep their parcel harm free. transparent and communicative to your customers on shipping costs is paramount. Well, of course, transparency on fees does not imply scaring customers with an unexpected cost for shipment. This can degrade your online traffic. To avoid unpredictable bargaining, you can mention a fixed price on your policy page.

    Create A Detailed Export Packing List

    You must create a typically detailed sheet on the package and this list includes- the buyer’s name, proper address, seller’s address, invoice number, date of shipment, and likewise. This will avoid confusion in the long run and also be a compulsory step in international shipments. Furthermore, the packing list includes many more like-

    Product Packaging Detail List
    Product Packaging Detail List

    ● Carrier info

    ● The mode of transport

    ● The quality and type of the package to be shipped

    ● Dimensions and weight of the package

    ● Package marks for approval

    Guide on Shipping Rules and Regulations

    Shipping goods from one part of the world to another part takes a lot of strategies as well as guts. But before taking this step you are ought to aware of the concrete rules and regulations in this field. Do a briefing with your team members on the places you are planning to ship the products. Note down the parcel laws that the country believes in and then you are good to go! Just like some countries prohibit the entry of outside goods and some sets some limits on shipments. Are you having thought about how to get this information? Then set your eyes on the rest of the content to get an acceptable answer.

    ● To study the specific rules and regulations of your target countries, you can take help from UPS. They can guide you on this with full authority.

    ● While you are preparing for packing the products to ship, check whether they fall under the less harmful category. During International Shipping, the parcels can malfunction and it is not a new thing but you must check it properly. Understand what the categories like “ safe goods” and “harmful goods” mean and design accordingly. Moreover, you can visit the country’s government website to be on the safe side.

    Taxes on International Goods

    A specific tariff is charged by the concerned government body on international shipments. Well, these charges and duties are not fixed to a constant percentage and it keeps on changing by the dimensions and type of the package. Duties can be of two types- DDP( Delivery Duty Paid) and DDU( Delivery Duty Unpaid). In the case of DDP, you have to pay all the taxes that apply to your shipment as the merchant. And in the case of DDU, the customer pays the associated fees that apply to your shipment. So keep a record of these duties and the concerned taxes before shipping your goods.

    Conclusion

    International Shipping is the best option to expand your e-commerce across the whole world. And having a good communicable working team, your business can reach an unexpected height in the upcoming years. Therefore, giving the above-mentioned factors some research and thought can be very much helpful to you if you are a beginner in this field. And also never forget to try out new approaches and techniques to flourish your business.

    Therefore, now it’s time to buckle up and focus on expanding your business worldwide. Also, try to make your content reach every geographical corner of the world. And the above-mentioned article is the right key to your business interests! Therefore, good luck with your efforts!

    FAQs

    Which are top 10 fastest international shipping companies?

    Top 10 most popular international shipping companies who ship fast are-

    • DHL
    • FedEx
    • UPS
    • USPS
    • DB Schenker
    • Royal Mail
    • DTDC
    • Bluedart
    • Aramex
    • Ecomm Express

    Is it hard to ship internationally?

    Shipping goods internationally is a complicated process as it needs a lot of paperwork, one must consider the custom regulations, international shipping rates, lost or damaged parcel, the delivery time.

    How do I figure out international shipping cost?

    You need to check out following things to get an estimate of international shipping cost-

    • Origin or Destination of Product Delivery
    • Weight Type- Either Dimensional or Product Weight whichever is larger.
    • Shipping Mode
    • Warehouse expenses
    • Delivery Timings

  • Snapchat $10 Billion Loss – How Will It Become Profitable?

    As early as a day ago, the news headlines screamed about Snapchat losing USD 10 billion as its stock fell at a 52-week low.  The company lost nearly 40% of its value and reported a net loss of USD 422 million.  This is a consecutive loss after it reported a loss of USD 152 million the previous year as well.

    Snapchat – A Brief
    The Rising Fame of Snapchat
    The Reason for the Loss
    The Future of Snapchat

    Snapchat – A Brief

    Snapchat Inc. later renamed Snap Inc., developed the American multimedia instant messaging app Snapchat. It was created by Evan Spiegel, Bobby Murphy and Reggie Brown, all former students of Stanford University.  Snapchat app became known for representing the new mobile-first direction for social media.  It places significant importance on users interacting with virtual stickers and augmented reality objects.

    Snapchat’s principal feature is that pictures and stories are available only for a short time to their recipients. Over time the app has evolved from a person-to-person photo sharing to now sharing ‘stories’ of 24 hours of chronological content.  It also allows brands to show ad-supported short-form content.  Its privacy includes allowing users to keep their personal photos in a password-protected space called ‘my eyes only’.

    Snapchat exchanges more than four billion snaps a day. It registered a 23% growth last year in its user base registering a total of 293 million daily active users. Due to its popularity among the younger generation, specifical users under the age of 16 years, it has raised privacy concerns for the parents.

    The Rising Fame of Snapchat

    Evan Spiegel, Bobby Murphy and Reggie Brown worked closely together to develop the app, which was initially, launched in July 2011 as ‘Picaboo’. The app was so named due to its feature of disappearing pictures. It was relaunched as Snapchat in September 2011. From thereon, the company turned its focus from branding efforts to usability and technical aspects.

    2012 – Trouble started brewing between the three app developers over the partnership and it took on the form of a legal battle.

    2012 – The CEO of Snapchat, Evan Spiegel described the company’s mission – “Snapchat isn’t about capturing the traditional Kodak moment. It’s about communicating with the full range of human emotion—not just what appears to be pretty or perfect.” He further elaborated and positioned Snapchat as the solution to the stress that was created due to the longevity of personal data on social media

    2012 – This resulted in an increase of Snapchat images sent per second from 25 in May 2012 to 20 million images per day by November of that year.  Within a space of 6 months, users had shared over one billion photos on the Snapchat iOS app

    2012 – Snapchat also released the Android app in October this year

    2013 – A new version 5.0 of Snapchat was released for iOS.  New features were available in this updated version like speed and design enhancements, swipe navigation, an improved friend finder and in-app profiles

    2013 – In June Snapchat introduced Snapkidz.  This app was made for children under 13 years of age.  It was a part of Snapchat and activated only when the user verified their age by keying in his/her birthdate.  This app only allowed users to click photos and draw restricting them to send to other users.  Also, any photos could only be saved locally on the device being used.

    2014 – In September Reggie Brown settled with Spiegel and Murphy for USD 157.5 million and was also credited as one of the authors of Snapchat

    2015 – Snapchat’s users were sending 6 billion videos per day by November

    2016 – In a few short months that figure reached 10 billion videos per day

    2016 – By May of this year, Snapchat had generated strong investor interest and raised USD 8.1 billion in equity offering

    2017 – The app’s popularity had grown its daily active user base of 166 million by May

    2017 – In November Snapchat ran into a spot of trouble when its redesign was not received enthusiastically.  This caused Snap Inc., to lose USD 1.3 billion in market value

    2019 – Snapchat rallied and by the end of the year had ranked as the fifth most downloaded app of the decade

    2020 – Snapchat acquired AI Factory, a computer vision start-up to boost its video capabilities

    2020 – In November Snapchat announced ‘Snapchat Spotlight’.  It declared a total pay out of USD 1 million a day to users posting viral videos.  However, the criteria for a video to be considered viral was not specified, nor was there any clarification on the distribution of the prize money

    2022 – Last month Snapchat announced its plans to launch Snapchat Plus – a subscription-based model.  The subscription will allow its users access to additional features and an ability to change the app icon.

    The Reason for the Loss

    Snap Inc., the camera and social media company went public in 2017 with a share value of USD 27.  In October of 2021 its stock price peaked at USD 83.  The stock saw a deep plunge of 25% just a few days before after the company posted a Q2 loss of USD 422 million.

    The company’s second-quarter investor letter read – “The second quarter of 2022 proved more challenging than we expected, Our financial results for Q2 do not reflect the scale of our ambition. We are not satisfied with the results we are delivering, regardless of the current headwinds.”

    Although Snap’s user base has grown from the first-quarter’s 332 million to second-quarter’s 347 million daily active users, the company’s losses have been attributed to a few broader reasons

    • Increase in cost of revenue – payments to content partners, costs of creating content and inventory costs for Spectacles – the company’s camera-enabled sunglasses.
    • Snapchat’s rejection of USD 3 billion from Facebook resulted in Facebook turning Instagram into a formidable competition to Snapchat. Instagram offers the same features made better than Snapchat.
    • The reduced advertising content on Snapchat is increasing pressure on revenue.
    • Economic challenges mean Snap is facing rising inflation and interest rates, supply chain shortages, labour disruption, policy changes as regards to the platform and, of course, the effects of the ongoing war.

    The company has announced a significant slow-down of the hiring process.

    The Future of Snapchat

    Apple’s change in privacy policy has adversely affected many social media platforms and Snapchat is no exception. In April 2021, Apple announced it would ask iPhone users for permission before allowing social media apps to track their activity. This move is likely to be replicated by Google for Android devices. This move threatens companies like Snap whose revenue is largely dependent on selling smartphone ads.

    However, the company is already on a quest of diverse revenue streams. It has already launched or has begun developing several new features designed to encourage users to buy products from brands within the app. It will allow Snap to earn commissions and increase revenue.

    The company is, although going through a troubled time, by no means finished. It is already ideating and creating new revenue streams to emerge stronger and post substantial profits in the future.

    FAQs

    Why did Snapchat lose $10 billion?

    Apple’s change of privacy policy, tough competition, and rescued advertising content were some of the reasons why Snapchat stocks dropped.

    What is the future of Snapchat?

    The future of Snapchat depends on the new features the app may introduce and its subscription services.

  • Why ShopClues Failed? | Case Study Behind the Downfall of the Once Unicorn Startup in India

    India’s long history of promising and successful eCommerce startups also includes some well-known crashes too. ShopClues, an online shopping marketplace venture is a great example here as it rose to great heights before facing a hard fall. The startup tasted success so well that it even acquired the status of India’s fourth unicorn in 2016. But it couldn’t maintain its status for long as a series of events contributed to its downfall. This article will go through the reasons behind ShopClues’s failure.

    The Rise of the Ecommerce Platforms in India
    ShopClues – An Overview
    Why ShopClues Failed?

    Why are Indian Startups Failing?

    The Rise of the Ecommerce Platforms in India

    The advent and wide use of the internet have ensured at least one element – the ability to create branching platforms. In this manner, most aspects of the pre-internet era have transformed to become more accessible and attainable. One such facet is the marketplace.

    The traditional physical marketplace has been replaced almost completely by an online space for selling and buying. Contrary to the belief almost 30 years ago, eCommerce spaces are here to stay and thrive at it. There are various reasons why the eCommerce marketplace is booming throughout the world. These include:

    • It covers almost all borders and distances to bring products to a marketing platform.
    • It ensures more widespread access to products that were previously closed off to people because of geographical distances, low awareness, lack of access, etc.
    • It promotes and employs a greater amount of employees than any traditional selling platform.

    These are some of the many reasons why eCommerce conglomerates like Amazon, eBay, Joi, Nykaa, etc., have created a successful space for eCommerce to flourish in most parts of the world.

    In recent years, the Indian market has opened up multiple avenues to small businesses looking to transform into sustainable eCommerce businesses. The country also promotes established online commercial platforms. Therefore, eCommerce platforms like Amazon India, Snapdeal, Flipkart, Nykaa, Myntra, and more, have gone on to see great success in the Indian subcontinent.

    However, these successes are balanced by major businesses that have failed to sustain themselves and secure a long-term future. One such company is ShopClues. Its rise and crash have been among well-noted cases in the eCommerce world.

    The Rise Of E-commerce Industry In India
    The E-Commerce sector in India is slowly expanding its step to the most remote locations across the country. This post is about E-Commerce growth in India and what the future holds for it.
    StartupTalkyDevashish Shrivastava

    ShopClues – An Overview

    ShopClues Financials for FY2019 and FY2020
    ShopClues Financials for FY2019 and FY2020

    ShopClues is an online marketplace, similar to Snapdeal and Amazon India. The eCommerce platform was founded 11 years ago in July 2011 by Sanjay Sethi, Sandeep Aggarwal, and Radhika Aggarwal. Owned by Clues Network Pvt. Ltd., the headquarters are situated in Gurugram, Haryana, India. The brand served the interests of the Indian consumerist client as an online shopping space.

    The brand operates under the banner of ‘Made in India.’ At a time when Indians were beginning to look for ways to reduce dependency on China for goods and materials, platforms like ShopClues came to the forefront. People saw these online establishments as the perfect solution to a more patriotic and unified image of India. ShopClues certainly profited off of this value, offering goods made in India as well as foreign products at considerable discounts. Moreover, instead of focusing on large urban metro cities, the brand concentrated on selling basic and practical products related to cleaning, kitchen, apparel, electronics, and other items to Tier II and Tier III cities. Within two years of its existence, ShopClues boasted one million active users.

    As a result, the brand saw major investors like Tiger Global, Helion Ventures, and Nexus Venture Partners invested in ShopClues. According to Forbes India, the brand possessed a value of $1.1 billion in 2016 and therefore, acquired the status of a unicorn startup in India.

    With such success, where did the brand go wrong? How did ShopClues lose such a massive chunk of its revenue in later years? Let us go on to find out the answers.

    Failed Startups In India | Why Indian Startups Are Not Successful
    Why do many Indian startups fail to soar high in the sky? The reasons are evident from this case study comprising 15 ill-fated Indian startups.
    StartupTalkyLakshya Singh

    Why ShopClues Failed?

    The success of an eCommerce venture goes beyond selling its products. From rival companies to internal affairs, a lot more goes behind the brand’s capability of running operations smoothly. Sustaining a project as well as ensuring a stream of profits at the end of every fiscal year is not as easy as it sounds. ShopClues also faced many hurdles that led to its downfall. Below, we are going to take a look at some of the most prominent issues ShopClues had to deal with and ended up failing disastrously:

    Aggressive Rival Tactics

    When ShopClues came about and gained traction in the Indian consumerist sector, eCommerce businesses were a thing of rarity. Its founders took advantage of this in 2011 and began to market its products accordingly. However, by 2014, Amazon and Walmart-owned Flipkart began to focus their attention on establishing online shopping platforms in India.

    Whereas Flipkart was seen as only an online bookstore and Amazon as a western organization. Both began to aggressively market themselves to remove rivals. This affected the growth and consolidation of ShopClues, which became the small fish surrounded by sharks. New rivals with better and more refined marketing skills overpowered any model ShopClues could produce. This was one of the reasons behind the failure of ShopClues.

    False Branding

    The company also suffered losses in terms of its offerings. In 2011, the vision was to bring urban goods to sub-urban and rural spaces that lacked the opportunity to access the same. However, complaints from consumers began to stream in that the products were fake. The Luxottica Group, the owner of Ray-Ban, alleged that ShopClues had been selling Ray-Ban products under fake labellings. The accusation prompted the Delhi High Court to pull up the Indian brand for selling the products despite previous warnings. This adversely affected the image of ShopClues among the public.

    Poor Quality Products

    Alongside fake products, reports also came in that the brand was dealing people with poor-quality products. Despite the low costs and exciting offers, the products were not up to par. Many users complained of scams and dupes perpetrated by the company. People did not receive their goods or refunds on time. The customer support option was unavailable to most pleas for help. This created bad blood among users towards the brand and affected ShopClue’s image.

    Internal Scandals

    Multiple scandals rocked the company over and over. The founder and CEO of ShopClues, Sandeep Agarwal, was charged with insider trading allegations in 2013. Consequently, Aggarwal was arrested in the United States where he accepted a plea bargain on the accusations and pleaded guilty. He resigned from the post of CEO of ShopClues the same year.

    2017 saw a stormy year for the brand internally. Sandeep Aggarwal blamed Radhika (his estranged wife) for forcing him out of the company. Subsequently, the couple split up and continued to spar publicly over voting privileges and charges of fraud. Aggarwal then made a humiliating Facebook post regarding his wife and also filed a case of criminal defamation against Sethi and Radhika. He accused them of downplaying his contribution as the creator and founder of ShopClues. All such scandals among the founders created a false image of the platform in the public eyes.

    ShopClues - Negative Reviews and Scandals
    ShopClues – Negative Reviews and Scandals

    Migration of Consumers

    With a clear lack of invigorating and innovative business foundations and adaptability, ShopClues was slated for failure when the big names came into the fight. Platforms like Amazon and Flipkart started gaining popularity and trust among the consumers and ShopClues did not have an adequate plan to retain its consumer base, leading to a collective exit of many consumers towards other platforms.

    Extreme Cost-Cutting Measures

    Due to continued failures, ShopClues decided to undergo extreme measures to save costs. Hundreds of employees were regularly laid off every year after 2016. In fact, more than 200 employees were laid off in 2017 itself. ShopClues’ expenses decreased by a whopping 60% between 2018 to 2020. The financial year of 2018 saw Rs. 363.4 crores in expenses which went down to Rs. 278 crores in 2019. 2020 saw a further dramatic decrease of Rs. 148.6 crores.

    ShopClues shortened its budget for ads and promotions down to 80% in 2018. It further slashed costs to 60% in 2019. The shipment cost dropped completely down to 100%. There were no reports of transport or charges for hiring in the fiscal year of 2020, so it is assumed that these costs were also slashed.

    Conclusion

    ShopClues had all the makings of being a successful eCommerce platform with viability. However, various factors like competition, a lack of business initiatives, and unclear modules of operation left the company in the dust. Its internal affairs and state of handling procedure also had a hand in ShopClues becoming a redundant business that was once a shining avenue.

    FAQs

    Is ShopClues an Indian company?

    Yes, ShopClues is an Indian company founded by Sandeep Aggarwal, Radhika Aggarwal, and Sanjay Sethi in the year 2011. The company has its headquarters in Gurugram, Haryana, India.

    Who acquired ShopClues?

    ShopClues was acquired by Singapore-based Qoo10 in a stock deal in the year 2019 for a valuation between 70 to 100 million USD.

    Is ShopClues a failure?

    ShopClues had many reasons that led the startup towards its failure. These include false branding, rival tactics, internal scandals, and the lack of trust among the customers.

    Is ShopClues unicorn?

    ShopClues acquired unicorn status in the year 2016 with a valuation of around $1.1 billion, making it the fourth unicorn startup in India. However, the company could not hold this valuation for long and ultimately got sold to Qoo10 at a valuation between $70-$100 million.

  • Why Did Quickbooks Fail in India?

    An accounting software package developed and marketed by Intuit Inc., Quickbooks was first introduced in 1983. It is mainly geared towards small and medium enterprises and offers on-premises accounting applications. It also offers cloud-based versions that accept business payments, payroll functions and bill management and payment.

    In June this year the company made a surprising announcement – “As of July 1, 2022, no new sign-ups to QuickBooks products in India will be accepted. Prior to July 31, all existing customers will be switched to a free subscription that will enable them to continue using QuickBooks until January 31, 2023, with no charges applied. Customers who paid an annual subscription will receive a pro-rata refund for the unused part of their subscription.”

    It also announced – “The decision to retire QuickBooks products in India does not impact Intuit’s ongoing presence and commitment to investing in top tech talent in the country. The 1,300+ strong team in India continues to deliver bold innovation that impacts more than 100 million Intuit customers around the world,”

    What comes as a surprise is that Intuit announced an exit at a time when Indian SMEs are increasingly digitizing their processes including bookkeeping, inventory and even delivery. This has gained speed since the pandemic. Many SMEs are, also, collaborating with SaaS startups to increase efficiency.

    This move by Intuit will help its Indian competitors like Zoho and Tally to increase their market share. In fact, Zoho has already stepped in to fill the gap caused by Intuit’s exit.

    “At Zoho, we understand how challenging it can be for businesses to find a replacement for their existing financial system. Zoho Books will be glad to serve the needs of those businesses looking for an alternative solution, and help them transition smoothly,” said Prashant Ganti, head of products tax, accounting and payroll, Zoho.

    So, the question is – Why has Intuit QuickBooks decided to exit the Indian Market?  To understand this, here’s a quick look at what is Quickbooks and what are the services it offers.

    Quickbooks – When, Where and How Was It Developed?
    QuickBooks India Journey
    The Indian Disconnection

    Quickbooks – When, Where and How Was It Developed?

    In 1983, Scott Cook and Tom Proulx co-founded Intuit Inc, in California, USA.  The company first developed ‘Quicken’, a product for individual financial management that will be immensely successful.  Following this, it developed similar services for small business owners.

    The first Release

    Quickbooks was initially released as a DOS version based on the Quicken code base. The software gained success among small business owners with no training in accounting. Quickbooks continued to grow and soon claimed 83% of the local market in the USA by 2013.

    Professional Accountants, however, were quick to point out the weak links in the software – poor security control, absence of audit trail and non-conformity with traditional accounting standards.

    Subsequent Releases

    The criticism from Professional Accounts did not go unheeded. Intuit is set to work improving upon their software constantly.

    Year 2000 – Intuit developed Basic and Pro Versions and included full audit trail capabilities, double-entry accounting function and increased functions.

    Year 2002 – Intuit launched Quickbooks Enterprise Solutions for medium-sized businesses.

    Year 2003 – Started offering industry-specific versions with workflow processes and reports including terminology specific to the trade.

    Year 2005 – Cornered 74% of the US market

    Year 2008 – More than 50,000 accountants, CPAs and independent consultants were a part of the Quickbooks ProAdvisor Program.

    Year 2014 – Quickbooks released the Quickbooks 2015 versions including features being requested by users in the past.  It included improved version of the income tracker, pinned notes, an improved registration process and insights on the homepage.

    Year 2015 – Release of Quickbooks 2016 with improvement to existing features and new features like batch transaction, bill tracking, continuous feed label printer support, batch delete/void transactions etc.

    Year 2016 – Release of Quickbooks 2017 with improvements like automated reports, smart search and improved viewing of report filters.

    Year 2017 – Release of Quickbooks 2018 with added features like mobile inventory barcode scanning, multi-monitor support, search in the chart of accounts and mobile inventory scanning.

    Year 2018 – release of Quickbooks 2019 with added unique features like a history tracker for customer invoices, the ability to transfer credits between other jobs for the same customer and a payroll adjustment feature.

    Year 2019 – release of Quickbooks 2020 aiming at improving experience quality and reliability. All desktop versions were packed with new features like the ability to add customer PO numbers in email subject lines, send batch invoices to customers, automated payment reminders, collapse and expand columns and easy updates.

    Year 2020 – release of Quickbooks 2021 with improved payment processes and automated features.  Desktop editions of this version have streamlined bank feeds, automated receipt management, rule-based customer groups, payment reminders, customized payment receipts, data level permissions and batch delete sales orders.

    Intuit’s Quickbooks versions are available in many different international markets.  The Canadian, British and Australian divisions of the company offer Quickbooks that support the unique tax calculation needs of each of these regions.

    QuickBooks India Journey

    Quickbooks entered India in 2012 providing its products and services for accountancy and small businesses.  Its product portfolio included cloud accounting, inventory management, cash flow management and invoicing.

    With its entry, Quickbooks positioned itself to target 2 million broadband-connected small businesses. With its friendly features like affordability, accessibility, ease of use and ease of installation and maintenance, it quickly gained popularity.

    In 2017, Quickbooks covered a major milestone by making the software GST compliant. It also announced an agreement with Visa to strengthen business propositions for SME customers.

    The Indian Disconnection

    After a decade of operations in the country, it has announced its exit. It has also requested all its clients to download their data and transition out of Quickbooks. With a customer base of four million globally, Intuit’s Indian customers barely constitute 1-2%.

    Its official statement for exit declared – “​​This difficult decision to discontinue QuickBooks has been made as the company can no longer deliver and support a product that meets the needs of customers in India,”

    There are compelling reasons for the discontinuation of Quickbooks.

    • Indian SMEs constitute anything from a local grocery store to manufacturers or suppliers to big brands. This poses a unique challenge to the design of the accounting software.
    • It is mandatory to have a precise understanding of the challenges and requirements of the SME industry
    • The short time frame, especially for an international player, is a huge roadblock to developing an understanding of an SME market like India which is not straightforward.
    • Standardising a product or a service for this segment is not easy
    • Indian Government’s initiative of ‘Atma Nirbhar Bharat’ has also played a key role in promoting homegrown businesses like Zoho and Tally which offer similar services and are also cost-competitive

    Conclusion

    With this exit announcement, an era is coming to an end.  It’s a story that, on one side reflects the inability of a company to keep abreast of the SME requirements in the country, and, on the other spells triumph for homegrown SaaS companies offering similar services with a deeper understanding.

    FAQs

    Why did QuickBooks exit India?

    One reason QuickBooks is planning to leave India is the Indian market is really competitive.

    Can I still use QuickBooks after the subscription expires?

    Yes, you can use QuickBooks after your subscription ends but you will not receive any security updates.

  • How to Start a Business in Qatar? | A Guide

    If you are planning to set up a business in Qatar, you are at the right place. Exports in Qatar have always been considerably more than imports. Do you know that Qatar had a total export of 72,934,956.29 in thousands of US$ and total imports of 29,178,064.57 in thousands of US$ leading to a positive trade balance of 43,756,891.72 in thousands of US$ in 2019? The second reason why you should explore the business opportunities in Qatar is its excellent infrastructure and monetary stability. You have to pay less tax in Qatar in comparison to other major countries of the world.

    Moreover, the Qatar government has committed to spending $200 billion on its country’s infrastructure by the year 2030 as a part of the development plan. All these factors together make Qatar a profitable business workplace. But one has to consider a lot of factors before inaugurating a business in Qatar. The factors include the legal system, administration, taxation, employing staff, finding a perfect corporate place, and other valuable resources. In this guide, we will illustrate how one can establish a Business in Qatar. Let’s dive in and explore Qatar’s business opportunities first.

    Business Opportunities to Explore in Qatar
    The Basics to Start a Business in Qatar
    How to Register Your Business in Qatar?
    Taxation System of Qatar
    Visa to Obtain in Qatar for Business
    Business Insurance One Should Undertake in Qatar

    Small Business Ideas in Qatar

    Business Opportunities to Explore in Qatar

    Growth of Real GDP Qatar from 2019 to 2024
    Growth of Real GDP Qatar from 2019 to 2024

    First of all, you should explore the business opportunities in Qatar as per your skills, interests and investment capacity. Since Qatar is becoming a global economic hub, there are too many fields in which a business person can invest to obtain profits. Here is a list of possible business opportunities in Qatar:

    Delivery Business

    The world is transforming and depending on the internet. Online deliveries have expanded their legs everywhere when it comes to shopping. Everyone wants to have different choices and deliveries at their home. So, a delivery for eCommerce businesses can also be an opportunity worth exploring in Qatar.

    Restaurants or Cafes

    Do you know that a major fraction of Qatar is filled with migrants? Such people miss their country’s food and native cuisines. So, you can opt for a restaurant where American, Indian, or Chinese food is available to fulfil customers’ cravings.

    Interior Designing

    Qatar is mostly occupied by wealthy people. As a result of which, people keep investing in expanding their luxurious lives, and transforming their hotels, homes, or offices. So, if you have a keen interest in designing, then interior designing can prove to be a boon in obtaining substantial earnings.  

    Maintenance Services Business

    There is no doubt that Qatar is premature in technology. So, when it comes to repairing machines, maintenance remains an affordable option for people rather than changing the machine. Hence, maintenance services for electrical gadgets, mechanical machinery, plumbing, etc. could be a field to opt for business.

    Financial Overhauls

    If you have a potbelly for finances, then financial services are one of the most profitable industries in Qatar. An increase in Qatar’s GDP makes it necessary for people to undertake financial services for their businesses. You can opt for either wealth management, commercial banking, retail banking, or anything summing up financial overhauls.

    Lastly, it all depends upon one’s interests and investment capacity to explore different business opportunities in Qatar.

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    The Basics to Start a Business in Qatar

    Annual Export Value Growth in Qatar in 2021 (by destination)
    Annual Export Value Growth in Qatar in 2021 (by destination)
    • First of all, you will need to appoint or find a Qatari sponsor or founder for your business. Preparing a sponsor with authorized entities is the very first requirement.
    • Secondly, the company has to undertake a commercial registration by the MOCI (Ministry of Commerce and Industry). Make sure the documentation of the legal procedure is completed in the Arabic language. The English translation of documentation can be followed afterwards. You can find all the legal procedures in commercial companies’ principles.
    • Most of the time, foreigners can hold only 49% of the total share capital of the company while the remaining 51% share comes under the control of the Qatari shareholders. However, the Minister of Economics and Trade can authorize a holding of foreign investors in certain industries (eg. healthcare, agriculture, Information Technology, Education, etc.) to surpass 49% to 100%, provided the company is compatible with the development plans of Qatar.
    • The company requires at least two Qatari shareholders and QAR 200,000 of share capital for starting a business in Qatar.

    How to Register Your Business in Qatar?

    Once you have fulfilled the basic requirements, it’s time to register your Limited Liability Company (LLC) in Qatar. Here are the major requirements one needs for business registration in Qatar:

    Commercial Residence

    Application for Registration in the Commercial Register, Qatar
    Application for Registration in the Commercial Register, Qatar

    The very first step is to get a trade name for your company. Make sure the name has its connotation in Arabic. If it has a different meaning, then you have to pay QAR 1,000 more to register the name. The trade name along with a list of the stakeholders and their fraction of companies on the document will allow you to get Commercial Residence (CR). The CR will state the legality of your company.

    Trade License

    The second most important thing that is needed to register one’s business in Qatar is the trade license. One needs to fill out and submit an application form with certain formalities attached. These include CR, owner’s identification, other business authorities’ identification, articles of incorporation, pictures of the office space, rental agreement, and building completion certification (in case of new construction).

    Computer Card

    Once you get your company seal officially registered in Qatar, you need to apply for a computer card. It is mandatory for a business owner in Qatar. To get this card you will need to submit certain documents. These include a copy of the identification of business partners and shareholders, a CR certificate, a trade licence, and the official company seal. Also, you have to submit proof for the application fee of QAR 200.

    Taxation System of Qatar

    Foreign businessmen in Qatar need to pay 10% tax on the profit obtained from the business which is comparatively lower than many countries of the world. This tax is known as withholding tax. If the business is wholly owned by Gulf Corporation Nationals or Qataris, then there will be no tax on profits. Tax is also not imposed in the case of nonprofit organizations, private associations, gross income from inheritances, wages, salaries, and allowances.

    You will have to keep all records of tax payments as per Financial Reporting Standards. The tax year ends on 31 December in Qatar. After that, you will be allowed the time of the next four months to pay any of the taxes in the accounting period. In case there is any tax return, extension requests, or withholding tax statements, you will have to submit them through the tax department through TAS (Tax Administration System).

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    Visa to Obtain in Qatar for Business

    It is very important to have a valid visa before starting a business in Qatar. The following are some of the visas that one can obtain for indulging in business in Qatar:

    • Non-Qataris can obtain different kinds of visas from Qatar to operate their business as per their requirements. One can opt for a business visa for business operations. Such a visa is valid for only three months. This allows one to stay for thirty days per visit.
    • Another option is a 72-hour business visa. This is used by people who are looking forward to short business tours. You can expand its validity up to 72 hours if required.
    • Investor Visa is for foreigners who capitalize on a few selected ventures. The persons who are obtaining investor visas must have health checkup certificates, decent behaviour certificates, and investment ownership documents. One can even apply for an investor visa if he/she has property without any ownership.

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    Business Insurance One Should Undertake in Qatar

    Business Insurance is crucial for future security. Here is the list of insurances you can opt for in Qatar:

    • General Third Party Liability Insurance
    • Product Liability Insurance
    • Business Interruption Insurance
    • Property All Risk Insurance
    • Workmen’s Compensation Insurance

    Conclusion

    Hence, this was the guide on how to start a business in Qatar. Its low tax imposition and financial stability make it the best possible place to begin a business. You must consider all of the above factors before opening a business in Qatar. From obtaining visas, registrations, insurance, and taxes to licenses, everything should be up to date when you go for launching a business. Thus, starting a business in Qatar is a great opportunity to earn profits and gain experience at the same time.

    FAQs

    Can foreigners own businesses in Qatar?

    The law of Qatar does not allow foreigners to have 100% ownership of businesses in Qatar. Most of the time, foreigners can hold only 49% of the total share capital of the company while the remaining 51% share comes under the control of the Qatari shareholders.

    Is there any tax in Qatar?

    No, there is no income tax in Qatar. However, foreign businessmen in Qatar need to pay a 10% tax on the profit obtained from the business.

    Is it good to do business in Qatar?

    Qatar is a great place to do business for many reasons. These include its excellent infrastructure, monetary stability, no income taxes, and luxurious lifestyle.