StartupTalky

Tag: 🔍Insights

  • FirstCry’s Ambitious IPO Plans

    Brainbees Solutions, the parent company of omnichannel retailer FirstCry, has submitted its draft red herring prospectus (DRHP) with plans to raise ₹1,816 crore through the issuance of fresh shares and an offer for sale of more than 54 million shares. The Pune-based company intends to utilize the raised capital for establishing new stores and warehouses, as well as facilitating international expansion. Despite being valued at under $3 billion in the private market, the company is anticipated to launch its public issue at a valuation of approximately $4 billion.

    Notably, existing investors such as SoftBank Vision Fund led by Masayoshi Son, Premji Invest, Mahindra Retail, and TPG Growth, among others, will divest a portion of their shares in FirstCry. In addition, all four co-founders of FirstCry will also sell part of their stakes to new investors through the offer for sale, with the proceeds not contributing to the company’s funds.

    Ratan Tata is set to sell nearly 78,000 shares, while SoftBank plans to sell 2 crore shares, Mahindra Retail 28 lakh shares, and Premji Invest will offload 86 lakh shares, as revealed in the filings. Currently, SoftBank and Premji Invest hold 25.5% and 10.36% of FirstCry, respectively, with SoftBank being the sole investor possessing more than a 15% stake in the company.

    CEO Supam Maheshwari has also diluted his holding, reducing from about 8.15% a year ago to 6%. The remaining co-founders – Sanket Hattimattur, Amitava Saha, and Prashant Jadhav – own 0.58%, 2%, and 1.44% of the startup, respectively.

    Additional selling stakeholders encompass PI Opportunities Fund, NewQuest Asia, Apricot Investments, Valiant Mauritius Partners, TIMF Holdings, Think India Opportunities Master Fund, and Schroders Capital Private Equity Asia. The funds generated from these transactions are earmarked for several purposes, including the establishment of new contemporary stores and warehouses in both India and Saudi Arabia. Furthermore, the funds will be allocated for lease payments related to existing stores, acquiring a supplementary stake in indirect subsidiaries affiliated with GlobalBees Brands, financing marketing and technology expenses, and supporting inorganic growth initiatives.

    FirstCry has indicated the possibility of exploring a private placement of equity shares for specific investors, with a potential infusion of up to Rs 363 crore, as outlined in the filing. If the pre-IPO placement materializes, the funds raised will be subtracted from the fresh issue, with the total amount not exceeding 20% of the overall size of the fresh issue.

    The company boasts in-house brands such as BabyHug, CuteWalk, Pine Kids, and Babyoye. Its comprehensive omnichannel approach encompasses 80 warehouses and stockists spread across 47 cities in India, boasting a cumulative capacity of 3.07 million sq ft to support 936 modern stores. Among these, 615 stores operate under franchise ownership, while 321 are directly owned and operated by the company.

    For the efficient execution of its expansion strategy, FirstCry plans to allocate Rs 357.2 crore from the net proceeds. These funds will specifically be channeled into capital expenditures for fit-outs, inventory costs, and security deposits, facilitating the establishment of 483 new stores in India by the fiscal year 2026-27.

    The book-running lead managers for the IPO are Kotak, Morgan Stanley, Bofa Securities, JM Financial, and Avendus, with Link Intime India Private Limited serving as the registrar of the offer.

    Although the specific dates for FirstCry’s IPO subscription have not been disclosed in its DRHP, various media reports suggest that the public issue is anticipated to open in early 2024. Details such as the offer price and IPO price band are yet to be announced.

    Established in 2010 by Maheshwari and Amitava Saha, the company initially commenced operations as an online baby care brand but swiftly transitioned to an omnichannel strategy, mirroring the approach of many direct-to-consumer entities. Despite experiencing consistent revenue growth, FirstCry encountered ongoing losses over the years. In the past decade, the company managed to achieve brief profitability in FY21, attaining a profit of Rs 216 crore.

    FirstCry Financials
    FirstCry Financials

    However, the financials for FY23 reveal a substantial six-fold increase in losses, reaching Rs 486 crore for the year. This escalation in losses occurred despite a twofold surge in sales, with the company reporting revenue from operations amounting to Rs 5,632 crore during FY23, more than double the Rs 2,401 crore recorded in the preceding year.

    The expenses for the year exhibited a notable 146% increase, rising from Rs 2,568 crore in FY22 to Rs 6,316 crore in FY23. Virtually every cost component experienced a significant uptick for the company during this period.

    According to the DRHP, FirstCry primarily contends with organized entities in the Indian Childcare Products market. This includes horizontal online platforms like Amazon, Flipkart, and Meesho, as well as vertical online platforms such as Hopscotch, Myntra, and Ajio. Additionally, it competes with multi-brand and exclusive retailers like Reliance Trends and Gini & Jony. Notably, there are no significant organized specialty vertical multi-channel players in India’s Childcare Products market.

    A RedSeer Report indicates that India boasts the largest population of children globally, with approximately 309 million children under 12 years of age as of July 1, 2022, and a birth rate of 16.4 births per thousand people in the calendar year 2021. Despite the current nascent spending per capita on childcare products in India at ₹7,975 in the calendar year 2022, it is projected to grow rapidly, with an estimated CAGR of around 15% from 2022 to 2027. This growth rate surpasses that of mature markets, such as the USA (3%) and China (7%), as outlined in the DRHP.

    FirstCry acknowledges potential risks in its future endeavors, highlighting concerns about expenses related to marketing, expansion, retail distribution, and stock options that could adversely affect its financial condition.

    The DRHP explicitly states, We cannot assure you that we will continue to grow our customer base at this rate or at all in the future. Further, if we fail to acquire new customers, or fail to do so in a cost-effective manner, we may not be able to maintain or increase our revenues or grow our operations.

    Story of Firstcry: Success Journey & Company Details
    Firscry is Asia’s largest e-commerce store for kids. This is the story of Firstcry, its business model, funding, revenue, and everything you need to know.
    StartupTalkyRishabh Rathi

  • OppDoor Launches as Binny Bansal’s Next ECommerce Venture

    Binny Bansal, the co-founder of Flipkart, has launched a new venture named OppDoor, which is geared towards assisting eCommerce businesses in expanding globally through comprehensive solutions. OppDoor aims to provide end-to-end support, including design, product, human resources, and backend assistance, to eCommerce companies seeking to extend their operations to different regions, leveraging top platforms like Amazon and others.

    The company’s website outlines a wide range of services, describing them as covering a brand’s entire lifecycle, from inception to exit. OppDoor emphasizes its ability to deliver fully managed operations and business advisory services.

    The strategic timing of OppDoor’s launch is noteworthy, occurring five years after the sale of Flipkart to Walmart in 2018 by Sachin Bansal and Binny Bansal. The non-compete clause associated with the Walmart deal ended in 2023, allowing Binny Bansal to venture into eCommerce again. In contrast to a consumer-facing internet firm like Flipkart, Bansal’s focus with OppDoor is to establish a startup that directly engages with businesses, aiding them in scaling operations.

    Initially concentrating on eCommerce companies in the United States, Canada, Mexico, the United Kingdom, Germany, Singapore, Japan, and Australia, OppDoor does not mention India on its website.

    Highlighting the significance of Amazon for eCommerce companies, OppDoor emphasizes its commitment to fully managed Amazon services for expanding private label brands globally. The website notes Amazon as an “endless opportunity,” citing that 63 percent of Amazon sellers embracing global expansion witnessed a surge in sales. OppDoor points out that brands with a multi-region presence achieved three times higher exit multiples compared to those operating in only one or two Amazon regions.

    While Amazon is a primary focus, OppDoor states its intention to collaborate with other platforms such as Walmart, Etsy, and more, offering services related to marketplace operations and seller management.

    It is important to note that the company is registered in Singapore and was incorporated in May 2021, initially operating under the name Three State Ventures Pte Ltd, which is Binny Bansal’s venture capital firm investing in various startups across sectors in India, including Curefoods and Scapia.

    Crafting a Multichannel Symphony: The OppDoor Approach
    Data-Driven Expansion to Walmart
    Google-Driven Visibility Improvement
    Innovative Shopify Storefront Collaboration

    Crafting a Multichannel Symphony: The OppDoor Approach

    Recognizing that Amazon is poised to be the linchpin of OppDoor’s client revenue, their strategy does not involve distancing but rather adding strategic layers. OppDoor is poised to focus on Walmart, an organic choice given its marketplace prominence. The objective is to establish a secondary sales channel, acting as a safety net for the predominantly Amazon-centric business model.

    Data-Driven Expansion to Walmart

    In a thorough analysis, OppDoor will delve into the search volume potential for each product listed on Amazon, aiming to expand to Walmart. While encountering fewer long-tail keywords compared to Amazon, the company will pinpoint broader keywords applicable to specific products. Based on this insight, OppDoor will strategically introduce selected products to Walmart, anticipating a noteworthy 10% incremental revenue boost for those items.

    Google-Driven Visibility Improvement

    Based on this insight, OppDoor will strategically introduce selected products to Walmart, anticipating a noteworthy 10% incremental revenue boost for those

    Innovative Shopify Storefront Collaboration

    For products gaining momentum through these campaigns, OppDoor will pioneer an innovative approach: partnering with their clients to establish a Shopify storefront. This strategic move is designed to redirect traffic from Google and various social media platforms to a dedicated Shopify website.

    OppDoor’s approach signifies a nuanced understanding of the evolving eCommerce landscape, where the orchestration of multiple channels and data-driven insights will play a pivotal role in shaping the success of businesses venturing into the global market. As OppDoor embarks on its journey, it is poised to redefine the dynamics of eCommerce expansion through innovation, strategic partnerships, and a commitment to client success.

    Flipkart’s Success Story: From a Startup to India’s Leading E-Commerce Platform
    Discover the full story of Flipkart, India’s leading e-commerce platform. Explore Flipkart’s subsidiaries, business model, funding, ESOPs, founders, and more.
    StartupTalkyRishabh Rathi

  • AI Firms Say Analysing Use Cases and Robust Data Strategies Key for AI

    One phenomenon that knocked the wind out of everyone’s lungs in 2023 was artificial intelligence! Right from chatbots to AI tools for video and content creation, it has caught everyone’s fancy.

    India wasn’t far behind, as several companies and apps mushroomed, reflecting the global scenario. A NASSCOM report shows that more than 60 Indian startups started shop in April and June 2023. The optimism surrounding AI has rubbed off on investors, too.

    NASSCOM’s India Data Science & AI Skills Report shows spending on AI in India topped $3 billion in 2022 and is expected to jump to $4.2 billion by 2024.

    In fact, Goldman Sachs sees investments in the AI sector topping $160 billion globally by 2025, with India having an advantage of “resilient growth and strong demographics,” which could attract investments from global investors and corporations.

    “The intricate dance of AI and ML capabilities, coupled with multi-channel integration, has propelled businesses toward a future where agility and scalability are paramount,” said Abhijit Dutta, Chief Strategy Officer of Hostbook, a cloud-based accounting services firm that also offers automated business solutions.

    Despite the rapid growth of AI companies, challenges remain when it comes to integrating AI into traditional corporate processes.

    In this article, StartupTalky speaks to a few AI consulting companies that shed light on AI integration in India.

    AI Awareness
    Data Mining Strategy
    Identifying Use Cases
    AI Training

    AI Awareness

    The top challenge faced by AI companies is to dispel myths surrounding AI integration, said Agam Chaudhary, founder and CEO of Two99, a collective of agencies with a focus on advanced e-commerce, technology, and marketing.

    Explaining how they tackle the problem, Chaudhry said, “We show them it’s not a sci-fi flick but a practical tool that can make their lives easier. We bring out the success stories custom-made for their industry. We lay it all out on the table—the good, the bad, and the ethical considerations. Building trust is crucial. We’re like AI consultants, working hand-in-hand with them, understanding their worries, and customizing solutions that fit like a glove,” Chaudhary said.

    Based on client experiences, PwC had listed some myths that clients seemed to express about AI: ‘ businesses don’t need AI, and they are ‘too risky, to name a few.’

    Over time, there seems to be a gradual attitudinal shift towards AI. A survey of 54,000 workers conducted by PwC in September showed that a third of respondents believe AI will help increase productivity and efficiency. More than a quarter said it would help them learn valuable new skills.

    An AI survey by Uplekha found that 61% of Indian companies feel AI will make work more efficient.

    Employee Attitudes on AI by PwC
    Employee Attitudes on AI by PwC

    Exploring the World of AI-Powered Productivity Tools
    Unlock efficiency with AI-powered productivity tools! Supercharge your workflow and save time. Explore the future of work with cutting-edge AI tools.
    StartupTalkyAbira Dutta

    Data Mining Strategy

    Data mining is the cornerstone of AI and ML. AI heavily leans on vast sets of existing data and statistics to come up with a near-perfect AI model of content or analysis, which can then be applied to the problems in question.

    According to E&Y India Chairman and CEO Rajiv Memani, India is the second largest generator of data after China, which is an added advantage for training AI models.

    Yet, the availability of clean data sets has been an issue.

    “All three aspects, i.e., clean data, relevant data, and a sufficient amount of data, are important. The models need sufficient data, and for financial risk use cases, they should cover historical data from at least 1-2 economic cycles. In the absence of such data, these AI and ML models produce suboptimal results and end up losing user confidence in using these models,” said Abhinava Bajpai, Co-founder and Head, Acies TechWorks.

    The government is in the process of developing India’s comprehensive AI strategy, which involves building an India Dataset Platform and an AI Compute Platform. 

    Information and Technology Minister Rajeev Chandrasekhar recently elaborated on these, saying that the Indian dataset platform will be one of the largest and most diverse collections of anonymized datasets to train multi-parameter AI models. Meanwhile, the India Compute Platform will create a substantial graphic processing unit (GPU) capacity for enterprises to train AI models under a public-private partnership.

    Leveraging Data to Increase Revenue: The Power of Insights
    Discover how harnessing data can increase revenue. Explore strategies and real-life examples of businesses that have achieved remarkable success.
    StartupTalkyMuskaan Kapoor

    Identifying Use Cases

    In a bid to jump onto the AI bandwagon, companies are struggling to adopt specific use cases, AI experts said.

    “I would say that you know, if organizations are looking at adopting AI, look at some of those achievable use cases, which they can then take right and partner with companies to achieve those,” said Rohit Yadava, Chief Operating Officer, MSys Technologies, which offers digitalization services to companies.

    Echoing this view, Sairam Vedam, Chief Marketing Officer of Cigniti Technologies, says, “Our approach has always been to understand the existing data strategy of the company. Also, what is the existing automation strategy of the company because we are a born-testing quality engineering company? So, we look at AI applications through those two lenses. And then, as I said, educate, experiment, experiment in the sense of experiment on use cases.”

    Another report by Deloitte outlined the use cases of AI across six major industries: consumer, energy, resources, and industrial; financial services; government and public services; life sciences and health care; technology; media; and telecommunications.

    For instance, use cases within the consumer goods segment could include aiding content generation, trade promotions, creating new product prototypes, creating an immersive marketing experience, market intelligence through data access, on-demand customer support, and shopping assistants.

    “Performing cost-benefit analysis of AI and ML models before implementing them is important for the continuous and persistent use of such models… The size of the business and revenue and cost impacts need to be considered before implementing AI and ML models,” said Bajpai from Acies Consulting.

    Global Data Science and AI Installed Talent
    Global Data Science and AI Installed Talent

    AI Training

    Training staff with AI know-how has now become imperative. This is apparent from the rise in demand for AI training and AI-related upskilling courses.

    “It has become essential for executives to learn AI. Data science training is specifically helpful to train aspirants in AI, and by ensuring the holistic development of executives, these programs can become a game-changer in helping industries realise the true potential of AI,” said Piyush Arora, senior director of business strategy at AI-based learning platform Edvancer.

    Edvancer has seen a 4x rise in applications for AI courses and a 100% increase in interview opportunities for students with data science and AI qualifications.

    A NASSCOM report shows India is currently ranking 2nd in training and hiring AI talent in the world.

    “A major portion of the future talent demand will come from the existing tech workforce through upskilling; learning curves are becoming shorter, and skills are becoming redundant in 18 months,” NASSCOM said, adding that “design thinking” is a key skill to implement AI and not merely the ability to build and run complex algorithms.

    However, all this training comes at a heavy cost.

    A study conducted by the Boston Consulting Group and the Indian Institute of Management-Ahmedabad estimated that just the top 500 Indian companies would require “at least one million hours of training.”

    “Organizations must invest in significant upskilling of mid- and senior-level management on the business aspects of AI, digital transformation, ‘agile’ ways of working, and more. Companies have a choice to prioritize AI and adopt it or perish—and the nature of this technology is such that either scenario would come about very quickly,” the report said.

    The top 500 listed companies would need at least 25,000–30,000 advanced practitioners of AI and ML in the next 3–5 years, including AI professionals, data scientists, data engineers, and enterprise architects, the report said.

    Conclusion

    AI maturity has been a buzzword in 2023, given the boom in AI and its peripheries. According to AI watchers and experts, this maturity will accrue over a period of time with enough use cases to innovate, experiment, and smartly apply collated data. However, the large boom in AI within the country has laid bare the talent and skills gap. Hence, training and upskilling pertinent AI skills must become a priority for companies going forward.

  • Fintechs in 2024: Navigating Toward a Brighter Future

    2023 is a year that loan app companies and fintech companies may want to erase from their memory. Fraudulent loan app companies, extortion cases, and a rigorous crackdown by policymakers have meant that the whole cart is being painted black.

    However, some loan app companies and fintech companies continue to pin their hopes on a better 2024 with consumer awareness programs, smarter risk-priced products, and collaborations to clean up the much-tarnished image of the sector. 

    Clean Business
    Risk-based Pricing
    End of a Tunnel

    Clean Business

    Digitization has hit nearly every aspect of life, and credit availability is not very far behind. A report released by banking regulator Reserve Bank of India showed that loans disbursed by banks and non-banking finance companies through the digital mode multiplied 12 times between 2017 and 2020. With the rise in several disbursements, the grim underbelly of several loan app companies has also been exposed.

    Earlier this month, Finance Minister Nirmala Seetharaman intimated the Lok Sabha, saying that between April 2021 and July 2022, Google Play had reviewed up to 4000 loan app companies and had removed more than 2500 loan apps from its Play store. Several debtors have been driven to death by extortion calls and threats, some even being sent morphed pictures of theirs, highlighting the dark side of loan app recovery agents.

    However, some of the more reputed companies are trying their best to clean off this image of loan app companies.

    “We continuously explain to our end consumers through online as well as offline mediums to not fall into offers that look very attractive or that are available through WhatsApp, SMS, and SMS calls,” said Rajesh Shet, founder of gold loan platform company Sahi Bandhu.

    The regulators, too, are putting in all efforts to curb unsolicited apps. Recently, the Ministry of Information and Technology has asked the Reserve Bank of India to have more exhaustive Know-Your-Digital-Finance-App norms.

    “This will ensure that only legitimate and scrutinized financial apps can access and use the Indian banking system, and further, if there is any violation of law, the KYDFA process will help in establishing the traceability and origin of the app for action under the law,” Minister for State for Electronics and Information Technology Rajeev Chandrasekhar told the news website Moneycontrol.com.

    Risk-based Pricing

    The issue of defaults within the loan app universe unravels a chicken-and-egg situation wherein companies are going overboard with selling products, thereby ending up sitting with bad loans on their books.

    “Within the fintech industry, to increase the top line, some companies are trying to sell everything possible, even if customers are not looking for a loan or a credit card. They are trying to cross-sell and try to bring in lucrative deals or offers,” said Brijesh Chokhra, co-founder of the instant loan app company Wecredit.

    Instant student loan app company Kuhoo Founder and Chief Executive Officer Prashant Bhonsle feels lending needs to be dealt with in a nuanced fashion to make it work for both the company and the customer.

    “There are interpretations that a lender will have to do to fully understand, such as the income documents of the customer, the P&L, and the ITR. Some businesses you are evaluating are cash-flow businesses, and some are asset-heavy businesses. How do you interpret that information? And that interpretation is the secret sauce, which varies from lender to lender,” said Bhonsle.

    Talking about Kuhoo’s focus area of student loans, the skill was to evaluate the potential of every student to get a job, Bhonsle said.

    The regulators are, however, not taking any chances. 

    Recently, the RBI asked banks and non-banking finance companies to increase the risk weights on commercial loan exposure and credit card exposures to 125% from 100% earlier. Interestingly, several digital lending apps borrow from NBFCs too.

    Rating agency ICRA recently observed in its press release that co-lending transactions by medium and small non-banking finance companies were “on the rise, largely seen in the unsecured loan segment, with the counterparty mostly being other NBFCs.”

    Attributing to RBI data, Minister of State for Finance Bhagwat Karad said in the Lok Sabha earlier this month that NBFC’s share of credit to the industry was the highest at 12.83 lakh crore INR, registering a 12% rise year on year. This was followed by retail loans at 10.55 lakh crore INR, recording a near 26% rise on the year.

    According to Bhonsle, appropriate “risk-based pricing” holds the key to a successful lending business.

    End of a Tunnel

    Given India’s sustained growth trajectory coupled with the promise held in artificial intelligence and machine learning, 2024 could hold promise for fintech companies.

    “The Indian economy is growing rapidly, and with it, the demand for financial services. The coming years hold immense promise, and innovators across the world should explore these opportunities,” RBI’s Governor Shaktikanta Das said in a speech in September. 

    “Technological innovation has unprecedented potential to make finance more inclusive, competitive, and robust. It is crucial that technological advancements in the world of Fintech evolve in a responsible manner and are truly beneficial to the people at large. It is, therefore, vital for these innovations to be scalable and interoperable,” he added.

    One of the ways to scale up operations for fintech companies would be through mergers, such as the one between the digital lending app Slice and North East Small Finance Bank in October. Touted as a breakthrough strategy to scale up, players are hoping for more such collaborations within the industry.

    “I strongly believe that this industry will have to work closely and collaboratively, keeping common interests in mind. There will be competition, but there are common industry concerns and matters that require collaboration. And then, at some stage, there will not be enough room for many players. That’s when one will have to join hands and see who is good at what. Someone may be very good in tech, and someone may be very good in customer onboarding,” said Shet of Sahibandhu.

    India’s growth prospects also hold promise as far as credit demand is concerned.  Rating agency S&P revised its growth projection for India in 2023–24 to 6.4% from 6% earlier. For the next fiscal, however, it lowered its projection marginally to 6.4% from 6.9% earlier.

    “India as an economy is doing so well, and this asset class (real estate) has shown returns year after year. I do see a lot of innovation on the FinTech side, particularly on the home loan side, because it seems like the norm of the regulators to allow the account aggregator framework to become more popular, which means that digital information will be a lot more freely available to many players who are part of the account aggregator framework,” said Pramod Kathuria, founder and CEO of AI-enabled fintech platform for home loans, Easiloans.

    Conclusion

    Fintech companies and digital lenders are hoping for a more responsible and cheerful 2024. While technological innovations unlock their potential further, the only thing that could put a spanner in their tracks would be unscrupulous lending by themselves.

    Fintech NBFCs and Market Shifts: How Fintech NBFCs Should Adapt to Market Trends
    NBFCs need to embrace technologically driven solutions for the best customer experience. Here are the key market trends affecting fintech NBFCs.
    StartupTalkyAshwini

  • “Swiftonomics” Wave Spurs Local Economies

    Taylor Swift, the internationally acclaimed pop artist, is not just a prominent figure in the music industry; she is emerging as a significant contributor to local economies throughout North America through her recent “Eras Tour.” This musical extravaganza has evolved into a remarkable subject of analysis, highlighting the extensive impact that major music events can exert on cities and communities.

    In unveiling the economic impact of Taylor Swift’s dedicated fanbase, commonly known as “Swifties,” a recent survey by QuestionPro has brought to light some striking numbers. Each average Swiftie is estimated to contribute a noteworthy $1,300 per show, creating a diverse array of expenditures that reverberate throughout local economies.

    The Impact Unfolds in Various Facets
    Resounding Economic Impact
    Media Spotlight on Swift

    The Impact Unfolds in Various Facets

    Ticket Sales: The North American leg of the tour is poised to achieve a staggering $2.2 billion in ticket sales, setting the stage for a potential record-breaking tour.

    Travel and Accommodation: Proximity to concert venues triggers a surge in hotel occupancy, soaring to as high as 95% during the immersive “Eras” weekends.

    Food and Entertainment: Local eateries, bars, and attractions experience a substantial uptick in foot traffic and revenue, with certain establishments near the venues reporting an astonishing 1,000% surge in demand for hourly workers during Swift’s performances. A bar owner near a Philadelphia concert venue provided insight into the widespread draw of the tour, stating, “We had fans coming from all over the country, and they were spending big on food and drinks.” This firsthand account highlights the tour’s capacity to attract a diverse audience, creating a boon for local businesses as fans contribute to the economic vitality of the area.

    Merchandise: Tour merchandise booths transform into lucrative pop-up destinations, where fans eagerly acquire an array of items ranging from glow sticks to personalized t-shirts. This surge in merchandise sales further adds to the economic resonance created by Swifties.

    Moving beyond mere numerical metrics, the impact of the “Eras” tour weaves a rich tapestry of both cultural and economic significance. This tour extends its influence beyond financial gains, contributing to a broader narrative.

    Job Creation: Acting as a catalyst for temporary employment opportunities, the tour generates hundreds of jobs per show across diverse sectors such as catering, security, hotel services, and transportation. This surge in employment not only supports the logistics of the tour but also injects vitality into local economies.

    Community Spirit: Beyond the stage, Swift’s concerts become a hub for fostering a sense of community and shared joy. Fans from various backgrounds come together to celebrate their shared love for her music, creating a positive communal experience. This collective celebration resonates within the concert venue and ripples into the local community, influencing morale and fostering a profound sense of belonging.

    Local Businesses Spotlight: The “Eras” tour provides an opportune moment for local businesses to shine. These enterprises seize the chance to showcase their unique offerings, catering to the influx of concertgoers. This spotlight on local businesses not only enhances the overall concert experience but also contributes to the economic vibrancy of the surrounding community.

    An economist, contemplating the magnitude of the tour’s influence on Toronto, remarked, “It’s like hosting six Super Bowls in a row.” This vivid analogy underscores the substantial and unprecedented impact that “Eras” has brought to the city.

    Resounding Economic Impact

    Projections for the “Eras” tour indicate an astronomical gross of $2.2 billion in North American ticket sales alone, positioning it as a potential record-breaking phenomenon in the realm of concert tours.

    Swifties, the dedicated fanbase, emerge as key contributors to this economic surge. According to a QuestionPro survey, these ardent fans, on average, invest $1,300 per show in local economies, as stated earlier. “Swiftonomics” emerges not just as a musical phenomenon but as a dynamic force propelling economic growth and vitality in its wake. The profound economic impact of the “Eras” tour extends far beyond the confines of concert halls, leaving an indelible mark on various sectors and contributing to overall GDP growth and industry success. This economic resonance is reflected in the latest GDP report from the Commerce Department, revealing robust consumer spending. Notably, events like Taylor Swift concerts play a significant role in contributing to this growth, showcasing the widespread impact of cultural phenomena on the broader economic landscape.

    The success story continues with Live Nation Entertainment, the parent company of Ticketmaster, reporting its strongest quarterly results to date. A record-breaking 140 million tickets have been sold this year, marking a notable 17% increase year-over-year. Additionally, concert revenue has surged by an impressive 32%, underscoring the enduring economic impact of the “Eras” tour.

    The Eras Tour Already the Most Profitable Concert Movie Ever
    The Eras Tour Already the Most Profitable Concert Movie Ever

    Media Spotlight on Swift

    The media’s focus on Taylor Swift’s “Eras” tour underscores its recognition of the cultural phenomenon it has become, with dedicated reporters diligently covering every aspect of the pop star’s journey.

    Media giant Gannett has taken a noteworthy step by appointing a Taylor Swift reporter. This dedicated journalist will be tasked with covering the exploits of America’s favorite pop star for The Tennessean and the USA Today Network. This strategic move by Gannett emphasizes the cultural significance Swift has attained, positioning her as a figure of immense public interest.

    Taylor Swift’s “Eras Tour” transcends the realm of a mere musical spectacle; it has evolved into an economic phenomenon. The tour is rewriting the playbook of entertainment economics and etching an indelible mark on local economies across North America. Swift’s influence, as evidenced by the media spotlight and economic impact, resonates far beyond the stage, solidifying her status as a multifaceted cultural force.

    List of Brands Endorsed by American Singer-Songwriter Taylor Swift
    Taylor Swift is an American pop singer-songwriter, she is famous for her songs Shake It Off and Blank Space. Take a look at her endorsements.
    StartupTalkyIpsita Acharya

  • Spirited Growth of India’s Booze Bazaar

    The estimated value of the alcohol market in India is projected to reach approximately US$ 54,740.0 million in 2023, with an anticipated increase to US$ 111,238.9 million by 2033. During the forecast period, a noteworthy Compound Annual Growth Rate (CAGR) of 7.0% is expected in alcohol sales.

    The growth of the alcohol market in India has been remarkable, driven by evolving lifestyles, urbanization, and the expanding middle class. The country’s rich cultural diversity has historically associated alcohol consumption with social gatherings, celebrations, and religious festivals.

    The Indian alcohol market encompasses various segments, including spirits, beer, and wine, and benefits from a substantial consumer base exceeding 1.3 billion people. Consumption patterns vary across regions and demographics, traditionally favoring spirits such as whisky, rum, and vodka. However, there is a discernible shift towards premium and craft spirits, as well as an increased demand for wine and craft beer, particularly among urban millennials and the emerging middle class.

    India’s drinking culture has evolved to a sophisticated level, deviating from global trends where developed markets have experienced a decline in alcohol consumption. Factors contributing to this shift include health concerns, changing lifestyles, and generational differences in alcohol consumption.

    The Indian market stands out as one of the fastest-growing for various alcoholic beverage categories, in contrast to global trends where developed markets are witnessing a decline in alcohol consumption. The resilient Indian economy, marked by rising consumer incomes and post-pandemic recovery, plays a significant role in shaping alcohol consumption patterns. According to IWSR 2022, India has become the global leader in whisky, rum, and brandy consumption.

    The global alcoholic beverage market is projected to grow at a CAGR of 1%-2% by volume and value, while the Indian market is expected to experience a higher growth rate of 6.8%, especially in premium segments like whisky, with an impressive 61% growth. The influx of new drinkers, projected to be around 100 million in the next five years, is attributed to the maturing young population in India.

    The International Spirits and Wines Association of India (ISWAI) forecasts that the Indian alcoholic beverage industry will reach $64 billion over the next five years. This growth is fueled by rising incomes, urbanization, increased accessibility, premiumization, and a younger consumer demographic. The industry already contributes to employment for over 80 lakh people, both directly and indirectly, accounting for 1.5% of the total manpower in the country, according to ISWAI. The ICRIER report for 2021 states that the alcohol industry currently supports approximately 15 lakh jobs nationally.

    Challenges in the Industry
    The Industry Forecast

    Challenges in the Industry

    Despite the optimistic revenue projections, the sector confronts obstacles related to operating profit margins (OPM). In the fiscal year 2024, it is anticipated that OPM will contract by approximately 90-140 basis points, following a significant decline of 300 basis points in FY2023. The primary cause behind this margin reduction is the escalating prices of key inputs during the current fiscal year. Taxation and pricing policies wield a significant influence on consumer behavior and brand profitability. Navigating the intricate tax landscape necessitates a strategic approach to maintain competitiveness.

    Notably, the costs of non-basmati rice and other grains, such as maize, utilized in the production of extra-neutral alcohol (ENA), a crucial component for manufacturing spirits, have experienced a substantial increase. The impact of sub-optimal monsoon conditions and El Nino, along with government interventions affecting grain prices, plays a pivotal role in shaping the industry’s cost structure.

    The costs of packaging materials, especially glass, have also exerted pressure on margins due to a surge in soda ash prices. On a positive note, barley prices, a crucial raw material for beer production, have undergone corrections in recent quarters and are expected to remain stable in the near to medium term. Nevertheless, the diversion of grains toward ethanol production, driven by government blending norms, poses an additional challenge that industry stakeholders need to closely monitor.

    Moreover, the alcohol and beverage industry in India is subject to stringent regulations, making operations challenging and expensive. Most states have policies that diverge from practical realities, making the ease of doing business a mere term, particularly for the alcohol industry, except in a few states. Remaining compliant with evolving regulations stands as a top priority for alcoholic beverage brands. Navigating the legal intricacies of the region requires a proactive approach and a commitment to ethical business practices. To address these issues, additional costs are incurred in each state to establish local teams for follow-ups and to facilitate necessary procedures.

    As health consciousness rises, consumers are becoming more selective about their alcohol choices. Brands that prioritize transparency and provide clear nutritional information are likely to align with this evolving mindset.

    The Industry Forecast

    Nevertheless, as the year approaches its conclusion, the sales of alcoholic beverages in the nation appear to have experienced a downturn in 2023. The Confederation of Indian Alcoholic Beverage Companies (CIABC) estimates that the sales of alcoholic beverages have decelerated from a robust 14% growth in 2022 to approximately 7%-8% in 2023. However, a notable aspect contributing to this growth is the demand for products priced above ₹500 per bottle. Looking ahead to 2024, the sector aims to maintain a similar growth trajectory as observed in 2023.

    Revenue of the Alcoholic Drinks Market Worldwide From 2017 to 2027
    Revenue of the Alcoholic Drinks Market Worldwide From 2017 to 2027

    Vinod Giri, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), stated, “The previous year was exceptionally positive for the industry, with a growth rate of about 14% over the preceding year. Therefore, a slowdown in growth was anticipated this year, as sustaining such high levels is challenging. On the demand side, we did not encounter significant issues this year. Challenges were more prevalent on the supply side, especially with the elections in five states disrupting supply chains. Karnataka faced issues due to a steep price increase after the new government took office. Despite these challenges, growth remained relatively consistent across markets. Our estimate is around 7 to 8% growth, contingent on the outcome of the ongoing festive season.”

    Giri also highlighted, “In addition to volume considerations, the market’s value has been on the rise. We anticipate a 2% increase in premiumization, referring to products priced above ₹500 per bottle. This segment is expected to contribute positively to the market value.”

    Furthermore, the industry is experiencing remarkable growth in Indian single malts, indicating a healthy trend. Giri emphasized, “This underscores the exceptional quality of products originating from India, gaining acceptance globally. It reflects that we are not merely a large-volume consuming country but are also evolving into a production and export hub for alcoholic beverages.”

    The Confederation of Indian Alcoholic Beverage Companies (CIABC) expresses confidence that the industry will be able to sustain growth levels of 7-8% in the coming year.

    The Liquor Industry in India – All You Need to Know
    Discover fast-growing liquor industry in India with a market size of 52.5 billion USD in 2020, according to ICRIER. Explore trends and insights.
    StartupTalkyJ.Vaidehi

  • Tanishq: Crafting Brilliance, Blending Tradition, and Sparking Innovation

    In the glittering realm of Indian jewelry, Tanishq stands as a crown jewel, not just for its exquisite craftsmanship but also for its revolutionary journey of disrupting and dominating the gold market. Its tale is a compelling case study in innovation, market penetration, and understanding the cultural pulse of a nation.

    From Humble Beginnings to Brand Brilliance
    Bridging the Gap Between Tradition and Trendsetting
    Innovation as the Guiding Light
    The Power of Storytelling and Emotional Connect
    The Midas Touch of Market Penetration
    A Legacy of Disruption and Domination

    From Humble Beginnings to Brand Brilliance

    The Tanishq journey began with the establishment of Titan in 1984. Originally focusing on watches, Titan quickly recognized the immense potential within the Indian gold market. The inception of Tanishq can be traced back to 1994, marked by the launch of 18k gold watches adorned with precious stones. Evolving swiftly, it transformed into a distinguished 22K jeweler renowned for its exquisite range of gold and diamond jewelry. The name Tanishq, crafted by Mr. Xerxes Desai, marries ‘Tan,’ signifying the body, with ‘Nishk,’ denoting a gold ornament. The first cutting-edge jewelry factory was established in Hosur, Tamil Nadu, featuring a dedicated karigaar park.

    In 1996, Tanishq faced a critical juncture with dwindling sales and escalating losses, threatening closure. However, resilient and armed with innovative strategies, the brand staged a remarkable turnaround, culminating in an impressive annual revenue of three billion dollars last year.

    Before Tanishq’s entry, the Indian gold jewelry sector was predominantly unorganized, characterized by numerous small local jewelers neglecting intricate designs and craftsmanship. Tanishq aimed to fill this void by producing intricately detailed gold jewelry that resonated with Indian consumers.

    We realized that gold buying in India was an emotional experience, often shrouded in uncertainty,” explains Rajesh Ramesh, former CEO of Tanishq. “We aimed to build trust and transparency, making gold a more accessible and aspirational asset.

    Income of Titan Company Limited From Jewelry From Financial Year 2015 to 2023
    Income of Titan Company Limited From Jewelry From Financial Year 2015 to 2023

    Bridging the Gap Between Tradition and Trendsetting

    While embracing modernity, Tanishq never lost sight of its cultural roots. It was understood that gold held immense sentimental value in Indian households, often passed down through generations. To bridge the gap between tradition and trendsetting, Tanishq created collections that were both contemporary and rooted in classic Indian motifs.

    We didn’t want to alienate our core audience, states Mr. Ramesh. We offered designs that resonated with their cultural understanding of beauty while introducing them to fresh silhouettes and styles.

    Innovation as the Guiding Light

    Tanishq didn’t shy away from pushing boundaries. It revolutionized the gold buying experience with initiatives like Karatmeter, a device that allowed customers to verify the purity of gold instantly. It launched innovative schemes like Dhanvarsha, a gold accumulation plan, and introduced online gold-buying platforms, making buying and owning gold easier than ever.

    We constantly strive to innovate. Technology and customer convenience are at the heart of our every decision, says Mr. Ramesh.

    Tanishq's Karatmeter
    Tanishq’s Karatmeter

    The Power of Storytelling and Emotional Connect

    But Tanishq’s success goes beyond product and design. It mastered the art of storytelling, weaving emotional narratives around its campaigns. From celebrating life’s milestones like weddings and festivals to portraying gold as a symbol of empowerment and achievement, Tanishq tapped into the deepest desires and aspirations of its audience.

    “We connect with our customers on an emotional level,” shares Mr. Ramesh. “We understand that gold is more than just an ornament; it’s a symbol of love, tradition, and hope.”

    The Superwoman | Tanishq

    The Midas Touch of Market Penetration

    Tanishq’s relentless focus on quality, innovation, and emotional connection translated into unparalleled market penetration. It expanded its reach from a single store in 1955 to over 300 stores across India today. It successfully entered Tier II and Tier III cities, catering to the rising aspirations of a burgeoning middle class.

    “We didn’t limit ourselves to metros,” emphasizes Mr. Ramesh. “We recognized the potential in smaller towns and cities, and created offerings that catered to their specific needs and preferences.”

    A Legacy of Disruption and Domination

    Today, Tanishq stands as a behemoth in the Indian gold market, having redefined the way gold is perceived and purchased. Its journey is a testament to the power of innovation, emotional connection, and a deep understanding of its cultural context. It disrupted an age-old industry, not through brute force, but through intelligent strategies and a genuine desire to create a better gold buying experience for every Indian.

    As Mr. Ramesh aptly concludes, “Tanishq’s success is not just about selling gold; it’s about building trust, celebrating tradition, and empowering individuals to own a piece of the golden dream.”

    The analysis of Tanishq’s rise to dominance in the Indian gold market, highlighting its key strategies:

    • Focus on innovation and quality control: Implementing modern manufacturing and stringent quality measures
    • Bridging tradition and trendsetting: Creating designs that resonate with both cultural heritage and contemporary aesthetics
    • Embracing technology and customer convenience: Introducing Karatmeter, Dhanvarsha scheme, and online gold buying platforms
    • Emotional storytelling and brand connect: Weaving narratives around gold as a symbol of love, tradition, and achievement
    • Strategic market penetration: Expanding reach to Tier II and Tier III cities and catering to diverse needs

    Best Digital Gold Investment Platforms to invest in E-gold
    Gold is a common investment of every Indian. Many platforms allow users to invest in e-gold. Here is a list of the best digital gold investment platforms to Invest in E-gold.
    StartupTalkySatyam Agarwal

  • OLA Electric Powers On for Historic Indian EV IPO

    In a groundbreaking move, OLA Electric, the renowned electric vehicle (EV) manufacturer, is gearing up for its much-anticipated Initial Public Offering (IPO). This milestone event is poised to make history, representing the first IPO by an automaker in India in over two decades. The last instance dates back to 2003 when Maruti Suzuki (then Maruti Udyog) embarked on a similar venture.

    In a recent triumph, OLA Electric secured a substantial Rs 3,200 crore in October of this year, employing a strategic mix of equity and debt. The majority of this funding is dedicated to accelerating the establishment of an EV manufacturing unit and a cutting-edge battery facility within its gigafactory situated in Tamil Nadu. This gigafactory, set to commence operations in early 2024, holds immense significance in OLA Electric’s overarching mission to contribute to the environmental cause by spearheading the decarbonization of the transportation sector.

    The impending IPO, aiming to raise a formidable $700 million, has the potential to value OLA Electric between an impressive $7 billion and $8 billion. This valuation marks a notable leap from previous funding rounds, triggering a wave of scrutiny from market experts who are expressing concerns about the rapid surge in valuation.

    One key aspect under the microscope is the imperative for OLA Electric to chart a clear path to profitability and sustained growth. The company faces the challenge of justifying a substantial $2–3 billion increase in valuation within a remarkably short span of two months. As OLA Electric prepares to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in the coming days, the anticipation is palpable.

    Market analysts are scrutinizing the critical factors contributing to this surge in valuation. The company is under pressure to present a comprehensive view of its trajectory, outlining a strategic roadmap that not only ensures profitability but also underscores its commitment to sustainable growth in the burgeoning EV market.

    This IPO holds immense significance not only for OLA Electric but also for the broader landscape of the Indian automotive industry. As the company navigates this pivotal moment, stakeholders, investors, and industry enthusiasts await insights into OLA Electric’s financial strategy, growth prospects, and its role in shaping the future of electric mobility in India. The success of this IPO could set a precedent and pave the way for further innovations and investments in the electric vehicle sector, contributing to the nation’s broader environmental goals.

    Bhavish Aggarwal, the founder of OLA Electric, unveiled ambitious plans during the company’s annual event on August 15 last year. The revelation included groundbreaking initiatives such as the development of a new indigenously produced lithium-ion battery, coupled with OLA’s visionary goal to position India as a global Electric Vehicle (EV) hub. This event also shed light on the eagerly awaited details of OLA’s upcoming electric car.

    Impressive Sales and Manufacturing Milestones
    Financial Resilience and Stakeholder Structure
    Innovations Beyond Wheels: Krutrim AI and Future Prospects
    Ambitious Targets and Market Dynamics
    Diversifying Beyond Two-Wheelers: Future Product Lineup
    CEO Insights and the Sequential Roadmap
    Navigating Challenges in a Competitive Landscape
    Strategic Delays and Market Expectations
    OLA Electric’s Dynamic Journey

    Impressive Sales and Manufacturing Milestones

    In the calendar year 2023 alone, OLA Electric achieved remarkable success by selling over 2.4 lakh vehicles, securing a substantial 35% market share. Looking ahead, the company is poised to further enhance its capabilities with the launch of a giga factory dedicated to lithium-ion cell manufacturing, scheduled to commence operations by February.

    Financial Resilience and Stakeholder Structure

    OLA Electric has exhibited financial resilience, demonstrating a noteworthy evolution in its gross margin. Progressing from a negative margin of -5.4% in FY22, the company achieved a positive 7.63% margin in FY23. As part of its strategic roadmap, OLA Electric aims to attain EBITDA profitability by FY25, targeting a commendable profit margin of 6.6%.

    Bhavish Aggarwal commands a substantial 37% stake in the company. Other key stakeholders include industry giants like SoftBank at 23.6%, Tiger Global at 6.3%, ANI Technologies, OLA (each at 4.7%), Matrix Partners at 3.8%, and Alpha Wave Global at 3.6%.

    Total Expenses of Ola Electric Mobility From Financial Year 2020 to 2022
    Total Expenses of Ola Electric Mobility From Financial Year 2020 to 2022

    Innovations Beyond Wheels: Krutrim AI and Future Prospects

    Bhavish Aggarwal’s recent launch of Krutrim AI on December 15 positions OLA Electric at the forefront of innovation. Touted as India’s first full-stack AI, Krutrim AI emphasizes unique localization, supporting 20 Indian languages with over 2 trillion tokens. The model aspires to shape a culturally expressive future for India, driving an AI-first economy and challenging global paradigms.

    Ambitious Targets and Market Dynamics

    OLA Electric sets ambitious targets, planning to sell 9 lakh units in 2024-25 and further escalating to 2.3 million units in 2025-26, as per a Reuters report. These goals, although lower than earlier estimates, align with the evolving market dynamics and changing incentives.

    Diversifying Beyond Two-Wheelers: Future Product Lineup

    OLA Electric’s strategic initiatives extend beyond two-wheelers, with plans to launch a giga factory for lithium-ion cells by February 2024. Additionally, the company contemplates introducing a 500km range electric car by late 2024, signaling its commitment to diversify its product portfolio. Notably, OLA is also in the testing phase for an autonomous vehicle, showcasing its commitment to cutting-edge technological advancements.

    CEO Insights and the Sequential Roadmap

    Bhavish Aggarwal’s grand vision for OLA Electric involves not just two-wheelers but an entire spectrum, including scooters, motorbikes, cars, and the fundamental cell platform. The sequential roadmap envisions the progression from scooters to motorbikes and eventually cars. Concurrently, the company remains focused on enhancing cell technology.

    Aggarwal boldly stated that by the end of 2025, OLA Electric aims to make all two-wheelers in India electric. Acknowledging the ambitious nature of this goal, Aggarwal emphasized the need to develop the right products for India, ensuring cost-effectiveness and bringing supply chains into the country.

    While OLA Electric celebrates its successes, challenges loom on the horizon. Maintaining a market lead in the face of fierce competition from players like TVS, Bajaj, Hero, and Ather remains a critical objective. The company also grapples with the task of reducing losses post-subsidy reductions and addressing after-sales issues more effectively.

    Strategic Delays and Market Expectations

    To meet market expectations and justify its valuation, OLA Electric faces the challenge of demonstrating its ability to launch viable products across different segments. Recent hints from Aggarwal suggest a potential delay in the launch of OLA’s electric car until early 2025, aligning with the company’s strategic approach.

    OLA Electric’s Dynamic Journey

    OLA Electric’s journey is marked by innovation, strategic planning, and the pursuit of an ambitious vision. As the company navigates challenges and seeks to establish itself as a global EV hub, stakeholders, market analysts, and enthusiasts await the unfolding chapters in this dynamic narrative. The IPO, with its substantial valuation, sets the stage for OLA Electric’s continued growth and its pivotal role in shaping the future of electric mobility in India.

    Ola Success Story – Funding, Founders, Team, Revenue and More
    Formerly known as Ola Cabs, Ola was founded in December 2010 by Bhavish Aggarwal and Ankit Bhatia. Here is the story of Ola, and how it all started for them!
    StartupTalkyShubham Kumar

  • Zudio’s Style of Strategic Success

    Zudio, a prominent player in India’s fashion industry, has achieved remarkable success through a combination of strategic business approaches. These include a value pricing strategy, swift inventory refresh cycles, targeted expansion into tier 2 cities, a distinctive focal model, and a private labeling strategy. These strategies collectively enable Zudio to provide trendy fashion offerings at competitive prices, effectively capturing the attention of value-conscious consumers across India.

    Established in 2016 as a fast-fashion brand under the ownership of Tata Group, Zudio has rapidly expanded its footprint to encompass over 300 stores nationwide. The company offers a diverse array of affordably priced clothing, accessories, and footwear for men, women, and children, positioning itself as a cost-effective fashion solution.

    Zudio’s success in the highly competitive Indian fashion market can be attributed to several key factors:

    Economies of Scale
    In-house Design and Production
    Effective Inventory Management
    Limited Traditional Marketing
    Direct-to-Customer Approach
    High-Volume Sales Strategy

    Economies of Scale

    Zudio adopts a fast fashion model, producing trendy apparel in large quantities to capitalize on economies of scale. This strategic advantage allows the company to efficiently manufacture and distribute high-quality products at reduced production costs. Recognizing the demand for quality, trendy products at affordable prices among the young middle-class population (comprising 60% of India’s populace), Zudio strategically addresses this market gap.

    Market Value of Textile and Apparel Across India From Financial Year 2006 to 2021, With Estimations Until 2026
    Market Value of Textile and Apparel Across India From Financial Year 2006 to 2021, With Estimations Until 2026

    In-house Design and Production

    Leveraging cost-effective production methods and sourcing raw materials from economical suppliers, Zudio maintains competitive prices while delivering a blend of style, quality, and affordability. This positioning resonates with the price-conscious yet fashion-forward audience.

    Effective Inventory Management

    Zudio excels in inventory management by offering appealing, fashionable clothing and refreshing its inventory every two months. This focus ensures that Zudio’s stores remain visually appealing and inviting, providing the brand with a competitive edge.

    Limited Traditional Marketing

    Zudio adopts a unique marketing approach by minimizing investments in traditional marketing channels. Instead, the company relies on cost-effective strategies such as influencer marketing and word of mouth, effectively boosting profitability. Incorporating influencers and content marketing amplifies the brand message, recognizing the impact of social media on consumer behavior.

    Direct-to-Customer Approach

    Zudio embraces a direct-to-customer approach, eliminating intermediaries and distributors. The brand sells its products directly through retail stores and online channels, reducing additional costs. This decision has proven to be successful, as the brand has effectively attracted value-conscious customers nationwide.

    High-Volume Sales Strategy

    Prioritizing high-volume sales over high-margin sales, Zudio maintains a vast network of outlets throughout India. The company’s profitability hinges on a high turnover of products at reduced pricing, sustaining its position as an affordable fashion brand.

    In contrast to regional retailers targeting lower middle-class families, Zudio differentiates itself by catering to the youth segment with a high fashion quotient at a low price point. According to analysts at Motilal Oswal Financial Services Ltd, this strategic positioning has set Zudio apart from competitors, allowing it to thrive even in the face of challenges such as weak consumption in smaller-tier cities.

    Zudio’s ascent to a prominent position in India’s fashion sector underscores its inventive approaches and perceptive grasp of the market dynamics. The emphasis on value pricing, adept inventory management, operational efficiency, and the implementation of private labeling has not only enabled Zudio to contend with well-established brands but has also positioned it as a transformative influence within the industry. As Zudio undergoes further expansion and development, it remains intriguing to observe the potential impact of its strategies and success on the broader landscape of fashion retail.

    Business Model of Top Fast Fashion Brands in the World
    The Business model of Fast Fashion Brands has changed on a frequent basis in response to trends, customer preferences, supply and demand.
    StartupTalkyAbinaya Arangarajan

  • Tesla’s India Entry Gathers Momentum as Deal with Delhi Nears

    Tesla Inc., the renowned electric vehicle manufacturer, is nearing an agreement with the Indian government that would allow the company to import its vehicles into the country starting next year and establish a manufacturing plant within the next two years, according to sources familiar with the discussions.

    Potential Timeline and Location for Tesla’s Indian Operations
    Investment and Procurement Plans
    Discussions and Opportunities
    Challenges in the Indian EV Market
    Tesla’s Pricing Strategy and Import Duties
    Trade Minister’s Visit and Tesla’s Procurement Plans
    Resumption of Discussions and Potential Tax Relief
    Tesla’s Ambitions to Become India’s Third-Largest Car Manufacturer
    Gigafactory Location and Government Support
    Production Linked Incentive Scheme and FAME 3 Scheme
    India’s Electric Vehicle Revolution Propelled by Affordable $10,000 Cars
    Dominance of Affordable Small Cars and Compact SUVs

    Potential Timeline and Location for Tesla’s Indian Operations

    An official announcement of this collaboration is expected to be made at the Vibrant Gujarat Global Summit in January 2024. The Indian government has identified three potential locations for Tesla’s manufacturing plant: Gujarat, Maharashtra, and Tamil Nadu. These states have well-established ecosystems for electric vehicle production and export capabilities.

    Investment and Procurement Plans

    Tesla is anticipated to make an initial investment of approximately $2 billion in the proposed plant. The company also intends to significantly increase its procurement of auto parts from India, aiming to reach a value of $15 billion. To reduce costs, Tesla plans to manufacture some batteries in India as well.

    Discussions and Opportunities

    While these plans are not yet finalized, the possibility of changes remains. Elon Musk, Tesla’s CEO, previously announced in June 2023 that the company plans to make a “significant investment” in India and expressed his intention to visit the country in 2024.

    Entering India’s vast market, with its growing demand for electric vehicles among the aspiring middle class, would be a significant opportunity for Tesla. The Indian government, under Prime Minister Modi, has been actively promoting domestic manufacturing of electric vehicles and encouraging the rapid adoption of cleaner transportation.

    Challenges in the Indian EV Market

    Despite these efforts, the electric vehicle market in India has not witnessed substantial growth. Battery-powered cars constituted only 1.3% of the total passenger vehicles sold in India last year. Consumers remain hesitant to switch to electric cars due to the high upfront costs and a lack of charging infrastructure.

    Tesla’s Pricing Strategy and Import Duties

    Tesla currently does not directly import cars into India due to the high import tariffs imposed. When locally manufactured Tesla cars become available for sale, they could be priced as low as $20,000, according to some sources.

    Trade Minister’s Visit and Tesla’s Procurement Plans

    Trade Minister Piyush Goyal, who visited Tesla’s plant in Fremont, California, stated in September 2023 that Tesla plans to nearly double its purchases of auto parts from India to $1.9 billion this year. Last year, the electric carmaker sourced parts worth $1 billion from India.

    Resumption of Discussions and Potential Tax Relief

    Tesla’s interactions with India resumed in May 2023 after a year-long impasse. There are now discussions about potentially lowering import taxes for international electric vehicle manufacturers for five years if they commit to establishing local factories.

    Tesla’s Ambitions to Become India’s Third-Largest Car Manufacturer

    Tesla is gearing up to introduce a comprehensive range of electric vehicles and establish a robust charging infrastructure in India on a large scale. The company aims to offer electric vehicles at a competitive price range, with specific pricing details yet to be finalized.

    Gigafactory Location and Government Support

    Should Tesla’s proposed plans materialize, the company is poised to become India’s third-largest car manufacturer, following Maruti and Hyundai. Ongoing discussions between Tesla and Indian government officials will delve into localization strategies, including the identification of a suitable location for the gigafactory.

    Production Linked Incentive Scheme and FAME 3 Scheme

    There are indications that India may consider implementing a second phase of the Production Linked Incentive scheme to provide support to Tesla. Government officials are also engaged in talks with the industry to explore the expansion of the FAME 3 scheme, considering that the FAME 2 scheme is scheduled to conclude in March 2024.

    Market Share of Electric Vehicle in India in 2022 With Estimates up to 2030
    Market Share of Electric Vehicles in India in 2022 With Estimates Up to 2030

    India’s Electric Vehicle Revolution Propelled by Affordable $10,000 Cars

    India’s electric vehicle (EV) market is witnessing a remarkable surge, fueled by the introduction of cost-effective new models. Sales of passenger EVs in the country have soared to an impressive 75,000 units in the nine months leading up to September, representing a more than twofold increase from the same period last year.

    While EVs still account for a modest 2.4% of the total market share, a closer examination of the underlying trends reveals a crucial insight for EV manufacturers seeking to penetrate the Indian market: An astounding 86% of all-electric cars sold this year were priced under $20,000.

    This surge in demand is attributed to the introduction of several new models this year, including the most affordable option, MG’s Comet mini car, priced at less than $10,000. Tata Motors’ popular Tiago compact EV, which accounts for 39% of EV shipments, retails for around $10,500, with deliveries commencing earlier this year.

    India's EV Market Sales With Estimates up to 2030
    India’s EV Market Sales With Estimates Up to 2030

    Dominance of Affordable Small Cars and Compact SUVs

    An analysis of statistics across all drivetrains further underscores the dominance of affordable small cars and compact SUVs. Approximately 69% of cars sold in India last year were priced below $15,000, with 27% costing less than $10,000. Even top-selling combustion-engine models like Suzuki’s Swift and Wagon R retail for under $8,000.

    By offering EVs at comparable prices, automakers have successfully tapped into demand from private customers, particularly those commuting in India’s urban centers. The growing popularity of battery-powered cars among ride-hailing and taxi companies is also driven by their low operating costs.

    This surge in demand has prompted significant commitments from automakers to increase local EV production, with nearly $5.4 billion in investments pledged to establish or expand EV manufacturing facilities in India, as reported by BloombergNEF. These commitments come from both domestic players such as Tata Motors and Mahindra & Mahindra, as well as international players like Hyundai, Kia, and Vietnamese EV startup VinFast.

    While promises to establish local battery plants are also on the rise, supported by government subsidies, one aspect of India’s EV ecosystem that lacks concerted efforts, particularly from private companies, is the charging network. Most public charging stations are currently concentrated in major cities like Delhi, Mumbai, and Bengaluru, with many designed to support electric two- and three-wheelers. To fully accelerate the next phase of EV adoption, more comprehensive efforts are needed to expand the charging infrastructure across the country.

    EV Investments Surge, But Hopes Pinned on Govt Policy Push
    As investments in electric vehicles soar, the future hinges on government policies. It, however, remains to be seen if India manages to hit a sweet spot in the EV sector.
    StartupTalkyPrithvi Durai