TTK Prestige Under Pressure from eCommerce

TTK-Prestige-eCommerceTTK Prestige is well positioned to leverage the revival in the Indian kitchen appliances industry, through new product launches, distribution expansion and ecommerce tie-ups.

How eCommerce Gained Significance in India ?
India is an extremely Price Sensitive Market. Even 5% Discount is enough to attract a potential consumer. In this backdrop, eCommerce companies decided to sacrifice Big Fat Margins as they had very little establishment costs compared to Street Retailer. Thus began (more…)

How big can Online Retail / e-Commerce get?

eCommerce Value CreationThe total value impact of the long-term growth story for e-Commerce should not be underestimated, in our view. One of the key reasons for this relates to current annual online spending per buyer. Across the developing world, eMarketer estimates that buyers spend c.US$600 per year. This compares with an average of US$1,500 for most developed countries and very high levels of more than US$3,500 for buyers in the UK and Australia. Estimates from eMarketer indicate that the total value for the online retail market in the key emerging and largest developed countries may reach US$2trn by 2018. This would represent an annual average increase of 19% from 2013 levels.

Scenario analysis for the e-Commerce globally
Retail We calculate total retail spending for the key regions by forecasting nominal GDP by year for the next 10 years and assuming (more…)

BigBasket – India’s Online Grocer

Big Bsket - Online Grockery Shopping in IndiaThe total grocery business in India is US$150-200 bn and is growing 15% p.a. The top 10 cities account for about 30-40% of it. The largest offline grocers are Reliance Fresh, Future Group, and Aditya Birla. BigBasket is currently available in four cities – Bangalore, Hyderabad, Mumbai, and Pune – with 300,000 unique customers (50% of them in Bangalore). BigBasket.Com has recorded a 9% compound monthly growth rate since inception and has cumulatively serviced more than 2 mn orders.

The key advantages of online groceries (more…)

Domino’s / Dunkin Donuts Geared for Urban Recovery

Dominos India GrowthJubilant Foodworks the master franchisee of Domino’s Pizza in India reported positive SSG performance was in sharp contrast to 10% decline reported by Yum! Brands India (Pizza Hut and KFC); we highlight Yum! SSG decline was stronger this quarter versus 2-4% decline witnessed in the past four quarters. The management attributed the SSG recovery to a lower base and indicated no major pick-up in consumer spends. Price hike of 3% taken in November also aided SSG a tad, in our view.

Management highlighted that over the past 12-18 months, net consumer-level prices have gone up by (more…)

Reliance Retail Revenue Grows 19% in Q3-FY2015

Reliance Retail posted 19% revenue growth in Q3FY15 and continued its focus on enhancing profitability. Reliance now operates 2,285 stores across 166 cities. Accelerated store openings and LFL growth of up to 19% across formats aided the top-line growth in a quarter which is heavy on festive sales. It has emerged as the largest retail chain in the country and is looking at judicious expansion in focus retail formats. Below are key highlights of company’s performance in Q3FY15.

Reliance Retail added 279 stores (more…)

Kishore Biyani’s Future Retail No Turnaround Insight

Future Retail TrurnaroundKishore Biyani led Future Retail Ltd reported a recurring PBT loss of Rs-282mn during Q2FY15. Revenue growth was 10% y/y and EBITDA margins rose 160bp y/y (flat q/q). This was led by gross margin expansion of 120bp y/y on account of improved product mix (in favour of apparels which now account for over 35% revenue share). Staff and rental costs witnessed modest sequential increases of 1% and 3% q/q, respectively. However, other expenses rose 9% q/q on account of higher marketing spend.

Value Retail registered 14.1% SSSG (more…)

Domino’s Pizza Same Store Sales Down

Dominos Pizza IndiaJubilant FoodWorks is the largest food service company in India and is Master Franchisee for Domino’s Pizza in India, Nepal, Bangladesh, and Sri Lanka. With over a 50% share of the market, it is the leader in the formal pizza market. It is also the Master Franchisee for Dunkin’ Donuts in India. Currently, there are 806 Dominos stores (170 cities) and 38 Dunkin Donut stores (13 cities).

Same Store Sales growth has declined further to ‐5.3% while the addition of new stores has resulted in pressure on margins. We believe the pressure (more…)