Amazon: Closing Chinese Marketplace Business, More Focus on India

Amazon has plowed billions of dollars into the India business since opening its website there in 2013, building more than 50 warehouses to support the business The company will

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April 18, 2019

Amazon has plowed billions of dollars into the India business since opening its website there in 2013, building more than 50 warehouses to support the business
The company will keep running other businesses in China, including Amazon Web Services, Kindle e-books, and cross-border operations

In a rare retreat for Amazon.com Inc., the e-commerce giant plans to shut down its Chinese marketplace business in July as it shifts its focus to offering mainland consumers overseas products rather than goods from local sellers.

Amazon will keep running its other businesses in China, including Amazon Web Services, Kindle e-books, and cross-border operations that help ship goods from Chinese merchants to customers abroad. Starting on 18 July, customers logging in to Amazon’s Chinese web portal, Amazon.cn, will only see a selection of goods from its global store, rather than products from third-party sellers.

Amazon entered China in 2004, when it bought a local online book seller for $75 million. Since then, it’s invested in warehouses, data centers, and programs to teach Chinese sellers how to get their goods to Amazon customers. It launched its Prime membership programme in China in 2016 with hopes of luring customers with promises of high-quality Western goods and perks like free international deliveries. But extra perks like Prime Video, which has been used to woo customers in other markets, aren’t available to users in China.

Alibaba, JD and other Chinese platforms also ramped up their offerings of everything from American cherries to Australian baby formula with steep discounts. Amazon still has less than 1 percent market share in China, according to iResearch.

For now, Amazon’s commitment to China remains strong and it will continue to invest in the country, according to a company spokeswoman. She said it has been shifting the focus of its online retail business in the country to cross-border sales, which cater both to Chinese merchants selling to consumers abroad and to Chinese customers looking for high-quality goods from around the world.

Apparel Spending by Indian Shoppers: Growth nearly threefold in last decade

The market for apparel in India grew at a CAGR of 13.8% in FY18, according to a report by CARE ratings Women’s wear contributes almost 38%, and is largely

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April 18, 2019

The market for apparel in India grew at a CAGR of 13.8% in FY18, according to a report by CARE ratings
Women’s wear contributes almost 38%, and is largely dominated by ethnic apparel such as sarees, and suits.

Indians spent ₹5,408 billion on buying clothes in 2018, a jump from the ₹1,924 billion they spent in 2010, as higher disposable incomes, greater migration to large cities, and brands opening up in non metros helped more people access branded clothing.

The market for apparel in India grew at a CAGR of 13.8% in FY18, according to a report on India’s apparel market by CARE ratings.

CARE used data from CMIE and measured private final consumption expenditure (PFCE) on clothing to map overall expenditure on apparel in India. While men’s clothing continues to constitute to be the biggest chunk of the local apparel market, at 41%; kids wear that is 21% of the overall market is the fastest growing segment in India.

Women’s wear contributes almost 38%, and is largely dominated by ethnic apparel such as sarees, and suits. However, denim is the fastest growing sub-segment for women’s wear. “The robust growth in this segment can be attributed to the rising income levels, rising number of working women and more college going females,” Saurabh Bhalerao. associate director, industry research, CARE Ratings said in the report.

For long the country’s top fashion brands focused on largely catering to shoppers in the country’s top metros. However, a proliferation of e-commerce and the popularity of the mall culture in tier 2 cities such as Indore, Surat, and Kochi over the last decade has helped brands cater to these markets. Additionally, more digitally connected shoppers across markets are now aware of the latest fashion trends. “The increasing purchasing capacity and awareness of fashion and trend in small cities has also resulted in providing a huge market to the organised players of the country,” the report noted.

Indians however still remain value conscious.

As a result, medium-price apparels hold majority share among the market followed by economy segment. Here, “the price sensitive rural population forms a major part of the value and economy price segments of apparel market.” Further, driven by the twin trends of premiumization and value consciousness, the mid-market segment is being squeezed on both sides, CARE noted.

Jet Airways Crash: Big Blow to Aviation !!!

Distressed airline Jet Airways (India) Ltd. halting its entire operations from Wednesday night for want of funds is set to rattle India’s aviation ecosystem with its adverse impact on

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April 18, 2019

Distressed airline Jet Airways (India) Ltd. halting its entire operations from Wednesday night for want of funds is set to rattle India’s aviation ecosystem with its adverse impact on other business in the value chain as well as on a large number of jobs. It is also set to have a ripple effect on market competition, fares and the travel experience as rivals struggle to cater to a sudden availability of market share left behind by Jet.

To ensure that there is a plan in place to protect the aviation ecosystem from Jet’s failure and to attempt to bridge the capacity gap, aviation regulator the Directorate General of Civil Aviation (DGCA) will meet executives of airline industry and that of airport operators separately on Thursday.

One of the biggest fallout of Jet’s collapse is the loss of jobs. Industry executives said it is not the people on the rolls of Jet alone who are hit. “The loss of job of every employee on the rolls of Jet Airways also costs five others indirectly involved in the value chain their work,” said a senior industry executive who spoke on condition of anonymity. That would mean loss of work for about 80,000 people considering Jet has about 16,000 workers.

Airport operators and fuel suppliers have also lost a big customer, with Jet’s collapse. The airline which had 119 aircraft in its fleet used to operate about 600 flights a day before the liquidity crisis hit the company last year. One big challenge for the regulators is to ensure that airfare does not go up sharply during summer holidays. Spot ticket prices have already surged sharply in recent weeks. Other airlines grabbing the routes left vacant by Jet is set to impact completion in the market, giving extra pricing power to the dominant player. Surging fares is also likely to have an impact on the travel plans of people.

Jet’s failure is also set to reignite the demand for inclusion of aviation turbine fuel within the Goods and Services Tax (GST), which will help airlines to reduce their tax outgo as the new indirect tax system is without the cascading effect of taxation.