Also in this letter:
■ WhatsApp users inundated with scam calls
■ Ola’s valuation cut by 35%
■ High salary a bane for startup executives
As pandemic shopping spree slows, online commerce not clicking as it did
Hi, Pranav Balakrishnan here from Bengaluru. Today my colleague Digbijay and I are reporting on how ecommerce is taking a hit after a pandemic-led uptick. The slowdown is more than what the industry had anticipated.
Driving the news: Data from Unicommerce, an ecommerce-focused warehouse solutions provider, showed a 16% volume growth in order shipments for the March quarter compared with the same quarter last year. Growth has been hit by low volumes, and discounts, we found out.
Also read | ONDC logs slow ecommerce uptake, snags may hit expansion
Tell me more: Order volumes climbed in Q3 and Q4 of FY23 by approximately 19% and 16%, respectively. Data from 1Lattice, a consulting and market research firm, said it estimated a 35% growth for ecommerce in FY23, but the past six months to March have seen a considerable slowdown.
Leaders and laggards: Electronics peripherals and audio, which include products like smartwatches, recorded a 36% growth, and fashion continued to grow beyond 20%. However, categories like beauty and personal care, and smartphones dragged down overall volumes.
What’s happening at Amazon India: Several sources and brands working with Amazon India said the e-tailer has seen the highest impact of the slowdown. “They (Amazon India) have shifted gears and are starting to focus on the bottom line. For each of our brands, there used to be multiple rebates and incentives based on certain metrics. Those are being cut. We have seen the slowest growth on Amazon India in this quarter ending March,” one of the ecommerce roll-up brands working across marketplaces said.
Namma Yatri expects to cross 1 lakh rides per day by Q3: CEO
Mobility app Namma Yatri on the Open Network for Digital Commerce (ONDC) platform has seen a sharp usage spike in the last eight months.
Comparing numbers: Launched by SoftBank-backed Juspay, the app is expected to cross 1 lakh rides per day in Q3, according to Juspay founder Vimal Kumar. Established players like Ola and Uber have been clocking 140,000-1,50,000 rides on a daily basis, as per market estimates.
Meanwhile, industry sources told us Namma Yatri, which is undertaking an average of 30,000 auto rides per day, has already cornered around 8% market share.
Cost optimisation: Namma Yatri is working on cloud-cost optimisation and migrating to Open Street Maps to reduce map costs. Kumar told ET that not offering discounts has helped optimise marketing and operations costs.
Also read | Explained: ONDC vs Zomato-Swiggy and what it means for the food-delivery space
Don’t pick up the phone: WhatsApp users hit with scam calls
WhatsApp users in India have been flooded with calls over the last week as scammers adopt different phishing methods. This has also left the telecom industry scrambling for solutions.
What’s happening? Simply put, while telcos and the regulator have been working to create artificial intelligence (AI)-based solutions to check spam calls and messages over the regular terrestrial network, scammers have moved to over-the-top (OTT) communication platforms such as, but not limited to, WhatsApp.
Modus operandi: Scammers create a fake Facebook or Instagram account to approach victims with fake offers and phishing links via messages from WhatsApp business accounts. Such messages include a link that leads to malware or other malicious entities that can result in data theft or phone cloning.
Solutions not so easy: Any anti-phishing solution which can’t work on OTT will be less effective offline as even the traditional commercial SMS traffic is increasingly shifting towards IP or internet protocol messaging, a telecom executive said.
Vanguard slashes Ola’s valuation by 35% to $4.8 billion
US-based investment firm Vanguard, an existing investor in Ola, has marked down the valuation of the ride-hailing firm by 35% to $4.8 billion from $7.4 billion.
Driving the news: According to regulatory filings with the US Securities and Exchange Commission, the value of Ola’s shares held by the Vanguard group funds fell to around $203.78 as on February 28, 2023, from $311.85 as of August 31, 2022.
Tell me more: The development comes on the back of Ola exiting verticals like food and grocery delivery and second-hand car marketplace, to focus on its mainstay ride-hailing business. The company, however, said it will continue to stay invested in the ride-hailing business.
Markdowns galore: ET reported on May 9 that Invesco had slashed food and grocery delivery company Swiggy’s valuation to $5.5 billion, down from its peak valuation of over $10 billion. Blackrock cut edtech giant Byju’s valuation by half to about $11 billion.
ET Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
ETtech Done Deals
Microsoft invests in software development firm Builder.ai: Microsoft said it has made an equity investment in Gurgaon-headquartered software development platform Builder.ai and that the two companies would work together to make software development accessible to the next set of non-tech users.
Ripplr raises $40 million in a mix of debt and equity, led by Fireside Ventures: Bengaluru-based startup Ripplr, which is a tech-enabled distributor of FMCG products, has raised $40 million in funding led by consumer-focussed venture investment fund Fireside Ventures.
Cybersecurity startup SquareX bags $6 million led by Sequoia Capital Southeast Asia: Cybersecurity startup SquareX has raised $6 million in a seed round led by Sequoia Capital Southeast Asia. The company said it will use the proceeds from the round to enhance its engineering research and development efforts, and speed up its go-to-market function.
Tweet of the day
Inflated pay dampens startup executives’ job hunt
The startup industry’s glorious days of astronomical salaries and lavish bonuses seem to be coming back to haunt senior executives in a sluggish job market.
Sharp cuts: Those seeking new jobs are finding that potential employers are hesitant to match their exorbitant compensation levels. Professionals are looking at 20-25% cuts in their payout, according to Anshuman Das, managing partner of specialised executive search firm Longhouse Consulting. Das also mentioned that employers too are avoiding candidates whose current salaries are 30% or higher than their allocated budget for the role.
Quote unquote: “The message going out is that the main thing such candidates are chasing is money. They’ll leave as soon as things improve. About 20-30% of resumes are in this category – in the current market, they’ve outpriced themselves,” said Amit Agarwal, CEO of proptech startup NoBroker, on candidates with salaries 50-60% higher than employer’s budget band.
Other Top Stories By Our Reporters
Will be remarkable to watch India for next 20 years, says Walmart CEO: Walmart Inc chief executive Doug McMillon said India has a very bright future and that his company, the world’s largest retailer, is “hoping to be a part of this economy for decades and decades”.
Will examine WhatsApp’s breach of privacy, says MoS IT: The Centre will examine the alleged breach of privacy wherein WhatsApp is said to be accessing the microphone of smartphone users while the phone was not in use.
‘Cisco aims $1 billion in production, export from new Tamil Nadu unit’: Global telecom and networking equipment maker Cisco will aim for $1 billion worth of domestic production and exports over the next few years from its new manufacturing unit to be set up in Tamil Nadu, the company’s chairperson and global chief executive officer Chuck Robbins said.
Global Picks We Are Reading
■ India’s religious AI chatbots are speaking in the voice of god — and condoning violence (Rest of World)
■ Microsoft Bets That Fusion Power Is Closer Than Many Think (WSJ)
■ A Mysterious New Hacker Group Is Lurking in Ukraine’s Cyberspace (Wired)
