FROM THE DESK OF DEBORAH WEINSWIG

It’s Amazon Prime Day All Over Again—in India’s $800 Billion Retail Sector Amazon’s Prime Day has been and gone for 2021 in the US and other Western markets but it is still to come in India: Amazon this week announced that the event would be held on July 26–27, to mark five years of the company operating in India. The event’s ambitions this year reflect Amazon’s commitment to capturing share by working with small businesses amid potential regulatory challenges in the e-commerce space. Amazon Courting Small Businesses Amazon states that this year’s Prime Day will “empower and support” tens of thousands of small and medium-sized businesses (SMBs) such as sellers, manufacturers, startups and brands, women entrepreneurs, artisans, weavers and local shops to “bounce back from the economic disruption owing to Covid-19.” SMBs are offering special deals daily in a countdown to Prime Day that began on July 8. In early July, Amazon opened its first Digital Kendra store in India in Surat, Gujarat. Amazon Digital Kendras are resource centers that provide smaller firms with information and resources to help them sell on Amazon. The Digital Kendras help with shipping and logistics, cataloging assistance, taxation support and digital marketing services. In January 2020, Amazon pledged to bring more than 10 million micro, small and medium-sized Indian businesses online by 2025. Amazon India is also working with small retailers through its “I Have Space” program, whereby the stores act as distribution hubs and deliver orders to their local area. Context: The Draft E-Commerce Bill Amazon’s latest appeal to small businesses comes amid a consultation by the Indian government on potentially disruptive new e-commerce regulations. In late June, the government unveiled its draft e-commerce rules, which would outlaw online flash sales and force e-commerce sites to detail the country of origin for each product and suggest locally made alternatives. It would also prohibit “related parties” selling on marketplace sites—stopping Amazon’s joint venture companies such as Appario and Cloudtail, which are currently major sellers on Amazon.in, from selling on the platform. The draft bill is out for consultation until August 5 (extended from its original deadline of July 6). What Else Is Amazon Doing To Capture Share? Amazon is not only trying to onboard more small businesses; it is trying to bring more consumers into the overall e-commerce market, too. Amazon India has partnered with third-party retailers to roll out Amazon Easy stores, which are designed to introduce consumers to e-commerce with “assisted shopping.” These retailers can sign up to the I Have Space program to enable pickup and delivery of orders—effectively becoming an end-to-end Amazon touchpoint. The Easy stores, first trialed in 2015, began rolling out a new format that features product displays in 2020. These moves on the supply and demand sides reflect the fragmented and largely offline nature of India’s retail market. Only around 12% of India’s retail sales occur through “organized” (or modern retail) channels, which include e-commerce. Converting more of those sales to organized retail and so consolidating this circa-$800-billion retail market presents major opportunities. We see e-commerce as the principal driver of overall retail consolidation in the coming years, to the benefit of the major e-commerce platforms. The model for this, arguably, is China, where e-commerce platforms owned by Alibaba Group and JD.com helped spearhead the shift from a fragmented market to a more concentrated one, and are now comfortably the biggest retail companies overall in a $5 trillion sector. The popularity of online-to-offline retail strategies and major shopping festivals are commonalities seen in Indian and Chinese e-commerce. In India, Amazon is in second place in the e-commerce sector, behind Flipkart—the latter reporting having completed a fundraising round this week, which valued the Indian online retailer at $37.6 billion; majority owner Walmart joined investors including SoftBank to inject $3.6 billion of new capital, according to Bloomberg. The opportunities in India’s retail sector will continue to spur investment and innovation in e-commerce.

• Keep an eye out for our forthcoming deep dive on India’s e-commerce market.

US RETAIL AND TECH HEADLINES

Amazon Adds New Products Under Sustainable Labeling Program (July 13) RetailDive.com

• Amazon has announced plans to expand the selection of products categorized under its Climate Pledge Friendly program, which helps to identify sustainable products across categories including beauty, grocery and household.
• As part of this initiative, the company has introduced four new certifications regarding animal welfare, health and organic organizations. With these new additions, Amazon has 31 certifications, covering more than 75,000 products.

L Brands Reports Sales for Second Quarter 2021 (July 13) Company press release

• L Brands generated net sales of $2.4 billion in its second quarter of 2021, ended July 3, 2021, up 84.6% year over year. Both of the company’s operating segments reported year-over-year sales growth—Bath & Body Works saw 67.0% growth and Victoria’s Secret saw 77.0% growth.
• The company expects operating income during the quarter for Bath & Body Works to be $400 million and to be $200 million for Victoria’s Secret. It expects growth to be driven by merchandise margin rates, which were higher than expected due to positive customer response to the company’s assortments, and its streamlined inventory management.

Nordstrom Obtains Minority Stake in Topshop and Topman Brands (July 12) Company press release

• Nordstrom has acquired a minority stake in four apparel brands owned by ASOS—HIIT, Miss Selfridge, Topman and Topshop—for an undisclosed sum. Through the partnership, Nordstrom aims to attract younger consumers.
• As part of the deal, Nordstrom will gain exclusive retail rights for Topshop and Topman across North America. According to Peter Nordstrom, President and Chief Brand Officer, “Bringing the ASOS brands, including Topshop and Topman, to our customers allows us to create newness and excitement.”

Qurate Retail, Inc. Appoints David Rawlinson II as President and CEO (July 13) Company press release

• Qurate Retail, Inc., an American e-commerce service provider, has appointed David Rawlinson II as its new President and CEO, replacing Mike George as of October 1, 2021.
• With more than 20 years of experience, Rawlinson has held various leadership roles, working previously as CEO of data analytics firm Nielsen and President of Grainger Global Online.

Sam’s Club Pilots New Scan & Ship Technology (July 13) Company press release

• Sam’s Club has announced plans to pilot a new “Scan & Ship” offering via its mobile app. The technology will allow Sam’s Club members to place direct-to-home orders by scanning merchandise in participating stores.
• Sam’s Club members will be able to purchase products, choose alternative colors or sizes that may not be available at that store, and have them delivered to their desired location within three to five business days.

EUROPE RETAIL AND TECH HEADLINES

Boohoo Announces Partnership with Alshaya To Expand Debenhams in the Middle East (July 14) RetailGazette.co.uk

• Boohoo Group has announced a new partnership with Alshaya, a Middle Eastern retail franchise operator, to run Debenhams stores in the region. The partnership will launch in stores from the fourth quarter of 2021 and will include the launch of a local online platform in 2022.
• Kuwait-based Alshaya will gain exclusive rights to operate Debenhams stores and its local e-commerce platform in Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia and UAE.

Caprabo Rolls Out Revamped Assortment (July 14) ESMMagazine.com

• Spanish supermarket chain Caprabo has announced plans to roll out its revamped product assortment to more stores in its network. The retailer has expanded its range to comprise 12,500 products across categories including beers, coffee, detergent, personal hygiene, preserves, smoothies, wines and many others.
• The company launched the initiative in February 2021 in some smaller format supermarkets and saw 8% growth in sales on average.

Carrefour Spain Announces Plans To Offload 38 Stores Acquired from Supersol (July 14) ESMMagazine.com

• Carrefour Spain has announced plans to sell 38 of the 172 stores it recently acquired from Spanish supermarket chain Supersol. The company has signed agreements with local and regional players for the sale, including Cash Lepe (Andalusia), Froiz (Galicia), Maskom (Malaga) and Ecomor (Madrid). Cash Lepe will acquire 28 stores, and Froiz, Mascom and Economor will acquire five, four, and one, respectively.
• Carrefour Spain plans to convert the rest of the stores to Express, Market and Supeco banners by the end of this year.

Hugo Boss Expects 2021 Revenue To Grow by 30–35% and Reports Preliminary Second-Quarter Sales (July 14) Reuters.com

• German luxury fashion house Hugo Boss has announced that it expects its fiscal 2021 revenue to grow by 30–35%, driven by the consumer return to physical stores. The company is confident that it will continue to recover in its 2021 second half and expects earnings before interest and tax (EBIT) of €125–€175 million ($147.4–$206.4 million) for the full year.
• The company also reported preliminary second-quarter sales: Its sales increased by 129% to €629 million ($741.9 million) compared to the same period last year. Hugo Boss will report full results for the quarter on August 4.

Nisa Attributes 10% of Store Turnover To Deliveroo Orders (July 13) ChargedRetail.co.uk

• UK-based convenience store chain Nisa Retail has stated that its partnership with Deliveroo has boosted sales significantly and that some participating stores receive 10% of their turnover through the Deliveroo app. Around 100 Nisa stores currently partner with Deliveroo.
• Nisa’s Lead for Delivered Services, James Taylor, stated, “The pandemic saw a huge increase in demand for delivered goods from convenience stores, and at Nisa, we now work with a number of delivered service companies in providing a range of solutions that best suit them and their individual store needs.”

ASIA RETAIL AND TECH HEADLINES

Aldi Australia To Launch Convenience Store Format Chain (July 13) New.com.au

• Aldi Australia is set to launch a new convenience store format chain, Corner Store—with the first store opening this week in North Sydney. The move follows recent company announcements of self-service checkouts trials and the launch of an e-commerce platform in the country.
• The new format is designed to support smaller-basket, convenience-driven purchases—as opposed to traditional Aldi supermarkets, typically frequented by consumers with larger basket sizes. Aldi’s new concept will compete with major supermarkets’ small store formats primarily located in urban areas—including Woolworths Metro and Coles Local.

Bewakoof Enters Beauty Market with Launch of Cosmos Beauty (July 14) ETRetail.com

• Bewakoof, an Indian DTC (direct-to-consumer) retailer of accessories and apparel, has announced its entry into the beauty and personal care market with the launch of its brand Cosmos Beauty. The brand will offer 43 products across categories including beard oil, creams, face wash, oils, serums, shampoos and shaving cream.
• Cosmos Beauty products will be available on Bewakoof.com and leading e-commerce marketplaces, such as Amazon, Flipkart and Nykaa. The company stated that it expects to hit sales of INR 1 billion ($13.4 million) in the next 18 months and INR 5 billion ($67 million) within four years.

Flipkart Raises $3.6 Billion in New Funding Round (July 12) Company press release

• Indian e-commerce marketplace Flipkart has announced that it has raised $3.6 billion in a new funding round, led by investors Canada Pension Plan Investment Board, GIC, Softbank Vision Fund 2 and Walmart. The new investment values the online retailer at $37.6 billion, a significant jump from its valuation of $24.9 billion last year, when Walmart invested $1.2 billion.
• The company stated that it will use the funds to develop its technology and supply chain infrastructure to cater to India’s rapidly growing consumer base. It will also expand its grocery assortment and last-mile delivery programs. Additionally, the company will work with small and medium businesses, including Kiranas (neighborhood stores), helping them to digitalize and grow.

Shein To Re-Enter Indian Market as a Seller for Amazon (July 13) BusinessInsider.in

• Chinese e-commerce app Shein may re-enter the Indian market as an Amazon seller, although an official statement is yet to be released. Amazon Fashion has listed Shein as part of its Prime Day sales, which are scheduled to start at midnight of July 26 and continue through July 27.
• The Indian government banned Shein in June 2020, as part of its larger crackdown on 250 Chinese apps, in the aftermath of escalating diplomatic tensions between India and China. Look out for Coresight Research’s report on highlights and analysis from Prime Day in India, which we will publish shortly after the event.

Tookdee To Roll Out 49,000 New Outlets in Thailand by 2023 (July 13) BangkokPost.com

• Thailand-based convenience store chain Tookdee has announced the expansion of its store count to 50,000 from its current 1,000, through a franchise model. The company’s operator, TD Tawandang Co, will invest THB 67 billion ($2 billion) to fund the expansion, of which THB 45 billion ($1.3 billion) will be used to build 15 new warehouses across the country, while the remainder will be spent on technology development and sales promotions.
• The company expects to open 8,000 stores by the end of 2021, reaching 30,000 in 2022 and 50,000 in 2023. It has established service centers in key provinces such as Chiang Mai, Nakhon Sawan and Nakhon Ratchasima to help franchisee operators interested in joining Tookdee’s business.