Data-driven insights that help companies navigate the changing retail and technology landscape. LEARN MORE
Weinswig’s Weekly 14 minutes

Weinswig’s Weekly — September 20, 2019

#
Coresight Research

Key Points

September 20, 2019

  • This week’s note “From the Desk of Deborah Weinswig” looks at India’s Big Billion Days shopping festival.

In the news this week:

  • Shopify is bringing new tools for US hemp and CBD retailers, such as online store design, payment, shipping and marketing.
  • Ahold Delhaize has partnered with China-based tech firm Hanshow Technology to install electronic shelf labels that allow shoppers to access product information and also enable automated price cuts.
  • IKEA has started construction on a new ¥1 billion ($141 million) store in China’s southwest Yunnan province, scheduled to open next year.
FROM THE DESK OF DEBORAH WEINSWIG

Gearing Up for Big Billion Days: “India’s Singles’ Day”

While Chinese shoppers may be starting to anticipate November’s Singles’ Day shopping event, their Indian counterparts are gearing up for their own major online-focused shopping festival. Each year since 2014, Flipkart, India’s biggest e-commerce marketplace (now majority owned by Walmart), has run the Big Billion Days event. This year, it runs from September 29 to October 4.

Like Singles’ Day, the Big Billion Days event is characterized by heavy promotions, participation by major global brands and financing options to make products more accessible to people at all income levels. And, like Singles’ Day, Big Billion Days is a major retail event: Flipkart does not provide total sales figures, but last year it did disclose that it grew sales 80% year over year during the event. The company also said it sold three million smartphones in one day; that in its first hour, the platform enjoyed a 70% share in mobile phones; that half of shoppers used affordable payment options; and that the event involved more than 100,000 sellers.

What Will We See This Big Billion Days?

  • This year, Flipkart is pushing into non-tier-one regions. For instance, it is partnering with 27,000 kiranas — traditional-format micro-stores — for last-mile delivery and customer support.
  • Flipkart more than doubled the number of PIN codes that help delivery teams find addresses (addresses in India are often inconsistent or incomplete). Flipkart says the first mile has been improved, too, with an “allocation engine” to more efficiently allocate shipments across different delivery options such as agents and kiranas.
  • Financing options will again be important to drive affordability, and Flipkart says over 50 million Indians will have access to some form of credit through its financing options.
  • Just in time for the event, Flipkart launched a Hindi-language interface, making its platform more accessible: According to the 2011 census, around 44% of Indians speak Hindi as their first or only language.
  • Flipkart has ramped up its private-label offering, with more than 10,000 products across 200 categories. And just as major brands drive shopper excitement in China by introducing new products during Singles’ Day, Flipkart is promising innovative products from leading brands during Big Billion Days.
  • Members of Flipkart Plus, the platform’s loyalty program, will get access to the sale four hours earlier than non-members.
  • Flipkart has partnered with a number of celebrities who will feature in videos and advertisements.
  • Mobile phones are a major category for the event: Flipkart will reveal offers for various categories of mobile phones from September 19 until September 26 — though mobile promotions will launch only on September 30. This is notable because it gives Flipkart a head-start over Amazon’s competing event, which begins on September 29 (we discuss Amazon below).

While Filpkart founded Big Billion Days, it will face competition for shoppers over the festival period: Amazon plans its own annual Great Indian Festival over the same dates, September 29-October 4. Taking online offline, Amazon is bringing its event to shoppers with what it calls Festive Yatra trucks, each designed to be a “house on wheels” to showcase Amazon’s product offering. However, the focus will remain online, with Amazon promising deals across electronics, appliances, home products, fashion and consumables. Like with Flipkart Plus, Prime members get early access.

Events Reflect the Scale of India’s E-Commerce Market

Events such as Big Billion Days, and the scale of the logistical preparations that support them, show the scale and pace of growth in the India market. Research firm Statista estimates India’s online retail market will be worth $32.3 billion this year, growing at a near-28% pace. Some 654 million shoppers will buy online in India this year, according to Statista—that represents around 48% of the total population, a figure which shows the potential for further growth.

Source: Statista
US RETAIL & TECH HEADLINES

Shopify, Already in Canadian Marijuana, Starts US CBD Platform

(September 17) BNN Bloomberg

  • Shopify is introducing new features for US hemp and CBD retailers: The company plans to offer tools including online store design, payment, shipping and marketing in more than 40 states to hemp and CBD retailers. The legal status of CBD was clarified by legislation passed in December 2018, effectively legalizing CBD and hemp in all 50 states.
  • Shopify’s platform is already widely used for online recreational marijuana sales in Canada, where it is now legal nationwide.

 

Walmart Is Bringing Back Trendy Fashion Brand Scoop in Bid to Juice its Fashion Business

(September 16) CNBC

  • Walmart said it’s relaunching the once-beloved trendy New York fashion brand Scoop NYC on its website and in select stores. Scoop shuttered all 16 of its stores in New York City three years ago, despite gaining fame with its chunky black-and-white logo.
  • The liquidation marked the end of Scoop’s 20 years in business, a victim of rising rents in the city. Now, in a bid to build itself as a bigger fashion destination, Walmart acquired the rights to the Scoop name to relaunch the brand.

 

Amazon Changed Search Algorithm in Ways That Boost Its Own Products

(September 16) The Wall Street Journal

  • Amazon has adjusted its product-search system to more prominently feature listings that are more profitable for the company, said people who worked on the project — a move, contested internally, that could favor Amazon’s own brands.
  • Late last year, these people said, Amazon optimized the secret algorithm that ranks listings so that instead of showing customers mainly the most-relevant and best-selling listings when they search, the site boosts items that are more profitable for the company.

 

Madewell, J Crew’s Denim Brand, Files for IPO

(September 13) CNN Business

  • Madewell, J Crew’s fast-growing denim brand, plans to split from its struggling parent company and hit the public market. The company will be called Madewell Group and wants to list on the New York Stock Exchange or the Nasdaq.
  • While J Crew is known for selling preppy clothes at high prices, Madewell launched in 2006 as a boutique denim jeans brand, along with tops and jackets shoppers might wear with jeans. It has expanded in to wardrobe basics, shoes, bags and other accessories.

 

You Can Now Get Free Shipping on Etsy Orders Over $35

(September 12) Huffington Post

  • The holidays came early, at least for folks who are obsessed with Etsy. The peer-to-peer marketplace known for one-of-a-kind gifts and handmade goods announced that it will eliminate shipping charges in select shops for orders over $35 made in those shops.
  • Shoppers on Etsy can now receive free shipping within the US from participating shops, which can be found using the “free shipping” filter when searching.

 

EUROPE RETAIL AND TECH HEADLINES

Aldi Plans UK Expansion

(September 16) Cityam.com

  • German supermarket chain Aldi reported an 11% increase in UK and Ireland sales in the year ending December 2018. However, operating profit dropped 26% due to ongoing investments in infrastructure and discounted pricing.
  • Aldi plans to double its store count from 45 to 100 stores over the next two years. Aldi will focus on London, where it has a 3.4% market share compared to 8.1% in the UK overall.

Asda Full Year Sales & Profits Rise Despite Unsuccessful Sainsbury’s Merger

(September 16) Company press release

  • Asda’s operating profit increased 9.2% in the year ending December 2018, compared to a 13% decline in the previous year. The strong growth was despite its failure to merge with Sainsbury’s.
  • Asda’s full year comparable sales excluding fuel and VAT grew 1.6% year over year, compared to a 0.5% increase in 2017.

 

Boozt Appoints New CFO

(September 17) News.Cision.com

  • Swedish online fashion retailer Boozt has appointed Sandra Gadd as its new CFO, who will replace Allan Junge-Jensen. Gadd will assume her new position on December 1, 2019.
  • Gadd started working at Boozt as Transformation Finance Manager in 2016 and was appointed as Business Development Director in January 2018. She was also responsible for the internal financial preparations for Boozt’s IPO in 2017.

 

Canada Goose Opens First Italy Store

(September 16) FashionNetwork.com

  • On September 12, Canadian apparel brand Canada Goose launched an online store in Italy, as well as its first monobrand store on in Italy, located in Milan’s Via della Spiga shopping district. The 4,306-square-foot store has two levels which showcase the brands seasonal collections and exclusive collaborations.
  • Similar to all its outlets, the new store features a “cold room” in which climate-control technology enables customers to try outdoor apparel at temperatures as low as -25 degrees Celsius.

 

AO and Aldi Sign a Three-Year Contract

(September 16) ChargedRetail.co.uk

  • German supermarket chain Aldi has signed a three-year agreement with British online appliances retailer AO.com to deliver Aldi’s Special Buys range across the UK.
  • Currently, AO.com has a logistics network which delivers to 95% of the UK. The partnership will allow Aldi to offer its customers weekday and weekend deliveries and home delivery of larger products such as sports equipment, barbeques and furniture.

 

Schuh Seeks Property Cost Reductions

(September 16) TheTimes.co.uk

  • Footwear retailer Schuh has appointed London-based property consultant Capa to find rent savings across its 132 locations. Schuh stated it will remain focused on enhancing its customer experience, brand awareness and its new TwentyTwenty store concept.
  • Last month, Schuh appointed KPMG as long-term adviser to review options following a difficult financial period. Schuh shut all three of its stores in Germany in June to focus on the UK and Ireland.

 

Ahold Delhaize Partners with Hanshow Technology To Enhance Digital Customer Experience

(September 13) Company press release

  • Dutch-Belgian food retailer Ahold Delhaize has partnered with China-based tech firm Hanshow Technology to enhance the customer experience with digital in-store applications. Hanshow will supply electronic shelf labels (ESLs) to all Ahold Delhaize European brands.
  • The ESLs will allow shoppers to easily access product information and pay via mobile phone or contactless near field communication (NFC) cards. It also enables automated price reductions for items close to expiry date.

 

ASIA RETAIL AND TECH HEADLINES

LYN Launches in India

(September 17) Retail4Growth.com

  • Thailand based ready-to-wear clothing retailer Jaspal Group launched an accessories brand in India called LYN. The store is located at the Select CITYWALK Mall in New Delhi.
  • LYN currently has 50 stores in Thailand, two stores in Cambodia, 10 stores in Vietnam and one in India.

 

GCDS Opens Its First Store in Mainland China

(September 16) FashionNetwork.com

  • Italian street wear brand God Can’t Destroy Streetwear (GCDS) opened its first store in China at the MixC shopping mall in Shenzhen.
  • The 1,506-square-foot store offers GCDS’s newest collections, such as the capsule series with US toy brand Polly Pocket. GCDS will also launch its newest capsule collection created through collaboration with Italian food company Barilla during Christmas this year.

 

IKEA China Begins Store Construction in Yunnan

(September 16) InsideRetail.Asia

  • IKEA has started construction of a new store in China’s southwest province of Yunnan, scheduled to open next year. The company is investing ¥1 billion ($141 million) to build the three-story store.
  • IKEA currently operates 34 stores in China. IKEA China Director Lukasz Ostrowski says he is confident in the future development of IKEA’s China business.

 

Uniqlo to Enter the India Market

(September 16) IndianRetailing.com

  • Uniqlo will enter the India market with its first store at the Ambience Mall in New Delhi, scheduled to open on October 4.
  • Uniqlo has put up red cube-like installations that resemble the brands logo across Delhi to advertise the store opening. The first 500 customers will receive a free t-shirt of their choice on opening day.

 

Tmall Looking for Israeli Beauty Brands

(September 15) Calcalistech.com

  • Alibaba’s Tmall beauty business head Liu Ying called on local beauty brands to join the platform during her recent visit to Israel.
  • Tmall, which currently sells 10 Israeli beauty brands, is looking for more beauty and aesthetics technology suppliers from Israel to join its online platform.

 

LATIN AMERICA RETAIL AND TECH HEADLINES

Zuo Modern Opens Galleries in 18 Sears Stores in Mexico

(September 16) FurnitureToday.com

  • California-based furniture retailer Zuo Modern has opened new furniture galleries in 18 Sears department stores in Mexico.
  • Each of the galleries span an area of 1,000 square feet and are decorated with Zuo furniture, lighting and décor. The galleries will be re-decorated four times a year, allowing shoppers to view the latest pieces, trends and seasonal additions.

 

Newton Running Opens Second Store in Mexico

(September 16) FashionNetwork.com

  • US sports brand Newton Running has expanded operations in Mexico with the opening of a second store on September 7 in Mexico City.
  • Newton Running opened its first store in Mexico in March 2019. The company also sells in the country through its e-commerce platform.

 

Zara to Launch an E-commerce Platform in Colombia

(September 16) FashionNetwork.com

  • Spanish apparel retailer Zara has started the pre-launch campaign of its e-commerce site in Colombia, set to launch in the fourth quarter of this year.
  • This move is a part of Zara’s objective to have all its brands available for purchase online globally by 2020. In March, Zara launched an online platform in Brazil and will launch in Peru and other regions of Latin America shortly.

 

Groupe Casino Makes Further Progress On Latin America Simplification

(September 13) Company press release 

  • Groupe Casino has announced it has completed all corporate approvals necessary for Brazilian retailer Grupo Pao de Acucar (GPA) to launch an all-cash tender offer for Columbian retailer Grupo Éxito. This will allow Groupe Casino to acquire Grupo Éxito’s equity interest in GPA.
  • The agreement is a part of Casino’s Latin American simplification plan. Eventually, Casino will own 41.4% of GPA, which would allow it to control Éxito and its Uruguay and Argentina subsidiaries.

 

Mercado Libre Launches a Special Section for the National Holidays in Mexico

(September 13) FashionNetwork.com

  • Argentinian online marketplace Mercado Libre has created a special section for the month of September to celebrate Mexico’s independence day – but will run for an entire month. The section will offer traditional and locally produced goods by home-grown businesses.
  • Among the 200 companies selling clothing and accessories on Mercado Libre, 50% are local firms such as Lob, Bobois, Quarry, Generra, Porto Blanco, Bizarro, Bruno Corza, Oggi Jeans and Tucane.

 

MACRO UPDATE

Key points from global macro indicators released September 11–17, 2019:

  1. US: The Consumer Price Index (CPI) increased 1.7% year over year in August, slightly lower than the 1.8% increase in July and below the consensus estimate of 1.8%. The import price index declined 2.0% year over year in August.
  2. Europe: In the eurozone, the trade surplus increased to €24.8 billion in July from €20.6 billion in June, primarily because of increased exports. In Germany, the Wholesale Price Index (WPI) fell 1.1% year over year in August, versus the 0.1% decrease in July.
  3. Asia: In China, retail sales increased 7.5% year over year in August, slightly lower than the 7.6% increase in July and below the consensus estimate of 7.9%. In Japan, industrial production increased 0.7% year over year in July.
  4. Latin America: Brazil’s retail sales grew 4.3% year over year in July, improving substantially from the 0.3% decrease in June and above the consensus estimate of 2.0%. In Colombia, retail sales grew 8.5% year over year in July, higher than the 7.2% growth in June.
*Coresight Research’s evaluation of the actual figure’s impact on the economy relative to historical benchmarks and the current macroeconomic environment: + indicates a positive signal for the country’s economy, – indicates a negative signal and = indicates a negligible or mixed impact.
Source: Bureau of Labor Statistics/Eurostat/Destatis/Insee/National Bureau of Statistics, China/Ministry of Economy, Trade and Industry, Japan/IBGE/DANE/ Coresight Research
EARNINGS CALENDAR
Source: Bloomberg
EVENT CALENDAR

Other research you may be interested in:

×