Metro Cash & Carry ventures into e-commerce space
DSIJ Intelligence / 16 Oct 2017
Companies like Metro and B2B startups are going to cut into the customer base of big-box retailers, who are either online or planning to go online. Be it online or offline big-box retailers in India are struggling to make profits.
Wholesale retailer, Metro Cash & Carry plans to enter the e-commerce B2B sales space by the end of the year. The German retailer aims to expand its customer base by catering to the large unmet demand in the business-to-business (B2B) trade space.
The company which set base in India as a self-service retailer has tweaked its business model to accommodate Indian business's tendency to buy now and pay later. The company has started giving small credits to kiranawala, ranging from Rs. 1 lakh to Rs. 15 lakh and besides providing them delivery, reported a leading news daily.
Currently, the B2B e-commerce market in India is dominated by Alibaba, IndiaMart and Trade India. There are also a large group of startups and newbies that cater to different sections of buyers. These websites have made the job of procuring raw materials for sellers and resellers at discount pretty easy.
Sites such as Power2SME.com, Bizongo, IndustryBuying.com have grown their businesses and also attracted the attention of venture capitalist and private equity firms.
Clearly, companies like Metro and B2B startups are going to cut into the customer base of big box retailers, who are either online or planning to go online. Be it online or offline big-box retailers in India are struggling to make profits.
Last month, Aditya Birla Group-led e-commerce site Abof.com decided to shut down its operation as it was unable to compete against the discounted pricing offered by rivals Flipkart and Amazon.
If the stock price of Avenue Supermarts results is anything to go by there is immense appetite for investment in retail. D-Mart's parent Avenue Supermarts reported good results for the quarter ended September 30, 2017 with total sales for Q2FY18 at Rs. 3,508.3 crore, which represents a 26.3 per cent YoY increase. The company's Q2 profit rose by 65.2%.
Even Reliance's organized retail business contributed meaningfully to the company's consolidated EBIT. The segment's quarterly revenues grew by 81.3 per cent YoY.
To add to the competition, the government has already allowed 100% foreign ownership in B2B e-commerce sector and for retailers that sell food items made in India. The government is also mulling on a proposal to allow 100% FDI, making way for foreign retailers like Wal-Mart Stores and Carrefour SA, if they agree to local sourcing.
This will be an interesting space to watch, given the potential for growth which is fueled by the changing lifestyles of Indian consumers.
If you want to stay updated with the share market news today, keep a close watch on the indian stock market today with real time movements like sensex today live and overall stock market today trends. Investors tracking ipo allotment status, ipo news today, or the latest ipo india can also follow daily updates along with bse share price live data. Whether you are learning how to invest in stock market in india, preparing for a market crash today, or searching for the best stocks to buy in india, insights on top gainers today india, top losers today india, trending stocks india and long term stocks india help in making informed investment decisions.