Global investors have placed a billion dollar bet on India's Internet and mobile start-ups during 2011, reposing confidence in the fast-growing base of digital consumers in the country. Marquee venture capital and private equity investors made aggressive investments in start-ups - most of which are less than five-year old - as they backed the story of rising disposable income and Internet penetration.
These investors have already ploughed more than $900 million between January and November, while deals worth another $250 million could be clinched by December-end, said an Avendus Capital report titled 'India Goes Digital'. The boutique investment bank, with work expertise in internet and technology, said the domestic e-commerce market would quadruple to $24 billion by 2015.
These global investors are bullish on India's Internet economy even as there's a waning appetite for the core sector investments stymied by highinterest rates and lack of policy reforms. The belief in the Indian digital consumer story has been so robust that start-up ecommerce firms managed to raise follow-on investments within six months, at significantly higher valuations.
Online retail, or e-tailing, will lead the internet consumer story catching up with online travel, classifieds and advertising which dominate the digital consumer industry in India right now. E-tailing will develop into a $12 billion-strong business, accounting for half of the total e-commerce market in the next four years.
"The e-commerce sector has reached an inflection point this year and will surely surpass the online travel industry over the next few years. India's online story currently is where China was five to six years back," said Niren Shah, MD, Norwest Venture Partners. The Silicon Valley-based-VC just announced an investment of $5 million in a soon-to-be launched shopping portal, Pepperfry.com.
The number of deals more than doubled to 66 in the first 11 months with investors rushing to board the digital consumer story. The top e-commerce firms emerged as big advertisers and employed hundreds of courier boys in the most techsavvy neighborhoods to grow their businesses.
"There seems to be a belief that you need to start working with the online players early because if they might become expensive. But next year, valuations and deal flow is likely to temper as 2011 was an exceptionally aggressive year," said Prashant Prakash, partner at Accel Partners, a US-based VC fund with investments in Flipkart.com, LetsBuy.com and Exclusively.in.
India's emerging e-tailers are burning cash - many of them incurring heavy operational losses - to emerge winners in an industry that is poised for a shake-out and consolidation. "We see the potential for online retail in India become larger than that of online travel in next five years, perhaps by a factor of 2:1.
Regular commerce will create more transactions as compared to travel since consumers need regular things on an everyday basis unlike travel which is mostly driven out of necessity," said Mahesh Murthy, founder, Pinstorm, and co-founder , Seedfund. Globally, e-tailing has cornered 6% of the US and 4% of the China retail markets.
Success in my Habit
Tuesday, December 13, 2011
Saturday, December 10, 2011
Scooters India plans new launches
NEW DELHI: Aiming for a bigger market share, public sector auto maker Scooters India is exploring options to launch new products.
"Your company is evaluating various new product development options to cater to various market segments with a view to higher production and sales," Scooters India Ltd (SIL) said in its Annual Report for 2010-11.
It, however, did not share further details such as whether the products will be a three-wheeler or two-wheeler and when it is likely to be introduced in the market.
The company is planning new launches even as it has incurred losses for over nine years. It is also scouting for a buyer.
In the report, the company said it has not paid salaries to the tune of Rs 4.62 crore to its employees during the last financial year. It also defaulted in paying back Rs 14.42 crore of loans and interests to the government as on March 31 this year.
Talking about workers and its salaries, the auditors said in the report, "The company has made statutory contravention by defaulting on salary and wages amounting to Rs 294.45 lakh and therefore not depositing Rs 167.53 lakh of PF/pension to the trust/PF authorities."
The company accepted that its relationship with workers were not cordial during 2010-11 as it "continued to be under stress" due to non-fulfilment of employees' aspirations.
"The aspiration of employees regarding wage revision and retirement age could not be fulfilled due to company's poor financial health," it added.
The retirement age has been increased to 60 years now from 58 years earlier, it said.
Besides, the company has also defaulted in repayment of debt that was taken from the Central government.
"Due to continuing losses, the company has not repaid principal amount of Rs 787.20 lakh and interest of Rs 658.58 lakh as on March 31, 2011," SIL said.
It also defaulted in repaying the instalment of term loan of Rs 37.32 crore and interests of Rs 9.42 crore, payable to Government of India.
Earlier in May this year, the Cabinet had approved divestment of the government's entire 95.38 per cent stake in SIL, which has been suffering losses since 2002-03 and its entire networth completely eroded by 2008-09.
In March 2009, the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises ( BRPSE). As on 2010-11, it had a net loss of Rs 17.11 crore.
Incorporated in 1972, SIL started commercial production of scooters under the brand name of 'Vijai Super' for domestic market and 'Lambretta' for overseas market.
Later, it ventured into three-wheelers with the 'Vikram' brand. However, in 1997 the firm stopped two-wheeler production and has since been into manufacturing and marketing 3-wheelers only.
"Your company is evaluating various new product development options to cater to various market segments with a view to higher production and sales," Scooters India Ltd (SIL) said in its Annual Report for 2010-11.
It, however, did not share further details such as whether the products will be a three-wheeler or two-wheeler and when it is likely to be introduced in the market.
The company is planning new launches even as it has incurred losses for over nine years. It is also scouting for a buyer.
In the report, the company said it has not paid salaries to the tune of Rs 4.62 crore to its employees during the last financial year. It also defaulted in paying back Rs 14.42 crore of loans and interests to the government as on March 31 this year.
Talking about workers and its salaries, the auditors said in the report, "The company has made statutory contravention by defaulting on salary and wages amounting to Rs 294.45 lakh and therefore not depositing Rs 167.53 lakh of PF/pension to the trust/PF authorities."
The company accepted that its relationship with workers were not cordial during 2010-11 as it "continued to be under stress" due to non-fulfilment of employees' aspirations.
"The aspiration of employees regarding wage revision and retirement age could not be fulfilled due to company's poor financial health," it added.
The retirement age has been increased to 60 years now from 58 years earlier, it said.
Besides, the company has also defaulted in repayment of debt that was taken from the Central government.
"Due to continuing losses, the company has not repaid principal amount of Rs 787.20 lakh and interest of Rs 658.58 lakh as on March 31, 2011," SIL said.
It also defaulted in repaying the instalment of term loan of Rs 37.32 crore and interests of Rs 9.42 crore, payable to Government of India.
Earlier in May this year, the Cabinet had approved divestment of the government's entire 95.38 per cent stake in SIL, which has been suffering losses since 2002-03 and its entire networth completely eroded by 2008-09.
In March 2009, the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises ( BRPSE). As on 2010-11, it had a net loss of Rs 17.11 crore.
Incorporated in 1972, SIL started commercial production of scooters under the brand name of 'Vijai Super' for domestic market and 'Lambretta' for overseas market.
Later, it ventured into three-wheelers with the 'Vikram' brand. However, in 1997 the firm stopped two-wheeler production and has since been into manufacturing and marketing 3-wheelers only.
Ozone Pharmaceuticals signs marketing pact with Japanese firm Koboyashi
NEW DELHI: Ozone Pharmaceuticals on Wednesday said it has entered into a marketing pact with Japan-based Koboyashi Pharmaceuticals to strengthen its presence in the pain management segment in the country.
As part of the agreement, Ozone will launch Koboyashi's air activated heat packs under the brand name "DFO Care" in the Indian market.
"We have entered into an original exclusive manufacturer (OEM) agreement with Koboyashi under which we will get the product from Japan and market it in India," Ozone Group Chairman and Managing Director SC Sehgal told PTI.
Currently the company sells pharmaceutical products such as DFO gel and Axbex.
Commenting on the pact, Ozone Pharmaceuticals CEO A K Sahoo said: "In the initial phase the agreement is for two years in which we will market the brand on import license. The product will be called DFO Care as it will complement our brand equity".
The launch will augment our pain management segment in which we are the second largest brand in the country, he added.
The company, however, subsequently plans to manufacture and market the product within the country and in non-regulated markets outside.
"Subsequently a Joint Venture (JV) will be formed between the two companies. We intend having the complete management rights in India. We plan to have stake of up to 60 per cent in the joint venture. It is wiser for them and wiser for us," Sehgal said.
Under the JV, Ozone will get technology transfer from Japan to India and will manufacture and market the heat packs in the country.
"Koboyashi will retain the intellectual property rights (IPR) for the product and Ozone will have the manufacturing and marketing rights for India," Sahoo said.
The company is looking for annual revenue of up to Rs 10 crore from the product, he added.
The company claims the air active heat packs provide heat up to 12 hours to relieve aches and are easy and convenient to use as they can be used even under clothing.
The company's 'No Marks' brand has been in the market since 2001. It is also present in various therapeutic areas, including cardiology, diabetes and gynaecology.
As part of the agreement, Ozone will launch Koboyashi's air activated heat packs under the brand name "DFO Care" in the Indian market.
"We have entered into an original exclusive manufacturer (OEM) agreement with Koboyashi under which we will get the product from Japan and market it in India," Ozone Group Chairman and Managing Director SC Sehgal told PTI.
Currently the company sells pharmaceutical products such as DFO gel and Axbex.
Commenting on the pact, Ozone Pharmaceuticals CEO A K Sahoo said: "In the initial phase the agreement is for two years in which we will market the brand on import license. The product will be called DFO Care as it will complement our brand equity".
The launch will augment our pain management segment in which we are the second largest brand in the country, he added.
The company, however, subsequently plans to manufacture and market the product within the country and in non-regulated markets outside.
"Subsequently a Joint Venture (JV) will be formed between the two companies. We intend having the complete management rights in India. We plan to have stake of up to 60 per cent in the joint venture. It is wiser for them and wiser for us," Sehgal said.
Under the JV, Ozone will get technology transfer from Japan to India and will manufacture and market the heat packs in the country.
"Koboyashi will retain the intellectual property rights (IPR) for the product and Ozone will have the manufacturing and marketing rights for India," Sahoo said.
The company is looking for annual revenue of up to Rs 10 crore from the product, he added.
The company claims the air active heat packs provide heat up to 12 hours to relieve aches and are easy and convenient to use as they can be used even under clothing.
The company's 'No Marks' brand has been in the market since 2001. It is also present in various therapeutic areas, including cardiology, diabetes and gynaecology.
Manappuram Group to invest up to Rs 1000 cr in healthcare arm
KOCHI: The Manappuram Group would be investing close to Rs 1000 crore in its healthcare arm Manappuram Health Care Ltd in the next 5 years to set up a chain of 50 medical, dental and diagnostic clinics across South India.
V P Nandakumar, chairman, Manappuram Group said here that the company plans to set up such clinics in other leading cities across the country. The company opened its diagnostic centre and international dental hospital in Kochi on Wednesday.
The healthcare arm of the group operates under the MAcare brand name. A super specialty medical centre will also come up at the centre shortly. The centre will offer services of expert doctors from all fields of medicine including cardiology, nephrology, neurology and gastroenterology.
A highlight of the centre will be laparoscopic day surgery centre. The centre will also have a pharmacy
V P Nandakumar, chairman, Manappuram Group said here that the company plans to set up such clinics in other leading cities across the country. The company opened its diagnostic centre and international dental hospital in Kochi on Wednesday.
The healthcare arm of the group operates under the MAcare brand name. A super specialty medical centre will also come up at the centre shortly. The centre will offer services of expert doctors from all fields of medicine including cardiology, nephrology, neurology and gastroenterology.
A highlight of the centre will be laparoscopic day surgery centre. The centre will also have a pharmacy
Nueclear, GE Healthcare join hands to fight cancer
MUMBAI: Nueclear Healthcare Ltd (NHL), a division of Thyrocare Group and GE Healthcare today announced a strategic partnership to establish a network of 120 molecular imaging centres to control the rapid growth of cancer incidence in India.
These molecular imaging centres, which will be equipped with 120 advanced GE Discovery PET/CT imaging systems and 12 GE PET Trace Medical Cyclotrons, will produce glucose (FDG) to aid the early detection.
GE Healthcare & NHL expect to put in place the network of 120 centres by 2015 in 3 phases, a company statement said here.
With about 2.5 million cancer patients, the disease is one of the major causes of deaths in India. One million patients are added every year and the number is feared to grow five-fold by 2025, which is why the Indian Council of Medical Research ( ICMR) had earlier urged the Centre to make cancer a notifiable disease.
Cancer can be treated and controlled, if detected early - in stages I or II, it said.
However, over 70 per cent of cancer is detected at a very late stage in India, when the treatment is less effective and costly.
While low awareness is one significant reason, unavailability of early cancer detection facilities and availability of experts is the other significant reason.
These molecular imaging centres, which will be equipped with 120 advanced GE Discovery PET/CT imaging systems and 12 GE PET Trace Medical Cyclotrons, will produce glucose (FDG) to aid the early detection.
GE Healthcare & NHL expect to put in place the network of 120 centres by 2015 in 3 phases, a company statement said here.
With about 2.5 million cancer patients, the disease is one of the major causes of deaths in India. One million patients are added every year and the number is feared to grow five-fold by 2025, which is why the Indian Council of Medical Research ( ICMR) had earlier urged the Centre to make cancer a notifiable disease.
Cancer can be treated and controlled, if detected early - in stages I or II, it said.
However, over 70 per cent of cancer is detected at a very late stage in India, when the treatment is less effective and costly.
While low awareness is one significant reason, unavailability of early cancer detection facilities and availability of experts is the other significant reason.
Reliance Infrastructure wins award for innovative training practices
NEW DELHI: Anil Ambani-promoted Reliance Infrastructure (RInfra) today said it has won National Award for Innovative Training Practices for 2011.
"We are honoured to win the national award ... This recognition is a milestone for RInfra...in the face of current global situation, we have embarked on several training initiatives to safeguard our employees' jobs," Lalit Jalan, CEO and Director, RInfra said in a statement.
"I congratulate my team on this significant achievement and reiterate that RInfra will continue to be recognised for its leadership and commitment to people management," he added.
RInfra was conferred the award by the Indian Society for Training and Development.
The infrastructure firm has also won Golden Peacock HR Excellence Award for 2011, and ASTD award for "Excellence in Practice", it said.
"We are honoured to win the national award ... This recognition is a milestone for RInfra...in the face of current global situation, we have embarked on several training initiatives to safeguard our employees' jobs," Lalit Jalan, CEO and Director, RInfra said in a statement.
"I congratulate my team on this significant achievement and reiterate that RInfra will continue to be recognised for its leadership and commitment to people management," he added.
RInfra was conferred the award by the Indian Society for Training and Development.
The infrastructure firm has also won Golden Peacock HR Excellence Award for 2011, and ASTD award for "Excellence in Practice", it said.
AICTE announces dates for CMAT 2012
NEW DELHI: The All India Council for Technical Education (AICTE) has announced the dates for the computer based Common Management Admission Test ( CMAT) 2012 on Thursday. Registration window opens on December 9 for online registration of candidates, while the exams will be conducted from February 20 to 28, 2012 across 61 cities.
Based on a judgment of the Supreme Court of India, the AICTE in order to reduce the burden of students in attending to multiple examinations is launching this first national level admission test for facilitating institutions to select suitable students for admission in management programs approved by the Council for the academic year 2012-13.
The initiative has been taken to address the issue of physical, mental and financial stress being imposed on the students through number of entrance examinations being followed by the institutions for admission into management programmes.
Based on a judgment of the Supreme Court of India, the AICTE in order to reduce the burden of students in attending to multiple examinations is launching this first national level admission test for facilitating institutions to select suitable students for admission in management programs approved by the Council for the academic year 2012-13.
The initiative has been taken to address the issue of physical, mental and financial stress being imposed on the students through number of entrance examinations being followed by the institutions for admission into management programmes.
Shah Rukh Khan, FMCG cos lead TV advertising charts
MUMBAI: Bollywood superstar Shah Rukh Khan, backed by more than a dozen brand endorsements, has emerged as the most visible celebrity on television in the first nine months of the year followed by Katrina Kaif and Kareena Kapoor.
The top ten advertisers list, on the hand, is dominated by the consumer goods majors. While Hindustan Unilever (HUL), Procter & Gamble (P&G), and L'oreal India led the pack, telecoms major Idea Cellular and jewellery brand Gitanjali Gems emerged as the only non-FMCG advertisers on the list, according to TAM, a television audience measurement agency.
Film actors, who continue to dominate television screen space thanks to their multiple brand endorsements, have seen their presence decline, even as sportspersons (read cricketers) led by M S Dhoni and Sachin Tendulkar upped their share by 7% between January-September this year compared to the corresponding period last year.
TAM AdEx, which takes into account advertising volumes for its analysis, said sports celebrities now have 19% share of the overall brand endorsement as seen on television.
Significantly, film actresses accounted for 39% while actors had 37% share. Besides film and sports celebrities, small-screen actors and actresses had 2% share each of the overall endorsement on TV.
As far as advertisers go, the telecom sector, which used to be one of the biggest spenders till recently, has seen its share decline this year as far as its visibility goes with a lone player-Idea Cellular-making it to the top ten list. "While consumer goods players like L'oreal have stepped up advertising in a big way, the telecom brands have not been able to match the pace due to issues surrounding the sector," said R Gowthaman, Leader, Mindshare South Asia, WPP's media agency, which works for HUL, PepsiCo besides others.
"The first half of the year had the cricket World Cup and also the Indian Premier League ( IPL) which meant that a lot of brands with crickets as ambassadors were most visible. But this will come down drastically now with the Indian team having had no time to shoot any new campaigns courtesy a chock-a-block calendar," said Indranil Das Blah, COO at Kwan Entertainment, a celebrity management agency.
Both Dhoni and Tendulkar haven't signed any new deals post the World Cup despite their big win in April. Although, MSD's signing amount has gone up sharply to upwards of Rs 10 crore per annum. But one cricketer who has been on a signing spree is Virat Kohli. He is learnt to have recently signed P&G's Vicks brand making his kitty swell up to eleven brand endorsements at the price of Rs 1.5 crore per year - up from Rs 75 lakh before the World Cup win.
What catapulted SRK to the top spot among brand endorsers is the unprecedented promotion that began a few months before the release of his magnum opus, Ra One, said industry watchers. The actor, who endorses brands like Emami, Hyundai Motors, Dish TV, besides others, charges anything between Rs 7-8 crore per year. "His (SRK) rates are half of what Aamir Khan charges, which makes him more visible. Also, for Aamir brand endorsements are not really his priority at the moment," Blah of Kwan Entertainment added.
The top ten advertisers list, on the hand, is dominated by the consumer goods majors. While Hindustan Unilever (HUL), Procter & Gamble (P&G), and L'oreal India led the pack, telecoms major Idea Cellular and jewellery brand Gitanjali Gems emerged as the only non-FMCG advertisers on the list, according to TAM, a television audience measurement agency.
Film actors, who continue to dominate television screen space thanks to their multiple brand endorsements, have seen their presence decline, even as sportspersons (read cricketers) led by M S Dhoni and Sachin Tendulkar upped their share by 7% between January-September this year compared to the corresponding period last year.
TAM AdEx, which takes into account advertising volumes for its analysis, said sports celebrities now have 19% share of the overall brand endorsement as seen on television.
Significantly, film actresses accounted for 39% while actors had 37% share. Besides film and sports celebrities, small-screen actors and actresses had 2% share each of the overall endorsement on TV.
As far as advertisers go, the telecom sector, which used to be one of the biggest spenders till recently, has seen its share decline this year as far as its visibility goes with a lone player-Idea Cellular-making it to the top ten list. "While consumer goods players like L'oreal have stepped up advertising in a big way, the telecom brands have not been able to match the pace due to issues surrounding the sector," said R Gowthaman, Leader, Mindshare South Asia, WPP's media agency, which works for HUL, PepsiCo besides others.
"The first half of the year had the cricket World Cup and also the Indian Premier League ( IPL) which meant that a lot of brands with crickets as ambassadors were most visible. But this will come down drastically now with the Indian team having had no time to shoot any new campaigns courtesy a chock-a-block calendar," said Indranil Das Blah, COO at Kwan Entertainment, a celebrity management agency.
Both Dhoni and Tendulkar haven't signed any new deals post the World Cup despite their big win in April. Although, MSD's signing amount has gone up sharply to upwards of Rs 10 crore per annum. But one cricketer who has been on a signing spree is Virat Kohli. He is learnt to have recently signed P&G's Vicks brand making his kitty swell up to eleven brand endorsements at the price of Rs 1.5 crore per year - up from Rs 75 lakh before the World Cup win.
What catapulted SRK to the top spot among brand endorsers is the unprecedented promotion that began a few months before the release of his magnum opus, Ra One, said industry watchers. The actor, who endorses brands like Emami, Hyundai Motors, Dish TV, besides others, charges anything between Rs 7-8 crore per year. "His (SRK) rates are half of what Aamir Khan charges, which makes him more visible. Also, for Aamir brand endorsements are not really his priority at the moment," Blah of Kwan Entertainment added.
Virender Sehwag's 219 attracts advertisers; may sign Rs 10 crore deals
NEW DELHI: With his stupendous 219-run show catapulting Virender Sehwag to the top of the one-day cricket record books, the advertisers have rushed in to sign on the flamboyant batsman with deals worth an estimated Rs 10 crore.
In pics: Virender Sehwag smashes 219, surpasses Sachin's 200
The record-breaking innings by 'Nawab of Najafgarh', as Sehwag is commonly known as, has not only made him the top-scorer in a one-day cricket match, it has also enhanced his value in the brand endorsement market, experts said.
A number of inquiries have starting flowing in from potential advertisers and the cricketer could sign atleast 4-5 endorsement deals. These deals could be collectively worth Rs 10 crore a year, going by an estimated annual fee of Rs 2-2.5 crore charged by Sehwag for every brand endorsement deal.
"In the next two months we hope to sign up with atleast 4-5 new brands," sports marketing company PMG Chief Operating Officer Melroy D'Souza told PTI.
PMG, promoted by legendary cricketer Sunil Gavaskar, handles Sehwag's brand endorsement deals.
"He (Sehwag) has come back with a bang and put to rest all the distractors at rest. There were already a few queries coming in for brands, but the interest level has clearly gone up," D'Souza said.
33-year-old Sehwag currently endorses about ten brands, including Adidas, Karbonn Mobiles, Royal Challenge, Hero MotoCorp and Emami's Zandu Balm.
According to sources, the cricketer charges between Rs 2 crore to Rs 2.5 crore for one deal per year.
Playing against West Indies at Indore yesterday, Sehwag broke his role model Sachin Tendulkar's record (of 200 runs) to make the highest score in a one-day match.
After Sachin, Sehwag has become only the second cricketer in the world to score a double-century in one-day cricket.
When asked if Sehwag's fee will jump post his latest record D'Souza said :"All the relationships that he has are for a long term and fee does not change on the basis of one event. However, his yesterday's performance will surely re- enforce brands' faith in him."
In pics: Virender Sehwag smashes 219, surpasses Sachin's 200
The record-breaking innings by 'Nawab of Najafgarh', as Sehwag is commonly known as, has not only made him the top-scorer in a one-day cricket match, it has also enhanced his value in the brand endorsement market, experts said.
A number of inquiries have starting flowing in from potential advertisers and the cricketer could sign atleast 4-5 endorsement deals. These deals could be collectively worth Rs 10 crore a year, going by an estimated annual fee of Rs 2-2.5 crore charged by Sehwag for every brand endorsement deal.
"In the next two months we hope to sign up with atleast 4-5 new brands," sports marketing company PMG Chief Operating Officer Melroy D'Souza told PTI.
PMG, promoted by legendary cricketer Sunil Gavaskar, handles Sehwag's brand endorsement deals.
"He (Sehwag) has come back with a bang and put to rest all the distractors at rest. There were already a few queries coming in for brands, but the interest level has clearly gone up," D'Souza said.
33-year-old Sehwag currently endorses about ten brands, including Adidas, Karbonn Mobiles, Royal Challenge, Hero MotoCorp and Emami's Zandu Balm.
According to sources, the cricketer charges between Rs 2 crore to Rs 2.5 crore for one deal per year.
Playing against West Indies at Indore yesterday, Sehwag broke his role model Sachin Tendulkar's record (of 200 runs) to make the highest score in a one-day match.
After Sachin, Sehwag has become only the second cricketer in the world to score a double-century in one-day cricket.
When asked if Sehwag's fee will jump post his latest record D'Souza said :"All the relationships that he has are for a long term and fee does not change on the basis of one event. However, his yesterday's performance will surely re- enforce brands' faith in him."
FDI in retail: Are commission agents really that bad?
A few days before the government stopped foreign investment in retail dead in its tracks, ET on Sunday caught up with A Mohammad, a commission agent or arthiya at the fruit and vegetable mandi in Okhla in south Delhi.
Such agents are essentially dealers, who buy produce from the farmers and then supply them to everyone, from hotels to the neighbourhood vegetable seller. An executive in an agribusiness company who deals with Mohammad described him as one of the two biggest dealers of carrots in the mandi. "Together, these two arthiyas dominate the trade in carrots," said the executive.
Okhla mandi is much smaller than the giant Azadpur mandi situated in north of Delhi, but it still handles thousands of kilos of vegetables and fruits per day, which pour in by trucks from all parts of India. But to look at him, you wouldn't think Mohammad (everyone in the business calls him Pappu) dominates much of anything. He's the kind of person who you would pass by on any street without a second glance.
When ET on Sunday asked him about his thoughts on the new policy on FDI in retail (still undead at the time), Mohammad said: "I am illiterate. I don't know much about these things." When prodded he did confess to being worried about the new FDI policy, but he actually seemed barely concerned.
Squeezing Both Sides
It is Mohammad, and his fellow arthiyas in Okhla, Azadpur and hundreds of other agricultural markets in the country who are the poster boys for much that is wrong with the trade in agricultural produce, and the reason why foreign investment in retail, or organised retail is needed.
They are accused of contributing to an enormous wastage of produce, and underinvesting in critical market infrastructure such as cold chains which prolong the life of otherwise perishable commodities. They are also seen as squeezing both sides, paying farmers a low price for their produce, holding onto a fat margin, and forcing consumers to pay high prices (officially, the arthiyas in Delhi take a 5% commission on what they buy, with a further 1% being paid as tax to the mandi).
By reaching out and procuring directly from the farmer, by investing in the necessary infrastructure, and by the ability to process large volumes, the big retail chains, whether a Reliance Fresh or a Walmart, would be able to cut out the many intermediaries (anywhere between four and seven) in the current flow of food from farm to a consumer's plate. Farmers would get a higher price and consumers would still be charged lower prices for the goods they buy.
If there is one aspect of the retail trade where this vision of the future will probably be most tested, it will be in the marketing of fruits and vegetables. It is here that the problems of the agricultural trade are starkest, sharp price spikes in one year (or even over a few months), followed by sharp price falls, and high levels of perishability and wastage of produce.
Such agents are essentially dealers, who buy produce from the farmers and then supply them to everyone, from hotels to the neighbourhood vegetable seller. An executive in an agribusiness company who deals with Mohammad described him as one of the two biggest dealers of carrots in the mandi. "Together, these two arthiyas dominate the trade in carrots," said the executive.
Okhla mandi is much smaller than the giant Azadpur mandi situated in north of Delhi, but it still handles thousands of kilos of vegetables and fruits per day, which pour in by trucks from all parts of India. But to look at him, you wouldn't think Mohammad (everyone in the business calls him Pappu) dominates much of anything. He's the kind of person who you would pass by on any street without a second glance.
When ET on Sunday asked him about his thoughts on the new policy on FDI in retail (still undead at the time), Mohammad said: "I am illiterate. I don't know much about these things." When prodded he did confess to being worried about the new FDI policy, but he actually seemed barely concerned.
Squeezing Both Sides
It is Mohammad, and his fellow arthiyas in Okhla, Azadpur and hundreds of other agricultural markets in the country who are the poster boys for much that is wrong with the trade in agricultural produce, and the reason why foreign investment in retail, or organised retail is needed.
They are accused of contributing to an enormous wastage of produce, and underinvesting in critical market infrastructure such as cold chains which prolong the life of otherwise perishable commodities. They are also seen as squeezing both sides, paying farmers a low price for their produce, holding onto a fat margin, and forcing consumers to pay high prices (officially, the arthiyas in Delhi take a 5% commission on what they buy, with a further 1% being paid as tax to the mandi).
By reaching out and procuring directly from the farmer, by investing in the necessary infrastructure, and by the ability to process large volumes, the big retail chains, whether a Reliance Fresh or a Walmart, would be able to cut out the many intermediaries (anywhere between four and seven) in the current flow of food from farm to a consumer's plate. Farmers would get a higher price and consumers would still be charged lower prices for the goods they buy.
If there is one aspect of the retail trade where this vision of the future will probably be most tested, it will be in the marketing of fruits and vegetables. It is here that the problems of the agricultural trade are starkest, sharp price spikes in one year (or even over a few months), followed by sharp price falls, and high levels of perishability and wastage of produce.
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