Full text: Snapdeal’s Kunal Bahl, Rohit Bansal tell staff ‘new path’ already profitable at gross level

Full text: Snapdeal’s Kunal Bahl, Rohit Bansal tell staff ‘new path’ already profitable at gross level

Snapdeal of conversations with Flipkart were canceled with the founders of the old commission to an independent road and a version of “Snapdeal 2.0”.

Firstpost mail received Kunal Bahl and Rohit Bansal wrote Snapdeal employees through the sources.

In the letter, they said that with the continued rationalization of costs and the sale of certain assets, such as Freecharge, “we are financially independent as a company and we do not need to generate additional capital to satisfy profitability.”

Recently, the company sold the mobile payment solutions company, Freecharge which it bought in 2015 for about Rs 2.500 crore to Rs 385 crore at Shaft Bank.

“… The opportunity for e-commerce in India is huge, and the surface of this market of 200 billion has barely been scratched,” said the letter’s founders, showing good face although media reported. 80 percent of its staff.

In recent months, our company has participated in strategic discussions with other stakeholders. A lot of time and effort in the process of all participants in this exhausting process.

The process led to intense speculation and uncertainty for our team, our partners and our shareholders. And now is the time to end this saga.

We will continue the Snapdeal tour as an independent company. As we have said many times, the opportunity for e-commerce in India is enormous and the size of this 200 billion market has barely been scratched.

We have a great team, millions of loyal customers, hundreds of thousands of motivated marketers and a phenomenal platform that was built with years of effort. All the ingredients for success have always been present in our society.

And after months of tumultuesse, it is time to focus on the business and take advantage of all the advantages we have to move towards our vision of building the best market to connect buyers to sellers in India.

The correct question is why we are moving independently, although much effort has been made to determine a strategic combination.

There are some reasons that go beyond the fact that the planned deal was incredibly complex to execute, as reported by the media.

First, there will be no successful model for e-commerce in India. In all markets, there are several successful e-commerce companies, as their strategy is differentiated and has a road to success, there is an excellent business that can be built.

Creating content

The success of this issue could see the RBL Bank also speed up its listing.

The healthy way

Delhi-based Best Foods, a ?2,400 crore company (chairman: M.P. Jindal) engaged in the production of pack­aged basmati rice is planning to make a big splash in the domestic market.

The company which has 18 factories processing rice is planning to increase its retail outlets from 250 to at least 350 across India in the current fiscal, by investing in health and wellness stores. A differential pricing strategy to promote rice in retail packs rang­ing from ?90-200 per kg are sought to be sold in these outlets. Promot­ing rice along with nuts and honey, the company is planning to dispel rumours that eating rice is unhealthy and also demonstrate the right ways of cooking rice. The company plans to build up a national presence.

Headless

institutions

The government’s move to lure private sector talent to fill up the numerous vacancies in PSU banks has apparently not met with the desired level of suc­cess. Many of the big jobs includ­ing finding a CEO for the BRICS bank, debt management office proposed in the budget by the finance minis­ter, Arun Jaitely, are vacant. Besides Punjab National Bank and a few oth­ers are also vacant and if reports are to be believed even some of the larger banks’ posts will also be vacant post May. Some of the posts in IREDA are also likely to remain vacant. One of the reasons for the private sector pussy-footing over taking up jobs in PSUs is the fear of reporting to some babus in New Delhi and taking ver­bal instructions from them. The gov­ernment, it is learnt, may soon step in aggressively in a bid to resolve some of these concerns as the post of BRICS Bank is too prestigious to leave open for a long period of time.

Going online

Kewal Kiran Clothing Ltd (KKCL), with a good collection of affordable and aspirational brands (Killer, Integriti, Lawman and Easies), is going through some challenging times. Although it is in the fastest growing fashion apparel segment, it has suffered due to a lacklustre demand environment for apparels and an onslaught of online retailers offering attractive dis­counted merchandise. Consequently, though its top line has grown by 9 per cent in the first nine months, its earn­ings are marginally down by 3 per cent in the same period. According to a source, KKCL is aggressively looking at the online model to boost sales, as the recovery in consumer sentiment sets in. Meanwhile, the company has a strong balance sheet (zero debt with net cash accruals at ?215 crore; consti­tuting 10 per cent of the market cap).

Reliance in Korea

ADAG-promoted Reliance AMC, where Nippon has a stake, is planning to strengthen its ties with Samsung Asset Management. If reports are to be believed a strategic tie-up to cross promote Reliance products in Korea and vice-versa may soon become reality. In which case it may not be long before we see more Korean money flowing into the Indian fund which currently has ^1,37,000 crore assets under management.*

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Niche

platforms

Phone accessories market in India is growing along with the growth in the sales of per­sonal devices such as smart­phones, tablets, etc. Although these accessories are available on e-commerce marketplaces, there are companies selling a particular accessory. Niche

(•) dailyobjects

vertical e-commerce plat­forms are coming up. Daily- objects.com, an e-commerce store sells only designer back covers of smartphones. It works with 50 designers and has 3,500 designs for more than 100 smartphones. Daily, on an average, it sells 350 back covers. DailyOb- jects has 50 per cent margin on these covers and it clocks
?1.5 crore turnover every month. It also sells on e-com­merce marketplaces.

Creating

content

Babyhugz.com, an e-com- merce store dedicated to baby care needs, offers both prod­ucts and content to provide information to new, young parents. The content, which is created to assist young par­ents, it claims, is the differ­entiator between itself and other players. The start-up has hired moms to create content, which is seamlessly integrated on the Website with the products. It sells baby products like apparel, skin care products, diapers and toys, baby essentials etc.

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Babyhugz has about 250,000 registered users since its launch in October 2014 and it sells 400-500 products daily. It has already raised seed funding of $350,000 and expects to break even in its fourth year of operations.

 

Weddings made easier

To make organising big fat Indian weddings easier, start-ups are ready to help you. There are wed­ding planners, list­ing Websites where various vendors are listed and then there’s a Website dedicated to vendors required for wed­dings. Wedding- plz.com, a one-stop Website for weddings has expanded in Mumbai. The start-up had begun its operations with

Delhi. It claims to have more than 25,000 vendors provid­ing services required for wed­dings listed on its Website across 42 categories viz. Wed­ding venues, caterers, bridal make-up artists, wedding bands, florists. The Web­site also has planning tools like budget manager, wed­ding checklist and options to create password-protected couple wedding Website. Contrary of popular percep­tion, it’s not a seasonal busi­ness. Because, according to Weddingplz, when its off­season for one reli­gion, its wedding season for another. It makes money through sponsored listings, lead genera­tion for its vendors, and earning com­mission on business given to vendors through the Website. In the next few months, it plans to expand to four cities. ♦

 

 

 

WEBWATCH

Preventing infiltration

Cyber attackers are infiltrating networks and evading detec­tion by hijacking the infrastructure of major corporations and using it against them, says Symantec. “Attackers don’t need to break down the door to a company’s network when the keys are readily available,” said Tarun Kaura, director, technology sales, India, Symantec. “We’re seeing attackers trick companies into infecting themselves by Trojanizing software updates to common programs and patiently wait­ing for their targets to download them – giving attackers unfettered access to the corporate network.”

Symantec research reveals that it took software companies an average of 59 days to create and roll out patches – up from only four days in 2013. Attackers took advantage of the delay and, in the case of Heartbleed, leapt to exploit the vulnerability within four hours. There were 24 total zero-day vulnerabilities discovered in 2014, leaving an open playing field for attackers to exploit known security gaps before they were patched.

Symantec observed that attackers are using stolen e-mail accounts from one cor­porate victim to spear-phish other victims higher up the food chain. Spear-phishing is a more highly targeted version of phishing, whichutilisese-mails to target users in the target company by appearing to originate from within the company – often from HR or IT departments or someone known to the user.

Risk of malware

Now, even new devices carry the risk of malware. The threat of pre-installed software on machines would be a com­mon source of spreading Adware in the next quarter and even the newly purchased machines would carry the risk of malware, Quick Heal Technologies has forecasted in its threat reports for the first quarter 2015. Adware is soft­ware that automatically displays or downloads advertising material such as banners or pop-ups, when a user is online. It can be designed to analyse which Internet sites the user visits and to present adver­tising pertinent to the types of goods or services featured there.

“We have, over the years, witnessed an increas­ing number of Ransomware and Adware cases across both Android and Windows platforms,” says Sanjay Kat- kar, CTO, Quick Heal Tech nologies. “In recent times Ransomware has evolvec some more with the help of different fil formats and social engineering tricks that a being used to increase its reach and impact.” Ransomware is a type of malicious softwa designed to block access to a computer system or device until money demanded by the hack is paid.

 

Promoting a negative image

Bad economics, bad polite Sadly, the BJP government is getting caught in the tax follies of the past. Unfortu­nately, over the last couple of years the two issues from India that have generated maximum news overseas have been the retro­spective demands by the tax authorities and the number of rapes in public places. The ret­rospective rules have severely impacted India’s image as a safe place to do business. And the cases of rape have impacted India’s image as a safe destination for women tourists.

First there was the well known and widely discussed Vodafone case which the govern­ment lost in the Supreme Court, but then tried to overcome by retrospective amendments to the tax law. And now in recent weeks there has been the demand retrospectively for the Min­imum Alternate Tax (MAT). The tax authori­ties have chosen, based on one ruling of the advance authority of tax rules, to reopen the cases of many Fils across the board, for several years past, and demand payment of MAT.

Both the minister of finance Arun Jaitely and his minster of state Jayant Sinha have been at pains to explain in various forums, both in India and overseas, again and again, that the present government does not intend hereafter to levy tax demands retrospectively. But where notices have been issued by the tax authorities under the law as it stands, they would have to be litigated and decided upon in the courts of law. They also add that the government has a sovereign right, in appropriate cases, to pass tax legislations which apply retrospectively.

It is nobody’s case that our government, like any other government does not have the right to pass tax legislation that applies retro­spectively. Several western governments assert the same right. While it may lead to inequity, sovereign right is difficult to deny.

But having said this it is difficult to under­stand, let alone justify the ministers’ insistence that the demands raised by the authorities on the Fils for MAT for the years past, be fought through and litigated to the bitter end in the courts. Especially since when most Indians, let alone foreigners are resigned to the end­less time taken for cases to wind their way through our courts.

If MAT is not applicable to Fils in the future there is little justification for raising demands for the past. Also, in all likelihood, it is misreading
of the law to say that all companies, wherever incorporated, are liable to MAT in India. It is obvious, under commonly accepted principles of international law, that the government leg­islation can only apply to companies which are incorporated in India or doing businesses in India through a permanent establishment. The law makes it clear that Fils investing in India are not deemed to have a permanent establish­ment in India. Therefore to demand MAT from them is unlikely to succeed.

Moreover the position adopted by the gov­ernment is at variance with commonly accepted international practices. Over the last 65 years international capital markets have grown dra­matically and well accepted rules of the game have evolved. As European pension funds insti­tutions and individuals invested in the US mar­kets and then the US institutions invested in Europe all governments accepted that such investments would be tax free in the countries receiving the investments but that tax would be paid in their own countries; similarly when west­ern institutions invested in Japan and Southeast Asia, the same rules applied. Since we have cho­sen to invite foreign institutional investments into India we should abide by the same rules.

Another way of looking at this would be to ask the hypothetical question as to what would have happened if the US chose to tax gains on the billions of dollars of investments in US treasuries held by the RBI.

This insistence on issuing clarifications only for the future, without applying the same logic to the demands for past years, is also bad politics. All it means is that India gets a nega­tive image amongst international institutional investors. In any case, the final amounts col­lected would be very small compared to the negative publicity the country has received.

Instead of the government and its ministers facing the flak whenever interacting with for­eign investors, it would make more sense for it to simply blame the previous finance min­isters, Pranab Mukherjee and then P. Chidam­baram, during whose tenures badly worded amendments were made to the Income Tax Act, and issue clarifications that applies ab ini­tio. This would be a positive push to Prime Minister Narendra Modi’s intent to make India an attractive place to do business.   ♦

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