Snapdeal may tap Chinese firms, SWFs to raise money for FreeCharge
Online marketplace Snapdeal is in talks with multiple investors including Chinese firms and sovereign funds to raise money for FreeCharge, seeking to bulk up its digital payments platform before pitting it against market leader Paytm. Jasper Infotech, which operates Snapdeal, is positioning FreeCharge as a cornerstone of its business as it builds a comprehensive online ecosystem of goods and services similar to that created by Chinese ecommerce giant Alibaba Group. The strategy, it expects, will make the electronic marketplace stand out from its closest rivals Flipkart and Amazon. “We are getting a lot of interest from sovereign funds and some Chinese investors,” Snapdeal CEO Kunal Bahl told ET. “Chinese investors have seen the Alipay story.” “They have seen that Alipay has be- Q&A en successful because it is attached to a large commerce platform,” said Bahl. ET first reported in October that Snapdeal, which is backed by Japan’s SoftBank and China’s Foxconn, was in talks with existing and new investors to raise about $300 million (Rs 2,000 crore) to strengthen FreeCharge. Bahl declined to disclose the valuation he is seeking for FreeCharge or the status of the fundraising. Jasper Infotech acquired FreeCharge in April last year for an estimated $400-450 million in cash and stock. FreeCharge can now be used to pay for purchases of goods on Snapdeal as well as a range of services such as travel-booking and food-ordering that the online marketplace recently included on its mobile application through tieups with other firms. “I have told investors, ‘If you want to come into our crown jewel, it is going to be at a price’,” Bahl said. “If you are not willing to pay that price today, no problem. Let’s wait for three to six months and let (Free-Charge) continue to execute. Till then, we will finance it.” Alipay, run by Alibaba Group affiliate Ant Financial, raised $4.5 billion at an estimated valuation of $60 billion in April and, according to a Bloomberg report, is planning an initial public offering of its shares. The company, controlled by Alibaba Group founder Jack Ma, has about 450 million active users. FreeCharge, which has details of 20 million credit and debit cards stored on its platform and 30 million verified addresses, is targeting transactions worth Rs 20,000 crore by the end of March 2017, more than a threefold increase from about Rs 6,600 crore in January 2016. Alibaba Group-backed Paytm, which was valued at $3.4 billion as of September, had 128 million registered wallet users and handled about 95 million transactions a month as of January, much higher than the 30-31 million transactions FreeCharge handles every month. India’s largest ecommerce firms are sharpening their focus on digital payment platforms to have greater control over transactions. Flipkart, the country’s biggest online marketplace, in March launched a mobile wallet called Flipkart Money, which it expects will help it save significant costs related to product returns in addition to offering users an in-house payments option. Snapdeal’s latest fundraise for FreeCharge is a departure from its earlier capital-raising rounds that were focused on funding overall growth. “FreeCharge is not a three-year journey. It’s a commitment of a lifetime for us that we have made to the company and to the business,” Bahl said. “If we are running Snapdeal for 25 years, we have to run FreeCharge for 25 years also, and hence we want high-quality strategic investors for them as well.” Chinese investors are increasingly looking to invest in Indian firms as they seek to replicate the outsized returns they earned from backing domestic consumer internet ventures such Alibaba Group. Indian companies are cognizant of this. Snapdeal in February brought on board technology-focused venture capital firm Iron Pillar, which is an adviser to Singapore-based investment firm Brother Fortune Apparel Pte Ltd that represents several very wealthy Chinese individuals. Saquon Barkley Authentic Jersey
Snapdeal bars sellers from giving more than 70% discount from May 13
Snapdeal has barred sellers on its platform from giving more than 70% discount on the maximum retail price on most products from May 13, as the ecommerce firm aims to tackle the increasing return of merchandise from buyers. In a communication sent to sellers on May 9, the company said: “We have noticed deeply discounted products often do not meet expectations, leading to increased returns and customer dissatisfaction. To improve customer experience, you would not be able to list a new product or update the price of a listed product with more than 70% discount on MRP.” Sellers on leading marketplaces, including Snapdeal, have been complaining of increased returns by buyers due to the “no questions asked” return policy of the ecommerce companies. Increased returns is a logistical nightmare as inventory is stuck in transit for long time and also cause accounting errors, say sellers. A Snapdeal spokesperson said this is a way to providing consumer insights and assisting the sellers in making asale. “In this instance, we have shared with our sellers that any discounts that the consumers perceive as unrealistic may adversely impact the consumer perception about the quality of products,” the spokesperson said. “Laying down the operating rules on our marketplace and providing market information is an ongoing activity. The price is determined by the sellers based on various inputs they may receive from multiple sources, including from us.” According to Devangshu Dutta, chief executive of retail consultancy firm Third Eyesight, Snapdeal’s strategy might go down well with India’s new foreign investment policy in ecommerce. But sellers won’t like it. “The intent of the new ecommerce policy is clear. The government wants to control deep discounting. So the government may not have any problem with Snapdeal’s diktat. However, since this policy is influencing the prices, sellers could challenge it,” Dutta said. As per the latest government guidelines, online marketplaces are not allowed to influence the price of goods and services directly or indirectly. While some sellers say this is a “good move”, others see it as a hindrance when they try to clear piled up inventory. The All India Online Vendors Association, which represents medium-to-large sellers on various ecommerce platforms, said, “Snapdeal should discuss such policies with vendors before putting any cap on discounts.” Troy Stecher Authentic Jersey
‘Indian unicorns unwilling to bring in professional CEOs’
Former Flipkart chief product officer Punit Soni, a prized Silicon valley hire who quit the company in less than a year, says Indian unicorns (startups with $1 billion or more in private valuations) are grappling with leadership challenges but are unwilling to bring professional chief executives on board. In an interaction with TOI, Soni, a former Googler, said, “In the US, you’re either taught to become a great CEO or you’re asked to step out to get a professional chief on board. Tell me: In all the Indian unicorns, do you have any situation where the founder is not the CEO?” He argued that investors in the Indian internet economy haven’t run large tech companies. “They have built small companies and sold them in the past. Do you think there are enough product CEOs in the country who are spending time coaching these entrepreneurs? The answer is no,” said Soni, who is probably headed back to the Bay area to start an entrepreneurial innings. The domestic e-commerce story has faced some early upheavals with large global asset managers beginning to reset startup valuations. The Indian leader Flipkart has witnessed successive markdowns, bringing its valuation lower to around $9 billion after hitting a peak of $15.2 billion in early 2015. “I don’t think these are fluffy and ambiguous exercises. It cleans up a system a bit after some irrationality crept into the India story of late,” Soni said. “Nobody is going to argue that India is not going to be a large market. Everybody thinks it’s an exponential curve, perhaps it’s a small exponential curve and a little bit of straight line,” he added. Soni said Flipkart has to revisit priorities with a fresh lens before Amazon further narrows the gap in a fiercely-competed domestic e-commerce business expected to grow tenfold to $50 billion by 2020. “It’s a neck and neck contest. If they shape up and do the right things, they will be able to hold up, else they will be No. 2. It’s not such a bad outcome in India,” said Soni who was instrumental in developing Flipkart’s chat application Ping and relaunching its mobile website – Flipkart Lite. Lawrence Taylor Womens Jersey
31 Complaints Regarding Air India’s Food Quality: Aviation Minister Mahesh Sharma
The number of complaints regarding the quality of food served on Air India’s domestic flights has down to 31 in the previous fiscal from 34 in the year-ago period, Rajya Sabha was informed today. In the month of November 2015, the complaints regarding the food quality did not account for even three per cent of the total 252 complaints received by the Government-run airline during that period, according to the data given by Minister of State for Civil Aviation Mahesh Sharma. As per record, the total number of 252 complaints were received in November last year on the domestic network of Air India and out of these complaints only six were related to quality of meals, Sharma said in a written reply. The Minister, in his reply, also said that punitive actions is taken, based on the gravity of complaints after they are received. Air India uplifts in-flight, meals from reputed caterers, who also cater to other international and domestic airlines, Sharma said adding, surprised meat checks are carried out at the airline’s premises to monitor uplift of meals with regard to quality, quantity, taste, presentations and eye appeal. Besides, periodic hygiene audits are also being carried out at caterer’s premises to improve the quality of meals. Dale Weise Womens Jersey
Asia’s top consumers paid more than $10/MMBtu for gas in 2015: IGU
The LNG-dependent countries of Asia Pacific paid the world’s highest wholesale prices for gas in 2015, according to a new survey from the International Gas Union. Wholesale prices for gas were highest in South Korea at more than $10/MMBtu, with Japan also paying double-digit figures, the IGU’s Wholesale Gas Price Survey for 2016 showed. The third-highest wholesale price was in China at just below $10/MMBtu, where domestic prices did not fully reflect declining oil prices until November, the IGU said. The average wholesale price in Japan in 2015 was $10.36/MMBtu, down from $15.98/MMBtu in 2014. Contract prices in Japan, which is the world’s largest LNG importer, did not begin to fall significantly until the first quarter of 2015 as the lag effect of falling crude oil prices began to feed through, the IGU said. The price in China declined only marginally to $9.67/MMBtu in 2015, from $10.56/MMBtu in 2014, as the adjustment to city gate prices, formally linked to oil product prices and LPG, were delayed. In addition, the delivered prices of pipeline gas from Turkmenistan to the key east coast markets contain significant fixed transit and transportation elements, the IGU said. In India, prices rose to $7.94/MMBtu in 2015, from 2014’s $6.80/MMBtu. The increase reflected a full year of the new hub-linked pricing formula for domestic production and the price of the Qatar LNG contract, since renegotiated from the start of 2016, remaining high because of long lags. Prices have fallen further in the first quarter of 2016, the IGU said. Prices in the first quarter were $7.50/MMbtu in Japan, $7.54/MMBtu in China and $5.50/MMBtu in India, the IGU estimated, with the markets in China and India catching up in the declines as the inertia in their pricing systems begins to reflect prices for spot gas and oil. The Platts JKM for spot LNG cargoes delivered in June fell by 25 cents over the week to May 6, closing at $4.50/MMBtu. At the low end of the scale, Australia enjoyed the cheapest wholesale gas prices in Asia Pacific, at less than $4/MMBtu for 2015, compared with a regional average of more than $8/MMBtu, the IGU said. Australia, which is on its way to becoming the world’s largest LNG exporter, also enjoyed lower wholesale gas prices than its two regional LNG export competitors, Malaysia and Indonesia. “Global energy pricing has entered a new paradigm,” IGU President David Carroll said in the report. “While $70 (and higher) crude was the norm for many years, we are now uncertain about when to expect a rebound to historical trading ranges,” he added. “Gas industry dynamics are also changing,” Carroll said. “Projects approved several years ago in a more robust pricing environment are now coming on stream. This supply abundance has affected gas hub and spot pricing levels and shifts in the wholesale price formation mechanisms are occurring.” Global consumption of gas in 2015 was around 3,554.8 Bcm, up from 3,506.2 Bcm in 2014, with Asia Pacific accounting for 399.9 Bcm, the IGU figures showed. Domestic production accounted for 73% of total world consumption, or around 2,590 Bcm, with pipeline imports accounting for around 637 Bcm and LNG imports accounting for about 330 Bcm. Asia Pacific is the world’s second-largest importing region behind Europe. Asia Pacific’s imports of gas via pipeline and as LNG totaled 221.0 Bcm in 2015, with global imports recorded at 966.3 Bcm. Taylor Moton Womens Jersey
Gujarat State Petroleum Corporation Ltd’s overseas dreams gas out
Gujarat State Petroleum Corporation Ltd (GSPC) has wrapped up its overseas operations, resulting in over Rs 17 billion going down the drain. The state-owned company, which is mired in controversy over alleged wasteful expenditure in KG Basin, has already begun the process of relinquishing its only remaining block in Australia. The company has already surrendered 10 overseas oil and gas blocks in Egypt, Yemen, Indonesia and Australia during 2011-15. GSPC had acquired five blocks in Egypt, three in Yemen and one in Indonesia and two in Australia. The company had acquired two blocks in Australia, of which one was already surrendered before 2015. “In Australia, one block is already relinquished. In second block minimum work programme (MWP) is completed, relinquishment is being processed,” Union petroleum and natural gas minister Dharmendra Pradhan recently informed the Rajya Sabha. “GSPC has reported that its overseas operations are closed,” the minister further added. While there was no exploration success in case of blocks in Egypt and Indonesia, rise in militancy and disturbances in Yemen forced the company to withdraw. When contacted, GSPC’s in-charge managing director J N Singh confirmed the development. “We have closed our Australia operations also. Earlier, we had closed other overseas operations. We now don’t have any further plans for overseas explorations,” he added. In its report for the year ended March 31, 2015, tabled in state assembly this year, CAG had pulled up GSPC for its lack of experience as ‘overseas operator’. “The delay in execution of the work committed resulted in cost escalations in overseas blocks. As a result, the company had incurred expenditure of Rs 17.5746 billion for 10 surrendered blocks, of which Rs 17.3412 billion has been written off,” the apex auditor noted. Last week, Congress halted Parliament proceedings over alleged scam in GSPC. Congress leaders on Saturday met President Pranab Mukherjee and demanded an independent inquiry into futile spending of public money to dig for gas in the KG Basin. Anders Bjork Womens Jersey