Micro and Small Businesses in India need capital to support growth, expansion or operations. They have traditionally been funded by family and friends, but are now more open to and prefer borrowing from third parties. There are several reasons why banks do not adequately address this demand. The need for funding for SMEs might be short-term or immediate or the requirement of a credit history or collateral might hinder their prospects. LendingKart jumped to address this demand by giving
Mukesh Ambani led Reliance Group wants to connect ~30m kirana stores across the country with its own physical and digital infrastructure, thereby creating a large omni-channel marketplace. A key part of creating such an ecosystem is deployment of merchant point-of-sale (PoS) devices across kirana stores. To better understand the features of such a machine, we visited a few kirana stores that have adopted the offering.
Jio PoS is a hand-held device connected to Jio’s 4G network and allows a retailer to accept payments through various digital means (i.e. credit cards, debit cards, wallets). However, unlike peers, Jio PoS also offers functionalities such as billing, online procurement (from RRL’s cash-and carry stores), management of purchases/ sales/ inventory, customer relationship management and generating tax reports.
Key Features of Reliance Jio PoS
A Jio PoS device is equipped with a barcode scanner, which can be used to generate bills for customers. Barcodes of most common SKUs are already fed into the device
We happened to be in the analyst Call with Reliance Jio executives and here is what the company had to share.
Interconnect Usage Charges – IUC top-up recharge should not be seen as a tariff move, the company emphasized strongly. The company categorically stated that the investment cycle in 4G LTE Wireless Network is largely done and capex intensity on the wireless business would be low hereon. The company, once again, emphasized its network coverage and capacity advantage over peers suggesting that Airtel would take 3 years and Vodafone Idea would take 8 years to match Jio on network if (a) these two keep their current network expansion pace going, and (b) Jio were to stop adding capacity.
Jio indicated strong response
Internet Food Delivery App Zomato posted solid revenue growth of 200% yoy in FY2019, a marked acceleration from the 33% revenue growth posted in FY2018. This was driven by the expeditious 310% revenue growth in the delivery segment, which saw a rapid scale-up of orders, from a monthly run-rate of 5 mn orders in March 2018 to 33 mn orders in March 2019. Revenues will likely grow at a strong clip in FY2020 also – compared to US$206 mn of revenues posted in FY2019, Zomato is already at a US$350 mn annualized revenue run-rate currently.
Zomato’s costs shot up by 525% yoy, higher than its revenue growth. We believe this was primarily on account of substantially higher marketing
Akash Ambani led Reliance Jio Infocomm has always thought beyond pure play telecom services. Jio network has advance(d) features such as Software Defined Networking (SDN) and Network Functions Virtualisation (NFV). It is ready for future evolution of technology, including transition to 5G with minimal additional capital expenditure in the network. Jio has has filed 68 patents for the path-breaking innovatoins from its Navi Mumbai Campus.
Jio led the Massive 4G network investments due to data explosion triggered by rapid shift in consumer behaviour from voice to entertainment. Jio is focused on building a platform, with an all IP 4G network, digital services/content, FTTH and enterprise services being key pillars. It continues to incur capex in improving its already
China is migrating from mobile internet to the internet of things (IoT). Voice assistant adoption has hit an inflection point while industrial internet opens up new big-business opportunities. The cloud is the foundation, driving the digital upgrade across traditional industries from retail to healthcare, finance, manufacturing and government.
Voice assistant adoption has hit an inflection point. Baidu’s DuerOS-powered smart device installed base also jumped 33% to 150m in the past three months. Baidu was the first to launch a smart speaker with display world-wid,
Pharmeasy is an online pharmacy player that delivers medicines in >1000 cities in India. It was founded in 2015 and now generates revenues of ~Rs550mn p.m. Its business model has been evolving since inception; now has an in-house distribution setup (warehouses in 8 cities) vs plain retail aggregation at the outset. The company also has a team of 900 delivery. The company offers discounts on medicines (usually 20% on MRP) and is in cash-burn mode.
The order mix is skewed towards chronic, at ~70% of sales. Higher share of chronic offers Pharmeasy the opportunity to push a subscription based proposition to customers. This ensures lower churn (through higher repeat orders) and better visibility of
Funding environment for internet/e-commerce companies in India seems to be reviving after the lull in 2016. Boosted by a few large deals, PE/VC funding has reached US$6.7 bn in 2017 (till August), compared with US$2.3 bn in 2016 and US$5.4 bn in 2015. However, unlike 2015 when funding was more broad based, PE/VCs are now making concentrated bets in a few large companies in order to have stakes in eventual market leaders.
Large investors such as Softbank, Alibaba, Tencent and others have led relatively large funding rounds in e-commerce companies such as
The industry revenue figures for the Jun-17 quarter recently released show headline improvement in market share for incumbents – but that is not representative of customer wallet as Jio has not reported revenues.
While on a Gross Revenue basis, 35-45% of Jio’s market share gains has come from top-3, the improving traffic mix for Jio means ~60% of market share gains on AGR level are from top 3. We believe Airtel has lost at least 80-200 bp market share since Jio’s launch, while Vodafone+Idea have lost 160-240 bp.
Jio is yet to report revenues from the telecom business, and we believe the TRAI reporting primarily captures only the interconnect payments and
The Indian Telecom Regulator – TRAI will decide on issue of predatory pricing in the next few weeks. In response to the consultation paper floated by the regulator in this regard, incumbent telcos (Airtel and Idea) have asked for following considerations – (a) Investments in 2G and 3G technologies cannot be ignored under the logic of obsolescence (b) asked for treating 4G/3G/2G services as a separate class of service. Additionally asked to treat wireline and wireless as separate services. (c) Not allow pricing below interconnect charges (IUC) and IUC should be computed on full costs.
Reliance Jio Infocomm is not in favour of