In the following video, Mr. Neev Ahuja, Country Manager – India, ETP Group, representing the new generation of customers, shares his views and cues for retailers to keep pace with the demands of the new generation of customers and how omni-channel has been influential both on retailers and the new age shoppers.
1. Foreign retailers focusing on core Asian markets
With the likes of China, India and other large Asian countries poised to have a large consumer base in the coming years thus creating a higher demand for international retail brands. This scenario is prompting big-name retailers to focus on capturing revenue from core Asian markets.
2. Big players emphasizing on Southeast Asian markets
As barriers to entry are erected in some of the larger Asian markets, Southeast Asian countries in-turn are seemingly converting into new playgrounds for big-name retailers. Countries like Indonesia, which is seeing a strong population growth and a rise in the income, and Vietnam, a country which is relatively FDI-friendly, are favoring big retail players to enter these markets.
3. The line between online-offline channels are blurring
As omni-channel retailing is the new rule in the retail playbook enabling retailers to transform their business and add features such as click-and-collect, endless aisles. Further, driving engagement using retail touch-points is becoming popular favoring the connected consumers’ sentiments and preferences of swift and simplified shopping.
4. Deeper penetration
From time-to time brands are announcing the grand openings of more and more stores and outlets in Asian markets. As in China, flagship stores are popping up in tier three and tier four cities, going beyond tier one and tier two cities, other regions will also witness a similar trend in the future.
5. Discount retailing
Although the discount retail channel is not as strong as it is in Western Europe, the trend is catching on in Asian countries such as China, India and so on where discount retailing is becoming popular online and Japan in the form of 100 Yen stores.
6. Equipping for m-commerce and s-commerce
Global e-Commerce growth is going to be driven by Asian retail markets, which are equipping themselves for m-commerce and emerging forms of social media commerce. As consumers in the Asian market are heavy mobile users and active on multiple social media channels on a daily basis, retailers adding m-commerce and s-commerce capabilities will favor these consumers.
7. Importance of local shopping cultures to retail markets
As foreign retail players are looking to expand their brands and businesses into Asian markets, they will need to imbibe the local flavor of the domestic retail markets and adhere to their respective shopping cultures as these will prevail over the coming years. As such retailers entered into countries like China (the likes of Starbucks) have opened outlets that feature local tastes and preferences.
Black Friday, the day after Thanksgiving in the United States, generally kicked off the holiday shopping season with crazy deals offered by retailers to get in more sales. But this year the story seems to be different. This past weekend, on November 11, or Singles’ Day, as it is popularly known in mainland China, got the global headlines gaga about it, setting a new start for the crazy shopping frenzy.
Before looking into what really happened, a brief privy about Singles’ day.
Chinese Singles’ Day or Guanggun Jie is a festival widespread among young Mainland Chinese people who celebrate the fact that they are proud of being single. The 11th day of November (11/11), is chosen because the number “1” resembles an individual that is single. As the day started getting popular, once a celebration for China’s singles, Singles’ Day has turned to be a 24 hour shopping extravaganza.
So how did Singles’ Day 2017 create history?
This year, the sales on Singles’ Day was more than 3 times the combined sales for Black Friday and Cyber Monday 2016 of US$6.79 billion in the United States, resulting this festival being the largest offline and online shopping day in the world thanks to Alibaba, the Chinese e-Commerce giant now rivaling Amazon, doing sales 168.2 billion yuan (approx. US$25.3 billion). Looking at the previous years, Alibaba’s sites Tmall and Taobao garnered sales of US$5.8 billion in 2013, US$9.3 billion in 2014, US$14.3 billion in 2015, and US$17.8 billion in 2016. Thus, this year’s sales of above US$25 billion has broken the previous year’s record.
While the US$25.4 billion worth of sales can be etched into record books, Alibaba also set a world record for payment transactions. Its mobile wallet app Alipay processed 256,000 payment transactions per second in 2017 taking the tally of the transactions processed by Alipay in the entire 24 hours to 1.48 billion. And that is not it, the delivery orders through Cainiao – Alibaba’s logistics affiliate reached close to 700 million, breaking 2016’s record.
Alibaba said that it had turned 100,000 physical shops around China into “smart stores” for this year’s event and via these pop-up smart stores and in-store technology, Alibaba and the retail brands helped drive online traffic to brick-and-mortar stores, further erasing the boundaries between the two channels.
While all that happened in China, the Singles’ Day online shopping craze picked up in some of the Southeast Asian countries like Singapore too, where Singles’ Day is still a relatively new thing. Lazada, the Southeast Asian online retailer owned by Alibaba, sold US$123 million of merchandise, a 171 per cent increase over the previous year. Shoppers in Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam ordered 6.5 million items, 191 per cent or nearly double that of last year.
4 important learnings from the Singles’ Day 2017 shopping event:
- Omni-channel retailing is the real deal when it comes to breaking sales records in a single day eclipsing previous years’ sales, as Alibaba and participating retail brands used both physical and online channels to help consumers make the most of the festival
- Promotions with the right messaging and at the right time can boost sales, as Alibaba started promotions 3 weeks before the event with a motto that resembles the sort of greetings, Chinese across the world exchange at the Lunar New Year
- Customer engagement is key to make success of a shopping day as Alibaba engaged with its customers not only before the event through promotions but also offered its most-loyal customers and viewers a gala that featured international and Chinese stars
- Mobile is a very important shopping channel for the success of shopping events, as Alibaba said that 90% of their sales were made on mobile and over 70% of orders on Lazada were placed from mobile devices
What’s in it for Indian retailers?
The above mentioned learnings are definitely worth analyzing and applying in the Indian retail market, especially during festival shopping events and one day this will help the shopping event(s) in India eclipse the likes of Black Friday and Singles’ Day and grab international headlines. Another thought to ponder is, should Indian retailers look at Singles’ Day as an opportunity and a reason to boost their sales?
Simply operating multiple retail channels does not constitute an omni-channel strategy, unless done right. Today, customers may start in one channel and switch to another as they progress to a definite buying decision. Omni-channel implies making sure these complex ‘hand-offs’ between channels must be effortless for the customer.
ETP presents ETP #Futuretail India 2017, an inspiring session on ‘The Omni-channel Transformation of Retail Businesses in India’ to show how to convert such omni-channel challenges into opportunities. It will be held on 11 October 2017 at the Vivanta by Taj.
During the event team ETP led by Mr. Naresh Ahuja, Chairman & CEO, ETP Group will lead discussions on the importance of ‘The Omni-channel Transformation of Retail Businesses in India’. He will shed light on the abundant opportunities at hand for the retailers in this dynamic region by adopting an omni-channel strategy for their businesses as well as share insights on some of the key trends in traditional retail, e-commerce and omni-channel retail. ETP customers will share their learnings and ETP will share its research and technology.
Mr. Varun Suri, Solutions Director, ETP Group will present a live demonstration of ETP’s Omni-channel Retail Solutions to establish how ETP can help retailers in India to overcome the challenges in omni-channel retailing.
Take this opportunity to network with industry experts and leading lifestyle retailers in India representing several verticals such as fashion, footwear, electronics, mobiles, books and stationery, sporting goods, furniture and home furnishings, over cocktails and dinner at the Vivanta by Taj, Plot No.1, Sector 44, Gurugram, Haryana 122004 on 11 October 2017. This exclusive event is invite only.
ETP #Futuretail will continue to drive the omni-channel transformation of retail businesses across Asia-Pacific, India and the Middle-East.
ETP Group, a leading provider of Omni-channel Retail Solutions in Asia, India and the Middle East is honored to be amongst the 25 Most Promising Retail Solutions Providers – 2017, as presented by the editorial board at APAC CIOOutlook. The key points of consideration while compiling this carefully selected list of new age retail solutions providers were their expertise, innovation and the ability to provide the right intel and resources to implement a scalable, cost-effective and easy to implement retail solution.
ETP is specifically focused on brick and mortar retailers as well as online retailers, and in fact is the change agent for the convergence of the two. ETP’s Omni-channel Retail Solution – ETP V5 serves large retailers for their enterprise class requirements of scalability, security, compliance and high performance. “We are very happy to be recognized at this moment in time for our leadership in the retail industry, when we are helping retailers transform from traditional brick and mortar models to a fully omni-channel model and embrace the new age consumer”, says Naresh Ahuja, Chairman and CEO, ETP International.
ETP is an Omni-channel Retail Solutions company headquartered in Singapore, driving change in Asia Pacific, India and the Middle East. ETP’s software includes Omni-channel POS, Mobility, CRM, Marketing and Promotion Campaigns, Procurement, Warehousing, Distribution, Omni-channel Analytics and Omni-channel Connect. ETP V5 is used to serve customers across 22 countries and thousands of stores for over 300 brands.
ETP is enabling brick and mortar retailers to embrace omni-channel commerce and drive their brand-customer relationships in a unified manner with features such as Click and Collect, Click and Deliver, Endless Aisle, a holistic view of the inventory and a single view of the customer. ETP helps its customers get it right in omni-channel retail.
The Government of India recently decided to do away with multiple taxes on goods and services by implementing a single tax – the GST, the revenue generated from which is shared between the Central and the State Government. Prior to GST, there were a number of different indirect taxes, the Value Added Tax (VAT) being the most prominent amongst them. VAT could been seen on almost every invoice, which has now been replaced by CGST and SGST thus making people wonder if GST is same as VAT. But GST is completely different from VAT and it is very important to have a clear picture of the distinction between the two.
- GST, as the name suggests is incurred on both the goods and the services where as VAT was implemented only on the goods. To take care of the tax on services, previously the government had Service Tax. Thus, one wouldn’t have had to pay VAT while booking railway tickets; instead he/she would have paid Service Tax based on the government guidelines. The government has now combined both of the aforementioned taxes into one – GST.
- GST unlike VAT doesn’t have a cascading effect. Prior to GST implementation, the retailers were required to pay VAT as soon as some value is added to the product. For instance, manufacturing a product caused value addition and the VAT was incurred on the entire value. Similarly once the product is ready and is being labeled for final consumption/usage, a retailer would have again incurred VAT. This use to cause a spike in tax burden for everyone in the retail chain. GST, unlike VAT enables retailers to claim input tax credit from the government, which can further be transferred through the retail chain. This brings tax respite to the retailer and consumer as the redundancy of tax payment is done away with.
- VAT was calculated and implemented differently by different state governments. The central government could implement only Central Sales Tax (CST). The state governments were empowered to tweak the imposed tax rate at their will, which cannot be done with GST. The central government has introduced different tax slabs for different products and has decided to share a fixed proportion of tax revenue with state governments. The state governments have agreed to this kind of revenue sharing and as a result they don’t have the power to make rate changes. It will thus provide more freedom to retailers to set up warehouses or manufacturing units in any state they wish to.
GST will bring about a positive change in the economy by creating a friendlier and understandable indirect tax regime. It will put an end to industry woes related to taxation and promote the ease of doing business. GST is simply not restricted to VAT, it encompasses almost everything which earlier fell under the scope of indirect taxes. It lies in our responsibility to understand it better for streamlining our business activities and processes. You may click here to know more about GST.
An in-depth understanding of GST is essential not only for end-customers, but also for retail businesses both in India as well as those looking to make an entry or investment in the Indian market.
GST is going to effective from 1st July 2017 in India and retail businesses in the country and those planning to enter India will need to be GST ready. Here is a quick overview of GST.
ETP Omni-channel Retail Solution with the GST pack handles not only the billing processes with GST impact, but also various other retail processes, making them GST ready.
Sometime in the 18th century, the world embarked upon an economic journey that was unprecedented in the past. The phenomenal movement that brought about a paradigm shift in the lifestyles of people is well known to everyone as Industrial Revolution. It set off the world economies on a journey where there was no looking back. US, UK and most of Europe made the most out of it, and the nation that failed or rather was not allowed to participate in the industrial revolution was India. The ramifications of it can still be felt, seen and observed in the Indian economy. The liberalization of 1990-91 that led to abolishing of the license raj and diminishing of red tape brought some respite. The IT sector too helped India in firmly establishing its feet on the global platform. But, India still could not come at par with the developed economies. India needed a reform which can help its economy to take a leap and establish itself as one of the strongest economies in the world. The GST (Goods and Services Tax) could be one such reform that can help the Indian economy to attain a stature which the country has been missing out for so long.
The GST will not only help India attain a formidable economic stature, but also help various sectors and industries in achieving the desired growth. The preparations to adopt GST are in full swing and industry stalwarts too are trying to gauge the outcomes of this mammoth tax reform thus, making it all the more important to simplify the complexities that exist in GST. Talking about industry and economy, it is of utmost importance to talk about retail. The Indian retail market is estimated to be US$ 600 billion and one of the top five retail markets in the world by economic value. Retailing in India is one of the most important pillars of Indian economy and hence it becomes indispensable for the retailers to understand the complex tax structure and streamline their strategy accordingly.
Like the industrial revolution, the impacts of GST too would be felt and perhaps even for a longer time. But how would they be felt? And, specifically what impacts would it have on retail sector is something to be pondered over. Here are certain attributes of GST that will help in gauging its outcomes –
- A unified tax regime – India has a number of indirect taxes – VAT, service tax, CST, service tax on warehousing, consulting and rent, octroi and entry tax to name a few. It’s a well-known fact that more the number of taxes, more is the burden faced by the taxpayers. Also, it serves as a deterrent to industries by causing impediments in the process of streamlining business and in turn, causing a dent in their bottom line. The government plans to create a unified tax regime that will boost the morale of retailers and will help the retailers to conduct business with greater confidence. For example, as on date, if a consumer pays Rs. X under 4 different taxes so his total expenditure on tax becomes Rs. 4X. After the implementation, it would require the taxpayer to pay a particular amount under one tax only, hence a person would require to pay Rs. Y only at one place, where most likely Y<4X. This is why it is being termed as One Nation, One Tax.
- Tax structure – The government has proposed four tax slabs at 5%, 12%, 18% & 28 % for different types of items and services. Moreover, there will be 3 kinds of applicable Goods and Services Taxes:
- Central GST (CGST), where the tax will be collected by the central government.
- State GST (SGST), where the tax will be collected by the state government
- Integrated GST (IGST), where tax will be collected by the central government for inter-state sales.
The aforementioned tax structure would encourage retailers to consolidate their warehouses. As much as 20-30% consolidation of warehouses is expected. Moreover, it would also be easy to transport goods from one state to another as boundaries will become insignificant.
- Input tax credit – This attribute can definitely be considered as the most important and significant aspect of GST. Input tax credit is the savings you can get while paying the tax at the output, by offsetting it with the tax you paid at the input. It applies to all barring Agriculturists. In the current tax regime, input tax credit is applicable only on VAT, but in proposed GST regime there will be a set off in taxation starting from the producer’s point till the customer’s point. The outcome of this step would be a significant reduction of the tax burden on retailers and this very well may be passed on to consumers, thus providing room for price reduction as well.
GST is a consumption based or destination based tax i.e. the tax should be received by the state in which the goods or services are consumed or rather the destination of the final goods and not by the state in which such goods are manufactured. So the cascading effect of taxes will be done away with. This indeed is one of the major advantages of implementing GST. But it would require a complete renovation of the existing systems/paradigms pertaining to taxation. And, this is where one of the most formidable players in our economy, the IT comes into play.
IT has brought about a revolution in the way we carry out our activities, and it is thus relevant for retailers to adopt/modify their IT strategies. Retailers have to deal with various aspects that would be affected by implementing GST such as billing, returns, merchandising, delivery, transportation, order management so on and so forth. The prerequisite for dealing with the changes pertaining to the aforementioned activities is to implement a comprehensive, extensive and user-friendly retail solution software. Easier said than done. Most of the retailers in India do not have their own retail software solution and they outsource it to 3rd party vendors. It becomes of immense importance for retailers to choose a solution software that helps them deal with –
- Supply chain management
- Inventory management
- Interstate transfers in case of deliveries
- Order management
- Effective return policy
- Discount offering
And many more. The aforementioned activities would entail conforming to the new tax regime. This is a mammoth task that would require developing complex algorithms and updating the existing ones to enhance compatibility. The right investment in this direction would end up saving a majority of future expenses. One such solution is ETP’s omni-channel retail software solution that has served industry giants in more than 22 countries across Asia Pacific, India and the Middle East. It provides solutions that already conform to tax regimes of different countries. From this, it can be safely stated that ETP understands the know-hows of tax structures, and thus it can be trusted with GST as well. ETP has been developing complex algorithms ever since the GST rollout was announced. It has also been working on to understand the other intricacies of GST so that it can be implemented efficiently in the software solution. Thus, the software will enable retailers to carry out their business operations without any hassles and expand their consumer/customer base, which in turn would also enhance their bottom line.
The GST reform is something that has been long yearned by the industry, retailers, manufacturers and consumers. We should embrace this reform with ample knowledge and understanding so that it doesn’t get misinterpreted and complex like the existing tax regime. The amount of complexity that the current tax structure entails, poses as a deterrent not only to the new entrants but to the existing players as well. Once implemented, retailers can shift their focus from tax planning to profit planning and can reap maximum benefits out of it.