Retail
Chronicles Monthly Newsletter | Volume 4 | Issue 2 | August 2019
CONTENTS
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FUTURE OF SPORTS IN RETAIL A look into the past, present and future of retail industry with specific focus on sports.
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Sagar Anam | Onkar Joshi Abhishek Wakode | Parth Reshamiya | Yash Jain
BYJU'S FALL IN LOVE WITH LEARNING a deep look into how Byju's made millions of kids fall in love with learning.
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CONTENT TEAM
TRADE SUSPENSION
DESIGN TEAM Surabhi Upadhyay | Sachin Gosh Archish Raval | Ayush Shah | Pushpak Holani | Ayush Goyal | Shriya Mahajan
How the trade occurs with neighboring countries India and Pkistan
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AUTOMOBILE DOWNFALL Learn how the automobile industry declined
EDITING TEAM Ayush Gupta Abhishek Wakode
FUTURE OF RETAIL IN SPORTS Abhishek Wakode PGDM RM
A look into the past, present and future of retail industry with special focus on sport retailing.
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August, 2019
FUTURE OF RETAIL INDUSTRY IN THE SPORTS SEGMENT
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“Retail! Retail! Retail!” all the transactions across the world, all the give and take is a part of the retail industry. Right from the unorganized local market to fortune 500 companies, everyone contributes and is simultaneously dependent on the retail sector. If you look at it from a certain perspective, the retail industry is the driving force of all the other sectors making it crucial to study about its history and future as well.While the retail industry is currently undergoing groundbreaking changes with the advancement of e-commerce, it remains essential to understand the history of today’s retail landscape. August, 2019
1900s - 1940s
In the early 1900s, shoppers used to visit their local corner stores. Instead of picking up the items they wanted in-store, shoppers used to make requests to the store owner at the counter. The biggest breakthrough in technology came with Frank Woolworth’s innovation of taking products from behind the counter and displaying them on the shelves, so people could both touch and feel them, much like they do nowadays.
1990s - Present
The breakthrough of the century that completely revolutionized shoppers' habits is the introduction of e-commerce. Internet penetration was increasing and the world was moving towards a digital era and so did the retail industry. The likes of Amazon and Etsy enabled people to purchase and sell online.
1940s - 1970s
As more people began relying on their cars and moving to the suburbs, huge enclosed shopping malls started to appear. The first fully enclosed, the climate-controlled mall opened in the United States in 1956 which had advanced technology such as air conditioning, this helped open the door to mass retailers. At the same time, open-air locations called strip malls also became popular.
1970s - 1990s
The big category killers that we still see today began to squeeze out many smaller businesses during the 1980s. Some major retailers filed for bankruptcy during that time, as they were too slow to adapt to consumers’ evolving needs.
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August, 2019
Sports And Fitness World Sports Forum (WSF) depicts the future of sports retailing as "point of engagement". Apparel stores operating as designer workshops, retail outlets organizing training sessions & offering customized products made on the spot are some of the possibilities soon. To compete with online retailing, retailers are expected to make the shopping experience more engaging which is something that will give them an edge over online retail stores. An estimate of 40% of people prefer to buy their sports equipment online, thus offline stores have to rethink their concept to make sure that people want to go there. Sports retailing has a huge potential to make the difference on points of engagement compared to other retail sectors, due to the products that they sell, the knowledge that they require and the passion of the customers. Though it is still early for sports revolution, a company like Adidas is already using the new idea for their stores.
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Adidas came up with a unique shopping experience in Berlin's Bikini Mall. The company opened up a pop-up store until mid-March that produced custom-made sweaters. Under the motto "Knit for you", it allowed customers to design their very own merino sweater and have it knitted for them then and there on machines installed instore. The idea is to transform the retail stores from point of selling to point of engagement. From traditional vendors, to changing rooms everything would primarily focus on the experience which the customer will get. The idea of creating an avatar that tries on clothing for customers in the online stores is something to look forward to. This will be achieved with the help of advanced body scanners that would help people get accurate measurements and varieties. Like theaters and food outlets have grown the shopping experience, where people come to socialize and crave for the experience, sports retailers will adopt the same and design the future outlets in such a way that people will experience more of the product. Technology,innovation and demand are some of the most important factors that affect the retail sector and since retail is the largest employer in the world, it is necessary to keep an update on it.
August, 2019
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Yash Jain PGDM RM "Every coin has two sides", similarly India, on one hand, has one of the largest workforces, but because of the infrastructure and the developing phase of the country, it is not able to provide education to its workforce effectively. According to the World Bank Percentage of population age, 42.29% of the Indians had no access to higher education. Raveendran, 35, CAT tutor, saw this problem as an opportunity and came up with an idea of online learning app – BYJU’s in 2011, a made in-house product that disseminates knowledge.
OBJECTIVE The objective of BYJU’ is to make learning compelling, lucrative and comprehensive for the students. They use a mix of video lessons and interactive tools which is prolific and efficacious. The main aim is to make education available to the people at their digital screens, i.e. from bricks to clicks.
REACH Started with a special focus on the K-12 segment in 2011, BYJU's launched its premier tablet learning program for competitive exams with content attainable 24 x7 for students in 2014. BYJU’s launched its learning mobile app in 2015 and added the curriculum for 4th and 5th grades in 2017.
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ATTIC | JANUARY 2016
Currently, it has more than 10 million downloads and more than 4 lakh subscribers yearly on android.
BUSINESS MODEL BYJU’s follows a freemium model - some of the content is offered for free, while students have to pay a fee for advanced levels. The app also accommodates competitive exams like JEE, NEET, CAT, IAS, GRE, and GMAT. BYJU follows an avant-garde strategy of marketing i.e." feet on the street", in which executives go home to home in small cities to sell the company products. Byju has a stalwart sales team (1,000 employees), most of them in telesales, looking to aggressively augment its feeton-street model and plans to set up 30 offices across India by the end of the year. It has various marketing roles like Conduction (a person have to go to the person home and convince them to buy the course), Calling (a person has to do a call to the person and convince them to buy the course) and Marketing (proper marketing role in which you have to create brand value and awareness about Byju and what engagement you can do in order to generate lead).
August, 2019
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BYJU’s had reported a loss of ₹29 crore in FY18. It turned profitable on a full-year basis, disclosing obscure number; having a monthly run rate of ₹200 crore in 2019. The company envisages 3,000 crores for FY19
FUTURE PROSPECTS BYJU further plans to introduce content in regional languages, moving beyond just English and Hindi. BYJU’s aims to expand into neoteric regions such as the United States, UK, and Australia as it gets 15% of its revenue from international students with its current portfolio of courses. It has acquired Osmo which was founded by Indiaorigin Pramod Sharma. Osmo produces augmentedreality games for iPads and iPhones targeted at children in the age group of 3-8 years.
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ATTIC | JANUARY 2016
BYJU's purchases it for $120 million to increase its presence in the USA. It conceives to have cocurricular activities such as teaching virtue and righteous aimed at the youngest of learners, which will be delivered in a gamified and mixed-reality format for better impact. The two main focus areas will be to get deeper into India and launching their international product as it reached out to less than 1% of the total student population. Thus, to reach their goal, they are planning to expand the number of languages and penetration in a rural area. For international product, they will fabricate the product in-house and collaborate with some of the most popular YouTube teachers who are experts in their domains. They are getting them to India to record and succor them in product development.
August, 2019
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August, 2019
TRADE SUSPENSION Shruti Srivastava PGDM RM
"A trade war would be a disaster for the world..." - Jack Ma
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August, 2019
TRADE SUSPENSION: WHO IS TAKING MORE AFFLICTION “INDIA OR PAKISTAN?” Retail Chronicles | Page 11
Relations between India and Pakistan took a dive when Pakistan decided to downgrade diplomatic ties with India, expel the Indian envoy to Islamabad, recall its high commissioner from New Delhi and suspend the bilateral trade. The decisions were taken by Pakistan Prime Minister Imran Khan in order to retaliate the Indian government’s decision to scrap the special status accorded to Jammu and Kashmir under Article 370 of the Indian Constitution. Article 370 of the Indian constitution is an article that gives autonomous status to the state of Jammu and Kashmir. August, 2019
Earlier, the Central government needed the concurrence of J&K state government for applying the laws but now everything changes.
plastics, paints and machinery. When compared to India’s trade with other countries especially with US and China, this is meager a dot in the India’s economy.
The above infographic shows the dependence of India on Pakistan, which is on 48th rank. Thus, the bilateral suspension won’t hurt the Indian economy much owing to the growing GDP of India and the informal route.
Pakistan terms India’s action as violation of United Nations’ resolutions on Kashmir and has taken the matter to various international forum such as United Nations Security Council and the Organization for Islamic Cooperation. A series of question pops up: how the dual-economies come in picture? The imports and exports between the two neighboring countries? How the suspension of it is going to affect and whom it’s going to affect more?
Now, let’s consider the reverse side of the story. Did the suspension by Pakistan’s PM Imran Khan costed Pakistan’s its own economy? Currently, Pakistan’s economy is unable to sustain itself and is dependent on China, Saudi Arabia, UAE and
In 2018-19, Indo-Pak trade was barely 0.1% of India's total trade. India's exports to Pakistan stood at $2.06 billion in 2018-19, while its imports valuing just $0.49 billion. Also, the trade between the two countries was not done directly, it was made through an informal route, implying the involvement of third country. Here, UAE was the supporting wheel to the system. India-UAE-Pakistan was the channel for the trade. India imported items like mineral fuel, fruits, salt, Sulphur, limestone, slag, rawhide, leather etc. while Pakistan imported cotton, organic chemicals,
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August, 2019
and organizations like International Monetary Fund for its survival. Suspension of India from trade is just an icing on the degrading economy of Pakistan. India was one of the major suppliers for the basic industries of Pakistan like pharma, now these industries won’t be able to receive the raw material which would in turn impact their economy to the core and not much for India.
Amongst these, Pakistan’s foreign reserves stood at $7.76 billion which is lower than even the Bangladesh’s forex and the inflation stood at 8.9 percent in June 2019. Going by the current scenario, the answer to the question, will the Indian businesses be impacted by the Pakistan’s “BOLD” move is a definite NO. Also, India has already revoked the tag of Most Favored Nation from Pakistan, which gave India trade benefits. Hence, the step that was meant to show power, control and authority, turned out to be a hoax!
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August, 2019
Indian auto industry - Is there any dawn for this down?
Parth Reshamiya PGDM RM
Indian auto industry - Is there any dawn for this down?It is the Sunday of last week of July. Mr. Raman, manager for the Ghatkopar branch of Maruti Suzuki was quite depressed due to low rate of booking. The month of July, which normally spreads hopes in the auto industry due to the festivals in coming months, was much dispiriting this year in India. Maruti Suzuki, which is one of the member of each Indian family is seeing hard times. The demand is so low that it has hit the largest car maker company of India. Maruti Suzuki on Thursday reported a consecutive decline of 36 percent in its domestic sales at 98,210 units for July 2019. This was the first time since June 2017 when Maruti has sold less than 1 lakh units in a month. That time, dispatches to dealerships were predictably low on account of roll out of Goods and Services Tax in July 2017. The labyrinth that the domestic automobile industry has been stuck in for the last 12 months is fast becoming more and more tricky to manage.
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August, 2019
Why the dream of each middle class person “ Meri apni Four-wheeler� is diminishing. Credit money that is hard to get - The recent NBFC crisis had a twin effect on demand. It curtailed financing to new vehicles, and NBFC were financing customers who were not preferred for financing by banks. Hence, the revival of lending by NBFC is critical for demand revival. Cost that is increasing instead of cutting - Over FY19-21, vehicle prices are estimated to jump 13-30 per cent (1-2 per cent per annum over the previous decade) due to safety, insurance and emission related compliance costs. Come April 2020, India will upgrade to BS-VI from BS-IV emission standard Given that general price hike over the previous decade was 1-2 per cent per annum, a sharp increase in vehicle prices over FY19-21 can restrict the recovery.
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Tariffs that are taking away benefits From super-rich text to the high GST in premium car segment, these all things are stopping super rich and rich class to put their feet in the showroom.
As we normally see, the middle part of the sandwich while eating, and the middle class of Indian economy during the economic downturn get the highest pressure. Slumping sales of cars and motorcycles are triggering massive job cuts in India's auto sector, with many companies forced to shut down factories for days and axe shifts. The cull has been so extensive that one senior industry source told Reuters that initial estimates suggest that automakers, parts manufacturers and dealers have laid off about 350,000 workers since April.The downturn - regarded by industry executives as the worst suffered by the Indian auto industry - is posing a big challenge for Prime Minister Narendra Modi's government as it begins its second term at a time when India's jobless numbers are climbing. August, 2019
The Road Ahead The road aheadAlthough tradewar, demonetization and certain geo-political conditions are showing their effects, certain steps by government can help in increasing the demand. Anand mahindra, the chairman of Mahindra & Mahindra Group said, temporary relief on the GST front, either by modifying the slabs, or, removing the cess can help in lessening the pressure and increasing the demand. Easing of liquidity as well as boosting of confidence of bankers and lenders in the non-banking finance sector can help unorganized sectors to get loans easily.The lesser demand in auto industry in India poses threat to the dream of being a leader in global electrical vehicle hub.
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August, 2019
Retail Chronicle is a monthly newsletter of Retail Lab, the retail committee of KJ Somiaya Institute of Management Studies and Research, Mumbai. Images used in Retail Chronical are subject to copyright.
/retaillabsimsr @Retail_Lab @Retail_Lab
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