E-commerce firms raked in $3.1 billion during the first few days of Diwali sales in 2020. But with the threat of a third wave in September or October, Amazon and Flipkart may be forced to call off their flagship events this year.
Also in this letter:
- Price cap may hit startups’ vaccine drives
- Wipro’s Delaporte took home $8.8 million
Kedaara Capitalraises over $1 billion corpus
Firms may tone down, rebrand mega sales if Covid surges again
Flipkart’s and Amazon’s annual pre-Diwali sales could be non-starters this year if there’s another surge in Covid-19 cases around that time, our sources tell us.
Plan B: If the mega sales are indeed called off, the two companies could host low-key sales under different names.
Why? Both companies believe that another surge in infections would not only reduce sales, it would dent the image of their biggest annual events, the sources said.
All about timing: Flipkart’s ‘Big Billion Day’ and Amazon’s ‘Great Indian Festival’ generate huge consumer interest every year.
But after a devastating surge in Covid-19 infections in April and May, experts warn that if the vaccination drive is not sped up and measures to control the spread of the virus are not maintained, India could face a third wave of infections in September or October.
Quote: “Flipkart may not call it Big Billion in case there is a spike in infections before Diwali. The third wave is expected around that time and if sales, hypothetically, drop by 50% compared to last year, [the] media will immediately call it a flop show,” said a source.
What they’d be giving up: Sales events by e-commerce platforms around Diwali last year, dominated of course by Big Billion Day and Great Indian Festival, helped them rake in about $3.1 billion in the few days of the festive season, exceeding the $2.7 billion in gross sales recorded during the entire season in 2019, according to market tracking firm RedSeer Consulting.
- In the 2020 edition of Big Billion Day, Flipkart said its first five-day deliveries had swelled 10 times from the previous year’s to nearly 10 million shipments.
Price cap may hit companies’ vaccine drives
The government’s move to cap the service charge for vaccine jabs at private hospitals at Rs 150 may slow down vaccination drives at delivery and e-commerce startups.
- Over the past month, several startups, besides e-commerce ones, have organised vaccination camps at their offices for their staff.
Sources told ET that these firms are now expecting a slowdown in vaccination camps following the recent changes to the policy.
The reason: Hospitals typically allocate 4 to 6 people even for a small-scale vaccination camp in private offices in Bengaluru. This would be higher for large e-commerce companies such as Amazon and Flipkart. There are additional expenses for ambulances, transport and other expenses for doctors at these camps.
ET reported on June 9, quoting Fortis Hospital and others, that hospitals were of the view that the cap would disincentivise them from setting up vaccination camps.
Also Read: Paytm, MakeMyTrip, Infosys offer to help India with Covid-19 vaccine bookings
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Wipro’s Delaporte took home $8.8 million in FY21
Wipro CEO Thierry Delaporte received a total compensation of $8.8 million in the fiscal year 2021, regulatory filings show.
This makes him the highest-paid chief executive among the country’s three largest software exporters.
A one-time cash award and stock grants boosted Delaporte’s earnings for the year, after he took charge amid the pandemic in June 2020, according to the company’s statement to the US Securities and Exchange Commission (SEC).
For the same year,
Kedaara Capital raises over $1 billion for its third fund
Kedaara Capital has raised more than $1 billion for its third fund.
In context: This is perhaps the largest fundraising by an India-dedicated private equity firm.The PE firm had raised $575 million in 2013 for its first fund and $750 million four years ago.
Why it matters: The youngest among the major domestic PE firms, Kedaara will take the lead over peers such as Multiples PE, True North, ChrysCapital and Everstone Capital, in topping the $1 billion corpus for any fund. After the closure of its third fund, it will manage nearly $2.5 billion in assets, behind ChrysCapital and Everstone.
Canada’s CDPQ and Ontario Teachers’ Pension Plan, German insurer Allianz and the International Finance Corporation (IFC) are some of the sponsors (or LPs) that have backed Kedaraa in its two previous funds.
Tata Digital, a wholly-owned subsidiary of the Tata Group, on Thursday said it is acquiring a majority stake in e-pharmacy 1mg.
Tata Digital buys majority stake in 1mg
Tata Digital is on a buying spree as it builds its super app to take on the likes of Amazon, Reliance Industries and Walmart-owned Flipkart.
The Tata Sons subsidiary is acquiring a 51-60% stake in online pharmacy 1mg, days after it pumped $75 million into health and fitness startup CureFit and appointed its co-founder Mukesh Bansal as president.
- 1mg is said to have received about $100-$120 million in primary capital and $220-240 million overall, including secondary investments, according to people close to the development.
- Existing investors Redwood Global-Korea Omega and World Bank’s International Finance Corporation (IFC) have also pumped in primary capital. The deal values 1mg at $450 million, a person briefed on the deal told us.
- Sequoia Capital and Omidyar Network are fully exiting the firm while other early investors are opting for partial exits.
In May, Tata Digital had announced its purchase of a 64% stake in online grocer BigBasket, in one of the largest M&A deals in India’s digital sector.
With the 1mg deal, India’s online pharmacy sector is now more or less a game of corporate giants, with Reliance having acquired a majority stake in Chennai-based Netmeds for Rs 640 crore last August and Amazon, ramping up its prescription drug deliveries in Bengaluru through its largest seller Cloudtail.
In other deal news:
■ Fintech startup BharatPe has made its first acquisition by purchasing multi-brand loyalty programme Payback India from American Express and ICICI Investments Strategic Fund for an undisclosed amount.
■ Cult.fit has acquired Bengaluru-based connected fitness startup Tread to bolster its portfolio of hardware products.
■ Neobanking startup Niyo has acquired Bengaluru-based personal finance startup Index, marking its second acquisition in less than a year.
For more startup deals and funding-related news, click here
LGBTQ+ influencers attract attention from brands
A growing number of couples from the LGBTQ+ community are turning influencers on social media for normalising expressing love for their significant other, amassing thousands of followers on platforms such as Twitter and Instagram and attracting the attention of brands seeking collaboration.
Is it an age thing? While most social media accounts have been set up by LGBTQ+ couples in their late teens and early 20s, they said their expression of love on social media has very little to do with their age.
Top Stories We Are Covering
BookMyShow layoffs: BookMyShow, an online platform for booking movie tickets and entertainment events, has laid off 200 people, cofounder and chief executive Ashish Hemrajani tweeted.
HC notice to Centre on TM Krishna’s petition against IT rules: The Madras High court has issued notice to the central government, giving it three weeks to respond to a petition filed by Carnatic music vocalist TM Krishna, challenging India’s new IT rules.
Global Picks We Are Reading
■ UK competition regulator plans probe into Amazon’s use of data (FT)
■ Facebook remote work made permanent as offices re-open (AFP)
■ What really happened when Google ousted Timnit Gebru (Wired)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant and Karan Dhar in Mumbai.