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Reliance Retail’s success in JioMart could change industry dynamics: Jefferies

RRL is also building B2B presence, while an important aspect of its B2C strategy, retailer has an option to even sell in the offline

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Jefferies

New Delhi, May 17 : Reliance Retail’s success in new commerce platform, JioMart could alter the industry dynamics, but execution holds the key and there are challenges, according to brokerage firm, Jefferies.

“We see the grocery opportunity as huge and own-label introduction as the next logical step. RRL’s success could alter the industry dynamics structurally, but execution holds the key and there are challenges”, it said in a research.

Reliance Retail’s partnership with Whatsapp holds promise for RRL’s new commerce platform, JioMart. The pilot, launched in some geographies last year, now extends to Mumbai. “Our interactions with retailers suggest the model is still evolving”, the research said.

“Execution holds the key and RRL would require significant efforts like micromarket strategy, feet on ground, customer & consumer-centric
approach”, the research said. “While we view the opportunity as immense, we believe RRL will take considerable time to gain scale”, it
said.

There is no JioMart app as of now and there is no link to JioMart on Whatsapp — these should be available in the coming months, it added.

“Given COVID-19 related issues, we expect issues like delayed delivery or lack of delivery option to be resolved in the coming months”,
according to the research.

The introduction of own labels is the logical step in due course, which would be margin positive — generic product name along with own
label could alter the FMCG industry dynamics.

With a presence of more than 11,700 outlets, RRL leads the Indian organised retail space and is the fastest-growing retailer in the
world. Although it has a broad-based presence, grocery contributes more than 20% to reported revenues and FY20 revenues nearly doubled
year-on-year. RRL has now set its eyes on the unorganized grocery retail market under ‘New Commerce’ where it connects merchants on an
uniform technology platform.

Unlike the competition, RRL offers POS (handheld device) free of cost, with less than Rs 5,000 refundable deposit, with no monthly outgo.

RRL’s POS allows retailer to manage inventory, place orders on RRL, accept payment, generate tax returns; hence, it is not just another
POS. However, not every retailer is using all functionalities as of now.

RRL is also building B2B presence, while an important aspect of its B2C strategy, retailer has an option to even sell in the offline
segment, on his own.

Jefferies said on B2B, RRL is not always the cheapest option. Hence, traditional distributors are also important — given the legacy of
several years or decades, retailers value relationships with them.

There is some concern about too much dependence on one vendor (RRL) in the long term, hence, most retailers expect both (RRL & traditional)
to co-exist, the research said.

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No BS-IV vehicles will be registered if sold after March 31: Supreme Court

This comes as India has decided to switch to the world’s cleanest emissions standard from April 1. It has gone straight to Euro-VI emission standards from Euro-IV.

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BS IV

NEW DELHI : The Supreme Court on Wednesday observed that no BS-IV vehicles will be registered if sold after March 31, 2020.

A bench of the Apex Court, headed by Justice Arun Mishra was hearing the matter pertaining to sale of BS-IV vehicles during COVID-19 lockdown, via video conferencing.

The top court recalled its earlier March 27 order allowing sale of BS-IV vehicles for 10 days post lockdown. The apex court had back then allowed marginal relief to auto dealers and auto companies, permitting sale of 10% unsold BS-IV inventory.

Justice Arun Mishra said, “Please do not take advantage of this court by playing fraud. You have told us no sales have taken place. You are understating your values.”

He said, “no vehicle could be registered without our order.” “You have sold more than allowed,” the court noted.

KV Vishwanathan, lawyer for FADA, said, the apex court allowed registration in March 2020.

However, the Bench asked how vehicles were sold during lockdown.

“It would be violation of the spirit of the court order if we allow sales after opening of lockdown,” the Apex Court said.

This comes as India has decided to switch to the world’s cleanest emissions standard from April 1. It has gone straight to Euro-VI emission standards from Euro-IV.

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New sanitiser makers face action for GST evasion

The urgent requirement for alcohol-based hand sanitisers amid the Covid-19 pandemic enthused many firms, including sugar mills and alcohol producers, to jump on the bandwagon.

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GST

New Delhi, July 8 : The urgent requirement for alcohol-based hand sanitisers amid the Covid-19 pandemic enthused many firms, including sugar mills and alcohol producers, to jump on the bandwagon.

But, it seems, some evaded duties worth crores of rupee by classifying their products under a lower-taxed tariff heading.

The Central Economic Intelligence Bureau (CEIB), which comes under the Department of Revenue, in a recent communication to the Directorate General of GST Intelligence (DGGI) has said some manufacturers of alcohol-based sanitisers are resorting to “non-payment” or “evasion” of Central GST and State GST by adopting wrong classification. They were paying 12 per cent GST instead of the 18 per cent, it said.

Following the CEIB letter, the DGGI prepared a list of 62 manufacturers and suppliers of sanitisers for analysis.

The DGGI has asked the CGST and the Customs Excise zones officials to look into the cases of evasion by sugar mills and distilleries and plug the leakages. The DGGI zonal units are looking into the instances of evasion by established brands.

“These manufacturers are classifying such products under the tariff heading 3004 under the harmonized system of nomenclature (HSN), whereas they are correctly classifiable under the tariff heading 3808,” the CEIB letter said.

The current applicable GST on products under heading the tariff heading 3004 of HSN of 2017 is 12 per cent, while the rate on those items under the tariff heading 3808 is 18 per cent.

The misclassification had resulted into “substantial evasion of CGST across the country,” it noted.

Acknowledging that the GST on alcohol-based hand sanitisers is 18 per cent, sugar industry officials said some manufacturers might be paying lower tax but that couldn’t be generalised.

The tariff heading 3004 includes medicaments comprising mixed or non-mixed products for therapeutic or prophylactic uses or in packs for retail sale, including Ayurvedic and Unani.

The tariff heading 3808 includes disinfectants under which alcohol-based hand sanitisers come. The classification also comprises insecticides, fungicides among others.

The misclassification had been continuing since the introduction of GST on July 1, 2017, it said.

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In latest attack on govt, Rahul Gandhi highlights NPAs, says was ridiculed

Rahul Gandhi has been leading his party’s sharp criticism of the central government over a host of issues, including the June 15 standoff between the Indian and Chinese soldiers.

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Rahul Gandhi

New Delhi: Congress leader Rahul Gandhi on Wednesday said that large companies are under severe stress in India and banks are in distress. He targeted the Bharatiya Janata Party (BJP) for ridiculing him for warning about all this months ago.

“Small & medium enterprises stand destroyed. Large companies are under severe stress. Banks are in distress. I stated months ago that an economic tsunami was coming and was ridiculed by BJP and the Media for warning the country about the truth,” Gandhi said on Twitter.

He also attached a news report which claimed that the non-performing assets (NPAs) in the country will increase.

The former Congress president had attacked the BJP on Tuesday too by accusing the government led by it of economic mismanagement. “India’s economic mismanagement is a tragedy that is going to destroy millions of families. It will no longer be accepted silently,” he had tweeted yesterday.

He tagged a report with his tweet that claimed that India’s economic growth is likely to contract 4.5 per cent in 2020-21 due to Covid-19.

Gandhi has been leading his party’s sharp criticism of the central government over a host of issues, including the June 15 standoff between the Indian and Chinese soldiers. He has criticised Prime Minister Narendra Modi’s statement at all-party meeting and questioned the government’s stand on China.

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