Daily Financial News Analysis – 17th August’20

e-Commerce Festive Sales

India’s two biggest e-commerce marketplaces expect this year’s festival-season business in smartphones, television sets, refrigerators, washing machines and apparel to nearly double for some categories and increase at least 40% in others.
The platforms have accordingly asked sellers to place large orders with the respective brands.
Customer base has also increased 35-40% since the pandemic
In mobile phones, Amazon and Flipkart expect sales to more than double this festive season from the year earlier while in consumer electronics, they expect a 50-60% surge in business.
These two categories contribute more than 60% to transaction revenue at the online marketplaces.
Flipkart and Amazon are hopeful of clocking 40-50% growth in apparel and fashion, with categories such as sportswear, footwear and casual wear performing better than formal wear in the last sales, the executives said.
The festive season is the biggest shopping period for Indian consumers, accounting for 40-50% of annual business for most brands.
Ecommerce accounts for about 45% of the smartphone business in India.
About a quarter of television sets are sold online, while these platforms account for 10-20% of annual revenue for other appliances and large fashion brands.

Samsung may shift a major part of its smartphone production to India from Vietnam and other countries.
South Korean electronics major finalising plans to produce devices worth over $40 billion (Rs 3 lakh crore) in the country.
Vietnam is the world’s second-largest exporter of smartphones after China.
Samsung has submitted estimates of making smartphones worth over $40 billion to the government in the next five years (under the PLI scheme).
Out of this, phones with factory price of over $200 could account for over $25 billion.
The company runs its largest mobile phone manufacturing unit in the world in Noida, from where it also exports to other markets.
In addition, it has manufacturing bases in Brazil and Indonesia.
Once Samsung’s move fructifies, the company will join iconic smartphone major Apple, which is also in the process of shifting a key part of its production line for smartphones to India.
The global smartphone export market is about $270 billion.
By value, Apple has a 38% market share and Samsung 22%. By volume, Samsung has 20% and Apple 14%.

A faster trade settlement system for Indian stocks is in the offing.
The Securities & Exchange Board of India is considering a reduction in the settlement cycle for completion of share transactions to T+1 — an abbreviation for ‘trade plus one day’ — from the existing T+2.
The move, when implemented, is expected to improve liquidity, boost efficiency and reduce risks to the system.
A T+1 system would mean that trades will be settled the day after the transaction.
So, a buyer would get the shares in the demat account and the seller would get the sale proceeds the next day.
Currently, trades are settled two working days after execution.
The majority of developed markets follow the T+2 trade settlement system. India had moved to the T+2 settlement cycle from T+3 cycle 17 years ago.

The pandemic has accelerated trends such as remote working, digitisation and the adoption of new technology, calling for new and upgraded skills in the post-Covid world.
Business heavyweights and top minds debated the future of work and what it will take to succeed at the second edition of the ET Back to Business Dialogues.
History has shown that the most adaptable will survive and the one essential skill is maintaining balance in the new work environment.
“Approaching this situation with an open mind and expecting the unexpected will be a necessary ingredient of all leadership and almost all managers. Only then can you be successful, regardless of what happens to the situation,” Munjal said.
All smart businesses will ask this question: Do we need so many people to come to work?
More flexibility is clearly on the cards but this is neither the end of employment nor the end of offices.
Problem-solving skills, agility will be key but even in traditional areas, people will have to adapt to be relevant in the virtual world.
Softer skills would become much more important.