Uber on Tuesday announced the sale of its food delivery business in India to Zomato in an all-stock deal.
Uber will get a 9.9 per cent stake in Zomato as part of the deal whose size has not been disclosed. The deal for Uber Eats, which operates in 41 cities, was signed at 3 am, and its customers will be shifted to the Zomato app from 7 am.
The deal is applicable only in India and Uber Eats will continue to operate in Bangladesh and Sri Lanka. According to sources the deal value is around $300- 350 million.
“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Deepinder Goyal, CEO of Zomato.
Sources said the move is part of Uber’s strategy to be either number one or two in each of their businesses in every country they operate. In India, Uber Eats grew very quickly to take a 12 per cent share of the food delivery market.
However, while India constituted for 3 per cent of the global gross booking of Uber Eats it also constituted for 25 per cent of its global EBITDA losses for the business segment. Intense competition in India’s food delivery market prevented India Uber Eats from taking either the first or second position, which are with Zomato and Swiggy.
The move to double down in India will help Uber Inc to improve the financials of Uber Eats.
Uber is concentrating on making its cab hailing business in India profitable and will expand of its network within the country from 50 cities to 200 cities this year.
“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success, ” said Dara Khosrowshahi, CEO of Uber.
The move is expected to push Zomato to the top slot in this space, pushing down Swiggy.
Around 245 Uber Eats employees will be affected by the deal. However, sources in Uber India say they will be in the pay rolls till March 3 and that the company is making every effort to absorb some of them and provide support to the rest in finding jobs.
Covid Crisis: Sensex sinks 883 points
Bombay Stock Exchange (BSE) Sensex ended 882.61 points or 1.81% lower at 47,949.42 while National Stock Exchange (NSE) Nifty tanked 258.40 points or 1.77% to 14,359.45.
Equity benchmark Sensex plummeted 883 points on April 19 following a massive across-the-board selloff as mounting COVID-19 cases spooked domestic investors. After crashing over 1,469 points in early trade, the 30-share BSE index pared some initial losses but still ended 882.61 points or 1.81% lower at 47,949.42.
Similarly, the broader NSE Nifty tanked 258.40 points or 1.77% to 14,359.45. PowerGrid was the top loser in the Sensex pack, slumping over 4%, followed by ONGC, IndusInd Bank, Kotak Bank, L&T, Asian Paints and Bajaj Auto. On the other hand, Dr Reddy’s and Infosys were the only gainers. Barring pharma and IT, which remained resilient, all key sectoral indices witnessed sharp correction.
Financials and automobiles witnessed steeper correction. Notably, volatility index soared by over 11%, which does not augur well. Investors’ wealth got eroded by over Rs 3 trillion today, he added.
India’s total tally of Covid-19 cases crossed 1.50 crore with a record single-day rise of 2,73,810 new coronavirus infections, while the active cases surpassed the 19-lakh mark, according to the Union Health Ministry data updated on April 19.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended on a positive note. Stock exchanges in Europe were also largely trading with gains in mid-session deals. Meanwhile, international oil benchmark Brent crude was trading 0.25% lower at $66.60 per barrel.
Flipkart beats Amazon in Diwali online sales!
The pandemic changed the buying behaviour drastically this year and accelerated the shift to e-commerce. This is evident from the increasing number of consumers reflected in the 88% customer growth as well as the higher frequency of shopping online while people celebrate slew of festivals including the festival of lights eventually leading to overall e-commerce market growth of 55% as compared to last year.
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According to Redseer, a management consulting firm, the festive sales from mid October to November clocked 8.3 billion $ in gross merchandise value(GMV) for the ecommerce sector which has increased significantly as compared to 5 billion $ during the festive month previous year. GMV has increased around 65% as compared to previous year. Flipkart, reportedly with 66 % of overall GMV has trumped Amazon this festive season with.
Out of 88 million shoppers who made the purchase this season through e-commerce, 55% come from Tier 2 towns whereas 45% from metros and Tier 1 cities. This number is huge when compared with 47 million shoppers the last season.
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According to Mrigank Gutgutia, director, e-commerce, RedSeer Consulting “One clear lesson from this festive season is that e-commerce has become more mainstream than ever. And it has proven that with the right assortment at the right prices which is delivered quickly in the safety of customer’s homes – the value proposition of e-commerce is very powerful. Thus, it is imperative for brands and sellers to shift their focus to online quickly and enable a seamless online experience for the customer in order to thrive in a post COVID world”
He also said that “The overall growth story has been very bullish this festive season. We had forecast $7 billion in sales but the actual figures surpassed our expectations clearly, showing how comfortable consumers have become with shopping online even in a pandemic-hit year.”
Flipkart experienced 40 % growth in its flagship event, Big Billion Days(BBD) as compared to last year. It was so well received that the ecommerce giant achieved its target only in three days of the week long sale. Amazon also witnessed their sellers reaching out to millions of customers but its sales in the first week was less than half to that of flipkart. The reason for the same is that flipkart has premium and value products hence catering to the not just to metro, tier1 but also tier 2 and tier 2 regions, unlike Amazon which is more targeted to metro and tier 1 customers.
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According to Redseer, despite the Indo-China relations being precarious which could have affected the supply chain, the ecommerce players maintained a high level of item availability.
Affordability along with aggressive tie-ups through brands and financing deals was the strategy used by ecommerce platforms to spur the demand which is enabling both the sellers and brands to recover after the pandemic due to online sales.
In the category mix, smartphones continue to dominate. Also due to forced shift to work and study from home, electronics and large appliances are witnessing increased sales.
Finance Minister Nirmala Sitharaman on country’s economic arrest
Recently Finance Minister Nirmala Sitharaman addresses the India Ideas Summit via video conferencing in New Delhi, She said that the Green shoots are visible and so interventions can happen in future with regard to this matter.
She also said that no sector will be in exclusive control of public sector and PSUs will be present only in pre determined strategic sectors.
She has noticed economic recovery happening both in rural and urban sectors through many governmental interventions.
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While addressing the 2020 India Ideas Summit organized by the US India Business Council (USIBC), we have seen her stating that the,
” The green shoots are based on the high frequency indicators. We will go along as we watch them. It’s not as if we have concluded that the economy has seen green shoots and therefore, we won’t take any more steps. We have kept all the options necessary, absolutely open. The government is willing to participate, talk with everybody and see what best has to be done, interventions can happen even in the future depending on how the
” During the lockdown the several things that have been done have now borne fruits that i can confidently tell you that we are able to see green shoots…the stimulus that we gave which has touched about 10 per cent of the GDP has actually made the difference for the companies which want to come out of the lockdown and the effects of the lockdown,” she said.
As regards to development in the rural sector the Finance Minister said that the, ” We have had a very good summer crop. All of what was necessary has been procured at reasonable price so that farmers are not left high and dry looking for purchasers. Now the estimate for the kharif crop has also come. We can clearly see the agriculture sector is driving the revival.”
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She also stated that the government and the industries have to work together for the economic development of the country and stated that this lockdown has helped most of us.
It looks like the the Finance Minister is putting more emphasis on both rural and urban sectors and various MSME’s because there has been an economic slowdown since the country is doing it’s best to recover from the ill effects of the corona pandemic.
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