News Burger of the Day – Your Daily Prep Diet – Jan 11th

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If you follow these articles regularly, they will help you build a broader perspective of the current Indian and global business scenario. Also, moving away a bit from regular news, we will try to bring forth informative articles that will guide your preparation for interviews.

What are the reasons for that Flipkart changed its CEO

Flipkart has declared that co-founder and current CEO Sachin Bansal will now become executive chairman with immediate effect. Mukesh Bansal who is the head of the commerce platform at Flipkart will also run Flipkart’s advertising business, which was previously overseen by Sachin Bansal.  There are a lot of speculations around this move and surprised the industry. Though there are no obvious reasons, but its expected that Sachins’s new role will be more strategic. “Sachin will now focus on fund raising and preparing Flipkart for an IPO. He will also look at doing strategic acquisitions, even large ones. The (reshuffle) had to happen,” Quoted by a person undisclosed.

Zomato decides to shut down its food ordering service in four cities

Zomato withdrew its food ordering service for Lucknow, Kochi, Indore and Coimbatore as they feel that the markets are small and growing at a small pace. Business in these cities failed to take off despite aggressive marketing and accounted for less than 2% of the total orders placed on Zomato when the over all online food delivery has been growing at 40%.While the likes of Grofers and Zomato have been shutting shop in smaller cities, e-commerce firms such as Flipkart, Amazon, Snapdeal and Shopclues, among others, say that tier II/III cities account for over half their sales.  A lot of analysts say that e-commerce has its edge as it provides accessibility to people for the things which aren’t available in local market, but food companies are suffering the brunt as they are providing things which are anyways available locally.

Is Patanjali a threat to registered consumer goods companies

Patanjali’s aggression is being viewed as an ambitious foray into the consumer segment, with rapid-fire launches in several categories such as apparel retail, packaged foods, personal care and stationery. Patanjali is being compared to Nirma which audaciously challenged HUL, by launching a surf for lower income segment.  An IIFL Institutional Equities report says the company is targeting a 2.5 times rise in sales in FY16 over a year ago.The report estimates that Patanjali’s sales will increase to Rs.20,000 crore by FY20. In contrast, ITC’s FMCG business sales was Rs.9,028 crore in revenue in FY15, compared with Rs.1,014 crore in FY06.