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India rejects Walmart-owned Flipkart’s proposed foray into food retail business

The Indian government has rejected Flipkart’s proposal to enter the food retail business in a setback for Walmart, which owns majority of the Indian e-commerce firm and which recently counted its business in Asia’s third-largest economy as one of the worst impacted by the global coronavirus pandemic.

The Department for Promotion of Industry and Internal Trade (DPIIT), a wing of the nation’s Ministry of Commerce and Industry, told Flipkart, which competes with Amazon India, that its proposed plan to enter the food retail business violates regulatory guidelines.

Flipkart’s proposed food retail business, called Flipkart FarmerMart, cannot be structured on a 100% foreign direct investment, the Indian agency said. Rajneesh Kumar, chief corporate affairs officer at Flipkart, told TechCrunch that the company was evaluating the agency’s response and intended to re-apply.

“At Flipkart, we believe that technology and innovation driven marketplace can add significant value to our country’s farmers and food processing sector by bringing value chain efficiency and transparency. This will further aid boosting farmers’ income & transform Indian agriculture,” he added.

While announcing the plan to enter the nation’s growing food retail market, Kalyan Krishnamurthy, Flipkart Group CEO, said in October last year that the company planned to invest $258 million in the new venture.

Flipkart planned to invest deeply in the local agriculture-ecosystem, supply chain, and work with tens of thousands of small farmers, their associations, and the nation’s food processing industry, Krishnamurthy said. The food retail unit would help “multiply farmers’ income and bring affordable, quality food for millions of customers across the country.”

Several e-commerce and grocery firms in India, including Amazon, Zomato, and Grofers, have previously secured approval from New Delhi, which earlier permitted 100% foreign direct investment in food and a handful of other sectors, for entering the food retail business.

The Indian government has since revisited the guidelines to clarify that food retail, like any other e-commerce sector, can only operate as a marketplace that allows third-party sellers to engage with buyers — and not offer their own inventories, nor have equity in any of the players who sell on the platform.

Food and grocery are compelling categories for e-commerce businesses in India as it enables them to engage with their customers more frequently. According to research firm Forrester, India’s online food and grocery market remain significantly tiny, accounting for just 1% of the overall sales.

In the most recent quarterly earnings call, Walmart said limited operations at Flipkart had negatively affected the group’s overall growth. New Delhi announced one of the world’s stringent lockdowns across the nation in late March that restricted Amazon and Flipkart from delivering in many states and only sell “essential items” such as grocery and hygienic products.

India maintains the stay-at-home orders for its 1.3 billion citizens, though it has eased some restrictions in recent weeks to resuscitate the economy.

India’s FarEye raises $25M to grow its logistics SaaS startup in international markets

More than 150 e-commerce and delivery companies globally use an Indian logistics startup’s service to work out the optimum way before they ship items to their customers. That startup, Noida-based FarEye, has raised $25 million in a new financing round as it looks to expand its footprint in international markets.

M12, Microsoft’s venture fund, led the seven-year-old startup’s Series D financing round. Eight Roads Ventures, Honeywell Ventures, and existing investor SAIF Partners participated in the round, which pushes FarEye’s total raise-to-date to $40 million.

FarEye helps companies orchestrate, track, and optimize their logistics operations. Say you order a pizza from Domino’s, the eatery uses FarEye’s service, which integrates into the system it is using, to quickly inform the customer how long they need to wait for the food to reach them.

Behind the scenes, FarEye is helping Domino’s evaluate a plethora of moving pieces. How many delivery people are in the vicinity? Can it bundle a few orders? What’s the maximum number of items one can carry? How experienced is the delivery person? What’s the best route to reach the customer? And, would the restaurant need the same number of delivery people the following day?, explained Kushal Nahata, co-founder and chief executive of FarEye, in an interview with TechCrunch .

Gautam Kumar (left), Gaurav Srivastava (centre), and Kushal Nahata co-founded FarEye in 2013

“The level of digitization that logistics firms have made over the years remains minimal. The amount of visibility they have over their own delivery network is minimal. Forget what a customer should expect,” said Nahata, explaining the challenges the industry faces.

FarEye is addressing this by using AI to parse through more than a billion data points to identify the optimum solution. In the past one year, it has fine-tuned its algorithm to handle last-mile and long-haul deliveries to offer a full-suite of services to its clients.

The startup, which employs about 350 people, said it is already handling more than 10 million transactions a day. The more transactions it processes, the better its algorithm becomes, he said.

FarEye today has clients across several categories including transportation and logistics, retail (which includes grocery, furniture, and fashion), and FMCG in 20 nations. Some of these clients include Walmart, FedEx, DHL, Amway, Domino’s, Bluedart, Future Group, and J&J. Nahata said the startup will use the fresh capital to improve its predictive tech and grow its footprint in the United States, Europe, and Asia-Pacific region.

“We are solving certain problems for our customers today, but I feel we can solve much larger problems and help digitize the entire supply chain network,” he said.

As the coronavirus pandemic jeopardises grocery and e-commerce firms’ ability to timely deliver items to customers, FarEye said it is making Serve, one of its services that focuses on enabling movement of everyday essentials, free for any firm to use for more than a year.

“The global pandemic has accelerated the need for enterprises to scale their supply chain operations efficiently to meet the rising share of online deliveries. FarEye’s highly configurable last-mile and long-haul logistics platform has been validated by leading global enterprises across the 3PL, retail and manufacturing categories,” said Shweta Bhatia, a partner at Eight Roads Ventures, in a statement.

FarEye has been making money since day one, but Nahata said an IPO is not something on the table for the foreseeable future. “Our biggest focus right now is to grow,” he said.

TikTok donates $3 million to Arnold Schwarzenegger’s charity feeding kids affected by school closures

The social media giant TikTok said that it would donate $3 million to AfterSchool All-Stars, a charity founded by actor and former California Governor Arnold Schwarzenegger, to feed families whose food security was affected by the close of public schools in response to the COVID-19 outbreak.

TikTok said in a statement Thursday that families in 60 cities with After-School All-Stars chapters would receive food vouchers and gift cards that can be spent on food and other essentials through local grocery stores.

“We are all operating in uncertain times, and it’s more important now than ever before for both our local and global communities to come together to help those in need,” said Vanessa Pappas, General Manager of TikTok U.S., in a statement. “This pledge to ASAS will help more students get access to meals, safely provided to them, during this crisis. While this alone won’t mitigate the impact of the current situation, we hope it can relieve one worry for parents who are balancing social distancing mandates, work and caring for children who can no longer go to school each day.”

Chapters in cities that have been hardest hit by the epidemic will receive the aid, including Los Angeles, Miami, New York, Newark, San Francisco, Seattle and Washington. Corporate partners in the initiative include Food Land, Giant, Kroger, Publix, Ralphs, Safeway, Target and Walmart .

TikTok, which is owned by the Chinese media company Bytedance, also said it would match up to $1 million in employee donations to the ASAS to boost the organization’s ability to provide food.

“During a crisis, improvisation is critical and everyone has to look at new ways to help the most vulnerable,” said Arnold Schwarzenegger, former California Governor and Founder of After-School All-Stars, in a statement. “The After-School All-Stars programs are paused with schools closed, but we remain committed to supporting the 100,000 families we work with year-round. When I founded After-School All-Stars in 1992, the goal was always to support the families who need it the most. I’m grateful to TikTok for their donation which allows us to shift our priorities so our team can safely deliver groceries and gift cards for groceries to the families we help.”

 

Workers at America’s largest companies are not covered under coronavirus aid package

Workers at America’s largest companies are not covered under a bill passed by the House of Representatives on Friday that is supposed to support American workers impacted by the spread of the novel coronavirus.

The bill still has to be voted on by the Senate and approved before it can be signed into law, but its structure leaves a gaping hole in the prevention strategy the government has said is necessary to reduce the COVID-19 outbreak in the US.

“No American worker should worry about missing a paycheck if they’re feeling ill,” said Vice President Mike Pence at the Sunday press briefing from the Coronavirus Task Force. “If you’re sick with a respiratory illness stay home.”

However, millions of Americans potentially don’t have the ability to make that choice under the congressional aid package touted by both Democrats and Republicans. By excluding companies with more than 500 employees from the Congressional aid, the health and welfare of millions of Americans in industries providing goods, manufacturing, and vital services to most of the country is being left up to the discretion of their employers.

Details of the legislative compromise were first reported by The New York Times yesterday. And chart published by The New York Times illustrated just how many companies didn’t have paid sick leave policies in place as the coronavirus began to spread in the US (companies have changed policies to respond to the coronavirus).

Image courtesy of The New York Times

Big technology companies took the lead early this month in changing policies for their workers and by the end of last week many of the country’s largest employers had followed suit. But it looks like their work won’t be covered under the government’s current plan — and that any measures to extend sick leave and paid time off will be limited to a response to the current outbreak.

These large employers have already responded by closing stores or reducing hours in areas where most cases of the novel coronavirus have been diagnosed — and companies operating in most of those states are required by law to offer paid leave to their hourly employees and contractors.

Companies who have responded to the outbreak by changing their time-off and sick leave policies include Walmart, Target, Darden Restaurants (the owner of the Olive Garden restaurant chain), Starbucks, Lowes, and KFC, have joined tech companies and gig economy businesses like Alphabet (the parent company of Google), Amazon, Apple, Facebook, Instacart, Microsoft, Postmates, Salesforce, and Uber in offering extended leave benefits to employees affected by the coronavirus.

These kinds of guarantees can go a long way to ensuring that hourly workers in the country don’t have to choose between their health and their employment. The inability to pass a law that would cover all workers puts everyone at risk.

Without government stepping in, industries are crafting their own responses. Late Sunday, automakers including GM, Ford, and FiatChrysler joined the United Auto Workers union in announcing the creation of a coronavirus task force to coordinate an industrywide response for the automotive sector.

As the Pew Research Center noted last week, the bill proposed by House Democrats had initially proposed temporary federal sick leave covering workers with COVID-19 or caring for family members with two-thirds of their wages for up to three months; expiring in January 2021. The measure would have also guaranteed private employers give workers seven days of paid sick leave with another 14 days available immediately in the event of future public health emergencies.

Most workers have less than nine days of sick leave covered under current state legislation. There is no national mandate for paid sick leave. After one year on the job, 22 percent of workers have access to less than five days, while another 46 percent of employees can get five-to-nine days of paid sick leave. Only 38 percent of workers have between ten and fourteen days of leave.

The Pew Research Center also reported that the lack of access to paid sick leave increases as wages decline. Over 90 percent of workers receiving hourly rages over $32.21 have some form of paid sick leave. Only about 50 percent of workers who make $13.80 or less have access to some form of paid sick leave. For Americans who make under $10.80 an hour, only about 30 percent receive any sick leave.

Walmart co-leads $500M investment in Chinese online grocery service Dada-JD Daojia

Walmart sold its China-based e-commerce business in 2016, but the U.S. retail giant is very much involved in the Chinese internet market through a partnership with e-commerce firm JD.com. Alibaba’s most serious rival, JD scooped up Walmart’s Yihaodian business and offered its own online retail platform to help enable Walmart to products in China, both on and offline.

Now that relationship is developing further after Walmart and JD jointly invested $500 million into Dada-JD Daojia, an online-to-offline grocery business which is part owned by JD, according to a CNBC report.

Unlike most grocery delivery services, though, Dada-JD Daojia stands apart because it includes a crowdsourced element.

The business was formed following a merger between JD Daojia, JD’s platform for order from supermarkets online which has 20 million monthly users, and Daojia, which uses crowdsourcing to fulfill deliveries and counts 10 million daily deliveries. JD Daojia claims over 100,000 retail stores and its signature is one-hour deliveries for a range of products, which include fruit, vegetables and groceries.

Walmart is already part of the service — it has 200 stores across 30 Chinese cities on the Dada-JD Daojia service; as well as five online stores on the core JD.com platform — and now it is getting into the business itself via this investment.

JD.com said the deal is part of its ‘Borderless Retail’ strategy, which includes staff-less stores and retail outlets that mix e-commerce with physical sales.

“The future of global retail is boundaryless. There will be no separation between online and offline shopping, only greater convenience, quality and selection to consumers. JD was an early investor in Dada-JD Daojia, and continues its support, because we believe that its innovations will be an important part of realizing that vision,” said Jianwen Liao, Chief Strategy Officer of JD.com, in a statement.

Alibaba, of course, has a similar hybrid strategy with its Hema stores and food delivery service Ele.me, all of which links up with its Taobao and T-Mall online shopping platforms. The company recently scored a major coup when it landed a tie-in with Starbucks, which is looking to rediscover growth in China through an alliance that will see Ele.me deliver coffee to customers and make use of Hema stores.

Away from the new retail experience, JD.com has been doing more to expand its overseas presence lately.

The company landed a $550 million investment from Google this summer which will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the world. Separately, JD.com has voiced intention to expand into Europe, starting in Germany, and that’s where the Google deal and a relationship with Walmart could be hugely helpful.

Another strategic JD investor is Tencent, and that relationship has helped the e-commerce firm sell direct to customers through Tencent’s WeChat app, which is China’s most popular messaging service. Tencent and JD have co-invested in a range of companies in China, such as discount marketplace Vipshop and retail group Better Life. Their collaboration has also extended to Southeast Asia, where they are both investors in ride-hailing unicorn Go-Jek, which is aiming to rival Grab, the startup that bought out Uber’s local business.

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Crunch Report | Hey Dillon Francis, iPhone X Is Now Available For Pre-Order

Today we’re hanging out with EDM artist Dillon Francis, Apple opens for iPhone X pre-orders and releases a sleeve for MacBooks, Walmart starts using robots in stores and Russia condemns Twitter for banning two of its media companies from advertising on the platform. All this on Crunch Report. Read More

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Crunch Report | Amazon Bids to Buy Whole Foods for $13.7 Billion

Amazon bids to buy Whole Foods for $13.7 billion, Walmart buys Bonobos for $310 million, Mobike, a ride-sharing company in China, raises $600 million. All this on Crunch Report. Read More

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Crunch Report | Walmart Acquires Modcloth

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Walmart’s app will now let Pharmacy and Money Services customers skip the line

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Walmart launches free, 2-day shipping without a membership on purchases of $35 or more

MIAMI, FL - AUGUST 18:  A Walmart sign is seen on August 18, 2015 in Miami, Florida. Walmart announced today that earnings fell in the second quarter due to currency fluctuations and the retailer's investment in employee wages and training.  (Photo by Joe Raedle/Getty Images) Walmart has just issued its strongest response to the growing Amazon threat, since its acquisition of e-commerce newcomer Jet.com last summer. Starting today, Walmart will begin offering free, two-day shipping on over 2 million items, with no need for a membership fee. The range of items will include “everyday essentials,” like household products, baby needs, pet supplies… Read More

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