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آگوست 22, 2022

No renewals or new patrons: Zomato takes Pro off menu

Food tech platform Zomato is recalibrating its loyalty programs, and has closed new sign ups and renewals for its flagship program Zomato Pro, The Indian Express has learnt. The company had already shut down the more premium iteration Zomato Pro Plus earlier, and revised the terms of its co-branded credit card with RBL Bank.
The Gurgaon-based company launched Zomato Pro in 2020 and Zomato Pro Plus in 2021. The Zomato Pro program replaced the Zomato Gold membership offering. Pro members get discounts while ordering food online from or dining out at partner restaurants.
In a message to users trying to renew their expired Pro membership, Zomato says: “Thank you for being a part of the Zomato Pro program. The membership is unavailable for renewal as we are working on a new and better experience for you. We request you to check the Zomato app to stay updated on the latest offerings.”
Confirming the development in response to queries sent by The Indian Express, a Zomato spokesperson said: “While Zomato Pro and Pro Plus have been loved tremendously by our customers and merchants, we want it to be even more beneficial, especially for the most engaged customers and merchant partners.”

“We are taking feedback and working closely with our customers and restaurant partners to craft a new program. Meanwhile, we are not onboarding new members and merchant partners to Zomato Pro and Zomato Pro Plus. While active members can continue to get their benefits as promised, they will not be able to extend/renew their memberships once their membership tenure expires,” the spokesperson added.
In a separate message to the users of Zomato’s co-branded credit card, RBL Bank and the food tech platform said that September 20 onwards, it was capping the cashback from orders placed on the app using the co-branded credit card to 500 Edition Cash a day (1 Edition Cash is redeemable as Re 1 for subsequent Zomato orders).
Zomato offers 5 per cent cash back on spends done on its app. Under the new conditions, the company has also added spends done on the Blinkit app to the cashback scheme. Zomato recently acquired quick-commerce platform Blinkit, formerly known as Grofers.

ExplainedEye on newer use casesThe decision to pause onboarding of new members as well as to renew the membership of existing ones on Zomato Pro comes amid the company’s strategy of introducing newer use cases, focused more on dining out. These plans are unfolding as Zomato attempts to further narrow its losses.

These recent decisions are in line with Zomato’s new strategy of looking beyond loyalty programs to drive customer frequency. In its earnings call for the April-June quarter earlier this month, Zomato’s chief financial officer Akshant Goyal said, “I think if you have to go from where we are today and meaningfully increase customer frequency, we will have to look beyond these loyalty programs and look at introducing newer use cases, which perhaps leads to a lot of the current offline spend on restaurant food moving on to our platform.”
The company reported a consolidated net loss of Rs 186 crore for the three-month period ended June, compared with Rs 359.70 crore in the March quarter and Rs 360.70 crore in the quarter ended June 30, 2021. This, even as its topline grew to Rs 1,413.90 crore in April-June this year, against Rs 844.40 crore in the same period last year.
The company said food delivery business grew 15 per cent sequentially and saw a break-even in adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) — a measure of its operating margins.
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Zomato’s chief rival in the food tech space Swiggy too runs its loyalty program Swiggy One, which was launched in November last year.
Swiggy operates this program as a common membership for the bouquet of services it provides, including food delivery, quick-commerce and local door-to-door package delivery.
The Swiggy One program offers the app’s users unlimited free deliveries from select restaurants and unlimited free delivery from Instamart on orders greater than Rs 99 in value, in addition to other discounts and no surge fees.

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آگوست 19, 2022

5G launch in sight: Telcos issued spectrum assignment letters

In what could significantly reduce timelines of network deployment by telecom operators, the Department of Telecommunications (DoT) has issued the spectrum assignment letters to telcos just 17 days after the auctions for 5G spectrum was concluded. Comparatively, in the previous auctions last year, these letters were issued more than a month after bidding ended.
Communications Minister Ashwini Vaishnaw tweeted on Thursday morning, “5G update: Spectrum assignment letter issued. Requesting TSPs (telecom service providers) to prepare for 5G launch.”
Bharti Airtel said it was provided with an allocation letter for the designated frequency bands it purchased at this year’s 5G spectrum auctions “hours after” it submitted its first tranche of upfront dues towards the airwaves to the DoT, said Bharti Enterprises founder & chairman Sunil Bharti Mittal. Calling it an example of ease of doing business, he said this has never happened in this three decade long experience with the DoT.

“No fuss, no follow up, no running around the corridors and no tall claims. This is ease of doing business at work in its full glory. In my over 30 years of first-hand experience with the DoT, this is a first. Business as it should be…” Mittal said in a statement.
On Wednesday, the DoT received Rs 17,876 crore as upfront dues from four entities that bought spectrum in the auctions that ended earlier this month. Bharti Airtel paid the highest amount of Rs 8,312.4 crore, followed by Rs 7,864.7 crore from Reliance Jio, Rs 1,679.98 crore from Vodafone Idea and Rs 18.94 crore from Adani Group arm Adani Data Networks.
As per DoT’s rules for receiving payments from the spectrum auctions, companies have the option to pay dues in 20 equated annual instalments.
However, they are also free to pay the entire amount or part of it upfront, with the minimum duration for upfront payment being two years.
On August 5, the Department had issued demand notices to all the four companies to pay up their spectrum payments in 10 days, with Wednesday being the final day.
Analysts tracking the field said that before this year, spectrum assignment was typically a months’ long process. For instance, in last year’s auctions, which ended on March 2, telecom operators had submitted their first upfront dues by March 18. But the spectrum assignment happened on April 16, almost a month later after the payments were made. In 2021, the amount of spectrum sold was worth Rs 77,814.80 crore, almost half of what was sold this year.
“Allocation of spectrum post auctions is an administrative and bureaucratic task, and it shows that the government was well prepared in this year’s auctions. Even the earlier decisions that have been taken regarding this, including issuing the Notice Inviting Applications (NIA) for the auctions that was released right after the Cabinet cleared the country’s biggest ever spectrum auctions so far, shows that everything was already in place. It points towards the government making a conscious effort to cut bureaucratic slack. Sunil Mittal is right to highlight this change,” telecom analyst Mahesh Uppal said.
Bharti’s Mittal said that the government also has assigned the company E-band spectrum “as promised”. The E-band spectrum, which is radio waves in the 70-80 GHz band, are pegged to play a major role in helping the telcos with backhaul, which will help smoothen data on their network. Last month, the DoT had agreed to provisionally allot E-band airwaves exclusively to mobile operators via the administrative route in circles where they hold 5G spectrum.
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Airtel and Jio have unveiled their 5G rollout plans, with the former saying that it will start rolling out the service this month itself and, by 2024, is expecting to cover large parts of the country, including in rural areas. Airtel has also prepared detailed network roll-out plans for 5,000 towns in India. Jio, meanwhile, has completed 5G coverage planning in 1,000 cities.
India’s biggest ever spectrum auction for 5G airwaves had ended on August 1 with bids upwards of Rs 1.5 lakh crore coming in after seven days of bidding spread over 40 rounds, belying initial expectations that the auction process would be wrapped up in under three days.
Jio emerged as the largest spender in the 5G spectrum auction, acquiring almost half of all the airwaves sold for more than Rs 88,000 crore, and was also the only one to have acquired spectrum in the premium 700 MHz band. Airtel, shelled out Rs 43,084 crore to acquire a total of 19.8 GHz of spectrum in the 900 MHz, 1,800 MHz, 2,100 MHz, 3,300 MHz and 26 GHz bands. Vi spent Rs 18,799 crore and bid for certain medium and high frequency bands. Adani Data Networks acquired spectrum only in the 26 GHz band and spent Rs 212 crore.

ژوئن 26, 2022

RBI eyes BNPL norms, to rope in fintechs amid concerns over cards by non-bank PPI issuers to extend short-term loans

After slapping curbs on non-bank buy now pay later (BNPL) companies, the Reserve Bank of India (RBI) is likely to come out with guidelines for the BNPL segment which was using pre-paid instruments (PPIs) to extend short-term, interest-free loans to customers for online purchases.
“This novel method shall be examined, and issuance of appropriate guidelines on payments involving BNPL shall be explored,” the central bank said in its Payments Vision 2025 document. The RBI had last week communicated to non-bank PPI issuers — or BNPL companies — to stop issuing cards where the funds are loaded through a credit line from NBFCs, sending jitters in the segment.
According to banking observers, the Reserve Bank is not happy with fintech companies using PPIs as a credit instrument, circumventing the regulatory oversight. The banking regulator is in discussion with fintech players to find a way out and bring the segment under a regulatory framework so that PPIs are used as a payment instrument and not as a credit avenue.

While BNPL services have developed into a new payment mode alongside the existing payment modes like cards, UPI and net banking, it has remained outside the direct RBI regulation. This channel, facilitated by a few payment aggregators, leverages the existing nodal account (escrow account after authorisation) to route payments between a BNPL customer and a merchant. “We welcome RBI’s move on barring wallet and PPIs top up from the credit lines. This will bring more transparency in the fintech lending space. We believe the main purpose of a PPI licence is to act as a payment instrument and not as a credit instrument,” said Nipun Jain, CEO, RapiPay Fintech Ltd.
The latest regulation is probably coming from recent developments wherein newer business models of credit-based payment products were built by companies using PPI as a vehicle, analysts said. The RBI has raised concerns on funding of these PPI instruments through a credit line from an NBFC, Kotak Securities said in a report.

ExplainedHow does a BNPL company operate?A customer who holds a BNPL card or account can make a purchase at a participating retailer and opt for the ‘Buy now, pay later’ option. After the purchase, the customer can repay the BNPL firm in a series of interest-free EMIs – unlike credit cards which carry a high interest rate of 42 per cent — spread over 3 months or as a lumpsum amount. If it remains unpaid, interest will be charged. The BNPL company will pay the merchant immediately. However, for a purchase of Rs 500, instead of settling the full Rs 500, they would pay something like Rs 470 or Rs 450 and pocket the difference. The merchant agrees to give a discount to the BNPL firm.

The RBI’s working group on digital lending had recently proposed restricting balance sheet lending by digital lending apps (DLAs) only to regulated entities of the central bank or entities registered under any other law for specifically undertaking lending business, enacting a separate legislation to prevent illegal digital lending activities and treating BNPL as part of balance sheet lending, and prohibition on unregulated entities from offering first loss default guarantee (FLDG).
Another major factor that worries the RBI could be the high delinquency levels in the BNPL segment. In the case of 60 days past due (DPD) credit, delinquencies in the BNPL segment are 18.9 per cent whereas non-BNPL show 10.1 per cent delinquencies, according to TransUnion Cibil data.
BNPL is India’s fastest-growing online payment method with a significant impact on banks, large merchants and card schemes. Due to its hassle-free on-boarding experience, extension of credit facility, low-cost structure for the customer and facilitating easy repayments, BNPL is growing popular among young income earners.
Some of the popular BNPL companies are LazyPay, Simpl, ZestMoney, Amazon Pay Later, Ola Money Postpaid, Paytm Postpaid, Flexmoney, Slice, UNI and EPayLater.
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“Regulatory clarity for big tech and fintechs as well as BNPL will really help entities plan long term and invest even more in fintech in India,” said Avinash Godkhindi, MD and CEO, Zaggle.
The RBI ban on credit lines from NBFCs is likely to hit fintech companies in the BNPL segment. BNPL companies are active on Zomato, Swiggy and other e-commerce sites.
For customers around the globe, e-commerce payment preferences continue to shift away from cash and credit cards towards digital wallets and BNPL. In its report ‘Digital Payments in India: A US$10 Trillion Opportunity’, BCG said the digital payment market In India will be $10 trillion in the next five years (by 2026), with non-cash contributions comprising 65 per cent of all payments and two out of three transactions will be digital in the next five years.

ژوئن 25, 2022

Citing fiscal strains, Expenditure Department advises against PMGKAY extension

It is not advisable to continue the Pradhan Mantri Garia Kalyan Anna Yoajana (PMGKAY) beyond its present extension (till September) both on “grounds of food security and on fiscal grounds” given that it is as it is “far beyond the need of non-pandemic times”, the Department of Expenditure under the Ministry of Finance has stated. Huge increase in fertiliser subsidy burden (both urea & non-urea), re-introduction of subsidy on cooking gas, reduction of excise duty on petrol, diesel and customs duty on various products have created a serious fiscal situation, it said.
“The budgeted fiscal deficit at 6.40 % of GDP was itself extremely high by historical standards, and deterioration therein poses a risk of serious adverse consequences. It is vital that major subsidy increases/tax reductions are not done. In particular, it is not advisable to continue the PMGKAY beyond its present extension, both on grounds of food security and on fiscal grounds. As it is, each family is getting 50 kg of grains, 25 kg at a nominal price of Rs.2/Rs.3, and 25 kg free. This is far beyond the need at a non-pandemic time,” the Expenditure Department said.
In March, the government extended the PMGKAY scheme for another six months till September 2022. The government has spent approximately Rs 2.60 lakh crore till March and another Rs 80,000 crore will be spent till September 2022, taking the total expenditure for PM-GKAY to nearly Rs 3.40 lakh crore. The scheme covers nearly 80 crore beneficiaries providing 5kg of foodgrains per month for free under this scheme. The additional free grains are over and above the normal quota provided under the NFSA at a subsidised rate of Rs 2-3 per kg.
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The Budget had pegged the fiscal deficit at 6.4 per cent of the GDP or Rs 16.61 lakh crore. In April, the first month of the current fiscal, the deficit stood at Rs 74,846 crore – or 4.5 per cent of the full-year target. In 2021-22, the deficit was 6.71 per cent or Rs 15.86 lakh crore, lower than the revised estimates of 6.9 per cent on better tax revenue mop up.
Fertiliser subsidy is estimated to rise to Rs 2.15 lakh crore from the budgeted level of Rs 1.05 lakh crore for 2022-23, having already seen an outgo of Rs 60,939.23 crore for the first six months of this fiscal. The government’s finances are also strained after the recent excise duty cuts, which are estimated to cost Rs 1 lakh crore. The cooking gas subsidy to the poor is estimated to cost the government Rs 6,100 crore, while the revenue loss from the recalibration in customs duty on iron and steel and plastic is expected to be Rs 10,000-15,000 crore.

ژوئن 5, 2022

Demand push: Rubber industry looks to double exports by ‘25

The $2-billion non-tyre rubber sector is aiming to double its exports by 2025, according to the All India Rubber Industries Association (AIRIA).
AIRIA president Sawar Dhanania said the global market for rubber products which is estimated at around $212 billion today is also expected to grow by 2025. “Because MSMEs are so important to India’s economy and commerce, we believe that India’s free trade agreements (FTAs) should include provisions to address the special concerns, demands and barriers that MSMEs may face while doing business in foreign markets,” Dhanania said at a meeting of the association in Mumbai.
He said the government should take steps to ensure that the terms of the FTAs benefit the MSMEs for internalisation, with trade facilitation mainstreamed in MSME development goals. “MSMEs can work world-wide by creating a level playing export infrastructure, improving their financing conditions, educating them about suitable marketing channels and facilitating their working with trading companies,” he said.
Shashi Singh, senior vice president of AIRIA, said, “Indian Institute of Foreign Trade (IIFT) and the export promotion councils should educate MSMEs on export procedures, documentation requirements, and the finer points of export.” “We expect IIFT and the EPCs should share export market intelligence and arrange specialist meets. It will be beneficial to individuals who are new to exports and wish to understand how to become export-ready,” Singh said.Best of Express PremiumPremiumPremiumPremiumPremium

ExplainedGlobal demand

“In the last 1-1.5 years, the government released Rs 55,000 crore under MEIS incentives as a reward. There are 13 trade agreements under which 12 are already implemented. Under India and the UAE agreement, 97% of Indian products exported get the direct benefit,” said Ramesh Holiachi, Joint Director General of Foreign Trade.
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“The India and Australia agreement is yet to be notified by the Indian government. The Australian government has provided geo-duty concessions to India…. 91-97% of Indian products will get duty concession in the Australian market. Footwear, pharmaceuticals and textile industry in India will benefit from this agreement,” said Holiachi.
AIRIA said the rubber industry has a huge potential for exporters as India is a labour-intensive market. “Due to Covid-19 and Ukraine war crisis, there have been a host of problems like availability of raw materials, increase in shipping prices and challenges to the cash flow. India has the highest cost in logistics at 17-18 per cent,” AIRIA said.