Also in this letter:
■ EPAM sacks 100 in India, revokes offers
■ Covid entrepreneurs hope for scale as pandemic subsides
■ India eyes chip hub status as demand for ‘new oil’ rises
Demand for consumer products has roared back in the past 10 days on the back of festive purchases across offline retail and ecommerce, and an easing of inflationary pressure, executives of several leading brands told us.
For ecommerce platforms, the first leg of the sales is the most crucial as it accounts for 60-70% of their total festive season sales.
By the numbers: Sales of smartphones, televisions, home appliances, apparel and fashion products rose 12-20% over last year’s festive season, while the sale of electronics grew 8-12% by volume.
The buoyant start to the festive sales – which will continue till Diwali – comes after muted growth over the past six to eight months, owing to high inflation.
The biggies: Flipkart and Amazon saw strong growth in volumes during the first leg of their sales this year, which ended over the weekend, industry executives said.
They estimated Flipkart grew sales by more than 25% over last year in its just-concluded BigBillionDays sale from September 23-30. It clocked gross sales of around $5.5 billion during the first eight days, the executives said.
Rival Amazon also reported robust growth, while SoftBank-backed Meesho said it grew order volumes by 68% this year.
Crucial category: Executives said the sale of smartphones — a crucial category for etailers— has bounced back, led by big online discounts.
Market tracker Counterpoint Research said the buoyant start will boost overall sales by 12-15% year-on-year over the entire festive season. It said it was confident after the Navratri sales the industry would meet its forecast of a record $7.7 billion in smartphone sales during the festive season.
NYSE-listed IT services provider EPAM Systems has asked around 100 Indian employees to resign – mostly benched employees not tagged to any specific project – and revoked offer letters of others who were to join the firm over the next few months, sources told us. We couldn’t independently verify the number.
Details: These people were employed at one of the two companies — EPAM Systems and EPAM Anywhere.
HR managers told them the company had over-hired after misjudging future demand, and couldn’t fund any projects for onboarding in the near future. We have reviewed recordings of the conversations.
According to EPAM Systems’ 2021 annual report, it had 4,349 professionals in India, its largest market after Ukraine, Belarus and Russia.
Headwinds: This comes as IT companies face macro headwinds as the US economy looks to be slipping into a recession.
Last month, news reports said HCL Tech had laid off nearly 350 employees working on a Microsoft project, suggesting the project had gone to Accenture.
We also reported that Big Tech firms like Google, Microsoft and Meta are slowing down hiring while clients are holding back on smaller contracts to IT services firms. According to a PwC survey released in August, 50% of respondents in the US said they were reducing their overall headcount even as business leaders remained concerned about hiring and retaining talent.
Covid-19 may have upended the entire world for a while but some eternal optimists found their lightbulb moment during the chaos and decided to found businesses in the middle of a pandemic.
Such as? Arham Partap Jain, a 31-year-old in Delhi, who saw trucks lying idle, went on to found Trucknetic. He calls it ‘Uber for trucks’ – an online logistics platform that connects shippers with carriers. “We want to be one of the largest truck companies by 2025, without owning a single truck,” he said.
Rajat Singhal, 35, pivoted from running City Public School in Gurugram to cofounding an online school called Cyboard during Covid. “Challenging times are the best to start a business, as there is less competition for resources. It also sees new customer needs,” he said.
Catalysts: These are just two of the thousands of people who started a business during the pandemic, resulting in a tidal wave of entrepreneurial activity in the fields of logistics, education, networking services, online conferencing, fitness and beauty. The combination of new, easily accessible technologies, funding, and work-from-home proved to be catalysts for new businesses.
Chips are the “new oil” but without adequate reserves, Chris Miller, the author of Chip War, said in a recent interview.
“If Taiwan chipmaking were to be knocked offline, there wouldn’t be enough capacity anywhere else in the world to make up for the loss,” he told digital publication Recode.
Concentration: A belligerent China at Taiwan’s heels has the world worried, as the island controls more than 60% of the semiconductor chips produced globally.
A single Taiwanese firm – TSMC – accounts for 50% of the world’s semiconductor foundry, powering industries across the world. No wonder, TSMC’s chief Mark Liu recently told CNN that “the war brings no winners.” Meanwhile, the United States is hedging its bets.
Last month, it passed the Chips and Science (CHIPS) Act with $53 billion in incentives, alarmed that its share of semiconductor manufacturing had eroded to 12% from 37% in 1990. The law – which is a fillip to advanced-node semiconductor manufacturing – also prohibits investments by American multinational chip makers in China.
India also unveiled a $10-billion semiconductor incentive package last year but so far the world’s leading chip makers have stayed away.
States across the country have raised concerns about the impact of gaming, pornography and social media on institutions and asked the central government to frame laws that could effectively regulate and control these, minister for electronics and information technology Ashwini Vaishnaw said.
Speaking to reporters after his meeting with state information technology ministers during the ongoing India Mobile Congress, Vaishnaw said almost all states expressed concerns about the impact of social media and suggested stronger laws to regulate such intermediaries.
Telecom bill concerns: The government has also started receiving inputs on the draft telecom bill that it had put up for consultation in public, the minister said.
“We are getting a very good idea about what is the sense of the industry, and majorly everybody has appreciated the bill. There are concerns about the definitions of OTT (over-the-top) and we have sought written suggestions from the industry about their concerns,” he said.
TWEET OF THE DAY
TCS has carved out two new business units dedicated to telecom and 5G solutions led by industry veterans, sources told us.
Details: The company has created a network solutions and services unit (NSS), under the communications and media vertical, to cater to 5G rollout and engineering solutions led by Vimal Kumar.
It has also created a cognitive enterprise network unit (CEN), within the enterprise growth group, to offer intelligent net-work management solutions led by Satya Pitta.
BSNL 4G deal: TCS is also in the final stages of closing a potential $2 billion (around Rs 16,000 crore) 4G network rollout deal with state-run telecom operator BSNL, we reported previously. The deal will also help the Tata Group consortium of TCS and Tejas Networks to take their 5G rollout offerings to global telecom operators.
Other Top Stories By Our Reporters
YouTube Shorts to drive long-term India-first innovations: YouTube is eyeing more India-first innovations, a senior executive said, citing its short-video format Shorts, which was developed in the country and scaled up for the rest of the world.
Total cloud integration in India still a complex issue, says report: A new study by IBM revealed that 85% of respondents in India have adopted a hybrid cloud approach, which could help drive digital transformation, even as the majority of organisations continue to struggle to make all their cloud environments work together.
Global Picks We Are Reading
■ Does Apple’s crash detection work? We totaled some cars to find out (WSJ)
■ If a Google billionaire can’t make flying cars happen, can anyone? (The Washington Post)
■ Same-sex couples from China are getting married in Utah over Zoom (Rest of World)
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