Moneycontrol PRO
Contest Alert:2 days left to win Amazon vouchers worth Rs 5000. Take the MCPRO Quiz today to grab yours!
you are here: HomeNewsBusiness

After taking products off Amazon, Shoppers Stop seeks clarity from govt on e-comm policy

The retailer has witnessed a slowdown in the demand and expects a single digit growth in the Jan-Mar quarter of FY19.

February 27, 2019 / 12:44 PM IST
  • bselive
  • nselive
Todays L/H

Himadri Buch

Moneycontrol News

Shoppers Stop, one of India's largest departmental store chains has discontinued selling its products on Amazon platform, said Rajiv Suri, Managing Director and Chief Executive Officer, Shoppers Stop.

In an interview to Moneycontrol, Suri said the retailer has sought clarification from the government whether Amazon’s stake in Shoppers Stop will be considered as FIPB (Foreign Investment Promotion Board) investments or FDI investment.

On December 26, Department of Industrial Policy and Promotion (DIPP)  barred online retailers from selling products of companies in which they hold stake. The deadline to comply with the rule was set at February 1.

The retailer has witnessed a slowdown in the demand and expects a single digit growth in the Jan-Mar quarter of FY19. The company is expanding its reach to 41 from 38 cities currently by April, and will open total five stores in the next financial year.


Excerpts from the interview 

Q: How is the demand scenario right now?

A: Q3 was exemplary as there was festive season. We had the right products at the right time. This quarter the demand has slowed down. We will end the quarter in single digit.

For next year, we are planning single digit growth for our branded business for like for like sales and we are hoping to get double digit growth for our private brands. In private brands, we have done big investments so we are keen on expanding that business both from profitability and margin point of view.

Q. How will the new e-commerce policy bill impact the e-commerce retail as you have partnered with Amazon and it holds 5 percent stake in Shoppers Stop?

A: We have two parts in our e-commerce. One is Shoppers Stop website and other is our business with Amazon.

The new DIPP Note 2 did affect us because of ownership status. Amazon owns 5 percent of our company and the press note was not clear as to how much percentage ownership should be allowed. So we have stopped selling products on Amazon from February.

It was also not clear that whether it was applicable to FIPB investment or FDI investment so based on that we are unable to list our products on Amazon we have to follow the law. 

We are seeking clarification from the government as to what percentage should be there and there should be some percentage assigned to us. Otherwise our relationship with Amazon remains strong.

Q. What kind of growth rate are you expecting from e-commerce and how much does it contribute to your revenue?

A: In Q3, our growth was around 45 percent and for the year it’s around 50 percent which is in line with the industry. E-commerce is under 2 percent of our business but as our e-commerce business increases gradually the share will go up.

Q. What are your revenue and margin projections in the next 3 years?

A: We have an ambition to grow mid single digit growth for like to like sales. Right now we would be around 5 percent.

Q. In terms of expansion, how many stores are you planning to open?

A: We are planning to open 3 stores between March and April and total 5 stores in the rest of the financial year. We will continue to grow our beauty business at a faster pace and open 15 stores in the financial year.

Q. Going by geographies, how many cities are you present in and how many will you be adding?

A: We are present in 38 cities, we are planning to add 3 more cities that makes it 41.
Himadri Buch
first published: Feb 27, 2019 12:44 pm

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark