The Deep-discount Model Followed by E-tailers is Unsustainable_ Kumar Mangalam Birla _ ET Retail
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An initiative of The Economic Times The deepdiscount model followed by etailers is unsustainable: Kumar Mangalam Birla The deepdiscount model followed by Indian retailers is unsustainable and will come to an end sooner or later as investors will demand returns, said Birla. Baiju Kalesh , Bodhisatva Ganguli & R Sriram | MUMBAI: The deepdiscount model followed by Indian retailers is unsustainable and would come to an end sooner or later as investors would surely demand returns, Aditya Birla Group Chairman Kumar Mangalam Birla has said, while calling for a level playing field for brickandmortar retailers. "I wonder how the (ecommerce) business can be sustainable. I understand the valuation play. At the end of the day the financial investor will have to make returns. One thing I am sure is that you can't have unlimited access to capital funding. Therefore the question that comes to my mind is whether the deep discount model is sustainable," Birla said in an exclusive interview. Speaking for the first time NEWS UPDATE Amazon's Prime Day draws big virtual crowd READ MORE ETRetail.com ET Home News IndustrySpeak Jobs & Career Feature Data & Analytics Apparel & Fashion Ecommerce Food & Entertainment CDIT Health & Beauty Home & Decor Books and Stationery Industry #Industry » #unsustainable #retailers #Kumar mangalam birla #invest #deepdiscount model #Aditya Birla Group 13 July 2015, 7:58 AM IST
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Transcript of The Deep-discount Model Followed by E-tailers is Unsustainable_ Kumar Mangalam Birla _ ET Retail
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7/16/2015 Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirla|ETRetail
http://retail.economictimes.indiatimes.com/news/industry/thedeepdiscountmodelfollowedbyetailersisunsustainablekumarmangalambirla/48048051 1/3
An initiative of The Economic Times
Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirlaThedeepdiscountmodelfollowedbyIndianretailersisunsustainableandwillcometoanendsoonerorlaterasinvestorswilldemandreturns,saidBirla.
BaijuKalesh ,BodhisatvaGanguli & RSriram |
MUMBAI:ThedeepdiscountmodelfollowedbyIndianretailersisunsustainableandwouldcometoanendsoonerorlaterasinvestorswouldsurelydemandreturns,AdityaBirlaGroupChairmanKumarMangalamBirlahassaid,whilecallingforalevelplayingfieldforbrickandmortarretailers."Iwonderhowthe(ecommerce)businesscanbesustainable.
Iunderstandthevaluationplay.Attheendofthedaythefinancialinvestorwillhavetomakereturns.OnethingIamsureisthatyoucan'thaveunlimitedaccesstocapitalfunding.Thereforethequestionthatcomestomymindiswhetherthedeepdiscountmodelissustainable,"Birlasaidinanexclusiveinterview.Speakingforthefirsttime
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#Industry #unsustainable #retailers #Kumarmangalambirla #invest #deepdiscountmodel
#AdityaBirlaGroup
13July2015,7:58AMIST
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7/16/2015 Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirla|ETRetail
http://retail.economictimes.indiatimes.com/news/industry/thedeepdiscountmodelfollowedbyetailersisunsustainablekumarmangalambirla/48048051 2/3
aboutthecontroversywhichembroiledthegroupafterCBIregisteredanFIRinOctober2013namingthe48yearoldindustrialistasanaccusedinacaselinkedtoallocationofacoalmine,Birladescribedtheepisodeasa"shock"butassertedthatthegrouphadbouncedback.
"Itwasashockandwascompletelyunexpected.Butitdidnotcomeinthewayofourgrowthaswearearesilientgroup.Itisbestnottogetemotionalaboutthesethings,"Birlasaid.
Askedifheascribedthecasetopoliticalvendetta,Birlarepliedinthenegative.Hedeclinedtodiscusstheaffairindetailasitissubjudice.InAprilthisyear,theSupremeCourtstayedalowercourtordersummoningBirlaandformerprimeministerManmohanSinghasaccused.
BirlapraisedtheeffortsoftheNarendraModigovernment,emphasisingthatoneyearwasnotenoughtojudgeitseffectiveness."Whenyougetabusinessoracompanythatisailing,Idonotthinkturningitaroundinoneyearisrealistic.Ihavealotoffaithinthisgovernment.
Theyunderstandissueswell.Mysenseisthattheyaredoingalotofworkwearenotawareof.Twosectorshavetakenoffoneiscoalintermsofproductionofcoal.Forthefirsttimeinmanyyears,wearenotstrugglingandhavesufficientcoalinourplants,whichisaverybigdeal.Roadshavetakenoff,whichisbig,"hesaid.
Inthenextfewyears,the$41billiongroupwillinvestmoreinitsnoncommoditybusiness,includinga$7billioninvestmentinIdeaCellular,India'sthirdlargesttelecomcompanybynumberofsubscribers.ThegroupalsoplanstoenterthehealthinsuranceandhousingfinancesectorsandsetupapaymentbankifgrantedalicencebyRBI.FurtherthegroupwouldbuildoutitsNBFCaswellasitsgarmentbusiness,thelatterthelargestinIndia.SunLife,thegroup'spartnerinthefinancialservicesbusiness,wouldraiseitsstateinthelifeinsuranceventureto49%bytheendoftheyear.Ingeneral,thegroup'spreferencewouldbetostayawayfromsectorsheavilydominatedbythegovernment,thoughthereareexceptionssuchasIdea.Thegroupwouldalsoforayintogenerationofsolarpower,oneoftheprioritiesoftheNDAgovernment.
Theemphasisonnoncommoditiescomesonthebackofa$26billioninvestment,muchofitintheareasofcementandaluminum.
Commentonthis
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7/16/2015 Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirla|ETRetail
http://retail.economictimes.indiatimes.com/news/industry/thedeepdiscountmodelfollowedbyetailersisunsustainablekumarmangalambirla/48048051 3/3
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