Indian Stock Market News 20th August 2024
India’s rural economy is driving the revival of the Fast-Moving Consumer Goods sector, the Reserve Bank of India said in its latest bulletin. Improved infrastructure and better income turned around rural consumption to become a significant driver for volume growth across FMCG products. Volumes grew a healthy 6.6% for the industry in the September quarter of FY25, in a solid comeback after a slow beginning to the financial year. The FMCG companies are now spotting “green shoots” of a recovery, largely driven by increased penetration of utilities such as LPG, electricity, and two-wheelers in the rural areas. This is signified by the increased number of savings bank accounts and their outstanding balances. Besides, rural savings are on the rise. A significant reason for increasing rural spending is the fact that inflationary pressures have been easing off, thereby allowing consumption volumes in rural areas to catch up with the urban areas. The RBI also expects this revival in the rural economy to gather further pace since the monsoon has been good and government spending in rural areas will encourage the private sector to start investing, too, due to which there is a pick-up in the overall economy.
Antfin Singapore, a unit of Alibaba Group, is set to sell a 1.54 per cent stake in online food delivery giant Zomato through block deals, according to sources, in deals estimated at ₹ 3,400 crore. The share sale, according to a term sheet filed by Goldman Sachs and Morgan Stanley, offers 136 million shares at a floor price of ₹251.68 a share, a 4% discount to Zomato’s recent closing price. Antfin, which held a 4.24% stake in Zomato as of June 2024, had earlier sold a 2% stake in March 2024, raising around ₹2,828 crore. Yet Zomato’s shares, in spite of these sales, have rallied 66 per cent this year, outperforming the broader market, because investors are confident about the long-term prospects.
High growth rates of the global Restaurant Accounting Software market result from accelerated adoption of cloud-based solutions, as well as an accelerating operational focus on efficiency in the restaurant business. All these are special financial management tools that should make all accounting works easier, right from managing financial transactions and tracking expenses to even payroll processing and coming up with financial reports in the most appropriate manner that fits the restaurant food service businesses. This will effectively save time for the time that almost eliminates errors and will yield valuable insights into the financial performance by automation. The market is likely to rise at a CAGR of 10% during the period of 2024 to 2031 due to technological advancement, integration of artificial intelligence, and enhanced user interface features that enable efficiency in making data-driven financial decisions for restaurants.
International QSR chains like McDonald’s, Burger King, and Pizza Hut are losing their popularity in India as local consumers, particularly Gen Z and millennials, are changing their preferences. With the development of modern food brands, which are venture capital-backed, and changes brought about in the industry through food delivery platforms like Zomato and Swiggy, the market has become quite challenging for global conglomerates to attract customers to their physical outlets. In return, these QSR chains have launched specific value offers in today’s scenario to recapture consumers, like McDonald’s McSavers+ combo, Burger King’s discounted burgers, and KFC’s budgeted meal bundles. But, analysts warn against the continual race to drop prices as it may come at the cost of decreasing long-term profits and quality. With the relentless fight from new-age brands, coupled with the disruptive force of food delivery aggregators, QSR chains are being pushed to innovate user experiences for considerations in India’s rapidly changing food market.
Zomato said it has banned AI-generated food pictures on different restaurant menus because it insists that customers could begin losing faith in the brand, and this step might work as an adverse effect in business. This comes after customer complaints led to higher refund rates and lower restaurant ratings. Zomato is also going to actively remove AI-generated images from its platform by the end of the month and use automation wherever possible to detect and reject such images. It is encouraging restaurant partners to invest in genuine food photography, and professional photo-shoots are being offered at bare cost, without profit margins to Zomato. The ban is only imposed on the AI-generated images of food, while Zomato does not shy away from investing for other reasons using generative AI, such as maximum user engagement and improvement in customer experience on their platform.
The diamond houses, in association with DeBeers, are rolling out an $8-10 million campaign to woo back the increasingly choosy Chinese consumer. The campaign rejuvenates the Chinese market, which has been sliding due to changes in consumer preference and economic factors. It is rather an attempt to bring back the magic of past successful marketing, like DeBeers did in Japan during the 1960s, where it successfully changed consumer behavior and made diamonds a symbol of engagement and prosperity. The new campaign, by focusing on quality and the emotional appeal that diamond jewelry holds, hopes to rekindle interest in diamonds by Chinese buyers.
Canadian operator of Circle K convenience stores Alimentation Couche-Tard has made an offer to acquire the much larger Japanese rival Seven & i Holdings Co., which owns 7-Eleven. If the deal concludes, it will be the biggest overseas acquisition for a Japanese firm, forming the world’s largest operator of approximately 100,000 chain stores. The bid is still preliminary, hence a special committee of independent directors from Seven & i will have to consider the one given to them by the convenience store operator. It was successful since the fact that Couche-Tard is a smaller sized operator in terms of the store size was exceeded by the fact that market capitalization of the firm is way bigger. The new M&As guidelines in Japan, along with activist investors’ pressure, may make such deals more possible in the future and slightly alter the global convenience store landscape.
Post success in the online market, direct-to-consumer meat and seafood brand Licious is now eyeing offline expansion. “It has plans to open 25 offline stores by end FY25, most of them in Bengaluru. Once the model proves profitable, the target is to open 70-100 stores every year”. Right now, there is one offline store and another one is opening in the next few days. They are aggressive on meat stores because there is a strong demand coming from consumers. The omnichannel future, therefore, is seen where both online and offline channels will complement each other. It is also looking at acquisitions in the offline meat space to give its expansion a fillip. While the company remains confident that online will remain the largest channel for the next couple of years, offline channels are expected to contribute more in due course when consumer trust in the brand builds up.
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Source: Google
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