The Malaysian Insider :: Features
The Malaysian Insider :: Features |
| Retailers look to click and collect online profits Posted: 06 Sep 2013 05:56 AM PDT E-commerce has revolutionised trade in books, music, clothes and electronics in the last decade, but food has proved a tough segment to crack. Grocery represents almost 40% of retail sales, but providing a profitable internet option for a high-volume, low-margin business with products that must be chilled is more complex and pricey than for non-perishables. Even Amazon has only made tentative steps into grocery, although it is now preparing to expand its "Fresh" business to 20 urban areas in 2014. If trials in Los Angeles and San Francisco work it says it may expand outside the United States, though has not specified where. That's an alarming prospect for other grocery retailers already struggling with falling store sales as austerity drives, rising prices and wage stagnation hit shoppers. So they are looking more closely at shopping habits and preparing to build in flexibility to boost their brands and profits. Busy customers often now prefer to collect an order, avoiding a delivery fee, than wait at home. A GMI survey commissioned by Mintel showed 39% of online shoppers in Britain and 33% in France collected goods in-store in the last 12 months. Mintel data shows young, affluent consumers – retailers' favourites – are most keen on click-and-collect. Retailers are experimenting with different pick-up models, from "drive-thrus" adjoining existing stores that are popular in France, to refrigerated lockers at petrol stations and new warehouses dedicated to online known as "dark" stores. Click and collect also means they can spend less on home delivery, often prohibitively expensive outside densely-populated urban areas. Food and consumer goods research group IGD predicts "drive-thru" will propel French online grocery sales to 10.6 billion euros by 2016 from 6.7 billion in 2013, while it sees home delivery push UK online grocery to 11.4 billion euros in 2016 from 7.4 billion in 2013. Stephen Mader, analyst at Kantar Retail, said retailers are moving "aggressively" to grab as much online share as possible. "They are throwing caution to the wind in terms of profitability," Mader said, adding that once they had built scale: "They will need to pay more attention to how much money it generates." Retailers are investing most in the easy-win of drive-thrus bolted on to existing stores, from which staff pick online orders, rather than warehouses with automated order selection, which are costly but set to be more efficient in the long run. Europe's top retailers Tesco and Carrefour are building hundreds of collection points at stores, as well as a handful of online-only warehouses, but as neither breaks out numbers for online grocery profitability it is hard to see whether the method is working yet. Tesco, Europe's biggest online grocer, where e-commerce accounted for almost 5% of sales in 2012-13, says the business is profitable but experts believe that is because it does not account for the cost of having staff pick up online orders at stores. "Picking from store is the easiest but it is disruptive to inventory forecasting. It is a short-term solution. I see a dedicated supply chain (for drive-thrus). Although it is capital intensive, it is a much more scalable solution," said Mader. So far France has moved fastest to capitalise on the trend. It now has 20% of the population already using drive-thru collection for groceries ordered online. Leclerc, the market leader with 352 so-called Drives, saw first-half sales in that segment jump 68% to 720 million euros, compared with overall French sales growth of 4.7% to 15.9 billion. The retailer estimates a Drive poaches a quarter of its sales from its own stores – but the rest comes from rivals' stores. Carrefour is hurrying to catch up, building 283 Drives since 2010 and contributing to a boom that research firm Editions Dauvers says resulted in 920 new pick-up points being built in France over the last year, bringing the total to 2,278 by June. The potential for growth is huge. In Britain, which has Europe's highest rate of grocery e-commerce, only 19% of people ordered food online in 2012. In Germany and France that figure was 9% and 7% respectively. In Germany, "click and collect" is popular for electrical goods from Metro AG's Media-Saturn chain, but the country's dominant discounters, Lidl and Aldi, already operating on razor-thin margins, have not embraced e-commerce for grocery. While e-commerce is marginal in southern Europe, where hard-pressed shoppers prefer local stores and markets, Carrefour has opened five Drives in Spain and one in Italy. The concept could also do well in the tech-friendly Nordics and the Netherlands. Tesco has led the way with click and collect in Britain. Two-thirds of its non-food online orders are collected at 1,500 collection points. While most food is still home delivered, it plans some 300 grocery pick-up points by mid-2014. But it acknowledges online is taking longer than expected to make money. Though it did not break out costs, it said it wanted "a profitable, scalable model" before accelerating growth. Wal-Mart's Asda, the UK's number two, will offer grocery pick-up in 200 outlets by the year end, including from stores and lockers at its petrol stations. It is also has vans serving commuter car parks for delivery of online orders, on a trial basis. Collection trends can give supermarkets an advantage on pure online retailers because of their store network, warehouses and logistics, especially if they combine sales of grocery with higher-margin general merchandise and own-label goods. And a customer coming to collect will sometimes browse in-store. "A dollar spent online doesn't necessarily mean a dollar less for the high street," said Kandar's Mader. "Smart retailers can take advantage of e-commerce to extend their brand and grow their overall share of the pie." - Reuters, September 6, 2013. |
| Muslim Brotherhood newspaper soldiers on despite Egypt crackdown Posted: 05 Sep 2013 04:45 PM PDT Thousands of Brotherhood members have been arrested in a widening crackdown on the group since the army deposed Islamist President Mohamed Morsi on July 3. Reporters for the newspaper, which still appears in a tiny fraction of its previous circulation, see themselves as the last people left to tell the Brotherhood's side of the story in a country dominated by media that back the military crackdown. The price, the journalists say, is an underground existence, moving from place to place, communicating from Internet cafes, rarely seeing family or friends. "The greatest form of jihad is speaking up against an unjust authority," Tawfiq, 27, said by telephone from an undisclosed location, citing the words of the Prophet Mohammad. The Brotherhood, which won every election after the 2011 revolt that toppled President Hosni Mubarak, has been on the defensive since Morsi's downfall. Security forces crushed pro-Morsi protest camps in Cairo, killing nearly 1,000 people, and forced many members underground. Many Egyptians turned against the movement after Morsi gave himself sweeping powers and mismanaged the economy. They now revere the man who toppled Morsi, army chief General Abdel Fattah al-Sisi. "Part of my goal in my reporting is to fight the coup. Not literally with weapons and blood, but with my way of fighting... as a journalist," said Tawfiq, a slight man with a close-cropped beard who joined the Brotherhood as a boy. "My hope is for my work to be stronger then Sisi's bullets against Egyptians." Charged environment The Brotherhood developed the skills of clandestine unarmed resistance under the iron rule of one Egyptian military-backed leader after another. This time, the government seems more determined than ever to crush it. For the reporters, going to the newsroom to discuss stories with editors is no longer an option. Meeting sources in public is out of the question. Most live away from home and might not see their families for weeks at a time. "It's a charged environment. I expect that things will only get worse for us," said reporter Mohamed el-Azouni, meeting in a Cairo restaurant. He had not seen his family in two months. He and about 50 others produce Freedom and Justice. It used to be a 16-page daily but is now half that length because, since the arrest of Saad al-Katatni, chairman of the Freedom and Justice Party and the newspaper's financier, it has no money. "We don't have access to our bank account," said Azouni. Reporters have not been paid in two months. The paper's print run has been cut from 100,000 to 10,000, and it is now available only in Cairo, not in other towns and cities. Editors, also in hiding, receive stories by email from reporters who often switch computers to avoid detection by state security agencies. Assem Ahmed, a 26-year-old photographer for the paper, was one of more than 50 people killed when Republican Guardsmen fired on a pro-Morsi protest in July. His last image was video footage of the sniper firing the shot that killed him. He was one of at least five journalists from all media killed since July 3. A mystery is why the government, which has closed down Islamist television channels, still allows the paper to be printed on the presses of the state-run newspaper Al-Ahram. Some suggest it may help keep tabs on the movement, in the knowledge that the paper is struggling to stay afloat and reaching only a small audience. It also could provide a defence against accusations that the government is suppressing dissent. None of the paper's staff are now jailed, but police raided the news director's apartment on Saturday, according to Tawfiq, and men broke into the paper's long-shuttered headquarters searching for information on the journalists. Journalist under pressure Rights groups say the climate for local and foreign journalists reporting in Egypt has deteriorated sharply since Morsi was toppled. On Tuesday a Cairo court ordered the switching off of the main source of news in Egypt that challenged the government's line and reported on Brotherhood demonstrations: a channel of Egypt news from Qatar-based pan-Arab network Al Jazeera. Three Al Jazeera journalists were expelled from Egypt on Sunday. Several others have been detained, and the station's offices in Egypt have been raided. Al Jazeera complains that its satellite signal has been jammed. The New York-based Committee to Protect Journalists (CPJ) said last Friday that it knew of 10 journalists in detention, nine raids on news organisations, and at least 64 temporary detentions, assaults or confiscations. The CPJ's Sherif Mansour said the government had been working to "increase censorship and increase the divide in the media and partisan alignment against the Brotherhood". The government says any arrests of journalists have been for inciting violence, not for their editorial work. Despite what seems like overwhelming odds, the Brotherhood's newspaper is still focused on efforts to reverse what it calls a military coup against an elected government. One story this week quoted relatives of top Brotherhood leader Mohamed Badie saying he appeared healthy during a prison visit after a report that he had suffered a heart attack. Political cartoons attack Sisi, the military chief now depicted as a hero in posters across Cairo. One shows him smashing helpless people with his fists. "This is the definitely the first showing of Sisi as a butcher in the Egyptian press that I'm aware of," said Jonathan Guyer, a scholar researching political cartoons in Egypt. Almost daily, the paper publishes photographs of Brotherhood "martyrs" killed by security forces at protest camps. "When a paper is eight pages and the whole centrefold is the names of 'martyrs' ... that is an incredible example of resistance," said Guyer. Azouni, the reporter, lost his laptop and camera while running for his life at a protest where security forces fired live rounds. He has to borrow computers from friends, or move from one Internet cafe to another. "We want to reach everyone in every place, in every house, everywhere. We are the voice of those who don't have a voice," he said, looking nervously around him for state security agents. "We are their only voice." – Reuters, September 6, 2013. |
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