Wednesday, October 19, 2016
Tuesday, October 18, 2016
After having started by providing ‘affordable and reliable’ auto-rickshaw rides to commuters in close to 40 cities, app-based mutli-service provider Jugnoo has clocked a sharp growth in logistics services.
Based out of Chandigarh, Jugnoo delivers raw materials and finished products to restaurants, florists, chemists and pathological laboratories, and distributes sports equipment, stationery and electronic hardware, among others.
Cargo delivery in three-wheelers is catching up so fast that in Gurgaon, where the firm launched services only a month-and-a-half ago, about 1,000 autorickshaws have already signed up, Zorawer Singh, who is driving the initiative for Jugnoo, told BusinessLine. Customers include Burger King, florists, Subway, Ferns N Petals, Baskin Robbins and many neighbourhood kiranastores
Of the over 10,000 auto-rickshaws on Jugnoo’s platform, 4,500 have signed up for delivery service. As of now, the firm offers cargo delivery in 13 cities for the business-to-business segment. The recent spurt in growth is driven by auto drivers who ferry passengers and have time to spare, and also Jugnoo’s “competitively priced” cargo transportation.
Jugnoo’s charges for cargo movement are the same as that for passenger movement. At present, the fares of auto-rickshaws hired through Jugnoo’s app are lower than those defined by a city or State’s transport regulations, said Singh.
The company, which at present offers a flat tariff level through the day, is, however, looking at dynamic pricing, Singh added. At times when it rains, there may be demand, but supply of autorickshaws may be low. This situation may call for higher tariffs, he said, adding that while Jugnoo’s tariffs are based on distance and weight of packets, the drivers get paid more if they help in loading and unloading.
Dodo, a door-to-door delivery service lead by Singh, did so well that it has been spun off as a separate segment and re-branded as Jugnoo Delivery. It is now replacing transportation services, earlier done through commercial vehicles, two-wheelers, cycle rickshaws and even auto-rickshaws that were independently hired.
From a pricing perspective, the highest delivery charges are in Bengaluru, as also Nagpur, where auto-rickshaws run on petrol as well as diesel. In cities such as Delhi and Gurgaon, autos are CNG-based and thus have lower fares.
The delivery timings also vary across cities, with the majority offering services between 8 am and 11 pm, stretching to 12-12:30 am in Chandigarh. The company is looking to extend the time to 12-12:30 am in Gurgaon, too.
The firm, which has about 350-400 people employees across 36 cities, is looking to expand to Chennai and Hyderabad in a month, and to over 20 cities cities by this year-end, Singh said.
Multiple pick-up points
Additionally, Jugnoo is looking at widening its services to allow multiple pick-up and delivery points, as the three-wheelers on its platform have flagged interesting patterns. For instance, demand from restaurants rises between 12 noon 3 pm in Chandigarh and florists in Bengaluru report higher demand after 11 pm. While most of the demand is intra-city, demand for inter-city delivery is also growing, as the auto-rickshaw fleet on Jugnoo’s platform has a mix of commercial and passenger vehicles.
“We never thought we will have demand from pathological labs, surgical equipment from hospitals, textiles and dry-cleaners,” Singh said, adding that the firm is already cash positive.
The delivery service has a pre-paid wallet for the merchants, who can credit the amount for Jugnoo delivery using cheque, cash, PayTM and debit or credit card. The payment gateways through debit/credit cards were added last week. The platform has over a 1,000 merchants, of which 600 are active users, with 140-150 transactions daily. On the drivers’ side, Jugnoo credits the fare twice a week into the account of each driver. Jugnoo Delivery gets a commission for each transaction.
Acquiring new customers and three-wheelers while keeping the fares competitive and fulfilling demands is a challenge for the platform, which is also in talks with FoodPanda, Ekart, Flipkart, Jabong and a national-level courier service. As of now, the company is operating in B2B, as getting into B2C delivery will be extremely challenging, Singh said.
India's leading travel portal MakeMyTrip is all set to completely acquire Naspers-backed ibibo group, signalling a major consolidation in the online travel aggregation space.
The companies did not disclose the deal size, but sources and industry experts pegged it at $400-$450 million, making it the biggest acquisition in this space.
Ibibo, in which South African investment firm Naspers and Chinese Internet giant Tencent hold 90 per cent stake, had acquired online bus aggregator RedBus for about $110 million in 2014.
The acquisition creates a one-stop shop for Indian travellers, as it brings together leading consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay.
The transaction is expected to close by the December end, and is subject to approval by MakeMyTrip shareholders and regulators since it is listed on Nasdaq.
Naspers and Tencent are selling their stake in ibibo Group to MakeMyTrip in exchange for an issuance of new shares. With the acquisition, MakeMyTrip will own 100 per cent of ibibo Group while Naspers and Tencent will together own about 40 per cent in MakeMyTrip, and will contribute proportionate working capital for the acquisition.
Besides, China’s leading OTA company Ctrip, which invested about $180 million in MakeMyTrip early this year, will also be used for the acquisition. Ctrip will have a 10 per cent stake in the combined entity.
Deep Kalra, founder of MMT, will remain Group CEO and Executive Chairman of the new entity, while ibibo Group founder Ashish Kashyap will join MakeMyTrip's executive team as a Co-founder and President.
Kalra said the announcement “is a significant step... for the... travel industry in India. We expect this to create an even more scalable business with the expertise to transform the booking experience for travellers..”
Experts reckon the combined entity will command over 50 per cent in the OTA space, which has other players like Yatra and ClearTrip.
Experts feel the OTA space has become cluttered, with everyone burning up cash in deals and offers, and incurring huge losses.
Monday, October 17, 2016
It is hailed as India's granary, but the northwestern state of Punjab faces a drastic decline in agricultural output unless it halts the rapid depletion of its groundwater, experts warn.
Groundwater irrigates almost three-quarters of Punjab’s agricultural land, but groundwater levels are dropping by 40 to 50 cm (16 to 20 inches) a year, according to Rajan Aggarwal, head of the soil and water engineering department at Punjab Agricultural University (PAU).
That has left farmers like Ajmir Singh struggling as their irrigation wells dry up.
"We are not able to find water even if we go down to 200 feet (61 m) or more at some places,” said Singh, who has farmed for 35 years in Jalandhar, 150km (95 miles) north of Chandigarh, the state capital.
His neighbor, Pawanjeet Singh, said lack of irrigation water has forced him to sell part of the land that has been in his family for generations to a large-scale farmer who has the resources to drill for water at much deeper levels.
“I took this decision with a heavy heart after I realized that drawing water for all my land is beyond my means,” Singh said.
According to Aggarwal, groundwater has been overexploited in 110 of the state’s 138 administrative blocks.
“This is alarming given that more than 73 percent of irrigation is taken care of by groundwater,” he said.
Experts say dealing with the problem, in the region that led India’s Green Revolution in the 1970s, will require a rapid shift away from crops that require large amounts of water, such as rice and wheat, to less-thirsty pulses, maize, vegetables and sugarcane to safeguard the state's agricultural economy.
Rice and wheat make up 81 percent of Punjab's irrigated crops, according to a report by PAU. Although the state accounts for only 1.5 percent of India’s geographical area, over the past two decades it has contributed 35 percent of the nation’s rice production and 60 cent of its wheat.
According to Sunil Jain, regional director of the Central Ground Water Board for northwest India, groundwater started dropping in 1985 in Punjab, and has sunk to alarming levels in recent years.
Thirty years ago farmers in most parts of the state could draw water at a depth of 10 meters (32 ft), but by 2015 this was 20 meters, while farmers in some central parts of the state are unable to find water even at 30 meters or deeper, he said.
“There has been a substantial rise in groundwater utilization, which has mainly happened because of the fact that Punjab gets less rainfall. Since paddy (rice) requires a lot of water, the farmers resort to heavy usage of groundwater for irrigating the paddy fields,” he said.
Jain added that Punjab gets less than 700mm of rainfall annually. This compares to a national average of 1,083mm, according to the World Bank.
Amit Kar, an economist at the Indian Council of Agricultural Research, attributed the groundwater shortage to government policies such as free electricity for irrigation, credit facilities and subsidies for digging wells and buying pumping equipment, as well as heavily subsidized diesel fuel for pumps.
The PAU report said annual demand for irrigation in Punjab is 4.76 million hectare meters (mhm) against a total annual supply of 3.48 mhm from canal and groundwater resources.
The deficit is met by overexploitation of deeper groundwater by farmers using nearly 1.4 million tube wells, which exacerbates the loss of more accessible groundwater.
According to the PAU report, 3.5 million of Punjab’s 9.1 million workers make a living from agriculture or associated activities.
Jain said the statistics suggest Punjab’s agricultural success may not be sustainable.
“Punjab’s exports of rice and wheat to other regions literally mean the export of its groundwater to those regions,” he said.
Amitabh Kant, chief executive officer of the government's National Institution for Transforming India (NITI Aayog), predicted “the present rate of withdrawal will lead to complete exhaustion of groundwater within a decade” in the region.
Kant said India, already water-stressed, is rapidly moving towards becoming water-scarce.
TIME TO SWITCH?
Switching to new crops is one way to ease the problem in Punjab, said PAU's Aggarwal. Rice requires about four times as much water as maize, pulses or oilseeds, for instance.
Vinod Kumar Singh, a scientist at the Indian Agricultural Research Institute, said Punjab must make the shift at any cost.
“The government has to make some policy decisions like assuring the farmers it will procure their produce other than paddy (rice) and wheat. Only then will they be convinced to switch over to these crops,” he said.
Under India’s state-sponsored Public Distribution System, the national government buys staple foods like rice, wheat and sugar from farmers and sells them to citizens at fair or cheaper prices. Commodities worth $2.25 billion, including rice and wheat, are sold annually to about 160 million families.
Jasbir Singh Bains, Punjab's director of agriculture, said that system makes farmers reluctant to cultivate other crops.
“We have started making efforts to popularize the cultivation of pulses, maize, vegetables and oilseeds,” Bains said. “For example, we have appealed to the central government to increase the procurement of pulses and are urging the farmers to grow vegetables, which also have a good market.”
Farmers like Shamsher Singh, in Nokdar–Jalandhar, said they would switch to less thirsty crops with government help.
“We are ready for this, but the government should give the guarantee that it will procure our products like it is doing in the case of wheat and rice,” he said.