Is Black Friday gone for good?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Once the biggest and most famous shopping day of the year, more and more retailers are now extending sale periods and offering bonus deals online.

The big discounts might no longer be just about the day after Thanksgiving, but is Black Friday really a thing of the past?

‘Exclusive savings’

According to the National Retail Federation (NRF), in the US an estimated 135.8 million shoppers are likely to shop on Thanksgiving, Black Friday and over the weekend. Up from last year’s Thanksgiving weekend as the shift moves away from Friday as the key shopping day.

NRF President and CEO Matthew Shay said he expected retailers to also offer exclusive savings and promotions throughout the week that follows the Thanksgiving weekend and Cyber Monday.

“This weekend isn’t the end-all-be-all; it’s important to remember, there will be several important weekends to keep an eye on before we wrap up the holiday season,” he said in a statement.

Amazon.com, the world’s largest online retailer, announced on Tuesday it will extend its holiday savings for an additional eight straight days of new deals. It said new price cuts will be added as often as every five minutes as a “celebration” of Cyber Monday.

The online giant is offering some of its best “lightning” deals on the Amazon smartphone or tablet app, or customers can sign up for mobile alerts to find out when new specials are offered.

‘Dazed and confused’

“We could be looking at a Red Friday rather than a Black Friday. Retailers are becoming dazed and confused as they are being pulled in every direction trying to outdo each other with the most competitive offers and looking to delivery orders faster than the competition,” said Siobhan Gehin, head of strategy and private equity at global consultancy firm Kurt Salmon.

“In reality this situation is just eating into retailers’ profits and is not sustainable.”

Meanwhile, Wal-Mart is moving “Cyber Monday” to Sunday because people now have fast Internet in their homes, the US retailer said Monday.

All 2,000 of Wal-Mart’s Cyber Monday deals will begin Sunday at 8 p.m. ET.

“By starting Cyber Monday hours earlier on Sunday evening and quadrupling the number of Cyber Monday specials, we’re making it easier for customers to get ahead of the busiest online shopping day of the year and save on the best gifts,” Fernando Madeira, president and chief executive of Walmart.com, said in a press release.

Other major US retailers including Target said they will offer the same deals online as in store from Thanksgiving morning.

Meanwhile, across the Atlantic in the UK, catalogue and warehouse retailer Argos said its decision to begin Black Friday discounts long before November 27 has paid off with the site achieving a 22 percent rise in traffic, according to digital analytics firm SimilarWeb.

The retailer was one of the first to start its Black Friday sales a week ahead of Black Friday, with deals between November 20 and 22.

But as Black Friday is still a relatively new event in the UK, analysts are still predicting bumper spending on the day, even as retailers extend the time period for discounts.

UK consumers are expected to spend more than £1 billion (USD 1.5 billion) online on Black Friday this year. The US imported phenomenon really took off back in 2013, when sales jumped 20.7 percent compared to the year prior, according to Barclaycard data.

“Reports of the death of Black Friday are exaggerated and it appears this year’s will be bigger than ever. Nearly half of those who didn’t shop last time are considering it for November 27th and the majority of sales will be online,” said Ian Hughes, the chief executive of Consumer Intelligence said in a statement.

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The days of Apple’s amazing profits may be over

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Consumer cos struggle to tap aspirational middle-class

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s burgeoning middle class has long been touted as a consumer gold mine but hasn’t always lived up to the hype.

“Over the past decade, India’s consumer market has generated plenty of interest among investors, most notably the size of the population, prospects for rapid growth in real incomes and better provision of financial services,” Shilan Shah, an India economist for Capital Economics, said in a recent note.

Those factors drove a private consumption surge from 2004-2011, but consumption growth has since slumped and consumer goods import growth is slowing, he said.

At least one analyst says the disappointment may be due, at least in part, to grossly overestimating the size of India’s middle class. Analysts have estimated that anywhere from 100 million to 300 million people out of its around 1.2 billion total population can be considered middle class.

But that’s just plain wrong, Dheeraj Sinha, author of India Reloaded: Inside India’s Resurgent Consumer Market, told CNBC.

“If you look at the census of India, there are about 600 million people in the country who do not have access to pure drinking water and toilets,” said Sinha, who also is chief strategy officer at advertising agency Grey, part of the WPP Group, in India.

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Asian markets gain on ECB easing prospects

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian markets rose on Thursday as traders cheered the prospect of fresh monetary stimulus in Europe.

The euro hit a fresh seven-and-a-half month low of USD 1.0632 against the dollar in Asian trade after European Central Bank (ECB) officials told Reuters on Wednesday that they were considering unconventional easing measures, such as introducing a two tiered deposit rate, ahead of the bank’s policy review next week.

“According to the report, large depositors would be charged more than small depositors. This plan isn’t likely to receive much support from Germany and France whose banks widely use the ECB’s facility. However it is clear from today’s price action that while investors have considered more stimulus, they have not considered how aggressive or creative they will be,” said Kathy Lien, managing director of FX strategy at BK Asset Management.

Those stimulus expectations saw the STOXX Europe 600 rally 1.3 percent and the German DAX close up more than 2 percent overnight.

Meanwhile, US stocks closed narrowly mixed in low volume trade on Wednesday, the last full trading day of the week. Wall Street will be closed Thursday for Thanksgiving and the stock market closes at 1 p.m. ET on Friday. In economic news, October US personal income ticked up modestly while durable goods soundly topped expectations last month and weekly jobless claims fell more than expected.

Hong Kong pops 1 percent

The Hang Seng Index opened above 22,700 points while China’s benchmark Shanghai Composite added 0.3 percent in early trade after Beijing announced new customs policies to boost trade, such as lowering costs for importers and exporters and streamlining the clearance of goods at customs.

Citic Securities was more than 2 percent higher in Shanghai despite the securities association accusing the brokerage of overstating its derivatives business by more than USD 166 billion. Other brokerages also rallied, with Everbright and Haitong Securities both 1.6 percent higher.

In Hong Kong, blue-chips Petrochina, Hong Kong Exchanges and HSBC spiked more than 1 percent each.

Nikkei adds 0.6 percent

Japan’s Nikkei index traded in sight of 20,000 points after closing down 0.4 percent in the previous session.

Heavyweight exporter stocks such as Honda Motor, Nissan and Nintendo rallied more than 1 percent each.

Liquid crystal display (LCD) panel maker Japan Display slumped 7 percent on reports that Apple plans to introduce organic light-emitting diode (OLED) displays for iPhones.

In a report on Wednesday, the government lowered its assessment of November capital expenditure for the first time in a year, citing “pockets of weakness” in the overall economy.

ASX 0.8 percent higher

Australian shares managed to recoup all of Wednesday’s losses thanks to a rally among financials. Commonwealth Bank of Australia, Westpac, National Australia Bank and Australia New Zealand Banking spiked more than 1 percent each, while AMP added 2 percent following a previous session of profit-taking.

BHP Billiton lost more than 3 percent after mud from the miner’s recent dam burst in Brazil was deemed toxic by the United Nations’ human rights agency on Wednesday.

The Australian dollar eased 0.4 percent after business investment slumped by the most on record last quarter, declining by a worse-than-expected 9.2 percent.

Kospi up 0.9 percent

South Korean shares traded above 2,000 points in early trade after November consumer sentiment shot to a 14-month high, according to central bank data released before the market open.

Local automakers rallied, with Hyundai Motor and Kia Motors up by 1 percent each, after South Korea recalled more than 125,000 Volkswagen vehicles.

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2015 to be the warmest year on record: UN

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Humans have pushed global temperatures to historical highs this year, with 2015 set to be the warmest on record thanks to climate change, according to the United Nations.

The World Meteorological Organization (WMO), a branch of the United Nations (UN), said climate change had broken “symbolic thresholds,” with global surface temperatures set to breach a 1 degree Celsius rise from pre-industrial levels – those counted between 1880 to 1899- by year-end.

It’s been a relatively rapid increase, as shown by the fact that temperatures are already up 0.73 degrees Celsius against the period from 1961 to 1990, the report out Wednesday explained.

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This is what India needs to revive manufacturing

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As Prime Minister Modi aims to turn manufacturing into a main growth contributor of India`s economy, new production models are necessary, warns the chairman of one of the country`s largest conglomerates.

“When you want to build a consumer product, test markets and mitigate risks, it makes sense to be very proximate to your ultimate market,” said Anand Mahindra, chairman of the Mahindra Group, a multinational with a wide range of businesses, spanning from aerospace, finance, and defense. Its automobile arm-Mahindra and Mahindra-is currently one of the largest tractor manufacturers in the world.

“Digital technology and things like 3D printing are enabling even more localized manufacturing. I want to make sure that India is ready for that future,” the 60-year old tycoon told CNBC.

The idea of peer-to-peer resources resulting in more personalized production harmonizes well with the holistic economic principles of Mahatma Gandhi, India`s founding father, where every village becomes a self-supporting and self-contained unit, Mahindra explained.

“If we want to prevent a mass migration and avoid the problems China`s suffered, we should enable a number of small scale units with new digital technology and connect it via the cloud to markets.”

New Delhi policymakers are aggressively spearheading an initiative to transform India into a global manufacturing powerhouse – a field dominated by China over the past three decades. Make in India, the centerpiece of the government`s drive, was introduced last year and Modi has since embarked on an international tour to get international business leaders on board.

“I just want to make sure that India doesn`t get left behind focusing on the old model of `Make in India` while the rest of the world moves in at warp speed in this new era,” Mahindra noted, referring to his innovative ideas of digital technology.

So where does the Mahindra Group`s massive productions scale and different verticals fit into the business leader`s vision?

“We are remodeling our group to mirror what society will look like. We will have large enterprises which involve large scale manufacturing and at the same time we are incubating a number of start-ups, which I hope will be in the vanguard of the `small is big` movement.”

But India`s archaic labor laws could make that movement tough to realize.

Asia`s third-largest economy has one of the most rigid labor markets in the world, according to a 2014 World Bank report, with current regulations encouraging firms to stay small instead of hiring more. Modi hopes to carry out a series of structural reforms that would giving companies greater flexibility in hiring and firing workers, measures that experts say will ultimately boost economic growth but they have been met with fierce protest by Indian unions.

“I will not pretend that India is an abundance source already of highly skilled, high tech oriented labor. We have a way to go for that and the government and the private sector have to invest a great amount in skilling them,” said Mahindra.

But once that happens, he believes Indian labor will be ideally suited for that kind of high tech manufacturing due to the nation`s aptitude for engineering.

-CNBC`s Leslie Shaffer contributed to this article.

Copyright 2011 cnbc.com

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Make in India: Big business delivers a report card

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Make in India, the program that is the centerpiece of the Indian government`s drive to attract fresh foreign investment and spur job creation, has scored some early wins, but shortcomings may stymie future successes.

Introduced in September 2014, Make in India is Prime Minister Narendra Modi`s ambitious initiative to transform India into a global manufacturing powerhouse – a field dominated by China over the past three decades.

Since the program`s launch, Modi has pulled out all the stops to court business leaders, traveling to France, Germany, the US, the UK and Canada to personally pitch the campaign.

The drive has had one big early success story: Chinese smartphone maker Xiaomi, which counts India as its second-largest market globally after China, has set up a manufacturing center on the subcontinent. Overall, India is expected to soon supplant the US as the world`s second-largest smartphone market after China.

“We announced our Make in India plans in the beginning of this year,” Manu Jain, chief executive of Xiaomi India, told CNBC. “We thought it would take us two years to set up this manufacturing plant. But surprisingly we were able to set up everything and our production started within seven months.”

That`s stunningly fast for India`s famously slow-moving bureaucracy, and Jain credits cooperation from Xiaomi`s partners as well as the state and central governments for the speed.

Xiaomi, in a tie-up with Taiwan-based contract manufacturer Foxconn, is manufacturing one of its best-selling products in India, the Redmi 2 Prime smartphone.

“When you import goods from another country, the lead time for you to order and bring goods to India is much higher, while if you manufacture in India, the lead time gets reduced, say from four to five weeks to two to three weeks,” Jain explains.

That was a key reason for the decision to “make in India,” he said, noting that the company also wanted to be closer to its Indian consumers so that it could respond more quickly to changing demand. Jain noted that Xiaomi made its move into India even before the program was expanded with more tax benefits.

Jain is very positive on Modi`s program.

“It has been a great step for us. I would actually encourage a large number of companies, whether they`re in smartphone or in other areas also to consider this kind of first step,” Jain said.

But not everyone has seen such quick success with the program, and analysts point to a slew of reforms that are needed to make foreign direct investment (FDI) into India more attractive.

On Nov. 10 the government announced a raft of fresh measures to ease foreign direct investment (FDI) restrictions, including allowing more funds to flow into protected sectors such as e-commerce and banking, as well as permitting the Foreign Investment Promotion Board to approve projects worth up to 50 billion rupees ($756.1 million), up from 30 billion rupees previously.

“To make India a more attractive investment destination, wider-ranging reform is needed,” Shilan Shah, an economist at Capital Economics, said in Nov. 11 note. “Two of the most important areas are easing land acquisition laws and simplifying domestic tax policy. Unfortunately, prospects for reform in both of these areas have taken a hit following the unproductive monsoon session of parliament and, more recently, the (ruling party) BJP`s chastening defeat in the Bihar state assembly election.”

That election had offered a chance for Modi`s Bharatiya Janata Party (BJP) alliance, which has faced pushback on its reform drive, to pick up some seats in the upper house of parliament, where it lacks a majority. The overwhelming loss in the country`s third-most-populous state was seen as a potential sign that the wave of optimism that Modi rode to power may be slipping.

That`s a concern for businesses trying to decide whether to enter the Indian market based on the prospects that reforms and much-needed infrastructure projects will proceed.

Others have also noted that when it comes to doing business, India isn`t quite ready for the big time. The World Bank`s ease of doing business survey, released in October, has ranked India at 130 out of 189 countries.

“There`s still 129 places in the world that are actually easier to do business with than in India right now, which is quite disappointing given the opportunity that exists,” Sanjay Bailur, managing director in India for business advisory firm AlixPartners, told CNBC.

He cited “huge issues” for companies looking to make a strategic decision to expand in India, including poor infrastructure and difficulties sourcing goods.

“Given the tight profit margins that a lot of these companies are running to, given the cost pressure in terms of maintaining pricing at a low level to satisfy local needs, it is a challenging area to try to maintain the business and make it successful within the constraints of an economy like India,” Bailur said.

Rather than making products in India for export – which requires navigating not just poor infrastructure but also complex foreign exchange rules – Bailur said may be easier for companies to first make products in India for the local market.

“Whilst I think the Make in India campaign will work in the long term, it is something that is a positive thing for the country, I think the initial step really should be a `make for India,`” he said. “There`s a large domestic market with increasingly affluent consumers.”

Some companies that have made the strategic decision to put money into India have received a mixed reception for their efforts.

Rio Tinto, for one, has “seen the `good` and the `needs to improve` category,” Alan Davies, the company`s CEO for diamonds and minerals, told CNBC.

The company has a diamond cutting and polishing partnership in Gujarat, employing around 250,000 people to handle diamonds from its Argyle diamond mines in Australia, which are generally exported from India for sale globally.

Rio Tinto has had some slow-moving success on its efforts to bring the Bunder diamond project in Madhya Pradesh – a decade-old find – to production. Davies told CNBC that the government has provided good support and the company was in the final permitting process.

He hopes to market the diamonds to Indians as an additional gift along with the traditional choice of gold when giving gifts for special occasions such as weddings.

But it`s a different story with Rio Tinto`s Orissa iron-ore joint venture in the Odisha province, with the company spending around two decades trying to get project approvals.

“We`ve had some examples where the decision-making has been extremely slow,” Davies said.

It isn`t clear if efforts to eliminate many business headaches will succeed, despite Modi`s best efforts.

Amid a tough September for the reform agenda, Finance Minister Arun Jaitley announced that the government had abandoned a plan to call a special session of parliament to secure approval for the implementation of a goods and services tax (GST) because it lacked political support.

The GST has broad support from businesses, in hope it will streamline India`s tax administration by replacing a myriad of complex taxes charged by the 29 states with a uniform nationwide levy.

Modi has also faced fierce protests against his efforts to overhaul stringent labor laws to give companies more flexibility to hire and fire. And he was defeated on a controversial land acquisition bill that would make it easier for businesses to buy farm land for infrastructure and industrial projects.

But there are hopes the FDI reforms announced in November and other small steps will produce results.

Success stories, such as Xiaomi`s, are likely to help.

“It has been a great step for us,” Xiaomi`s Jain said. “Most of us are confident that over the next few years, India will become a manufacturing hub and many multinational companies, international companies should take advantage of the all the benefits the government is providing.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow