Elite SEM Acquires CPC Strategy

Elite SEM has acquired CPC Strategy, the San Diego based agency known for its expertise in retail, ecommerce and specifically the Amazon Channel, where it expects to drive more than half of its revenue in 2018. The combination with CPC Strategy adds critical scale to Elite’s rapidly growing Amazon practice, bolsters the depth of its expertise in search and social and also delivers a powerful technology asset in CPC strategy proprietary CAPx media and bid optimization platform.

CPC Strategy, with a team of over 125 employees, works with both brands and sellers and provides services including strategy and advisory, media planning and placement, creative and content services, and data and analytics. Clients include Pfizer, Reef, and Guthy Renker, The Honest Company, Hallmark, Nestle, Comvita, Riddell, Unilever's Seventh Generation, and Nutrisystem, as well as many Amazon-only sellers.

The combined entity will have approximately 500 performance media specialists, integrated media strategists, and data scientists. Both companies have a deep commitment to creating the best possible work environment, based on meritocracy, resulting in superior client service and retention. The acquisition follows Elite SEM's 'Experts Only' operating model, which maintains and develops specialization around each practice area while bringing a holistic approach to clients through Integrated Media Strategy and Marketing Science.

The acquisition includes CPC Strategy's proprietary Amazon media and bid optimization platform, CAPx, which provides a substantial competitive advantage through both efficiency and efficacy gains, resulting in superior service and performance gains for their clients. While Elite SEM will continue to work with industry partners and third-party technology, this proprietary solution enables strategy and service teams to address market gaps and provide the best platform recommendation for clients.

Future Retail to merge with Bharti Retail

Kishore Biyani Future Retail Ltd and Bharti Retail Ltd have decided to combine their retail operations to create Rs 15000 crore companies in a move that accelerates the consolidation of India’s organized retail trade. Bharti Retail will get a 10% stake in the combined entity. Future Retail is valued at Rs 5000 crore currently.

The combined company will be demerged into two companies one which will be the front end will retain the name Future Retail and will have 570 stores and a presence in multiple retail formats across 243 cities. The second will be back end, investments and Infrastructure Company and will be listed separately as Future Enterprises Ltd.

Bharti Retail has 203 Easy Day stores currently which generates close to Rs 2000 crore in revenues whereas Future Retail has 300 stores and revenues to close to Rs 13000 crore. Bharti Easy Day retail brand will be retained. Future retail has about Rs 1200 crore debt and Future infrastructure has close to Rs 3500 crore of debt in the books.

The company is looking to have 4000 supermarket or small format stores in India by 2021. Currently it has close to 450 small stores. Shareholders of both Bharti Retail and Future Retail would hold shares in the two new companies. Future retail operates around 350 stores in different parts of the country spread over 11 million feet of retail space. Bharti retail currently operates a network of over stores in multiple formats across 114 cities.

Future Group and Amazon Partnership

From being dismissive about the potential of e-commerce in India to joining hands with the sector, leading ‘brick and mortar’ retailing entities seem to have had a chance of thinking on the former. A week after Future group Kishore Biyani alleged that online retailers were indulging in predatory pricing, the company announced a partnership with Amazon India.

The two companies will jointly sell goods over the internet amid growing friction between online and offline retailers over heavy discounting. Future group will sell more than 45 own labels of apparel, followed by in-house brands in the home, electronics and food categories, while the US headquartered company will handle order fulfillment and customer service for the merchandise on its portal. Both firms will also develop a new line of products across categories to be exclusively sold at Amazon and Future Group’s retail stores.

In its home market, Amazon had similar alliances with retailers such as Target Corp and Toys R US in the past decade though both sourced over time once the online seller gained scale and attracted other large brands. Following the India deal, Future Group’s four dozen own brands such as Lee Cooper, John Miller and Indigo nation will be taken off from online marketplaces where they are currently being sold.

It is also reported that Amazon is planning to open its first brick and mortar store in New York. The company main rivals in India are Flipkart, Snapdeal and other online stores. In the offline market, just three companies – Aditya Birla Madura Garments, Arvind Brands and Future Group either own or sell more than two dozen brands each, thus becoming the preferred options for any online player looking to partner retailers.

Industry insiders also said the Indian retailers move reflects a bid to expand into new distribution channels such as e-commerce in the search of growth. Last month, Snapdeal agreed to create Croma Flagship store on its e-commerce portal to sell electronics items including mobiles, tablets, and laptops.