Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Event-Driven

In a recently published interview, <a href="https://www.livemint.com/companies/news/ikea-finds-mattresses-score-over-bookcases-in-india-1554752934010.html" target="_blank">IKEA's chief executive confirmed </a>that offtake in furniture has been slow at its only store in India at Hyderabad and sales are mostly limited to low-value items and mattresses. Overwhelming crowds had thronged the store for weeks post its opening in August 2018 ( <a href="https://www.smartkarma.com/insights/consumption-diary-as-ikea-storms-india-gsk-wants-a-way-out-actionable-insights-from-smartkarma" target="_blank" data-smartkarma-citation="insights:23284">Consumption Diary: As IKEA Storms India, GSK Wants a Way Out; Actionable Insights from Smartkarma</a> ), suggestive of India's large pent up demand for quality affordable home products. However, during our ground check in the year-end holiday season, we were surprised to note that while visitors came in large numbers, shoppers were sparse in furniture segment and billing counter was nearly empty. Apart from the kitchen supplies area and a good turnout at the food section, shopping seemed lacklustre. Why isn't IKEA's attractive price-product proposition able to convert curious walk-in visitors to loyal customers?
In the detailed note below, we look into possible reasons why IKEA's furniture sales arent commensurate with high footfalls, based on the store visit and our analysis of Indian shopper's preferences/constraints with respect to home products purchase. We believe many shoppers are constrained by access to purchase than affordability, given lack of credit options. We also compare IKEA with existing large home products retailers in India and look at the scope of IKEA's opportunity/challenges as it expands presence across geographies and formats in India.

In a recently published interview, IKEA's chief executive confirmed that offtake in furniture has been slow at its only store in India at Hyderabad and sales are mostly limited to low-value items and mattresses. Overwhelming crowds had thronged the store for weeks post its opening in August 2018 ( Consumption Diary: As IKEA Storms India, GSK Wants a Way Out; Actionable Insights from Smartkarma ), suggestive of India's large pent up demand for quality affordable home products. However, during our ground check in the year-end holiday season, we were surprised to note that while visitors came in large numbers, shoppers were sparse in furniture segment and billing counter was nearly empty. Apart from the kitchen supplies area and a good turnout at the food section, shopping seemed lacklustre. Why isn't IKEA's attractive price-product proposition able to convert curious walk-in visitors to loyal customers?
In the detailed note below, we look into possible reasons why IKEA's furniture sales arent commensurate with high footfalls, based on the store visit and our analysis of Indian shopper's preferences/constraints with respect to home products purchase. We believe many shoppers are constrained by access to purchase than affordability, given lack of credit options. We also compare IKEA with existing large home products retailers in India and look at the scope of IKEA's opportunity/challenges as it expands presence across geographies and formats in India.

IKEA in India: Decoding the Case of the Curious Shopper & Slow Offtake for High-Value Items

Asia consumer research, Investory

Shilpa Krishnan

Asia consumer research

Thematic (Sector/Industry)

Disruption as a theme has fired investor imagination in recent times. The disruption space is mainly a private party though, even as the publicly listed space is evolving. It is easier to find listed companies facing a credible disruption risk, as potential sell ideas. In the first of this series, we present 3 Indian small-cap companies with an established brick-and-mortar model. These are gearing up to be millennial-ready, powered by digital strategies in an effort to survive/thrive in a disruptive market space.1. <a href="https://www.smartkarma.com/entities/20462" target="_blank" data-smartkarma-citation="entities:20462:1">Archies Ltd (AGG IN)</a> : an old popular gift and greeting card store countering disruption in its core business, via <a href="http://www.archiesonline.com" target="_blank">archiesonline.com</a>. 2. <a href="https://www.smartkarma.com/entities/26797" target="_blank" data-smartkarma-citation="entities:26797:1">5Paisa Capital Ltd (5PAISA IN)</a> : an offshoot of <a href="https://www.smartkarma.com/entities/20197" target="_blank" data-smartkarma-citation="entities:20197:1">IIFL Holdings Ltd (IIFL IN)</a> aiming to offer DIY discount broking and robo-advisory services to retail investors in tier2/3 cities and 3. <a href="https://www.smartkarma.com/entities/26798" target="_blank" data-smartkarma-citation="entities:26798:1">Praxis Home Retail Ltd (PRAXIS IN)</a>, an offshoot of the <a href="https://www.smartkarma.com/entities/26799" target="_blank" data-smartkarma-citation="entities:26799:1">Future Retail Ltd (FRETAIL IN)</a> group aiming to create an online marketplace for home furnishing and furniture, via its <a href="http://www.hometown.in" target="_blank">hometown portal</a>

Disruption as a theme has fired investor imagination in recent times. The disruption space is mainly a private party though, even as the publicly listed space is evolving. It is easier to find listed companies facing a credible disruption risk, as potential sell ideas. In the first of this series, we present 3 Indian small-cap companies with an established brick-and-mortar model. These are gearing up to be millennial-ready, powered by digital strategies in an effort to survive/thrive in a disruptive market space.1. Archies Ltd (AGG IN) : an old popular gift and greeting card store countering disruption in its core business, via archiesonline.com. 2. 5Paisa Capital Ltd (5PAISA IN) : an offshoot of IIFL Holdings Ltd (IIFL IN) aiming to offer DIY discount broking and robo-advisory services to retail investors in tier2/3 cities and 3. Praxis Home Retail Ltd (PRAXIS IN), an offshoot of the Future Retail Ltd (FRETAIL IN) group aiming to create an online marketplace for home furnishing and furniture, via its hometown portal

Disruption Diaries: Small-Cap Ideas in the Brick-And-Click Space

India

Praxis Home Retail Limited (PHRL) operates an online portal and retails store for the sale of home furnishing products. The Company offers bed sheets, cushions, and towels, as well as home design, modular kitchen, tiles, plumbing, wallpaper, and flooring services. PHRL serves customers in India.

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Praxis Home Retail Ltd (PRAXIS IN)

IKEA in India: Decoding the Case of the Curious Shopper & Slow Offtake for High-Value Items

In a recently published interview, IKEA's chief executive confirmed that offtake in furniture has been slow at its only store in India at Hyderabad...

Devi Subhakesan

Disruption Diaries: Small-Cap Ideas in the Brick-And-Click Space

Disruption as a theme has fired investor imagination in recent times. The disruption space is mainly a private party though, even as the publicly...

Shilpa Krishnan

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)