Groupon offers to take the sting out of onion prices in India



NEW DELHI // A discount website offering onions at heavily discounted prices in India has seen an "overwhelming" response as consumers there reel from skyrocketing prices.

Groupon, which offers cut-price deals on everything from restaurant meals to shoes and watches, offered onions at nine rupees (50 fils) a kilogram on Thursday.

By Friday, 8,057 Indian customers had bought the onions. The website had temporarily crashed after 5,000 kilograms of the vegetable had sold.

"The driver behind this is obviously fun. It was meant to generate excitement by selling onions at a knock-down price," said Ankur Warikoo, the chief executive of Groupon India.

The website advertised the deal in a tongue-in-cheek manner, claiming that "people haven't experienced onions in a long, long time" and comparing them to caviar and diamonds.

It was the first time ever the company had put onions on sale and the response, Mr Warikoo said, had been "overwhelming".

"The first day itself we ended up selling 5,000 kilos. Today [Friday] our site crashed completely for 10 minutes. It's been absolutely fantastic."

While food prices have risen across the board in India, the cost of onions had increased dramatically. The spike was caused by supply shortages, with a kilogram costing on average about 60 rupees in some retail markets after prices touched 100 rupees a kilogram in recent weeks.

Market prices of onions "have been a huge talking point", Mr Warikoo said.

"We wanted to sell it at a price that most of us have completely forgotten. This kind of onion price was last seen in 1999."

Customers cannot buy more than one kilogram of onions.

"We deliberately put the cap at one kilo. It is really intended to be something fun," said Mr Warikoo.

High onion costs have become a problem for the Congress Party-led government as it bids for a third consecutive term in general elections expected by May next year.

Onions may not be the most vital source of nutrition but they are regarded as essential to spice-loving palates, which, when dissatisfied, can play a crucial hand in politics.

In January 1980, the late Congress leader, Indira Gandhi, rode back to power on the back of rising onion prices. She waved huge strings of them at campaign rallies and said that a government had no right to govern if it could not control onion costs.

Eighteen years later, an election defeat for the ruling Delhi state government was blamed in part on a surge in onion prices.

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Founder: Jacqueline Perrottet
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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