The Hindu Business Line : SpiceJet plans joint venture with UK-based online retailer

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SpiceJet plans joint venture with UK-based online retailer

To foray into merchandising on board by early next year

Mr Samyukth Sridharan

Purvita Chatterjee

Mumbai, Dec. 12 The UK-based online retailer UnderFivePound.com is forging a joint venture with the low-cost carrier (LCC) SpiceJet, in which the latter would have a majority stake. SpiceJet has decided to outsource its logistics and retailing operations to UnderFivePound.com and expects to make a foray into merchandising on board by early next year.

“There is going to be a joint venture with UnderFivePound.com and we are in the final stages of tying up with the UK-based online retailer. We would be adhering to the regulations governing retail in the country and would be having a majority stake of 51 per cent, while the balance would be held by our exclusive partner. With this joint venture, we are making a foray into merchandising and would commence operations by next year,” Mr Samyukth Sridharan, Chief Commercial Officer, SpiceJet, told Business Line.

UnderFivePound.Com, through its Web site, sells a range of men’s, women’s and children’s clothing along with other items such as jewellery and houseware gadgets. Known for its ‘amazing’ offers, the Web site, as its name suggests, sells products for less than £5 and is known for its discounts and freebies.

Keeping the pricing of the merchandise in sync with the image of a LCC, SpiceJet expects to sell value-for-money items on board, to its customers. As Mr Sridharan said: “As we are a low-cost airline and believe in keeping down prices, our merchandise would be value-for-money items as well”.

Outsourcing the backend retailing and logistics functions to the online company in the UK, the airline, to begin with, will be vending watches and imitation jewellery brands to passengers on board its aircraft.

“We would have merchandise which would get branded under SpiceJet. UnderFivePound.com would be providing backend support for our retail operations and we would be sourcing low-end watches, imitation jewellery and branded apparel from them and selling the same to our passengers on board,” added Mr Sridharan.

At the same time, the LCC has been tapping into other sources of non-passenger related revenues. For instance, it is now looking at branding opportunities on its boarding cards and has managed to rope in advertisers such as Whirpool and Tata AIG for the same.

Besides, it is already selling travel related health insurance from Tata AIG and intends extending it to general insurance products in the future.

Added Mr Sridharan, “We would be adding general insurance to our existing insurance business and this would be typically in the area of non-life and non-health related insurance.”

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