How is the E-Commerce industry in India shaping up ? Accel Partners India provides some key insights into how the industry is transforming itself
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How is the E-Commerce industry in India shaping up ? Accel Partners India provides some key insights into how the industry is transforming itself

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Accel Partners India has completed a comprehensive study on the e-Commerce sector in India. The study provides key insights into how the e-commerce landscape is transforming itself and what some of ...

Accel Partners India has completed a comprehensive study on the e-Commerce sector in India. The study provides key insights into how the e-commerce landscape is transforming itself and what some of the key takeaways are - categories, buying trends, growth rates, payments and what holds for the future

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  • Full Name Full Name Comment goes here.
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  • very insightful, good data points!
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  • its fine and good the data is very useful , thank you for the hard work in presenting the data
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  • Saved my day.. very well compiled and just the kind of information that I was looking for. Thanks Accel India
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  • Amazing compilation of information. I think that this slide will be the starting block for many of the analysis and reports that we can prepare for the industry. Good depth of information too.

    Off the top of my head, I cannot say that any particular information is missing.
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How is the E-Commerce industry in India shaping up ? Accel Partners India provides some key insights into how the industry is transforming itself How is the E-Commerce industry in India shaping up ? Accel Partners India provides some key insights into how the industry is transforming itself Presentation Transcript

  • India e-commerce Accel Partners 2014
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 2
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 3
  • Executive summary 4 $2Bn 2013 $8.5Bn 2016P Online Shopping defined in this presentation does not include travel, ticketing and food ordering – only physical goods commerce Online shopping of physical goods in India, will grow to $8.5Bn in 2016. Number of online shoppers in India will more than double to 40M. Key finding 2x Indian shoppers X 1.1x number of orders per year per shopper X 2x average order value 63% CAGR KEY FINDING 25% CAGR 20M 40M CY2013 CY2016P Indian online shoppers will double Accel estimates and Industry sources
  • $278 M $559 M $2,811 M CY2012 CY2013 CY2016P Fashion + Footwear + Accessories GMV INR 1,080 INR 1,860 INR 3,600 CY2012 CY2013 CY2016P Increasing average order value Executive summary Key findings 5 67% 25% CAGR KEY FINDING 1.  Last year there was a significant jump in average order value as there was a penetration of new categories like jewellery, home décor etc. 2.  Also, users are becoming more comfortable buying higher priced items online. 100% Growth 71% CAGR 1.  Last year was the rise of the fashion category – fashion e-commerce GMV doubled since 2012. 2.  Given the young demographic which is shopping for latest looks online and increasing choice online – we estimate that this category will see 400% growth in the next 3 years and rival electronics and mobile category in GMV. Accel estimates and Industry sources Average order values climbing up rapidly Fashion category doubled last year
  • Executive summary 6 1x 8x 27x 2012 2013 2016P Online Shopping defined in this presentation does not include travel, ticketing and food ordering 1x 4x 24x Mobile shopping is seeing phenomenal growth Women influenced sales will grow 5x in next 3 years 1.  Mobile shopping infrastructure is improving – smartphones, connectivity, mobile websites and apps 2.  People are becoming more comfortable in ordering higher priced items online 1.  35% of online GMV in 2016 will be influenced by women 2.  Key factor in this growth is increasing supply of women specific categories e.g. jewellery, lingerie, motherhood products Trends 2012 2013 2016P Accel estimates and Industry sources TRENDS
  • Executive Summary 7 Trends: Rise of EMIs &Wallets •  With increasing order values, we are seeing an uptick of EMI payments •  3rd party wallets albeit a new phenomenon, have a strong value proposition and will be quick to become popular – similar to China TRENDS 60% 16% 12% 12% 1% 0% 50% 12% 15% 11% 5% 7% COD Credit Cards Debit Cards Net banking EMI 3rd party wallets Indian payment landscape - rise of EMIs and Wallets (Total: 100%) 2013 2016P Accel estimates, Accel portfolio companies and Industry sources: PayU, EMVantage
  • Executive summary 8Online Shopping defined in this presentation does not include travel, ticketing and food ordering More penetration in Tier-II and Tier-III towns New shoppers will come from the 40M+ Gen-Y FB users 1.  Tier 2 cities growing much faster in eCommerce adoption than Tier 1 2.  Some states completely lagging in ecommerce, waiting for infrastructure to be put in place 1.  Potentially 40M shoppers between ages of 19 – 24 years, will start spending money online 2.  These shoppers also have a propensity to spend more money than Gen-X shoppers Growth factors 20M Gen-Y shoppers 20M Gen-X shoppers GROWTH FACTORS Accel estimates, Google, Facebook, NSSO, Accel portfolio companies
  • Enough headroom for growth Online retail is still a very small portion of retail in India 9 Online sales, 4 Mn, 2% Offline sales, 243 Mn, 98% 247Mn mobiles shipments in India CY2013 Online sales, 45 Mn, 7% Offline sales, 555 Mn, 93% 600Mn books sold in India CY 2013 Online sales, $0.08 Bn, 0.2% Offline sales, $44.92 Bn, 99.8% USD 45Bn jewellery sales in India CY 2013 Online sales, $0.5 Bn, 1% Offline sales, $42 Bn, 99% USD 43Bn fashion + footwear sales in India CY 2013 Accel estimates, Accel portfolio companies and industry sources: CMR, FICCI, Deloitte GROWTH FACTORS
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 10
  • $816 M $1,983 M $8,519 M CY2012 CY2013 CY2016P Annualized online shopping GMV Growth of India online shopping 11 Market Trends Growth Factors Payments BRICS 140 M 213 M 400 M CY2012 CY2013 CY2016P Internet users in India % of internet users who visit e- commerce sites = 60% 4M 5M 12M CY2012 CY2013 CY2016P # of orders per month 3.00% 2.70% 2.90% CY2012 CY2013 CY2016P Conversion from visitors to buyers 1.50 1.55 1.70 CY2012 CY2013 CY2016P Orders per buyer per month $18 $31 $60 CY2012 CY2013 CY2016P Average order value Accel estimates, Accel portfolio companies, comScore & IAMAI
  • Growth of India online shopping 12 Market Trends Growth Factors Payments BRICS 140 M 213 M 400 M CY2012 CY2013 CY2016P Internet users in India Accel estimates, Accel portfolio companies, comScore & IAMAI
  • Growth of India online shopping 13 Market Trends Growth Factors Payments BRICS 140 M 213 M 400 M CY2012 CY2013 CY2016P Internet users in India % of internet users who visit e- commerce sites = 60% 3.00% 2.70% 2.90% CY2012 CY2013 CY2016P Conversion from visitors to buyers •  India e-commerce market will start maturing and display characteristics similar to China – which traditionally has higher conversion rates (nearly 3.5%) •  This is due to e-commerce being only choice for availability of goods in parts of the country and easy payment options like COD – which are not problems in western countries Accel estimates, Accel portfolio companies, comScore & IAMAI
  • Growth of India online shopping 14 Market Trends Growth Factors Payments BRICS 140 M 213 M 400 M CY2012 CY2013 CY2016P Internet users in India % of internet users who visit e- commerce sites = 60% •  As e-commerce sites gain trust, users are beginning to order more frequently •  Also, repeat users – acquired more than 1yr old - are more comfortable ordering online and order significantly more than first time buyers 4M 5M 12M CY2012 CY2013 CY2016P # of orders per month 3.00% 2.70% 2.90% CY2012 CY2013 CY2016P Conversion from visitors to buyers 1.50 1.55 1.70 CY2012 CY2013 CY2016P Orders per buyer per month •  India e-commerce market will start maturing and display characteristics similar to China – which traditionally has higher conversion rates (nearly 3.5%) •  This is due to e-commerce being only choice for availability of goods in parts of the country and easy payment options like COD – which are not problems in western countries Accel estimates, Accel portfolio companies, comScore & IAMAI
  • Growth of India online shopping 15 Market Trends Growth Factors Payments BRICS 140 M 213 M 400 M CY2012 CY2013 CY2016P Internet users in India % of internet users who visit e- commerce sites = 60% •  Last year there was a significant jump in average order value as there was a penetration of new categories like jewellery, home décor etc •  Also, users are becoming more comfortable buying higher priced items online 4M 5M 12M CY2012 CY2013 CY2016P # of orders per month 3.00% 2.70% 2.90% CY2012 CY2013 CY2016P Conversion from visitors to buyers 1.50 1.55 1.70 CY2012 CY2013 CY2016P Orders per buyer per month $18 $31 $60 CY2012 CY2013 CY2016P Average order value Accel estimates, Accel portfolio companies, comScore & IAMAI
  • Growth of India online shopping 16 Market Trends Growth Factors Payments BRICS 140 M 213 M 400 M CY2012 CY2013 CY2016P Internet users in India % of internet users who visit e- commerce sites = 60% •  Last year there was a significant jump in average order value as there was a penetration of new categories like jewellery, home décor etc •  Also, users are becoming more comfortable buying higher priced items online 4M 5M 12M CY2012 CY2013 CY2016P # of orders per month 3.00% 2.70% 2.90% CY2012 CY2013 CY2016P Conversion from visitors to buyers 1.50 1.55 1.70 CY2012 CY2013 CY2016P Orders per buyer per month $18 $31 $60 CY2012 CY2013 CY2016P Average order value $816 M $1,983 M $8,519 M CY2012 CY2013 CY2016P Annualized online shopping GMV Accel estimates, Accel portfolio companies, comScore & IAMAI
  • Other observations 17 Market Trends Growth Factors Payments BRICS 1.  ~200M of Indians will come online in next 3 years 2.  Majority of these will come online on smartphones 3.  E-Commerce companies are building their brands, thus gaining trust of users 1.  Existing shoppers shop more number of times than new shoppers (in that year) 2.  As India’s e-commerce market grows the proportion of existing shoppers will increase from 30% (in 2013) to 50% (in 2016) 13M 20M 40M CY2012 CY2013 CY2016P # of online shoppers in India 3.4 3.2 3.55 CY2012 CY2013 CY2016P # of orders per customer / year Accel estimates & Accel portfolio companies
  • E-commerce is a small sliver of Indian retail 18 91.0% 8.7% 0.3% Unorganized retail Organized retail - offline Organized retail - online 92.0% 7.8% 0.2% 2012 2013 Market Trends Growth Factors Payments BRICS Accel estimates & Deloitte
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 19
  • Mobile There is a traffic to revenue gap on mobile e-commerce in India 20 Factors leading to major adoption of mobile as a channel: •  70% of the growth in Indian internet users was mobile only •  Showrooming – a growing habit Reasons why there is not a 1:1 conversion of traffic to mobile: •  Most e-retailers do not have mobile optimized sites •  Most transactions are for low ticket items •  Mobile marketing budgets are < 10% of overall digital marketing budgets, even though they have increased 100% Y-o-Y, even though overall ad spends have increased 20% Y-o-Y 23% 27% 33% 9% 10% 33% India China Japan Mobile revenue share is lagging mobile traffic share in India and China Mobile Traffic % 9% 4% N/A 9.8% India Brazil Russia China India vs rest of BRICS - mobile shopping GMV as % of overall GMV 1x 8x 27x 2012 2013 2016 Mobile shopping grew 800% in 2013, we expect it to grow at a 150% CAGR till 2016 Market Trends Growth Factors Payments BRICS Accel estimates, Accel portfolio companies, CNNIC and other industry sources
  • $122 M / 1x $511 M / 4x $3Bn / 24x 2012 2013 2016P Women influenced GMV Women shoppers – a growing force 21 Male Female Women spend 60% more time on jewellery sites than men Male Female Women spend 40% more time on fashion sites 1.3x 1.1x 1.0x Luxury/Jewellery Apparel Home furnishings Women spend upto 30% more time on luxury sites than on home furnishing Market Trends Growth Factors Payments BRICS 15% of market 26% of market 35% of market 1.  Working women segment grew 43% in 2013 and constitutes nearly 10% of Active internet users in India according to i-Cube & IAMAI 2.  Categories like baby care, home décor, jewellery etc have traditionally been influenced by women decision makers. As more choice become available more women are shopping online. Accel estimates, Accel portfolio companies & comScore
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 22
  • 149M 132M 132M 102M 19M 40M 20M 8M 13% 30% 15% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0M 20M 40M 60M 80M 100M 120M 140M 160M 13 - 18 19 - 24 25 - 30 31 - 36 20M new shoppers could come just from the 19-24 age group India population FB users (2013) FB users % Young India will become dominant presence in e-Commerce 23 Market Trends Growth Factors Payments BRICS Young Indians (19-24yrs) are more comfortable with online services e.g. FB and thus could potentially add upto 40M new shoppers in next 3 years – if we just take the Facebook users Accel estimates, NSSO, Facebook
  • E-commerce friendly states 24 •  Top 3 e-commerce states •  Delhi-NCR •  Karnataka •  Maharashtra •  Large states with very little ecommerce presence: •  Bihar •  Uttrakhand •  Chhatisgarh •  Top 10 cities: 1.  Delhi 2.  Bangalore 3.  Mumbai 4.  Pune 5.  Hyderabad 6.  Chennai 7.  Kolkata 8.  Ahmedabad 9.  Jaipur 10.  Panaji Central & North-Eastern India appears to have low adoption of e-commerce Market Trends Growth Factors Payments BRICS Accel estimates, Accel portfolio companies, Google
  • Categories Books 7% Mobile, Tablets & Accessories 35% Computers, Cameras, Electronics & Appliances 18% Health & Personal care 2% Babycare 3% Fashion, Footwear & Accessories 28% Jewellery 2% Home décor 3% Others 2% Categories by GMV (%) Books 21% Mobile, Tablets & Accessories 9% Computers, Cameras, Electronics & Appliances 10%Health & Personal care 4% Babycare 8% Fashion, Footwear & Accessories 35% Jewellery 1% Home décor 8% Others 4% Categories by # of trxns. (%) Books category contributed to 21% of the transactions … … but only 7% of the GMV Market Trends Growth Factors Payments BRICS Accel estimates & Accel portfolio companies
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 26
  • Payments 27 COD 60% Credit Cards 16% Debit Cards 11% Net banking 12% EMI 1% 2013 Market Trends Growth Factors Payments BRICS With most e-commerce players launching their wallets, we believe that 3rd party wallets will become a significant alternative to COD in coming years. COD 50% Credit Cards 12% Debit Cards 15% Net banking 11% EMI 5% 3rd party wallets 7% 2016P Accel estimates & Accel portfolio companies
  • Contents S.No. Content Slide Number 1. Summary 3 - 9 2. Current Market Information 10 - 18 3. Trends 19 - 21 4. Growth Factors 22 - 25 5. Payments 26 - 27 6. BRICs comparison 28 - 31 28
  • Indian online shopping has tremendous growth potential Significant headroom for growth 29 1,249 200 144 1,358 213 99 66 591 17% 50% 46% 44% 0% 10% 20% 30% 40% 50% 60% - 500 1,000 1,500 India Brazil Russia China InMillions Only 17% of Indians are online, compared to >40% for other countries … Population Online population Internet penetration % 213 99 66 591 19 31 30 280 9% 31% 45% 47% 0% 20% 40% 60% 80% 100% - 100 200 300 400 500 600 700 India Brazil Russia China inMillions … only 9% of online Indians shop, compared to >30% in other countries Online population Online shoppers Online shopper penetration % Market Trends Growth Factors Payments BRICs Accel estimates & Industry sources
  • BRICs B2C online shopping market India is quite small compared to rest of BRIC countries… 30 $ 1.8 Bn / 1x $ 13 Bn / 7x $ 16 Bn / 9x $ 106 Bn / 60x India Brazil Russia China Indian e-Commerce market is $1.8Bn, 60x smaller than the Chinese market … $ 93 $ 421 $ 533 $ 380 India Brazil Russia China … annual spend by an Indian online shopper is $93 - 4x smaller than Chinese one Market Trends Growth Factors Payments BRICs Accel estimates & Industry sources
  • 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Onlineshopperpenetration Internet Penetration (size of bubble indicates market size) Indian e-commerce needs better infrastructure to grow 88% of the growth in India online shopping will come from more Indians online Infrastructure issues Shopping issues Happy shoppers Willing shoppers but infrastructure problems 31 India China Brazil Russia Market Trends Growth Factors Payments BRICs Accel estimates & Industry sources
  • CONTACT Prashanth Prakash Partner, Accel Partners 32 Subrata Mitra Partner, Accel Partners Prayank Swaroop Senior Associate, Accel Partners prayank@accel.com
  • Disclaimer The information and opinions in this Report have been prepared or complied by ACCEL PARTNERS and are subject to change/modification without any notice. The information contained in this Report is believed to be accurate at the time of date of issue of this Report, but no representation or warranty is given (express or implied) as to its accuracy, completeness or correctness. ACCEL PARTNERS accepts no liability whatsoever for any direct, indirect or consequential loss or damage arising in any way from any use of or reliance placed on this material for any purpose. The contents of this Report are the copyright of ACCEL PARTNERS. Nothing on this Report constitutes advice, nor creates any contractual relationship. 33