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State of E-Commerce in india

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  • 1. State of the E-CommerceIndustry in IndiaA study on the Current Trends, Domain Insights,Success Criteria & Investment OpportunitiesAbhishek Mathur8/24/2011Given the MakeMyTrip & JustDial IPO’s, Interest in Consumer Driven Ecommerce has increased bothfrom Investors and Entrepreneurs. At the same time reports of Accounting Harakiri & Amazon’sannounced Entry have cast a doubt on the monetization capabilities. This report studies Ecommerce inIndia and attempts to draw parallels within Sectors and Geographies to identify Investmentopportunities
  • 2. Table of ContentsInvestment Hypothesis............................................................................................................... 3Measuring E-Commerce Success.............................................................................................. 4Ecommerce Verticals ................................................................................................................. 4Demographic Trends.................................................................................................................. 5Market Size................................................................................................................................ 6Financial Analysis ...................................................................................................................... 6The Three Facets of Ecommerce............................................................................................... 7Customer Facing .................................................................................................................... 7Supply Networks .................................................................................................................... 71. Books, Electronics & Apparel....................................................................................... 72. Travel Ticketing ........................................................................................................... 83. Hotel Booking .............................................................................................................. 84. Deals ........................................................................................................................... 8Delivery Channels .................................................................................................................. 81. Inventory Management, Warehousing, Packaging and Shipping:................................. 82. Couriers and Last mile delivery channels:.................................................................... 8Key Growth Drivers...................................................................................................................10Key Challenges / Barriers .........................................................................................................10Online Usage Behavior trends & Key Opportunities ..................................................................11Major Investments in the industry..............................................................................................11Success stories / Important Exits ..............................................................................................12MakeMyTrip...........................................................................................................................12Justdial..................................................................................................................................12Yatra .....................................................................................................................................12Regulatory Advantage & legal frameworks................................................................................13Appendix 1: Evolution of an ECommerce Startup / ECommerce Org Chart...............................14Appendix 2: Fundamental Analysis of Global Ecommerce Players............................................15Appendix 3: Revenue Growth Projections.................................................................................16Appendix 4: Current Revenue Projections.................................................................................17Appendix 5: List of Ecommerce players by category .................................................................17
  • 3. Investment HypothesisIndia, in the last decade has seen rapidlyincreasing disposable incomes leading toincreasing demand for branded goods.However, traditional retail channels areencumbered by inefficient distributionnetworks which can be optimized furtherthrough cutting edge technology enabledplatforms.The last 2-3 years have seen a rapid growth in Internet/Mobile as a channel for Retail Sales.This has led to a widespread belief that the Ecommerce platform has come of age in India andwill leapfrog organized retail as the primary retail channel. Political will has been againstsupplanting traditional Middlemen. A fact which hampers organized direct to consumer retailand strengthens the case for ECommerceA closer look at 2011 data, demonstrates thatprimary drivers for increased Ecommerceusage have been Services (Deals, Ticketing,etc...), whereas Products (Books, Electronics,and Apparel) have been stagnant.Macro Trends are extremely positive.The current real Revenues of the Ecommercemarket is estimated at $1B, which isconsiderably lesser than China ($ 70B) and other comparable economies. Active Internetuser base of 70-80 Million users is roughly 10% of the Mobile user base (700 Million).People from 3300 distinct locations made online transactions in 2010, indicating mass appeal.Valuations (See Section Financial Analysis) are high even by global standards (See Appendix 2:Fundamental Analysis of Global Ecommerce Players). However this report attempts to identifyniches within the Apparel and Deals Categories which present opportunities to invest in. GroupDeals are doing very well globally with Groupon, LivingSocial, etc... Claiming 25% SMEmarketing budget in the US. Given the unorganized and technologically challenged servicesector in India the scope for growth is even higher. JustDial (catering to a similar audience) hasproven a strong need for such Aggregators. Apparel (branded and unbranded) is interestingbecause latest technologies around Augmented Reality, Flexible return policies, Cash Ondelivery and Deep discounts will lead to explosive growth in this category. Additionally, marginsavailable in this space (25% - 200%), lend themselves very well to a quality offering andfantastic customer experience. (http://vizisense.com/html/press/newAgeShopaholics.html)Source: VizisenseSource: Vizisense
  • 4. Measuring E-Commerce SuccessAs per current trends none of the Ecommerce players will operationally break even before2014. The question then is how to differentiate the winners from the laggards. Based on expertopinion the following may be used as surrogate success criteriaa. Transactions per Day An Ecommerce player which can consistently grow and cross 5000Tx/day by 2012 will be well poised to succeed in the long termb. Customer Acquisition cost. A consistent linear reduction in Acquisition costdemonstrates Customer satisfaction and repeat purchase. This would be essential toscalec. Team A Company which can hire and retain top level vertical specific domain expertswill naturally scale well.d. Gross Merchandise Volumes Growth in GMV is a good sign; however this needs to betracked in conjunction with changes in Unit ProfitabilityEcommerce VerticalsEcommerce in India Can be divided into 21 broad verticals (See Appendix 5: List of Ecommerceplayers by category). The Top 4 comprise Travel, Books/Electronics/DVD’s, Apparel and Deals.The rest include Gifts, cakes, Custom memorabilia, Sweets and bakery items, Artwork auction,Baby Care, Movie ticket booking, Airlines portals, Horizontal Players, Movie Rentals, Footwear,Jewellery, Lingerie Straps and Strings, Sports, Health, Fitness, Beauty, Wellness, Perfumes,Groceries, Vegetables, Fruits
  • 5. Demographic TrendsAcross verticals1. 15-24 age group gets 40% traffic. Early adoption amongst this Age group which will leadconsumption in the coming decade is a good sign.2. Low –Middle Income earners dominate3. City wise traffic is Maximum from Mumbai, Delhi, and Bangalore. About 40% traffic isoutside metro and tier 1 cites.4. Primary customers are Young Graduate Adults.Vertical SpecificVertical UniqueUsers /DayAnnualGrowthAllIndiaReachTimeSpent/Visit(Minutes)Sites ConsideredTravel 150,000 100% 4% 8 Makemytrip.com,Cleartrip.com, Yatra.com,Tripadvisor.inBooksElectronics/DVD’s40,000 80% 1.5% 7 Flipkart.com, Infibeam.com,Naaptol.com, Letsbuy.comApparel 30,000 220% 1.25% 9.2 FashionAndYou.com,Yebhi.com,Myntra.com, 99labels.comDeals 425,000 3000% 13% 3.7 Snapdeal.com1. Amongst Books/Electronics/DVD’s offline players with Online presence such asFutureBazaar.com and HomeShop18.com receive as many visits as the pure playEcommerce players. Amazon.com still receives twice as many visits as Indian playerswithin India.2. Amongst apparel, offline brands such as Shoppersstop.com lag pure Ecommerceplayers.3. Among deals, there is a clear monopoly with Snapdeal accounting for more than 90% ofthe traffic. Deals also have a secondary demographic group – Students.Source: Google Trends for Websites & Vizisense
  • 6. Market SizeThe Total Ecommerce Market for 2011 Is estimated to be 50,000 Crores (GMV), an impressivegrowth rate of 47 per cent YoY. This is on the back of 5 Crores ‘active’ internet users in India.Implying a revenue of Rs 1000 per active User. People from more than 3300 Villages and Citieshave purchased something online, including 1100 rural locations.Through an average of Top Down, Bottom Up and Comparable Geography Market Size, I expectIndian E-Commerce to grow at 30-40% Annually and be a Rs 260,000 Crores(GMV) market by2016 (See Appendix 3: Revenue Growth Projections).Financial AnalysisBranded E-tailing (Books, Electronics, Music,Movies, etc…)a. Globally Etailing platforms run on profitablymargin of 1.3 – 2.58%, Indian Ecommerceplatforms may run on even lesser marginsgiven Infrastructural and Payment processingdifficultiesb. A Future Multiple based valuation techniquevalues the Etaiing Market at INR 4200 Croresc. It is rumored that Flipkart is valued at INR4800 Crores, this may be a strategy to deterAmazon from entering India alone. (http://www.vccircle.com/500/news/flipkart-set-to-raise-150m-from-general-atlantic-at-1b-valuation)d. There are concerns around overvaluation and a bubble in Ecommerce. (See:http://www.pluggd.in/stop-blowing-our-ecommerce-bubbles-297/,http://blog.kamadolli.com/2011/08/india-e-commerce-joining-the-rant-wagon/)Travela. MMYT (and other Indian players) need to rampup hotel and Package bookings in order to reachglobal margin standards.b. Reported Revenues are $124.72M for FY11c. Gross bookings $742.5 million for FY11d. MMYT just released Q1’12 reports showing healthy growth in Revenues(http://investors.makemytrip.com/releasedetail.cfm?ReleaseID=598162)Amazon DangDang.comP/S (ttm) 2.24 1.88Return on Equity (TTM): 15.24% NAEV 85.48B 526.24MProfit Margin (TTM): 2.58% 1.30%Expedia Ctrip.com MMYTP/S (ttm) 2.14 11.55 5.62Return onEquity (ttm)15.59% 18.87% 18.82%EV 7.24B 5.32B 664.47MProfit Margin(ttm)12.09% 35.07% 3.87%Value Metrics (2016) INR CroresTotal Retail Sales (GMV) 260000GMV to Revenue 20%Revenue 52000% Share of Etailing 15%Total Etailing Sales 7800P/S 2.02Future Valuation 15756Discount Rate 30%Current Valuation(2011) 4243.549Source: Google FinanceSource: Google Finance
  • 7. The Three Facets of EcommerceEcommerce can be broadly divided into three distinct modules Customer Facing, SupplyNetworks and Delivery Channels (See Appendix 1: Evolution of an ECommerce Startup / ECommerceOrg Chart)Customer Facing1. Web Product Design. User friendly interface is crucial to converting Visitors into Buyers.Typical Ecommerce conversions are 4-6%. China/US Ecommerce sites convert at > 10%levels.2. Customer Acquisition. Digital Marketing channels including SEO, SEM, Social Media,SMS, Emails, Mobile Ads; Offline channels include Print, Radio and TV. Typical Cost perAcquisition range from Rs 400 to Rs 2000. Marketing through Digital Channels is clearlynot cheap. (See Appendix 7: Google AdWords CPC by Segment)(http://www.alootechie.com/news/google-targets-triple-digit-revenue-growth-through-local-ads-indian-smbs) .3. Customer Support (Social Media and Inbound Call Centers)4. Payment Processing. E.g. Avenues.com, ItzCash. Costs can vary from 2-5% depending onvolumes and form of payment. Failure rates and Fraud have considerably reduced to anacceptable levelSupply NetworksSupply networks have evolved differently for each vertical. Merchandiser- Vendor negotiationsgreatly determine Payment terms and Supply Time/reliability. In general the more consolidatedan industry the more organized the network (E.g. Flight Ticketing).1. Books, Electronics & ApparelMost brands/publishers work with national level distributors, who then distribute to regionaldealers. Ecommerce players can work with either Regional Dealers or National Distributors.With volume these can be removed and direct brand relationships need to be built.EcommercePlayers such asFlipkart,Infibeam, F & YouNationalLevelDistributorRegionalDealersBrands:Samsung, LG, Rupa,Levi’s, Van Heusen
  • 8. 2. Travel Ticketing: Ticket Aggregators such as GDS provide fairly straightforwardintegration into flight availability and booking.3. Hotel Booking: A challenge exists in streamlining the various layers of intermediaries/aggregators which exist without adding any real value between the Customer andHotel. Myriad layers of intermediaries with vested interests are not allowing thiscategory to take off in spite of huge margins and high volumes. However as OTA’s gainvolumes they are replacing some of these aggregators and there is an opportunity toconsolidate the value chain.4. Deals: There are no existing networks for aggregating deals. Thus it is a challenge tobuild a Business Development team to collect deals. At the same time it is anopportunity given that margins do not need to be shared with intermediaries.Delivery ChannelsNeeded only for product delivery, deals/ticketing can forgo this expense1. Inventory Management, Warehousing, Packaging and Shipping:Technology enabled CRM systems and demand forecasting are vital to optimize deliverytime & cost.2. Couriers and Last mile delivery channels:(E.g. Aramaex and AFL Couriers) Negotiations determine freight costs, time to deliver, attemptsat delivery, etc.. COD greatly boosts market size; however it comes with its own challengesaround Returns, Incorrect Address, etc... Hence this is more expensive (even excluding freight)than traditional Payment processors.Hotel SideAggregatorsSuch As HbsiAgent SideAggregatorsSuch as Via,Travelocity,ExpediaAffiliates Suchas IxigoOTA’s such as Cleartrip,Travelguru, Yatra, MMTTravel Agents
  • 9. Market share & CompetitionNon travel Retail related sites reachabout 54% (up 14% YoY) of the OnlineAudience in India. With the bulk of thereach coming from Computer Softwaredownloads, Consumer Electronics,Hardware, Comparison shopping andBooksTravel related sites reach 40% (up 13%YoY) of Indian Online users, dominatedby Railways booking sites, followed byOTA’sOf the 7.1 million people visiting the top three OTAs, MakeMyTrip, Yatra Online andClearTrip.com, 71 percent of visitors checked in at only one of the three sites,demonstrating relatively strong brand loyalty among the top players.Competitive Landscape for Travelbased ECommerceSouce: ComscoreCompetitive Landscape of Consumer Ecommerce: ProductsSource:VizisenseShare of Retail Categories by Geography Source: Comscore
  • 10. Key Growth Drivers1. Scale through a superior service quality and high repeat business and referrals.2. Horizontal play, Number of categories served3. Reduce operational expenses by investing in warehouses / Logistics.4. Supplier relationships over other brands and potential new entrants5. Variety of products available under each category.6. Conversion rates for major players are still in the middle single digits, contrast withUS/China where they are above 10%.7. COD consists of 80% of Ecommerce transactions in China, India has much lesser.8. South East Asia represents a huge opportunity for Indian Ecommerce companies toexpand into. Snapdeal is one of the Companies considering going global.Key Challenges / Barriers1. Accounting practices at most ecommerce sites still report revenuesas Gross Merchandise Value. Further deep discounts are treated aslong-term amortisable marketing expenses2. 20 % of the Users account for 64% of the total time spent on theInternet. In order to scale it is important to increase internetconsumption across existing Internet users3. Core network infrastructure in India is not capable of handling ahuge surge in Internet traffic. Only 20% of the Intra Telco network isover robust fiber networks, While Telco’s concentrate on individualnetworks, there aren’t sufficient peering points for traffic crossover.4. Payment system infrastructure continues to be woefullyinadequate.5. It is rumored that SEBI is considering imposing Capital gains tax onVenture capital investments.6. Global players such as Amazon looking to enter India7. Local Language Content – Local Search Engines Like BaiduInternet Distribution System &structureShared-access (Cyber Cafes / Mobile Phones / Universities)population in India is almost as large as the Internetpopulation accessing from work and homeInternet Usage Patterns:Source: Comscore44Figure 1 Unique Visitors (Million) Independent Vs Shared
  • 11. Online Usage Behavior trends & Key Opportunities1. Internet Audience in India skews dramaticallyyoung, three-quarters of the web audience isunder the age of 35. This skew can beattributed to the demographic profile of thecountry, Younger population has access tobetter devices and connectivity .2. 41% of Indian Internet users visited anEducation site3. 14% of Indian Internet users visited a Personal’s site(Dating/Matrimony, etc..)4. 40% of Indian Internet users visited a Career services anddevelopment site5. 77% of Indian Internet users visited a Entertainmentsite (Music/Movies/Videos). However, Online videoviewing in India is still lower than the World Average6. This Age group also has disposable incomes, hencecould be the drivers for Ecommerce7. Comparison shopping is used by only 10% of theIndian Online users, give the price sensitive mindsetthis should increase ( Argentina/Brazil has more than 50% adoption of comparisonshopping)Major Investments in the industryCompany CompanyDescriptionInvestor AmountraisedDate1 Flipkart Online ServicesPvt LtdEcommerce forBooks, Electronics,Music, MoviesGeneral AtlanticPartners$150 Million,($1BValuation)Not Yetdeclared2 Ixigo.com Travel Metasearch SAIF Partners,MakeMyTrip$18.5 Million August10, 20112 Snapdeal (JasperInfoTech)Group deals portal Bessemer Ventures,Nexus Venture Partnersand IndoUS VenturePartners$40 Million July 26,20113 Yebhi.com(Bigshoebazaar)Online shoes, apparel,bags, accessories andgift itemsNexus Venture Partnersand Catamaran Ventures$9 Million July 21,20114 Zovi.com Private Label Apparel SAIF Partners & Others $5.5 Million July 5,20115 Global Online Apparel(FashionAndYou,Apparel, Deals, etc… Mangrove CapitalPartners$4.4 Million July 5,2011Netflix Youku.comP/S (ttm) 4.81 30.88Return on Equity(ttm)83.62% NAEV 12.68B 2.34BProfit Margin (ttm) 8.04% -27.96%Source: Google Finance2Internet Audience Age Group. Souce:Comscore
  • 12. DealAndYou,6 JustDial Local business listingssiteSequoia CapitalGlobal Equities and SAPVentures$10 Million June 6,20117 Exclusively.in Fashion flash sales Tiger GlobalManagement LLC, AccelPartners and HelionVentures$16 Million May 27,20118 ThePrivateSales.com Fashion flash sales Undisclosed $5 Million May 20,20119 Redbus.in (PilaniSoft) Bus Tickets Helion Ventures,Inventus and Seedfund$6.5 Million May 16,201110 Yatra Online Pvt Ltd, online travelcompanyIntel Capital Undisclosed May 13,201111 99labels.com Fashion flash Sales InfoEdge $3.5 Million May 11,201112 Quickr a horizontalclassifieds playerNokia Growth Partners(NGP), Norwest VenturePartners and eBay Inc.$8 Million May 9,201113 Policy Bazaar Financial ProductscomparisonInfoEdge, Intel Capital $10 Million April 21,2011Success stories / Important ExitsMakeMyTripThe MakeMyTrip (MMYT) stock surged 89% on its listing on 12thAugust’2010, and has been thebest IPO to list in the US since Athena health Inc’s IPO in 1997 which surged 97% on listing.JustdialJust Dial’s consolidated total income stood at Rs 189.91 Crores in FY11, representing a CAGR of39.4 per cent. Its profits after tax increased from Rs 1.64 Crores in FY07 to Rs 28.62 Crores inFY11. In FY 2011, the company addressed over 180 million search queries from millions of usersacross platforms. For the year ended March, Just Dial reported a profit after tax of Rs 28.6Crores, up from last year’s Rs 18.4 Crores. Mumbai’s Just Dial plans to go down the IPO pathand has filed documents with SEBI. It seeks to raise Rs 360 Crores through sale of fresh sharesand some more via sale of shares by private equity (PE) investors. PE companies suchas SAIF Partners (21.58 per cent), Sequoia (12.73 per cent) and Tiger Global (21.84 per cent)own large stakes.YatraEmboldened by the success of MakeMyTrip (MMYT) Ltd’s listing on Nasdaq, the US exchange,Yatra.com, one of MMYT’s major competitors, may also go the public offer way. Industry
  • 13. sources peg the IPO figure at $50-80 million (Rs 230-370 Crores). Yatra.com has a market shareof about 30 per cent, while about 48 per cent of the $1 billion (Rs 4,600 Crores) in online travelreservations made in India last year were booked through MMYT.Regulatory Advantage & legal frameworksAs per regulations, foreign companies cannot enter into retail business directly (they can engage in B2Btrading though) – and that’s precisely the reason why you won’t see Yahoo Shopping/Amazon runningtheir operation in India.FDI up to 100% permitted for e-commerce activities subject to the condition that such companies woulddivest 26% of their equity in favor of the Indian public in five years, if these companies are listed in otherparts of the world. Such companies would engage only in business to business (B2B) e-commerce andnot in retail trading
  • 14. Appendix 1: Evolution of an ECommerce Startup / ECommerce Org Chart1. Get ECommerce site up to take transactions (Typically 3-6 months since start)a. Get website ready (either build from scratch or use a hosted shopping cart)b. Setup payment gatewayc. Setup a shipping partnerd. Upload and manage initial list of productse. Setup and manage initial supplier list for products to be drop shipped (or ship from own simplewarehouse)Team needed: Business (customer service, supply chain, operations, legal, etc) + Engineering (1-2 folks shouldsuffice)2. Get to 100 transactions / day & unit profitability (Typically 9 months to 1.5 years since start)a. Optimize website for SEO, put an affiliate marketing program, pay for SEM, social mediab. Expand product list and supplier listc. Setup small warehouse (if customization is required) and manage inventory costsTeam added: Digital marketing, Procurement manager, Supply Chain and Logistics Managers and CustomerService, Increase engineering (User experience, Scalability experts, etc.)3. Get to 500 transactions / day & scale (Typically 2-4 years from start)a. Include brand marketing efforts including TV, print and billboard advertisingb. Expand into adjacent vertical products spaces, add new suppliersc. Keep refining website to include up sell, cross sell and analytics effortsTeam added: Head of brand marketing, Category manager (Merchandise Manager) for each category, Catalogmanager (write product descriptions, take product photos, etc.)4. Show gross profitability and scale beyond 1000 transactionsa. Manage inventory and costs and ensure optimization of logistics and warehousingb. Recruit and manage team for growthc. Look for non-linear sources of traffic to the website, possibly add corporate salesFigure 3 Source http://www.pluggd.in/author/mukund/
  • 15. Appendix 2: Fundamental Analysis of Global Ecommerce PlayersFigure 4 Source: http://blog.kamadolli.com/
  • 16. Appendix 3: Revenue Growth Projections1. US Ecommerce Growth rates have been in the 20-30% range over the past decade2. In India, Broadband PenetrationGrowth(Source:http://rtn.asia/347_indias-broadband-growth-slows-65-december-quarter) >20%, Plus Revenue Per User Growth >10 % will support sustained Ecommercegrowth > 30%3. Related technologies such as Mobilepenetration have grown faster(although later)in India than in US4. Globalization and Cultural convergencewill lead to higher consumptionaspirations5. Adoption amongst Tier3 cities andvillages as well as amongst low incomegroups suggests mass appeal6. Recent technology Innovations havereduced digital fraud to below retailcash fraud rates7. There is an immediate opportunity towin customers buying offline afterlooking for Information Online8. We are looking at an opportunity tocreate the next Airtel / Tata / RelianceThe total retail sales in India will growfrom US$ 395.96 billion in 2011 to US$785.12 billion by 2015http://www.ibef.org/industry/retail.aspx).Currently 3% of retail transactions occuronline, which will grow to 7-9% by 2016.%Age Transactions Online (2016) Ecommerce market (INRCrores)5 1570246 1884297 2198348 2512389 28264310 31404811 34545312 376858Figure 5 Ecommerce Market Size Vs Online as a %age of total retail
  • 17. Appendix 4: Current RevenueProjectionsSensitivity of Yearly Revenues (INR Crores)toConversion rates and Average TransactionSize. These tables are drawn using AverageVisitors from Appendix 7.Appendix 5: List of Ecommerce players by category1. Gifts, cakes etc. Infibeam.com, Fernsnpetals.com, IndianGiftsPortal.com, Talash.com GlimGifts.com2. Books Flipkart.com, Landmarkonthenet.com, A1books.co.in3. Custom designed T-shirt, mug, calendar etc Myntra.com,Zoomin.com, Snapfish.in, Picsquare.com4. ApparelsPantaloons, Shoppersstop.com, Inkfruit.com,UtsavSarees.comGlobusZovi.com5. Sweets and bakery items Mithaimate.com6. Artwork auction Saffronart.com7. A-Z items for Babies Hushbabies.com, Firstcry.com, BalGopal.com, Kidloo.comBabyoye.com8. Movie ticket bookingBookmyshow.comPVRCinemas.com9. Online travel ticketing and hotel booking Irctc.co.in, Redbus.in, MakeMyTrip.com, Yatra.com,TripAdvisor.in, ClearTrip.com, Travelguru.com,Expedia.co.in, Ezeego1.co.in, Ixigo.com, TravelMasti.com,Hotels.com10. Airlines portals Goindigo.in, Indian Airlines, Jetlite.com, Flykingfisher.com, Goair.in, Spicejet.com,Jetairways11. B2C ( Multiple products ) Ebay.in, IndiaTimes, Rediff Shopping, Bigbazar, Homeshop18.com,Shop.zapak.com, Shop.in.com, Tradeus.in, Indiaplaza.in, Egully.com, 20north.comTimtara.comYepmeShopping.comBigadda.com12. Rent a movie BigFlix.com,Seventymm.com13. FootwearYebhi.com,Metro ShoesBata ShoesBeStylish14. Deal a day SnapDeal.com, Dealsandyou.com, Mydala.com, Koovs.com, Grabbon.com,BindaasBargain.com, Taggle.com, SoSasta.com, Dealivore.com, Grako.in, Dealsonline4u.comBagittoday.com 99labels.com Fashionandyou.com Timesdeal.com Rediff-DealHoJaye Dealface.comDealYantra.comBuzzintown DealsDealsNow (For Corporates)15. Electronics, Gadgets, PhonesDell.co.in, Ezone, EDigiWorld, BitFang.comLetsbuy.comLootSpot.comNext.co.in, infibeam.com16. Jewellery Caratlane.com, Suratdiamond.com Ddamas.co.in17. Lingerie Straps and Strings, Ngal Originals, Victoria’s Secret India18. Sports Playgroundonline.com Esportsbuy.com19. Health, Fitness, Beauty, Wellness Health Shoppe, Urbantouch20. Perfumes Perfume2Order, Beautymart.in,PerfumesDirect21. Groceries, Vegetables, Fruits AaramShop.com MandifreshSensitivity 3% 4% 5% 6% 7%300 13 17 22 26 30400 17 23 29 35 40500 22 29 36 43 50600 26 35 43 52 60700 30 40 50 60 71Figure 6, Revenue projections for Books/Electronics/Music/Movies
  • 18. Appendix 6: Vertical specific demographicsOTA & Hotel BookingFigure 7 Daily Unique Visitors by MonthFigure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by AgeTable 1 %Users by City0 20 40 60< 22 - 4.995 - 6.997 - 9.9910 - 14.99> 150 20 40 60below 1515 - 2425 - 3435 - 4445 - 60above 600.25 0.25 0.50 0.75 0.75 0.75 2.25 2.25 3.50 4.75 4.757.2512.00 12.5047.5Each Web propertyreceives on an average150,000 Unique Users /Day (Growing > 100%annually).In a month theseproperties reachedaround 4% of the IndianPopulationUsers spent about 8minutes per visit, enoughtime to research and buy.Primary customers areYoung Graduate Males,Middle Income Groups.Long tail in terms oflower Income groups isalso visibleEarly adoption amongstthe Under 15 and 15-24Age group who will leadconsumption in thecoming decade.Metro’s and Tier onecities account for roughlyhalf the traffic, with theremainder distributedacross India. Showing thelong tail of users
  • 19. Books & ElectronicsFigure 8 Daily Unique Visitors by MonthFigure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by AgeTable 2 %Users by City0 20 40 60< 22 - 4.995 - 6.997 - 9.9910 - 14.99> 150 20 40 60below 1515 - 2425 - 3435 - 4445 - 60above 600.5 0.5 0.5 0.5 0.5 0.8 1.0 1.3 1.3 1.3 1.3 1.3 1.8 2.55.0 6.5 7.510.0 10.046.3Each Web property receiveson an average 40,000Unique Users / Day(Growing > 80% annually).Amazon still gets 80,000Unique visits indicatingopportunity for growth,Homeshop18 andFuturebazaar also get similarnumber of visitsIn a month these propertiesreached around 1.5% of theIndian Population.Users spent 7 minutes pervisit, enough time toresearch & transact.Primary customers areYoung Graduate Males &Females, Middle IncomeGroups. Long tail in terms oflower Income groups is alsovisibleEarly adoption amongst theUnder 15 and 15-24 Agegroup who will leadconsumption in the comingdecade.Long tail in city trafficTypical Conversion rates are4-6%. i.e. revenues of INR36-52 Crores (Appendix 3)
  • 20. ApparelFigure 9 Daily Unique Visitors by MonthFigure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by AgeTable 3 %Users by City0 20 40< 22 - 4.995 - 6.997 - 9.9910 - 14.99> 150 20 40 60below 1515 - 2425 - 3435 - 4445 - 60above 600.25 0.25 0.25 0.50 0.75 0.75 0.75 0.75 0.75 1.00 1.50 1.75 2.258.25 8.25 9.50 9.5053.00Each Web property receiveson an average 30,000Unique Users / Day(Growing > 220% annually).Established offline Brandssuch as Shoppers stop arelagging the New entrantsIn a month these propertiesreached around 1.25% ofthe Indian Population.Users spent 9.2 minutes pervisit, this is higher thantravel, books and electronicsindicating a more engagingexperienceContrary to perceptionmales (60%) outnumberfemales (40%)Primary customers areYoung Graduate Adults,Middle - High IncomeGroups. Long tail in terms oflower Income groups is alsovisibleEarly adoption amongst the15-24 Age group who willlead consumption in thecoming decade.Long tail in city traffic
  • 21. Daily DealsFigure 10 Daily Unique Visitors by Month (TTM)Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by AgeTable 4 %Users by City0 20 40 60< 22 - 4.995 - 6.997 - 9.9910 - 14.99> 150 20 40 60below 1515 - 2425 - 3435 - 4445 - 60above 601.00 1.00 1.00 2.00 2.00 5.00 6.00 6.00 8.00 8.0068.000.0010.0020.0030.0040.0050.0060.0070.0080.00Snapdeal is a clear winnerreceiving on an average425,000 Unique Users / Day(Growing >3000% annually).Remaining websites are farbehind at 30,000 UU’s/DayIn a month Snapdealreached around 13% of theIndian Population.Users spent 3.7 minutes pervisit, indicates casualbrowsing, not enough timefor purchasePrimary customers areStudents/Young GraduateAdults, Middle - HighIncome Groups. Long tail interms of lower Incomegroups is also visibleEarly adoption amongst the15-24 Age group who willlead consumption in thecoming decade.Long tail in city traffic
  • 22. Appendix 7: Google AdWords CPC by SegmentClearly, CPC are highest for Deals and Electronics, whereas Apparel has very low CPC’s