State of ecommerce in india
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Given the MakeMyTrip & JustDial IPO’s, Interest in Consumer Driven Ecommerce has increased both from Investors and Entrepreneurs. At the same time reports of Accounting Harakiri & Amazon’s......

Given the MakeMyTrip & JustDial IPO’s, Interest in Consumer Driven Ecommerce has increased both from Investors and Entrepreneurs. At the same time reports of Accounting Harakiri & Amazon’s announced Entry have cast a doubt on the monetization capabilities. This report studies Ecommerce in India and attempts to draw parallels within Sectors and Geographies to identify Investment opportunities

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  • Nice coverage!

    Clearly there is a desperate requirement for some differentiation with so many competing online brands now.. Most of the ecommerce sites need optimizing user experience and other elements like functionality, security and performance; else pay the consequences like what we are seeing in the online retail markets across the world.

    Need more details to understand what, why and how to be done effectively & frugally. Checkout: www.intentree.com
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  • You can see www.indiarunway.com , sell kids high fashion Luxury clothing at the most affordable Indian Prices , we are here to take the biggest share of the Market.
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  • Future of the retail industry belongs to the Indian Ecommerce ,
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  • Abhishek - nice presentation. Could you please share the source of 'users by income' and 'users by city' charts in appendix.
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  • Try MyDeals247.com.... I love this ecommerce site.. totally innovative.. I get what I want.. good bye to other general ecommerce
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  • 1. State of the E-Commerce Industry in India A study on the Current Trends, Domain Insights, Success Criteria & Investment Opportunities Abhishek Mathur 8/24/2011Given 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 ............................................................................................... 7 Customer Facing .................................................................................................................... 7 Supply Networks .................................................................................................................... 7 1. Books, Electronics & Apparel ....................................................................................... 7 2. Travel Ticketing ........................................................................................................... 8 3. Hotel Booking .............................................................................................................. 8 4. Deals ........................................................................................................................... 8 Delivery Channels .................................................................................................................. 8 1. Inventory Management, Warehousing, Packaging and Shipping:................................. 8 2. 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 ..............................................................................................12 MakeMyTrip...........................................................................................................................12 Justdial ..................................................................................................................................12 Yatra .....................................................................................................................................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. Source: VizisenseThe 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 Internet Source: Vizisenseuser 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)
  • 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 criteria a. Transactions per Day An Ecommerce player which can consistently grow and cross 5000 Tx/day by 2012 will be well poised to succeed in the long term b. Customer Acquisition cost. A consistent linear reduction in Acquisition cost demonstrates Customer satisfaction and repeat purchase. This would be essential to scale c. Team A Company which can hire and retain top level vertical specific domain experts will naturally scale well. d. Gross Merchandise Volumes Growth in GMV is a good sign; however this needs to be tracked 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 verticals 1. 15-24 age group gets 40% traffic. Early adoption amongst this Age group which will lead consumption in the coming decade is a good sign. 2. Low –Middle Income earners dominate 3. City wise traffic is Maximum from Mumbai, Delhi, and Bangalore. About 40% traffic is outside metro and tier 1 cites. 4. Primary customers are Young Graduate Adults.Vertical SpecificVertical Unique Annual All Time Sites Considered Users / Growth India Spent/Visit Day Reach (Minutes)Travel 150,000 100% 4% 8 Makemytrip.com, Cleartrip.com, Yatra.com, Tripadvisor.inBooks 40,000 80% 1.5% 7 Flipkart.com, Infibeam.com,Electronics/DVD’s 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.com Source: Google Trends for Websites & Vizisense 1. Amongst Books/Electronics/DVD’s offline players with Online presence such as FutureBazaar.com and HomeShop18.com receive as many visits as the pure play Ecommerce players. Amazon.com still receives twice as many visits as Indian players within India. 2. Amongst apparel, offline brands such as Shoppersstop.com lag pure Ecommerce players. 3. Among deals, there is a clear monopoly with Snapdeal accounting for more than 90% of the traffic. Deals also have a secondary demographic group – Students.
  • 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). Amazon DangDanFinancial Analysis g.com P/S (ttm) 2.24 1.88Branded E-tailing (Books, Electronics, Music, Return on Equity (TTM): 15.24% NA EV 85.48B 526.24MMovies, etc…) Profit Margin (TTM): 2.58% 1.30% Source: Google Finance a. Globally Etailing platforms run on profitably Value Metrics (2016) INR Crores margin of 1.3 – 2.58%, Indian Ecommerce Total Retail Sales (GMV) 260000 platforms may run on even lesser margins GMV to Revenue 20% given Infrastructural and Payment processing Revenue 52000 difficulties % Share of Etailing 15% Total Etailing Sales 7800 b. A Future Multiple based valuation technique P/S 2.02 values the Etaiing Market at INR 4200 Crores Future Valuation 15756 c. It is rumored that Flipkart is valued at INR Discount Rate 30% 4800 Crores, this may be a strategy to deter Current Valuation(2011) 4243.549 Amazon 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/)Travel Expedia Ctrip.com MMYT a. MMYT (and other Indian players) need to ramp P/S (ttm) 2.14 11.55 5.62 up hotel and Package bookings in order to reach Return on 15.59% 18.87% 18.82% Equity (ttm) global margin standards. EV 7.24B 5.32B 664.47M b. Reported Revenues are $124.72M for FY11 Profit Margin 12.09% 35.07% 3.87% (ttm) c. Gross bookings $742.5 million for FY11 Source: Google Finance d. MMYT just released Q1’12 reports showing healthy growth in Revenues (http://investors.makemytrip.com/releasedetail.cfm?ReleaseID=598162)
  • 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 Facing 1. 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 per Acquisition range from Rs 400 to Rs 2000. Marketing through Digital Channels is clearly not 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 on volumes and form of payment. Failure rates and Fraud have considerably reduced to an acceptable 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 & Apparel Regional Dealers Brands: Ecommerce National Players such as Level Samsung, LG, Rupa, Flipkart, Distributor Levi’s, Van Heusen Infibeam, F & YouMost 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.
  • 8. 2. Travel Ticketing: Ticket Aggregators such as GDS provide fairly straightforward integration 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 and Hotel. Myriad layers of intermediaries with vested interests are not allowing this category to take off in spite of huge margins and high volumes. However as OTA’s gain volumes they are replacing some of these aggregators and there is an opportunity to consolidate the value chain. Affiliates Such as Ixigo OTA’s such as Cleartrip, Travelguru, Yatra, MMT Agent Side Hotel Side Aggregators Aggregators Such as Via, Such As Hbsi Travelocity, Expedia Travel Agents 4. Deals: There are no existing networks for aggregating deals. Thus it is a challenge to build a Business Development team to collect deals. At the same time it is an opportunity given that margins do not need to be shared with intermediaries.Delivery ChannelsNeeded only for product delivery, deals/ticketing can forgo this expense 1. 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.
  • 9. Market share & Competition Non travel Retail related sites reach about 54% (up 14% YoY) of the Online Audience in India. With the bulk of the reach coming from Computer Software downloads, Consumer Electronics, Hardware, Comparison shopping and Books Travel related sites reach 40% (up 13% YoY) of Indian Online users, dominated by Railways booking sites, followed by OTA’s Competitive Landscape of Consumer Ecommerce: Products Source:Vizisense Of the 7.1 million people visiting the top three OTAs, MakeMyTrip, Yatra Online and ClearTrip.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 Travel based ECommerce Souce: Comscore Share of Retail Categories by Geography Source: Comscore
  • 10. Key Growth Drivers 1. Scale through a superior service quality and high repeat business and referrals. 2. Horizontal play, Number of categories served 3. Reduce operational expenses by investing in warehouses / Logistics. 4. Supplier relationships over other brands and potential new entrants 5. Variety of products available under each category. 6. Conversion rates for major players are still in the middle single digits, contrast with US/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 to expand into. Snapdeal is one of the Companies considering going global. 44Key Challenges / Barriers 1. Accounting practices at most ecommerce sites still report revenues as Gross Merchandise Value. Further deep discounts are treated as long-term amortisable marketing expenses 2. 20 % of the Users account for 64% of the total time spent on the Internet. In order to scale it is important to increase internet consumption across existing Internet users 3. Core network infrastructure in India is not capable of handling a huge surge in Internet traffic. Only 20% of the Intra Telco network is over robust fiber networks, While Telco’s concentrate on individual networks, there aren’t sufficient peering points for traffic crossover. 4. Payment system infrastructure continues to be woefully inadequate. 5. It is rumored that SEBI is considering imposing Capital gains tax on Venture capital investments. 6. Global players such as Amazon looking to enter India Internet Usage Patterns: 7. Local Language Content – Local Search Engines Like Baidu Source: ComscoreInternet Distribution System &structureShared-access (Cyber Cafes / Mobile Phones / Universities)population in India is almost as large as the Internetpopulation accessing from work and home Figure 1 Unique Visitors (Million) Independent Vs Shared
  • 11. Online Usage Behavior trends & Key Opportunities 1. Internet Audience in India skews dramatically young, three-quarters of the web audience is under the age of 35. This skew can be attributed to the demographic profile of the country, Younger population has access to better devices and connectivity . 2. 41% of Indian Internet users visited an Education site 3. 14% of Indian Internet users visited a Personal’s site 2Internet Audience Age Group. Souce: (Dating/Matrimony, etc..) Comscore 4. 40% of Indian Internet users visited a Career services and development site 5. 77% of Indian Internet users visited a Entertainment Netflix Youku.com P/S (ttm) 4.81 30.88 site (Music/Movies/Videos). However, Online video Return on Equity 83.62% NA viewing in India is still lower than the World Average (ttm) 6. This Age group also has disposable incomes, hence EV 12.68B 2.34B could be the drivers for Ecommerce Profit Margin (ttm) 8.04% -27.96% 7. Comparison shopping is used by only 10% of the Indian Online users, give the price sensitive mindset this should increase ( Argentina/Brazil has more than 50% adoption of comparison shopping) Source: Google FinanceMajor Investments in the industry Company Company Investor Amount Date Description raised1 Flipkart Online Services Ecommerce for General Atlantic $150 Million, Not Yet Pvt Ltd Books, Electronics, Partners ($1B declared Music, Movies Valuation)2 Ixigo.com Travel Metasearch SAIF Partners, $18.5 Million August MakeMyTrip 10, 20112 Snapdeal (Jasper Group deals portal Bessemer Ventures, $40 Million July 26, InfoTech) Nexus Venture Partners 2011 and IndoUS Venture Partners3 Yebhi.com Online shoes, apparel, Nexus Venture Partners $9 Million July 21, (Bigshoebazaar) bags, accessories and and Catamaran Ventures 2011 gift items4 Zovi.com Private Label Apparel SAIF Partners & Others $5.5 Million July 5, 20115 Global Online Apparel Apparel, Deals, etc… Mangrove Capital $4.4 Million July 5, (FashionAndYou, Partners 2011
  • 12. DealAndYou,6 JustDial Local business listings Sequoia Capital $10 Million June 6, site Global Equities and SAP 2011 Ventures7 Exclusively.in Fashion flash sales Tiger Global $16 Million May 27, Management LLC, Accel 2011 Partners and Helion Ventures8 ThePrivateSales.com Fashion flash sales Undisclosed $5 Million May 20, 20119 Redbus.in (PilaniSoft) Bus Tickets Helion Ventures, $6.5 Million May 16, Inventus and Seedfund 201110 Yatra Online Pvt Ltd, online travel Intel Capital Undisclosed May 13, company 201111 99labels.com Fashion flash Sales InfoEdge $3.5 Million May 11, 201112 Quickr a horizontal Nokia Growth Partners $8 Million May 9, classifieds player (NGP), Norwest Venture 2011 Partners and eBay Inc.13 Policy Bazaar Financial Products InfoEdge, Intel Capital $10 Million April 21, comparison 2011Success stories / Important ExitsMakeMyTripThe MakeMyTrip (MMYT) stock surged 89% on its listing on 12th August’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 Chart 1. 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 gateway c. Setup a shipping partner d. Upload and manage initial list of products e. Setup and manage initial supplier list for products to be drop shipped (or ship from own simple warehouse)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 media b. Expand product list and supplier list c. 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 advertising b. Expand into adjacent vertical products spaces, add new suppliers c. 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 transactions a. Manage inventory and costs and ensure optimization of logistics and warehousing b. Recruit and manage team for growth c. Look for non-linear sources of traffic to the website, possibly add corporate sales Figure 3 Source http://www.pluggd.in/author/mukund/
  • 15. Appendix 2: Fundamental Analysis of Global Ecommerce Players Figure 4 Source: http://blog.kamadolli.com/
  • 16. Appendix 3: Revenue Growth Projections 1. US Ecommerce Growth rates have been in the 20-30% range over the past decade 2. In India, Broadband Penetration Growth(Source: http://rtn.asia/347_indias-broadband- growth-slows-65-december-quarter) > 20%, Plus Revenue Per User Growth > 10 % will support sustained Ecommerce growth > 30% 3. Related technologies such as Mobile penetration have grown faster (although later)in India than in US 4. Globalization and Cultural convergence will lead to higher consumption aspirations 5. Adoption amongst Tier3 cities and villages as well as amongst low income groups suggests mass appeal 6. Recent technology Innovations have reduced digital fraud to below retail cash fraud rates 7. There is an immediate opportunity to win customers buying offline after looking for Information Online 8. We are looking at an opportunity to create the next Airtel / Tata / Reliance The total retail sales in India will grow %Age Transactions Online (2016) Ecommerce market (INR Crores) from US$ 395.96 billion in 2011 to US$ 5 157024 6 188429 785.12 billion by 2015 7 219834 http://www.ibef.org/industry/retail.aspx). 8 251238 Currently 3% of retail transactions occur 9 282643 10 314048 online, which will grow to 7-9% by 2016. 11 345453 12 376858 Figure 5 Ecommerce Market Size Vs Online as a %age of total retail
  • 17. Appendix 4: Current Revenue Sensitivity 3% 4% 5% 6% 7%Projections 300 13 17 22 26 30 400 17 23 29 35 40Sensitivity of Yearly Revenues (INR Crores)to 500 22 29 36 43 50Conversion rates and Average Transaction 600 26 35 43 52 60Size. These tables are drawn using Average 700 30 40 50 60 71Visitors from Appendix 7. Figure 6, Revenue projections for Books/Electronics/Music/MoviesAppendix 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 Mandifresh
  • 18. Appendix 6: Vertical specific demographicsOTA & Hotel Booking Each Web property receives on an average 150,000 Unique Users / Day (Growing > 100% annually). In a month these properties reached around 4% of the Indian Population Users spent about 8 minutes per visit, enough time to research and buy. Figure 7 Daily Unique Visitors by Month Primary customers are Young Graduate Males, > 15 above 60 Middle Income Groups. 10 - 14.99 45 - 60 Long tail in terms of 7 - 9.99 35 - 44 5 - 6.99 25 - 34 lower Income groups is 2 - 4.99 15 - 24 also visible <2 below 15 Early adoption amongst 0 20 40 60 0 20 40 60 the Under 15 and 15-24 Age group who will lead consumption in the Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by Age decade. coming Metro’s and Tier one 47.5 cities account for roughly half the traffic, with the remainder distributed across India. Showing the long tail of users 12.00 12.50 7.25 3.50 4.75 4.75 0.25 0.25 0.50 0.75 0.75 0.75 2.25 2.25 Table 1 %Users by City
  • 19. Books & Electronics Each Web property receives on an average 40,000 Unique Users / Day (Growing > 80% annually). Amazon still gets 80,000 Unique visits indicating opportunity for growth, Homeshop18 and Futurebazaar also get similar number of visits In a month these properties reached around 1.5% of the Figure 8 Daily Unique Visitors by Month Indian Population. Users spent 7 minutes per > 15 above 60 visit, enough time to 10 - 14.99 45 - 60 research & transact. 7 - 9.99 35 - 44 Primary customers are 5 - 6.99 25 - 34 Young Graduate Males & 2 - 4.99 15 - 24 <2 below 15 Females, Middle Income Groups. Long tail in terms of 0 20 40 60 0 20 40 60 lower Income groups is also visible Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3 Early adoption amongst the%Users by Age Under 15 and 15-24 Age group who will lead consumption in the coming decade. 46.3 Long tail in city traffic Typical Conversion rates are 4-6%. i.e. revenues of INR 36-52 Crores (Appendix 3) 10.0 10.0 7.5 5.0 6.5 0.5 0.5 0.5 0.5 0.5 0.8 1.0 1.3 1.3 1.3 1.3 1.3 1.8 2.5 Table 2 %Users by City
  • 20. Apparel Each Web property receives on an average 30,000 Unique Users / Day (Growing > 220% annually). Established offline Brands such as Shoppers stop are lagging the New entrants In a month these properties reached around 1.25% of the Indian Population. Users spent 9.2 minutes per Figure 9 Daily Unique Visitors by Month visit, this is higher than travel, books and electronics indicating a more engaging > 15 above 60 experience 10 - 14.99 45 - 60 Contrary to perception 7 - 9.99 35 - 44 5 - 6.99 25 - 34 males (60%) outnumber 2 - 4.99 15 - 24 females (40%) <2 below 15 Primary customers are Young Graduate Adults, 0 20 40 0 20 40 60 Middle - High Income Groups. Long tail in terms of Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by Age Income groups is also lower visible Early adoption amongst the 15-24 Age group who will lead consumption in the 53.00 coming decade. Long tail in city traffic 8.25 8.25 9.50 9.50 0.25 0.25 0.25 0.50 0.75 0.75 0.75 0.75 0.75 1.00 1.50 1.75 2.25 Table 3 %Users by City
  • 21. Daily Deals Snapdeal is a clear winner receiving on an average 425,000 Unique Users / Day (Growing >3000% annually). Remaining websites are far behind at 30,000 UU’s/Day In a month Snapdeal reached around 13% of the Indian Population. Users spent 3.7 minutes per visit, indicates casual Figure 10 Daily Unique Visitors by Month (TTM) browsing, not enough time for purchase Primary customers are > 15 above 60 10 - 14.99 45 - 60 Students/Young Graduate 7 - 9.99 35 - 44 Adults, Middle - High 5 - 6.99 25 - 34 Income Groups. Long tail in 2 - 4.99 15 - 24 terms of lower Income <2 below 15 groups is also visible Early adoption amongst the 0 20 40 60 0 20 40 60 15-24 Age group who will lead consumption in the Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3%Users by Age decade. coming Long tail in city traffic 80.00 68.00 70.00 60.00 50.00 40.00 30.00 20.00 5.00 6.00 6.00 8.00 8.00 10.00 1.00 1.00 1.00 2.00 2.00 0.00 Table 4 %Users by City
  • 22. Appendix 7: Google AdWords CPC by SegmentClearly, CPC are highest for Deals and Electronics, whereas Apparel has very low CPC’s