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Analysis of E-Commerce Industry in India

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This presentation gives detailed and in depth Analysis of E-Commerce Industry in India. It has been made by integrating latest available data regarding this industry on various websites which are trustworthy. This is for educational purpose only. Hope you will find it helpful.

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Analysis of E-Commerce Industry in India

  1. 1. Analysis of E-Commerce Industry in India By Wadhonkar Pavankumar D. Department of Management Studies, IIT Roorkee IIT ROORKEE
  2. 2. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis The e-commerce sector in India has grown by 34% (CAGR) since 2009 to touch 16.4 billion USD in 2014. The sector is expected to be in the range of 22 billion USD in 2015 $ 22 Bn 2015P $ 3.8 Bn 2009 34% CAGR Asia-Pacific emerged as the strongest business-to-consumer (B2C) e-commerce region in the world in 2013 • Sales of around 567.3 billion USD, a growth of 45% over 2012 • Ranked ahead of Europe (482.3 billion USD) and North America (452.4 billion USD). India’s internet penetration with total e-households at 46 million against China’s 207 million is one of the reasons behind India’s poor B2C sales growth. • The US, UK and China together account for 57% of the world’s total B2C e-commerce sales in 2013 with China having total sales of 328.4 billion USD. • As against this, India had sales of only 10.7 billion USD.
  3. 3. 0% 10% 20% 30% 40% 50% 60% 70% 80% 2012 2013 2014 2015(Est.) 2016(Est.) 2017(Est.) Online travel sales volume in India from 2012 to 2017 Source: eMarketer Series 1 Column1 Column2 Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis • Currently, e-Travel comprises 70% of the total e- commerce market. • It has been observed that online travel sales are maturing in most of the major economies. Same trend is observed in India as well.
  4. 4. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis By 2020, eTail in India is expected to account for 3% of total retail. orders per million are expected to more than double from five million in 2013 to 12 million by 2016 it is still miniscule compared to the figure in China, where the share is 8-10%.
  5. 5. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis By 2020, eTail in India is expected to account for 3% of total retail. orders per million are expected to more than double from five million in 2013 to 12 million by 2016 it is still miniscule compared to the figure in China, where the share is 8-10%.
  6. 6. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis • Different e-commerce companies follow different models for functioning. • Amazon India follows Online Marketplace model. • Amazon India has two fulfilment centers in Mumbai and Bangalore. • And it plans to start five new fulfilment centres across the country. Sources: ASSOCHAM India, PwC
  7. 7. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis M-Commerce There is a traffic to revenue gap on mobile e-commerce in India Sources: Accel estimates, Accel portfolio companies, CNNIC and other industry sources
  8. 8. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis Women Shoppers – A Growing Force • Working women segment grew 43% in 2013 and constitutes nearly 10% of Active internet users in India according to i-Cube & IAMAI • 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. Sources: Accel estimates, Accel portfolio companies & comScore
  9. 9. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis • A significantly low (19%) but fast-growing internet population of 243 million in 2014 is an indicator of the sector’s huge growth potential in India. • It is evident that in absolute terms India’s internet users are short by only 36 million as compared with 279 million in the US. High Scope For Internet Penetration • In coming years, as internet presence increases in rural areas, rural India will yield more e-commerce business.
  10. 10. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis E-commerce Friendly States Top 3 e-commerce states • Delhi-NCR • Karnataka • Maharashtra Large states with very little ecommerce presence: • Bihar • Uttrakhand • Chhattisgarh 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 Sources: Accel estimates, Accel portfolio companies, Google
  11. 11. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis Sources: Accel estimates, NSSO, Facebook Young India Will Become Dominant Presence In E-Commerce Young Indians (19-24yrs) are more comfortable with online services e.g. FB and thus could potentially add up to 40M new shoppers in next 3 years – if we just take the Facebook users
  12. 12. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis Major difference between various companies is the way they maintain their inventory, Whilst Flipkart follows the inventory led model, Amazon India and Snapdeal, the other two major players follow marketplace model. Flipkart (inventory-led model) • It started with a consignment model where goods were procured on demand • And turned into inventory e-retailer supported by registered suppliers • This provides better control on the logistics chain. • Manages a fine balance between inventory and cost of delivering goods. Amazon India (marketplace model) • Amazon started practicing the market place model by launching its site in early 2013 in India. • It started registering electronics goods sellers and ended FY 2013 offering nearly 15 million products. • Known for its strong last-mile delivery network • Amazon India has set up a logistics arm named Amazon Logistics and started offering same day delivery. Sources: ASSOCHAM India, PwC | Forbes India, Jun 24, 2014
  13. 13. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis Company Name Alexa Popularity Rank in India Flipkart.com 6 Amazon.in 8 Snapdeal.com 13 Quikr.com 17 Amazon.com 18 Jabong.com 21 Ebay.in 28 Paytm.com 30 Olx.in 37 Naukri.com 43 Alibaba.com 46 Shopclues.com 50 Myntra.com 52 Popularity Comparison of Various E- Commerce Websites in India Source : Alexa.com accessed on 28 Mar 2015 Top 10 Parameters The E-Commerce Companies In India Should Be Evaluated Upon Customer Experience Tax And Regulatory Environment Technological Advancements Operational Framework Convergence Of Online And Off Line Channels Customer Acquisition Delivery Experience Digital Infrastructure Payments And Transactions Addressable Markets
  14. 14. Overview of the industry Domain wise Market Penetration Market Trends Market Potential Competitive Analysis Value Chain Analysis E-products/Services Software Platform/Tech tools Payment integration Logistics & Fulfillments Customer Service and CRM Source: Emerald Insight Every e-commerce company has to evaluate itself on various parameters. These parameters are as diversified as of the conventional Value chain analysis on one hand. On the other hand it would also has to take care of some specialized instruments as depicted in the above diagram. Indian e-commerce industry is still in the inception to growth stage, so most of the companies make negative margins on each product that they sell. All companies are innovating on all the primary and support activities for their firm, to reduce their losses, but due to fierce competition, all major firms are still loss making.

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