Industry monitor Indian e-commerce sector December 2014

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Industry Monitor
Indian e-Commerce
December 2014
Disclaimer: All information contained in this report has been obtained from sources believed to be accurate by Gyan Research and Analytics (Gyan). While
reasonable care has been taken in its preparation, Gyan makes no representation or warranty, express or implied, as to the accuracy, timeliness or
completeness of any such information. The information contained herein may be changed without notice. All information should be considered solely as
statements of opinion and Gyan will not be liable for any loss incurred by users from any use of the publication or contents.

Industry Monitor - Indian e-Commerce, December 2014
1. In Focus – Online Classifieds .......................................................................................................... 3
2. Industry Statistics .......................................................................................................................... 6
3. Product Scan – E-tailing ................................................................................................................. 8
4. Industry News Brief – E-Commerce .............................................................................................. 10
5. Company News Brief – E-Commerce ............................................................................................ 11
6. Mergers, Acquisitions and Investments........................................................................................ 12
7. Company Scan: Jabong Online Services Private Limited ............................................................... 13
8. Upcoming Events ......................................................................................................................... 14
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Table of Contents
© Gyan Research and Analytics Pvt. Ltd., 2014

600
500
400
300
200
100
Transition from Print Media to the Web
2013
Subscription to various websites by the
advertiser is the major revenue earning
tool for online classifieds. In 2013, within the segment, online recruitment has the major share of
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1. In Focus – Online Classifieds
Advertisements that are grouped into
categories or classes are known as
"classified ads". It is a form of
advertising which is popular not only
in newspapers and periodicals, but
also online. Online classifieds appear on
websites and advertise a wide range of
products from apparel to grocery to
medicine and houses. Some online
classifieds are of specific nature and offer
limited services. The online classifieds
segment of the advertising sector
includes recruitment, matrimonial,
automobile and real estate.
The online classified industry in India is
growing rapidly and is attracting many
large and small players. The market grew
at the Compounded Annual Growth Rate
(CAGR) of 29 percent to 2013 from 2009.
Revenue of online classified segment
increased to USD 486 million in 2013
from USD 159 million in 2009. Most of
the business for these online companies
comes from Tier Ι and metro cities, since
the internet penetration and awareness
in these areas is high.
159.9
224.5
292.6
377.5
486.9
0
2009 2010 2011 2012 2013
USD Million
Online Classifieds Market in India
Source: Ernst & Young
Source: Ernst & Young
43
57
2009
51 49
Online Offline

revenue, followed by online matrimonial sites. Classified portals like jobs, matrimonial and real
estate together earned almost 96 percent of total online classifieds revenue in 2013.
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Online Recruitment
E-recruitment is the largest category in
the online classified segment in India, with
a 62.5 percent share of the market.
According to ASSOCHAM, the number of
jobs in India is expected to increase; by
2015, 87.37 million jobs will be created.
Thus, the growth of the online
recruitment classified segment holds great
potential.
Low advertisement cost, wider
geographical access and easy search
options are some of the advantages of e-recruitment
classifieds. Players in this
segment are investing on improving
search functionalities, such as providing
superior search options.
Online Matrimonial
The online matrimonial market generated
revenue of USD 63 million in 2011 and is
growing at the rate of 25 percent from
2009 to 2013. In India, there are more
than 100 matrimonial sites catering to
multiple communities and demographics.
However, the market is dominated by a
few large players, such as shaadi.com,
Bharat matrimony and jeevansathi.com.
35,500
42,000
46,000 48,000
52,320
60000
50000
40000
30000
20000
10000
0
FY2010 FY2011 FY2012 FY2013 FY2014
thousand
Number of Unique Consumers Visiting
naukri.com
Source: Infoedge
3.7
4.3
5
5.6
6.6
7
6
5
4
3
2
1
0
FY2010 FY2011 FY2012 FY2013 FY2014
million
Profiles Uploaded in Jeevansathi.com
Source: Infoedge

Online classified players are trying to expand their market by widening their services. Matrimonial
sites now provide relationship counseling, horoscope matching, chat services and round the clock
customer support.
In 2013 online real estate and auto classifieds together had a 14 percent market share. Growth of
the real estate classified segment has been sluggish due to the lack of computer knowledge among
real estate agents. On the brighter side, demand for rented and owned properties in the country is
likely to rise as a result of rising urban population. The demand for real estate is expected to grow at
the CAGR of 19 percent from 2010 to 2014, some of this growth will inevitably reflect in online real
estate classifieds.
The overall outlook of online classified segment is positive. The only challenges that this sector faces
are language barrier, online payment mechanisms and low visibility and coverage. Players in this
segment are working to overcome these barriers to capture the potential that India has to offer. The
market is seeing the emergence of mobile classified, value added services and the entry of local
classifieds. Newspapers are also launching their own online classified portals. The increasing number
of mobile web users in India has lead to the rise in market of online classifieds.
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Online Real Estate

Jan - March 2013 Apr - June 2013 July - Sep 2013 Oct - Dec 2013 Jan - March 2014
164.81 198.39 210.38 238.71 251.59
Jan-March 2013 Apr - June 2013 July - Sep 2013 Oct - Dec 2013 Jan - March 2014
143.20 176.50 188.20 220.38 233.09
2009 2010 2011 2012 2013
4.5 10 18 44 67
2009 2010 2011 2012 2013
149 332 431 432 613
2009 2010 2011 2012 2013
NA 5 11 23 56
Source: TRAI quarterly performance indicator reports, Nielsen, IDC, NTT Docomo, Avendus estimates
6 | P a g e
2. Industry Statistics
Total Internet Subscribers in India – in million
Mobile Internet Users in India – in million
Smart Phone Users in India – in million
Internet Capable Mobile Devices in India – in million
3G Subscribers in India – in million

Number of Unique Visitors and Penetration Rate of e-tailing in India, 2013
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E – tailing Sites
Average Number of Unique
Visitors per month
(in thousands)
Penetration in Percentage
Myntra.com 13,173 17.1
Flipkart.com 12,649 16.4
Jabong.com 12,425 16.1
Amazon Sites 11,924 15.5
Snapdeal.com 8,447 10.9
Homeshop18.com 8,109 10.5
Source: Comscore
Penetration of Internet in Rural India, 2013
(in percentage)
Computer literates 14
Mobile phone users 38.5
Claimed internet users 6.7
Active internet users
4.6
Mobile internet users 2.4
Source: IMRB

Commodity Distribution of E-tailing Sector in
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3. Product Scan – E-tailing
India is emerging as an exciting market
for e-retail companies. The Indian e-tailing
market grew at a Compounded
Annual Growth Rate (CAGR) of 55
percent from 2009 to 2013; it is
expected to expand at a similar rate
right up to 2018. It generated revenues
of USD 2.3 billion in 2013.
Factors such as the penetration of
technology, 3G rollout, cash on delivery
facilities, rise in debit and credit usage
and changing consumer lifestyles have
led to the boom in Indian e-retail.
The electronics and lifestyle segment
accounts for more than 70 percent of
the total market. In 2013, electronics
captured 34 percent market share,
followed by apparel and accessories
with 30 percent. The e-tailing business in
India is mostly driven by non-food
categories. The food and grocery
segment has a negligible share. Complex
consumption patterns, supply chain
challenges and product perishability and
storage issues plague the segment.
In the early 2000’s, India witnessed the
launch of several e-tailing sites like
rediff.com, indiaplaza.com and
0.4
0.6
1
1.5
2.3
2.5
2
1.5
1
0.5
0
2009 2010 2011 2012 2013
USD billion
Growth of E-tailing in India
Source: KPMG, Crisil, PWC Analysis
India
2
34
30
15
10
6 3
Baby Products Electronics
Apparels and Accessories Books
Beauty and Personal Care Home and Furnishing
Healthcare
Source: Internet and Mobile Association of India Research

bazee.com. However, the launch of Flipkart in 2077 was the real game changer. Flipkart still
continues to be leading player in this
segment. Other major players
include Amazon, Snapdeal, ebay,
Jabong and Myntra.
E-tailing creates an efficient marketplace for vendors and consumers. At present the Indian e-tailing
market is hampered by some challenges. Low profitability, aligning and upgrading vendors to e-tailers’
requirements, creation of business-to-consumer logistics, developing tools for online
shopping are restricting the growth of this segment. However, if the Indian e-tailing market can
overcome these bottlenecks, it can drive efficiency, contribute to new capabilities and increase
competitiveness.
9 | P a g e
A recent phenomenon is that of
niche retailers who have succeeded
in creating a space for themselves.
For instance, Cartlane, an online fine
jewellery store, Firstcry, a one-step
online solution for baby care and
Localbanya, an online grocer, have
tasted success. Each of these players
has concentrated on distinct
consumer needs and is currently
growing briskly. Niche players are
expected to have a higher contribution to the e-retailing space over the next five years.
Recent Entrants in the Indian E-tailing Market
Retailer Category
Number of
Stores
E-tailing
Portal Launch
More
(Aditya Birla)
Multiple 575+ 2012
GKB Opticals Eyewear 61 2012
Tata Croma CDIT 81 2012
Crossword Books 78 2011
Om Bookstore Books 29 2011
PUMA Lifestyle 200 2011
Bata Footwear 1300+ 2011
Source: Technopak Advisors

1. Government seeks new tax regime for global e-commerce firms – The Indian government is
formulating new tax regime for global e-commerce firms. Currently, existing global giants are taking
advantage of the country’s lax tax regime to avoid paying taxes. India raised the issue at the G20
meeting in Brisbane.
2. India’s e-commerce sector venture capital investment above USD 1 billion – India’s e-commerce
venture capital investment is expected to cross USD 1 billion in 2014. Venture capitalists in the US
and India predict robust growth of the sector, similar to what was experienced by the Chinese e-commerce
sector five years ago. Investors are focusing on the growing competition between
Amazon, Flipkart and Snapdeal. The ongoing e-commerce boom is responsible for the rise in venture
capital investment.
3. Logistics companies attract investment in e-commerce – Investors are betting on the logistics
sector, which is expected to be a key beneficiary of the e-commerce surge. Widely followed
investors like Radhakrishnan, R. Damani are active buyers in shares of logistics companies such as
Gati, Blue Dart and Transport Corporation. Brightstars Investments and Derive Investments bought
5.77 percent in Gati, 4.88 percent in Transport Corporation and 5.35 percent in Blue Star.
4. Accel India to invest USD 250 million in e-commerce start ups – Accel Partners, India, is looking
to invest roughly USD 250 million in e-commerce and technology start ups. The company is planning
to start making investments from its fund before April 2015.
10 | P a g e
4. Industry News Brief – E-Commerce

1. Reliance Retail enters India’s e-commerce sector – Reliance Retail’s Reliance Fresh has started
taking online orders for groceries and household items. Reliance entered the e-commerce sector
quietly, without any formal marketing. Presently, the service is restricted to a few neighborhoods in
Mumbai. Reliancefreshdirect.com not only provides customers with choice but also the convenience
of direct delivery.
2. India Post to foray into e-commerce – The West Bengal circle of India Post department is
planning to create an online marketplace for local traders. The postal department aims to earn
higher revenues by involving local traders and business houses. The department has approached
various industrial bodies and the Chamber of Commerce in Kolkata, Howrah and other districts of
the state for help.
3. E-commerce certification program launched by NIIT and ebay – NIIT Limited and ebay India
together have launched an e-commerce certification program for online entrepreneurs. The course
will be rolled out at NIIT centers and will focus on students, home-makers and artisans who aspire to
enter the e-commerce sector. The course involves 8 hours of video tutorials and interactive learning
and another 8 hours of online cloud learning. The training aims to impart skills in photography,
listing quality and customer sales service to online sellers.
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5. Company News Brief – E-Commerce

12 | P a g e
6. Mergers, Acquisitions and Investments
Company Type
Investment
(in USD Million)
Tata Sons invests in furniture e-tailer, Urban Ladder Investment NA
Foodpanda buys Tastykhana Acquisition 20 - 25
Soft Bank invests in online ventures in India like Ola
Cab, Snapdeal
Investment 10000
Flipkart buys out Myntra Acquisition 300
Amazon to acquire Jabong Acquisition 550
Source: Business Standard, Economic Times

13 | P a g e
7. Company Scan: Jabong Online Services Private Limited
Snapshot
Legal Status: Private Limited Company
Year of Incorporation: 2012
Industry/Sector: e-commerce
Founder /CEO: Arun Chandra Mohan, Praveen
Sinha
Address: Xerion Retail Pvt. Ltd., Plot 521,
Ground Floor, Udyog Vihar Phase ΙΙΙ,
Gurgaon - 122016
Employees: Approximately 1000
Background
 Jabong.com is an Indian fashion and lifestyle
ecommerce portal. The company is headquatered
in Gurgaon
 It was co-founded by Arun Chandra Mohan and
Praveen Sinha
 According to The Economist, Jabong clocked gross
sales of around USD 150 million in its year of
incorporation itself
 It received the ‘Most Impactful Launch of the Year’
award at the Pitch Brands 50 Awards, 2013
Products/Services
The company caters to several categories:
 Clothing
 Footwear
 Watches
 Sunglasses
 Jewellery
 Wellness and Beauty Products
 Baby & Kids Wear

Event Organiser Date Venue Highlights Contact Details
14 | P a g e
8. Upcoming Events
India
Ecommerce
Expo, 2014
NA December
12, 2014
International
Trade Expo
Center,
Noida, A-11,
Sector 62,
National
Highway 24,
Noida -
201306
Mobile –
9810303916/9167280
126
Email –
info@indiaecommerce
expo.com
Web –
www.indiaecommerce
expo.com

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E-mail: reports@gyananalytics.com
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Industry monitor Indian e-commerce sector December 2014

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