Gyan Research weekly newsletter on #ecommerce sector

1. © Gyan Research and Analytics Pvt. Ltd., 2015 1
Policy News
 E-commerce firms under ASCI scanner for misleading ads
E-commerce firms such as Flipkart and Snapdeal are among 82 companies against whom complaints have
been registered by the Consumer Complaints Council (CCC) of the Advertising Standards Council of India
(ASCI), for misleading advertisements campaigns which did not meet their regulatory guidelines. Some of
the advertisements were considered misleading, indecent, false or unfair to the competition. There were
three instances against Flipkart of allegedly marking up the product prices on its marketplace and offering
discounts on the increased price, thereby misleading consumers. ASCI is a voluntary, self-regulatory
organization monitoring the advertising industry.
Industry News
 eBay India to expand its refurbished listings
eBay will expand its refurbished devices category to include electrical goods to increase sales in the
category this month. White goods were introduced in August and have since seen a 100 percent increase
in demand. Most of the refurbished products currently offered are mobility devices priced 35-50 percent
lower than the product's original price. The refurbished products listings has grown to 20,000 at present
from 6,000 in August. The ecommerce platform will have 80 percent new products and 20 percent
refurbished and second hand items from the three crore listed products on its website. Presently, 95
percent are new items and only five percent are second hand and refurbished units.
 Flipkart to add 50-100 warehouses
Flipkart is commissioning its largest warehouse - of the size of three combined football fields. Located in
Telangana, it will be the most technologically advanced. Flipkart currently has 16 warehouses and intends
to add another 50-100 warehouses. For this, it has outlaid USD 500 million in investment in the next five
years to build scores of fulfillment centres across India. It will inaugurate a warehouse this month, which
will be the first to use automation to perform several functions. The ecommerce company targets USD 10
billion sales by the end of 2016, with shipments going up to 1 billion a month in 2017-18 from almost 8
million a month at present.
 Ecommerce companies focus on last-mile delivery
Ecommerce companies such as Snapdeal and Flipkart are expecting a surge in orders this festive season,
which will benefit the last-mile delivery service companies. New strategies such as directly shipping from
the merchant in case the buyer lives in the same city or region and several short-term tie-ups with intra-
city and regional logistics players are being adopted by the online marketplaces to focus on the last mile
delivery services. The trends of hyperlocal fulfillment and last-mile delivery are making the festive season
busy for small, regional players as well as national logistics players,. This will also boost short-term, part-
time and temporary job openings in the logistics segment.
Ecommerce News
October 3, 2015 – October 9, 2015

2. © Gyan Research and Analytics Pvt. Ltd., 2015 2
 E-commerce to grow by 36 percent in 2015-20
According to a recent report by Canada-based TechSci Research, the Indian e-commerce market is
expected to grow 36 percent during 2015-20, due to huge discounts and offers, rising per capita
disposable income, a growing youth population and an expanding smartphone user base. Currently, the
market is dominated by the e-services segment largely due to rising online travel market, which has
emerged as the most preferred medium for planning holidays, hotel bookings and purchasing tickets for
air, bus or rail travel. Further, growing number of high speed internet users has encouraged businesses to
innovate and offer a variety of online products and services. Improvement in the payment structure in e-
commerce market has also added to the upsurge.
 Amazon launches AmazonBasics
Amazon has announced the expansion of its consumer electronics portfolio with the launch of
AmazonBasics, which will offer a range of home and digital accessories for its customers in India.
AmazonBasics, launched in 2009 in the US, will make its products available in most of Amazon’s global
marketplaces. It will offer an enhanced customer experience with a wide range of products with
appealing designs and reliable quality, in addition to a 1-year warranty. Their Indian operation includes
products such as data cables for Android devices, Apple-certified lightning cables, audio video cables and
adapters.
 Amazon India to expand designer wear segment
Amazon India is expanding its online designer wear portfolio and has created a specialty handicraft store.
The target is to boost demand for slow selling products that can be customized for individual users. This
week, the company will launch its online store, ‘Crafted in India’, which will offer 3,500 handicraft
products including saris, handbags, jewellery, shoes and other handicrafts sourced from regional artisans
and weavers across 11 regions. The initiative comes ahead of the Amazon Fashion Week later this month.
The company aims to revive the authentic Indian handicrafts market with every region’s iconic crafts
making accessible at affordable prices to customer across India. Sales of fashion products have the highest
margins among the top product categories.
 Flipkart Nearby – new grocery delivery app
Flipkart has launched 'Flipkart Nearby' - a grocery delivery service on Google Play store - over the
weekend which is currently operational in selected neighbourhoods of Bengaluru. The app is only
available on android for the time being. It will help customers to place orders at any given time, though
deliveries will be made from 10 am to 8 pm. Flipkart Nearby accepts cash on delivery payment only. The
store offers a wide range of products including grocery and food items, health and wellness products like
condoms and sanitary napkins, household supplies, baby care products and personal care products.
Ecommerce News
October 3, 2015 – October 9, 2015

3. © Gyan Research and Analytics Pvt. Ltd., 2015 3
Investment News
 Nykaa.com raises USD 9.5 million
Online beauty and wellness retailer Nykaa.com has raised USD 9.5 million from multiple investors,
including the family offices of Marico Industries chairman and Hexaware Technologies Limited
chairman. The online retailer has sold 20 percent of its stake. The Series B funding was run by the
private equity arm of the TVS Group with the participation of Techpro Ventures Private Limited. The
funds will be used to launch a private label, increase the team and expand marketing activities. The
firm intends to open three stores in Delhi, Mumbai and Bengaluru as part of its omni-channel strategy.
Nykaa lists over 350 brands and 35,000 products on its site. It has so far sold nearly 1.25 million
products, with over 4 million hits every month.
 Snapdeal to help sellers get loans
Snapdeal aims to help its sellers to raise INR 1,000 crore in loans through its 'Capital Assist' initiative,
launched in August last year. This initiative helps sellers to meet their working capital requirement to
scale up their business on the Snapdeal marketplace platform. NBFCs and banks such as Axis Bank,
HDFC Bank, ICICI Bank, Religare, RBL and L&T Finance are the part of this initiative. Snapdeal has
already helped its sellers to secure INR 200 crore in loans, which it aims to scale up to INR 1,000 crore.
 Snapdeal puts in another USD 20 million in GoJavas
Snapdeal has invested an additional USD 20 million (about INR 131 crore) in GoJavas – the third party
logistics and delivery services venture; the first investment was in March. The investment will be used
by GoJavas to expand its reach to include 100 additional cities in the next 6-12 months. With this, the
company will to reach 350 towns and cities with more than 3,000 pin codes. Snapdeal now holds 42
percent of GoJavas.
Weekly Snapshot
Source: Statista.com
Ecommerce News
October 3, 2015 – October 9, 2015
Average B2C E-commerce Sales per Digital Buyer in India from 2011 to 2016 (in US dollars)
Year Spending per Digital Buyer in USD
2011 597
2012 632
2013 665
2014 691
2015F 708
2016F 724

4. © Gyan Research and Analytics Pvt. Ltd., 2015 4
Ecommerce News, October 3, 2015 – October 9, 2015
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