Accel Partners India has completed a comprehensive study on the e-Commerce sector in India. The study provides key insights into how the e-commerce landscape is transforming itself and what some of the key takeaways are - categories, buying trends, growth rates, payments and what holds for the future

1. India e-commerce
Accel Partners
2014

2. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
2

3. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
3

4. Executive summary
4
$2Bn
2013
$8.5Bn
2016P
Online Shopping defined in this presentation does not include travel, ticketing and food ordering – only physical goods commerce
Online shopping of physical goods in India, will grow to $8.5Bn in 2016.
Number of online shoppers in India will more than double to 40M.
Key finding
2x Indian shoppers X 1.1x number of orders per year per shopper X 2x average order value
63% CAGR
KEY FINDING
25% CAGR
20M
40M
CY2013 CY2016P
Indian online shoppers will double
Accel estimates and Industry sources

5. $278 M
$559 M
$2,811 M
CY2012 CY2013 CY2016P
Fashion + Footwear + Accessories GMV
INR 1,080
INR 1,860
INR 3,600
CY2012 CY2013 CY2016P
Increasing average order value
Executive summary
Key findings
5
67%
25%
CAGR
KEY FINDING
1. Last year there was a significant jump in average
order value as there was a penetration of new
categories like jewellery, home décor etc.
2. Also, users are becoming more comfortable
buying higher priced items online.
100%
Growth
71%
CAGR
1. Last year was the rise of the fashion category –
fashion e-commerce GMV doubled since 2012.
2. Given the young demographic which is shopping
for latest looks online and increasing choice
online – we estimate that this category will see
400% growth in the next 3 years and rival
electronics and mobile category in GMV.
Accel estimates and Industry sources
Average order values climbing up rapidly
Fashion category doubled last year

6. Executive summary
6
1x 8x
27x
2012 2013 2016P
Online Shopping defined in this presentation does not include travel, ticketing and food ordering
1x
4x
24x
Mobile shopping is seeing phenomenal growth
Women influenced sales will grow 5x
in next 3 years
1. Mobile shopping infrastructure is improving –
smartphones, connectivity, mobile websites
and apps
2. People are becoming more comfortable in
ordering higher priced items online
1. 35% of online GMV in 2016 will be influenced by
women
2. Key factor in this growth is increasing supply of
women specific categories e.g. jewellery, lingerie,
motherhood products
Trends
2012 2013 2016P Accel estimates and Industry sources
TRENDS

7. Executive Summary
7
Trends: Rise of EMIs &Wallets
• With increasing order values, we are seeing an uptick of EMI payments
• 3rd party wallets albeit a new phenomenon, have a strong value proposition and
will be quick to become popular – similar to China
TRENDS
60%
16%
12% 12%
1% 0%
50%
12%
15%
11%
5% 7%
COD Credit Cards Debit Cards Net banking EMI 3rd party wallets
Indian payment landscape - rise of EMIs and Wallets
(Total: 100%)
2013 2016P
Accel estimates, Accel portfolio companies and Industry sources: PayU, EMVantage

8. Executive summary
8Online Shopping defined in this presentation does not include travel, ticketing and food ordering
More penetration in Tier-II and Tier-III towns
New shoppers will come from the 40M+ Gen-Y FB users
1. Tier 2 cities growing much faster in eCommerce
adoption than Tier 1
2. Some states completely lagging in ecommerce,
waiting for infrastructure to be put in place
1. Potentially 40M shoppers between ages of 19 –
24 years, will start spending money online
2. These shoppers also have a propensity to
spend more money than Gen-X shoppers
Growth factors
20M
Gen-Y
shoppers
20M
Gen-X
shoppers
GROWTH FACTORS
Accel estimates, Google, Facebook, NSSO, Accel portfolio companies

9. Enough headroom for growth
Online retail is still a very small portion of retail in India
9
Online sales,
4 Mn, 2%
Offline sales,
243 Mn, 98%
247Mn mobiles shipments in India CY2013
Online sales,
45 Mn, 7%
Offline sales,
555 Mn,
93%
600Mn books sold in India CY 2013
Online sales,
$0.08 Bn, 0.2%
Offline sales,
$44.92 Bn,
99.8%
USD 45Bn jewellery sales in India CY 2013
Online sales,
$0.5 Bn, 1%
Offline sales,
$42 Bn, 99%
USD 43Bn fashion + footwear sales in India CY 2013
Accel estimates, Accel portfolio companies and industry sources: CMR, FICCI, Deloitte
GROWTH FACTORS

10. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
10

11. $816 M
$1,983 M
$8,519 M
CY2012 CY2013 CY2016P
Annualized online shopping GMV
Growth of India online shopping
11
Market
Trends
Growth Factors
Payments
BRICS
140 M
213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-
commerce sites = 60%
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.50
1.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
$18
$31
$60
CY2012 CY2013 CY2016P
Average order value
Accel estimates, Accel portfolio companies, comScore & IAMAI

12. Growth of India online shopping
12
Market
Trends
Growth Factors
Payments
BRICS
140 M
213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
Accel estimates, Accel portfolio companies, comScore & IAMAI

13. Growth of India online shopping
13
Market
Trends
Growth Factors
Payments
BRICS
140 M
213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-
commerce sites = 60%
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
• India e-commerce market will start maturing
and display characteristics similar to China –
which traditionally has higher conversion rates
(nearly 3.5%)
• This is due to e-commerce being only choice for
availability of goods in parts of the country and
easy payment options like COD – which are not
problems in western countries
Accel estimates, Accel portfolio companies, comScore & IAMAI

14. Growth of India online shopping
14
Market
Trends
Growth Factors
Payments
BRICS
140 M
213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-
commerce sites = 60%
• As e-commerce sites gain trust, users are
beginning to order more frequently
• Also, repeat users – acquired more than 1yr old
- are more comfortable ordering online and
order significantly more than first time buyers
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.50
1.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
• India e-commerce market will start maturing
and display characteristics similar to China –
which traditionally has higher conversion rates
(nearly 3.5%)
• This is due to e-commerce being only choice for
availability of goods in parts of the country and
easy payment options like COD – which are not
problems in western countries
Accel estimates, Accel portfolio companies, comScore & IAMAI

15. Growth of India online shopping
15
Market
Trends
Growth Factors
Payments
BRICS
140 M
213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-
commerce sites = 60%
• Last year there was a significant jump in
average order value as there was a
penetration of new categories like jewellery,
home décor etc
• Also, users are becoming more comfortable
buying higher priced items online
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.50
1.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
$18
$31
$60
CY2012 CY2013 CY2016P
Average order value
Accel estimates, Accel portfolio companies, comScore & IAMAI

16. Growth of India online shopping
16
Market
Trends
Growth Factors
Payments
BRICS
140 M
213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-
commerce sites = 60%
• Last year there was a significant jump in
average order value as there was a
penetration of new categories like jewellery,
home décor etc
• Also, users are becoming more comfortable
buying higher priced items online
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.50
1.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
$18
$31
$60
CY2012 CY2013 CY2016P
Average order value
$816 M
$1,983 M
$8,519 M
CY2012 CY2013 CY2016P
Annualized online shopping GMV
Accel estimates, Accel portfolio companies, comScore & IAMAI

17. Other observations
17
Market
Trends
Growth Factors
Payments
BRICS
1. ~200M of Indians will come online in next 3 years
2. Majority of these will come online on
smartphones
3. E-Commerce companies are building their
brands, thus gaining trust of users
1. Existing shoppers shop more number of times
than new shoppers (in that year)
2. As India’s e-commerce market grows the
proportion of existing shoppers will increase from
30% (in 2013) to 50% (in 2016)
13M
20M
40M
CY2012 CY2013 CY2016P
# of online shoppers in India
3.4
3.2
3.55
CY2012 CY2013 CY2016P
# of orders per customer / year
Accel estimates & Accel portfolio companies

18. E-commerce is a small sliver of Indian retail
18
91.0%
8.7%
0.3%
Unorganized retail Organized retail - offline Organized retail - online
92.0%
7.8%
0.2%
2012
2013
Market
Trends
Growth Factors
Payments
BRICS
Accel estimates & Deloitte

19. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
19

20. Mobile
There is a traffic to revenue gap on mobile e-commerce in India
20
Factors leading to major adoption of mobile as a channel:
• 70% of the growth in Indian internet users was mobile only
• Showrooming – a growing habit
Reasons why there is not a 1:1 conversion of traffic to mobile:
• Most e-retailers do not have mobile optimized sites
• Most transactions are for low ticket items
• Mobile marketing budgets are < 10% of overall digital marketing
budgets, even though they have increased 100% Y-o-Y, even
though overall ad spends have increased 20% Y-o-Y
23%
27%
33%
9% 10%
33%
India China Japan
Mobile revenue share is lagging mobile
traffic share in India and China
Mobile Traffic %
9%
4%
N/A
9.8%
India Brazil Russia China
India vs rest of BRICS - mobile shopping GMV as % of
overall GMV
1x 8x 27x
2012 2013 2016
Mobile shopping grew 800% in 2013, we
expect it to grow at a 150% CAGR till 2016
Market
Trends
Growth Factors
Payments
BRICS
Accel estimates, Accel portfolio companies, CNNIC and other industry sources

21. $122 M / 1x
$511 M / 4x
$3Bn / 24x
2012 2013 2016P
Women influenced GMV
Women shoppers – a growing force
21
Male Female
Women spend 60% more time
on jewellery sites than men
Male Female
Women spend 40% more
time on fashion sites
1.3x
1.1x
1.0x
Luxury/Jewellery Apparel Home furnishings
Women spend upto 30% more time on
luxury sites than on home furnishing
Market
Trends
Growth Factors
Payments
BRICS
15% of
market
26% of
market
35% of
market
1. Working women segment grew 43% in 2013 and
constitutes nearly 10% of Active internet users in
India according to i-Cube & IAMAI
2. 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.
Accel estimates, Accel portfolio companies & comScore

22. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
22

23. 149M
132M 132M
102M
19M
40M
20M 8M
13%
30%
15%
8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0M
20M
40M
60M
80M
100M
120M
140M
160M
13 - 18 19 - 24 25 - 30 31 - 36
20M new shoppers could come just from the 19-24 age group
India population FB users (2013) FB users %
Young India will become dominant presence in e-Commerce
23
Market
Trends
Growth Factors
Payments
BRICS
Young Indians (19-24yrs) are more comfortable with online services e.g. FB and thus could
potentially add upto 40M new shoppers in next 3 years – if we just take the Facebook users
Accel estimates, NSSO, Facebook

24. E-commerce friendly states
24
• Top 3 e-commerce states
• Delhi-NCR
• Karnataka
• Maharashtra
• Large states with very little ecommerce
presence:
• Bihar
• Uttrakhand
• Chhatisgarh
• 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
Market
Trends
Growth Factors
Payments
BRICS
Accel estimates, Accel portfolio companies, Google

25. Categories
Books
7%
Mobile, Tablets &
Accessories
35%
Computers,
Cameras,
Electronics &
Appliances
18%
Health &
Personal care
2%
Babycare
3%
Fashion, Footwear
& Accessories
28%
Jewellery
2%
Home décor
3%
Others
2%
Categories by GMV (%)
Books
21%
Mobile,
Tablets &
Accessories
9%
Computers,
Cameras,
Electronics &
Appliances
10%Health &
Personal care
4%
Babycare
8%
Fashion,
Footwear &
Accessories
35%
Jewellery
1% Home
décor
8%
Others
4%
Categories by # of trxns. (%)
Books category contributed to 21% of
the transactions …
… but only 7% of the GMV
Market
Trends
Growth Factors
Payments
BRICS
Accel estimates & Accel portfolio companies

26. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
26

27. Payments
27
COD
60%
Credit
Cards
16%
Debit
Cards
11%
Net
banking
12%
EMI
1%
2013
Market
Trends
Growth Factors
Payments
BRICS
With most e-commerce players launching their wallets, we believe that 3rd
party wallets will become a significant alternative to COD in coming years.
COD
50%
Credit Cards
12%
Debit Cards
15%
Net banking
11%
EMI
5%
3rd party
wallets
7%
2016P
Accel estimates & Accel portfolio companies

28. Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
28

29. Indian online shopping has tremendous growth potential
Significant headroom for growth
29
1,249
200 144
1,358
213
99 66
591
17%
50%
46% 44%
0%
10%
20%
30%
40%
50%
60%
-
500
1,000
1,500
India Brazil Russia China
InMillions
Only 17% of Indians are online, compared to >40% for other countries …
Population Online population Internet penetration %
213
99
66
591
19 31 30
280
9%
31%
45% 47%
0%
20%
40%
60%
80%
100%
-
100
200
300
400
500
600
700
India Brazil Russia China
inMillions
… only 9% of online Indians shop, compared to >30% in other countries
Online population Online shoppers Online shopper penetration %
Market
Trends
Growth Factors
Payments
BRICs
Accel estimates & Industry sources

30. BRICs B2C online shopping market
India is quite small compared to rest of BRIC countries…
30
$ 1.8 Bn / 1x
$ 13 Bn / 7x $ 16 Bn / 9x
$ 106 Bn / 60x
India Brazil Russia China
Indian e-Commerce market is $1.8Bn, 60x smaller than the Chinese market …
$ 93
$ 421
$ 533
$ 380
India Brazil Russia China
… annual spend by an Indian online shopper is $93 - 4x smaller than Chinese one
Market
Trends
Growth Factors
Payments
BRICs
Accel estimates & Industry sources

31. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Onlineshopperpenetration
Internet Penetration
(size of bubble indicates market size)
Indian e-commerce needs better infrastructure to grow
88% of the growth in India online shopping will come from more Indians online
Infrastructure issues
Shopping issues
Happy shoppers
Willing shoppers but
infrastructure problems
31
India
China
Brazil
Russia
Market
Trends
Growth Factors
Payments
BRICs
Accel estimates & Industry sources

32. CONTACT
Prashanth Prakash
Partner, Accel Partners
32
Subrata Mitra
Partner, Accel Partners
Prayank Swaroop
Senior Associate, Accel Partners
prayank@accel.com

33. Disclaimer
The information and opinions in this Report have been prepared or complied by ACCEL
PARTNERS and are subject to change/modification without any notice. The information
contained in this Report is believed to be accurate at the time of date of issue of this
Report, but no representation or warranty is given (express or implied) as to its accuracy,
completeness or correctness. ACCEL PARTNERS accepts no liability whatsoever for any
direct, indirect or consequential loss or damage arising in any way from any use of or
reliance placed on this material for any purpose. The contents of this Report are the
copyright of ACCEL PARTNERS. Nothing on this Report constitutes advice, nor creates
any contractual relationship.
33