This document provides insights into the growing e-commerce market in India: - E-commerce in India has grown significantly since 2009 as the number of internet users has risen dramatically from 5 million in 2000 to 100 million in 2011. - Online shopping sites see around 14 million visitors regularly, though conversion rates remain low in some sectors. - Usage of social media, online travel sites, and apps is also increasing rapidly in India, indicating strong growth potential for e-commerce.

1. E-Tailing Insights in India
Since 2009 there is a sudden increase in the number of online shoppers. This
document provides an insight to the same and the growing online shop providers
Created By: Jolsna R G

2. E-commerce In India Currently (2011-2012) Resembles The North American E-
commerce Market In The Year 2000
• E-Commerce known as electronic commerce in India is
witnessing an unprecedented growth since 2009. Not so long
ago (2003), internet users shared inhibitions about
transacting online. E-bay, Wal-Mart shared apprehensions
about starting online in India, in 2000
• The evolvement has been gradual and the key reason for the
growth of E-commerce in India has been the rising internet
users. While, the year 2000 witnessed 5 million users, year
2004 witnessed a 3 fold raise in the number. In 2011, India
contributes 100 million internet users (Source: Business
Standard).
CHART 1
• Women Internet users are less in India as compared to the
males users
• This was the situation in Northern America in the year
2000-2002
• It was an e-commerce boom period in NA, then
• India is eventually set to witness a high rate of women
internet users (even online shoppers)
• The reason being: Out of the 36% working women in
India (2011), only 11% of them use internet. 6% of the
non-working population and 2% housewives are the
other set of population using internet.
• Online providers are tapping this lucrative market
(rest of the non-internet user population) and tap the
market using the right channels (the slides CHART 2
further, describe the best channels)

3. Internet Usage In India (Sites Most Visited)
• Out of the 100 million internet users, 16 million visit news sites CHART 3
(comScore 2011)
• Retail segment and Travel occupy the next biggest share
• The most visited industry segments are as shown in Chart 3
• Finance websites are gradually attracting the working
population, because it is convenient an option
CHART 4
• Although consumer goods sites are the most advertised and targeted
sites, software download sites and the new releases demo sites are
the occupy the largest share with respect to the number of visits
• 14 million users visit the online shopping sites, consumer sites and the
various other e-tail sites regularly
• Online travel sites are the other set of sites commonly visited CHART 5
• With globalization, proximity with respect to geographical
presence is not a concern
• Travel is made easy and convenient for users
• 19.4 million book online using the Indian railways site
(largest share)
• Yatra Online, MakeMy Trip, Clear Trip who are best known
as online providers for Flight bookings occupy the next
best share

4. Internet Usage Market Trends
• 35% of the internet connection are below 256kbps (2011)
Internet Connection • The average Internet speed is 0.8 mbps (Source: Akamai Report)
Speed • Despite this low speed in connectivity, there are 100 million users in India. With the steps
to improve broadband connectivity, India will see a rapid growth in users
• There are 30 million online Indian users on Social networking sites and 20 million users
visit these sites once everyday
Social Networking Sites
– Key Interest
• Facebook has 32 million Indian users and has grown to this number by 50%, when
compared to 2010 (Source: InternetworldStats)
• India is the 3rd largest country in terms of Facebook users
• Digital advertising constitutes to only 7% of the total ad spends as of 2011 (a rise of 4%
Digital Advertising when compared to 2010)
Spends • With mobile advertising, and DTH advertising on the rise, the Digital Advertising spends
will see a continual rise
• There has been a huge investment on the 3G licenses. Due to which the better broadband
Mobile Broadband connectivity along with handsets for low cost will witness an easy access to internet
Usage • iPads and Tablets are the next rising communication devices in demand. This will bring a
huge impact on the mobile-based purchases
• Mobile payments are still a concern. However with the current investment measures to
better the system, mobile-based purchases will see a sudden growth

5. Segment Specific Market Trends – Comparison Between Offline Buying Pattern And
Online Buying
Automotives
Retail
The untapped
online market
Healthcare
Technology
Products
Media &
Travel
Entertainment
• According to the Google estimates, out of the 100 million internet users, 40 million access internet via mobile phones and there
are 30 million app downloads in a week. This market is set to grow to 300 million by 2015
• However some of the segment specific trends show a poor conversion of online buying. Online providers need to act on the
best marketing channels to tap the productive market

6. The Evolving Buying Channels
• Introduction
Shoppers preferred a touch and feel and
Brick & Mortar – test features experience 2000
Physical Stores Drawback – Not an easy and convenient
option
Economic deals and the features of each
of the products were displayed in detail
2003
Tele-shopping by the product owners
Drawback – Limited range of products
Products available under a single roof
2005
Indian Shoppers and at competitive price points. The
largest buying channel, currently
Mall - Culture
Drawback - Investment on commercial
space does not allow a large discount in
price points
2007
The fast growing channel and the best
discounts available channel. With the
2009
Online Shopping
modernization and fast paced life, the
buying channel is expected to grow
Drawback – Online payment, logistics
and touch and feel experience features 2011
are the key issues

7. Online Buying, Importing, Selling & Exporting Market Trends – India (2011)
• According to eBay India census 2011, there are 3,311 Ecommerce hubs in India
E-Commerce Centers • The urban areas in Maharashtra, New Delhi, Tamil Nadu, Karnataka, and Andhra Pradesh
witnessed the maximum online transactions
• There are 1,267 non-metro cities Ecommerce hubs. 1:19 is the ratio of sales between rural
and metropolitan cities respectively
• Although metropolitan cities contribute to the major share (51%) of the online sales, Tier 2
Tier 2 & 3 Cities & 3 cities hold a 40% share (which is a rising trend) and rural India (9%)
• Vivek Doraiswami, Founder & CEO of Zibika stated that “The reason for the growth of Tier
2 & 3 cities is the unavailability of certain products in the physical stores / mall. Online
shopping helps them own a product that is unique”
• Cosmetics, Jewelry, Watches, Fashion and Fitness equipment are the favorites of the
Women Shoppers shoppers in this segment
• Lifestyle category is a fast and catching up trend. The key reason is the discounts available
on unique and branded products
• This segment occupies the largest share in the online shopping wallet
• Electronic gadgets contribute to more than 50% of the online purchases
Electronic Gadgets and • There are examples of purchases worth 75,000 and more made online (as stated by Vivek
Books & Stationery
Doraiswami, Zibika)
• Again, the key reason is the Tier 2 & 3 cities who are deprived of certain products in
the physical stores
• Although online selling in India is one of the rewarding market that is growing in trend, it is
very important to state the rapidly growing retail exports
Indian Retail Exports
• Indian market is exporting a variety of products to Ebay shoppers in 189 countries
• Key exports to - United States, United Kingdom, Australia, Canada & Germany

8. Online Service Providers In India
Flipkart Positioned as the key provider of Electronic Gadgets, Books & Stationery
Private Ltd
Positioned as the key provider of Group Deals (coupons) for events, experiential shopping
Snapdeal & (lifestyle, movies)
Deals and you
Fashion and Positioned as the key provider of Branded Lifestyle products
You (Apparel, Jewelry, Home Decor)
Positioned as the key provider of Lifestyle products 99Labels &
(Apparel, Jewelry) Myntra
Yatra Online,
MakeMy Trip
Positioned as the key provider of travel bookings (best deals on Air tickets)
& Clear Trip
RedBus.in &
Positioned as the key provider of travel bookings – Bus & Railway Bookings, respectively IRCTC.co.in
Positioned as the key provider of Local Business listings JustDial
Positioned as the key provider of Horizontal Classifieds Quickr
Positioned as the key provider of Financial Services Policy Bazaar

9. E-commerce - Market Size (Across Various Products/ Services)
• According to the IAMAI report, Online Travel Market is the largest
– It occupies 81% of the market share and is expected to grow in the coming years
• The other markets occupy 20% of the share and is expected to grow exponentially in the next few years
– E-tailing Market that includes electronic products, home appliances, personal products such as apparels and jewelry
and other accessories – is worth Rs.2050 Cr. (over US$ 410 million) and is expected to grow by 32% in 2012 to Rs.2700
Cr. (over US$ 500 million)

10. Primary Research – Online Shopping Trends & Identifying Key Growth
Sectors
To understand the online shopping behavior and beneficial product sectors.
• The number of respondents are a group of avid shoppers, occasional shoppers and “do not prefer
online” shoppers
• They belong to the Metropolitan Cities in India.

11. Primary Research Conducted On Urban Areas, Entails
• Objective: To understand the Online Shopping Preferences and the
Buying Patterns and thereby analyzing the key sectors of growth
• This Primary Research is conducted on the key metropolitan cities
(New Delhi, Mumbai, Chennai, Bangalore & Hyderabad)
– It includes the working, non-working and household men &
women in India
• It entails a quick comparison among the various E-tailing products
and the shopping sites that are newly emerging
• E-bay and Amazon are still the primary shopping sites. Since
2009, there have been a sudden splurge of online shopping sites
and some of them are the current favorites of several Indian
shoppers/ users
• The products surveyed include:
– Electronics
– Books
– Apparels • Geographical Location: India
– Music
– Home Linen & Décor • Time Period: February 2012
– Accessories
– Beauty & Fitness
– Kitchen Appliances
– Furniture
– Travel & Leisure
• The research does not include the online travel industry data

12. Methodology
• A survey was conducted to know the preferences of the online shoppers/ users. Below were the objectives of the study
The preferred online shopping sites
The products that online buyers prefer the most? What are
they looking for?
How often do these users visit the site?
What do they like about the site and what additionally would
they prefer?
No. Of Survey Respondents: 189
Male: 157
Female: 32
Geographical Location: India

13. Use of Online Shopping Sites
• Out of 189 respondents, people who use online shopping
websites were 172
– The fear of shopping online has taken a back seat
since 2009
• Amazon and ebay are the most preferred sites among
users.
• Apart from which, some of the newly emerging sites
stood as shopper favorites
– Flipkart who are well known as a provider for
Books Stationery & Electronic appliances are the
most preferred
• Around 131 people indicated their 131 users
preference for Flipkart
– Snapdeal who are better identified as the provider
for discount coupons for events, spas & other
experiential shopping services are the next
65 users
preferred
• Around 65 people preferred to use Snapdeal
33 users 33 users
29 users 29 users
22 users
– Some of the other sites (apart from the mentioned
sites) used are:
• Indiashopping, rediff, timtara, zoomin, letsbu
y (had more than 2 mentions)

14. What Do Customers Prefer While Shopping Online?
• Customers prefer easy accessibility of products
– Findings suggest that convenience is the
key reason to shop online
• As mentioned earlier, some of the shoppers
place a constant watch on each of these online
sites, the reason is “Discounts”
– Discounts are the second best feature to
shop online
– However, some of the user mentions are
that “Not many products offer discounts.
In that case, they prefer to buy certain
products like Home linen &
Décor, Furniture and Kids wear at Brick &
Mortar outlets
• Branded Products is another prime reason.
However users prefer such products, only if it is
tagged with discounts

15. Preferred Products Shopped Online
Products No. of
users
Apparels 46
Bags & Accessories 42
Jewelry 18
Home Linen & Décor 14
Electronics 136
Books & Stationery 105
For Kids 14
Furniture 11
Kitchen Appliances 27.9
Travel & Leisure 59.5
Events & 31.5
Entertainment
Beauty & Fitness 21
None at all 11
• Electronic appliances and other peripherals are the most
commonly shopped products
• Books & Stationery stands second highest in online purchase
• Travel & leisure, Apparels, Bags & Accessories are the next
preferences respectively

16. International Brands Over Domestic Brands
• Findings suggests that people are looking for an
experience and they prefer brands that are not
common in India
– 115 users preferred shopping for international
brands as against 57 who do not prefer the
same
• Most of them prefer to shop occasionally
– However, regular users (twice a week) are 43
in number out of 189 which is a large
population
– The online market is gaining traction and
findings suggest that shoppers constantly 71 users
watch for updates on such sites
43 users
32 users
11 users 18 users
11 users
4 users

17. Site Drawbacks
• Flipkart, 99labels, Deals and You, Myntra has the most number of drawbacks stated
– Although Flipkart is the most preferred site, user mentions stated that there is no much discounts
available when compared to the stores
– This could be a threat to Flipkart, if other competitors enter into the mainstream electronics and
home appliances market with better discounts
• Technical issues at the time of payment is a prime drawback. And the most common reason stated
is, “some of the card types are not accepted”.
• The non-site issues include shipment, unavailable delivery to certain locations, and customer care related
issues

18. Tier 2 & 3 Cities – Market Watch
• Non-Metros play a vital role in the growth of e-commerce
– Reason: Big Brands do not open retail shops in non-metros and hence a void for Big Branded products is created
– While logistics is the biggest challenge in non-metros, Online Shopping is an easy and viable business model in
such cities
• Siddharth Puri, Senior Marketing Manager Fetise.com, an online shopping community for Men said, "Fetise
get 500-700 orders a day on an average of which about 150-220 are from the non-metros.“
Online Shopping Provider % of Online Sales from their Total Sales
in non-metro cities
Valyoo Technologies 50%
Fashos.com(online shoe store) 70%
Greendust.com (Consumer Durables) 28%
• Google report
– In 2011, out of the total searches recorded in 2011, 70% of the search happened in non-metros
• Myntra, the largest online fashion store has partnered with Portland India Outdoor Advertising specifically to reach out
to markets like Chandigarh, Lucknow and Pune as 50% of their overall sales volumes is contributed by these tier 2 cities

19. Rural India – Market Watch
• Trends in Rural Buying
• Customers in the rural sector prefer to buy goods using the cash on delivery model
Cash on Delivery
• Metro population buy goods online for convenience, rural population prefer online
shopping due to unavailability of products
Branded products
• Customers in the rural area prefer online shopping for a key reason ( as the non-metros)
• Branded products that are not available at retail stores are rural market favorites
Increasing Internet • The government of India is providing internet kiosks in villages
Kiosks and Wi-Fi • Organizations like ‘Drishti’ and ‘n-Logue’ have spread the use of kiosks
• Google will be soon providing internet service for this population
• It will include:
• Weather updates, information on agriculture trends, modern farming
techniques, local information, railway timings and many others
• The biggest challenge in the rural area is logistics and distribution networks
• With this prevalent issue, online shopping providers are investing time and money in making the networks effective
• Myntra, Flipkart, Indiangiftsportal, 99labels, Bigshoebazaar.com, Snapdeal, Naaptol.com, Taggle.com, Timtara.com and
many other providers are investing in Tier-2 & Tier-3 cities and Rural markets
Source: TheEconomicTimes 2011

20. Product Sectors – Rising Trend
• Some of the uncommon products bought
online is as in the image provided
• The other products that was commonly
bought by some of the cities were
Cities Unique Products
Delhi Body Art Products
Bangalore & Rare coins & Notes
Mumbai (Philanthropy)
Jaipur Chocolates
Chennai Water Filters
Hyderabad Food-Storage Containers
Ahmedabad Shower-gels
Source: ebay Census

21. Product Trends
• Delhi
Northeastern States – Digital Products Trends
– Some of the key trends witnessed in Delhi are
recorded (Gartner Report)
– Top 5 domestic goods bought by Delhi city
shoppers include
• Kurtis, 4GB Pen Drive, Digital Photo
Frames, Bath & Shower Products and
Antivirus software
• 51% Electronics goods and 38% lifestyle
products are the highest
• Women shoppers buy cosmetics, jewelry,
watches, fashion and fitness equipments
mostly
– Top 5 goods imported in Delhi include
• Smart Phones, Indian Commonwealth
Stamps (due to the games season),
Designer wrist watch, headsets and
men’s shoes • The highlighted states and Sikkim preferred digital
• 61% lifestyle products stands the highest products over the others
• They waited for a period of 7-15 days to receive the
latest iPhone version that to travel to Guwahati or
Kolkata to buy a new one

22. Demographics Trends
There is slowdown in traffic in March. The
Flipkart.com reason could be a reduction in PPC budget
“buy books online” is one of the search query
that has got the maximum hits for this site
The site visits are dominated by Men who are
unmarried and in the age group 18-24, mostly

23. Demographics Trends
Myntra.com has maintained its traffic on an
Myntra.com upward trend
Myntra is best positioned as an apparel
provider. “buy t shirts online” is one of the key
search apart from “myntra.com”
As Flipkart.com, Myntra’s frequent customers
belong to the age group 18-24

24. Operations
Logistics, Payments & Site Challenges

25. Operational Challenges - Logistics
• Logistics and Distribution network is one of the key challenges faced by Online providers
– For a B2B or a B2C customer, it is key to provide timely shipment
– It is key to meet the constant supply and demands of B2C customers
1 Manufacturer Distributor Online provider Customer
Shipment Shipment Shipment
2 Manufacturer Online provider Customer
Shipment Shipment
3 Manufacturer Customer
Shipment
Shipment is the key challenge –
• However with the disintermediation in the levels of communication, the price of the product/ service and the
shipment information can be tackled
• But online providers are a medium of marketing and advertising and hence option 1 of the shipment channel works
best in certain cases

26. Operational Challenges - Payment Methods
• Indian consumers are concerned about security and payments
e.g.: Subscribe to certain software sites to
Pay-Online and use their products online
Consume Online
e.g.: Products that range above 25K
Pay Offline Buy Online cannot be taken as cash payment due to It
e.g.: Products such as apparel
and Consume and Consume issues. These goods (electronics, home
and accessories that are paid Offline Offline décor) have to be purchased online and
delivered offline
and delivered off line
• With the payment concerns, websites have resorted to two different means
• Cash-on-Delivery model
• Deal discounts and Coupons
• A trend of online payment is increasingly witnessed and according to e-bay census online shopping providers will
witness a remarkable change in payment by 2016

27. Operational Challenges – Website Experience
• The key to a website design is to reduce the number of steps for the user to select a product to the payment out page
• It is also very key to make the product selection page attractive
• Below are some of the key examples of the sites and how appealing it is to the customers
Fashion and you displays all its products
even if the homepage is long and has to be
scrolled. Certain users prefer this detailed
info right on the homepage
Flipkart and Myntra have a similar website
theme. Key products are listed in the
homepage banner/ product highlight
section

28. Investments – E-tailing in India

29. Flipkart Has Changed India’s Online Shopping Market– Success Story
• US$ 5 million sales is recorded by Flipkart daily
Flipkart Sales
• The growth rate is 100%, quarter on quarter
• 60 per cent of Flipkart's orders are cash or card on delivery
• Right from browsing to delivery, one can track their orders on the site
Website Experience • One can pre-order an unreleased book and get a good price as alerts
• Importantly, the discounts offered on books is the key to their success
• Bookstores receive 50-60% discounts from publishers, but the overheads reduce the
option to keep a low margin on the books
Product growth
• With this low overhead advantage, Flipkart is able to over huge discounts
• The company has grown to offer 11.5 million titles (largest book retailer in India)
• Flipkart started with books and now offers 12 product categories
Marketing and • The company is investing on online and offline ad campaigns
Advertising • This is to not only convert the internet savvy population but also the retail shopping
customers
• Sanjay Bhansal, CEO of Flipkart believes a 10 fold increase in the customer base
• Flipkart is entering the Digital Media market
Acquisition
• Flipkart acquired Mallers Inc, (Mime 360) to enter the music industry (CD’s, DVD’s )
• Flipkart also acquired LetsBuy, provider of electronic gadgets
• With this acquisition Letsbuy’s US$6 million share is owned by Flipkart making them
the not only the market leaders but eliminating one big threat

30. Appendix

31. E-Commerce - Business Chart
E-Commerce Business Unit
Quadrant 1 - when business Business
Quadrant 2 - when an agent or
and operations are handled by
a distribution network is
Manufacturer to reach out to
contacted to manage logistics
customers
Distribution
Manufacturer
Network
Technical
Operations
Outsourcing Online Shopping
Operations Provider
Quadrant 4 - when the
manufacturer outsources the Quadrant 3 - when a e-tailer
logistics operations and marketing. manages the marketing show
In some cases a franchisee of the Innovation for the manufacturer
manufacturing unit is also provided

32. Online Service Provider – Key To Efficient Business
Technology
Offer Site
Experience
Offer Secure
Payment Updating of
methodology Inventory
Customer Order
Info Tracking
Tracking features
Backend
Provide
integration
automatic
with Supplier
alerts
systems
Customer
Newsletters Feedback –
and product Satisfaction
brochures survey
Provide product
news to
customers based
on past behavior
Business