India’s Digital Proxy War of the Worlds! 1.) India has emerged as the e-commerce battleground for the slugfest between US and China. 2.) It has brought a great bounty of riches for the Indian consumer and the payments ecosystem. But will the good times last? Find out as Sriram Natarajan speaks on the prevalent issue.

1. #
The Battle of the Binge
India’s digital proxy War of the Worlds!
Sriram Natarajan
President & COO

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• India has emerged as the e-commerce battleground for the
slugfest between US and China.
• It has brought a great bounty of riches for the Indian
consumer and the payments ecosystem.
• But will the good times last?

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Consumers Are Proving to be the
Real Winners!!
Who are the Winners & Why?

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India’s Digital Economy Facts & Figures
India’s Online Population
Is Tipped To Reach 550
Million People By June
2018
The Value Of Online
Sales In India Is
Predicted To Reach
$48 Billion By 2020
1.4 Billion Cards
expected to in
circulation by 2020
The Indian Digital
Payments Industry Is
Projected To Reach
$500 Billion
By 2020
Source: IndiaToday |Hindu | Quora | HostingFacts
With the burgeoning growth of Smart Phones and payment cards; India’s digital revolution appears to
be the next big thing!

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With the world’s largest Biometric database of over a billion
(Aadhaar) ; India is poised to adopt omni channel digital
payments
Preferred Mode Of Digital TransactionsIndia Is Becoming A Digital Country
Digital Economy Facts & Figures (Cont.)
Source: eMarketer, Ericsson, UN estimates, BCG research Source: KPMG

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Mobile Wallet Market Share
39%
26%
17%
10%
7%
6%
5%
4%
40
29
18
17
17
14
23
70 Facts
Paytm is the most popular mobile payment app among Android
smartphone owners in urban India.
FreeCharge is the second most popular service with 26% reach and
40 minutes of usage per month.
Mobikwik (17% reach and 29 minutes) is the next most popular
service followed by My Airtel (10% and 18 minutes), Oxigen
Wallet (7% and 17 minutes), My Vodafone(6% and 17
minutes), Paytm Wallet (5% and 14 minutes) and Pockets by
ICICI (4% and 23 minutes).
PAYMENT APPS
(Reach %); Dec 2015
TIME SPENT BY USERS
(Mins/Month); Dec 2015
Source: Nielsen’s Research
India’s Mobile Wallet Transactions Were $9 Billion In April-17 Versus 1 Billion 2 Years Ago
The Economic Times
The preponderance of Prepaid mobile
connections (96%) means that there is a
convergence of MSPs, PSPs and
Ecommerce companies

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E-tailers Market Share
32.50%
39.50%
5.50%
4%
4%
14.50%
Amazon
Flipkart
Snapdeal
Shopclues
Paytm
Others
Source: India-Ecommerce-battle-Sep2017, Research: Neeraj Krishnan
Head to Head –
Amazon and
Flipkart
Deep Pockets and
Cash Investors
backing all the key
players

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Global Players & Challenges To Digital Payments
Key Barriers to Digital Payment
16%
27%
29%
33%
48%
55%
68%
Reach
Fraud/Hidden Charges
Incentives/Offers From Other
Methods
Intertia Of Non-Cash Methods
Lack Of Compelling Value Of
Proposition
Complexity Of Using
Habit To Cash Use
Source: Google-BCG Report
Cash has always been King- nay Emperor!
CoD (cash on delivery) accounted for more than 70% of ecommerce sales until hit by demonetization

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Yawning Gap Between India And China
100
420
1,342
Online Buyers
Internet Users
India
Population
467
731
1,388
Online Buyers
Internet Users
China
Population
Internet Users And Online Shoppers
In 2016, 467 Million internet users in China purchase through online mode on the other hand, for the same
period in India, 100 Million internet users purchased online. Therefore, there is a huge gap in Chinese and India
online buyers, Besides the fact that population of both the countries are at almost the same level.
Source: The Economics Times, LiveMint, WorldBank Report, Techinasia, Statista
Figures in Millions Figures in Millions
Up to now – it is a no contest!
But India looks to be the next big market for a digital revolution
India China

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Chinese Investments Are Pouring In!
Huge stakes for all the key players – China, US and Japan!
Tencent Leads $1.4 Billion Investment In India’s Flipkart
Source: The Economic Times
China's Tencent May Put $400 Million In Ola To Fight Uber
Source: Times of India
Hike Messenger Grabs $175M Led By WeChat Parent Tencent & Foxconn
Source: The Economic Times
Alibaba Group Holding Ltd Considering $200M Bigbasket Investment
Source: Stocknews.com

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Let the Proxy Wars begin!
Amazon, which entered in India three
years ago, had invested $3 Billion or
over Rs 20,000 crore to build a strong
backend infrastructure and ensuring
quicker product delivery.
SoftBank And Amazon Are Turning Out To Take
On The Chinese! PayPal In The Fray Too.

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Jeff Bezos Has Committed To Invest $5 Billion In Amazon India
Masayoshi Son’s Softbank Investment Fund To Invest $2.5 Billion In Flipkart
Amazon’s Key Acquisitions
$13.7 Billion
In American Grocery Chain Whole Foods
$1.20 Billion
In Online Clothing Company Zappos
$980 Million
In Online Television Platform Twitch
$780 Million
In Robot Manufacturer Kiva Systems
$650 Million
In UAE-based Online Shopping Platform Souq.Com
Softbank’s Biggest Investments
$60 Billion
For A 28% Stake In Chinese E-commerce Giant Alibaba
Battle Of The Titans
$32 Billion
In Acquiring Chip Manufacturer ARM Holdings
$22 Billion
For An 80% Stake In American Carrier Sprint Corp
$5 Billion
In Chinese Ride-sharing Company DidiChuxing
$1.4 Billion
In Paytm
$1 Billion
For A 30% Stake In Ola
$900 Million
For A 33% Stake In Snapdeal
Source: India-Ecommerce-battle-Sep2017, Research: Neeraj Krishnan
India Is Prominent In The Multi Billion
Dollar Acquisition Gambits Of The Giants

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Parting Thoughts
• Expect more intensive battles in this space
• Increased focus on top line sales for now
• Expect heat on bottom line when the market matures
• Growing penetration and mass adoption of ecommerce is the priority for now
• Both Amazon and Flipkart to spend a significant amount on infrastructure and logistics
to control the customer experience and increase their buyer base
The Indian Consumer holds the bleeding edge!
Sriram Natarajan
President & COO, Quatrro Processing

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Thank You!