The online retail market in the Middle East and North Africa region is poised for rapid growth and is expected to reach a tipping point. Recent developments like Mohammed Alabbar's new e-commerce venture and Amazon's acquisition of Souq will significantly improve online retail capabilities in the region. These moves will increase product selection, boost operational efficiency through better inventory management, and enhance the customer experience through improved after-sales support. However, rising competition may also put pressure on companies' margins as growth is prioritized over profitability. Overall, the online retail industry in MENA appears well-positioned for exponential expansion in the coming years.
eCommerce platforms shipped ~2.5 billion shipments in
FY2020 growing at ~50%+ CAGR in the last 3 years. However,
we expect shipment volume to grow at ~30-35% CAGR for next
5 years.
Some of the key drivers of growth for eCommerce are the
latent demand in Tier-2+ cities, enablement of logistics
networks, infrastructure built by eCommerce platforms (large
horizontals), and new age third-party logistics players in
the last 3-4 years. The investment in logistics networks and
infrastructure has enabled eCommerce platforms to reach
online shoppers beyond metro and tier-1 cities to hinterland in
the country
Ground Zero 4.0 | Scaling Up - Event ReportRedSeer
Executive Summary
The report is compiled of all the topics that were discussed at Ground Zero 4.0 and has been
segregated based on RedSeer’s research and panel inputs.
Key Findings:
1. Digital India
2. Retail
3. D2C
4. Education
5. Healthcare
6. Grocery
7. Etailing
Spend on hotels in international market observed higher drop compared to domestic market due to COVID led travel restrictions. We expect the recovery for international markets to take longer compared to domestic markets given the uncertainty around the travel requirements (due to COVID).
eCommerce platforms shipped ~2.5 billion shipments in
FY2020 growing at ~50%+ CAGR in the last 3 years. However,
we expect shipment volume to grow at ~30-35% CAGR for next
5 years.
Some of the key drivers of growth for eCommerce are the
latent demand in Tier-2+ cities, enablement of logistics
networks, infrastructure built by eCommerce platforms (large
horizontals), and new age third-party logistics players in
the last 3-4 years. The investment in logistics networks and
infrastructure has enabled eCommerce platforms to reach
online shoppers beyond metro and tier-1 cities to hinterland in
the country
There has been a sudden switch in the buying and selling pattern of the customers in all over India, which created the growth of e-commerce industry. This switch can also be noticed in the automobile industry. The online penetration of auto sector in the world market is approx. 0.7% in 2019. It was challenging for automobile ecommerce industry to make it successful in India, but eminent players of India have made it possible. To learn the possibilities and success of auto ecommerce industry go through this document.
Gated community $ 500B consumption story in 2026RedSeer
1.4 Bn Indian population translates to ~310 Mn Households pan India. Out of this, top-50 cities, by population, have 50Mn households (~16%) expected to grow by 2.5% CAGR to reach 63Mn by 2031. In the top-50 cities, 16 Mn households (~32% of overall households in top-50 cities) reside in the gated communities. This is expected to grow by ~7% CAGR in the next 10 years to reach 32 Mn Households in 2031- contributing to ~50% of households in top-50 cities.
Indian apps have retained 65-70% of the Tiktok era users driven by acquisiton of influencers on these platforms as well as efforts to provide similar/ better product experience for creators and users. 30-35% of users on short-form video have been acquired through aggressive customer acquisition and marketing push by Indian apps. The new users getting on-boarded have a higher share of tier-2+ users driven by stronger focus of platforms on vernacular content and ‘Bharat’ positioning.
eCommerce platforms shipped ~2.5 billion shipments in
FY2020 growing at ~50%+ CAGR in the last 3 years. However,
we expect shipment volume to grow at ~30-35% CAGR for next
5 years.
Some of the key drivers of growth for eCommerce are the
latent demand in Tier-2+ cities, enablement of logistics
networks, infrastructure built by eCommerce platforms (large
horizontals), and new age third-party logistics players in
the last 3-4 years. The investment in logistics networks and
infrastructure has enabled eCommerce platforms to reach
online shoppers beyond metro and tier-1 cities to hinterland in
the country
Ground Zero 4.0 | Scaling Up - Event ReportRedSeer
Executive Summary
The report is compiled of all the topics that were discussed at Ground Zero 4.0 and has been
segregated based on RedSeer’s research and panel inputs.
Key Findings:
1. Digital India
2. Retail
3. D2C
4. Education
5. Healthcare
6. Grocery
7. Etailing
Spend on hotels in international market observed higher drop compared to domestic market due to COVID led travel restrictions. We expect the recovery for international markets to take longer compared to domestic markets given the uncertainty around the travel requirements (due to COVID).
eCommerce platforms shipped ~2.5 billion shipments in
FY2020 growing at ~50%+ CAGR in the last 3 years. However,
we expect shipment volume to grow at ~30-35% CAGR for next
5 years.
Some of the key drivers of growth for eCommerce are the
latent demand in Tier-2+ cities, enablement of logistics
networks, infrastructure built by eCommerce platforms (large
horizontals), and new age third-party logistics players in
the last 3-4 years. The investment in logistics networks and
infrastructure has enabled eCommerce platforms to reach
online shoppers beyond metro and tier-1 cities to hinterland in
the country
There has been a sudden switch in the buying and selling pattern of the customers in all over India, which created the growth of e-commerce industry. This switch can also be noticed in the automobile industry. The online penetration of auto sector in the world market is approx. 0.7% in 2019. It was challenging for automobile ecommerce industry to make it successful in India, but eminent players of India have made it possible. To learn the possibilities and success of auto ecommerce industry go through this document.
Gated community $ 500B consumption story in 2026RedSeer
1.4 Bn Indian population translates to ~310 Mn Households pan India. Out of this, top-50 cities, by population, have 50Mn households (~16%) expected to grow by 2.5% CAGR to reach 63Mn by 2031. In the top-50 cities, 16 Mn households (~32% of overall households in top-50 cities) reside in the gated communities. This is expected to grow by ~7% CAGR in the next 10 years to reach 32 Mn Households in 2031- contributing to ~50% of households in top-50 cities.
Indian apps have retained 65-70% of the Tiktok era users driven by acquisiton of influencers on these platforms as well as efforts to provide similar/ better product experience for creators and users. 30-35% of users on short-form video have been acquired through aggressive customer acquisition and marketing push by Indian apps. The new users getting on-boarded have a higher share of tier-2+ users driven by stronger focus of platforms on vernacular content and ‘Bharat’ positioning.
As one of the fastest growing e-commerce models, RedSeer latest report highlights quick commerce platforms such as Swiggy's Instamart, Dunzo, and more.
Overall performance of players has improved in DDI #3 across both Speed of Delivery basis Expectation and Delivery Experience perceived by consumers driven by complete
unlock in JFM’21 and last-mile innovations by platforms and logistics partners
Funded by large global investors, the e-tailing market in India is growing exponentially. Going forward, what are the megatrends likely to emerge in this market?
Indian grocery traditionally has been a primarily unorganized market, wherein more than 90% of the market is driven by traditional ‘kirana stores. However, in the past decade or so, organized brick & mortar and online channels have gained prominence. Online grocery has been boosted by covid-19 related tailwinds, with the GMV run-rates of major players growing by 70%+ during the period. This has led to an increased focus on the sector by large conglomerates as well as mature online players.
During Covid, while there were some challenges in the initial days of the lockdown, the segment has grown significantly. Most notably, fresh vegetables and fruits have seen 144% growth, while FMCG products grew 150%. While a lot of this growth will normalize to some extent as the COVID situation subsides, a significant portion of new users will persist and drive growth.
With the increasing demand and competition, it becomes imperative for brands to stay ahead by making data-driven decisions. In order to equip the brands to win in the online space, BigBasket Brand Intelligence and RedSeer have partnered to author this report. The idea here is to combine high-quality RedSeer IP on broader trends in the sector and BigBasket’s grocery expertise to create a ready-reckoner for brands, as they make strategic, product or channel-related decisions.
This report is an abridged version of the larger report which can be subscribed as per need. Besides the key trends of the sector, customer insights etc., this report deep dives on key categories such as Snacks & Packaged Foods, Beverages, Personal Care and Home Utilities, we present the quarterly growth in sales in the past 5 quarters with various sub-category splits.
Indian E-Grocery: A Promising Opportunity Led By Value-First UsersRedSeer
The ~$600 Bn grocery industry in India is undergoing
a similar disruption enabled by eGrocery platforms,
that have done a tremendous job in transforming how
people shop for their groceries. While these platforms
have solved for a number of consumer needs ranging
from improved access to higher convenience, the largest
challenge still faced by an average Indian is around
affordability and eGrocery platforms have the potential to
effectively resolve this aspect.
With increasing prevalence of top-up and unplanned purchases in metro and Tier1, convenience and speed of delivery have become important; super-specialized platforms have emerged to offer convenience and instant deliveries.
Key themes in this section:
1. Moats for the winning play Based on learnings from global successful models, we have created a capability framework for identifying ‘emerging winners’ with proven capabilities
2. Experience on ‘emerging winners’
platforms Basis deep research on multiple aspects including personalization, user feedback and creator feedback- we have created a nuanced view of current experience on the platforms
1. Online skill-based real-money gaming market in India is estimated to grow to become ~$3.8 Bn1 by 2024 speed of growing smartphone penetration, low cost of data and vast digital payment infrastructure allowing individuals access to instant real-time inter-bank transactions.
2. Introduced to Indian market in early 2010 and pioneered by Dream11, Fantasy sports contributed ~ 30% of the RMG market in 2019. Fantasy sports market has witnessed exponential growth in recent years fuelled by increasing user base, high engagement and increasing investor interest and is expected to grow by ~60% till 2024.
3. Casual online real-gaming market contributed ~70% of the total RMG market in 2019. However, it is expected to grow relatively slower at ~35% when compared to fantasy sports.
4. Driven by high growth opportunity in RMG market, horizontal players have started foraying in the segment. In 2019, Paytm entered the casual gaming space with Paytm First Games.
40% Of TikTok’s India Market Captured By Homegrown AppsRedSeer
Increase in smartphone sales driven by a rising middle class, more digitalization through tech advancements such as 5G, etc. Shorter attention spans of Millennials and GenZ, Increased visibility for creators, need for entertainment, Vast vernacular libraries. Short curated videos to be the primary source of entertainment (acting as fillers during breaks between daily tasks), Social community through short-form to aid in enhancing retention. High stickiness because of the wide array of content ( Challenges, hashtags, etc), monetization opportunities will aid in enhancing stickiness. Enhanced tech engine ensures better personalization and content moderation, leading to increased daily engagement.
Indian Female Innerwear’s $12 Billion OpportunityRedSeer
India currently stands at quite an interesting juncture of consumption. It consists of a majority of young populace who are mainly driving the growth of income per capita and consumption. India’s GNI (Gross National Income) per capita was US$ 2,120 in 2019 which is lower than the US (US$ 65,850) and China (US$ 10,410). However, India’s GNI per capita is expected to grow at 7% between 2019 and 2025, which is faster than US’ and China’s expected growth rates between 2019 and 2025 at 2.9% and 6.1% respectively.
Flipkart-Walmart deal has been a landmark moment in the history of e-tailing. Since its humble beginnings in 2000, e-tailing has come a long way. The growth story of the industry in the last 10 years has been nothing less than remarkable. While the growth had slowed down between 2014-2016 due to multiple factors like DIPP regulations and demonetization, 2017 has seen a turnaround for the industry.
Spend on hotels in international market observed higher drop compared to domestic market due to COVID led travel restrictions. We expect the recovery for international markets to take longer compared to domestic markets given the uncertainty around the travel requirements (due to COVID).
Black Friday is a critical event in the retail calendar in MENA. This event which was first launched by Souq (now Amazon) as a 3-day online only event has now expanded to over six weeks of Q4. The event has been so popular that ~20% of annual online retail sales happen during the Black Friday sale period.
The $500 Mn Potential Indian Smartphone Insurance Market, But Are The Custome...RedSeer
With a 1.3 billion population, India showcases a humongous
market for smartphones. On an average, an Indian spends
1/3 of their total awake time on their phones. Driven by rapid
digitization and expanding internet accessibility, smartphones
have become a necessity and have already landed in the
hands of 550 million Indians.
Marketers' guide to connected consumer journeys in Festive season 2021 by MMA...Social Samosa
MMA, GroupM, and Amazon Advertising have launched the ‘Decoding Consumer behavior and Winning the 2021 Festive season’ Playbook is a handbook for marketers on expected consumer sentiments along with recommended strategies for Diwali this year in 2021
Kantar annual trends share insights on how the consumers are preparing themselves with the brewing challenges, obstacles, and opportunities as we move forward in 2022.
Ereputation Intelligence for your big data journeyM Kadi
Big Data applies to data sets whose size is beyond the ability of commonly used traditional techniques to capture, manage, and process within a tolerable elapsed time . This is where ERI builds a solid grounding and design infrastructure to drive this innovation forward and boost better outcomes
As one of the fastest growing e-commerce models, RedSeer latest report highlights quick commerce platforms such as Swiggy's Instamart, Dunzo, and more.
Overall performance of players has improved in DDI #3 across both Speed of Delivery basis Expectation and Delivery Experience perceived by consumers driven by complete
unlock in JFM’21 and last-mile innovations by platforms and logistics partners
Funded by large global investors, the e-tailing market in India is growing exponentially. Going forward, what are the megatrends likely to emerge in this market?
Indian grocery traditionally has been a primarily unorganized market, wherein more than 90% of the market is driven by traditional ‘kirana stores. However, in the past decade or so, organized brick & mortar and online channels have gained prominence. Online grocery has been boosted by covid-19 related tailwinds, with the GMV run-rates of major players growing by 70%+ during the period. This has led to an increased focus on the sector by large conglomerates as well as mature online players.
During Covid, while there were some challenges in the initial days of the lockdown, the segment has grown significantly. Most notably, fresh vegetables and fruits have seen 144% growth, while FMCG products grew 150%. While a lot of this growth will normalize to some extent as the COVID situation subsides, a significant portion of new users will persist and drive growth.
With the increasing demand and competition, it becomes imperative for brands to stay ahead by making data-driven decisions. In order to equip the brands to win in the online space, BigBasket Brand Intelligence and RedSeer have partnered to author this report. The idea here is to combine high-quality RedSeer IP on broader trends in the sector and BigBasket’s grocery expertise to create a ready-reckoner for brands, as they make strategic, product or channel-related decisions.
This report is an abridged version of the larger report which can be subscribed as per need. Besides the key trends of the sector, customer insights etc., this report deep dives on key categories such as Snacks & Packaged Foods, Beverages, Personal Care and Home Utilities, we present the quarterly growth in sales in the past 5 quarters with various sub-category splits.
Indian E-Grocery: A Promising Opportunity Led By Value-First UsersRedSeer
The ~$600 Bn grocery industry in India is undergoing
a similar disruption enabled by eGrocery platforms,
that have done a tremendous job in transforming how
people shop for their groceries. While these platforms
have solved for a number of consumer needs ranging
from improved access to higher convenience, the largest
challenge still faced by an average Indian is around
affordability and eGrocery platforms have the potential to
effectively resolve this aspect.
With increasing prevalence of top-up and unplanned purchases in metro and Tier1, convenience and speed of delivery have become important; super-specialized platforms have emerged to offer convenience and instant deliveries.
Key themes in this section:
1. Moats for the winning play Based on learnings from global successful models, we have created a capability framework for identifying ‘emerging winners’ with proven capabilities
2. Experience on ‘emerging winners’
platforms Basis deep research on multiple aspects including personalization, user feedback and creator feedback- we have created a nuanced view of current experience on the platforms
1. Online skill-based real-money gaming market in India is estimated to grow to become ~$3.8 Bn1 by 2024 speed of growing smartphone penetration, low cost of data and vast digital payment infrastructure allowing individuals access to instant real-time inter-bank transactions.
2. Introduced to Indian market in early 2010 and pioneered by Dream11, Fantasy sports contributed ~ 30% of the RMG market in 2019. Fantasy sports market has witnessed exponential growth in recent years fuelled by increasing user base, high engagement and increasing investor interest and is expected to grow by ~60% till 2024.
3. Casual online real-gaming market contributed ~70% of the total RMG market in 2019. However, it is expected to grow relatively slower at ~35% when compared to fantasy sports.
4. Driven by high growth opportunity in RMG market, horizontal players have started foraying in the segment. In 2019, Paytm entered the casual gaming space with Paytm First Games.
40% Of TikTok’s India Market Captured By Homegrown AppsRedSeer
Increase in smartphone sales driven by a rising middle class, more digitalization through tech advancements such as 5G, etc. Shorter attention spans of Millennials and GenZ, Increased visibility for creators, need for entertainment, Vast vernacular libraries. Short curated videos to be the primary source of entertainment (acting as fillers during breaks between daily tasks), Social community through short-form to aid in enhancing retention. High stickiness because of the wide array of content ( Challenges, hashtags, etc), monetization opportunities will aid in enhancing stickiness. Enhanced tech engine ensures better personalization and content moderation, leading to increased daily engagement.
Indian Female Innerwear’s $12 Billion OpportunityRedSeer
India currently stands at quite an interesting juncture of consumption. It consists of a majority of young populace who are mainly driving the growth of income per capita and consumption. India’s GNI (Gross National Income) per capita was US$ 2,120 in 2019 which is lower than the US (US$ 65,850) and China (US$ 10,410). However, India’s GNI per capita is expected to grow at 7% between 2019 and 2025, which is faster than US’ and China’s expected growth rates between 2019 and 2025 at 2.9% and 6.1% respectively.
Flipkart-Walmart deal has been a landmark moment in the history of e-tailing. Since its humble beginnings in 2000, e-tailing has come a long way. The growth story of the industry in the last 10 years has been nothing less than remarkable. While the growth had slowed down between 2014-2016 due to multiple factors like DIPP regulations and demonetization, 2017 has seen a turnaround for the industry.
Spend on hotels in international market observed higher drop compared to domestic market due to COVID led travel restrictions. We expect the recovery for international markets to take longer compared to domestic markets given the uncertainty around the travel requirements (due to COVID).
Black Friday is a critical event in the retail calendar in MENA. This event which was first launched by Souq (now Amazon) as a 3-day online only event has now expanded to over six weeks of Q4. The event has been so popular that ~20% of annual online retail sales happen during the Black Friday sale period.
The $500 Mn Potential Indian Smartphone Insurance Market, But Are The Custome...RedSeer
With a 1.3 billion population, India showcases a humongous
market for smartphones. On an average, an Indian spends
1/3 of their total awake time on their phones. Driven by rapid
digitization and expanding internet accessibility, smartphones
have become a necessity and have already landed in the
hands of 550 million Indians.
Marketers' guide to connected consumer journeys in Festive season 2021 by MMA...Social Samosa
MMA, GroupM, and Amazon Advertising have launched the ‘Decoding Consumer behavior and Winning the 2021 Festive season’ Playbook is a handbook for marketers on expected consumer sentiments along with recommended strategies for Diwali this year in 2021
Kantar annual trends share insights on how the consumers are preparing themselves with the brewing challenges, obstacles, and opportunities as we move forward in 2022.
Ereputation Intelligence for your big data journeyM Kadi
Big Data applies to data sets whose size is beyond the ability of commonly used traditional techniques to capture, manage, and process within a tolerable elapsed time . This is where ERI builds a solid grounding and design infrastructure to drive this innovation forward and boost better outcomes
Foison Accounting Management System is accounting software that provides you all the functionality related to accounts on a single platform. Accounting is the process of identifying, measuring and communicating the economic information of an organisation to its users for the correct decision making. This system identifies transactions and events of a specific entity.
This presentation takes account of exponential progress of Flipkart and identifies some of the weaknesses in its business model. Further it suggests some Strategic actions which could be taken in short term and in long term, to make itself profitable
Extensive Validated Case Study on the Business Process Framework for Market Entry of a Minimum Viable Product corresponding to a Mobile App Generating Vernacular Payment Links.
CX2016: Transform Retail Customer Engagement Across Every ChannelMaria Humphrey
In today’s connected world, every customer interaction matters. Hear first hand how The Land of Nod is leveraging data science, targeted content and personalized journeys as a vehicle for enhancing customer engagement through both on-line and in-store. Learn how to make the most of every shopper touchpoint to create loyal brand advocates.
RSR ebook: Retail ecommerce in context: the next iterationLeigh Doyle
After years of steady ecommerce growth, there has been an unprecedented acceleration of the shift from physical stores to online shopping. Retailers are facing the limitations of their aging technology stack in allowing them to offer buy online pick up in store (BOPIS), social commerce, adding new payment methods, launching subscription programs and more. This study aims to understand how well retailers have been able to pivot to a digital-first world, the challenges they face, the opportunities nascent in the marketplace, and how their technology portfolios are able to support these shifts profitably.
Our first Leeds Online Seller Meetup held on 7th April in Leeds Beckett University was really successful. We had attendance of 20 online
businesses and a representative from local chamber of commerce. There was an interesting mix of businesses selling fancy clothes, books to kitchen doors.
2. This growth will be driven by a combination
of supply side initiatives. Product selection is
expected to show manifold growth, as the
nascent seller ecosystem expands sharply.
Growth in operational efficiency driven by
inventory stocking will shorten delivery
times significantly - leading to strong
consumption spike. Thirdly, hyper
competition will drive consumer experience
focus especially on after sales - boosting
adoption significantly. Together, these
factors should push the market to its tipping
point and truly make it roar.
The online retail industry in the Middle East
and North Africa (MENA) is at the cusp of
reaching its tipping point and is likely to grow
exponentially to more than $20bn by 2020.
| RedSeer Consulting
SUMMARY
3. Online retail market is
evolving at a rapid pace in MENA region.
We believe that the last 12 months will
go down as a watershed moment in the
history of online retail in this region.
There were two game changing events
over the last 12 months : announcement
of Mohammed Alabbar’s ecommerce
venture and the acquisition of Souq, the
largest regional e-tailer, by Amazon.
Mohamed Alabbar has been on an
aggressive capability building spree to
build end-to-end ecommerce
capabilities since 2016. He has
announced the launch of Noon, a new
e-tailing portal and acquired talent
across the world. His companies have
also acquired stakes in a regional
logistics leader (Aramex), an
international online fashion portal &
white label technology provider
(Yoox-Netaporter), two regional
ecommerce providers (JadoPado /
Namshi), a regional venture capital firm
(Middle East Venture Partners) and a
FMCG company (Americana).
On the other hand, Souq, the regional
online retail leader, has been acquired by
Amazon, the global leader in online
retail. Amazon is a pioneer in online
retail and has deep online retail
capabilities with more than 50% market
share in USA. Also, Amazon is
war-hardened after it cracked open an
emerging ecommerce market, India, as
demonstrated in our latest E-tailing
leadership index. As the index shows,
Amazon is now neck-to-neck with
Flipkart, the incumbent, across
dimensions.
Indian online market grew by almost
3x in 2015, it’s breakout year. We
estimate MENA online retail market also
to break out in the coming three years to
reach more than $20bn by 2020.
2016-2017:
A Watershed Moment
in Online Retail in MENA
Page 1 | RedSeer Consulting
4. Capability: Steep Improvements
Expected
Theseinitiatives will provide an
unparalleled access to processes,
technology and more importantly talent
(a recurring challenge for the region).
This will in turn improve capabilities
across the online retail value chain. Key
capabilities where we expect to see
significant improvement are:
• Improved product variety and
availability
• Better operational efficiency
• Better customer experience
Mohamed Alabbar has stated that his
ecommerce venture will offer ~20m
product listings. Amazon had a
productlisting of 15m in India within 10
months of its launch. Souq, in
comparison, has <8m products (with
~6m of them in the “book” category).
These numbers also vary significantly by
the country of delivery. We expect the
online product assortment to increase
multi-fold in the coming years.
One of the challenges to increasing
product assortment is the nascent seller
ecosystem in the region. A survey of
sellers by Redseer Consulting showed
that 50% of sellers were willing to go
online – a healthy number given the
current size of online retail market (~1%
of total retail). However, there was a lack
of understanding about ecommerce and
cost of online sales was perceived to be
high.
Improved Product Variety and
Availability
We are not comfortable with technology
and do not understand e-commerce
Online demand is poor as very few
customers shop online
We cannot affort logistics and
commissions costs in online selling
We only sell locally, no need
for us to online.
IncreasingnumberofMentions
Hurdles to selling online
As A % of sellers surveyed
Source : RedSeer survey of ~70 Sellers in MENA region.
~20 sellers were selling online
Fig : 1
Page 2 | RedSeer Consulting
5. Source : RedSeer Database
Fig : 2
Fig : 2
This indicates that seller-related
processes need to be further optimized.
Emerging markets such as India have
already gone through this transition.
For example, Flipkart tied-up with local
vendors to reach out to sellers and created
a seller protection fund to resolve disputes
quickly.
Amazon India increased seller awareness
and onboarding through its innovative
Tatkal and Seller Café concepts.
SELLER ONBOARDING PROCESS
SELLER POLICY DESIGN
• Flipkart tied up with local vendors reaching out
sellers and driving up the seller count on its
marketplace.
• Seller protection fund in place to enable quick and
hassle free resolution of disputes related to
damages and returns.
SELLER DASHBOARD
SELLER ENGAGEMENT PROGRAMS
• Detailed performance dashboard showing SKU
level sales performance and shipment tracking.
• Easy to use advertising feature,priced on a per
click basis.
• High performing sellers are able to interact
regularly with the account mangers for expectation
and target setting and obtaining feedback.
• For larger sellers, direct access to account
managers enables swift customer support.
KEY LEARNINGS
Launch of easy-to-use advertising
feature has helped increase seller
visibility and is showing increased
adoption to 2-4% of seller base.
Best practices
Page 3 | RedSeer Consulting
6. MENA market is divided into multiple
countries with different legal
framework and custom taxes making
the operations complex to manage. This
is very different from other large
markets such as USA, India and China
which are relatively homogenous to
operate. This is arguably one of the
biggest challenges for e-tailing to grow
in the region. Smooth operations impact
speed of delivery to customer which in
turn impacts both profitability and
customer experience.
We estimate that less than 10% of
the orders in the region have a promised
of less than two days currently. This is in
part because majority of the orders are
still fulfilledby the sellers (inventory is
stocked with sellers). In the coming
years, weexpect that e-tailers will start
stocking inventory required for fulfilling
orders in warehouses controlled by
them. In India, today more than 60% of
orders are warehouse fulfilled. When
Indian e-tailers transitioned to stocking
inventory in their warehouses, the
order-to-shipment delivery times
reduced by one full day.
Better Operational Efficiency
We expect that MENA will also witness
similar improvements in delivery times
once they moved to stocking inventory.
Redseer’s research indicates that
customer satisfaction improves with
improving delivery speeds. It is not
surprising that Souq is already
experimenting with same day delivery
while Noon is expected to make two-day
delivery a central part of their
proposition.
Page 4 | RedSeer Consulting
7. We expect e-tailers to build on the best
practices across different geographies
while customizing them to the region.
Some examples include :
• Communication channels: Currently,
customer interactions are primarily
through call centers and emails while
other channels are used sporadically.
We expect additional channels of
engagement such as virtual messaging
chats between stakeholders to be more
widely available. Also, currently, many
e-tailers insist on returns only through
call centers.
With increasing competition, most
e-tailers would decide to provide
website / in-app based returns to
remain competitive.
• After-sales care: E-tailers will look to
move away from pricing to identify
sustainable sources of differentiation.
For example, installation services
provided after sales in electronics have
a significant impact on the net promoter
score (NPS) of the e-tailer.
25
After Sales Impact on NPS
NPS
Installationservice
Promoters (5)Moderators (4)Detractors (1 - 3)
High
Low
X%
Overall NPS Score
Scheduling
channels
Customers to be allowed to
schedule installation using
calls, chats and mails
Installation
Personnel
In-house team of service
personnel for installation
Better Customer Experience
After Sales Effect: Electronics Category Example
Fig : 3 Fig : 4
Slotted
Installation
Slots to be provided for
installation and demo of
products after selling.
Options Description
Page 5 | RedSeer Consulting
-25% 63% 13%
-14% 64% 21%
-14% 64% 21%
-7% 53% 40%
-12%
7%
7%
33%
8. Margins Pressure to Increase
Conclusion : Ready to Roar
While we expect the revenues to
grow and capabilities to improve, we
also believe that the online retail will
see hyper-competition from the
regional online players, international
online players (for example, Alibaba
although not officially present already
has significant market share) and the
large brick-and-mortar players who are
currently experimenting with the digital
channels.
In such a scenario, online players might
be tempted to choose growth over
profitability. For example, at one stage,
it is estimated that the Indian online
retail industry was losing ~30 cents for
every one dollar of sales couple of years
ago – now we estimate it to be losing
~20 cents for every dollar of sales.
Online retail is at its inflexion
point in MENA. Experienced,
well-funded and deep pocketed players
with a long term view are entering the
market - this is expected to
exponentially improve capabilities and
topline.
Online players that take a data-driven
approach to decision making and
continuously innovate will be able to
exploit the online opportunity and come
out stronger on the other side.
We, at Redseer Consulting, have helped
many e-tailers to accelerate their
performance through our in-depth
E-Acceleration Program using our
proprietary Integrated Research
Approach (IRA).
We should see improvement across all
key capabilities: sourcing, operations
and marketing. However, topline growth
with a clear path to profitability will be
equally important for long term
sustenance for e-tailers.
Page 6 | RedSeer Consulting
9. RedSeer
About RedSeer
RedSeer is one of the fastest growing research and consulting firms in India. It's unique
service offerings serves decision makers across the value chain. RedSeer works across the
sectors with specific focus on auto, construction, farm equipments, healthcare,
CPG/retail/e-commerce, funds, investment banks and technology sectors.
For more information, visit : www.redseerconsulting.com
Our Offices
BANGALORE
Indiqube Sigma, Plot3/B, 7th C Main, 3rd Block Koramangala,Bangalore – 560034
DUBAI
42Seer TechnologiesFZE, G-D-Flex G089 C-Thub, Dubai SiliconOasis, Dubai, UAE
DELHI
INHWA BusinessCenter Sector 48, Sohana Road Gurgaon – 122018
MUMBAI
25/b 4th Floor,Usha Sadan, Near Colaba PO, Colaba, Mumbai– 400005
Authors
Sandeep Ganediwalla
sandeep@redseerconsulting.com
Mrigank Gutgutia
mrigank@redseerconsulting.com
Sandeep is the Managing Partner of RedSeer Consulting looking at the Middle East and
Africa regions. He is a digital strategist with a focus on emerging markets with 13+ years
of experience in consulting and technology.
Mrigank is an Engagement Manager at RedSeer. He heads the Consumer Internet Division
and has led over 100+ engagements in the space, advising leading Indian and international
corporates and funds on business strategy, market entry, growth strategy and M&A.