India E-commerce Market 2019 · 2020. 2. 6. · Sales between customer to customer (C2C) (e.g. OLX)...

2020 © Benori Knowledge. All Rights Reserved 1

India E-commerce

Market 2019

PREMIUM

2020 © Benori Knowledge. All Rights Reserved

Contents

▪ Executive Summary

▪ Industry Definition and Coverage

▪ Industry Overview

▪ Market Evolution

▪ Business Model

▪ Industry Size, Performance and Growth Outlook

▪ Industry Drivers and Key Challenges

▪ Industry Drivers

▪ Key Challenges

▪ Impact of Disruptive Technologies

▪ Developments and Trends

▪ M&As, Partnerships & Alliances

▪ PE Deals

▪ Market Trends

▪ Competitive Analysis

▪ Player Landscape

▪ Player Profiles

▪ Flipkart Online Services Pvt Ltd

▪ Amazon Seller Services Pvt. Ltd

▪ One97 Communications Limited

▪ Snapdeal Private Limited

▪ Bundl Technologies Pvt Ltd


Executive Summary


Executive Summary

43.0 53.0

106.0

2018 2019-E 2022-F

India E-commerce Market, US$ B

604.2 679.1904.0

2018 2019-E 2022-F

India Internet Subscribers, Million

524.91218.8

1912.7

Jan-18 Jan-19 Jan-20

UPI Transactions, Million

The Indian e-commerce industry is growing exponentially due to increasing

internet subscribers, rising digital transactions (UPI transactions, mobile wallet

and net banking transactions) and growing government support.

In 2018, the e-commerce market in India was US$ 43 B and is expected to be a

US$ 53 B industry in 2019. Further, the market is expected to cross US$ 100 B

by 2022 at a CAGR of 26% during 2019-2022. Growing per capita income coupled

with rising internet penetration in tier-II and tier-III cities in India are also

driving the growth of the industry.

Internet subscribers in India are expected to increase from 604.2 million (in

2018) to 904 million subscribers (in 2022). In addition, India is adding

approximately 10 million daily active internet subscribers each month, which is

the highest rate of internet penetration in the globe.

Further, online shoppers in India are expected to reach 220 million by 2025 as

compared to 117 million in 2018.

Innovation in payments industry due to emerging technologies such as AI,

blockchain, IoT and real-time payment, along with growing government focus

towards building a cashless economy (leveraging improved telecom and

payment infrastructure) is driving the adoption of digital instruments by

merchants and proliferation of UPI.

Sources: eMarketer, NASSCOM, TRAI, NPCI, Benori


Executive Summary

Technology Focused Acquisitions

Focus: Conversational shopping experience

Strengthen product selection,

recommendation and pricing capabilities

Focus: AI and IoT based tech infrastructure for

managing hotels and other assets

Focus: To develop wearables for its in-house

brands and enhance customer engagement

With growing internet penetration in rural areas across the country, the number of online

shoppers is also increasing rapidly. E-commerce players witnessed strong growth in their

consumer base belonging to tier-II and tier-III cities due to slow deployment of physical organised

retail, availability of better discount and offers, wider product range and multiple payment

options such as ‘no cost EMI’.

In 2018, the total number of online shoppers stood at 117 million, of which 61 million were from

tier-I cities while, 56 million shoppers belonged to tier-II and tier-III cities.

Major e-commerce players such as Amazon recorded that more than 80% of its customers, during

festive season sale are from tier-II and tier-III cities. Similarly, with growing demand, Swiggy

expanded its presence to 16 new tier-II and tier-III cities to capture the consumer demand, as

the company noticed increase in their app downloads in these cities.

India E-commerce Industry Goes Rural Technological Advancement

To gain competitive advantage, major e-commerce

players are either acquiring or partnering with tech

firms to enhance consumer experience and

strengthen their portfolio.

E-commerce giants such as Flipkart, Myntra, Oyo,

Snapdeal, Amazon are investing heavily on disruptive

technologies like artificial Intelligence, IoT, AR/VR,

automation and blockchain to enhance consumer

shopping experience and provide recommendations

based on their search pattern.

Sources: Press Releases, Benori


Industry Definition, Coverage and Research Methodology


Industry Definition, Coverage and Research Methodology

The e-commerce market comprises sale of physical goods or services via digital platforms to end users (B2C). Consumers are required to purchase goods or

services via connected devices such as smartphones, tablets, laptops or desktops, among several other digital mediums. On the other hand, sellers must have a

secure website (or a mobile app) well-equipped to sell their products online.

As per United Nations Industrial Development Organization (UNIDO), “e-commerce means buying and selling of goods and services including products over digital

and electronic networks”.

Scope of the study is limited to:

Sale of physical goods or services via a digital channel to a

private end user (B2C)

Purchases via desktop computer (including notebooks) and

purchases via mobile devices (e.g. smartphones)

Market Scope

B2B markets (e.g. Alibaba)

Resale of used goods (re-commerce)

Sales between customer to customer (C2C) (e.g. OLX)

Limitation

Research Methodology: All the quantitative and qualitative information given in the study is based on secondary research. Benori has referred to several studies

published by different associations and government press releases and annual reports. For forecasting, Benori has used multiple forecasting techniques to

forecast market numbers and has also considered various factors influencing the market growth.

Note: All the numbers given in the study are rounded off to one digit after decimal.


Industry Overview

• Market Evolution

• Business Model

• Industry Size, Performance and Growth Outlook


Market Evolution

The security, convenience and user experience has enhanced since the inception of Rediff.com. The industry continues to grow with

technology advancement and thousands of businesses entering the online market each year.

India Goes Online

Rediff added online

shopping to its portal.

Later, Indiatimes shopping

and Baazee.com entered

India’s e-commerce market.

IRCTC introduced their e-

commerce platform to book

tickets in one go with easy

online payment options.

Later in 2005, MakeMyTrip

started its operation with

online flight tickets and

hotel and holiday package

bookings. Yatra also started

its operation in 2006.

E-commerce Penetration

In 2007, Bookmyshow and

Flipkart entered India’s e-

commerce market. Customised

facilities such as ‘choose your

preferred seat’ and deep

discount offers attracted

customers that majorly

belonged to tier-I cities, to go

online.

In 2009, Myntra entered the

market and started offering

personalised products online.

The company extended its

product line to retail fashion

and lifestyle category. Mydala

and Snapdeal started in 2009

and 2010 respectively with

their daily deal platforms. In

2011, Snapdeal started using

marketplace model for their e-

commerce operations.

Amazon in India

In 2012, Jabong entered

with fashion and lifestyle

e-commerce portal. It

became the most visited

website in 2013.

In 2013, Amazon launched

its website and app in

India and started its

operations by selling

electronic products online.

Later, the company also

entered into fashion

apparel, beauty, home

essentials and healthcare

categories.

Online Grocery

In 2014, Dunzo and Swiggy

started their operations in

India. The next year (2015)

witnessed several start-ups

entering the online food

ordering e-commerce market

in India, with Zomato and

Food Panda being the major

ones amongst them.

In 2017, Ola, a transportation

network company, acquired

FoodPanda to enter the online

food delivery business in

India. Similarly, Uber

launched ‘UberEats’, an

online food delivery platform

under marketplace model.

In 2018, Amazon started its

food retail business in India.

1999-

2006

2007-

2010

2011-

2013

2014-

2018What

Next

With growing funding in

India’s e-commerce industry

coupled with rising

government support, the

e-commerce industry in

India is expected to evolve

at the fastest pace globally.

Companies, are also using

social media platform for

lead generation, as the

number of social media

users is also growing

exponentially.

The Future


Business Model

E-commerce market in India primarily operates through three business models, namely marketplace, inventory–based and hybrid model. Most of the major e-

commerce players at present, are operating through the marketplace model, while companies such as ShoppersStop and Ikea are operating via inventory-based

model. Although, Bigbasket initially operated through inventory model, the company switched to hybrid business model due to the rise in competition and

consumer base.

In the Indian e-commerce industry, 100% FDI under automatic route is permitted for platforms operating via marketplace business model.

However, FDI in inventory-based model of e-commerce is strictly prohibited.

E-Tailing Business Model

Marketplace Model Inventory Based Model Hybrid Model

A marketplace is a platform provided by a third party, enabling buyers and sellers to conduct commerce. The company only acts as a mediator and does not own the products/services provided.

In inventory-based model, goods andservices are owned by e-commerceentity and are sold to the consumersdirectly.

Hybrid model is a combination ofboth marketplace and inventory-based business model. The entitiespartially own and partially sourcetheir products from third partysellers.

Defi

nit

ion

Exam

ple


Industry Size, Performance and Growth OutlookGlobal vs Indian e-commerce market

20.3 21.0

28.5

2.9 3.55.7

2018 2019-E 2022-F

Retail

E-Commerce

Global Retail & E-commerce Market, 2018-2022 (US$ T)

Sources: eMarketer, NASSCOM, Benori

Globally, e-commerce market witnessed a strong growth in 2018 and is

further expected to grow exponentially during the forecast period. In 2018,

e-commerce market contributed over 14% in the total retail market and is

expected to contribute over 22% by 2022.

Mobile phones, attributing to over 60% market share continued to be the

dominant purchase channel in 2018. The segment contributed around US$

1.8 T to the global e-commerce market in the same year.

In 2018, Asia-Pacific was the largest revenue contributor to the global e-

commerce market and is further expected to be the leading contributor led

by China, Japan, South Korea and India during the forecast period.

Note: E-Expected; F-Forecast

950.0 1,062.51,400.0

43.0 53.0 106.0

2018 2019-E 2022-F

Retail

E-Commerce

India Retail & E-commerce Market, 2018-2022 (US$ B)

Retail is India’s largest industry that contributes over 10% of the country’s

GDP and 8% of the total employment. In 2019, retail sector of the country

is expected to cross US$ 1.0 T and is further expected to grow at 9.6%

CAGR during 2019-2022.

India is one of the fastest growing e-commerce market globally and is

expected to grow at 26% CAGR during 2019-2022. By 2022, e-commerce

market is expected to cross US$ 106 B (as compared to US$ 43 B in 2018)

on account of growing government focus towards improving digital

infrastructure via multiple initiatives such as Digital India.

Online grocery and pharmacy are emerging as new areas in focus in the

e-commerce arena in India due to ticket size and repeat purchase.

Sources: NASSCOM, Invest India, FICCI, Benori Note: E-Expected; F-Forecast

Global E-commerce Market Scenario India E-commerce Market Scenario

6.0%

17.3%

CAGR

2019-22

9.6%

26.0%

CAGR

2019-22

By 2021, e-commerce is expected to become one of the largest retail channels globally. E-commerce players continued acquisitions and

investments in disruptive technologies such as Artificial Intelligence, IoT and analytics solutions.


Industry Size, Performance and Growth Outlook

21.0 27.062.019.0 22.0

34.03.0 4.0

10.0

2018 2019-E 2022-F

E-commerce Market, By Type (US$ B)

eTail eTravel Others*

12.0 15.032.45.0 7.0

16.94.0 5.0

12.8

2018 2019-E 2022-F

eTail Market, By Type (US$ B)

Electronics Fashion Others**

7.8 8.7 12.84.4 4.9

7.12.4 3.0

5.8

2.3 2.7

4.1

1.1 1.5

2.5

1.1 1.2

1.7

2018 2019-E 2022-F

eTravel Market, By Type (US$ B)

Domestic Air Rail International Air

Hotel Others*** Bus

Source: eMarketer, NASSCOM, Benori Note: E-Expected; F-Forecast

Rising smartphone and

internet penetration

coupled with declining

data costs

Proliferation of digital

options such as m-wallet,

Unified Payment Interface

(UPI) and mobile banking

Enhanced logistics

infrastructure with focus

on last-mile delivery

Increasing number of

online shoppers from tier-

II and tier-III cities

Key Takeaways

Online shoppers from tier-I cities will continue to dominate the overall online

consumer base in India. However, online shoppers in tier-II and tier-III cities

are also rising exponentially with growing awareness.

In 2018, the total number of online shoppers stood at 117 million, in which

61 million were from tier-I cities while, 56 million shoppers belonged to

tier-II and tier-III cities.

Online grocery and e-pharmacy have emerged as the must-capture segment

for e-commerce players due to ticket size and high repeat purchase rate.

Indian e-commerce market outlook

*Financial Services, Consumer Services And Digital Content

**Online grocery and ePharma ***Online cab booking and others

Key Drivers of Growth

Flow of credit to consumers, sellers and micro enterprises and growing focus towards the enhancement of payment solutions and gaining

trust of the consumers are driving the e-commerce market in India.


Industry Size, Performance and Growth OutlookEmerging e-commerce segments

Online Grocery - The fastest growing eTail segment

Grocery contributed to around 60% of India’s retail market in 2018. With

growing online penetration and changing lifestyles, online grocery

became the must-capture segment for e-commerce players owing to its

larger ticket size and repeated frequent purchase rate.

According to NASSCOM, online grocery market in India stood at US$ 1 B in

2017 and is expected to reach US$ 5 B by 2020. On an average ~80% online

orders are worth about US$ 20 B.

Alongside already established players such as Bigbasket and Grofers;

leading e-commerce players such as Flipkart and Amazon also entered the

online grocery market under their ‘Supermart’ and ‘Prime Now’ services,

respectively. Moreover, the market is expected to be driven by technological

advancements and faster delivery services in the coming years.

With growing online grocery market, the number of startup companies,

majorly in tier-II and tier-III cities are also growing. Few of the examples

are: Flipfresh (Hubballi), ShopitDaily (Indore), PinckCityKirana (Jaipur),

GharBaitheBazar (Lucknow) and Kada (Vishakhapatnam), MeraKisan

(Pune), Ananda Grocery (Coimbatore).

From little to no existence in 2010, startups in online grocery market have

risen in the recent years, accounting for 40% of the total e-commerce

funding in India. Until October 2019, online grocery startup companies

received total funding amounted to US$ 665.7 M.

E-PharmaGrowing internet penetration, rising smartphone ownership, growing

awareness related to online shopping and high discount offers are driving

the e-pharma market across the country.

In 2018, the e-pharma market was around US$ 350 M (approximately 2% of

the total pharma retail market in India), and is further expected to grow at

a CAGR of over 40% during 2019-2022.

1MG, NetMeds, Medlife, PharmEasy, LifCare and Practo are the leading

e-pharma companies that handle around 25,000-30,000 orders per day.

Major Indian E-Pharma Companies

Consultation Diagnostics Pharmaceuticals Hospitals

Source: News Articles, Benori

With growing competition, companies are investing heavily on disruptive technologies to gain advantage. For instance, 1MG is working on

artificial intelligence to create ‘doctor assistant’ that would make a doctor more productive.


Industry Drivers and Key Challenges

• Industry Drivers

• Key Challenges


Industry Drivers

Attractive discounts and offers and the ‘no

cost EMI’ option offered by multiple e-

commerce players are attracting consumers to

purchase required product/services via online

platforms.

Online shopping channels are also enabling

their users to select from multiple options a

single platform. In addition, they also provide

the facility to order any product from any

region of the country or the world.

With growing competition, companies are

integrating artificial Intelligence for offering

personalised solutions to customers based on

their search results over the app/website.

As awareness around the internet is

increasing, more and more people (sellers,

buyers and investors) are being drawn towards

e-commerce.

India, a country with the second largest

internet users after China, had over 604

million internet users in 2018. The country is

further expected to cross 904 million internet

users by 2022.

Increase in multi-lingual content and customer

support across the internet ecosystem. As 75%

Indians speak at least one of the numerous

regional languages in the country, e-commerce

players have started focusing on targeting tier-

II, tier-III and other untapped markets.

The number of mobile internet users is

expected to reach 37.4% of the total

population by 2021.

With growing usage of mobile internet across

the country, online retailers are expanding

their footprint in tier-II and tier-III cities. By

2018, tier-II cities in India had over 50 million

online shoppers. Additionally, with rise in

investments in logistics and warehouses,

online retailers are now delivering to 12,500-

19,200 pin codes out of around 100,000 pin

codes in the country.

By 2020, smartphone penetration is expected

to reach 50% in India.

Also, according to Ericsson, India’s data usage

per smartphone reached 9.8 GB/month, the

highest in the world, and is further expected

to be double to 18 GB by 2024.

Improved logistics infrastructure with a focus on last-mile delivery along with increasing attention towards strengthening the technology

infrastructure is boosting the e-commerce industry in India.

Discounts, Offers and Depth

in Product LineInternet Subscribers Mobile Commerce


Industry Drivers

Rising investments in the e-commerce industry

in India are supporting the sector’s growth. For

instance:

In December 2019, Licious, a Bangalore-

based e-commerce platform selling

fresh meat and seafood, raised funding

of US$ 30 M by Singapore-based Vertex

Growth Fund to expand its footprint in

India. Currently the company is

processing more than 17,000 orders

every day.

In October 2019, Amazon Inc. infused

US$ 631 M into its Indian subsidiaries,

including Amazon Seller Services (~US$

480 M), Amazon Pay (~US$ 127 M) and

Amazon Retail (~US$ 24 M).

Convenient payment models coupled with

attractive discount offers by e-commerce

players have compelled the usage of

credit/debit cards, m-wallets and UPI

transactions.

In December 2018, India had 958.2 million

debit card and 44.2 million active credit card

users.

On the other hand, transactions through

mobile wallets increased by 3.4% month-on-

month to 347.1 million transactions in July

2019 as compared to 334.7 million in June

2019.

In addition, number of transactions though UPI

increased exponentially from 524.9 million in

January 2018 to 1,218.8 million in January

2019.

The Government of India is supporting growth

in the e-commerce industry with multiple

initiatives such as ‘Digital India’, ‘Make In

India’ and ‘Start-Up India’.

The government has allocated US$ 1500 M for

the expansion of telecom infrastructure, which

is directly linked to digital India initiatives.

In February 2019, the Government of India

released the draft National e-commerce

policy. Further, in June 2019, the government

further announced to introduce national e-

commerce policy within next 12 months.

Under “Internet Saathi” project, Google and

Tata Trust have collaborated to boost internet

penetration among rural women in India. Till

July 2019, the project has benefited over 26

million women across 2.6 lakh villages and

20 states in India.

Due to the growing e-commerce market, companies such as P&G, Ikea and Amway are exploring the option of entering the online market

for their next phase of growth.

Growing Investment Seamless Transactions Government Initiatives


Key Challenges

In order to reduce the concerns around online

transaction security, major e-commerce

players started providing COD facility to their

customers. While placing an order, shoppers

can skip paying online (through debit/credit

card or net banking) and choose to pay in

cash when the product arrives at their

doorstep. Although cases of customers

refusing to pay at the time of delivery

resulted in heavy losses that incurred in

product transit and sales.

Receiving payment in cash (via COD) makes

the process laborious, risky and more

expensive for companies as their capital

requirements and collections increased.

Higher return ratio for goods sold online also

poses an expensive challenge for e-commerce

companies. The return percentage of COD

orders is also high.

Data security is a major concern for all the

players operating in the e-commerce industry

as they deal with huge volumes of customer

information which is shared with external

parties such as sellers and logistics providers.

These external players can misuse the

consumer data provided.

Majority of buyers in India prefer to touch and

feel the product before buying to be assured

of its looks and quality, which they can not

validate over an online platform until they

buy the product and it arrives at their

doorstep. This is a major challenge for e-

commerce players who sell products such as

apparels, jewellery, cosmetics and

accessories. However, the above constraints

do not affect online booking and ticketing

businesses in India.

Lack of awareness majorly in tier-III cities, inadequate plastic money holder and the concerns around online transactions are the major

challenges for the e-commerce industry in India.

Cash on Delivery (COD) Mode

and High Logistics CostData Security Touch & Feel Constraint


Impact of Disruptive Technologies


Impact of Disruptive Technologies (1/2)With growing competition in the e-commerce industry in India, giants in the sector are focusing on integrating disruptive technologies such as Artificial

Intelligence (AI) (which also includes machine learning, deep learning and natural language processing), augmented reality and virtual reality, Internet of

Things (IoT), industrial automation and vernacular technology. The integration of these technologies is aimed at gaining competitive advantage in

acquiring new customers, understanding their purchasing pattern and reducing the operational cost.

In addition, companies are investing on drone-based delivery services, blockchain and edge computing, that would help in mitigating overall logistics cost

and security concerns among the consumers.

Artificial Intelligence

AI is an essential tool for e-commerce players to

differentiate themselves in the marketplace.

With growing online shoppers and rising data

traffic, companies are integrating AI (including

machine learning, deep learning and natural

language processing) for multiple use cases such

as product recommendation and planning

based on search patterns, customer loyalty,

customer retention, virtual assistance, price

optimisation and visual search.

Flipkart is using an AI-based solution to

understand and analyse upsell, buying

behaviour, buying capacity and preferences;

give recommendations; and lower the return rate

of products. Flipkart is also using conversational

chatbots to solve the queries of their customers

in real time. In addition, Flipkart has also done

some technology-focused acquisitions such as

Liv.ai and Upstream Commerce to accelerate and

enhance shopping experience of its customers.

The acquisition of Liv.ai is focused on providing

speech recognition ‘voice-based’ services, while

acquisition of Upstream is focused on building

advanced and intelligent solutions for

strengthening their product selection and price

optimisation process.

Current Use Case: Future Use Case: Example:

These use cases will play a vital role for e-

commerce players in optimising their operational

costs and enhancing their customer experience

with growing online shoppers.

BeaconsMixed Reality

Smart LabelsDigital Payments

E-commerce players rely on AI to predict traffic, detect and mitigate bots and consumption traffic during festive season sale. AI

chatbots/virtual agents are expected to replace around 85% of customer interactions by 2020.


Impact of Disruptive Technologies (2/2)

AR/VR provides a new way to experience products in a digital environment.

With changing lifestyle and growing online spends, e-commerce players are

also integrating AR/VR technology within their platforms to enhance

consumer experience. Moreover, AR also provides customisation facilities to

online consumers based on their style, size, colour and other preferences.

Example: LensKart, an eyewear e-commerce platform leverages this

immersive technology to enable its users to virtually try out frames through

their 3D feature. Byju’s, an online ed-tech company is another example that

uses VR-based technology to provide an experimental learning experience to

their customers.

Robotic automation helps e-commerce players automate and eliminate tedious

tasks, optimise processes and reduce man hour work. Supply chain

management, inventory management, product classification and delivery

management are the major use cases for Robotic Automation.

Example: To scale up processing of customer shipments, Flipkart introduced

robot-based sortation technology, Automated Guided Vehicles (AGVs) in its

Bengaluru-based delivery hub. The set-up involves over 100 self-guided bots

that automatically sort packages to the right customer’s pin-code by

identifying encoded information on each package.

Growing customer data traffic along with rising focus towards providing real-

time solutions to the customer is driving companies to enhance their IoT

infrastructure. Real-time surveillance, product tracking and optimisation

are the major use cases of IoT. On the other hand, with increasing number

of edge devices, edge computing is becoming a prominent use case of IoT

for e-commerce players.

Example: Oyo has acquired AblePlus, a Mumbai-based IoT solution provider,

to create an AI and IoT-based tech infrastructure for managing hotels and

assets.

Blockchain, drone-based delivery services, edge computing and vernacular

technology are the other disruptive technologies where e-commerce players

are investing heavily.

Example: Zomato, an online food delivery company has acquired TechEagle, a

drone startup to deliver food in India. Similarly, Amazon has also invested in

drone technology that can be used for delivering goods in India.

In addition, Amazon has also invested in vernacular tech and launched its

Hindi mobile app and website to tap into Hindi speaking customers majorly

from tier-III cities and villages.

Augmented & Virtual Reality (AR/VR) Robotic Automation

Internet of Things (IoT) Other Disruptive Technologies

E-commerce players have been into aggressive competition and are eyeing to capture significant share of the consumer spending by

investing in disruptive technologies and expanding their business operations majorly in tier-II and tier-III cities.


Developments and Trends• M&As, Partnerships & Alliances

• PE Deals

• Market Trends


M&As, Partnerships & AlliancesList of major M&A deals in 2019

Swiggy

acquired Kint.io

Value: Undisclosed

Jan-

19

Feb-

19

Mar-

19

May

-19

Jul-

19

Oct-

19

Nov-

19

Paytm

acquired NightStay

Value: US$ 20.0 M

Oyo

acquired Innov8

Value: US$ 31.8 M

Medlife

acquired Myra

Value: Undisclosed

Info Edge acquired

Happily Unmarried

Marketing

Value US$ 0.8 M

Bennett, Coleman & Co.

acquired Grofers India

Value: US$ 20.1 M

Flipkart acquired

EasyReward Software

Value: US$ 4.0 M

BrainBees Solutions –

FirstCry acquired Oi

Playschool

Value: Undisclosed

Qoo10 acquired

ShopClues

Value: US$ 70-100 M

Ebix acquired

Yatra.com.

Value: US$ 337.8 M

India has the highest number of unicorn startups after the US and China. In addition, the list is expected to add more than 10 members by

2020. Some of them are Bigbasket, MobikWik and Practo.

Source: Grant Thornton, News Articles, Company Website, Press releases, Benori


PE Deals

May

-19

Oct-

19

Nov-

19

TravelTriangle.com

Paytm

13

150 PolicyBazaarTencent Holdings Ltd

T Rowe Price, Alibaba, Ant

Financial and SoftBank Vision

Fund and Discovery Capital

KB Global Platform Fund, The

Fundamentum partnership

Fund I, RB Investments, SAIF

Partners, Bessemer Venture

Partners

11.2

45 1000

3.2 BeYouPlusvyCap Ventures, Madison

Capital and Singapore Angel

Network

SAIF Partners, Sequoia Capital

and Steadview Capital2.1 Urban Ladder

Angel investors NA goStops

200

150

105

Bewakoof.comInvestcorp

Lightbox Ventures,

Google, 3L Capital and

STIC Investment & STIC

Ventures

Dunzo

SoftBank Group Corp,

KTB Ventures, Tiger

Global and Sequoia

Capital

Grofers India

Mirae Asset Financial

Group, CDC Group and

Alibaba GroupBigBasket.com

Delivery Hero and

Glade Brook Capita Zomato

List of major PE deals in 2019

Investor | Investee

Bubble size represents PE deal size in US$ M

Source: Grant Thornton, News Articles, Company Website, Press releases, Benori

India has the highest number of unicorn startups after the US and China. In addition, the list is expected to add more than 10 members by

2020. Some of them are Bigbasket, MobikWik and Practo.


Market Trends

02Festive Season Sale ▪ E-commerce players witnessed major boom in sales value and volume during the festive season on their websites

and mobile applications. Flipkart and Amazon India along with other e-commerce giants are investing heavily on

advertisements to promote their festive season offers and hire new temporary employees to fulfill the demand

surge during the festive seasons.

▪ Multiple payment options such as EMI, UPI and mobile wallet drove 60% of the overall sales of Flipkart during the

festive seasons in 2018.

03Growing Space for

Niche Players

01Image Search

▪ With growing e-commerce market, niche players such as Nykaa in beauty care, Bigbasket and Grofers in grocery,

Lenskart in eyewear, Pepperfry in furniture retail, Clovia in lingerie and 1mg and Netmeds in selling medicines

online will gain attention from customers across the country to grow their space in their specific market segments.

▪ However, major e-commerce players such as Amazon, Flipkart, Paytm and Snapdeal are focusing towards

expanding their footprint primarily in tier-II and tier-III cities to increase their consumer base and acquire new

customers from such regions across the country.

Subscription business model is getting traction in the e-commerce industry in India. For instance, Amazon launched Amazon Prime in 2016.

Also, Flipkart, Swiggy and Zomato launched Flipkart Plus, Swiggy Super and Zomato Gold respectively in 2018.

▪ With a growing number of listed products on e-commerce marketplaces, e-commerce giants are focusing on

implementing product image search-based services. This would enhance consumer experience while shopping online

and reduce the time taken for searching products.

▪ In addition, Amazon India is working on integrating new search features that will also include images.


Competitive Analysis• Player Landscape

• Player Profiles• Flipkart Online Services Pvt Ltd

• Amazon Seller Services Pvt. Ltd

• One97 Communications Limited

• Snapdeal Private Limited

• Bundl Technologies Pvt Ltd


Player Landscape

eTravel Others*eTail

According to the survey conducted by PayPal, in India, Facebook, WhatsApp and Facebook Messenger are the most used social media

platforms by the merchants. In addition, social media platforms account for 79% of e-commerce in India.

Source: Company Website, Press Releases, Benori


Company Profile: Flipkart Online Services Pvt Ltd (Flipkart)

Company Name: Flipkart Online Services Pvt Ltd.

Founded In: 2007

Headquartered: Bengaluru, India

Founder: Sachin Bansal and Binny Bansal

Key Executives:

Kalyan Krishnamurthy (CEO)

Emily McNeal (Group CFO)

Website: www.flipkart.com

Registered Users: 100+ M (as of 2018)

Average Sales Per Order: US$ 27.9 (*Festive season – Oct to Nov)

Funding Received: US$ 7.7 B in 22 Rounds (Till 3rd

December 2019)

Major Stakeholder: Walmart (81.3%), Tencent (5.4%), Binny

Bansal (4.2%), Tiger Global (4.8%), Microsoft Corp. (1.5%), Accel (1.4%), Iconiq Capital

(0.98%), Temasek (0.3%) and UBS (0.2%)

Turnover:

2019: US$ 6,269.1 M 2018: US$ 4,710.8 M

Recent Developments: In July 2019, Flipkart Group announced the launch of

Samarth, an initiative to uplift various artists, weavers and

handicrafts in India through e-commerce.

In May 2019, Flipkart Group announced to launch Flipkart

Supermart, an online grocery store with its operations in

Mumbai. It includes products such as FMCG, staples and

dairy products.

M&As/Joint Ventures/Partnerships: In November 2019, Flipkart invested US$ 4 M in

EasyReward, a customer engagement and rewards platform

that offers customer engagement solutions to merchant

sellers transacting on Flipkart’s platforms.

In September 2019, Flipkart Group and the Government of

Jharkhand signed an MoU to launch Samarth in Jharkhand.

The program will provide online business to weavers,

artisans and craftsmen of Jharkhand.

In September 2018, Flipkart Group acquired Upstream

Commerce, an Israel-based company to build advanced data

science-based intelligent solutions and strengthen

selection and pricing capabilities.

Source: Company Website, Press Releases, News Articles

Key Statistics

Company Overview

Flipkart has partnered with Federation of Indian Chambers of Commerce & Industry (FICCI) to launch a series of workshops across India for

MSMEs, which would help in understanding how e-commerce marketplace can help in increasing brand visibility.

http://www.flipkart.com/


Company Profile: Amazon Seller Services Pvt. Ltd (Amazon)

Company Name: Amazon Seller Services Pvt. Ltd.

Founded In/Started Ops in India: 2013

Headquartered: Hyderabad, India

Founder: Jeff Bezos

Key Executives:

Amit Agarwal (Global Senior VP and Country Head)

Raghava Rao (VP Finance & India CFO)

Website: https://www.amazon.in

Registered Users: 150 M (as of 2018)

Average Sales Per Order: US$ 20.6 (*Festive season – Oct to Nov)

Funding Received: NA

Major Stakeholder: NA

Turnover:

2019: US$ 1,118.0 M

2018: US$ 771.2 M

Recent Developments:

In September 2019, Amazon India announced to unveil

long-term sustainable packaging initiatives and its

commitment to eliminate the use of plastics from its

packaging by June 2020.

In August 2019, Amazon India launched Military Veterans

Employment Program dedicated to creating substantial

opportunities for military veterans as well as their spouses

across Amazon’s delivery centres, sort centres and fulfilment

centres in India.

In August 2019, Amazon India launched Amazon Fresh store

with 2-hour delivery facility for select pin-codes in

Bengaluru.

M&As/Joint Ventures/Partnerships:

In April 2019, Amazon India announced an alliance with

Ketto, a crowdfunding platform to introduce a program

‘Amazon Wings’.

Launch of this program will help Amazon sellers to use

Ketto’s platform for initiating fundraisers at a

subsidised fee.


Key Statistics

Company Overview

Amazon invested US$ 626.6 M in its three-business units in India (Amazon Seller Services, Amazon Pay and Amazon Retail). Amazon Seller

Services received US$ 476.4 M, Amazon Pay received US$ 26.1 M, while Amazon Retail received US$ 24.2 M.

https://www.amazon.in/


Company Profile: One97 Communications Limited (Paytm)

Company Name: One97 Communications Limited

Founded In: 2010

Headquartered: Noida, India

Founder: Vijay Shekhar Sharma

Key Executives:

Vijay Shekhar Sharma (CEO)

Amit Sinha (COO-Paytm Mall)

Website: https://paytm.com

Registered Users: 350 M (as of 2019)

Average Sales Per Order: US$ 18.4

Funding Received: US$ 2.5 B

Major Stakeholder: Alibaba.com Singapore E-commerce (30.2%),

SB Investment Holdings (21.1%), Alipay Singapore E-commerce (15.9%), SAIF Partners

(18.7%) and Vijay Shekhar Sharma (9.7%)

Turnover:

2019: US$ 477.1 M

2018: US$ 496.4 M

Recent Developments: In December 2019, Paytm Payments Bank announced the

offering of corporate salary account. The account offered

substantial features for both employer and their employees.

In March 2019, Paytm launched Paytm First, a subscription-

based loyalty and reward program for its users. The

customer can use the service by paying an annual fee of US$

10.50 (Rs 750) coupled with an inaugural cashback offer of

US$ 1.40 (Rs 100). The program includes various

subscription and membership offers from Uber Eats, Zomato,

The Man company and OYO among others.

M&As/Joint Ventures/Partnerships: In May 2019, Paytm partnered with Citigroup Inc., a US-

based investment bank and financial services corporation to

provide cashback-driven credit card marketed by Paytm and

underwritten by Citigroup.

In January 2019, Paytm acquired NightStay, a Noida-based

company that offers deals on last-minute hotel bookings

through their mobile app. The acquisition will further help

Paytm to enter the hotel booking business too.


Key Statistics

Company Overview

On November 2019, Paytm raised US$ 1 B by US asset manager T Rowe Price along with existing investors Ant Financial and SoftBank Vision

Fund.

https://paytm.com/


Company Profile: Snapdeal Private Limited (Snapdeal)

Company Name: Snapdeal Private Limited

Founded In: 2010

Headquartered: New Delhi, India

Founder: Kunal Bahl and Rohit Bansal

Key Executives:

Kunal Bahl (CEO)

Rohit Bansal (COO)

Website: https://www.snapdeal.com

Registered Users: 80+ M (as of 2018)


Funding Received: US$ 1.8 B (July 2019)

Major Stakeholder: Softbank (36.1%), Nexus Venture Partners (11.2%),

eBay Singapore (5.7%), Alibaba (4.4%), Foxconn

(4.4%), Temasek (2.9%)

Turnover:

2019: US$ 13.3 M

2018: US$ 8.2 M

Recent Developments:

Till December 2019, the company added additional 3,500

pin codes to its logistics network. As a result, the company

is now delivering across 26K pin codes across the country.

In November 2019, Snapdeal joined International

Trademark Association (INTA) to support protection of

intellectual property on online marketplaces.

In July 2019, the company announced that it has raised

funding of an undisclosed amount from Anand Piramal, the

Executive Director of Piramal Group.

M&As/Joint Ventures/Partnerships:

In September 2019, Snapdeal partnered with National

Payments Corporation of India’s RuPay to offer discounts to

its credit and debit card users in the festive season sale.

The partnership will enable approximately 600 million

RuPay users to gain 20% discount during checkouts from

Snapdeal’s website.


Key Statistics

Company Overview

With growing focus towards expanding logistics network, Snapdeal is also gaining traction from non-metro segment, with almost 90% of the

total orders coming from non-metro cities.

https://www.snapdeal.com/


Company Profile: Bundl Technologies Pvt Ltd (Swiggy)

Company Name: Bundl Technologies Pvt Ltd (Swiggy)

Founded In: 2014

Headquartered: Bengaluru, India

Founder: Sriharsha Majety and Nandan Reddy

Key Executives:

Vivek Sunder (COO)

Rahul Bothra (CFO)

Website: https://www.swiggy.com

Registered Users: NA


Funding Received: US$ 1.5 B in 10 rounds (December 2018)

Major Stakeholder: NASPERS (39.0%), SAIF Partners (9.2%), Accel

(8.5%) and Norwest Venture (8%)

Turnover:

2019: US$ 161.2 M

2018: US$ 6.4 M

Recent Developments: In Sept 2019, the company launched Swiggy Go, an

additional service for pick-up and drop of personal

packages.

In August 2019, the company launched Swiggy Store, a

personalised service that allows customers to order any

product from any retail store in Gurugram. The company is

anticipated to steadily expand the services in Bengaluru

and Hyderabad.

In June 2019, the company launched “Daily”, a

subscription-based homestyle meal app with zero delivery

fee in Gurugram.

In February 2019, the company invested US$ 4.4 M in

Fingerlix, a ready to cook startup company.

M&As/Joint Ventures/Partnerships: In February 2019, Swiggy acquired a startup that

specialises in applying deep learning and computer vision

techniques for object recognition in videos. The acquisition

of the company is focused on their long-term strategy of

making an AI-driven platform to enhance customer

experience.

In August 2018, the company acquired Scootsy, an on-

demand delivery firm, to expand its delivery network.


Key Statistics

Company Overview

As of December 2019, with presence in over 500 cities and towns, 140,000 restaurants associated on its platform and 2.1 lakh active

delivery partners, the company is catering 1.4 million food orders daily.

https://www.swiggy.com/


Benori Knowledge is a global provider of custom research and analytics

solutions across industries, including consumer & retail, technology, media &

telecom, internet & e-commerce, professional services, financial services,

healthcare, industrials and education & social. We offer solutions aimed at

supporting our clients’ strategic needs that are critical to accelerate their

growth and value creation.

Our team of knowledge consultants is committed to minimising the

challenges faced due to high costs, poor access and low quality of knowledge

processes, and transforming them to deliver world-class and cost-effective

information, intelligence and insights.

Headquartered in India, we serve clients across the world.

Simplifying Decisions.

[email protected]

benoriknowledge.com

India E-commerce Market 2019 · 2020. 2. 6. · Sales between customer to customer (C2C) (e.g. OLX)...

Documents

Transcript of India E-commerce Market 2019 · 2020. 2. 6. · Sales between customer to customer (C2C) (e.g. OLX)...