Post on 02-Jun-2018
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
1/33
India e-commerce
Accel Partners
2014
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
2/33
Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
2
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
3/33
Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
3
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
4/33
Executive summary
4
$2Bn2013
$8.5Bn2016P
Online Shopping defined in this presentation does not include travel, ticketing and food ordering only physical goods commerce
Online shopping of physical goods in India, will grow to $8.5Bn in 2016.
Number of online shoppers in India will more than double to 40M.
Key finding
2x Indian shoppers X 1.1x number of orders per year per shopper X 2x average order value
63% CAGR
KEY FINDING
25% CAGR
20M
40M
CY2013 CY2016P
Indian online shoppers will double
Accel estimates and Industry sources
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
5/33
$278 M$559 M
$2,811 M
CY2012 CY2013 CY2016P
Fashion + Footwear + Accessories GMV
INR 1,080
INR 1,860
INR 3,600
CY2012 CY2013 CY2016P
Increasing average order value
Executive summaryKey findings
5
67%
25%CAGR
KEY FINDING
1. Last year there was a significant jump in averageorder value as there was a penetration of newcategories like jewellery, home dcor etc.
2. Also, users are becoming more comfortablebuying higher priced items online.
100%Growth
71%CAGR
1. Last year was the rise of the fashion category fashion e-commerce GMV doubled since 2012.
2.
Given the young demographic which is shoppingfor latest looks online and increasing choiceonline we estimate that this category will see400% growth in the next 3 years and rivalelectronics and mobile category in GMV.
Accel estimates and Industry sources
Average order values climbing up rapidly
Fashion category doubled last year
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
6/33
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
7/33
Executive Summary
7
Trends: Rise of EMIs Wallets
With increasing order values, we are seeing an uptick of EMI payments
3rdparty wallets albeit a new phenomenon, have a strong value proposition andwill be quick to become popular similar to China
TRENDS
60%
16%12% 12%
1% 0%
50%
12%15%
11%5% 7%
COD Credit Cards Debit Cards Net banking EMI 3rd party wallets
Indian payment landscape - rise of EMIs and Wallets(Total: 100%)
2013 2016P
Accel estimates, Accel portfolio companies and Industry sources: PayU, EMVantage
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
8/33
Executive summary
8Online Shopping defined in this presentation does not include travel, ticketing and food ordering
More penetration in Tier-II and Tier-III towns
New shoppers will come from the 40M+ Gen-Y FB users
1. Tier 2 cities growing much faster in eCommerce
adoption than Tier 1
2. Some states completely lagging in ecommerce,
waiting for infrastructure to be put in place
1.
Potentially 40M shoppers between ages of 19 24 years, will start spending money online
2. These shoppers also have a propensity tospend more money than Gen-X shoppers
Growth factors
20MGen-Y
shoppers
20MGen-X
shoppers
GROWTH FACTORS
Accel estimates, Google, Facebook, NSSO, Accel portfolio companies
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
9/33
Enough headroom for growthOnline retail is still a very small portion of retail in India
9
Online sales,4 Mn, 2%
Offline sales,243 Mn, 98%
247Mn mobiles shipments in India CY2013
Online sales,
45 Mn, 7%
Offline sales,555 Mn,
93%
600Mn books sold in India CY 2013
Online sales,$0.08 Bn, 0.2
Offline sales,$44.92 Bn,
99.8%
USD 45Bn jewellery sales in India CY 2013
Online sales,$0.5 Bn, 1%
Offline sales,
$42 Bn, 99%
USD 43Bn fashion + footwear sales in India CY 2013
Accel estimates, Accel portfolio companies and industry sources: CMR, FICCI, Deloitte
GROWTH FACTORS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
10/33
Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
10
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
11/33
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
12/33
Growth of India online shopping
12
Market Trends Growth Factors Payments BRICS
140 M213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
Accel estimates, Accel portfolio companies, comScore & IAMAI
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
13/33
Growth of India online shopping
13
Market Trends Growth Factors Payments BRICS
140 M213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-commerce sites = 60%
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers India e-commerce market will start maturing
and display characteristics similar to China which traditionally has higher conversion rates(nearly 3.5%)
This is due to e-commerce being only choice foravailability of goods in parts of the country and
easy payment options like COD which are notproblems in western countries
Accel estimates, Accel portfolio companies, comScore & IAMAI
k d G h CS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
14/33
Growth of India online shopping
14
Market Trends Growth Factors Payments BRICS
140 M213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-commerce sites = 60%
As e-commerce sites gain trust, users arebeginning to order more frequently
Also, repeat users acquired more than 1yr old- are more comfortable ordering online andorder significantly more than first time buyers
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.501.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
India e-commerce market will start maturingand display characteristics similar to China which traditionally has higher conversion rates(nearly 3.5%)
This is due to e-commerce being only choice foravailability of goods in parts of the country and
easy payment options like COD which are notproblems in western countries
Accel estimates, Accel portfolio companies, comScore & IAMAI
M k T d G h F P BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
15/33
Growth of India online shopping
15
Market Trends Growth Factors Payments BRICS
140 M213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-commerce sites = 60%
Last year there was a significant jump inaverage order value as there was apenetration of new categories like jewellery,home dcor etc
Also, users are becoming more comfortablebuying higher priced items online
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.501.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
$18
$31
$60
CY2012 CY2013 CY2016P
Average order value
Accel estimates, Accel portfolio companies, comScore & IAMAI
M k t T d G th F t P t BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
16/33
Growth of India online shopping
16
Market Trends Growth Factors Payments BRICS
140 M213 M
400 M
CY2012 CY2013 CY2016P
Internet users in India
% of internet users who visit e-commerce sites = 60%
Last year there was a significant jump inaverage order value as there was apenetration of new categories like jewellery,home dcor etc
Also, users are becoming more comfortablebuying higher priced items online
4M
5M
12M
CY2012 CY2013 CY2016P
# of orders per month
3.00%
2.70%
2.90%
CY2012 CY2013 CY2016P
Conversion from visitors to buyers
1.501.55
1.70
CY2012 CY2013 CY2016P
Orders per buyer per month
$18
$31
$60
CY2012 CY2013 CY2016P
Average order value$816 M
$1,983 M
$8,519 M
CY2012 CY2013 CY2016P
Annualized online shopping GMV
Accel estimates, Accel portfolio companies, comScore & IAMAI
M k t T d G th F t P t BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
17/33
Other observations
17
Market Trends Growth Factors Payments BRICS
1. ~200M of Indians will come online in next 3 years
2. Majority of these will come online on
smartphones
3. E-Commerce companies are building their
brands, thus gaining trust of users
1. Existing shoppers shop more number of times
than new shoppers (in that year)2. As Indias e-commerce market grows the
proportion of existing shoppers will increase from
30% (in 2013) to 50% (in 2016)
13M
20M
40M
CY2012 CY2013 CY2016P
# of online shoppers in India
3.4
3.2
3.55
CY2012 CY2013 CY2016P
# of orders per customer / year
Accel estimates & Accel portfolio companies
M k t T d G th F t P t BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
18/33
E-commerce is a small sliver of Indian retail
18
91.0%
8.7%
0.3%
Unorganized retail Organized retail - offline Organized retail - online
92.0%
7.8%
0.2%
2012 2013
Market Trends Growth Factors Payments BRICS
Accel estimates & Deloitte
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
19/33
Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
19
Market Trends Growth Factors Payments BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
20/33
MobileThere is a traffic to revenue gap on mobile e-commerce in India
20
Factors leading to major adoption of mobile as a channel:
70% of the growth in Indian internet users was mobile only
Showrooming a growing habit
Reasons why there is not a 1:1 conversion of traffic to mobile:
Most e-retailers do not have mobile optimized sites
Most transactions are for low ticket items
Mobile marketing budgets are < 10% of overall digital marketingbudgets, even though they have increased 100% Y-o-Y, eventhough overall ad spends have increased 20% Y-o-Y
23%27%
33%
9% 10%
33%
India China Japan
Mobile revenue share is lagging mobiletraffic share in India and China
Mobile Traffic %
9%
4%
N/A
9.8%
India Brazil Russia China
India vs rest of BRICS - mobile shopping GMV as % ofoverall GMV
1x 8x 27x
2012 2013 2016
Mobile shopping grew 800% in 2013, weexpect it to grow at a 150% CAGR till 2016
Market Trends Growth Factors Payments BRICS
Accel estimates, Accel portfolio companies, CNNIC and other industry sources
Market Trends Growth Factors Payments BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
21/33
$122 M / 1x$511 M / 4x
$3Bn / 24x
2012 2013 2016P
Women influenced GMV
Women shoppers a growing force
21
Male Female
Women spend 60% more timeon jewellery sites than men
Male Female
Women spend 40% moretime on fashion sites
1.3x 1.1x1.0x
Luxury/Jewellery Apparel Home furnishings
Women spend upto 30% more time onluxury sites than on home furnishing
Market Trends Growth Factors Payments BRICS
15% ofmarket
26% ofmarket
35% ofmarket
1.
Working women segment grew 43% in 2013 andconstitutes nearly 10% of Active internet users in
India according to i-Cube & IAMAI
2. Categories like baby care, home dcor, jewellery
etc have traditionally been influenced by women
decision makers. As more choice become
available more women are shopping online.
Accel estimates, Accel portfolio companies & comScore
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
22/33
Market Trends Growth Factors Payments BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
23/33
149M
132M 132M
102M
19M
40M
20M 8M
13%
30%
15%8%
0%10%20%30%40%
50%60%70%80%90%100%
0M
20M
40M
60M
80M
100M
120M
140M
160M
13 - 18 19 - 24 25 - 30 31 - 36
20M new shoppers could come just from the 19-24 age group
India population FB users (2013) FB users %
Young India will become dominant presence in e-Commerce
23
Market Trends Growth Factors Payments BRICS
Young Indians (19-24yrs) are more comfortable with online services e.g. FB and thus could
potentially add upto 40M new shoppers in next 3 years if we just take the Facebook users
Accel estimates, NSSO, Facebook
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
24/33
Market Trends Growth Factors Payments BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
25/33
Categories
Books
7%
Mobile, Tablets &Accessories
35%
Computers,Cameras,
Electronics &Appliances
18%Health &
Personal care2%
Babycare3%
Fashion, Footwear& Accessories
28%
Jewellery2%
Home dcor3%
Others2%
Categories by GMV (%)
Books21%
Mobile,Tablets &
Accessories
9%
Computers,Cameras,
Electronics &Appliances
10%Health &
Personal care4%
Babycare8%
Fashion,Footwear &Accessories
35%
Jewellery
1% Homedcor8%
Others4%
Categories by # of trxns. (%)
Books category contributed to 21% of
the transactions but only 7% of the GMV
Market Trends Growth Factors Payments BRICS
Accel estimates & Accel portfolio companies
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
26/33
Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
26
Market Trends Growth Factors Payments BRICS
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
27/33
Payments
27
COD
60%
CreditCards16%
DebitCards11%
Net
banking12%
EMI1%
2013
Market Trends Growth Factors Payments BRICS
With most e-commerce players launching their wallets, we believe that 3rd
party wallets will become a significant alternative to COD in coming years.
COD50%
Credit Cards12%
Debit Cards15%
Net banking11%
EMI5%
3rd partywallets
7%
2016P
Accel estimates & Accel portfolio companies
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
28/33
Contents
S.No. Content Slide Number
1. Summary 3 - 9
2. Current Market Information 10 - 18
3. Trends 19 - 21
4. Growth Factors 22 - 25
5. Payments 26 - 27
6. BRICs comparison 28 - 31
28
Market Trends Growth Factors Payments BRICs
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
29/33
Indian online shopping has tremendous growth potentialSignificant headroom for growth
29
1,249
200144
1,358
21399 66
59117%
50%46% 44%
0%10%
20%
30%
40%
50%
60%
-
500
1,000
1,500
India Brazil Russia China
InMillions
Only 17% of Indians are online, compared to >40% for other countries
Population Online population Internet penetration %
213
9966
591
19 31 30
280
9%
31%
45% 47%
0%
20%
40%
60%
80%
100%
-
100
200
300
400
500600
700
India Brazil Russia China
i
n
i
o
only 9% of online Indians shop, compared to >30% in other countries
Online population Online shoppers Online shopper penetration %
Market Trends Growth Factors Payments BRICs
Accel estimates & Industry sources
Market
Trends
Growth Factors
Payments
BRICs
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
30/33
BRICs B2C online shopping marketIndia is quite small compared to rest of BRIC countries
30
$ 1.8 Bn / 1x$ 13 Bn / 7x $ 16 Bn / 9x
$ 106 Bn / 60x
India Brazil Russia China
Indian e-Commerce market is $1.8Bn, 60x smaller than the Chinese market
$ 93
$ 421
$ 533
$ 380
India Brazil Russia China
annual spend by an Indian online shopper is $93 - 4x smaller than Chinese one
y
Accel estimates & Industry sources
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
31/33
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
32/33
8/10/2019 Thestateofecommerceinindia April2014 140410021035 Phpapp01
33/33
Disclaimer
The information and opinions in this Report have been prepared or complied by ACCELPARTNERS and are subject to change/modification without any notice. The informationcontained in this Report is believed to be accurate at the time of date of issue of thisReport, but no representation or warranty is given (express or implied) as to its accuracy,completeness or correctness. ACCEL PARTNERS accepts no liability whatsoever for anydirect, indirect or consequential loss or damage arising in any way from any use of orreliance placed on this material for any purpose. The contents of this Report are the
copyright of ACCEL PARTNERS. Nothing on this Report constitutes advice, nor createsany contractual relationship.