Market Research Report : E-Commerce India 2011

e-Commerce Market – India

November 2011

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E-COMMERCE MARKET INDIA 2011.PPT

Executive Summary

Market

�e-Commerce market in India is witnessing an exponential growth rate over the years and with the emergence of better marketing techniques, this market is expected to grow by leaps and bounds

�The e-Commerce market in 20-- was valued at INR a tr and is expected to grow at a CAGR of x% to reach INR b tr by 20--

�The market space can be segregated into multiple segments such as online retail, online travel, online financial services, online digital and online other services

�Having a combined market share of more than y%, online travel and retail players mainly dominate the market space

Drivers &

Challenges

Drivers:

� Increased Spending Power

� Extensive Usage of Plastic Money

� Increasing Internet Penetration and PC Users

� Ease of Transaction

� Government Initiative

Challenges:

�Secure Payment Concern

�Lack of Confidence

Trends

�Purchase Decisions are Brand Oriented

�Social Media Involvement

� Increasing BPO Tie Ups

Competition

Player 8Player 7Player 6Player 5

Major e-Commerce Vendors

Player 1 Player 2 Player 3 Player 4

3E-COMMERCE MARKET INDIA 2011.PPT

•Introduction

•Market Overview

•e-Commerce Market Segments

•e-Commerce Ecosystem

•Types of e-Commerce

•Technology used in e-Commerce

•Drivers and Challenges

•Demand and Supply Perspective

•Trends

•PE Investments

•Major Players

•Strategic Recommendation

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An example of e-Commerce system work model

e-Commerce

Space

Regional Logistics Support Regional Warehouse Logistics Support

Warehouse

e-Commerce

Vendor

Financial Service Provider

Consumers

Internet Enabled Devices

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An illustration of the transaction flow within an

e-Commerce system

Consumer Bank Account Vendor Bank Account

Third Party

Vendor

Authorization

Consumer VendorProduct

Transaction

Notification Notification

Transaction via credit/debit cards

Product Delivery Logistics Support

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Presence of extremely affordable and desirable

e-Commerce options is driving the market in India

• Indian e-Commerce market is currently undergoing through a phase where it is experiencing a strong growth rate� Factors such as increased disposable income coupled with a surge in internet penetration is primarily driving growth in the market

• Market size of e-Commerce is estimated to grow at a dynamic growth rate of x% to reach INR a tr in 20-- from INR b tr in 20--

• The market can be broadly classified into several segments which include ‘Online Travel’, ‘Financial Services’, ‘Digital Downloads’, ‘e-Retailing’ and ‘ Other Services ‘

• Players in the market are following several strategic moves to lure and attract customers, some of which are enlisted as below:� Easy availability of EMI schemes and lucrative offers on e-Commerce, provided by players in the market happen to be a major source of

attraction for customers

� Often customers are offered a scheme of earning loyalty points which can be redeemed to claim discounts on commodities or services availed online

• Increasing tendency to save time and energy, especially amongst the working population will further intensify the e-Commerce market by a large extent

e-Commerce Market – India Overview

Source: x

INR tr

c

b

a

0

xyz

2015e

f

2014e

e

2013e

d

2012e

c

2011e

b

2010

a

Segment 5

Segment 4

Segment 3

Segment 2

Segment 1

e-Commerce Market Growth - India e-Commerce Market Share (2010)

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e-Commerce Segments (x/x)

• Online travel segment enjoys a lions share of a% of the overall e-Commerce market in India and is flourishing at an unprecedented growth rate� Market size of Online travel registered a growth rate of b% in 20-- to reach a whooping market size of INR abc bn as compared to INR

def bn in 20--

• Aspects such as the proliferation of internet, increased medical tourism, higher disposable income, availability of low cost carriers mainly catalyze the market

• Major trends identified are listed below:� Railway booking is the most popular amongst all categories

� Religious and pilgrimage traveling is growing exponentially

� Frequent use of search tools for gathering ticket availability and price related information

• Major three sub segments of the online travel industry has been illustrated below:

e-Commerce – Segment 1

Source: x

xyz

Subsegment 1 Subsegment 2 Subsegment 3

xxx yyy zzz

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An example of e-Commerce ecosystem

Source: x

Internet

Infrastructure

Application

InfrastructureIntermediaries

e-Commerce

Companies

aaa bbb ccc ddd

eee fff ggg hhh

www xxx yyy zzz

Description

Company

Type

Examples of

Companies

Ecosystem

Layers

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e-Commerce in India has diversified immensely wherein

various methods of transaction has evolved

Source: x

•Currently, there are several types of e-Commerce methods prevailing which has witnessed tremendous acceptance amongst customers and sellers

•A list of e-Commerce types and their relevant vendors are mentioned below:

E-Commerce

B2B B2EB2C

C2B C2C

• xxx • xxx

• xxx• xxx• xxx

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e-Commerce website development is carried out in phases

so as to ensure proper and efficient functioning

Developing an e-Commerce website is a step by step approach, consisting of various phases, so as to

ensure proper and efficient transaction over the internet

e-Commerce – Website Development Phases

Source: x

Research•Aaa•Sss•Ttt

Planning

Design

Development

Website

Launch

• Ddd• Eee• Zzz

• Mmm

• Nnn

• Ooo

• Bbb• Ccc• Yyy

• Ggg• Hhh• Lll


Drivers & Challenges – Summary

Government Initiative

Drivers

Increased Spending Power

Extensive Usage of Plastic Money

Increasing Internet Penetration and PC

Users

Ease of Transaction

Challenges

Secure Payment Concern

Lack of Confidence

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A comparison between the supply and demand side of e-

Commerce system

e-Commerce

Space

e-Commerce Vendors

(Supply Side) e-Commerce Users

(Demand Side)

Perception

• Generate higher revenues

• Utilize existing resources

• Offer enhanced customer satisfaction

• Maintain healthy brand image

• Provide full fledged virtual store

facilities to consumers

Requirements

• xxx

Consumer Objectives

• Round the clock availability of products

/ services

• Hassle free product / services

comparison

• Reduced time requirement

• Nullification of Fuel and transportation

expenses

• Benefits from loyalty programs offered

by vendors

Requirements

• yyy

Source: x

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Online purchase decisions are mostly brand oriented and is

mainly influenced according to the area of living

Source: x

• Indian e-Commerce market is witnessing some phenomenal trends, which reflects the shopping pattern of consumers

• These trends can listed as:• States including Maharashtra, Delhi, Tamil Nadu, Karnataka

and Andhra Pradesh happen to be most acquainted with e-Commerce

• Metros, tier II and III cities and rural areas accounts for x%, y% and z% of the overall market

• Purchase patterns are purely brand driven• Jewellery & Accessory segment witnessed a continual

increase in the number of women shoppers• Majority of products purchased belonged to the electronic

goods while lifestyle products accounted for a%

Top 10 Cities involved in e-Commerce

Rank Name Rank Name

1 City 1 6 City 6

2 City 2 7 City 7

3 City 3 8 City 8

4 City 4 9 City 9

5 City 5 10 City 10

AAA & BBB – Products

AAA BBB

Cell Phones Blu -ray DVDsSolitaire

Pendants Lamp work

Stamps Men’s shoes Wrist WatchesCrystal Items

Watches NetbooksCommonwealth

Stamps PC Games

Natural Diamonds Digital Cameras Medical Items DVDs

SunglassesLaptop

BatteriesSarees & Apparels

Mineral Specimens

Brand Preferences – Across Categories

a b c d

e f g h

hH happens to be the only Indian

brand to find substantial popularity

in e-Commerce market

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PE investments in the e-Commerce market is witnessing a

major growth over the past years

Source: x

• Owing to the lucrative aspects in the e-Commerce market in India, it is attracting major domestic and international PE funds� The market received a total of xxx investments in FY 11 as

compared to yyy in FY 10

• PE investments made in the recent years has facilitated modernization and betterment of services by a large extent

• Primarily, only the online retail players benefited from the investments

INR bn

c

b

a

0

xyz

20-- e

c

20--

a

PE Investments – Online Ventures

Recent investments in the Indian e-Commerce market (2009 -2010)

Investor Amount (INR bn) No. of Deals Some Key Targeted Companies

Investor 1 xxx y Abc, def, ghi

Investor 2 xxx y Ijk, klm, npo

Investor 3 xxx y Qrs, tuv, wxy

Investor 4 xxx y Abc, def

Investor 5 xxx y Ghi, jkl

Investor 6 xxx y Abc, def

Overview

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Major e-Commerce Players (1/8)

Online Retail Players

Company Name Company Snapshot Business Description

Player 1 Headquarter: x • Possess the license for online portal abcxyz

� Offers foot wears, apparel, bags and accessories, jewellery, sunglasses, winter wears and sports apparels

• Caters to the need of individuals as well as retailers

� Currently, serves to about 3000 retailers across India

• In July, the company has received a fund worth INR xyz mn, from abc and def in its second round of funding

� The company had earlier announced in Dec 2010, to have received an investment of INR asd mn, from xxx

Parent Company: x

Industry Classification: x

Website: x

Phone: x

Key Person: x

Player 2 Headquarter: x • Primarily operates as an online e-commerce portal wherein it offers lucrative deals for individuals, specific to an individual’s location of interest

• Its areas of operation comprise of Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune

• Till Jun 2010, the company was known as abc

• Currently, the company is anticipated to be valued at INR xxx mn and is expected to receive investments from international investors

� More than a% of the share in the company is withheld by the European firm ABC, while the remaining shares are segregated amongst xyz, yyy and zzz

Parent Company: x

Industry Classification: x

Website: x

Phone: x

Key Person: x

Source: x


Strategic Recommendations

AAA• aaa

BBB • bbb

xyz

CCC • ccc

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