E-Commerceindustry in India

Analysis ofE-CommerceIndustry in IndiaByWadhonkar Pavankumar D.Department of Management Studies, IIT Roorkee

IIT ROORKEE1The e-commerce sector in India has grown by 34% (CAGR) since 2009 to touch 16.4 billion USD in 2014. The sector is expected to be in the range of 22 billion USD in 2015$ 22 Bn2015P$ 3.8 Bn200934% CAGR

Currently, e-Travel comprises 70% of the total e-commerce market. It has been observed that online travel sales are maturing in most of the major economies. Same trend is observed in India as well.

Different e-commerce companies follow different models for functioning.Amazon India follows Online Marketplace model. Amazon India has two fulfilment centers in Mumbai and Bangalore.And it plans to start five new fulfilment centres across the country.

Sources: ASSOCHAM India, PwC

M-CommerceThere is a traffic torevenue gap onmobile e-commercein IndiaSources: Accel estimates, Accel portfolio companies, CNNIC and other industry sources

Women Shoppers A Growing ForceWorking women segment grew 43% in 2013 and constitutes nearly 10% of Active internet users in India according to i-Cube & IAMAICategories 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.Sources: Accel estimates, Accel portfolio companies & comScore

A significantly low (19%) but fast-growing internet population of 243 million in 2014 is an indicator of the sectors huge growth potential in India.It is evident that in absolute terms Indias internet users are short by only 36 million as compared with 279 million in the US.High Scope For Internet PenetrationIn coming years, as internet presence increases in rural areas, rural India will yield more e-commerce business.

E-commerce Friendly StatesTop 3 e-commerce states Delhi-NCR Karnataka Maharashtra

Large states with verylittle ecommerce presence: Bihar Uttrakhand ChhattisgarhTop 10 cities:1. Delhi2. Bangalore3. Mumbai4. Pune5. Hyderabad6. Chennai7. Kolkata8. Ahmedabad9. Jaipur10. PanajiCentral & North-Eastern India appears to have low adoption of e-commerceSources: Accel estimates, Accel portfolio companies, Google10

Sources: Accel estimates, NSSO, FacebookYoung India Will Become Dominant Presence In E-CommerceYoung Indians (19-24yrs) are more comfortable with online services e.g. FB and thus couldpotentially add up to 40M new shoppers in next 3 years if we just take the Facebook usersMajor difference between various companies is the way they maintain their inventory, Whilst Flipkart follows the inventory led model, Amazon India and Snapdeal, the other two major players follow marketplace model.

Sources: ASSOCHAM India, PwC | Forbes India, Jun 24, 2014Company NameAlexa Popularity Rank in IndiaFlipkart.com6Amazon.in8Snapdeal.com13Quikr.com17Amazon.com18Jabong.com21Ebay.in28Paytm.com30Olx.in37Naukri.com43Alibaba.com46Shopclues.com50Myntra.com52Popularity Comparison of Various E-Commerce Websites in IndiaSource : Alexa.com accessed on 28 Mar 2015Top 10 Parameters The E-Commerce Companies In India Should Be Evaluated UponCustomer ExperienceTax And Regulatory EnvironmentTechnologicalAdvancementsOperational FrameworkConvergence Of Online And Off Line ChannelsCustomer AcquisitionDelivery ExperienceDigital InfrastructurePayments And TransactionsAddressable Markets13

Source: Emerald InsightEvery e-commerce company has to evaluate itself on various parameters. These parameters are as diversified as of the conventional Value chain analysis on one hand. On the other hand it would also has to take care of some specialized instruments as depicted in the above diagram.

Indian e-commerce industry is still in the inception to growth stage, so most of the companies make negative margins on each product that they sell.

All companies are innovating on all the primary and support activities for their firm, to reduce their losses, but due to fierce competition, all major firms are still loss making.

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