industry monitor indian e-commerce sector december 2014

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Industry Monitor

Indian e-Commerce

December 2014

Industry Monitor - Indian e-Commerce, December 2014

2 | P a g e © Gyan Research and Analytics Pvt. Ltd., 2014

Table of Contents

1. In Focus – Online Classifieds .......................................................................................................... 3

2. Industry Statistics .......................................................................................................................... 6

3. Product Scan – E-tailing ................................................................................................................. 8

4. Industry News Brief – E-Commerce .............................................................................................. 10

5. Company News Brief – E-Commerce ............................................................................................ 11

6. Mergers, Acquisitions and Investments........................................................................................ 12

7. Company Scan: Jabong Online Services Private Limited ............................................................... 13

8. Upcoming Events ......................................................................................................................... 14



1. In Focus – Online Classifieds

Advertisements that are grouped into

categories or classes are known as

"classified ads". It is a form of

advertising which is popular not only

in newspapers and periodicals, but

also online. Online classifieds appear on

websites and advertise a wide range of

products from apparel to grocery to

medicine and houses. Some online

classifieds are of specific nature and offer

limited services. The online classifieds

segment of the advertising sector

includes recruitment, matrimonial,

automobile and real estate.

The online classified industry in India is

growing rapidly and is attracting many

large and small players. The market grew

at the Compounded Annual Growth Rate

(CAGR) of 29 percent to 2013 from 2009.

Revenue of online classified segment

increased to USD 486 million in 2013

from USD 159 million in 2009. Most of

the business for these online companies

comes from Tier Ι and metro cities, since

the internet penetration and awareness

in these areas is high.

Subscription to various websites by the

advertiser is the major revenue earning

tool for online classifieds. In 2013, within the segment, online recruitment has the major share of

159.9

224.5

292.6

377.5

486.9

0

100

200

300

400

500

600

2009 2010 2011 2012 2013

USD

Mill

ion

Online Classifieds Market in India

Source: Ernst & Young

Source: Ernst & Young

Transition from Print Media to the Web

43

57

2009

4951

2013

Online Offline

http://en.wikipedia.org/wiki/Newspapers

http://en.wikipedia.org/wiki/Periodicals



revenue, followed by online matrimonial sites. Classified portals like jobs, matrimonial and real

estate together earned almost 96 percent of total online classifieds revenue in 2013.

Online Recruitment

E-recruitment is the largest category in

the online classified segment in India, with

a 62.5 percent share of the market.

According to ASSOCHAM, the number of

jobs in India is expected to increase; by

2015, 87.37 million jobs will be created.

Thus, the growth of the online

recruitment classified segment holds great

potential.

Low advertisement cost, wider

geographical access and easy search

options are some of the advantages of e-

recruitment classifieds. Players in this

segment are investing on improving

search functionalities, such as providing

superior search options.

Online Matrimonial

The online matrimonial market generated

revenue of USD 63 million in 2011 and is

growing at the rate of 25 percent from

2009 to 2013. In India, there are more

than 100 matrimonial sites catering to

multiple communities and demographics.

However, the market is dominated by a

few large players, such as shaadi.com,

Bharat matrimony and jeevansathi.com.

35,500

42,00046,000 48,000

52,320

0

10000

20000

30000

40000

50000

60000

FY2010 FY2011 FY2012 FY2013 FY2014

tho

usa

nd

Number of Unique Consumers Visiting naukri.com

Source: Infoedge

3.7

4.3

5

5.6

6.6

0

1

2

3

4

5

6

7

FY2010 FY2011 FY2012 FY2013 FY2014

mill

ion

Profiles Uploaded in Jeevansathi.com

Source: Infoedge



Online classified players are trying to expand their market by widening their services. Matrimonial

sites now provide relationship counseling, horoscope matching, chat services and round the clock

customer support.

Online Real Estate

In 2013 online real estate and auto classifieds together had a 14 percent market share. Growth of

the real estate classified segment has been sluggish due to the lack of computer knowledge among

real estate agents. On the brighter side, demand for rented and owned properties in the country is

likely to rise as a result of rising urban population. The demand for real estate is expected to grow at

the CAGR of 19 percent from 2010 to 2014, some of this growth will inevitably reflect in online real

estate classifieds.

The overall outlook of online classified segment is positive. The only challenges that this sector faces

are language barrier, online payment mechanisms and low visibility and coverage. Players in this

segment are working to overcome these barriers to capture the potential that India has to offer. The

market is seeing the emergence of mobile classified, value added services and the entry of local

classifieds. Newspapers are also launching their own online classified portals. The increasing number

of mobile web users in India has lead to the rise in market of online classifieds.



2. Industry Statistics

Total Internet Subscribers in India – in million

Jan - March 2013 Apr - June 2013 July - Sep 2013 Oct - Dec 2013 Jan - March 2014

164.81 198.39 210.38 238.71 251.59

Mobile Internet Users in India – in million

Jan-March 2013 Apr - June 2013 July - Sep 2013 Oct - Dec 2013 Jan - March 2014

143.20 176.50 188.20 220.38 233.09

Smart Phone Users in India – in million

2009 2010 2011 2012 2013

4.5 10 18 44 67

Internet Capable Mobile Devices in India – in million

2009 2010 2011 2012 2013

149 332 431 432 613

3G Subscribers in India – in million

2009 2010 2011 2012 2013

NA 5 11 23 56

Source: TRAI quarterly performance indicator reports, Nielsen, IDC, NTT Docomo, Avendus estimates



Number of Unique Visitors and Penetration Rate of e-tailing in India, 2013

E – tailing Sites Average Number of Unique

Visitors per month (in thousands)

Penetration in Percentage

Myntra.com 13,173 17.1

Flipkart.com 12,649 16.4

Jabong.com 12,425 16.1

Amazon Sites 11,924 15.5

Snapdeal.com 8,447 10.9

Homeshop18.com 8,109 10.5

Source: Comscore

Penetration of Internet in Rural India, 2013 (in percentage)

Computer literates 14

Mobile phone users 38.5

Claimed internet users 6.7

Active internet users 4.6

Mobile internet users 2.4

Source: IMRB



3. Product Scan – E-tailing

India is emerging as an exciting market

for e-retail companies. The Indian e-

tailing market grew at a Compounded

Annual Growth Rate (CAGR) of 55

percent from 2009 to 2013; it is

expected to expand at a similar rate

right up to 2018. It generated revenues

of USD 2.3 billion in 2013.

Factors such as the penetration of

technology, 3G rollout, cash on delivery

facilities, rise in debit and credit usage

and changing consumer lifestyles have

led to the boom in Indian e-retail.

The electronics and lifestyle segment

accounts for more than 70 percent of

the total market. In 2013, electronics

captured 34 percent market share,

followed by apparel and accessories

with 30 percent. The e-tailing business in

India is mostly driven by non-food

categories. The food and grocery

segment has a negligible share. Complex

consumption patterns, supply chain

challenges and product perishability and

storage issues plague the segment.

In the early 2000’s, India witnessed the

launch of several e-tailing sites like

rediff.com, indiaplaza.com and

0.4

0.6

1

1.5

2.3

0

0.5

1

1.5

2

2.5

2009 2010 2011 2012 2013

USD

bill

ion

Growth of E-tailing in India

Source: KPMG, Crisil, PWC Analysis

2

34

30

15

10

6 3

Commodity Distribution of E-tailing Sector in India

Baby Products Electronics

Apparels and Accessories Books

Beauty and Personal Care Home and Furnishing

Healthcare

Source: Internet and Mobile Association of India Research



bazee.com. However, the launch of Flipkart in 2077 was the real game changer. Flipkart still

continues to be leading player in this

segment. Other major players

include Amazon, Snapdeal, ebay,

Jabong and Myntra.

A recent phenomenon is that of

niche retailers who have succeeded

in creating a space for themselves.

For instance, Cartlane, an online fine

jewellery store, Firstcry, a one-step

online solution for baby care and

Localbanya, an online grocer, have

tasted success. Each of these players

has concentrated on distinct

consumer needs and is currently

growing briskly. Niche players are

expected to have a higher contribution to the e-retailing space over the next five years.

E-tailing creates an efficient marketplace for vendors and consumers. At present the Indian e-tailing

market is hampered by some challenges. Low profitability, aligning and upgrading vendors to e-

tailers’ requirements, creation of business-to-consumer logistics, developing tools for online

shopping are restricting the growth of this segment. However, if the Indian e-tailing market can

overcome these bottlenecks, it can drive efficiency, contribute to new capabilities and increase

competitiveness.

Recent Entrants in the Indian E-tailing Market

Retailer Category Number of

Stores E-tailing

Portal Launch

More (Aditya Birla)

Multiple 575+ 2012

GKB Opticals Eyewear 61 2012

Tata Croma CDIT 81 2012

Crossword Books 78 2011

Om Bookstore Books 29 2011

PUMA Lifestyle 200 2011

Bata Footwear 1300+ 2011

Source: Technopak Advisors



4. Industry News Brief – E-Commerce

1. Government seeks new tax regime for global e-commerce firms – The Indian government is

formulating new tax regime for global e-commerce firms. Currently, existing global giants are taking

advantage of the country’s lax tax regime to avoid paying taxes. India raised the issue at the G20

meeting in Brisbane.

2. India’s e-commerce sector venture capital investment above USD 1 billion – India’s e-commerce

venture capital investment is expected to cross USD 1 billion in 2014. Venture capitalists in the US

and India predict robust growth of the sector, similar to what was experienced by the Chinese e-

commerce sector five years ago. Investors are focusing on the growing competition between

Amazon, Flipkart and Snapdeal. The ongoing e-commerce boom is responsible for the rise in venture

capital investment.

3. Logistics companies attract investment in e-commerce – Investors are betting on the logistics

sector, which is expected to be a key beneficiary of the e-commerce surge. Widely followed

investors like Radhakrishnan, R. Damani are active buyers in shares of logistics companies such as

Gati, Blue Dart and Transport Corporation. Brightstars Investments and Derive Investments bought

5.77 percent in Gati, 4.88 percent in Transport Corporation and 5.35 percent in Blue Star.

4. Accel India to invest USD 250 million in e-commerce start ups – Accel Partners, India, is looking

to invest roughly USD 250 million in e-commerce and technology start ups. The company is planning

to start making investments from its fund before April 2015.



5. Company News Brief – E-Commerce

1. Reliance Retail enters India’s e-commerce sector – Reliance Retail’s Reliance Fresh has started

taking online orders for groceries and household items. Reliance entered the e-commerce sector

quietly, without any formal marketing. Presently, the service is restricted to a few neighborhoods in

Mumbai. Reliancefreshdirect.com not only provides customers with choice but also the convenience

of direct delivery.

2. India Post to foray into e-commerce – The West Bengal circle of India Post department is

planning to create an online marketplace for local traders. The postal department aims to earn

higher revenues by involving local traders and business houses. The department has approached

various industrial bodies and the Chamber of Commerce in Kolkata, Howrah and other districts of

the state for help.

3. E-commerce certification program launched by NIIT and ebay – NIIT Limited and ebay India

together have launched an e-commerce certification program for online entrepreneurs. The course

will be rolled out at NIIT centers and will focus on students, home-makers and artisans who aspire to

enter the e-commerce sector. The course involves 8 hours of video tutorials and interactive learning

and another 8 hours of online cloud learning. The training aims to impart skills in photography,

listing quality and customer sales service to online sellers.



6. Mergers, Acquisitions and Investments

Company Type Investment

(in USD Million)

Tata Sons invests in furniture e-tailer, Urban Ladder Investment NA

Foodpanda buys Tastykhana Acquisition 20 - 25

Soft Bank invests in online ventures in India like Ola Cab, Snapdeal

Investment 10000

Flipkart buys out Myntra Acquisition 300

Amazon to acquire Jabong Acquisition 550

Source: Business Standard, Economic Times



7. Company Scan: Jabong Online Services Private Limited

Snapshot

Legal Status: Private Limited Company

Year of Incorporation: 2012

Industry/Sector: e-commerce

Founder /CEO: Arun Chandra Mohan, Praveen

Sinha

Address: Xerion Retail Pvt. Ltd., Plot 521,

Ground Floor, Udyog Vihar Phase ΙΙΙ,

Gurgaon - 122016

Employees: Approximately 1000

Background

Jabong.com is an Indian fashion and lifestyle

ecommerce portal. The company is headquatered

in Gurgaon

It was co-founded by Arun Chandra Mohan and

Praveen Sinha

According to The Economist, Jabong clocked gross

sales of around USD 150 million in its year of

incorporation itself

It received the ‘Most Impactful Launch of the Year’

award at the Pitch Brands 50 Awards, 2013

Products/Services

The company caters to several categories:

Clothing

Footwear

Watches

Sunglasses

Jewellery

Wellness and Beauty Products

Baby & Kids Wear



8. Upcoming Events

Event Organiser Date Venue Highlights Contact Details

India Ecommerce Expo, 2014

NA December 12, 2014

International Trade Expo Center, Noida, A-11, Sector 62, National Highway 24, Noida - 201306

Mobile – 9810303916/9167280126 Email – [email protected] Web – www.indiaecommerceexpo.com

mailto:[email protected]

mailto:[email protected]

http://www.indiaecommerceexpo.com/

http://www.indiaecommerceexpo.com/



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industry monitor indian e-commerce sector december 2014

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