Which Are the Next Big Players in India's E-commerce Industry
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Guest Author | February 12, 2015 at 11:45 am
Which are the next big players in Indias e-commerceindustry?
The Indian e-retailing industry is booming. Case in point, the market size has grown from $600 million two yearsago to $2.3 billion. We are at a similar inflection point as China was 10 years ago. This is just the beginning. The e-retailing market is expected to reach $32 Billion by 2020. According to Matrix Partners, many Billion dollar e-commerce companies are expected to be created in India by then. At present, there are just 3: Flipkart, Snapdealand Paytm that has just joined the club. Notably, these 3 and the other big domestic and foreign players, namelyShopclues, eBay and Amazon, follow a horizontal marketplace model. As competition amongst them heats up and itis hard to distinguish from each other in terms of products and user experience, new players are emerging with afocus on differentiation. And not surprisingly, they focus on vertical or niche categories. Heres a look at some ofthem.
image credit: Shutter Stock
Tradus and BigBasket (Groceries): Tradus has recently pivoted from being a horizontal marketplace to selling onlygroceries. While it remains a marketplace, connecting local buyers and sellers in seven cities, BigBasket is not amarketplace and therefore has more control over the entire supply chain. BigBasket has presence in four cities andhas its own warehouses and delivery network.
UrbanLadder, FabFurnish and Pepperfry (Furniture): UrbanLadder is a curated online marketplace for furnitureand home decor products, and currently operates in seven cities. FabFurnish too is shifting from an inventory-ledmodel to a marketplace model, thus becoming more cost-effective and also covering more cities. Pepperfry is amanaged marketplace that switched focus from initially selling products across multiple lifestyle categories to onlyfurniture and home dcor. It has the largest coverage, shipping to about 500 cities in India.
FirstCry, HopScotch and BabyOye (Baby care products): FirstCry is the leader in the baby care products onlineretail segment, and has been around for 4 years now. HopScotch is a relatively new entrant and has a flash salesmodel (which offers smaller scale) as opposed to FirstCrys inventory-based model. BabyOye follows both aninventory storage model and a just-in-time arrangement with its distribution partners. It had acquired itscompetitor Hoopos in late 2013. In return, BabyOye has been acquired by the Mahindra group in February 2015. Itappears that the niche baby care players have increasingly been edged out of the market by the large horizontalplayers such as Flipkart, SnapDeal and Amazon. As a result, out of the half a dozen baby care focused players thathad sprung up about five years ago, only a couple of etailers, like FirstCry and Hopscotch, remain in the game.
Jabong, Zovi and FashionAndYou (Lifestyle): The lifestyle categories consist of apparel, shoes, jewellery,
accessories and home dcor and accounts for a massive 45% of the entire e-retail market. With the acquisition ofMyntra, the prominent players are Jabong, Zovi and FashionAndYou. They continue to face enormous competitionfrom the horizontal players such as Flipkart, SnapDeal and Amazon that are focusing on fashion more and more.Jabong has been in existence since 2012 and follows both an inventory model and a managed marketplace model.
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Jabong has been in existence since 2012 and follows both an inventory model and a managed marketplace model.On the other hand, Zovi designs and manufactures privately labelled lifestyle apparel and accessory products thatit sells exclusively online. Lastly, FashionAndYou is a marketplace that operates in a flash sales model, offeringproducts from retailers at discounts for only a limited period.
CaratLane, Voylla and BlueStone: Bluestone has an end-to-end approach to selling jewellery online that involvesdesigning and manufacturing themselves. It also has a just-in-time manufacturing model where the jewellery ismanufactured within days of an order being placed. Caratlane too designs and manufactures its jewellery in-house,but also has a marketplace model for solitaires sourced from vendors globally. While CaratLane and Bluestone sellprecious jewellery, Voylla deals largely in imitation jewellery though an inventory-led model.
Cbazaar, IndianRoots and Craftsvilla (Ethnic Lifestyle): An emerging trend is niche players dealing in ethniclifestyle products that have a huge demand outside India in the international market. Three of the prominentplayers in the space, Cbazaar, IndianRoots and Craftsvilla, have over 50% of their sales of ethnic apparel, homefurnishing, home dcor, jewellery, bags, etc. originating from abroad. Notably all of them work in a zero-inventorymarketplace model.
LimeRoad and Xarato (Social Shopping): Another recent trend is social shopping where shoppers friends becomeinvolved in the shopping experience. There are two only players in India that have integrated social shopping intothe online product discovery and purchasing experience: Limeroad and Xarato* and many more. Both are lifestylecategory marketplaces and differentiate themselves from the rest of the competition by providing value tocustomers through superior user experience. They have set the benchmark for the next generation of e-commercesites with social baked in from the start.
*About the author:
Indrashis Ghosh, Head of marketing at www.xarato.com, Indias social shopping marketplace. Indrashis has over 12years of experience in the IT industry and is an MBA from IIMK in Marketing & Strategy.
TOPICS E-COMMERCE SITES ECOMMERCE INDIA
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