Inc42's Q1 2023 Ecommerce Report

STATE OF
THE INDIAN
ECOMMERCE
Q1 | 2023
InFocus : Omnichannel
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TABLE OF CONTENTS
04 INDIA’S DIGITAL ECONOMY IN A NUTSHELL 28 ECOMMERCE IN INDIA: KEY DEVELOPMENTS
05 THE ECOMMERCE MARKET IN INDIA: A SNAPSHOT 30 IN FOCUS: RISE OF OMNICHANNEL
HOW OMNICHANNEL WORKS

06 ECOMMERCE IN INDIA: A GLOBAL COMPARISON
INDIA’S OMNICHANNEL LANDSCAPE
07 FACTORS SUPPORTING OMNICHANNEL RISE

ECOMMERCE IN INDIA
FINANCIAL ANALYSIS OF OMNICHANNEL STARTUPS
INDAN ECOMMERCE LANDSCAPE OMNICHANNEL CASE STUDIES
THE FUNDED STARTUPS PYRAMID OMNICHANNEL IN INDIA: SWOT ANALYSIS
OMNICHANNEL TRENDS IN INDIA
08 INDIA’S ECOMMERCE STARTUP ECOSYSTEM PERFORMANCE OF LISTED OMNICHANNEL PLAYERS
FUNDING TRENDS
61 ECOMMERCE IN INDIA: TRENDS & CHALLENGES
LARGEST ECOMMERCE FUNDING ROUND OF 2022
MEGA DEALS (2014-2022)
15 EARLY STARTUPS TO WATCH
NOTABLE ECOMMERCE INVESTORS
M&A LANDSCAPE
© INC42 MEDIA | NOT FOR DISTRIBUTION / 3
India’s Digital Economy In A Nutshell
1,500
1.3 Bn+ 61% 44%
Internet Users Internet Penetration Increase In Internet
1,343
By 2030 In India Users From 2022 To
1,310
1,273
1,132
2030
1,186
1,134
1,000
1,075
Internet Users (Mn)
1,008
$0.68 4.7 Hours 350 Mn+

932
846
Per GB Internet Average Hours Spent Number Of Users

749
Cost In India On Mobile Per Day Transacting

500 Per User Online
$152 Bn+ $3 Tn+ 373 Mn+

Total Volume Of Total Value Of UPI Estimated Rural
0 UPI Transactions Transactions As Internet Users In
2020 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F As On Jan 2023 On Jan 2023 2022
Source: TRAI, NPCI, Bain & Company, Data.ai

India’s Ecommerce Market: Decoding The $400 Bn Market Opportunity
Market Opportunity Venture Capital Unicorns & Soonicorns
Market Opportunity Total Funding Unicorns In

$400 Bn (2030) $31 Bn (2014 to 2022) 24 India
CAGR 5 year funding Soonicorns In

19% (2022 to 2030) 25% CAGR 15 India
Estimated Number Active Ecommerce Combined Valuation

500 Mn Of Online Shoppers 5.1K+ Startups In India $87 Bn+ Of Unicorns
(2030)
Spending In Fashion Funded Ecommerce Combined Valuation

28% Sector To Be The 750+ Startups $2 Bn+ Of Soonicorns
Highest (2030)
SOURCE: INC42, IBEF, DELOITTE

Global Ecommerce Ecosystem Comparison: India Vs China Vs USA
Total Funding (2014 - 2022) $31 Bn $80 Bn $60 Bn
5-Year Funding CAGR 25% 48% 7%
Number Of Unicorns 24 40+ 38+
Average Ticket Size In 2022 $18 Mn $32 Mn $29 Mn
SOURCE: INC42
NOTE: ECOMMERCE FUNDING DATA FOR UNITED STATES & CHINA HAVE BEEN TAKEN FROM CRUNCHBASE.
NUMBER OF CHINESE ECOMMERCE UNICORNS HAS BEEN TAKEN FROM CFTE
India’s Ecommerce Landscape: Key Players

UNICORNS Total Unicorns: 24 Combined Valuation: $87 Bn+ Total Funding: $29 Bn Top Hub: Delhi-NCR
SOONICORNS Total Soonicorns: 15 Combined Valuation: $3.96 Bn+ Total Funding: $2 Bn+ Top Hub: Mumbai
GROWTH STAGE Total Funded Startups (2022): 61+ Total Funding (2022): $947 Mn+ Top Hub (2022): Delhi-NCR
SOURCE: INC42
Ecommerce Startups: The Funding Pyramid [2014 - 2022]
79
Late Stage Startups
218 Growth Stage

Startups
145 Bridge Stage Startups
494 Seed Stage Startups
750+ Total Number Of Funded Startups
SOURCE: INC42
Ecommerce Funding Trends In 2022: A Snapshot
51% YoY Surge In Seed Funding

$4 Bn Total Funding Raised, 63% YoY Decline 71% YOY Decline In Late Stage
277 Number Of Unique Funded Startups

310 Deal Count, 9% Surge In Deal Count YOY Delhi-NCR Top Startup Hub
Venture Catalyst, Sixth Ventures and Better Capital

$16 Mn Average Ticket Size, 66% YOY Decline
Most Active Ecommerce Investors
SOURCE: INC42
Funding Winter Chops Ecommerce Funding By More Than Half In 2022

Excluding 2021 as an outlier year, ecommerce funding saw 4X YoY growth compared to 2020, the highest so far
12.0 400
284
10.0 310
300
8.0
Funding Amount (In $ Bn)
Deal Count
6.0 175 200
160
106 11
116
4.0 106 97
51
100
4.0
2.0 2.6 2.5
3.9 1.9
3.1 1.0 0.9
0.0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022
Funding Amount Deal Count
SOURCE: INC42
Indian Ecommerce Startup Ecosystem: A QoQ Comparison
Q4 2022 Q3 2022 Q4 2021
$523 Mn $413 Mn $3.5 Bn

Total Funding
(-85%) YoY (-93%) YoY (+9.8x) YoY
58 72 115
Funding Deals
(-50%) YoY (-12%) YoY (+2x) YoY
5 8 45
Mergers & Acquisitions (-87%) YoY (+33%) YoY (10x) YoY
$12 Mn $7 Mn $41 Mn
Average Ticket Size
(-71%) YoY (-91%) YoY (+2.5x%) YoY
SOURCE: INC42
Ecommerce Startups That Bagged Biggest Funding Rounds In 2022

Startup Name Subsector Funding Stage Funding In $ Mn
B2B Late Stage 370
B2B Late Stage 300
B2B Late Stage 250
Social Commerce Late Stage 210
D2C Late Stage 205
D2C Late Stage 150
D2C Late Stage 108
Roll-Up Seed Stage 100
D2C Late Stage 100
B2B Growth Stage 100
SOURCE: INC42
Startup Name Subsector Funding Stage Funding In $ Mn
Recommerce Late Stage 90
B2B Late Stage 80
Social Commerce Late Stage 75
B2B Growth Stage 70
D2C Late Stage 68
B2B Late Stage 65
D2C Growth Stage 61
D2C Late Stage 57
Marketplace Late Stage 53
D2C Late Stage 50
SOURCE: INC42
Average Ticket Size For Ecommerce Funding Drops To $12 Mn In Q4 2022

From its highest value $88 Mn in Q3 2021, the average ticket size saw a fall of 90% in Q3 2022 to $8 Mn, reaching the Q2 2019
(pre-pandemic) level
100
88
75 72% YoY decrease in average ticket size of funding in Q4 2022
Average Ticket Size (In $ Mn)
50
43
37
25
27 26
21 20 20 19
13 13 12
8 5 6 8
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022
SOURCE: INC42
Funding Winter Reduces Mega Deal Count By 61% YOY
100 50
44
40
75
Funding Amount (In $Bn)
30
93
Deal Count
50
7 17 20
25 10 10
8 9 10
5
18 17 14 3 19
36
0
7 5 5 0
2014 2015 2016 2017 2018 2019 2020 2021 2022
Funding Amount Deal Count
SOURCE: INC42
NOTE: MEGA DEAL ARE THOSE DEALS WHOSE VALUE IS MORE THAN $100 MN
D2C Replaces Marketplace To Be The Most Funded Ecommerce Subsector In 2022

Percentage of marketplace startups in total amount of ecommerce funding raised fall by 51.4% in 2022 YOY
2022 2021
Roll Up D2C
Roll Up
2.3% 241 10.8%
4.4%
176 1,138
Marketplace
15.0%
594
B2B
D2C
2,055 19.4%
Total 1,700
42.9% Total
Funding Funding
$4 Bn $10.7 Bn
1,482 Marketplace 7,016

B2B Ecommerce 66.4%
37.4%
SOURCE: INC42
Ecommerce In Q4 2022: Sub-sector Wise Venture Capital Inflow Split

D2C dominates both funding and deal count in Q4 2022
Funding in $Mn Deal Count
Others
Others 13.8%
20.8%
109 8
Roll Up
1.7%
Roll Up Marketplace
0.2% 8.6% 5
Marketplace
20 D2C
3.8%
Total Funding 248
47.5%
Deal Count 34
$523Mn 58
D2C
58.6%
B2B 10
17.2%
B2B 145
27.8%
SOURCE: INC42
Funding At Seed Stage Showed Highest YoY Surge For Ecommerce Startups In 2022
Compared to past year funding deals in 2022 for emerging hubs increased by 13%
Funding Amount YoY Change % Average Ticket Size YoY Change % Deal Count YoY Change %
Late Stage $2651 Mn -71% $ 61.6Mn -63% 44 -18.5%
Growth Stage $948 Mn -25% $15.8Mn -19% 68 4.2%
Bridge Funding $158 Mn +47% $3.5Mn +25% 52 +10.6%
Seed Stage $257 Mn +51% $ 2.5Mn +9% 146 +30%
SOURCE: INC42
Ecommerce In Q4 2022: Stage Wise Venture Capital Inflow
Funding Amount YoY Change % Average Ticket Size YoY Change % Deal Count YoY Change %
Late Stage $226 Mn -92% $45 Mn -68% 6 -70%
Growth Stage $216 Mn 60% $16.6 Mn -35% 14 -39%
Bridge Funding $45 Mn 0.64% $5.7 Mn 89% 8 -53%
Seed Stage $35 Mn -59% $1.8 Mn -35% 30 -45%
SOURCE: INC42
Ecommerce Funding Amount Across All Three Major Hubs Dropped By 32% In
2022 From 2021
Funding in 2022 Funding in 2021
Other Emerging
Hubs
19.0%
296
Other Emerging Delhi-NCR,

Hubs Total Funding 10,236 Mumbai,
Total Funding 467
4.4% $10.7 Bn Bengaluru
$4 Bn
95.6%
Delhi-NCR,
Mumbai,
3,264 Bengaluru
81.0%
SOURCE: INC42
Bengaluru Surpasses Delhi NCR In Ecommerce Funding In Q4 2022

Delhi-NCR remains top destination in terms of number of deals in ecommerce startups in Q4 2022
Bengaluru 16.5 Delhi-NCR 481
Delhi-NCR 9.0 Bengaluru 373
Mumbai 2.8 Mumbai 346
Pune 1.0 Pune 37
0.0 5.0 10.0 15.0 20.0 0 100 200 300 400 500
Funding Amount (In $Bn) Deal Count
SOURCE: INC42
15 Early Stage Ecommerce Startups To Look Out For

Startup Name Sub Sector Headquater Funding Amount Key Investors
Private Labels Pune $4.98 Mn Kalaari
Marketplace Bengaluru $4.75 Mn Accel, RB Investments
Private Labels Mumbai $4.70 Mn Xentel Investments
Social Commerce Delhi NCR $4.60 Mn Inflection Point Ventures, LC Nueva Investment Partners, LetsVenture
Marketplace Bengaluru $4.50 Mn SIG Venture Capital, Tanglin Venture Partners, India Quotient
Private Labels Delhi NCR $4.50 Mn Asia Pacific Internet Group
Marketplace Pune $4.50 Mn Brand Capital, Siddhivinayak Skyscrapers, Dinesh R. Challa
Social Commerce Ahemdabad $4.30 Mn Desai Family Office, LetsVenture Angel Fund, Centera Fund UK
Startup Name Sub Sector Headquater Funding Amount Investor
Vertical Ecommerce Delhi NCR $4.25 Mn Brijesh Agarwal, Baskara Rao, Raghav Gupta,Ganesh Iyer
Ecommerce Enablers Chennai $4.24 Mn Calega,Yournest, Pranay Palepu, Ajay Nambiar Velluva Puthiyaveettil
D2C Hyderabad $4.07 Mn Wami Capital, Multiply Ventures, Sattva Family Office, Grip
Home Decor Bengaluru $4.00 Mn Accel, TI Platform, TiE SoCal Angels, Larry Braitma
Social Commerce Delhi NCR $4.00 Mn 3one4 Capital, IEG, Manisha Girotra, Surendra Kumar Jain
D2C Kolkata $4.00 Mn Stellaris Venture Partners, Varun Alagh, Sahil Barua, Anuj Srivastava
D2C Delhi NCR $4.00 Mn Fireside Ventures
SOURCE: INC42
Most Active Indian Ecommerce Investors

No. Of Deals Notable Investments
64 Mama Earth, Moglix, Wake fit
62 Citymall, fashinza, renomojo
51 VanityWagon, Buyofuel, WickedGud, ClearDekho, Evenflow, GOAT Brand Labs, Let's Try, NOTO
34 Sugar , Country Delight, The Souled Store
38 Acefour Accessories, Dogsee Chew, Freecultr, GIVA, Just Dogs, Open Secret, Phool.co, ShopKirana
29 Urban Ladder, The Good Glam Group, KindLife
27 Country Delight, Open Secret, DealShare
25 Open Secret, Rage Coffee, ShopKirana
23 Cashify, Purplle, Spinny
23 The Sleep Company, Smytten, Mamaearth
SOURCE: INC42
Most Active Indian Ecommerce Investors In 2022

No. Of Deals Notable Investments
11 VanityWagon, Buyofuel, WickedGud, ClearDekho, Evenflow, GOAT Brand Labs, Let's Try, NOTO
10 Acefour Accessories, Dogsee Chew, Freecultr, GIVA, Just Dogs, Open Secret, phool.co, ShopKirana
9 Beco, EekiFoods, GetSupp, HYPD, Kolo, Mekr, ShopKirana, Vendekin Technologies, Ximkart
9 DrinkPrime, Evenflow, GOAT Brand Labs, Join Ventures, MonRow Shoes and Accesories
8 82°E, Farmley, Join Ventures, KNYA Med, Power Gummies, Supertails, XYXX
7 ApnaKlub, Chaayos, Groyyo, Moglix
7 Bold Care, Eat Better, Evenflow, Nirmalya, Perfora Shoppr. TV, Woovly
6 Buyofuel, The Healthy Company, The Nestery, Vanity Wagon, White. Inc
5 DaMENSCH, GlobalFair, Mokobora, MyMuse, Supertails
5 Hoovu Fresh, HYPD, Mokobora, MyMuse, Perfora
SOURCE: INC42
170+ Mergers & Acquisitions Recorded In Indian Ecommerce Startup Ecosystem

Since 2015
60
54
49
40
M&A Deal Count
20 23
12 12
11
6 6
0
2015 2016 2017 2018 2019 2020 2021 2022
SOURCE: INC42
Slowdown In Exits Through Mergers & Acquisitions Continue Post Q4 2021
50
45
40 India witnessed jump in Ecommerce M&A deals in Q4 2021
30
M&A Deal Count
23
20
15
10 8
6 5
3 3 4 4 4
2 2 2
0 0
0
9
2
9
1
0
02
02
02
02
02
02
02
02
01
01
01
01
02
02
02
02
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q1
Q2
Q3
Q4
Q4
Q1
Q3
Q2
SOURCE: INC42
Indian Ecommerce Startup Ecosystem: Key Developments In 2022
Fear of layoffs In 2022, the Indian startups have together handed over pink slips to more than 20K employees. As the global ecommerce giant laid off 18K+ workforce globally with 1000
continues employees in India, the fear of recession is now creeping into ecommerce ecosystem as well.
Dwindling stocks Both Nykaa and CarTrade’s public market performance has fallen significantly in 2022. Also, most ecommerce unicorns and soonicorns are struggling to reach profitability,
of listed companies and many shelved their IPO plans last year. In 2022, only three Indian startups went ahead with their IPOs — Delhivery, Tracxn, and DroneAcharya. However, eight startups,
including Droom, Snapdeal, PharmEasy, MobiKwik, and OYO, which filed their draft red herring prospectus (DRHP) in 2021 and had the best chance to go going public in
remain a concern
2022, either shelved their IPO plans or withdrew DRHP or are yet to receive the approval from the Securities and Exchange Board of India (SEBI).
Govt took steps to The Department of Consumer Affairs launched a set of regulations in November 2022 for protecting online shoppers from the menace of fake reviews and deceptive
protect consumers product feedback on ecommerce platforms. The standard will initially be voluntary for compliance, but when made mandatory, any violation can invite punishment for
from fake reviews unfair trade practice or violation of consumer rights.
Launch of ONDC is In April 2022, the Open Network For Digital Commerce (ONDC) started its pilot in selected cities. With the launch of this open initiative, the government aims to
democratise ecommerce from the dominance of marketplaces and enable fair opportunities for sellers, buyers and logistics providers, leading to dynamic pricing and
expected to be a optimum inventory management. ONDC is currently live in 85 Indian cities. More than 250 Mn buyers will be able to purchase goods and services via this network in the
game changer next five years, according to a recently published report by Publicis Groupe India and the Digital India Foundation
Draft Ecommerce First issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in February 2019, the draft guidelines are again under deliberation. However, the
Policy under government will soon launch the Draft in the public domain. The overall objective of this policy is to help stakeholders benefit from the opportunities arising from the
discussion progressive digitalisation of the domestic digital economy. Its scope and objectives have been defined under six heads, including data, infrastructure development,
ecommerce marketplaces, regulatory issues, stimulating the domestic digital economy and export promotion through ecommerce. It aims to regulate cross-border data
flow while enabling sharing of anonymised community data.
SOURCE: INC42
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*Source - https://www.ibef.org/industry/ecommerce
IN FOCUS
THE RISE OF OMNICHANNEL
Indian Phygital Market Will Be A $1 Tn Market Opportunity In 2030

Omnichannel or hybrid shopping will be at the center of this growth which is projected to reach $55 Bn by 2027 from the current $11 Bn
Single Multi Cross Omni

Channel Channel Channel Channel
SOURCE: IBEF, LENSKART

Because The Consumer Wants It All..

Shopping can no longer be divided into online or offline. Many consumers now prefer “all of the above approach” and are
using a mix of both channels to create custom experiences
KEY CHANNELS IN CONSUMER’S SHOPPING JOURNEY
LEARN SHOP BUY
WEBSITE IN-STORE IN-STORE ONLY
IN-STORE MOBILE APP ONLINE ONLY
SOCIAL MEDIA WEBSITE HYBRID (INSTORE, ONLINE, INSTORE-ONLINE)
MARKETPLACE SOCIAL MEDIA
FRIENDS/FAMILY CALL TO ORDER
CONSUMER REVIEWS
PROFESSIONAL REVIEWS
SOURCE: INC42, INDIA RETAILING, IBM
Omnichannel Is Not A Choice Anymore Because Consumers....
49% 52% 47% 37% 37%
Use more comparison Switch to buying Shop at multiple Switch to buying Change the retail store/outlet
sites in look for product online different retailers products in-store you usually shop in (in order to
availability to meet your needs get the product you want)
SOURCE: PWC
Cross Channel Buying Behaviour Of Consumers

3%
100%
10% 14%
75%
Purchasing Behaviour (In Percentage)
50% 82% 76% 91%
25%
8% 10% 6%
0%
INDIA USA CHINA
ONLINE ONLY HYBRID BRICK AND MOTOR ONLY

SOURCE:YOUGOV-OMNICHANNEL REPORT 2021
NOTE: THIS IS BASED ON THE SAMPLE SURVEY OF 1021, 1011, 2251 PARTICIPANTS FROM INDIA, CHINA AND USA RESPECTIVELY AND THEY REVELAVED THERE PURCHASING BEHAVIOUR FOR PAST
90 DAYS.PARTICIPANTS FROM INDIA WHERE 18+ ADULTS FROM THE URBAN AREA.
Consumer Behaviour Pushing Ecommerce Retailers Towards Omnichannel

64% of consumers continue to spend online even after Covid-19.
74% of online shoppers want to focus more on working from home, and this shift in mindset
encourages them to opt for ecommerce.
India is among the top 5 countries where 85% of consumers now feel more comfortable with
technology usage.
Globally, India has the highest percentage (47%) of digital items purchased online.
Globally, India ranks third in terms of most demanding online customers, and 72% will not
buy from retailers, brands or marketplaces that do not match their e-shopping expectations.
46% of online shoppers expect their orders to arrive in less than 2 hours.
88% of Indian consumers want inspiration to purchase items as quickly as possible, pushing
ecommerce retailers to have an omnichannel strategy
50% of online shoppers have made their purchases on social media platforms, indicating an
affinity towards exploring new channels.
SOURCE: WUNDERMAN THOMPSON FUTURE SHOPPERS REPORT 2022

Key Factors Driving Omnichannel Ecommerce Growth In India
India’s consumption expenditure to double by 2030: India is likely to overtake Japan as Asia’s second-largest economy by 2030 when its GDP is projected to surpass that
of Germany to rank as the world’s No. 3. Other positive factors include the rise in disposable incomes and the newfound rural consumption, helping drive consumer
spending across Bharat. The country’s consumption expenditure is expected to double from $1.5 Tn in 2020 to $3 Tn by 2030, and ecommerce as a sector will be a
significant beneficiary.
More maturity in the retail ecosystem: According to market experts, 2022 was a banner year for omnichannel retail as the entire ecosystem of shopping, payments and
logistics reached greater maturity levels. Meanwhile, the popularity of direct-to-consumer (D2C) brands, the rise of quick commerce, brands’ deeper reach in non-metro
locations and further consolidation of retail and consumer packaged goods (CPG) sectors were the defining trends of the year.
Convergence of online and offline across sectors: The first wave of omnichannel was primarily around the fashion and lifestyle sector. But the emergence of dark stores,
retail tech and multiple delivery models has seen other segments like food delivery and e-grocery opt for omnichannel.
Brands working on trust building: Touch-and-feel still rules an Indian consumer’s mindset during a purchase. So, D2C players and marketplaces such as Nykaa, Mamaearth,
Sugar Cosmetics among others now leverage the hybrid approach to build customer trust.
Large legacy retailers adopting omnichannel engagement for growth: Legacy brands like Reliance, Tata, Pepsico, among others have made their move towards increasing
their digital presence across channels in last few years. This has led to omnichannel emerging as a key differentiator, thereby pushing ecommerrce unicorns, flushed with
VC money to experiment with omnichannel and optimise it as a key revenue channel as well.
SOURCE: INC42, EY, IHS

The Omnichannel Experience Combines All Channels into One Seamless

Experience
PLATFORM PHYSICAL SOCIAL

OPTIMIZATION LOCATION MEDIA
CISCUSSIONS WITH SALES PEOPLE

CUSTOMER
SERVICE ECOMMERCE
APPS
DIRECT MAIL
ONLINE
EMAIL
OMNICHANNEL
SOURCE: ENSIGHTEN.COM
INCREASED CONSUMER INCREASE IN MORE DATA COLLECTION

INTERACTION REVENUE FROM CONSUMERS
CATERING THE NEEDS OF DIFFERENT

RISE OF TIER 2 & TIER TYPES OF CONSUMERS
3 ONLINE SHOPPER BASE
D2C Key Benefits Of CREATING A

REVOLUTION
Omnichannel For Retailers ECOSYSTEM
PANDEMIC
IMPACT
INCREASED
CUSTOMER SATISFACTION
INCREASED OPERATIONAL INCREASED CUSTOMER

PROFITS EFFICIENCY LIFETIME VALUE
SOURCE: INC42, SALESFORCE

Ecommerce Brands With Omnichannel Presence: A Landscape
BEAUTY,COSMETICS CONSUMER
FASHION BEVERAGES HOME DECOR
AND WELLNESS ELECTRONICS
SOURCE: INC42
NOTE: THIS IS NOT AN EXHAUSTIVE LIST OF STARTUPS.
Key Indian Beauty, Cosmetics & Wellness Brands With Omnichannel Presence
Number of Exclusive Other Retail Channel Total Funding
Online Presence
Offline Stores Association in $Mn
Website, iOS, Android 35 Yes 112
Website 67 Yes Na
Website, iOS, Android 100+ Yes 73
Website 0 Yes 10
SOURCE: INC42
Financial Analysis Of Indian Omnichannel Beauty, Cosmetics & Wellness Brands

Profits/Loss After EBITDA YoY change
Founded In Total Revenue (FY22)
Taxes(FY22) in FY 2022
2016 +$117 Mn (102%) +$2.4 Mn (102%) +102.75%
2016 +$43 Mn (241%) -$17 Mn (-14x) -32.59%
2002 +$18 Mn (+47%) +$300K (+110%) +133%
2015 + $28 Mn (+76%) -$9.5 Mn (-261%) -30%
2012 +$472 Mn (+55%) +$5.16 Mn (-33%) -14%
SOURCE: COMPANY FILINGS, INC42 CALCULATIONS

NOTE: (+/- X%) DEPICTS YEAR-ON-YEAR CHANGE
INR TO USD EXCHANGE RATE IS 80
Key Indian Fashion Brands With Omnichannel Presence

Online Presence
Website, iOS, Android 1100+ NO 980
Website, iOS, Android 60 YES 69
Website 0 YES 10
Website, iOS, Android 400+ NO 741
Website, iOS, Android 15 NO 9
SOURCE: INC42
Financial Analysis Of Indian Omnichannel Fashion Brands

2010 +$195 Mn (+55%) +$0.7 Mn (-90%) -4%
2011 +$18 Mn (-31%) -$5.2 Mn (+10%) +31%
2018 +$6 Mn (+5.8x) +$3.12 Mn (-654%) -636%
2010 +$181 Mn (63%) +$35.5 Mn (+274%) +283%
2012 +$10 Mn (-56%) -$88 K (+80%) +84%

Key Indian Beverage Brands With Omnichannel Presence

Online Presence
Website, iOS, Android 50+ YES 46
Website 0 YES 8
Website 0 YES 5
Website 0 YES 1
SOURCE: INC42
Financial Analysis Of Indian Omnichannel Beverage Brands

2013 +$9 Mn (+81%) +$1.5 Mn (-73%) -51%
2016 +$3 Mn (+204%) -$1.2 Mn (-359%) 362%
2008 +$14 Mn (88%) -$10.5 Mn (-7%) -26%
2012 +$18 Mn (+130%) -$8.8 Mn (-35%) -38%

Key Indian Home Decor Brands With Omnichannel Presence

Online Presence
Website 10 YES 145
Website 5 YES NA
SOURCE: INC42
NOTE: DATA FOR LIVSPACE UPDATED ON 27-02-2023
Financial Analysis Of Indian Omnichannel Home Decor Brands

Funding Amount Total Revenue (FY22)
2010 +$8 Mn (+27%) -$4.4 Mn (-2.6%) -9.8%
2011 +$34 Mn (+27%) -$21.5 Mn (-265%) -178%
2016 +$80 Mn (+53%) -$12.8 Mn (-175%) -184%
2014 +$75.4 Mn (+55%) -$134.6 Mn (-149%) +76%

LIVSPACE DATA UPDATED ON 27-02-2023 EX. RATE : SGD 1.35/USD.
OMNICHANNEL
CASE STUDIES
CASE STUDY
THE PROBLEM
When Lenskart started selling eyewear online, product returns went up by 3-4x in spite of many benefits like at-home
access to a vast catalogue allowing enough time to select a product and a hassle-free buying process.
HOW OMNICHANNEL CAME INTO PLAY

The startup created an omnichannel presence so customers can buy online and pick up their purchases from designated
stores. An expert is available at each store to custom-fit the eyewear to ensure maximum effectiveness and comfort
THE OMNICHANNEL IMPACT

With the launch of the omnichannel model, consumer satisfaction went up as prospects could browse a variety of
products online and access the services of eyecare experts offline, similar to the offerings of brick-and-mortar outlets
SOURCE: INC42, LENSKART

CASE STUDY
THE PROBLEM
Furniture can be functional, stylish or decorative, but given the utility and cost of each piece, most are handmade by
expert carpenters or purchased from trusted offline stores. Interestingly, in non-metros, a piece of furniture is often
expected to last for generations. So, it is made under the watchful eyes of shoppers looking for quality and affordability.
Pepperfry needed to break down the silos and combine the ease and convenience of online with the quality and reliability
of an offline purchase.

Pepperfry decided to launch Pepperfry Studios for a differentiated customer experience. Here people can explore an
infinite catalogue just like they do online, get expert advice on custom requirements and get a fair idea of the materials
and specifications, look and feel of the furniture piece before ordering offline/online.

Going omnichannel has allowed Pepperfry to expand its reach in metros and further create a strong foothold in Tier 2
and 3 cities. Currently, 40% of its sales come from offline stores, but the average value is 2.2x the online business. Also,
repeat purchases are 1.8x more compared to online sales. On the other hand, the online platform helps with quick
product discovery, visualising end products in one's own space, lead generation and deal closing. The online-offline mix
has created an end-to-end, customer-first strategy for optimal business outcomes.
SOURCE:INC42, PEPPERFRY, LIVEMENT

CASE STUDY
THE PROBLEM
FirstCry kicked off with an inventory-heavy, pure-play ecommerce model, as did a handful of companies in 2010
(zero-inventory marketplaces were not widely popular at the time). But soon, it adopted a contrarian approach, moving
from online to offline despite the immense hype around ecommerce. Online shopping was convenient, but the nature of
FirstCry products required the involvement of the entire family as they shopped for the baby/kid. This could only be
achieved offline. Moreover, its offline business could grow faster beyond metros, where people were not too familiar
with ecommerce more than a decade ago.

FirstCry started its offline outlets in metro and non-metro cities and expanded the hybrid model through franchisees. But
it's holistic goal was to sync online data with marketing strategies and offline experiences. For instance, a physical shop
can track people's online preferences to serve them better, while shoppers can do inventory search, price comparison
and check products in real time for quality and fit. This helped create the trust of new parents who earlier hesitated to
purchase baby products online.

The omnichannel strategy helped FirstCry cement its presence in Tier 1 and 2 cities, resulting in 400+ offline stores.
About 40% of its sales come from brick-and-mortar businesses, amply enhanced by its online features.
SOURCE: INC42, FIRSTCRY,ENTREPRENEUR, FINANCIAL EXPRESS

CASE STUDY
THE PROBLEM
Like fashion and accessories, the beauty business thrives on the try-before-you-buy rituals, and offline retail is a
surefire way to achieve this. Aware of the consumer mindset and their widespread practice of buying cosmetics
offline, digital-first beauty brand Nykaa thought it fit to introduce an omnichannel model to help shoppers make up
their minds before buying.

Nykaa’s offline outlets were established so customers could test products and purchase in-shop or buy it later online.

By going omnichannel, Nykaa can provide better service as the brand is now available at every touch point. As a result,
brand awareness has increased, new consumer bases have been created and Nykaa can ensure efficient inventory
management.
SOURCE: INC42, NYKAA

Omnichannel In India: SWOT Analysis
STRENGTH WEAKNESS OPPORTUNITY THREAT

Time Saving Capital extensive Tier 2 and tier 3 cities Government regulation
penetration
Convenient More labour required New consumer base Monopoly
Digital Infrastructure Hard to Manage Creating Ecosystem Supply chain disruption
Efficient Brick and mortar store More Products Barrier to entry
Large Consumer base Poor infrastructure More Penetration in Increase in Interest rate
Metropolitan Cities
Inventory management High Rent New Revenue Stream Shortage of Quality Human
resource
S W O T
SOURCE: INC42
Omnichannel In India: Trends To Watch Out In 2023

Omnichannel experience to expand beyond online-offline
Checking a product online and buying it offline or vice-versa will give way to new distribution models. For instance, customers can buy things online and pick them up from a nearby brick-and-mortar store or buy
them in-store but get them delivered to their chosen locations. Similarly, one can return a product online before a physical delivery or at a store after delivery instead of waiting for reverse logistics. In brief, the
formats will vary in sync with customer convenience, and retailers must expand their services across online and offline channels.
Social media will remain a powerful channel

Platforms like Facebook, Instagram and YouTube are now popular among online shoppers. Therefore, a powerful social media presence will enhance a brand’s image and help build trust for new customers.
According to Google’s research insight blog, Think with Google, half of the shoppers watch videos to help them decide what to buy, and 55% report watching videos in-store to remind themselves what they want
to purchase.
Personalisation will be the key to success

Experts believe that personalisation will be the determining factor for success in omnichannel retail. According to the global marketing company Epsilon, 80% of customers report they are more likely to buy when
offered a personalised experience, like discounts related to recent browsing. Making customers feel valuable should be an essential trait of retailers, especially when they handle multichannel shoppers.
Supply chain management will be crucial

Brands must be able to deal with issues like delayed product delivery and inadequate inventories featuring out-of-stock products. Good supply chain management (SCM) and cutting-edge tech solutions for
inventory reconciliation are critical for omnichannel retailers.
24x7 customer support will be essential

Omnichannel commerce demands 24x7 customer support for the best possible outcomes. While human assistance is required for complex issues, brands must look at virtual assistants/chatbots for initial
customer engagement across geographies and time zones.
SOURCE: INC42
How D2C Brands Can
Optimise Omnichannel
SAAHIL Expansion
GOEL India is striving towards a $400 Bn ecommerce opportunity by 2030, and our not-so-new buzzword –
omnichannel expansion – is resurfacing. Blurring boundaries across channels became a way of business
during the pandemic, but an omnichannel strategy has become a necessity now more than ever. From
Cofounder and CEO facilitating a seamless consumer experience to driving reach to every nook and corner of the country, the
omnichannel approach is the way to go.
Shiprocket
Business Growth Through Customer Data Insights
Omnichannel expansion facilitates the elimination of all intermediaries and establishes a single
platform for D2C brands to connect and sell. Imagine accessing the entire data, from production
to distribution, on this single platform.
D2C brands with omnichannel automation can leverage these insights to monitor their sales and
marketing strategies. Further, the insights into consumer behaviour become the basis of
strategies for driving repeat purchases. The power of customer data is unparalleled but still
untapped by many D2C brands. Once unleashed, D2C brands can provide the best traditional and
online shopping experiences right from a single platform. 0°
Consumer Centricity Lies At The Core

A D2C brand functions on the idea of directly selling to a consumer. And an omnichannel
strategy enables the brand to connect, engage and sell to a consumer directly. In this way, the
brand facilitates a consumer-centric purchasing process. The idea is not to focus just on one
channel but to be present across multiple touchpoints, everywhere the consumers are.
Every consumer across these touchpoints has unique preferences. So, D2C brands can tap into
reaching these consumers innovatively. The most reliable strategy to make this possible is
understanding consumer preferences and building brand offerings that drive consumer value.
Building An Impactful Shopping Experience
Today D2C brands are offering hyper-personalised experiences tailored through convenience. The idea is to
enable consumers to control their shopping experiences themselves. Therefore, brands are building these
enriching experiences based on the insights derived from a consumer’s decision-making process.
Omnichannel automation has facilitated an intelligent integration of technology even in offline stores. These
integrated technologies help brands deliver a highly personalised and interactive shopping experience for all
their consumers across channels. Technology automation is smoothly interwoven throughout the consumer’s
journey, from researching and reviewing the product to clicking the purchase button. These integrations
further help in building higher brand recall.
Capturing Bharatwide Retail Expansion 0°
In today’s digital-first world, when D2C brands are hopping on the metaverse bandwagon, online brands are
also exploring the traditional brick-and-mortar routes. The reason is simple: Enhancing brand visibility. An
offline store adds to the digital store’s credibility, thus building consumer trust.
According to Statista, India has 190 Mn online shoppers, but the need for retail shelves will always be
persistent. Bharat, namely, the Tier 2 cities and beyond, have a knack for exploring new brands, and
omnichannel expansion is the only bet to drive that accessibility. While offline expansion is important to
establish trust and loyalty among consumers for D2C brands, it is equally important to grow aggressively
across the real Bharat through the right touchpoints, taking value-driven offerings to a large consumer base.
Omnichannel expansion is also helping D2C brands drive revenue growth and strong brand awareness. It is
simple to achieve, as customers are targeted across channels with an active and personalised approach. So,
to ensure that a consumer’s journey from ‘Add to Cart’ to ‘Proceed to Checkout’ is enriching, omnichannel is
the way to go.
Price Of Ecommerce Startup Stocks See Massive Setback
20%
0%
Daily stock price change %
-20%
-40% Two Ecommerce player —

Nykaa and Cartrade have
-60%
eroded 66.11% and
67.36% market
-80%
Dec 2021 Jul 2022 JAN 2023 capitalisation
respectively since there
IPO.
Last Traded Price (LTP) (YTD) Price diff. (YTD) % change
NYKAA ₹133.20 -₹259.85 66.11%
CARTRADE ₹490.00 -₹1,011.05 67.36%
SOURCE: NSE, INC42 CALCULATIONS

NOTE: THE LATEST STOCK MARKET DATA USED IN THIS SLIDE IS AS ON 31 JAN 2023.
Despite Fallout, Indiamart, Dmart Stock Price Continues To Be Above Listing Price
800%
600%
Daily stock price change %
400%
200%
0%
-200%
2018 2020 2022
Last Traded Price (LTP) (YTD) Price diff. (YTD) % change
Avenue Supermarts Ltd (Dmart) ₹3,543.90 +₹2,927.00 474.471%
IndiaMART ₹4,479.10 +₹3,153.55 237.91%

How Ecommerce Companies Are Performing On The Stock Market Since IPO
Listing Date Price at IPO (INR) Price on 23 Jan 2023 % change since IPO P/E Ratio
4-07-2019 1325.5 4479.1 +237.9 +45.55
21-03-2017 616.9 3543.9 +474.47% +154.61
10-11-2021 393 133.20 -66.11% +873.05
20-08-2021 1501 490 -67.36% -17.11

Ecommerce In India: Key Challenges To Expect In 2023
OMNICHANNEL ADOPTION
Selling a brand on multiple platforms is challenging. If not done right, it can quickly tarnish a brand’s image and lead to losses. Although omnichannel will be the key
theme for ecommerce startups in 2023, efforts must be taken to identify the data quality metrics for monitoring and evaluating all distribution channels.
SHIFT IN CUSTOMER SENTIMENT

Shoppers today have many options to choose from, and social media allows them to review products and discuss brands without much restraint. In reality, brands will
no longer find perfect customers who are perpetually satisfied with their products and services. As onboarding new users will become more costly and challenging, we
expect retailers to focus more on retaining customers and creating a smooth experience for them across shopping channels.
RIGHTSIZING THE WORKFORCE

In 2022, the Indian startup ecosystem saw more than 20K layoffs due to geopolitical uncertainties, a slowing economy and a harsh funding winter. However, the ecom-
merce sector did not see too many pink slips apart from Amazon laying off 1K of its India staff. But 2023 has been touted as the year of recession, and most ecom-
merce companies are struggling on the revenue front. This may impact their expenditure and workforce commitments in the future.
TACKLING ECOMMERCE FRAUDS

Frauds across orders and returns is common in ecommerce. However, in the last two years, the volume of ecommerce orders have gone considerably high (37% in
2022). This has made ecommerce startups to focus more on strengthening the transparency across the supply chain and invest more in technology to avoid mishaps.
SOURCE: INC42
©INC42
© INC42 MEDIA
MEDIA||NOT
NOTFOR
FORDISTRIBUTION
DISTRIBUTION // 61
61
Ecommerce In India: Trends To Watch Out For In 2023

PHYGITAL WILL BE IN FOCUS
Tech-infused physical stores with digital inventories will level the playing field for offline retailers and enable them to compete with large online platforms and sellers.
This becomes even more crucial as customers expect a similar product range available at better prices from offline retailers as offered by ecommerce platforms.
LAST-MILE DELIVERY WILL BE CRITICAL

Last-mile delivery is perhaps the most critical part of the order-fullfillment cycle and can make or break the customer experience. With ONDC in play in 2022 and
expanding in 2023, we will see more ecommerce focused logistics companies emerging in this segment.
ONLINE SHOPPING TO GO DEEPER

he ecommerce user base in India is estimated to grow at 23% CAGR to reach 500 Mn by 2030. Both ecommerce brands and marketplaces want to tap into this growing
user base in metros and non-metro locations.
VERNACULAR, VIDEO CONTENT AND VOICE SEARCH TO DRIVE THE MARKET

While ecommerce companies have already latched on to voice shopping, localisation through vernacular languages to reach out to a vast, non-English-speaking
consumer base is in the works. More and more brands will jump on the bandwagon as they seek to grow across Bharat.
QUICK COMMERCE TO THRIVE

The trend which picked up its pace during Covid-19 will continue to entice users and investors alike. Instant deliveries or quick commerce has created a new wave of
startups, driven M&As and gained investments in the past two years. In 2023, more and more D2C brands will make a play to tailor their distribution to fit quick
commerce operations, just as FMCG giants have pivoted to cater to this channel in 2022.
SOURCE: INC42
www.inc42.com
CREDITS
ANALYST
Inc42 is India’s largest tech media & information platform on a SAIFLAN AIJAZ
mission to build & serve India’s tech, startup & internet economy.
EDITOR
From breaking the latest news to discovering the hottest startups, MEHA AGARWAL, SANGHAMITRA MANDAL
from spotting upcoming trends to simplifying complex concepts, we
cover everything tech in India’s internet economy. COVER DESIGN
ANJAN DAS
Born in January 2015, Inc42 has become the leading source for news
& analysis on India’s rapidly growing tech, startup & internet economy. REPORT DESIGN
Inc42, with over 35,000+ published stories, 80+ research reports, 120+ SABITH
conferences & events & having featured 1000s of entrepreneurs, now
reaches over 25 Mn+ tech leaders & professionals every month. ADDRESS
Inc42 Media, 59/16, 4th Floor, Jujhar Tower,
RD Marg, Kalkaji, New Delhi, Delhi 110019
Contact: editor@inc42.com
Disclaimer
The data provided in this report has been obtained from public and private sources. We have made every attempt to ensure that the information presented in this
report is accurate and free from any discrepancies. Ideope Media Pvt Ltd, the parent company of Inc42 Media and Inc42 DataLabs, is not responsible for any
inaccuracy in the information presented or for any damages caused by the use of information provided in this report. In case of any discrepancy or errors in the
data, you can contact us at editor@inc42.com and we will try our best to update the information in the digital version of the report. We are constantly updating
our database of startups due to new person using or relying on any information in this publication.
This report has been prepared in good faith on the basis of information available at the date of publication without any independent verification. Ideope Media
Pvt. Ltd. does not guarantee the accuracy, reliability or completeness of the information in this publication. Readers are responsible for assessing the relevance
and accuracy of the content of this publication. While this report talks about various individuals and institutions, Ideope Media Pvt. Ltd. will not be liable for any
loss, damage, cost or expense incurred or arising by reason of anyperson using or relying on any information in this publication.
This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of
such trademarks by Ideope Media Pvt Ltd and is not intended to represent or imply the existence of an association between Ideope Media Pvt Ltd and the lawful
owners of such trademarks. Information regarding third-party products, services and organisations was obtained from publicly available sources, and Ideope
Media Pvt. Ltd. cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party.
The views and opinions in this report should not be viewed as professional advice with respect to your business.

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STATE OF

05 THE ECOMMERCE MARKET IN INDIA: A SNAPSHOT 30 IN FOCUS: RISE OF OMNICHANNEL

HOW OMNICHANNEL WORKS

07 FACTORS SUPPORTING OMNICHANNEL RISE

India’s Digital Economy In A Nutshell

$0.68 4.7 Hours 350 Mn+

Per GB Internet Average Hours Spent Number Of Users

Cost In India On Mobile Per Day Transacting

$152 Bn+ $3 Tn+ 373 Mn+

Source: TRAI, NPCI, Bain & Company, Data.ai

India’s Ecommerce Market: Decoding The $400 Bn Market Opportunity

Market Opportunity Venture Capital Unicorns & Soonicorns

Market Opportunity Total Funding Unicorns In

CAGR 5 year funding Soonicorns In

Estimated Number Active Ecommerce Combined Valuation

Spending In Fashion Funded Ecommerce Combined Valuation

SOURCE: INC42, IBEF, DELOITTE

Global Ecommerce Ecosystem Comparison: India Vs China Vs USA

Total Funding (2014 - 2022) $31 Bn $80 Bn $60 Bn

5-Year Funding CAGR 25% 48% 7%

Number Of Unicorns 24 40+ 38+

Average Ticket Size In 2022 $18 Mn $32 Mn $29 Mn

India’s Ecommerce Landscape: Key Players

Ecommerce Startups: The Funding Pyramid [2014 - 2022]

218 Growth Stage

145 Bridge Stage Startups

494 Seed Stage Startups

750+ Total Number Of Funded Startups

Ecommerce Funding Trends In 2022: A Snapshot

51% YoY Surge In Seed Funding

277 Number Of Unique Funded Startups

Venture Catalyst, Sixth Ventures and Better Capital

Funding Winter Chops Ecommerce Funding By More Than Half In 2022

Indian Ecommerce Startup Ecosystem: A QoQ Comparison

Q4 2022 Q3 2022 Q4 2021

$523 Mn $413 Mn $3.5 Bn

Ecommerce Startups That Bagged Biggest Funding Rounds In 2022

B2B Late Stage 370

B2B Late Stage 300

B2B Late Stage 250

Social Commerce Late Stage 210

D2C Late Stage 205

D2C Late Stage 150

D2C Late Stage 108

Roll-Up Seed Stage 100

D2C Late Stage 100

B2B Growth Stage 100

Startup Name Subsector Funding Stage Funding In $ Mn

Recommerce Late Stage 90

B2B Late Stage 80

Social Commerce Late Stage 75

B2B Growth Stage 70

D2C Late Stage 68

B2B Late Stage 65

D2C Growth Stage 61

D2C Late Stage 57

Marketplace Late Stage 53

D2C Late Stage 50

Average Ticket Size For Ecommerce Funding Drops To $12 Mn In Q4 2022

Funding Winter Reduces Mega Deal Count By 61% YOY

Funding Amount Deal Count

D2C Replaces Marketplace To Be The Most Funded Ecommerce Subsector In 2022

1,482 Marketplace 7,016

Ecommerce In Q4 2022: Sub-sector Wise Venture Capital Inﬂow Split

Inc42's Q1 2023 Ecommerce Report

Inc42's Q1 2023 Ecommerce Report