RETAIL E-COMMERCE IN INDIA

• • • • Indian economy is growing by 8% a year, its stock market rose by nearly 40% in 2005 . There are about nine million small grocery shops in India whichever way we measure it, business in India is booming and as the economy grows so does India's middle class. It is estimated that 70 million Indians in a population of about 1 billion now earn a salary of $18,000 a year, a figure that is set to rise to 140 million by 2011. Many of these people are looking for more choice in where to spend their new-found wealth. The Indian retail sector is now worth about $250bn (£140bn) a year, but it is heavily underdeveloped. Over 94% of the market is made up of small, un-computerized family-run stores.

with organised retail sector estimated to grow by 400 per cent of its current size by 2007-08. • Indian retail business promises to be one of the core sectors of the Indian economy. • The sector is on a high growth trajectory and is expected to grow by more than 27 per cent over the next 5 to 6 years. Retail is one of India’s largest industries. .THE INDIAN SCENARIO • Trade or retailing is the single largest component of the services sector in terms of contribution to GDP. • contributing to about 10 per cent of the GDP and providing employment to 8 per cent of the nation’s workforce.

Subhiksha. • Multi brand retailers came into the picture in the 1990s. Nilgris are some of the examples. Bombay Dying. Music world and in books Crossword and Fountainhead are some others. HUL. Calico. and ITC are entering into the organized retail segment . Gwalior Suitings. Tatas. Now big players like Reliance. In music Segment Planet M. Titan etc started making its appearance in Metros and small towns. • The millennium year saw the emergence of super markets and hypermarkets.EVOLUTION OF RETAIL MARKET IN INDIA • In the 1980s manufacturer’s retail chains like DCM. Bharti. In the food and FMCG sectors retailers like Food world.

5% ($300 Million as of 2009). railway tickets.E-commerce in India: Sell now. • The India retail market is estimated at $470 Bn in 2011 and is expected to grow to $675 Bn by 2016 and $850 Bn by 2020. India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%. About 75% of this is travel related (airline tickets. online mobile recharge etc. Electronics and Apparel are the biggest categories in terms of sales. . – estimated CAGR of 7%. • India e-tailing market in 2011 was about $600 Mn and expected to touch $9 Bn by 2016 and $70 Bn by 2020 – estimated CAGR of 61%.).5 billion in 2009. hotel bookings. • Online Retailing comprises about 12. pay later • India’s e-commerce market was worth about $2.

Unique to India Some of the aspects of Indian e-commerce that are unique to India (and potentially to other developing countries) are: • Cash on Delivery as a preferred payment method. Demand for international consumer products (including long-tail) is growing much faster than incountry supply from authorized distributors and ecommerce offerings. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be Cash On Delivery (COD). . • Direct Imports constitute a large component of online sales.

Name a business segment which is a decade old. big or small. . all players. are losing money and yet investors are ready to pump in more and more funds.

every month around five new ones jump on to the bandwagon and investors keep cutting cheques with a hope that there is a pot of gold at the end of the road.com are present in the Indian space. . and daily deals site Snapdeal. valuing it in excess of Rs 1.com which raised $40 million.Online Retail Business • The 50-player retail e-com is growing at over 40 per cent a year. • Myntra.com’s parent Jasper Infotech that recently raised $40 million from VCs. Even global majors like eBay.com which recently raised $20 million in its third round of funding from a venture capital (VC). • India’s largest retail e-com company Flipkart.com (entered six years ago) and Amazon.000 crore. Indiaplaza that raised $8 million so far.

is the tremendous growth in internet penetration which has now reached 100 million as against only 3 million in 2001.000 crore is captured by travel e-commerce (online train.000 crore.000 crore. • According to a recent report from Internet and Mobile Association of India (IAMAI). now about 8 per cent or 8 million shop online.Drivers of growth E-com companies and experts believe that several factors will drive e-retailing growth in India..000 crore and the share of retail will be half at Rs 2.00.00. total Indian market for e-com is around Rs 50.000 crore. Earlier only around 1 per cent of internet users were shopping online. the total e-com market will reach at least Rs 4. of which 80 per cent or Rs 40. • Experts hope that by the year 2025. bus and airline tickets) while non-travel or retail e-com is 20 per cent or Rs 10. . • One of the major reasons why e-com has grown very fast in the last 2 to 3 years.

buyers from small towns and cities are also buying online in large numbers. and quality products which earlier was a privilege of large city buyers . • internet has dissolved the discrimination factor between the small and the big cities enabling buyers from small towns to have access to the same branded goods.• With the phenomenal spread of mobile telephony and the advent of 3G in the country.

• Back then only a small fraction of the 3m internet users transacted online. . Close to 30m scour for bargains online.com (now IndiaPlaza).E-commerce to change face of Indian retail sector • In 1999 K Vaitheeswaran founded Fabmart. • Nowadays more than 100m surf the web. and the number which grows by 1. The industry is worth around $10 billion.5m every month. India's first e-commerce site. • Few Indians held credit cards and fewer still were keen on disclosing their card details. Halting dial-up connections and textonly browsing were not cut out for navigating complex payment gateways.

For example Myntra’s online store.000. . and even if they do. sells all top branded apparels and sports shoes with a wide variation in style. on the other hand. size and price. With average daily sales of $500. the company aims to hit $1 billion by 2014-15. • Around 60 per cent of online buying now comes from the top 10 cities and 40 per cent from smaller towns • 2011 investors ploughed more than $450m into Indian ecommerce.000 people. India's largest online store by revenue has so far raised $31m since it was founded in 2007 and employs more than 5.• Normally big brands don’t have outlets in small towns. • Flipkart. stocks and varieties are limited.

used a seed fund of $5m to launch Pepperfry. a product-comparison website which aggregates information from different e-commerce sites. an erstwhile e-Bay executive. • In February Amazon debuted in India through Junglee. .com. which sells lifestyle products. • Myntra. • In just two years Snapdeal's venture-capital (VC) backers have stumped up $52m.com.• Ambareesh Murty. has managed to tap investors for $40m since its launch in 2007. a popular seller of fashion products.

com .com Fashionandyou.com Flipkart.com Caratlane.India's 20 hottest e-commerce startups • • • • • • • • • • 20north.com Indiangiftsportal.com Bindaasbargain Buytheprice.com Dealsandyou.com 99labels.com Infibeam.

.com Perfume2order Playgroundonline.com SnapDeal Taggle Timtara.in Myntra. • • • • • • • • • • Inkfruit.Contd….com Magazinemall.com Naaptol.com Yebhi.com .