India E-Commerce Overview 3 X US Population 1.21 billion 2nd most populous Population country in the world That is only 1/16th Only a $ 10 the size of US Billion Market market
India E-Commerce Overview Imagine if the US had the same population size as IndiaE-Commerce volume ofthe USA with 1.2 Billion $ 500 Billion population This is India’s potential
Challenges & Opportunities Low internet users (100 million) Low credit card penetration + Slow internet speed Fulfillment issues Only $ 10 BILLION Market
But There Is So Much HypeFlipkart set to be Amazon moving1st Indian Billion to IndiaDollar Company “An E-Com firm can become India’s largest retailer by 2015." Vishal Mehta, CEO, Infibeam
Is This Hype of Any Worth Current GrowthLet’s have a glance at current Rate: Growth Rate 47% CAGR E-Commerce volume will increase 10 fold if current $ 100 Billiongrowth rate continues for 6 years
Will It Get That BigNo one knows about it for sure but there are some indications supporting it: India’s population will be more affluent GDP will grow 5 times by 2030 Rapid growth of Tier 2 cities
Global Online Growth Trend Unique Visitors in Million700 617600 574500 399400 370 Asia Pacific300 206 213 Europe200 134 134 North America 120 121100 Latin America Middle East & Africa 0 July11 July12 Growth in internet usage is more in Asia Pacific (7%) and Latin America (11%)
BRIC Nations: A Comparison Unique Visitors (In Million)400 +5%350 336 322300250200 +20%150 +41% Brazil100 +6% Russia 52 59 62.6 48.9 49.1 44.5 China 50 India 0 Jan-11 Jan-12 India: Fastest growing market among BRIC nations adding > 18 mn internet users
India: Digital Achieves Critical Mass Time Spent (in billion minutes) Pages viewed (in billion)60 80 48 69.950 70 60 54.640 36 5030 4020 30 2010 Time Spent Pages (in billion 10 viewed (in 0 minutes) billion) 0 Jan-11 Jan-12 Jan-11 Jan-12 The time spent has The consumption of content increased by 33% online has grown up by 28%
Online Users: A Demographic Study Demographic Profile of online Users (July’12)25 23.7 21.920 15.315 13.7 9.710 6.5 Percentage of female users5 3.6 2.4 1.3 1.8 Percentage of male users0 15-24 25-34 35-44 45-54 55 + Around 75% Online users are the age group ranging from 15-34 years.
Retail: A Closer Look Unique visitors in retail (in million)40 37.535 33.330 29 27.6 26.12520151050 Unique visitors Nov-11 Dec-11 Jan-12 May-12 Aug-11 Sep-11 Mar-12 Apr-12 Oct-11 Feb-12 Jul-11 Jul-12 Jun-12 (in million) Retail category penetration has increased by ~45% within 1 year and has grown to 37.5 million unique visitors a month.
Retail: A Closer Look % Reach in July 2012Homeshop 18 6.5 Myntra 8.5 Jabong 8.6 Snapdeal 11.1 Flipkart 11.5 Amazon 15.4 % Reach in July 2012 0 5 10 15 20 Amazon is the most visited retail site.
Payment Type Classification Indian Payment Type Transaction Average transaction size (in $) by Share (in %) payment type Visa 48 2 7 MasterCard 47 12 Cash/COD 33 Direct JCB 21 debit Visa American… 110 5821 Mastercar Direct Debit 20 d Cash/COD PayPal 178 Average All others All other 43 transaction size (in $) 0 50 100 150 200 Debit card is the most The average transaction commonly used payment type. size in India is $ 31.
Growth Drivers of E-Retailing Internet penetration, the use of broadband Active participation by global and local E-Commerce players Consumers: More willing to experiment with new forms of retail purchase Convenience, speed and 24x7 accessibility
Integrated Multichannel Retail Model Channel Assortment Planning Content Management Fulfillment Support Marketing and Promotion Brand Connect
Impact of FDI on E-RetailingCategory Example ImpactForeign sites operating Amazon.com, No impact unless theyoutside Indian shores eBay.com want to set up venture in IndiaForeign sites operating Expedia.com As usual since theyin India but only lists don’t have anyproducts inventoryIndian sites Flipkart.com Will come under FDI Snapdeal.com rule if they want to get foreign investmentSingle brand portals Dell.com No impact(FDI rules are HCLStore.in for Multi-brand retailing)B2B portals Indiamart.com Huge impact because they are allowed for 100% FDI
ConclusionIndian Retail: Tremendous potential of 1.21 billion population The emergence of digital channel can augment the benefit of retailer-customer relationA shift towards e-retailing is relatively elastic with the profitability of the retailers Retailer-FMCG collaboration is needed for the desired outcome
References 1. ASSOCHAM Report (Comscore)2. PWC Report (Winning in India’s Retail Sector) 3. FICCI Report on E-Retailing