e Commerce m Commerce in 5 Years

M COMMERCE

E COMMERCE GROWTH IN THE LAST 5 YEARS

2008-09 ONWARDS

Present Scenario:Indias E-Commerce market grew at a staggering 88% in 2013 to $16 billion, riding

on booming online retail trends and defying slower economic growth and spiraling inflation, according

to a survey by industry body ASSCHOM.

Indias E-Commerce market was about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to

$16 billion in 2013 and is expected to growhuge $56 billion by 2023 that would be 6.5% of the total

retail market.

Year Internet Users (millions)

2006 32.2

2007 46.0

2008 51.8

2009 61.3

2010 100.0

(Source:Google Public Data)

The trend is expected to continue as the e-commerce market in India is estimated to be worth

$16 billion in 2013 and is expected to touch $56 billion by 2023, according to the latest

ASSOCHAM report. Consumer behavior and shopping-trends have helped the Indian e-

commerce industry to record a staggering 85% growth in 2013. The e-commerce market in India

will control 6.5% of total retail market by 2023.

The number of Internet users in India has reached 205 million in October this year, registering a Y-o-Y growth of 40% over last year. By December 2013, it is expected to reach 213 million. This was the major findings of the I-Cube 2013 report, released by the Internet and Mobile Association of India (IAMAI) and IMRB International, today. The report also estimates that by June 2014, India will have 243 million internet users, at which point of time, it is expected to overtake the US as the second largest Internet base in the world. China currently leads with more than 300 million internet users while the US currently has estimated 207 million internet users.

Mary Meeker, a partner at Kleiner Perkins Caufield & Byers (KPCB) and former Internet analyst,

has released her latest report on Internet Trends called 2012 KPCB Internet Trends Year-End

Update. She noted that this report provides an update to the Internet trends report released in

June 2012.

India has added 88 million Internet users during 2008-2012 and now has 137 million Internet

users, recording a 26% growth year-on-year (YoY). The population penetration rate for India

stood at 11%.

- India has 44 million smartphone subscribers as of Q4 2012, recording a 52% growth YoY.

with a report by Internet & Mobile Association Of India (IAMAI) and IMRB International

predicting that there will be 155 million people accessing the web through their phones by the

end of March 2014. With a quarter-over-quarter growth of 20 per cent, this number is expected to cross 185 million

by June 2014, says the Mobile Internet In India 2013 report released Wednesday. According to

the report, in October 2013, India had 110 million mobile internet users

According to the survey, India's e-commerce market, which stood at $2.5 billion in 2009, reached

$8.5 billion in 2012 and rose 88 per cent to touch $16 billion in 2013. The survey estimates the

country's e-commerce market to reach USD 56 billion by 2023, driven by rising online retail.

India has Internet base of around 150 million as of August, 2013, the survey said.

"Having close to 10 per cent of Internet penetration in India throws a very big opportunity for

online retailers to grow and expand as future of Internet seems very bright,"

The number of Internet users in India has reached 205 million in October this year and by June

2014, India will have 243 million internet users,

According to the report, the number of internet users in urban India was 137 Million in October

and is estimated to touch 141 Million by December 2013.

The ecommerce industry of India is one of the fastest growing segment in the Asia Pacific region.

With a staggering CAGR of 34.58% from 2009 to 2012, the Industry has expanded from INR

19249 Crore (USD 3.49 bn) to INR 47,349 Crore (USD 8.60 bn) in a matter of 3 years.

SMARTPHONES

According to IDC, 40 million no. of smartphones in India at present that is expected to surge to 155

million in 2017

smartphone sales in India has grown over three-fold to touch 12.8 million units in third

quarter of 2013, cannibalising the feature phone market, research firm IDC says.

According to IDC, the India smartphone market grew by 229 percent year-on-year to 12.8

million smartphones in third quarter of 2013 compared to 3.8 million units in Q3 of 2012.

Smartphone sales grew 28 percent in Q3 of 2013 compared to April-June 2013 (10.02

million), it added.

IDC said 53.9 million feature phones numbers were sold in Q3 of 2013 compared to 55.7

million in Q3 of 2012.

The share of feature phones slipped to 81 percent (from 84 percent) of the total market in Q3

2013, it added.

In Q2, 2012 India witnessed 3.9 million shipments, this figure grew to 9 million in Q2, 2013.

With this growth India has now become the 3rd largest Smartphone market in the world.

Overall Smartphone sales grew 50 percent with shipments growing from 158.3 million in Q2

of 2012 to 238.1 million in Q2 of 2013.

As per the Neilsen report, penetration of smartphones in India stands at 9 per cent of

929 million users growing at 50 per cent year-on-year compared with 55.5 per cent in the

US. And over 75 per cent of these smartphone users access Internet on their device at

least twice a day.

YEBHI.COM

As Chief Marketing and Business Officer of Yebhi.com, Nikhil Rungta has been at the helm of

marketing and PR for the e-commerce portal. He has additional responsibilities of managing the

business P&L, corporate strategy and product management (UI and UX).

Currently, India has a mobile customer base of 951 million, of which 87 million Indians are

accessing the internet through their mobile phones. Yebhi.com receives close to 15-20 per cent

traffic from mobile phones. This further indicates how consumers are using different platforms to

shop online.

SNAPDEAL

For the first time in the history of Indian eCommerce, a major player has come out and openly

admittedthat they are fully experiencing the next wave of mobile ecommerce. In a statement released

by Snapdeal, it has been revealed that out of 10 orders, 3 are coming in from a mobile phone.

30% of all Snapdeal orders are originating from mobile commerce, and thats a huge chunk.

These insights from Snapdeal were revealed after a 6 month survey and research based on the traffic

received by their main website and mobile commerce site.

Snapdeal shared that it received around 35 to 40 million visits every month, out of which 12 million

reaches its mobile commerce site.

"Intent to purchase is now driven via mobile"

The contribution of e-commerce site traffic to the online shopping category via mobile has

increased from 8 per cent to 20 per cent and on tablet from 2 per cent to 6 per cent in 2013.

About 61 per cent of smartphone users in the country, according to a syndicated research, have

spent money via their mobile phones on purchase. The top purchase categories are digital goods

at 37 per cent and movie tickets at 24 per cent. This is followed by clothes, travel and financial

services at roughly 16-22 per cent. The overall mobile ecosystem in India has created favourable

conditions for m-commerce to explode. The few reasons for this trend include the fact that

devices are becoming cheaper - cellphones are far cheaper than desktops and laptops. The

second is mobile internet connectivity. According to Trai, there are over 431 million internet

capable mobile devices in India, making access easy for consumers across the length and

breadth of India.

Third is access; the on-the-go nature of the mobile phone makes purchases of low hanging

categories like movie tickets, fast food, digital goods more convenient than ever. Fourth is

personalisation. It is a big advantage for marketers as the nature of the device can help deliver

personalised communication, therefore, aiding better receptivity when it comes to transactions.

The larger question is whether to develop a mobile site or an app to aid transactions? However,

this issue is redundant in a country like India. I don't think it's a choice anymore. It also doesn't

depend on the retailers/merchant; it is basically about how consumers are browsing the content

via feature phone or a smartphone. Hence, one needs to have both access modes - a mobile-

optimised website as well as a mobile app.

Also one must take into account the ROPO (research online, purchase offline) effect that didn't

get e-commerce to explode in the early days. It has now become the ROMPO effect of research

on mobile and purchase online. While transactions may not be at an explosive pace on mobile,

ROMPO has ensured that intent to purchase is now driven via mobile. Cash on delivery is a great

innovation therefore for m-commerce as it surely fuels purchase via mobile.

The largest apprehension is that consumers refrain from transacting high value items on mobile.

But this is changing gradually.

Vinod Thadani, CEO, Madhouse India

AVENDUS REPORT

Apparel & lifestyle e-tailers, Myntra and Yepme claim that 12% and 10% of their transactions

respectively are coming from mobile while leading marketplace, Snapdeal continues to demonstrate

the traction marketplaces have enjoyed with m-tailing and claim that 15-20% of their transactions

are done through mobile devices.

COMSCORE-ASSOCHAM REPORT, SEP 2012

Retail : A closer look

Retail category penetration has increased to 60% reach and has grown to 37.5 million unique visitors

a month, an overall growth of 43% annually. The growth has come across all retail categories and

most of them show promising transactions and conversion rates along with growth in visitors. The

top retail sites shown above in India have each seen a growth of over 100% in the last 12 months.

Amazon is the most visited retail site with most of the traffic slipt among Amazon.com, ImDB and

Junglee.com.

Flipkart leads the way among the online retailers in India with 7.4 million unique visitors a month,

growing at 431% annually. Snapdeal has been close second with 6.9 million uniques. Jabong and

Myntra have been competing closely in the lifestlye category with over 5.3 million uniques each.

HomeShop18 has over 4 million uniques a month.

Apparel has been the fastest g r owing subcategory in retail and reaches 13.4% online users in India.

Comparison shopping, as research of retail online grows continue to dominate. Most of the

comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow as more

categories of retail come online. Travel category has shown this trend with high overlap among OTAs

and this trend is expected among online retailers as well.

Consumer goods, sports/outdoor products and retail food sub categories have also shown early

growth signs. Consumer goods being a popular category among horizontal retailers is still way below

global averages.

Flowers/gifts/greetings is the only subcategory which has shown de-growth of over 33% in the last

12 months.

State of Ecommerce in India - Sept 2012 9

Average transaction size

Vertical e-Commerce categories including baby products, apparel, shoes and other lifestyle

categories have also shown tremendous growth. Wider assortment and product availability have

helped these retailers in growing business online.

IS Advisors

ECOMMERCE INDUSTRY IN INDIA (20112015) , JAN 2012

APPAREL E-COMMERCE

Worth $16 Billion In 2013 And Is Headed Towards The $56 Billion Mark By 2023

The e-commerce market in India has been growing by leaps and bounds for the last few years.

The trend is expected to continue as the e-commerce market in India is estimated to be worth

$16 billion in 2013 and is expected to touch $56 billion by 2023, according to the latest

ASSOCHAM report. Consumer behavior and shopping-trends have helped the Indian e-

commerce industry to record a staggering 85% growth in 2013. The e-commerce market in India

will control 6.5% of total retail market by 2023.

The Indian e-commerce market grew at 88% and amounted to $ 16 billion in 2013according to a recent

Assocham report.

The increasing Internet penetration and availability of more payment options boosted the e-commerce industry in 2013. Besides electronics gadgets, apparel and jewellery, home and kitchen appliances, lifestyle

accessories like watches, books, beauty products and perfumes, baby products witnessed significant

upward movement in last one year, Assocham Secretary General, D S Rawat told Economic Times.

Assocham estimates that Indias e-commerce market will reach $56 billion by 2023, driven by rising online retail. It stood at $2.5 billion in 2009, amounted to $8.5 billion in 2012 and rose 88% to touch $16

billion in 2013.

Nearly 10% of the total population in India is on the internet now and with a growing penetration

India is expected to leapfrog U.S. to become the second largest country by the number of

internet users. According to a report from ComScore, three out of every five internet users in

India are shopping online. This has made India, one of the most lucrative markets for global e-

commerce giants, especially the likes of Amazon and Alibaba. While Amazon has already

ventured into the Indian market, Alibaba is keen to make a perfect start.

Ecommerce market is reaching new heights as online shopping has grown many

folds in the last four-five years, especially in the year 2012. Google has released its

report on ecommerce trends and the share of potential categories driving the

ecommerce market. As per the report, online shopping has grown by a whooping

128 percent in the year 2011-12 as compared to 40 per cent in the year 2010-11.

Another important finding of the report suggests that while it was electronics and

books that had lead the shopping categories, the year 2012 saw a potential growth

in apparel and accessories with it comprising of 30 percent of the queries filed on

Google search, and this trend is expected to see major growth in the year 2013 as

well.

As suggested by the report, books and electronics lead the e-commerce growth

initially, but 2012 saw a huge growth in the demand for apparels and accessories

via online portals. It is expected that the apparel and accessories market will

overtake consumer electronics, which shared 34 percent of the overall Google

search records in 2012 and make a larger space than consumer electronics.

RETAIL ECOMMERCE

Apparel e-com fastest growing category; One in

10 Indians logged online in July: comScore September 14, 2012 | Sonam Gulati

Retail e-commerce

In the retail e-commerce space, worlds largest player Amazon remains at the top although

the traffic is split between the parent online retailer Amazon.com, movie information

site ImDb and India-focused e-commerce search enabler Junglee.com. Although Indian

consumers can buy directly from Amazon.com, they need to pay in US dollar and have to pay

shipping charges as well besides import tax as Amazon is not yet allowed to operate an Indian e-

commerce site. However, Amazon may only strengthen its lead, having recently launched an e-

book site for the Indian consumers (as also its own e-book reader).

Among the local players, Flipkart leads the way with 7.4 million unique visitors a month

(growing more than fivefold over the past one year), closely followed by Snapdeal, which had

6.9 million unique visitors. Jabong, Myntra and HomeShop18 square up the top five local e-

commerce sites.

Flipkart also leads in terms of average transaction size with $35 whereas Myntras and

Yebhis average transaction figures were $24 and $27, respectively.

The study has brought out how apparel, as a category, is clearly on a tear as the fastest-growing

retail sub-category. Although it is smaller in reach, compared to the comparison shopping sites

(see graph), it grew 362 per cent in the past one year.

The only category to have shown de-growth in India over the last 12 months is

flowers/gifts/greetings (decline of around 33 per cent).

Overall penetration of retail e-commerce category has increased to 60 per cent, growing to 37.5

million unique visitors in July and recording an overall growth of 43 per cent YoY, as per

comScore. In comparison, globally, retail e-commerce has penetration of close to 72 per cent

and has grown over 13 per cent YoY in July.

December 20, 2012

Marketsize

The eCommerce industry in India has seen a multifold increase in the past three years, with the total

market size increasing from Rs 19,688 crore by the end of 2009 to an estimated Rs 28,500 Crore ($6.3

billion) in 2011 and Rs. 76,300 crore ($14 billion) in 2012.

Online travel constitutes a sizeable portion (87%) of this market today. Globally, online travel constitutes

a much smaller portion of the overall e-commerce pie in the US, online travel contributes 37% of total e-

commerce revenues.

Asian markets, especially China and Japan have been even lower (less than 20% in both these countries) in

terms of online travels contribution to e-commerce. [Source IAMAI and Avendus] Below is the

infographic highlighting growth/projection of total online consumer revenue.

E-tailing market has become already larger than most projections, the segment reportedly grew around

80% in 2011 and 139% in 2012. Based on Technopak report, the e-tailing market will grow to Rs 73,575

Crore ($13.5 billion) in 2017.

The number of Indian online shoppers is currently estimated at 14% of the total Internet users; and is

expected to increase at a rate of 35% over the next 4 years. At these growth rates, the number of online

shoppers is likely to reach 38 million by 2015. This growth is expected to drive the overall growth of the e-

commerce space in India, with revenue per online shopper also increasing at a similar pace.

The Indian ecommerce market to also evolve towards higher contribution from e-tailing in coming years.

E-tailing will catch up with online travel by 2015, with each of them contributing approximately $12

billion to the total ecommerce market in that year.

(source Avendus)