India ecommerce landscape

INDIA ECOMMERCE LANDSCAPE

May 2015

ONLINE SHOPPING DEFINED IN THIS PRESENTATION DOS NOT

INCLUDE TRAVEL, TICKETING & FOOD ORDERING – ONLY

PHYSICAL GOODS COMMERCE

Sources:IAMAIGoogleDelloitteNSSOFacebookCNNICIndustry sourcesComscoreFICCICMRPayUEMVantage

SUMMARY

ONLINE SHOPPING OF PHYSICAL GOODS IN INDIA WILL GROW TO $8.5BN IN 2016. NUMBER OF ONLINE SHOPPERS WILL MORE THAN DOUBLE TO 40 MN.

KEY FINDINGS

1.  Last year there was a significant jump in average order value as there was a penetration of new categories like jewellery, home décor etc. 2.  Also, users are becoming more comfortable buying higher priced items online.

1.  Last year was the rise of the fashion category – fashion e-commerce GMV doubled since 2012. 2.  Given the young demographic which is shopping for latest looks online and increasing choice online – we estimate that this category will see 400% growth in the next 3 years and rival electronics and mobile category in GMV.

Fashion category doubled last year

Average order values climbing up rapidly

KEY FINDINGS

1.  Mobile shopping infrastructure is improving – smartphones, connectivity, mobile websites and apps 2.  People are becoming more comfortable in ordering higher priced items online

1.  35% of online GMV in 2016 will be influenced by women 2.  Key factor in this growth is increasing supply of women specific categories e.g. jewellery, lingerie, motherhood products

Mobile shopping is seeing phenomenal growth

Women influenced sales will grow 5x in next 3 years

RISE OF EMIS AND WALLETSWith increasing order values, we are seeing an uptick of EMI payments •  3rd party wallets albeit a new phenomenon, have a strong value proposition and will be quick to become popular – similar to China

GROWTH FACTORS

1.  Tier 2 cities growing much faster in eCommerce adoption than Tier 1 2.  Some states completely lagging in ecommerce, waiting for infrastructure to be put in place

1.  Potentially 40M shoppers between ages of 19 – 24 years, will start spending money online 2.  These shoppers also have a propensity to spend more money than Gen-X shoppers

More penetration in Tier-II and Tier-III towns

New shoppers will come from the 40M+ Gen-Y FB users

20Mn Gen-

X

20Mn Gen-Y

+

ENOUGH HEADROOM FOR GROWTHONLINE RETAIL IS STILL A VERY SMALL PORTION OF RETAIL IN INDIA

CURRENT MARKET

SCENARIO

GROWTH OF INDIA ONLINE SHOPPING

GROWTH OF INDIA ONLINE SHOPPING

GROWTH OF INDIA ONLINE SHOPPING

GROWTH OF INDIA ONLINE SHOPPING

OTHER OBSERVATIONS

1.  ~200M of Indians will come online in next 3 years 2.  Majority of these will come online on smartphones 3.  E-Commerce companies are building their brands, thus gaining trust of users

1.  Existing shoppers shop more number of times than new shoppers (in that year) 2.  As India’s e-commerce market grows the proportion of existing shoppers will increase from 30% (in 2013) to 50% (in 2016)

TRENDS

MOBILETHERE IS A TRAFFIC TO REVENUE GAP ON MOBILE ECOMMERCE IN INDIA

WOMEN SHOPPERS A GROWING FORCE

1.  Working women segment grew 43% in 2013 and constitutes nearly 10% of Active internet users in India.

2.  Categories like baby care, home décor, jewellery etc have traditionally been influenced by women decision makers. As more choice become available more women are shopping online.

GROWTH FACTORS

YOUNG INDIA WILL BECOME DOMINANT PRESENCE IN ECOMMERCE

Young Indians (19-24yrs) are more comfortable with online services e.g. FB and thus could potentially add upto 40M new shoppers in next 3 years – if we just take the Facebook users

ECOMMERCE FRIENDLY STATES

Top 3 e-commerce states •  Delhi-NCR •  Karnataka •  Maharashtra

Large states with very little ecommerce presence: •  Bihar •  Uttrakhand •  Chhatisgarh

Top 10 cities: 1.  Delhi 2.  Bangalore 3.  Mumbai 4.  Pune 5.  Hyderabad 6.  Chennai 7.  Kolkata 8.  Ahmedabad 9.  Jaipur 10.  Panaji

Central & North-Eastern India appears to have low adoption of e-commerce

CATEGORIES

PAYMENTS

INDIAN INFRASTRUCTURE 88% of the growth in India online shopping will come from more Indians online

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