There’s so much happening in the Indian ecommerce landscape everyday – acquisitions, funding and investments, strategy changes, business model shifts, and so on. So we thought why not collect some of the major stats and compile into one digest for your quick read.
Check out some of the interesting changes in the world of Indian ecommerce so far this year.
“The Indian ecommerce market is expected to grow by more than 50 per cent in the next five years,” the Finance Minister, Arun Jaitely said in the Economic Survey 2014-15.
While the survey mentioned that the hurdles being faced by the sector are majorly Inventory management, logistics planning and resource availability there are more important hurdles for online retail in India. However, with Prime Minister Narendra Modi setting up a Task Force to drive up revenues of India Post, recommendations are big for the ecommerce services too along with other sectors.
The passing year saw big investors from India and abroad putting their money on various e-commerce ventures, which got funds to the tune of $3 billion from individuals, companies and private equity firms.
With close to 250 million internet users, Indian e-commerce industry has been a land of opportunities for institutional investors. Besides Tiger Global, Sequoia, and Naspers among others, this year Indian e-commerce segment also drew the attention of new investors like DST Global, Soft Bank, BlackRock, and Sofina etc.
The zooming valuations and ease at which etailers are raising funds; now need to answer the questions of sustainability & profitability.The chosen ones that made it to YourStory’s list of the top 15 investments in Indian e-commerce in 2014 are the ones that are definitely going to see growth this year and also stand as a bench mark for the other businesses out there to be tagged as the ‘Million Dollar Funded Babies’.
However, a recently released UBS report titled ‘Is India in an eCommerce bubble?’ says that investor concerns about e-commerce being a bubble in India are misplaced. UBS says that according to its estimates the sector will start making operating profits by 2020. Indian e-tail market will grow 10 times by 2020 to $50 billion and it is only then that they will start being profitable to investors.
Yes it’s a dot com business, but the need for personnel in this field is going to see a big boom this year. Backed by robust growth, the leading 10 companies in the sector are themselves looking to absorb at least 15,000 professionals by December 2015. Not only the big players, but even the niche segments are aggressively ramping up their teams.
Last year, over half a million jobs are estimated to have been created in the e-commerce space. Flipkart said the marketplace model has opened up opportunities in metros and non-metro cities
Here is a snapshot of the Hiring numbers by the businesses for the year.
Focusing on Mobile technology is no longer a strategic decision for ecommerce businesses but a mandate. But mobile website v.s mobile app is a decision many strategists still debate on. However, looking at India’s largest etailer, Flipkart gunning for the app-only strategy is a risky move that may prove to be successful in the long run. Even Myntra and Urban Ladder have a Mobile App only strategy.
The main reason for this shift is to provide customers a great mobile experience which is definitely possible through an app than a mobile site. However, a lot of veterans in the market say this is a good move as they weigh the pros against the cons. From personalised recommendations to geo –targeting, a ‘Mobile App only’ strategy is the hero of the hour.
While for many customers, downloading an app would be a forced action, with ‘Mobile App only’ discounts and offers we Indians will soon imbibe the new shopping route! Check out the Myntra App Rap and decide for yourself.
“The touch-and-feel experience remains a barrier to online purchase” says Zivame’s CEO Richa Kar. The brand has launched offline ‘home-try’ and ‘fit lounges’ for customers to experience their products on shelves. Even the famed Chumbak stores in malls today bring out the quirkiness that we witnessed on their website all these days. Bluestone.com also has its offline stores in metro cities.
This trend is catch up among many other online sellers too. “Stores will help online retailers gain more visibility and build a market presence rather than spend on customer acquisition, which is probably the largest cost head after technology and logistics,” said Anand Ramanathan, associate director at KPMG. “It is also especially important in the ‘touch and feel’ category or the high-value items.”
“Physical stores help you showcase your product and build your brand, while an online presence helps you get instant feedback which you can use to improve your product or decide where next to open your store in,” said Vivek Prabhakar, founder of Chumbak Design.
I remember buying a pair of wedges from the offline retail styletag.com store in a mall at a discount that their online site was also not offering! Many more are sure to follow suit. And with these offline stores having exclusive offers themselves, they will definitely be a hit among those who like the idea of ‘shopping now’!
Every third advertisement that hits a consumer today is that of an etailer. Every time you ‘look up’ the hoardings of Housing .com make you feel as if the city was swept by their branding team. Snapdeal & Flipkart don’t see a week where they haven’t been all over the front pages of the Times of India.
Are ecommerce companies resorting to heavy ad spends this year to be able to get their message across to consumers? The sector is expected to spend almost Rs 3,500 crore on advertising in 2015, roughly a sixth of Rs 20,000 crore that it raised in funding in 2014. From IPL sponsorship tie ups by brands like Paytm & Shopclues to commercial ads on TV by Yepme, to digital splashes across websites and mobile apps; ecommerce companies are not letting a single stone unturned when it comes to advertising. They are still roping in super stars as brand ambassadors and spending big on advertisements.
Here is a snapshot of the ad spend by ecommerce giants in 2014:
| Ecomm Player | Spend in INR Crore | Spend in USD million |
| Flipkart | 170 | 27.4 |
| Snapdeal | 180 | 29 |
| Amazon India | 150 | 24.2 |
| Olx.in | 140 | 22.6 |
Advertising spends in India are expected to grow 12.6% year on year to Rs 48,977 crores, of which Digital Advertising spends will account for Rs 4,661 crore, according to estimates by GroupM. The report also says that e-Commerce is expected to lead the charge in 2015 in terms of ad spend as there is increased competition in this sector and no dearth of funding.
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