Indian Ecommerce – 7 Highlights of the Year 2015

2015 was filled with various highs and lows for ecommerce. On one side, the festive sales figures filled the lockers of ecommerce biggies, on the other hand tax woes kept the leaders busy too.

Here are the 7 highlights of ecommerce’s evolution in 2015:

1. Funds flowed in

It seemed that the days of profit-can-wait funding spree would be put to sleep in 2015. However, fortunately investors still poured funds and backed many start-ups. LiveMint news report stated that VCs invested $5.7 billion in Indian start-ups, 39% more than 2014. Online marketplaces received most of it.

2. M-commerce received the most attention

Affordable smartphones and mobile data charges prompted a huge number of people to go online this year. This is why India’s internet user base nearly doubled, including rural population. The ripple effect was m-commerce got a boost and marketplaces concentrated on mobile centric strategies.

3. Online retail flourished

Online retail is still a small percentage of the total retail market, but looking at the pace it’s growing, experts feel online retail is the future.

Vishal Gupta, MD, Bessemer Venture Partners – India explained, “We didn’t have a landline revolution, but went straight to mobile. Similarly, we didn’t have a (fixed) broadband revolution but went (straight) to wireless Internet. Similarly, in retail we are going to skip offline and predominantly be online.”

Flipkart, Amazon and Snapdeal had nearly 80% share of the online retail market in India.

4. Food start-ups hit a rough patch

A category that showed so much potential in the beginning, online food ordering companies struggled this year. Be it Tiny Owl or Zomato, both laid-off employees and were embroiled in controversies. There was a 64% jump in the number of food start-ups in 2015 but many had to shut their operations as they failed to convert funds into profits.

5. Competition between taxi aggregators intensified

Ola and Uber made a lot of noise, some for good reasons and some for not so good ones. While the aggregators adopted aggressive marketing techniques to grab the No. 1 position, State rules and regulations slowed down their growth.

6. Hyperlocal delivery start-ups crowded the space

2015 has been a good year for hyperlocal delivery and last-mile delivery start-ups. So much so, that even ecommerce leaders competed for a share in hyperlocal market. As of now, there isn’t a clear winner in this space, but in the years to come a leader will emerge. Whether it will be a new start-up or an existing ecommerce leader that is yet to be discovered.

7. Tax battle between government and ecommerce players

Tax woes continued to follow online marketplaces this year. GST bill is expected to put an end to this problem. However, only when the final draft is ready, will we know if demands of ecommerce companies are met or not.

Industry experts believe that investors will get more cautious in 2016 while releasing funds. A lot would depend on the current leadership position & performance rather than projected potential.

Sudhir Sethi, MD of IDG Ventures India rightly said, “The year 2016 will be the year of sanity where operating metrics will justify whether a company will get funded adequately or not. Next year will also be the time when the difference between the best and the also-rans will be substantial. Those companies that have established leadership will attract much more capital than the second and the third ranked.”

Let’s hope 2016 turns out to be an amazing year for the Indian ecommerce industry.