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RETAIL E-commerce

TODAY vs TOMORROW
44 2.3 150 32

Big
(8%) (0.4%) (14%) (3%)

479
(91%) 858
(83%)

IS 2014

Independent Retail Organised Retail: B&M


2020 (P)

Organised Retail: E-tailing

BEAUTIFUL
Figures in $ billion; Source: Technopak Analysis

Billion Day, a discount carnival in- 3,000 pieces to these websites out of
tended as a tribute to the flat number which 2,500 went to Amazon India.
610 in which Sachin and Binny We have just started selling online
Bansal set up the company in 2007, and we are still testing this channel.
Nagpal sold 11,000 items on the site. A bigger e-commerce company can
Nagpal, who has nearly 15,000 help us in understanding the market
product varieties and an online stock better, says a Havells spokesperson.
of 1.5 lakh products, says that even Likewise, consumers, too, are
in terms of listings and catalogue he moving towards the biggies. In Pune,
is biased towards large players. At 28-year-old Mohua Mandal was
The oth- the end of the day, I have limited in- shocked out of her wits when her fa-
ers Naaptol, ventory and bandwidth. I will put my thers customary Diwali gift this year,
ShopClues, efforts behind the big names. a saree, was delivered to her by
HomeShop18, He is not the only one to think Flipkart. Kolkata-based Santosh,
Limeroad and Indiatimes like that. In January this year, electri- Mohuas father, found it the most
where, too, Nagpal ped- cal equipment maker Havells India convenient way. The choice was vast
dles his wares, brought in little started selling its 700 products online and the discount deep. And there

AJAY THAKURI
more than chickenfeed. through tie-ups with Amazon, would be no need for him to find a
IN THE FESTIVE SEASON FRENZY OF ONLINE SHOPPING, THE BIG Large e-commerce sites generate
more traffic and therefore we tend to
Naaptol, Pepperfry and Indiatimes.
The company quickly realised that
courier to carry the saree from
Kolkata to Pune.
PLAYERS HAVE ELBOWED OUT THE SMALL ONES, IN MORE WAYS focus more on them, says Nagpal. the large ones, with their scale, gave Santosh, a retired railways profes-
On October 6 alone, Flipkarts Big more for less. In October, Havells sold sional, is hardly the kind that listens
THAN ONE. By MANU KAUSHIK and ARPITA MUKHERJEE

A
hmedabad-based Anish his own brands, Cenizas and Macoro. around 90 per cent of his sales, in
Nagpal has been selling In October, as festival buying terms of the number of items, were on
products online since peaked, Nagpals company cashed in Flipkart and Snapdeal, the two big
December 2011. He by selling over 80,000 items, much e-commerce rivals which, fattened
sells clothing, footwear higher than the average of some with funding, have unleashed high-
and home decor under 50,000 in other months. However, decibel advertising campaigns.

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RETAIL E-Commerce

HITS AND MISSES SimilarWeb, there were 16.4 million


visits on Flipkart on October 6. For
20,000,000 smaller ones like Homeshop18 and
Figures are average daily visits Lenskart, the numbers were merely
16,419,558 Source: SimilarWeb
543,056 and 120,852.
Oct 6, 14
Throughout October, Flipkart
Flipkart
3,762,955 had an average daily traffic of 10 mil-
lion, compared with six million in the
Amazon month before. Its October revenue
2,515,575 stood at around $400 million, while
Snapdeal Snapdeal clocked some $120 million,
2,098,540 according to Spire Research and
Consulting. Smaller players regis-
eBay tered far lower revenues.
5,000,000 863,269
Sandeep Sharma, Co-founder
ShopClues and Chief Operating Officer of niche
459,714 e-commerce portal Yepme.com, ac-
cepts that the large players are hog-
Homeshop18 ging the limelight. I think smaller
280,373
e-commerce players have been over-
FabFurnish shadowed by the bigger players.
217,886 Companies such as FashionAndYou,
Lenskart, Fashionara and ShopClues
Lenskart
dont have the kind of money that big
93,909
e-commerce sites have raised or have
Mydala committed for expansion. Big players
0 10,969 have deep pockets which smaller
Sep 30, 14 Oct 27, 14 companies cant match.
Yepme sells its products on its
to punk rock on headphones and However, this growth is hardly own website (Yepme.com) as well as
makes online purchases in coffee even. The likes of Flipkart, Snapdeal, other large e-commerce portals such
shops. But the sustained advertising Amazon and eBay are taking away as Flipkart-Myntra and Snapdeal.
blitzkrieg by the big e-commerce the lions share of it. Small and niche The buzz created by large players re-
players first made him curious and e-commerce firms such as Infibeam, sulted in Yepme clocking higher sales
then a convert. Naaptol, Tradus, and a plethora of growth on other portals as compared
There was a tangible decline in others, seem to have lost ground due to its own website in October. The
footfall and transaction [in malls and to inadequate money power. sales growth on other websites was
offline stores], which was attributed eTailing India estimates suggest 100 per cent in October, whereas the
by retailers to the whole e-commerce that the pie this festive season was growth on our own website was just
shebang, says Devangshu Dutta, gobbled up mostly by Flipkart, 50 per cent, says Sharma.
CEO of consulting firm Third Eyesight. Amazon, Snapdeal and eBay. While Other small outfits disagree with
According to industry body there are no official estimates, the Big him. Naaptol, Homeshop18, Mydala
Gartner, the e-commerce market Four have together cornered 70 per and Infibeam say they, too, have
stands at $3.5 billion, which is ex- cent of the e-tailing market, averag- grown well. Mydala claims its sales
pected to reach $6 billion in 2015, a ing out the sales during the festive rose 60 per cent during the festive
71 per cent growth. and non-festive seasons. season. We are not spending any-
Experts attribute the growth this Starting with the Big Billion Sale thing close to what they are spend-
year to the publicity around the on October 6, when it sold products ing, says its Co-founder and Chief
growing e-commerce market, deep worth $100 million in 10 hours and Technology Officer, Ashish
discounts and the ease of purchase. saw a billion hits on the website, Bhatnagar. We cannot make that
This, along with a one-upmanship Flipkart had a dream run in the big marketing push. Not just because
battle raging between the big guys month. If traffic is a good proxy to they have deep pockets but also be-
Flipkart, Snapdeal and Amazon a measure sales, Flipkart was far ahead cause we do not believe this will give
lot more willing customers are join- of the others on that day. However, us return on investment.
ing the online consumer base. according to Internet agency Homeshop18 says it wouldnt be

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The small players, many of
which thrive in niche segments, will
face more heat because the big ones
have followed them there. Flipkart
acquired Myntra this year to widen
its apparel offerings. Snapdeal sells
furniture, an area that was so far
the domain of mainly FabFurnish
and Pepperfry.
However, FabFurnish Co-
founder Vikram Chopra is unfazed.
The experience that players like us
can offer is unmatched. You need
specialised experience in running a
furniture business online. Walmart

VIVAN MEHRA
sells furniture in its store, but people
still go to Ikea.
That they do, but the money-
bags have veered largely towards
the big e-commerce players in India.
SANJAY SETHI With the recent round of investment
squeezed by the march of the e-com- Co-founder/CEO, ShopClues.com of $627 million from Japan-based
merce biggies because most of its SoftBank, which it announced on
revenues come from television. The October 28, Snapdeal has now raised
web audience is evolved and can do We see huge trafc about $1 billion from investors such
its own online research. Television whenever big players as Temasek, Myriad, Tybourne, and
audience is different; you need to hold
their hand, says Vikrant Khanna,
advertise Blackrock.
Flipkart has also raised substan-
Chief Operating Officer, TV Business, tial sums from investors such as Tiger
Homeshop18. Global, Accel Partners and Morgan
The smaller firms also say that with a Snapdeal-branded question, Stanley. Then there are the Indian
profitability is supreme for them. for which it would be paying a pre- arms of the global biggies Amazon
Infibeam Founder and CEO Vishal mium of 25 to 30 per cent. and eBay.
Mehta says size is important, but so is ShopClues, with much less Experts say that e-commerce in
profitability. Those who have the money to play with, decided to stay India is in a habit forming stage and
largest market shares will not neces- away from the print and TV advertis- money will have to flow in advertis-
sarily be the last men standing. ing frenzy. As compared to around ing and discounts to lure more
Infibeam, he says, broke even last nine to 12 per cent of the top line for consumers, and bring them online
year and expects profits this year. large players, ShopClues spent more frequently. That is why inves-
The small outfits say they benefit around 6.5 per cent on marketing in tors do not mind punting on the
from the rub-off of the advertising the festive season. It confined itself to promising ones like Flipkart, which
campaigns of the big players. We see a small awareness campaign. many have taken to calling Indias
huge traffic whenever big players Gaurav Gupta, Senior Director, Amazon, and Snapdeal, its close rival.
advertise, says Sanjay Sethi, Co- Deloitte India, says the smaller play- The question is, for how long will
founder and CEO, ShopClues.com, an ers will continue to get squeezed. It they continue to pump in money
online marketplace. requires a large amount of capabili- without worrying about profits? For
Advertising spends by e-com- ties to become a large player: building the smaller ones, it is the opposite:
merce players this festive season in brand, product catalogue, offering how long will they make do with
the week leading up to Diwali were competitive prices, and customer ex- claims of profitability, without worry-
40 to 60 per cent higher, says ad re- perience. In all these areas, large ing about funding? ~
targeting company Vizury. Take the players clearly have an advantage. ADDITIONAL REPORTING BY
case of Snapdeal. A 10-second spot Experts believe in specific catego- ARUNIMA MISHRA AND
on Sonys game show KBC costs ries such as fashion, those other than TASLIMA KHAN
around `6 lakh, and Snapdeal has Jabong and Myntra clearly lost out on
gone in for an in-show integration, the discounts battle. @manukaushik; @arpitamukherjee

34 BUSINESS TODAY November 23 2014

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