e-Commercein India

Growth Prospects

Overview of the
industry

$ 35 Bn
2017(E
)
$ 5.3 Bn
2010

Category wise
Market
Penetration

Market Trends

The e-Commerce sector in

India has grown by 34%
(CAGR) since 2009 to
touch 16.4 billion USD in
2014. The sector is
expected to grow 35
billion USD by 2017

Asia-Pacific emerged as the strongest business-toconsumer (B2C) e-commerce region in the world in
2013
Sales of around 567.3 billion USD, a growth of 45%
over 2012
Ranked ahead of Europe (482.3 billion USD) and
North America (452.4 billion USD).

Competitive
Analysis

Market Potential

Value Chain
Analysis

India e-Commerce and eTail

35.4
27.5
21.3
3.8
0.3

5.3
0.6

8
1

9.5
1.5

12.6
2.3

16.4
3.5

10.62

19.77

eTail
e-Commerce ( Including eTail)

Indias internet penetration with total

e-households at 46 million against Chinas 207
million is one of
the reasons behind Indias poor B2C sales growth.
The US, UK and China together account for 57% of
the worlds total B2C e-commerce sales in 2013
with China having total sales of 328.4 billion USD.
As against this, India had sales of only 10.7 billion
USD.

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential

Competitive
Analysis

Value Chain
Analysis

Currently, e-Travel comprises 70% of the

total e-commerce market.
It has been observed that online travel
sales are maturing in most of the major
economies. Same trend is observed in
India as well.

Online travel sales volume in India from 2012 to 2017

Source: eMarketer

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential
By 2020, eTail in
India is expected
to account for 3%
of total retail.

Competitive
Analysis
Orders per million
are expected to
more than double
from five million in
2013 to 12 million
by 2016

Value Chain
Analysis
it is still miniscule
compared to the
figure in China,
where the share is
8-10%.

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential

M-Commerce
There is a traffic to
revenue gap on
mobile e-commerce
in India

Sources: Accel
estimates, Accel
portfolio companies,
CNNIC and other
industry sources

Competitive
Analysis

Value Chain
Analysis

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential

Competitive
Analysis

Value Chain
Analysis

Women Shoppers A Growing Force

Working women segment grew 43% in 2013 and
constitutes nearly 10% of Active internet users in
India according to i-Cube & IAMAI
Categories like baby care, home dcor, jewellery
etc. have traditionally been influenced by women
decision makers. As more choice become
available more women are shopping online.
Sources: Accel estimates, Accel portfolio companies & comScore

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential

Competitive
Analysis

Value Chain
Analysis

High Scope For Internet Penetration

It is evident that in absolute terms Indias internet users are
short by only 36
million as compared with 279 million in the US.
A significantly low (19%) but fast-growing internet
population of 243 million in 2014 is an indicator of the
sectors huge growth potential in India.

In coming years, as internet presence increases in rural

areas, rural India will yield more e-commerce business.

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential

Competitive
Analysis

Value Chain
Analysis

Young India Will Become Dominant Presence In E-Commerce

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

Sources: Accel estimates, NSSO, Facebook

Overview of the
industry

Category wise
Market
Penetration

Market Trends

Market Potential

Competitive
Analysis

Value Chain
Analysis

Major difference between various companies is the way they maintain their inventory, Whilst Flipkart
follows the inventory led model, Amazon India and Snap deal, the other two major players follow
marketplace model.
Amazon India (marketplace
Flipkart (inventory-led model)
model)
It started with a consignment model where
goods were procured on demand
And turned into inventory e-retailer
supported by registered suppliers
This provides better control on the logistics
chain.
Manages a fine balance between inventory
and cost of delivering goods.

Amazon started practicing the market place

model by launching its site in early 2013 in
India.
It started registering electronics goods sellers
and ended FY 2013 offering nearly 15 million
products.
Known for its strong last-mile delivery
network
Amazon India has set up a logistics arm
named Amazon Logistics and started offering
same day delivery.

Sources: ASSOCHAM India, PwC | Forbes India, Jun 24, 2

Overview of the
industry

Category wise
Market
Penetration

Eproducts/Servic
es

Market Trends

Software
Platform/Tech
tools

Market Potential

Payment
integration

Every e-commerce company has to evaluate itself

on various parameters. These parameters are as
diversified as of the conventional Value chain
analysis on one hand. On the other hand it would
also has to take care of some specialized
instruments as depicted in the above diagram.
Indian e-commerce industry is still in the inception
to growth stage, so most of the companies make
negative margins on each product that they sell.
All companies are innovating on all the primary
and support activities for their firm, to reduce their
losses, but due to fierce competition, all major

Logistics &
Fulfillments

Competitive
Analysis

Customer
Service and
CRM

Value Chain
Analysis

Recent Investments in India e-Commerce

With the new government policies, Investors aggressively funded the e-Commerce sector due to strong growth
prospects. Apart from the existing business segments, newer segments such as grocery, food service, jewellery,
healthcare were also trying to ramp up the industry in a robust way.
Innovative young ideas and untapped segments will continue to attract investor interest in e-Commerce sector.
The focus mainly on service providers, companies involved in support functions ranging from delivery, logistics,
and payments with investments largely driven by the relatively lower valuations and smaller amounts of capital
required.