Ecommerce

• Electronic transactions of a commercial nature taking place on the internet can be defined as e-commerce.

• Transactions are for products, goods or services that are located on the web, for e.g. buying and selling products on eBay.

• Products have the potential to reach millions of computer users on the Internet because of e-commerce.

GLOBAL E-COMMERCE BOOM

• Global business-to-consumer (B2C) e-commerce sales to hit $1.5 trillion in 2014.

• This will be a 20.1% increase in sales as compared to last year.

• The large populations of emerging markets like China and India buying online for the first time, will drive e-commerce growth.

E-COMMERCE BOOM IN INDIA

• Younger consumers make for a majority of e-commerce drivers in India, a country set to become world's No 1 in terms of population.

• More than $50 million dollars have been invested by Indian VCs in seven e-commerce companies.

• This is a 400% increase in investment as compared to 2013.

• Snapdeal recently raised $100 million from Temasek, BlackRock, Myriad, Premji Invest and Tybourne.

• In December 2007 India’s digital commerce market was Rs 8,146 crore; it grew to Rs 47,349 crore by the end of 2012 it grew to Rs 47, 349 crore; by the end of December 2013, it grew to Rs 62,967 crore.

2009 2010 2011 2012 2013 2014 20150

20,000

40,000

60,000

80,000

100,000

120,000

16,600 21,70028,500

40,30055,600

77,100

107,800

Total online Consumer revenues (Rs Crore)IAMAI digital commerce : Avendus estimates

REASONS FOR ECOMMERCE GROWTH IN INDIA

Rising incomes and a greater variety of goods and services that can be bought over the internet is making buying online more attractive and convenient for consumers all over the country.

7 Key reasons for e-commerce growth:1. Tech Savvy people2. Busy Lifestyles3. Internet Users4. Rising Middle Class with disposable income5. Comparatively lower pricing for products6. Flexible Payment options7. Rise of Coupon and discount Sites

Growth 2010 2011 2012 2014

•Growing number of smartphone users with availability of Internet on mobile phones.

1

•There are 27 million mobile Internet users in India out of which 4 percent are buying products on mobile.

2

1. Tech Savvy Generation

•Busy lifestyles, traffic congestion, lack of offline shopping time, have led to more and more consumers switch to online shopping.

1•Busy Indians, owing to their punishing work schedule,

have very little time for themselves let alone shopping. They don’t have time for making the rounds of brick and mortar stores to search for the best products.

2

•Online shopping is a convenient option that helps them shop for products in their own time from the comforts of their home.

3

2. Busy Lifestyles

•With more and more people accessing the Web through mobile phones, the Internet user base in the country is projected to touch 243 million by June 2014.

1

•This is a year-on-year growth of 28 per cent.2

3. Internet Users

June'11 June'12 June'13 Oct'13 Dec'13 June'140

50100150200250300

Figures in Millions

ClaimedActive

Overall internet Users

4. Rising Middle Class with disposable income

•The rise of small and medium enterprises, foreign direct investment, and India’s own powerful multinational corporations creating millions of new jobs, a new generation of globally-minded Indian consumers has been created.

1•Growing job opportunities have led to increase in sources

of income and high spending power; customers are more willing to experiment with online shopping.

2

•This growing middle class is increasingly turning to e-commerce as the primary outlet for buying sophisticated consumer products and services.

3

5. Comparatively lower pricing for products

•Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs.

1•Competition – There are new e-commerce players

entering the marketing regularly and they are differentiating with other players in the niche, based on price.

2

•Price Wars – e-commerce sites are tripping over each other to offer a price discount.

3

•Customers find virtually anything they need online at ridiculously discounted prices and have them delivered for free. They save money, fuel, time, get more done in same time frame.

4

6. Flexible Payment options

COD Credit Cards Debit Cards Net Banking EMI 3rd Party Wallets

60%

16%12% 12%

1% 0%

50%

12% 15%11%

5% 7%

Indian Payment landscape - Rise of EMI and Wallets

2013 2016

Accel estimates, Accel portfolio companies and industry sources: PayU, EMVantage

•With increasing order value, we are seeing an uptick of EMI Payments.

1

•One can also say that e-commerce sites offering the option of making EMI payments has increased the order value. One cannot happen without the other and vice versa.

2•Users buying from e-commerce sites can pay Cash-on-

Delivery; this means they can stick to the traditionally trusted method of paying money that is - in cash.

3

•The use of plastic money (credit cards) is increasing as it allows users to buy now, pay later.

4

RISE OF COUPON AND DISCOUNT SITES

• Indian consumers' love for discounts has led to the rise of many portals offering discounts and coupons primarily aimed at the online shopper.

• India’s coupon sites attracted 7.6 million visitors*

*2011 figures, which must have gone up considerably since then

95%

5%

% Using Coupons While Shopping

YesNo

Let’s take a look at the Puma Example

• Customer Footfalls in Puma's 300-odd stores across India fell by 25%

• Online sales continued to gain traction because of a large number of promotions and discount coupons offered by the company through coupon and discount sites.

But

Online consumer sites are pushing

forward the growth on online

retail in India.

The rapid growth of coupon

websites indicates Indian consumers

are becoming more open to

shopping online.

Sources:• http://enginesofcreation.com/eCommerce-terms-explained.php

• http://www.emarketer.com/Article/Global-B2C-Ecommerce-Sales-Hit-15-Trillion-This-Year-Driven-by-Growth-Emerging-Markets/1010575

• http://www.businessinsider.in/E-commerce-In-India-Looks-Inviting-Now-For-FDI/articleshow/33012752.cms

• http://www.academia.edu/5219116/E-COMMERCE_INDUSTRY_IN_INDIA

• http://www.powerretail.com.au/pureplay/e-coupons-the-new-e-commerce-phenomenon/#ixzz32zWsts39

• http://www.informationweek.in/informationweek/news-analysis/175870/growth-progression-commerce-india?utm_source=referrence_article

• http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-201405270349KRTRIB__BUSNEWS_26673_48001-1&ex=true&ticker=AMZN

• http://www.techinasia.com/india-times-internet-acquires-coupondunia/

• http://articles.economictimes.indiatimes.com/2014-05-30/news/50211134_1_online-retail-industry-crore-helion-venture

• http://techgyo.com/index.php/online-shopping-on-the-rise-in-india-coupon-websites-driving-the-growth/#ixzz32zYyrGQk

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