RETAIL E-COMMERCE IN INDIA • Indian economy is growing by 8% a year, its stock market rose

by nearly 40% in 2005 . • There are about nine million small grocery shops in India

whichever way we measure it, business in India is booming and as the economy grows so does India's middle class.

• It is estimated that 70 million Indians in a population of about 1 billion now earn a salary of $18,000 a year, a figure that is set to rise to 140 million by 2011.

• Many of these people are looking for more choice in where to spend their new-found wealth. The Indian retail sector is now worth about $250bn (£140bn) a year, but it is heavily underdeveloped.

• Over 94% of the market is made up of small, un-computerized family-run stores.

THE INDIAN SCENARIO• Trade or retailing is the single largest component of the

services sector in terms of contribution to GDP. • The sector is on a high growth trajectory and is expected to

grow by more than 27 per cent over the next 5 to 6 years. Retail is one of India’s largest industries,

• contributing to about 10 per cent of the GDP and providing employment to 8 per cent of the nation’s workforce.

• Indian retail business promises to be one of the core sectors of the Indian economy, with organised retail sector estimated to grow by 400 per cent of its current size by 2007-08.

EVOLUTION OF RETAIL MARKET IN INDIA• In the 1980s manufacturer’s retail chains like DCM, Gwalior

Suitings, Bombay Dying, Calico, Titan etc started making its appearance in Metros and small towns.

• Multi brand retailers came into the picture in the 1990s. In the food and FMCG sectors retailers like Food world, Subhiksha, Nilgris are some of the examples. In music Segment Planet M, Music world and in books Crossword and Fountainhead are some others.

• The millennium year saw the emergence of super markets and hypermarkets. Now big players like Reliance, Bharti, Tatas, HUL, and ITC are entering into the organized retail segment

E-commerce in India: Sell now, pay later • India’s e-commerce market was worth about $2.5 billion in 2009.

About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.).

• Online Retailing comprises about 12.5% ($300 Million as of 2009). India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%. Electronics and Apparel are the biggest categories in terms of sales.

• The India retail market is estimated at $470 Bn in 2011 and is

expected to grow to $675 Bn by 2016 and $850 Bn by 2020, – estimated CAGR of 7%.

• India e-tailing market in 2011 was about $600 Mn and expected to touch $9 Bn by 2016 and $70 Bn by 2020 – estimated CAGR of 61%.

Unique to IndiaSome of the aspects of Indian e-commerce that are unique to India (and potentially to other developing countries) are:

•Cash on Delivery as a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be Cash On Delivery (COD).

•Direct Imports constitute a large component of online sales. Demand for international consumer products (including long-tail) is growing much faster than in-country supply from authorized distributors and e-commerce offerings.

Name a business segment which is a decade old, all players, big or small, are losing money and yet investors are ready to pump in more and more funds.

Online Retail Business• The 50-player retail e-com is growing at over 40 per cent a

year, every month around five new ones jump on to the bandwagon and investors keep cutting cheques with a hope that there is a pot of gold at the end of the road.

• India’s largest retail e-com company Flipkart.com which recently raised $20 million in its third round of funding from a venture capital (VC), valuing it in excess of Rs 1,000 crore.

• Myntra.com which raised $40 million, Indiaplaza that raised $8 million so far, and daily deals site Snapdeal.com’s parent Jasper Infotech that recently raised $40 million from VCs. Even global majors like eBay.com (entered six years ago) and Amazon.com are present in the Indian space.

Drivers of growthE-com companies and experts believe that several factors will drive e-retailing growth in India.• According to a recent report from Internet and Mobile Association of India (IAMAI), total Indian market for e-com is around Rs 50,000 crore, of which 80 per cent or Rs 40,000 crore is captured by travel e-commerce (online train, bus and airline tickets) while non-travel or retail e-com is 20 per cent or Rs 10,000 crore.

•Experts hope that by the year 2025, the total e-com market will reach at least Rs 4,00,000 crore and the share of retail will be half at Rs 2,00,000 crore.. •One of the major reasons why e-com has grown very fast in the last 2 to 3 years, is the tremendous growth in internet penetration which has now reached 100 million as against only 3 million in 2001. Earlier only around 1 per cent of internet users were shopping online, now about 8 per cent or 8 million shop online.

• With the phenomenal spread of mobile telephony and the advent of 3G in the country, buyers from small towns and cities are also buying online in large numbers.

• internet has dissolved the discrimination factor between the small and the big cities enabling buyers from small towns to have access to the same branded goods, and quality products which earlier was a privilege of large city buyers

E-commerce to change face of Indian retail sector

• In 1999 K Vaitheeswaran founded Fabmart.com (now IndiaPlaza), India's first e-commerce site.

• Back then only a small fraction of the 3m internet users transacted online. Halting dial-up connections and text-only browsing were not cut out for navigating complex payment gateways.

• Few Indians held credit cards and fewer still were keen on disclosing their card details.

• Nowadays more than 100m surf the web. Close to 30m scour for bargains online, and the number which grows by 1.5m every month. The industry is worth around $10 billion,

• Normally big brands don’t have outlets in small towns, and even if they do, stocks and varieties are limited.For example Myntra’s online store, on the other hand, sells all top branded apparels and sports shoes with a wide variation in style, size and price.

• Around 60 per cent of online buying now comes from the top 10 cities and 40 per cent from smaller towns

• 2011 investors ploughed more than $450m into Indian e-commerce.

• Flipkart, India's largest online store by revenue has so far raised $31m since it was founded in 2007 and employs more than 5,000 people. With average daily sales of $500,000, the company aims to hit $1 billion by 2014-15.

• Ambareesh Murty, an erstwhile e-Bay executive, used a seed fund of $5m to launch Pepperfry.com, which sells lifestyle products.

• In February Amazon debuted in India through Junglee.com, a product-comparison website which aggregates information from different e-commerce sites.

• In just two years Snapdeal's venture-capital (VC) backers have stumped up $52m.

• Myntra, a popular seller of fashion products, has managed to tap investors for $40m since its launch in 2007.

India's 20 hottest e-commerce startups• 20north.com• 99labels.com• Bindaasbargain• Buytheprice.com• Caratlane.com• Dealsandyou.com• Fashionandyou.com• Flipkart.com• Indiangiftsportal.com• Infibeam.com

Contd…..• Inkfruit.com• Magazinemall.in• Myntra.com• Naaptol.com• Perfume2order• Playgroundonline.com• SnapDeal• Taggle• Timtara.com• Yebhi.com