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7/23/2019 Whitepaper Indian Retail
http://slidepdf.com/reader/full/whitepaper-indian-retail 1/51
E‐Commerce & Online Retail
India – an evolving market with unique challenges
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CONTENTS
Executive Summary .................................................................................................................... 5
Overview Of E‐Commerce In India ............................................................................................. 6
Segments ................................................................................................................................
6
Online Retail ....................................................................................................................... 6
Online Classifieds ................................................................................................................ 6
Online Travel ....................................................................................................................... 6
How The Market Has Evolved ................................................................................................ 7
Phase I: Job Portals And Matrimonial Services .................................................................. 8
Phase II: Adapting Global Business Models ........................................................................ 9
Stakeholders .........................................................................................................................
11
The Venture Capitalists: Capitalizing On Potential .............................................................. 12
Investment Focus: Why Only Inventory Led Companies? ................................................ 12
Regulatory Scenario ............................................................................................................. 12
E‐Commerce Ecosystem........................................................................................................... 13
Indian E‐Commerce Market Size .......................................................................................... 13
First To Second Phase: Key Growth Drivers ......................................................................... 14
Internet
Penetration
............................................................................................................
15
Internet Users In India .......................................................................................................... 16
Investment In E‐Commerce ..................................................................................................... 17
Increase In Deal Size And Frequency Of Funding ................................................................. 18
Investments Across Verticals ............................................................................................... 18
Valuation Bubble .................................................................................................................. 18
Under Pricing And Under Recovery ..................................................................................... 19
Creative Accounting Methods .............................................................................................. 19
VCs Banking On Growth Of E‐Commerce To Make Lucrative Exits ..................................... 19
Impact Of FDI ........................................................................................................................ 20
Challenges For E‐Commerce Sector ......................................................................................... 22
Lack Of Customer Lifecycle Management ............................................................................ 22
Low Rural Penetration .......................................................................................................... 22
Need For Continuous Innovation: Business Models ............................................................ 22
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Competitive Advantage Being Eroded By Low Entry Barrier ............................................... 22
Lack Of Clarity In Laws Governing E‐Commerce .................................................................. 23
Scarcity Of Human Resource ................................................................................................ 23
Online Retail
.............................................................................................................................
24
Organized Sector .................................................................................................................. 24
Online Retail: Mixed Signals ................................................................................................. 26
Reasons For Limited Growth ............................................................................................ 26
Changing Pattern .............................................................................................................. 27
Top Categories Driving Online Retail ................................................................................... 27
Underpenetrated Segments In Online Retail ....................................................................... 28
Structure
Of
Online
Retail
Market
.......................................................................................
29
Focus On Specific Product / Service Category .................................................................. 30
Diversifying Categories Or Getting Acquired By Multi‐Category Players ......................... 30
Key Driver To Target Larger Wallet Share: Diversification ............................................... 30
Specific Category Focused Businesses Will Be Able To Coexist ....................................... 30
Business Models ................................................................................................................... 30
Presence Of The Marketplace Model In The C2C Space .................................................. 31
Deals/Group Buying .......................................................................................................... 31
Key Decision Points .............................................................................................................. 32
Logistics ................................................................................................................................ 35
Last Mile Connectivity ...................................................................................................... 35
Free Shipping .................................................................................................................... 35
Inadequate Capacity And High Cost Of Logistics .............................................................. 36
Substandard Technology Infrastructure ........................................................................... 36
High Charges Levied By Vendors For COD And Returns ................................................... 36
In‐House Facility ............................................................................................................... 37
In‐House Logistics: Costly And Painful .............................................................................. 38
Managing Customer Experience Driving In‐House Logistics ............................................ 38
Tax Issues .............................................................................................................................. 39
Decisions On Warehouses Location ................................................................................. 40
GST: A Boon For All ........................................................................................................... 40
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The Right Business Model For India ......................................................................................... 41
Private Label Products .......................................................................................................... 42
High Margins Of Private Labels ........................................................................................ 42
Private Labels
Already
In
The
E‐Commerce
Market
.........................................................
42
Challenges In Online Retail Market ......................................................................................... 43
Customer Product Experience .............................................................................................. 43
Entry Of Global Players ......................................................................................................... 43
Low Margins ......................................................................................................................... 44
The Impact Of Analytics ........................................................................................................... 45
Key Inflection Points ............................................................................................................. 46
Delivery
And
Logistics
.......................................................................................................
46
Customer Experience ........................................................................................................ 47
Customer Support ................................................................................................................ 47
To Make It Real ..................................................................................................................... 48
About Nangia Group ................................................................................................................ 49
Service Offerings .................................................................................................................. 50
How We Add Value To Our Clients ....................................................................................... 50
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EXECUTIVE SUMMARY
The E‐Commerce industry in India has enjoyed phenomenal growth at a rate of almost 50%
in the
last
five
years.
Although
the
trend
of
E‐Commerce
has
been
making
rounds
in
India
for 15 years, the appropriate ecosystem has now started to fall in place. The considerable
rise in the number of internet users, growing acceptability of online payments, the
proliferation of internet enabled devices and favorable demographics are the key factors
driving the growth story of E‐Commerce in the country. The number of users making online
transactions has been on a steady growth path, and it is expected to reach c. 40 mn users in
2015.
If we look at the investments made in the sector, Venture Capitalists (VC) and Private Equity
(PE) players lead the pack. This is substantiated by the significant increase in the total
investments made in the sector, PEs invested US$467 mn in 2011 against US$99 mn in 2010.
The other significant contribution by VCs and PEs is the expertise and experience they have
gained by investing in the sector in mature markets, which is shared with the investee
companies who are generally at the startup stage.
To ensure that E‐Commerce maintains its growth trajectory, the government needs to
provide impetus on the regulatory front. Unlike most developed countries, India still does
not have dedicated E‐Commerce laws; the current sales tax laws are outdated and are
detrimental to the industry, especially on the logistics and warehousing front. The
introduction of legislation governing and protecting the industry as well as implementation
of GST is a need of the hour.
As consumers spend more time online on Social Media websites, reading reviews, exploring
products or services, be it need based or aspirational, this provides a great opportunity to
the E‐Commerce industry to understand them better and start providing bespoke deals,
content, services et al to them. Though basic analytics is currently used by all players in the
industry, we foresee Big Data Analytics (BDA) driven real time marketing and customer
lifecycle management to become mainstream and necessary not just to improve margins
but to remain competitive against MNC giants like Amazon who have BDA embedded into
their strategy.
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OVERVIEW OF E‐COMMERCE IN INDIA
SEGMENTS
ONLINE RETAIL
This segment has evolved and grown rapidly over the past few years. Cash on delivery, now
considered to be one of the key growth driving factors, is touted to have accounted for 50%
to 80% of online retail sales. Players have adopted new business models including stock and
sell, consignment and group buying; however, concerns surrounding inventory
management, location of warehouses and in‐house logistics capabilities are posing teething
issues.
ONLINE CLASSIFIEDS
The earliest entrant in the E‐Commerce space in India; the online classifieds segment is
undergoing a shift in operational model from vertical to horizontal offering. Players now
offer a gamut of services ranging from buying/ selling cars to event management classifieds.
ONLINE TRAVEL
The online travel segment has traditionally been the largest E‐Commerce subsector (by
revenue) in India. It is now being chased by online retail (in terms of revenue), which is
catching up fast and is expected to match online travel revenues by 2015.
Transactions classified on three broad segments based on the participants involved in the
transaction. E‐Commerce can be broken into four main categories:
E‐Commerce market share by revenue (2012)
Source: The Paypers
Travel 75%
Classifieds &
Retail 25%
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HOW THE MARKET HAS EVOLVED
Growing internet penetration, especially across major cities and evolving consumer mindset,
has enabled
the
E‐Commerce
space
to
touch
new
heights.
With
consumer
habits
changing
constantly, more and more people are finding it convenient to purchase amongst a wide
range of products via internet; most brands have adapted and successfully implemented the
‘Brick and Mortar’ strategy with online presence. The retail world is evolving and retailers
will continue to learn how to best merge offline and online concepts. The market was
initially limited to print media dominated classified services. It has now expanded to include
new internet focused business models, e.g., group buying and social commerce.
The most common
users of B2B online
classifieds are micro,
small and medium
enterprises (MSMEs).
Due to lack of the
requisite financial
resources, these
companies find
it
difficult to market
their products and
services to potential
clients through
traditional media such
as newspapers,
banners and
television. Trade
through online B2B
portals increases the
visibility of MSMEs in
the
marketplace
and
helps them overcome
barriers of time,
communication and
geography.
B2B
The B2C market in
India is the largest
contributor to the
whole E‐Commerce
revenue pie.
Furthermore,
though online
travel has typically
held a major share
of the B2C market,
online retail is also
growing rapidly and
is expected to
significantly
increase its share.
Connecting a large
group of people to
a bidirectional
network has made
this sort of
commercial
relationship
possible. The large
traditional media
outlets are one
direction
relationship
whereas the
internet is
bidirectional one.
Individuals now
have access to
technologies that
were once only
available to large
companies (digital
printing and
acquisition
technology, high
performance
computer, powerful
software).
India’s C2C market,
though currently
small, is set to grow
with the entry of
several players.
These entrants
are
attracting VC
investment possibly
due to significant
growth in traffic
thereby making it
attractive for VCs).
We expect the C2C
segment to show
rapid growth in
coming years.
B2C
C2B
C2C
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The evolution of E‐Commerce in India can be broadly divided into two phases based on the
emergence of various sub segments. Furthermore, distinct developments define each of
these phases.
PHASE I: JO B PORTALS AND MATRIMONIAL SERVICES
The introduction of internet in India in 1995 marked the beginning of the first phase of E‐
Commerce in the country. Moreover, economic liberalization after the launch of reforms in
1991 attracted many multinationals and brought about with itself the much needed growth
in the IT sector. Implementation of liberalization policies led to a complete overhaul of the
license regime, and high taxes and import restrictions, and at the same time facilitated the
growth of small businesses (SMEs). The IT industry and SMEs were the early adopters of
internet. This led to the emergence of B2B, job searches and matrimonial portals.
B2B directory : India’s first online B2B directory was launched in 1996. The
liberalization process of the country’s international trade policies was the key factor
that accelerated the growth of B2B online portals. It enabled buyers and sellers to
easily connect with their global counterparts.
Online recruitment : India’s online recruitment industry took shape in 1997. The
growth of the services sector, following the economic reforms of 1991, resulted in
the more employment opportunities. In view of these happenings, internet proved
• India’s first online
B2B directory
launched
• Launch of India’s first
matrimonial portal
• IT downturn in 2000 led
to the collapse of more
than 1,000 E‐Commerce
businesses in India.
• Entry of low cost
carriers in India
marked the onset of
online travel in India
• Following the global
trend, group buying
and daily deals models
became a sought after
space for
entrepreneurs in India
• Commencement
of the online
recruitment
industry
• Launch of
multiple online
retail websites
1996 1997 2000
2005
2006
2007
2010
• End of slowdown in the
E‐Commerce Industry
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to be an efficient medium that allowed employers and job seekers to connect. Prior
to job portals, weekly government magazines such as Employment News and
newspaper notifications were the primary means for employers and job seekers to
interact.1
Online matrimonial: In 1996, the first online matrimonial portal was launched in
India. A concept unique to India,2 online matrimonial portals transformed the
perception about the matchmaking process from “marriages are made in heaven” to
“marriages are made in cyber space.” Such portals have now evolved to cater to
various segments of the population such as NRIs, H1B visa holders, widows or
widowers, divorcees and other special groups.3
Although online businesses had begun to develop in the late 1990s, the supporting
ecosystem had not been put in place. The first wave of E‐Commerce in India was
characterized by low internet penetration, a small online shopping user base, slow internet
speed, low
consumer
acceptance
of
online
shopping
and
inadequate
logistics
infrastructure.
Thereafter, the IT downturn in 2000 led to the collapse of more than 1,000 E‐Commerce
businesses in India.4 Following this, there was muted activity in the space in India between
2000 and 2005.
PHASE II : ADAPTING GLOBAL BUSINESS MODELS
The entry of Low Cost Carriers (LCCs) in the Indian aviation sector in 2005 marked the
beginning of the second wave of E‐Commerce in India. Travel emerged as the largest
segment. People began relying on internet to search for travel related information and to
book tickets.
As
a ripple
effect,
the
success
of
the
online
travel
segment
made
consumers
comfortable with shopping through the medium, thus leading to the development of online
retail.
Online travel : The decision of LCCs to sell their tickets online and through third
parties enabled the development of Online Travel Agents (OTAs). Prior to the entry
of LCCs in 2005–06, air travel was considered a luxury meant only for the rich and for
corporate travel. LCCs changed the scenario by making air travel affordable for a
large number of people. They developed their own websites and partnered with
OTAs to distribute their tickets online and, thus, contain costs. The Indian Railways
1 “Where cyber evolution meets `rojgaar’,” The Hindu website,
www.hindu.com/thehindu/seta/2003/03/06/stories/2003030600210200.htm
2 “India’s Internet Matchmakers See Potential Boom,” Internet evolution website,
www.internetevolution.com/author.asp?section_id=687&doc_id=160162; “The business of onlinematrimonial sites in India,” Articlebase
website, www.articlesbase.com/marriage‐articles/the‐business‐of ‐online‐matrimonial‐sites‐in‐india‐5242118.html
3 “Matrimonial portals: tradition and technology are a perfect match for those looking online,” India Knowledge @Wharton website,
www.knowledge.wharton.upenn.edu/india/article.cfm?articleid=4331
4“Has Indian E‐Commerce really arrived?,” Globalpost website, www.mobile.globalpost.com/dispatch/news/regions/asia‐
pacific/india/110831/indian‐E‐Commerce‐economyamazon‐internet
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had already implemented the eticket booking initiative by the time LCCs commenced
their online ticket booking schemes.
Online retail : The growth of online retail was partly driven by changing urban
consumer
lifestyle
and
the
need
for
convenience
of
shopping
at
home.
This
segment
developed in the second phase in 2007 with the launch of multiple online retail
websites. New businesses were driven by entrepreneurs who looked to differentiate
themselves by enhancing customer experience and establishing a strong market
presence.
Group buying: Started in 2010, the group buying and daily deals models became a
sought after space for entrepreneurs in India, following the global trend. Group
buying sites have seen a significant rise in the number of unique visitors and
membership. This growth has attracted investments from VCs.
Social networking actively used by organizations to reach out to customers: In the
second wave, social networking gained steam in the Indian online space. It has gone
on to become an integral part of people’s lives. Initially used for staying connected
with friends, social networking websites have now emerged as an anchor in any
company’s digital strategy. Termed as social commerce, it is a key avenue for E‐
Commerce players to reach out to target customers. Companies have started
establishing their presence in the social media space for branding activities,
connecting with customers for feedback and advertising new product launches.
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STAKEHOLDERS
Given the substantial growth in the sector, the list of suppliers is expected to grow
proportionately, as both businesses and individuals are looking to join the E‐Commerce
movement. The customer/buyer has become the crucial point for E‐Commerce players. In
view of this, enablers such as logistics players call centers and even social networking sites
are widening and evolving their offerings to align them with the strategies of E‐Commerce
players. To gain an edge and differentiation power, all the key participants in this
aggressively evolving industry are engaging in innovation to provide a meaningful and value
added experience to their customers.
These participants coordinate among each other to facilitate three main components in an
E‐Commerce transaction:
Logistics and supply chain: Movement of goods from suppliers to end consumers
through E‐Commerce and logistic players
Information processing: Information transmission of orders from customers and
subsequent information flow of order status through the value chain
• Airlines
• Indian Railways
• Service providers
• Individuals
• Individuals
• Businesses
• Retailers /
Manufacturers
• Bus operators
• Companies offering jobs
• Logistics Provider
• Contact Centre
• Financial
Intermediaries
• Social Networking Sites
• Network Service
Providers
• Internet Service Providers
Suppliers
Supporting
Industry
Government
Consumers
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Payment: Payments from consumers to E‐Commerce players and/or suppliers and
vice versa through financial intermediaries
TH E VENTURE
CAPITALISTS:
CAPITALIZING
ON
POTENTIAL
With the underlying opportunities, the industry is set to benefit, driven by strong
fundamentals and provision of continuous assistance by various PE and VC firms to fund
their expansion plans.
INVESTMENT FOCUS: WH Y ONLY INVENTORY LED COMPANIES?
While more than US$350 mn have been invested in Indian E‐Commerce companies over the
past three years, a majority of the capital has gone into only one kind of E‐Commerce
business model, i.e., inventory led E‐Commerce models. The inventory led E‐Commerce
models have
almost
the
same
economic
characteristics
as
the
traditional
brick
and
mortar
model when it comes to inventory risk exposure, warehousing, and sourcing. Even at an
approximately US$65 bn in gross merchandise value (excluding Kindle, AWS and digital
downloads) in 2011, Amazon did not produce more than 0.25% in operating margin from
Amazon.com. The entire Indian E‐Commerce (excluding online travel) is around US$550 mn
and is, at least, 8‐10 years away from the scale, where inventory led model may even turn
profitable5.
REGULATORY SCENARIO
The Indian government has restricted foreign companies from selling their products in India
through the online medium. This regulation safeguards Indian companies against
competition from global leaders such as Amazon. The restriction is also extended to foreign
retail companies that have entered India. However, in the longer term, Indian companies
have to evolve and shield themselves not only from their Indian counterparts but also from
the global E‐Commerce giants as the government might allow FDI in the segment.
Multinational E‐Commerce players such as the Amazon have even got approval from the
government to build large warehouses to stock third party goods. Strategic moves such as
these would support its expansion plans once FDI is allowed.
Moreover, the government’s plan to interlink every Panchayat (village council) of the
country through high speed broadband service by 2014 would aid the sector’s growth. Also,
government organizations’ increasing reliance on the E‐Commerce methodology for their
money related transactions would help the upward trend.
5http://www.vccircle.com/blog/2012/09/03/why‐inventory‐led‐E‐Commerce‐companies‐india‐will‐not‐be profitable%E2%80%A6‐ever
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E‐COMMERCE ECOSYSTEM
INDIAN E‐COMMERCE MARKET SIZE
The Indian
retail
E‐Commerce
market
(B2C
‐C2C)
grew
at
a CAGR
of
49.1%
from
2007
to
2011
to reach a market size of US$9.9 bn. Whereas, the B2B market was relatively a small
contributor to the overall domestic E‐Commerce market, and was estimated at US$50.37
mn in 2011.6
Retail E‐Commerce market size (US$ bn)
Source: IAMAI
Given the dominance of online travel in the country’s B2C E‐Commerce sector, the sector is
typically split into two broad categories — travel and non travel. Online travel is the largest
domestic B2C E‐Commerce segment, accounting for 81% revenues in 2011. The online non
travel market can be further categorized into online retail, digital downloads, financial
services and classifieds.
KEY DRIVERS:
By 2015, annual disposable income of the average household is expected to more
than double itself
People are spending more time online
Rising sales of internet enabled communication devices and PCs
A significant portion of expenditure is expected to be discretionary spending
6 “Digital Commerce,” IAMAI reports, March 2011, p.4; “B2B Online Market – India (Part I),” researchonIndia reports, November 2010, p.4.
20072008
20092010
2011E
23.2 4
6.9
9.9
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Continued penetration of the internet especially towards the rural population which
is not yet been tapped as a potential customer base
Average spend and number of transactions on credit and debit cards on the rise
Increase in the number of payment options
INHIBITORS:
Low internet speed
Lack of enabling infrastructure on the telecom and logistics fronts
High failure rate of online payment transactions
FIRST TO SECOND PHASE: KEY GROWTH DRIVERS
The supporting ecosystem for E‐Commerce has evolved significantly from what it was a
decade ago. Internet is the key to the development of E‐Commerce and has become
pervasive
in daily
life.
People
have
come
to
rely
heavily
on
internet
for
activities
ranging
from accessing email and searching for information to keeping in touch with friends.7
Internet user base has been growing significantly, with an exponential increase in internet
usage. The
growth
is
supported
by
the
increasing
PC
and
broadband
penetration,
coupled
with the declining prices of PCs. Tablets and smartphones have given a new meaning to
7 “India ‐ internet market and forecasts,” BuddeComm, July 2010, p.3; “India ‐ broadband market, internet services and forecasts,”
BuddeComm, July 2011, p.2; “The Indian telecom services performance indicators ‐ July – September 2011,” TRAI, 9 January 2012, p.5;
“India goes digital ‐ a bird’s eye view of the Indian digital consumer industry,”; Avendus, November 2011, p. 8; “MakeMyTrip limited,”
Deutsche Bank, 6 June 2011, via Thomson Research; “Cash on Delivery to be the prominent payment mode for domestic e‐com,” VCCircle
website, www.vccircle.com/500/news/cashon‐delivery‐to‐be‐the‐prominent‐payment‐mode‐for‐domestic‐e‐com; “Report on Internet in
India (I‐Cube) 2011,” IAMAI, November 2011, p.1; “India ‐ Internet ,” IIFL Institutional Equities, 2011, p.1;
T h e nInternet user base close to 5.5
million in 2000
Number of broadband
subscribers as low as 51,000 in
2001
Number of credit and debit cards in India 4.2 million and 0.3
million respectively,
in
1999
No 3G spectrum auctions till 2010
Average time spent online by an
India consumer per month 12.9
hours in 2006
Number of users transacting
online 3 million in 2007
N o w
Internet user base 121 million at the end of 2011.
The number of broadband
subscribers 12.8 million, as of September 2011
Number of credit cards and
debit cards
was
18
million
and
228 million, respectively as of July 2011
3G spectrum auctions in 2010
Increased to 17.4 hours in 2011
Increased further to 11 million in
2011
G o i n
g a h e a dInternet base to increase to 300
million by 2015
Number of broadband
subscribers to reach 100 million
by 2014 and 150 million by 2020
Number of credit cards and
debit cards to reach 73.7 million
and 350.4 million, respectively in
2014
3G subscribers to reach 118
million by 2014 and 303.4
million by 2020
Expected to increase to 21 hours in 2015
Expected to increase to 38
million by 2015
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connectivity and user experience. The adoption of 3G, coupled with the declining prices of
smartphones, is expected to further increase internet usage in the country.
Improvements on the payment front have brought about the increasing use of plastic
money by Indian consumers. Payment gateways have now been made more secure through
multiple levels of authentication via one time passwords (OTPs) and transaction passwords.
This has helped strengthen users’ confidence in carrying out online transactions. These
enablers augur well for the development of E‐Commerce in India.
INTERNET PENETRATION
Internet statistics in India was 11.4% as of June 2012, one of the lowest worldwide.
Percent of internet penetration by country (June 2012)
Source: Internet
World
Stats
The National Telecom Policy–2011 (NTP–2011) is a step toward increasing technology
adoption in India.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90% 83%80% 80%
78%
49%45%
40%
11%
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Source: TRAI
INTERNET USERS IN INDIA
India achieved its position as the third largest country worldwide in terms of internet
population when it crossed the 100 mn internet user figure in 2010 and reached 121 mn
users by end 2011. The number of internet users in India is expected to triple to 300 mn by
2015, growing at a CAGR of 25.5%.
Internet users in millions
Source: EY estimates
• High speed and high quality broadband availability to all
village panchayats through optical fibre2014
• Target of 175 million broadband connections2017
• Target of 600 million broadband connections
• Target of minimum 2 Mbps download speed
• Plans to make 100 Mbps connections on demand2020
0
50
100
150
200
250
300
20082009
20102011
20122015F
63 78 93 121
150
300
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INVESTMENT IN E‐COMMERCE
The second phase of E‐Commerce saw emergence of new business models and new
ventures in
the
domain.
The
E‐Commerce
arena
now
comprises
of
startups
that
are
on
a steep growth curve. However, in order maintain the pace of this growth, these startups
need additional capital to scale up. The need for capital, coupled with the growth potential
of the sector, has made it a lucrative investment option among VCs8 given the current
economic scenario.
India’s E‐Commerce sector attracted US$305 mn (in 37 deals) from January 2011 to
November 2011 (454% more than US$55 mn raised from 12 deals in 2010). Investments in
the sector accounted for more than 20% of total VC investments in the country in 20119.
Funds raised by industry players were used to expand market presence, build logistics and
supply chain capabilities, and enhance technology platforms.
Value of PE investments in Indian E‐Commerce sector (US$ mn)
Source: KPMG
8 “Upswing in E‐Commerce attracts more investors in India,” iamwire website, www.iamwire.com/2011/12/upswingin‐E‐Commerce‐
attracts‐more‐investors/; “Indian e‐com thriving on strong investments, start‐up action,” VCCircle website,
www.vccircle.com/500/news/indian‐e‐com‐thriving‐on‐strong‐investments‐startup‐action
9 “The new targets ‐ venture capitalists have their eyes firmly set on the new batch of E‐Commerce startups,” Businessworld website,
www.businessworld.in/businessworld/businessworld/content/New Targets.html?print=yes
15294
20599 99
467
242
8
6
8
5 5
8
11
0
2
4
6
8
10
12
0
200
400
600
800
2006 2007 2008 2009 2010 2011 2012
(Till April)
Deal Value Average Deal Size
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INCREASE IN DEAL SIZE AND FREQUENCY OF FUNDING
The main feature of funding received by E‐Commerce players in 2011 was the reduction in
time (by half) between two rounds of funding against 2010 levels. This is due to the need for
funds to scale up rapidly. The average deal size of each round of funding received by E‐
Commerce players
in
2011
was
substantially
more
than
that
received
in
2010.
Deal
sizes
in
the second and subsequent rounds more than doubled in 2011 compared with earlier years.
These increased deal sizes have attracted private equity (PE) funds, which invest in mature
companies. Another noteworthy feature is the increase in the fund size of VCs, which gives
PE players the flexibility to make large investments in high return deals outside their focus
areas10
.
INVESTMENTS ACROSS VERTICALS11
VALUATION BUBBLE
Although new companies do not have any significant differentiator in their businesses, they
have been successful in attracting investments12
. The rapid growth of these companies has
attracted new players. However, most of these companies are not yet profitable and are
only growing
on
volumes.
For
some,
this
might
suggest
that
there
may
be
a possibility
of
a valuation bubble.
10 “VC funds loosen purse strings, dabble in big‐ticket deals,” Mint website, www.livemint.com/2011/11/30231821/VC‐funds‐loosen‐
purse‐strings.html
11 “Six portfolio cos to hit bn dollar mkt cap soon: MD, Sequoia Cap India,” VCCircle website, www.vccircle.com/500/news/six‐portfolio‐
cos‐to‐hit‐bn‐dollar‐mkt‐cap‐soon‐md‐sequoia‐cap‐india; “VCinflows into E‐Commerce zoom,” The Times of India website,
www.articles.timesofindia.indiatimes.com/2011‐03‐22/india‐business/29174344_1_E‐Commerce‐canaan‐partners‐vcs
12 “Whether it is hype or not – E‐Commerce in India continues to grow,” iamwire website, www.iamwire.com/2011/11/whether‐it‐is‐hype‐
or‐not‐E‐Commerce‐in‐india‐continues‐to‐grow/
Online retail, group buying and online travel
segments were the top three segments to receive
funding from VCs in India
VCs were observed to be investing more in vertical
focused niche e‐commerce startups in India
Early stage funding in the e‐commerce sector in
India has also picked up with a few companies
providing seed‐funding and series A funding
Trends
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UNDER PRICING AND UNDER RECOVERY
One of the reasons that justify this concern is that companies are looking to acquire
customers by selling below the cost price. They are mainly competing on price to overcome
competition — at the expense of investors’ funds. The sales to market cap valuation ratio of
leading E‐Commerce
players
is
around
1:100,
which
implies
a mismatch
between
their
sales,
margins and valuations.
CREATIVE ACCOUNTING METHODS
The second reason relates to accounting methods adopted by E‐Commerce companies.
Some of these are amortizing discounts that they provide on sales as capital expenditure,
based on the premise that this will benefit them in later years, instead of accounting for this
in the year of sale. This leads to inflation of their balance sheets13
.
VCS BANKING ON GROWTH OF E‐COMMERCE TO MAKE LUCRATIVE EXITS
Several VCs are investing in the E‐Commerce space because they feel this is the right time to
invest in the space and do not want to miss out on its current wave of popularity. They think
it necessary to have an E‐Commerce company in their portfolios, as this would allow them
to sell their stakes at high prices14
. The sector would continue to receive funding from VC
and PE players despite concerns relating to a valuation bubble. Early stage–focused PE
players would invest a major part of their funds (40%) in internet based companies by 2014–
15.
Source: Allegro Capital Advisors
13 “Is online retail the next bubble waiting to pop?,” Business Standard website, www.business‐standard.com/india/ news/is‐online‐
retailnext‐bubble‐waiting‐to‐pop/461511/
14 “E‐com hype is driven by cash‐rich VC funds, not wise investors,” VCCircle website, www.vccircle.com/500/news/ecom‐ hype‐is‐driven‐
by‐cash‐rich‐vc‐funds‐not‐wise‐investors; “8 reasons why the E‐Commerce Balloon In India is gonna burst..,” afaqs website,
www.afaqs.com/community/blog/index.html?blogID=16 5_8+reasons+why+the+E‐Commerce+Balloon+In+India+is+gonna+burst
•USD $185mn across 52 firms
Series A
•USD $210mn across 16 firms
Series B•USD $300mn across
7 firms
Further
Rounds
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Source: Allegro Capital Advisors
IMPACT OF FDI
In September 2012, the government made a landmark announcement allowing 51% FDI in
multi brand retail, subject to certain conditions. Initially, this announcement was applauded
by E‐Commerce players, since it was assumed that this would attract foreign investments in
B2C E‐Commerce. However, the initial euphoria was short lived, since the Department of
Industrial Policy and Promotion (DIPP), an arm of the Ministry of Commerce and Industry,
later clarified that this mandate does not apply to B2C E‐Commerce retail and is applicable
only to retailers with brick and mortar operations. One of the reasons cited for this was the
difficulty encountered in monitoring interstate transactions in E‐Commerce activities.
Therefore, this relaxation does not benefit pure play B2C E‐Commerce players and may not
also benefit retailers engaged in B2C E‐Commerce operations.
Private Label
Apparel &
Others
Apparels &
Accessories
Multi Category
Retailers
US$155 mn US$180 mn US$355 mn
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Source: The Hindu
E‐Commerce companies’ opinion about the government’s decision on not allowing FDI in
B2C E‐Commerce
retail
is
mixed.
Some
players
are
indifferent
and
maintain
that
this
new
directive does not change anything for them; others have expressed their disappointment15
.
However, consensus is that this may prevent foreign E‐Commerce companies from entering
India16
. They could have brought in the much needed investments in the ecosystem, e.g., in
logistics, payments, to drive market growth. To access foreign capital, some players have set
up a separate entity for activities where 100% FDI is allowed. This covers back end
operations such as logistics, inventory and technology, which enables 100% Indian owned
and controlled front end entities to leverage on the capabilities of these back end
operations. With this new directive, future investments would be routed through the same
path as earlier. A positive aspect of the regulation is that it would buy more time for local E‐
Commerce players
to
consolidate
and
leverage
their
presence
in
India.
Many
of
these
have
made significant investments and have offered steep discounts to generate recurring cash
flows. Therefore, this mandate gives hope to domestic players to not worry about
customers’ defection to global players. While most players are pressing for FDI in E‐
Commerce, when the government will do so is a subject that is open to debate and
conjecture. Overall, Indian players are expected to benefit from the current directive to
consolidate and build their capabilities before facing competition from the eventual arrival
of global players in India.
15 “What do experts feel about E‐Commerce being kept out of FDI in multi‐brand retail,” ,VCC circle website,
www.techcircle.vccircle.com/500/what‐do‐experts‐feel‐about‐E‐Commerce‐being‐kept‐out‐of ‐fdi‐in‐multi‐brand‐retail/
16 “Retail firms with FDI won’t get to do E‐Commerce,” Live Mint website, www.livemint.com/Politics/nkLZlitZlmw53LCq2ENCEM/India‐
wont‐allow‐E‐Commerce‐by‐retail‐companies‐with‐FDI.html
Segment Impact
Foreign sites operating outside India No impact for cross‐border shipment, but
not allowed to set up operations in India
Foreign sites operating in India, but only
listing products or services
No impact since these do not hold or own
inventory
Indian e‐Commerce sites Will come under the FDI directive
B2B portals No impact on their 100% limit
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CHALLENGES FOR E‐COMMERCE SECTOR
LACK OF CUSTOMER LIFECYCLE MANAGEMENT
E‐Commerce players offer huge discounts to lure people to shop online. However, since
Indian consumer looks for the lowest price before making a purchase, the cost of customer
acquisition is high for these companies. Moreover, since a large number of players offer the
same products at the same prices, switching cost is nonexistent. Consequently, a customer’s
lifetime value is low. This poses a challenge for players in their effort to develop sound
strategies to attract and generate repeat customers.
LOW RURAL PENETRATION
India’s E‐Commerce market is concentrated to urban areas, wherein the bulk of purchases
made are restricted to cities with limited demand from rural areas. This is attributed to
various causes including low internet speed and internet user base (20 mn out of a total of
121 mn in 2011), in spite of rural areas accounting for 70% of the country’s population. The
inadequacy of local language content on E‐Commerce websites is another reason for low
penetration in rural areas.
NEED FOR CONTINUOUS INNOVATION: BUSINESS MODELS
Players in the E‐Commerce space need to adapt to changing business models and innovate
constantly to sustain their businesses. Business models have been changing rapidly in the E‐
Commerce sector owing to heightened competition and the inability of players to sustain
high costs. Some businesses, have become obsolete; some companies in the online retail
segment have completely shut down businesses due to their inability to sustain price wars
with their competitors. Group buying companies, which started off by providing deals at
high discounts, have now begun selling products. The very nature and pace of the industry
necessitates continuous innovation
COMPETITIVE ADVANTAGE BEING ERODED BY LOW ENTRY BARRIER
E‐Commerce sector growth is attracting new players. US$10,000–20,00017
is the initial
investment required to start an online venture. This has led to easy entrance of new
companies to easily replicate the existing business models which in turn increase
17 “The Flipkart story,” The Hindu website, www.thehindu.com/arts/magazine/article3290735.ece
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competition in the sector. Some operational aspects such as free shipping of products and
COD, which were differentiators earlier are now considered standard practice.
LACK OF CLARITY IN LAWS GOVERNING E‐COMMERCE
With the backdrop of a rapidly growing market, and domestic as well as international
players looking to tap the opportunity within in the sector, the lack of E‐Commerce
governing laws in India is proving to be a hindrance. This poses a challenge for potential
entrants and existing players. Furthermore, the lack of law firms or lawyers specializing in E‐
Commerce laws compounds the problem. The onus is, therefore, on the government to
formulate dedicated E‐Commerce laws so that current issues in the sector’s legal
environment can be addressed. The sector is currently governed by the IT Act 2000, which
regulates the legal obligations of sellers and buyers of goods and services in cyberspace18
.
Apart from
this,
E‐Commerce
players
need
to
comply
with
other
statutory
laws
in
force
in
the country, e.g., the Indian Contract Act and Foreign Investment Regulations as well as
comply with banking and financial laws, where applicable. E.g., financial intermediaries are
required to obtain licenses from the RBI to provide services. Adding to the complexity of
such laws in the country is the fact that legal issues pertaining to the sector differ across
categories of E‐Commerce. Laws regulating E‐Commerce in India are still evolving and lack
clarity.
SCARCITY OF HUMAN RESOURCE
The E‐Commerce sector is growing rapidly, but scarcity of trained manpower is threatening
to slow down this growth. The lack of specialized courses on E‐Commerce at college or
university levels limits the talent pool available to E‐Commerce players. Therefore, the
senior management of E‐Commerce companies needs to expend a considerable amount of
time on hiring (the conversion rate is very low). The attrition rate at some E‐Commerce
companies is as high as 65% at the junior level and 20% at the mid senior management
level19
.Furthermore, due to the competitive nature of the industry, companies poach from
their competitors. This drives up the cost of retention for companies, which sometimes offer
employee stock options (ESOPs) and other incentives to retain their employees.
18 “Legal Requirements Of Undertaking E‐Commerce In India,” CJNews India website, www.cjnewsind.blogspot.in/2012/02/legal‐
requirements‐of ‐undertaking‐e.html; “Legal Requirements To Start An E‐Commerce Website In India,” E‐Commerce Laws And Regulations
In India website www.E‐Commercelawsinindia.blogspot.in
19 “E‐Commerce players see manpower crunch,” Business Standard website, www.business‐standard.com/india/news/E‐Commerce‐
players‐see‐manpower‐crunch/462050
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ONLINE RETAIL
ORGANIZED SECTOR
Growing at
a faster
pace
than
total
retail
(i.e.
organized
and
unorganized
retail).
Organized retail still forms a small portion of the total retail market.
Positive growth in large number of online retailers moving to the inventory holding
model from the consignment model.
Online retailers are developing in‐house logistics capabilities so as to reduce costs
and achieve management objective.
Logistics players need to gear up their operating models to tap the huge opportunity
presented by online retail.
Complex tax structures are making decisions relating to warehouse locations difficult
for online retailers (applicability of value added tax (VAT) etc.)
Organized retailers
facing
the
big
question
of
entering
the
online
retail
market.
Innovative business models needed by online retailers to take control over
decreasing margins.
Share of apparels expected to increase in online retail.
Underpenetrated segments, such as online groceries, other home and kitchen
products and various ‘easily available categories’ expected to grow.
COD – The preferred payment choice for customers.
Online retail, in its various forms, has been drawing the maximum interest among all the
segments of
the
internet
commerce
market
20
. 60%
of
online
users
in
India
visited
retail
sites
in November 201121
, according to a report published by comScore Inc.
The Indian retail industry was estimated at US$528 bn in 2012 (growing at 11% per annum).
A significant portion (90.4%) of Indian retail is unorganized. Nevertheless, the share of
organized retail is growing at 24% per annum. Currently, online retail constitutes 1% of the
total organized retail market in India and is set to make a higher contribution to the growth
of organized retail in the country.22
20 “Retail in India: Brief Overview,” IBEF website, www.ibef.org/industry/retail.aspx
21 “Online shopping takes off in India: retail web audience grows 18 percent in the past year as nearly 3 of every 5 internet users now shop
online,” comScore website,
www.comscore.com/por/layout/set/popup/Press_Events/Press_Releases/2011/12/Online_Shopping_Takes_Off_in_India
22 “Building a new India – The Role of Organized Retail in Driving Inclusive Growth,” BCG report, February 2011; “Beating the early mover
disadvantage,” IAMAI website, http://www.iamai.in/PCov_Detail.aspx?nid=2534&NMonth=4&NYear=2012
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Total retail market: market size of the organized and unorganized segments
(US$ bns)
Source: BCG
Size
of
online
retail
market
and
online
retail
as
percentage
of
organized
retail
(US$ mn)
Source: IAMAI
15
19
22
28
35
44
85
262
301
343
346
397
436
484
640
986
0 400 800 1200
2007
2008
2009
2010
2011
2012
2015F
2020F
Organized retail
Unorganized retail
235 258 318
447
572
0
200
400
600
800
2007 2008 2009 2010 2011
1.6%
1.6%
1.6%
1.4%
1.4%
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According to report, online retail sales of nearly US$572 mn in 2011 and accounted for 6%
of overall internet commerce revenues in India (grew at a CAGR of 25% since 2007). The
market is expected to find rapid growth in coming years.
ONLINE RETAIL: MIXED SIGNALS
Internet retail is not a new phenomenon in India. It saw its share of popularity in the early
2000s, with several portals setting up shop during the period. Some multimedia portals
continued to have sections on online retail that largely focused on catering to the needs of
NRIs looking for means to send gifts to India. Advertising revenue continued to be the
largest source of income for these sites, with the average Indian consumer not showing
much interest in making actual purchases.
REASONS
FOR
LIMITED
GROWTH
While all of the above reasons have contributed to the dismal performance of the segment,
another important reason was limited focus on the real value being delivered. Most of the
products sold online were inferior; there was limited assurance on the products that were
eventually delivered, and customer service was a non priority.
Low internet penetration
An inadequate supply chain
Low propensity to buy online
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CHANGING PATTERN
The redesigned and innovative entrance of E‐Commerce in India is promising. This
observation is not just based on the unprecedented number of people buying online or the
range of products offered, but is also backed by the emphasis on customers. Products
available online
are
the
ones
that
customers
typically
buy
when
they
go
out
shopping.
In
fact, in some cases, the desired products are not available in shops but are being offered
online. Customer service is amongst the most distinguishing factors, with portals
increasingly thinking of newer ways to delight the average customer.
TO P CATEGORIES DRIVING ONLINE RETAIL
Electronics is the largest category of products selling online in India, with a market share of
61%.Electronics include computers, peripherals, televisions, cameras and mobiles. While
electronics goods
enjoy
the
maximum
popularity
in
India,
apparel
and
accessories
seem
to
be the largest selling categories in leading markets such as the US, the UK and Germany.
This is because of the higher margins that this category generates for E‐Commerce players.
As is the case in leading E‐Commerce markets, we can expect online retailers to shift to
selling higher margin products such as apparel.
The preference for apparels in online shopping is a global phenomenon. According to a
survey conducted by Nielsen in March 2010, books and clothing/accessories/shoes emerged
as the most preferred product categories to be bought online in the next six months. A total
of 44% of the respondents claimed to buy books online in the next six months, while 36%
preferred
clothing/accessories/shoes
23
.
23 “Global Trends in Online Shopping,” A Nielsen Consumer Report, June 2010, p. 2; “Digital Commerce,” IAMAI reports, March 2011, p.10.
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Products/services intended to be purchased
Source: Nielsen
UNDERPENETRATED SEGMENTS
IN
ONLINE
RETAIL
Product categories sold in organized retail indicate a slightly different scenario from online
retail. Certain segments that command a significant share of the organized retail market are
underpenetrated in the online retail sector. Food services and beverages have a share of
20% of the organized retail market. However, these product categories are still at a nascent
stage in the online retail world.
44.0%
36.0%
32.0%
27.0%
26.0%
22.0%
20.0%
19.0%
18.0%
18.0%
16.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Books
Clothing/accessories/shoes
Airline ticket/reservations
Electronic equipment
Tours/hotel reservations
Cosmetics/nutrition supplies
Event tickets
Computer hardware
Videos/DVDs/games
Groceries
Music
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Organized retail categories in India in 2010 (%)
Source: BCG
STRUCTURE OF ONLINE RETAIL MARKET
Online retails market comprises with two types of players, niche or single category focused
and general or multiple category focused
Source: Avendus
36%
14%
12%
9%
8%
6%
6%
5%
2%
1%
Clothing
Electronics
Food and beverages
Footwear
Food services
Leisure
Furniture
Accessories
Pharmacy
Health
and
personal
care
Niche or single
category, 54%
General or
multiple
category, 46%
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FOCUS ON SPECIFIC PRODUCT / SERVICE CATEGORY
The choice of categories ranges across books, electronics, apparel, and baby care products,
perfumes and
even
prescription
lens.
Players
that
emerged
as
category
leaders
were
those
that were able to penetrate their target category deeply to offer a large range of products
by spreading their operations beyond the top cities.
DIVERSIFYING CATEGORIES OR GETTING ACQUIRED BY MULTI‐CATEGORY PLAYERS
Categories such as books and electronics saw early traction, with market leaders moving
toward multi category models. Large players have been on an acquisition spree, acquiring
small single category online retailers to enhance their portfolios.
KEY DRIVER
TO
TARGET
LARGER
WALLET
SHARE:
DIVERSIFICATION
Online retailers incur high costs in their effort to acquire customers through aggressive
marketing and by offering large discounts on products. The underlying thought is to recover
these investments over multiple purchases made by the same customer which consequently
pushes their existing strategies to be molded to incorporate necessary focus on delivering a
superior customer experience to invite future business. A broader product category is a
safer bet to invite customers wanting to buy from their preferred online retailers. A higher
volume of transactions could drive down cost per transaction (economies of scale), thereby
leading to a direct effect on the company valuations also.
SPECIFIC CATEGORY
FOCUSED
BUSINESSES
WILL
BE
ABLE
TO
COEXIST
The vertical focused business strategy exemplifies a thorough understanding of their target
customer segments and product categories. Maintaining category focus enables a portal to
design the entire customer experience around the specific needs of its target segment. This
can enable the portal to become a brand that is larger than the products sold and have
strong bargaining power with its supplier group.
BUSINESS MODELS
An eMarketPlace
is
an
internet
location
owned
by
a company
or
consortium
which
allows
other companies or individuals to get new suppliers or buyers for their products as well as
develop trading networks which makes negotiating, settlement and delivery easier and
more efficient. It is a usual practice to adopt such a model since it gives advantages in terms
of reduced cost and the complexity of putting products up for sale on the web. They also
benefit from leveraging websites (e‐mall) traffic and user base, given the expectation that
visiting other stores on the e‐mall would lead to visits to their stores as well. Smaller
merchants also look to leverage the brand name of the e‐Marketplace, based on the
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premise that this would lead to increased trust and, therefore, readiness on customers’
behalf to buy products online. Larger merchants sell their products through these virtual
stores, in addition to their own sales channels which leads to multiple sales points. Product
pricing is not controlled by E‐Commerce players and is decided by merchants. For the
purpose
of
billing,
merchants
use
the
common
payment
gateway/method
provided
by
the
E‐Commerce player hosting the platform.
PRESENCE OF THE MARKETPLACE MODEL IN TH E C2 C SPACE
These marketplaces allow consumers to sell products directly to other consumers, either at
a fixed price or through auctions. E‐Commerce players allow monetary exchange through
offering payment modes on their websites or proposing direct payment by buyers to sellers.
Membership or subscription fees from sellers setting up virtual stores, and commission
charges on transactions and advertising fees are various revenue sources for E‐Commerce
players.
DEALS/GROUP BUYING
Group buying offers products and services at significantly reduced prices on the condition
that a minimum number of buyers would make the purchase. It is a common phenomenon
in China where team buying was executed to get discount prices from retailer when a large
group of people were willing to buy the same item. However, this model has been unable to
establish its footing in India.
Deal sites provide daily discount offers in various categories including restaurants, apparel,
lifestyle products and travel. Group buying sites work on the premise that collective buying
leads to
larger
volumes
for
merchants,
who
in
turn
can
offer
attractive
prices
to
consumers.
There is a subtle difference between deals and group buying. In group buying, a minimum
number of buyers are required for a deal to go live, whereas deal sites do not have such
requirements. Most online players in India offer deals; the group buying segment is smaller
in comparison. Deal sites provide another platform for merchants to advertise and sell their
products and services. While small and new merchants may look at group buying as a
marketing option, established brands perceive it or deal sites as another sale channel. This
business model is providing an avenue to offload distressed inventory. Revenue is lost if
capacity is unused in the services sector. Perishable inventory in the services sector, such as
restaurants, spas
and
beauty
services,
can
be
as
high
as
80%
24
. Deal
sites
provide
merchants
a means for reducing distressed inventory in the services sector. Another motivation of
discount selling is building customer loyalty. By taking a cut in their initial deal profits,
merchants aspire for repeat visits and treat the loss as customer acquisition cost.
24 “Snapdeal.com services soon in foreign shores,” Business Line website, www.thehindubusinessline.com/todayspaper/tp‐
marketing/article1009775.ece
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The fact that customers prefer to buy deals that are in proximity of their localities has led
group buying sites to provide hyper local deals (deals in every major area of a city). Players
are also upgrading technology to understand the buying behavior of customers (based on
their previous purchases) and match the latter’s requirements. Consumers are the key
beneficiaries
of
this
business
model.
Deal
sites
enable
consumers
to
obtain
products
and
services of their choice and in their locality at much lower prices than the original ones.
Consumers are also drawn by the discounts offered and purchase products and services
they would have not bought otherwise.
KEY DECISION POINTS
Inventory related decision. Two models have evolved within eStores with respect to
inventory management25
.
25 “Online retail: Are e‐retail firms in India building a bubble again?,” The Economic Times website,
www.articles.economictimes.indiatimes.com/2011‐07‐19/news/29791081_1_online‐retailers‐e‐retail‐private‐equity; “Bleeding e‐shops
creating shared marketplace,” Mydigitalfc website, www.m.mydigitalfc.com/news/bleeding‐e‐shops‐creating‐shared‐marketplace‐663; “In
India, online retailers take a new tack,” The New York Times website, www.nytimes.com/2011/09/15/business/with‐no‐amazon‐as‐a‐
rivalflipkart‐moves‐fast‐in‐india.html; “What will be the online retail scene in India by 2012,”iMediaconnection website,
www.imediaconnection.in/article/306/Marketing/what‐will‐be‐the‐online‐retail‐scenein‐india‐by‐2012.html; “India’s first online retail
store for all earning needs,” EFYTimes website, www.efytimes.com/e1/72871/fullnews.htm; “Boom time for online kids retail in India,”
Business Standard website, www.business‐standard.com/india/news/boom‐time‐for‐online‐kids‐retail‐inindia/459694/; “Best shoe
forward,” Business Today website, www.businesstoday.intoday.in/story/yebhi.com‐as‐a‐potential‐threat‐to‐flipkart/1/19577.html;
“Online retailing gathers steam in India,” Business Standard website, www.business‐standard.com/india/news/online‐retailinggathers‐
steam‐in‐india/359627/; “India goes digital ‐ a bird’s eye view of the Indian digital consumer industry,” Avendus, November 2011, p.80;
“Top 10 trends in Indian E‐Commerce in 2010,” VCCircle website, www.vccircle.com/500/news/top‐10‐trends‐in‐indian‐E‐Commerce‐in‐
2010
Stock and sell model
Assumes inventory risk and invests
in warehouses logistics
Consignment model
Ships products directly from the
vendor to the customer with no
investments in warehouse and
logistics
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Online retail in India was traditionally a low entry barrier business, with most players
working on a consignment model based on the following principles:
Online retailers
tied
up
with
networks
of
merchants
to
source
products.
They then prepared web catalogs of products offered by their partner merchants.
Once a customer order was received for any of the catalog items, a notification was
sent to the merchant for its fulfillment.
The merchant then supplied the goods to the customer, and financial settlement was
made between the online retailer and the merchant for the products sold.
The consignment
model
provides
several
inherent
advantages
for
an
online
retailer:
Requires Limited or no investment in inventory or warehousing.
Delivery of goods generally managed by merchants or third party providers
Online payment system and settlement with later executed with merchants
It is pertinent to note that in this model, the online retailer is responsible primarily for
managing the web catalog and the online experience of the customer. Despite the
advantages of the consignment model, online retailers are moving towards an inventory
holding model, wherein players across the industry hold 40% to 80% of the SKU they offer
online as inventory.
Customer
E‐Commerce Player Merchant
Logistics player
Places order and makes
payment
Notifies on receiving the
payment
Local logistics
Merchant ships the
product directly to the
customer through
logistics player
Logistics player ships
product
to
a
local
logistics service
provider
Product delivered
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The drivers of this initiative are quite apparent when one looks deeper to estimate the
advantages
of
stocking
products
and
selling
them
on
an
E‐
Commerce
player’s
portal.
Ability
to honor customers’ commitments: Meeting commitments on products and services
consistently is the cornerstone of success of an E‐Commerce business. The consignment
model makes online retailers highly dependent on product merchants.
Minimal technology integration with merchants results in online retailers seldom
having adequate visibility of the actual stock situation.
Additionally, meeting delivery commitments is always a challenge when merchants
control the bulk of end customer deliveries.
Managing in‐house inventory enables online retailers to ensure that the right
products (quantity and quality) are delivered within committed timelines. Better
bargains due
to
bulk
buying:
online
retailers
focusing
on
specific
categories
have
the
option of making bulk purchases of fast moving and popular products and, thereby,
obtaining discount in the process. The additional percentage points in their gross
margins can contribute significantly to the overall profitability of their portals.
Innovative pricing and product bundles: Over time, we have seen vertical focused
online retailers.
We see online retailers adopting a hybrid consignment and inventory holding model.
Inventory holding decisions would be based on factors such as the profiles of customers
visiting a portal, unique category positioning, the delivery criticality of certain categories and
historical
sales
numbers.
This
decision
would
also
be
influenced
by
the
degree
of
integration
of technology of merchants, as well as the commercial arrangements of online retailers with
product merchants for product ownership and return gaining an adequate understanding of
customers’ buying patterns, moving away from a cost plus model and playing a larger role in
the pricing and packaging of products. online retailers form innovative product bundles that
are aligned with the unique needs of customers.
Customer
E‐Commerce Player Zonal warehouse
Logistics player
Places order and makes
payment
Local logistics
E ‐Commerce player
ships the product
directly to the customer
through logistics player
Logistics player ships
product to a local
logistics service
provider
Product delivered
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LOGISTICS
LAST MILE CONNECTIVITY
Last mile logistics constitute online retailers’ key component of service fulfillment. This has
been one of the key areas of focus for online retailers attempting to make the average
Indian customer comfortable with buying products online26
.
Almost all online retailers worked with third party logistics providers to deliver goods to
customers. Lately, several players have begun building their in‐house capability to manage
customers’ deliveries.
FREE SHIPPING
In many of the developed countries, where the E‐Commerce players charge shipping cost
and
its
considered
to
be
a
privilege
if
the
customer
is
offered
free
shipping,
the
Indian scenario is entirely different. Here, it is the primary business strategy for an E‐Commerce
player to provide free shipping cost for the Indian customer doesn’t really appreciate you
charging more.
Many of the E‐Commerce companies are offering their own branded delivery. These
companies have been investing heavily in creating their own delivery networks for a country
like India, which has poor infrastructure and high diversity. Creating your own delivery
network is a huge task and one may not be able to make the economics of it, but at the
same time it should be kept in mind that many E‐Commerce players have achieved a
successful delivery network and are using it as a unique feature over the products they are
offering.
Segmentation of customers for own delivery proposition: Most companies pursuing
customer centricity rely on some form of market segmentation. Segmentation provides
insight into customer behavior, habits, and preferences increasing the odds of success in
marketing, experienced management campaigns, driving brand positioning and product
development. First, customers can be divided into urban and rural area and then on region
basis like Mumbai, Delhi or other metropolitans cities where services are in high demand.
However, the delay in services due to high demand should not affect services given to
customer from the E‐Commerce companies.
26 “Jolly’s Volley: E‐Commerce Challenge No. 2 – Logistics,” VCCircle website, www.vccircle.com/columns/jolly%E2%80%99svolley‐E‐
Commerce‐challenge‐no‐2‐%E2%80%93‐logistics; “E‐Commerce in India – the real challenges?” Pluggd.in website, www.pluggd.in/india/E‐
Commerce‐in‐india‐challenges‐3983/; “Logistics and its challenges in Indian E‐Commerce,” E‐Commerce website, www.E‐
Commerce.etcetra.co.in/2011/06/29/logisticsand‐its‐challenges‐in‐indian‐E‐Commerce/; “Highway bribery: no full stop to unofficial taxes
paid by the truckers,” The Economic Times website, www.articles.economictimes.indiatimes.com/2011‐12‐23/news/30551185_1_check‐
post‐octroi‐rto; “India’s online booksellers try to write a new chapter,” India Knowledge @Wharton website,
www.knowledge.wharton.upenn.edu/india/article.cfm?articleid=4502
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INADEQUATE CAPACITY AND HIGH COST OF LOGISTICS
Over the last decade, there has been a significant growth in the number of express courier
companies in India, with more than 4,500 companies covering a large number of areas
across the country27
. The substandard quality of physical infrastructure means the cost of
logistics in
India
is
among
the
world’s
highest.
Another
issue
clouding
the
logistics
sector
is
the inadequate airline fleet size of express courier companies. This hinders same day
delivery of products ordered online. The aircraft fleets size of the leading express courier
players in the US and India is 420 and 7 which clearly shows the huge difference in the
logistics support system in India.28
SUBSTANDARD TECHNOLOGY INFRASTRUCTURE
Limited investment and obsolete technology (GPS systems for fleet, bar codes/RFID tags on
packages and hand held devices for their field force) are the primary areas of concern for
logistics
companies
in
India.
This
grossly
limits
the
ability
of
online
retailers
in
India
to
monitor the delivery of shipments and provide accurate information in the event of delays;
whereas such a supporting ecosystem is a norm in developed countries such as the US.
HIGH CHARGES LEVIED BY VENDORS FOR CO D AND RETURNS
Use of third party logistics poses a huge challenge for CoD to prove as a preferred mode of
payment. Some of the reasons are highlighted below:
27 “Express Courier Market – India,” researchonIndia, via ISI Emerging Markets, March 2010
28 Plane Spotters
A
combination
of
fixed
charges
for
the
collection
of
CoD,
along
with a percentage of the shipment value (1% to 2%) charged by
logistics providers, thereby increasing the cost of delivery .Extra charges levied
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IN‐HOUSE FACILITY
Several economic and operational advantages can be observed when online retailers have
self controlled logistic. As per analysts estimate, in‐house logistics become more cost
effective when average daily shipments of common products such as apparel exceed around
100 deliveries
a day
in
a city.
Some of the key factors that decide the point of breakeven:
In‐house delivery capability is an advantage for organizations that have a high percentage of
shipments on the CoD model or a high return rate. Large companies make savings in terms
of costs on account of returns and at the same time benefit due to the shorter collection
cycles of CoD shipments vis‐à‐vis delayed settlements made by service providers. There
could be other auxiliary benefits of in‐house logistics capability:
Ability to tailor delivery schedules to meet specific customer requirements (urgent
deliveries, specific
time
slots,
etc.)
leading
to
customer
delight
Opportunity to make an impression on customers through trained agents and, if
possible, obtain first hand feedback on services
Cross sell (though this is uncommon in the country)
Delivery team serving the purpose of OOH branding by online retailers
Average value of goods
Physical size of shipmentsReturn
rate
witnessed
by company
Percentage of shipments
delivered with CoD
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IN‐HOUSE LOGISTICS: COSTLY AND PAINFUL29
Building in‐house logistics capabilities is resource and capital intensive, and can be a
significant drain on costs if not managed efficiently. It puts pressure on the already wafer
thin margins. Scaling in‐house logistics operations to meet growing demand is another
challenge. This
is
one
function
where
the
size
of
manpower
grows
almost
proportionately
to
the volume of shipments. The management of a large workforce has always been an issue. It
is a tradeoff that online retailers need to make between having greater control and working
with a lean organization. Online retailers seem to be moving toward a self controlled rather
than the owned logistics function. In this option, the bulk of manpower is contractual and
leased from existing logistics providers, along with supervisory support. This team works
dedicatedly for an online retailer and brings the required experience to run an efficient
operation. We foresee all online retailers adopting a hybrid model, with a mix of in‐house
and outsourced logistics functions (differing by cities) depending on the evolution of the
organization.
MANAGING CUSTOMER EXPERIENCE DRIVING IN ‐HOUSE LOGISTICS
Logistics players will always find online retail to be an attractive business due to a single
reason, the delivery of products to customers is an inherent part of this segment. However,
many companies have in‐house capabilities because of their strategy to enrich customer
experience with quick delivery. The same speedy delivery cannot be made by outside
logistics support services.
Product delivery is not just the delivery of products to the doorsteps of consumers, but also
an important element in customer experience. Therefore, in order to retain presence in the
onlion logistics
support,
It
is
needful
that
they
effectively
work
on
their
operating
models
to
suit the needs of their online retail customers. Some of the factors are:
29 “China’s E‐Commerce Market: The Logistics Challenges,” ATKearney website, www.atkearney.com/index.php/Publications/chinas‐E‐
Commerce‐market‐the‐logistics‐challenges.html
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TA X ISSUES
The retail sector in India needs to comply with the regulations of a complex nature and
multiple tax
structure
system
leads
to
increase
in
cost
and
warehouse
location
issues.
This
poses various challenges for E‐Commerce players.
Sellers collect Central Sales Tax (CST), which is levied by the Central Government when
goods are shipped across states. When products are sold within a state in which a
warehouse is located, state governments charge Value added Tax (VAT). As VAT is a
multistage tax and the credit of VAT can be availed only in the same State where the tax has
been paid, it leads to double taxation issues. Currently, CST cannot be offset against any
other tax in India. This means that it is a cost incurred by manufacturers and retailers. This
results in double taxation, since an online retailer passes on costs to consumers. Non
uniform
VAT
rates
levied
by
state
governments,
CST
charge
on
interstate
sales
and
the
retention of VAT in case of interstate stock transfers make it challenging to decide
warehouse location. Octroi and entry tax also increase the transportation costs. All these
issues could force the online retailers to open warehouses in various states, keeping in mind
the tax rate and other related costs of the respective state.
Adoption of new and
upgraded technology
Search for investors
who can fund this
technology adoption
Time sensitivity: Same day
delivery and specific
day/time delivery options
to customers
Focus on last mile
delivery
Making the customer
experience
paramount
Focus on key trends –
Returns management
and CoD services
Training delivery
personnel to take
feedback from customers
Managing
Customer
Experience
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THE RIGHT BUSINESS MODEL FOR INDIA
Online retail is expected to grow at a rapid pace in India in coming years. While pure play
players
are
expected
to
benefit
from
the
fruits
of
this
growth,
brick
and
mortar
retail companies face the challenge of deciding on the right business model with respect to the
implementation of an online sales channel. Staying off the online medium may imply losing
sales to online retail players. They need to ponder on the following key aspects while
deciding their strategy:
How to enter the online space: through acquisitions, joint ventures or the organic
route
Partnerships with other online retail players
Presence in the offline and online space may present challenges related to:
Pricing decisions
on
the
same
product
sold
via
two
channels
Customer segmentation to ensure that customers are targeted through the
preferred channel
E‐Marketplace Model
Advantages of adopting this model as a
new entrant:
• Low Inventory cost – while carrying
inventory offers enhanced customer
experience, by giving visibility i nto
availability, it often is not a good idea
for an entrant to risk its survival by
increasing inventory carrying cost
• Creation of multiple revenue points:
E‐Marketplace offers the dual
benefits of increasing it sales by
offering own products and by
earning from other sellers who post
their products and services in the
marketplace
Hybrid model
Phase I Phase II
Cash and carry Model
Phase III
• C ustomer comfort – For categories
like apparel or footwear that are
non‐standardized like electronics and
where touch and feel is important,
the offl ine format will help
consumers shed their inhibitions. A
first offline purchase will make them
comfortable to buy the products
online later
• Expansion from online to offline: A
hybrid concept can significantly help
an online retailer to establish its
footing in the offline category due to
existing customer loyalty and brand
value
• A win‐win for all – Cash and Carry
shall bring efficiency in the supply
chain (Reducing middleman) which
will ultimately lead to lower prices
for all types of consumers i.e. Semi ‐
wholesalers, retailers, endc onsumer
• Customer retention – Since it is
usually a membership based model
(Due to discounts availability), an e‐
Commerce player can retain its
customer base
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PRIVATE LABEL PRODUCTS
According to a TechSci Research research study, Private Label & Indian Consumer Insight
2010, almost 85% of the consumers indicated willingness to purchase private labels
promoted by retailers. Indian consumers, being value conscious, are expected to welcome
private labels
in
the
market.
HIGH MARGINS OF PRIVATE LABELS
Margins on private labels range between 10% and 15% in the case of FMCG products and
touch as high as 40% ‐ 60% for apparel in India.
PRIVATE LABELS ALREADY IN THE E‐COMMERCE MARKET
Private labels have been adopted in E‐Commerce markets worldwide. They have crept into
the Indian E‐Commerce market as well, with a few small players adopting the model to
shore up
margins.
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CHALLENGES IN ONLINE RETAIL MARKET
CUSTOMER PRODUCT EXPERIENCE
Most Indian
consumers
prefer
to
sample
a product
before
making
a purchase.
And
such
a
method is usually adopted across categories such as clothing, shoes, perfumes and
accessories. The lack of touch and feel or product experience in online shopping could lead
to issues such as wrong product sizes (in shoes and clothing). This poses as a mental barrier
for consumers to shop online31
.
Forrester estimates that Indians spent around US$1.6 bn online on retail E‐Commerce sites
in 2012. The projection is for this number to reach US$8.8 bn by 2016. Despite this
potential, and the ongoing excitement, Indian E‐Commerce is not profitable. Almost 50% of
the E‐Commerce ventures launched in 2012 have shut shop.32
High customer acquisition cost is being driven by low Internet penetration and distrust
around online buying. Most sites spend between Rs 800‐1,500 to acquire a customer.
Considering that the average order size is around Rs 1,500, and that gross margins range
between 3% to 8%, the customer needs to transact over 10 times for the retailer to recover
the acquisition cost.
ENTRY OF GLOBAL PLAYERS
The growth potential of the online retail segment in India has attracted leading international
players. Entry of international players means increased competition. The advanced
technology capabilities that global players possess in areas such as customer analytics and
recommendation engines would pose a challenge for local companies. International players
have larger financial resources than their Indian counterparts thereby enabling them to bear
losses and restrict supplies to their competitors by buying out supplies from vendors. This is
a bigger threat especially for smaller domestic players as this is a threat for their very
survival.
31 “Jolly’s Volley: E‐Commerce Challenge No. 2 – Logistics,” VCCircle website, www.vccircle.com/columns/jolly%E2%80%99s‐volley‐E‐
Commerce‐challenge‐no‐2‐%E2%80%93‐logisticsE‐Commerce in India – the real challenges?” Pluggd.in website, www.pluggd.in/india/E‐
Commerce‐in‐india‐challenges‐3983/; “Logistics and its challenges in Indian E‐Commerce,” E‐Commerce website, www.E‐
Commerce.etcetra.co.in/2011/06/29/logistics‐and‐its‐challenges‐in‐indian‐E‐Commerce/; “Highway bribery: no full stop to unofficial taxes
paid by the truckers,” The Economic Times website, www.articles.economictimes.indiatimes.com/2011‐12‐23/news/30551185_1_check‐
post‐octroi‐rto; “India’s online booksellers try to write a new chapter,” India Knowledge @ Wharton website,
www.knowledge.wharton.upenn.edu/india/article.cfm?articleid=4502;
32“ Forrester estimates that Indians spent around”, http://www.thehindubusinessline.com/features/weekend‐life/can‐indian‐etailers‐be‐
profitable/article4673803.ece
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LOW MARGINS
The majority of E‐Commerce companies are price players due to the stiff competition they
face and
the
race
to
acquire
the
maximum
number
of
customers.
This
results
in
very
low
margins or none at all. E‐Commerce players could look to adopt new business models to
increase their margins. One such example includes private labels33
.
33 “Private Label Set to Dominate Indian Organized Retail Shelf Space in Coming Years, says TechSci Research,” TEchSci Research website,
www.techsciresearch.com/private‐label‐set‐to‐dominate‐indian‐organized‐retail‐shelf ‐spacein‐coming‐years‐says‐techsci‐research
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THE IMPACT OF ANALYTICS
E‐Commerce companies have been successful in showcasing their products to consumer in
real time
however
the
ecosystem
around
E‐Commerce
stills
seems
to
be
deeply
penetrated
by companies that are not really interested in establishing an innovative driven business
model with most of the systems working in silos be it logistics, supply chain, marketing, MIS
or customer support.
Given the current competitive scenario, chances of complete wipe outs loom large on the
existing players. And under these circumstances, there are a host of questions that every E‐
Commerce company is anxiously seeking answers to:
Enabling a tighter integration with their critical operation nodes and enabling real time
interventions for critical functions viz. procurement management, delivery logistics,
customer experience, cart tracking, customer loyalty, offer management and customer
support in a unified Omni channel dash boards that can provide insights in real time. The
concept of real time analytics can greatly help an E‐Commerce company to achieve the
overall speed
and
efficiency.
How many visitors on website right now?
What is the conversion probability?
What is the demand and supply pattern?
Where is the delivery status?
Where is the customer shipment status?
How many returns are expected?
What would be the price of the same product
tomorrow?
How many
happy
and
unhappy
customers
created?
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KEY INFLECTION POINTS
Some the critical functions where real time interventions based on real time analytics can
help are:
DELIVERY AND LOGISTICS
As opposed to a conventional store, where product delivery is immediate and there is no
anxiousness on the part of the customers and the seller. However, there is an element of
waiting i.e. E‐Commerce customers have to typically wait from a day to a week before their
product arrives. This provides anxious moments to customers as well as E‐Commerce
companies because every company wants to know what happens after the order is taken.
Tracking shipments, returns, transportation routing, cost reduction and price discovery in
real time system can significantly help companies to provide value to the customer.
A B
C D
Analyzing in real time the geographic
order pattern and warehouse proximity
to reduce end user product price
Analyzing the current inventory levels
and demand patterns to automatically
trigger price reduction/ increase
notifications the website
Analyze current transportation time for
shipping, transportation cost andpredict approximate delivery time to
the user
Detect early logistics situations such as
freight delay or loading time andautomatically send notification to the
customer with an estimate of delay in
shipping
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CUSTOMER EXPERIENCE
Personalization is considered to be one of the basic differentiating factors but surprisingly,
most of the E‐Commerce companies have not been able to derive the benefits of providing
customization. The one‐size‐fit‐for‐all criterion is definitely not the appropriate way for all
users.
Highlighted below are some of the advantages that a business can achieve by looking
through the real time analytics window in a more precise and creative manner:
Customization based on behavioral targeting: Analysis of early visits to indicate the
interest of the user
Recommendations and suggestions on real time basis: Reviews by other users of
the same product, demonstrations, video attachments, accessories for the same
product, deliver
and
payment
options,
advertisement
of
loyalty
programs
etc
Customer segmentation: Analyze on real time basis their behaviors and automate
customized offers for each customer
Personalization: To provide customized offerings like name display on website,
modified screen according to user preference can assist in increasing the
engagement from the customer’s end
CUSTOMER SUPPORT
One of the many reasons of lesser interest initially in the website is the inability of the
company to provide a user‐friendly interface. These dropouts have huge implications
because it is not only an opportunity loss but it also negates the marketing effort and costs
involved in driving the traffic to site. Most of visitors/ shoppers drop out of site primarily
because they find difficulty in finding the products, or have doubts, queries, and concerns or
are simply not sure of their choice. This is only possible if we have real time data about the
visitor online. Real time engagement and personalization can be invoked through real time
forms, surveys, asks or chats without being intrusive once there is an actionable insight.
For first
time
users,
use
of
social
networking
websites
can
enhance
convenience
level.
An
instant pop‐up window for a user who has visited twice during a day could induce him to
further explore the product which will greatly help the company to grow its user‐friendly
factor. So the next time a user comes, they will be aware of the search process and how to
go about in the website. Similarly, time specific pop‐ups can also help to achieve the same.
Similarly, for the second time or ‘website friendly user’, various techniques could be
adopted
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Generally, there are three types of users/ visitors, Dependent, Semi Dependent &
Experienced. Dependent & semi dependent shoppers require some help or support to
complete transactions. Real time tools such as real time chats with the customer
representatives or call solutions, FAQs can resolve their queries and built customer
confidence in
relation
to
the
highly
prevailing
issues
in
the
user’s
mind
such
as
post
delivery
problems faced that the customer may face, who shall provide after‐sale support etc.
TO MAKE IT REAL
The ultimate objective of an E‐Commerce player is to bring the user experience closer or
even better than the real store experience for the customer does value the difference
between the services and convenience offered by the real store operator and an E‐
Commerce company.
The support provided by real time analytics can help reduce the gap between real store
experience not just in terms of price and convenience but also to make the E‐Commerce
company more customers centric. It will help the company to integrate their systems vital
for survival and growth amidst a competitive environment.
Personal messaging to showcase
special attention
Best offer/ deal for users viewing the
site through a mobile/ Hand held device
Conducting feedback/ surveys so as to
engage the customer to receive valuableinsights i.e. any issues that they may be
facing which the website operators wereunable to detect
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49 | P a g e
ABOUT NANGIA GROUP
Boutique Chartered Accountancy and
Advisory firm
with
one
of
the
largest
tax and transaction advisory practices
in India
Founded over 30 years ago
Rated as a leading Tax Advisory firm
by International Tax Review
Part of Transfer Pricing Associates
Network Netherlands having network
partners across 50 countries
Global
coverage
through
alliances
in
Australia, China, Dubai, Germany,
Netherlands, and USA
150+ professionals from premier
institutions like ICAI, IITs, ISB among
others, and on track to double team
size in next 2 – 3 years
Considerable experience in working
with and providing advisory services
to
leading
Indian
companies
in
E‐
Commerce and retail sector, we
provide advisory services to major
Indian conglomerates and business
houses as well as Fortune 500
companies from 20 countries with
operations in India
Successfully undergone ICAI
mandated peer review
Registered
with
the
Public
Company
Accounting Oversight Board (private
sector, non‐profit corporation,
created under the Sarbanes‐Oxley
Act) in USA
New Delhi | Mumbai | Dehradun | Singapo re
CA, CFA, CPA, CS
Strategy and
Management
Consultants
Engineers and
Statisticians
Legal Experts
EmpanelledGovernment
Bodies
Banks
CentralGovernment
StateGovernments
InsuranceCompanies
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50 | P a g e
SERVICE OFFERINGS
HOW WE AD D VALUE TO OUR CLIENTS
Direct Tax
and
Regulatory
consulting
and
advisory
Indirect Tax
compliance
and
advisory
Transfer
Pricing
Business
Intelligence
and
Analytics
Mergers and
Acquisitions
Corporate
Finance
Audit and
Assurance
1. Full Service
Boutique Firm
2. Low Cost3. Open Source
Solutions
4. Bespoke
Solutions
5. Rapid
Deployment
1 Entire gamut of professional
services under one roof
2 Competitive pricing on account
of lean, efficient and optimised
processes
3 Our solutions are designed on open
source platforms like Hadoop, R Pack,
AML among others to ensure low cost,
scalability and flexibility to make
changes without
external
dependence
4 We believe each of our clients have
unique requirements which need
bespoke solutions instead of
modifying off the shelf products
5 We pride ourselves in our ability to
deploy at a rapid pace, enabling us to
address our Clients’ needs at the earliest
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NEW DELHI
Suite ‐ 4A, Plaza M‐6, Jasola, New Delhi ‐ 110025
Tel: +91 (11) 4737 1000, Fax: +91 (11) 4737 1010, Email: [email protected]
MUMBAI
The Summit Level 2, Unit No. 210, Western Express Highway, Ville Parle (East), Mumbai – 400 001
T: +91
(22)
6455
9696,
F:
+91
(22)
2617
4676,
Email:
DEHRADUN
75/7 Rajpur Road, Dehradun – 248001, Uttarakhand
Tel: +91(135) 2742026, Fax: +91(135) 2740186, Email: [email protected]
SINGAPORE
Nangia & Co (Singapore) Pte Ltd., 24 Raffles Place, #25‐04A Clifford Centre, Singapore 048621