Online Retailing in India

to Leap Ahead 50%

By 2016, the Indian online retail market is
expected to grow at more than 50% annually,
largely driven by intense competition.

Indian Online Retail Market Size (in USD Million)

CAGR: 54.12%

8140

2016P
5394
3618
2245
1469

2015P

2014P

2013E

2012
936
2011

Note: P refers to Projected

E refers to Expected

Electronic retailing market breakup by products, 2013

3%

10%

Healthcare

Beauty and personal

2%

Baby products

15%
Books

6%

Home and
furnishing

30%

Electronics

34%

Apparels and
accessories

Key Parameters for Comparison: Online Retail Companies (2014)

Key Parameters
GMV/Sales
(USD Billion)
Number of
Products
(in Million)

NA

15

15

1.1

Product Categories

70

24

500

2,000

Sellers

3,000

5,000

1,00,000

45,000

Presence in India
(in years)

133 (into SnapDeal)

Latest Funding
(USD Million)

Investment Plans
(USD Billion)

1,700

2,000

eBay 133;
Blackrock 105;
Softbank 627
Total (865)

0.133

Expanding seller
base

Tier 2/3/Non-metro
cities

Growth driven by
PayPal

Logistics and
guaranteed service
delivery

Expanding on the
marketplace model

Improving conversion
rate

Fashion segment
(Myntra was acquired
for USD300 Million)
Focus Areas

Mitigating risks by
expanding into multiple
categories such as
furniture, jewellery
and groceries

Challenges

Drivers

Increasing preference for online

shopping: In India, 62% of consumers
prefer shopping online; more than the
global average of 54% placing India
ahead of the US, the UK, Japan and
Russia, among other countries.
Favourable demographics: India is set to
become the youngest country by 2020.
The average age of a working individual
at that time is expected to be 29.
Booming smartphones: In Q3 2014, 72.5
million units were shipped (23.3 million
smartphones and 49.2 million feature
phones) in the Indian mobile phones
market, representing a 9% year-on-year
growth.

Lack of touch-feel-try experience:

Consumers cannot try products before
purchasing in online retail. This acts as
a barrier for some Internet users.
Untimely delivery of products: While it
takes just a few minutes to search,
order and pay for a product online, its
delivery may take an unreasonable
amount of time.
Lack of trust : Given the fact that
customers do not get to physically see
or experience the product, gaining
consumer confidence becomes all the
more important. This should be done by
assuring the customer that an online
retailer is also available offline
(inventory setups).

Source: Crisil, PwC, Business Standard, Forbes, MarketWatch, Wall Street Journal, Economic Times, DNA, Mint,
Times of India, E&Y , IDC, AT Kearney
Compiled by: Amey Mahant
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