Market Research Report : Indian e-tailers market in India 2012
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Transcript of Market Research Report : Indian e-tailers market in India 2012
E‐tailing Market in India
October 2012
2
Executive Summary
Market
The Indian e‐commerce market is growing at a CAGR of a1% and can broadly be categorized into a2 and a3The e‐tailing sector is a subset of the e‐commerce market and is deemed to be growing at a CAGR of a4%Huge growth registered by e‐tailing concerns in terns of VC investments hint at the growth potential of the sector
Drivers & Challenges
Competition
Drivers– Internet penetration–Boost from social media–Changing demographics– Increase of internet enabled computing devices
–Soaring real estate costs–Need to save time
Challenges–Negative consumer perspective related to cyber security
–High cost of customer acquisition
– Issue of reverse logistics
–Lack of touch and feel element
Major Players
Flipkart Jasper Infotech Myntra
NSI Infinium TV 18 Home Shopping Xerion Retail
Consolidation seen as a trendPrivate labels going e‐tailing wayCash on delivery as a payment option Introduction of brand storesEmergence of kids’ e‐tailing
Trends
E‐TAILING MARKET IN INDIA 2012.PPT
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•Introduction•Market Overview•E‐tailing Formats•Benefits •Suitable Product Categories•Drivers & Challenges•Government Regulations•Trends•Mergers & Acquisitions•Major Players•Strategic Recommendation•Appendix
E‐TAILING MARKET IN INDIA 2012.PPT
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Availability of products coupled with ease of selection have led to the proliferation of e‐tailing in India
E−tailing Market – Overview
E‐tailing Market – Growth in India
•The need to save time by urban India and the plethora of options and choices offered by online stores have been deemed as the chief drivers for the growth of e−tailing market in India
•The growth and optimism in this arena has resulted in the spurt of private equity investments in online and e −commerce ventures in the market
•As the burgeoning internet penetration continues aided with flexible payment modes, physical retail majors are also treading the lines of setting up online stores
•Trends suggest that metros are not the only area of operation for the players, tier I and II cities are also fast catching up owing to their evolved brand consciousness and lack of availability of products in their vicinity
Online Shoppers – Growth in India
mn
0
2016e2015e2014e2013e2012e2011
INR bn
0
2015e2014e2013e2012e20112010
E‐TAILING MARKET IN INDIA 2012.PPT
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Challenges
E‐tailing Formats (1/4)
• xxx
• xxx • xxx
• xxxx
Business Model & Target Segment Scalability
Strengths
• Xx• Xx
F1
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E‐tailing – Suitable Product Categories
• Xx• Xx• Xx
Low
Low
High
High B1
B2
B3
B4
B5
B6
B7
B8
B9
B10
B11
B12
B13
B14
B15
B16 Supply Chain Complexity
Value
xxxxx
4
1
3
2
E‐TAILING MARKET IN INDIA 2012.PPT
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Drivers & Challenges – Summary
Drivers
Increase in internet users
Boost from social media
Changing demographics
Increase of internet enabled computing devices
Soaring real estate costs
Need to save time
Challenges
Negative consumer perspective related to cyber security
High cost of customer acquisition
Issue of reverse logistics
Lack of touch and feel element
E‐TAILING MARKET IN INDIA 2012.PPT
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As internet reach ramifies into remote spaces, e‐tailing derives growth from it
Increase in internet users Impact•The ever increasing figure of internet users in India is considered to be one of the key drivers for this market
•The introduction of internet as an alternative channel for shopping has changed the consumers’decision making process inadvertently
• Internet has aided the consumers to frequent the retail websites more often not only for deriving product information but also for making the final purchase
•Advent of internet has brought the ambit of retail products within the purview of consumers at their fingertips
•Today, consumers can browse through different products, seek their information and make purchases sitting at their convenient places without requiring to go to a physical store
mn
0
2015e2014e2013e2012e20112010
Total Internet Subscribers – India Number of Broadband Subscribers – India
As of Jul 2012, India had ‐mn internet users
2011
mn
0
2015e2014e2013e2012e
Urban SubscribersRural Subscribers
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Impact of FDI cap on e‐tailing firms
D
E
a5
a6
B a3
A a2
a4C
a1
b1
c1
d1
e1
Category Example Impact
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`
Consolidation seen as a trend
Private labels going e‐tailing way
Emergence of kids’ e‐tailing
Cash on delivery as a payment option
Trends – Summary
Key Trends
Introduction of brand stores
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Kids’ e‐tailing is fast growing as a major category that is deemed to be having great potential
E‐tailing sites specifically targeting kids’ products have mushroomed in the Indian online domain over the last year and has emerged as a latest trend that is shaping the e‐tailing sector in the country
c4
Emergence of kids’ e‐tailing
c5
c3
c2
c1
c9
c10
c8
c7
c6
• The opportunity for children’s products including apparel, footwear, toys, bathing products have been on the anvil for a considerable period of time
• However, with the advent of specialty retail formats, the sector has seen major breakthroughs
• Lack of presence of physical retail stores selling kids’ products in majority of areas have translated into a huge opportunity generation for e‐tailing sites selling such products
Baby Products – Purchase (2011)
2013e2011 2012e2010
INR bn
0
2015e2014e
Kids’ E‐tailing – Market Size & Growth
q
pOffline
Online
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Investments in the E‐tail Sector
Year Buyer Target Deal Size (INR ) Type of Transaction
x x x x x
x x x x x
x x x x x
x x x x x
x x x x x
x x x x x
x x x x x
E‐TAILING MARKET IN INDIA 2012.PPT
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Private: Domestic Company – Company 1 (1/3)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Tel No.
Website
Year of Incorporation
Category Products/Services
Retail
Name Designation
Note: The list of products and services is not exhaustive
Place
Head Office
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Financial Snapshot Key Ratios
Financial Summary
• The company incurred a net loss of INR 240.1 mn in FY 2011, as compared to net loss of INR 8.9 mn in FY 2010
• The company reported total income of INR 430.9 mn in FY 2011, as compared to INR 116.1 mn in FY 2010
• The company earned an operating margin of ‐53.63% in FY 2011 a decrease of 46.77 percentage points over FY 2010
Particulars y‐o‐y change (2011‐10)
2011 2010 2009
Profitability RatiosOperating Margin ‐46.77 ‐53.63% ‐6.86% N.A.
Net Margin ‐47.99 ‐55.73% ‐7.74% N.A.
Profit Before Tax Margin ‐46.77 ‐53.63% ‐6.86% N.A.
Return on Equity ‐15.08 ‐16.79% ‐1.70% ‐137.85%
Return on Capital Employed ‐15.49 ‐17.04% ‐1.55% 0.00%
Return on Working Capital ‐18.88 ‐21.06% ‐2.18% ‐23.79%
Return on Assets ‐15.08 ‐16.79% ‐1.70% ‐11.63%
Return on Fixed Assets ‐448.79 ‐643.83% ‐195.04% ‐47.02%
Cost RatiosOperating costs (% of Sales) 46.77 153.63% 106.86% N.A.
Administration costs (% of Sales)
N.A. N.A. N.A. N.A.
Interest costs (% of Sales) N.A. N.A. N.A. N.A.
Liquidity RatiosCurrent Ratio ‐48.21% 16.29 31.45 13.03
Cash Ratio ‐61.16% 14.35 36.95 0.00
Leverage RatiosDebt to Equity Ratio N.A. N.A. N.A. 10.85
Debt to Capital Ratio N.A. N.A. N.A. 0.92
Interest Coverage Ratio N.A. N.A. N.A. N.A.
Efficiency RatiosFixed Asset Turnover ‐54.14% 11.55 25.19 0.00
Asset Turnover 36.82% 0.30 0.22 0.00
Current Asset Turnover 29.95% 0.35 0.27 0.00
Working Capital Turnover 34.05% 0.38 0.28 0.00
Capital Employed Turnover 36.82% 0.30 0.22 0.00
Improved Decline
2011
0
INR mn INR mn
0
20102009
Net Profit/LossTotal Income
Private: Domestic Company – Company 1 (2/3)
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Business Highlights
Description News
Overview
•Has earned its name as one of the leading e‐commerce players in India boasting of over ‐mn book titles and ‐ different categories
• It has more than ‐mn registered users and sale of ‐ items per day
• It has its footprint in ‐ cities and is looking at expanding its reach in near future
• It hit a new milestone by clocking INR ‐ bn in gross merchandise value shipped in a month for the first time in ‐
• The number of daily orders has also hit ‐ or ‐ orders per minute which represents a five‐fold rise after the company clocked ‐ orders a day for the first time in ‐
Acquisition • It has announced about its acquisition of local company xx for an undisclosed sum in ‐
Funding
•Has secured its finances for the coming ‐ years after it raised INR ‐ bn from new investors
namely xx and xx along with the existing ones in xx and xx
‐, the founders of the company earlier controlled about ‐% of ‐ equity, while the xx and xx together
controlled ‐% and the management held the remaining ‐%
Private: Domestic Company – Company 1 (3/3)
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SWOT Analysis – Company 1
• Xx
• Xx
• Xx
• Xx
• Xx
• Xx
• Xx
• Xx
SWOT
STRENGTH WEAKNESS
OPPORTUNITY THREAT
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E‐TAILING MARKET IN INDIA 2012.PPT