State of the E-Commerce Industry in India

A study on the Current Trends, Domain Insights, Success Criteria & Investment Opportunities

Abhishek Mathur

8/24/2011

Given the MakeMyTrip & JustDial IPO’s, Interest in Consumer Driven Ecommerce has increased both from Investors and Entrepreneurs. At the same time reports of Accounting Harakiri & Amazon’s announced Entry have cast a doubt on the monetization capabilities. This report studies Ecommerce in India and attempts to draw parallels within Sectors and Geographies to identify Investment opportunities

Table of Contents

Investment Hypothesis ............................................................................................................... 3

Measuring E-Commerce Success .............................................................................................. 4

Ecommerce Verticals ................................................................................................................. 4

Demographic Trends.................................................................................................................. 5

Market Size ................................................................................................................................ 6

Financial Analysis ...................................................................................................................... 6

The Three Facets of Ecommerce ............................................................................................... 7

Customer Facing .................................................................................................................... 7

Supply Networks .................................................................................................................... 7

1. Books, Electronics & Apparel ....................................................................................... 7

2. Travel Ticketing ........................................................................................................... 8

3. Hotel Booking .............................................................................................................. 8

4. Deals ........................................................................................................................... 8

Delivery Channels .................................................................................................................. 8

1. Inventory Management, Warehousing, Packaging and Shipping: ................................. 8

2. Couriers and Last mile delivery channels: .................................................................... 8

Key Growth Drivers ...................................................................................................................10

Key Challenges / Barriers .........................................................................................................10

Online Usage Behavior trends & Key Opportunities ..................................................................11

Major Investments in the industry ..............................................................................................11

Success stories / Important Exits ..............................................................................................12

MakeMyTrip...........................................................................................................................12

Justdial ..................................................................................................................................12

Yatra .....................................................................................................................................12

Regulatory Advantage & legal frameworks ................................................................................13

Appendix 1: Evolution of an ECommerce Startup / ECommerce Org Chart ...............................14

Appendix 2: Fundamental Analysis of Global Ecommerce Players ............................................15

Appendix 3: Revenue Growth Projections .................................................................................16

Appendix 4: Current Revenue Projections .................................................................................17

Appendix 5: List of Ecommerce players by category .................................................................17

Investment Hypothesis India, in the last decade has seen rapidly

increasing disposable incomes leading to

increasing demand for branded goods.

However, traditional retail channels are

encumbered by inefficient distribution

networks which can be optimized further

through cutting edge technology enabled

platforms.

The last 2-3 years have seen a rapid growth in Internet/Mobile as a channel for Retail Sales.

This has led to a widespread belief that the Ecommerce platform has come of age in India and

will leapfrog organized retail as the primary retail channel. Political will has been against

supplanting traditional Middlemen. A fact which hampers organized direct to consumer retail

and strengthens the case for ECommerce

A closer look at 2011 data, demonstrates that

primary drivers for increased Ecommerce

usage have been Services (Deals, Ticketing,

etc...), whereas Products (Books, Electronics,

and Apparel) have been stagnant.

Macro Trends are extremely positive.

The current real Revenues of the Ecommerce

market is estimated at $1B, which is

considerably lesser than China ($ 70B) and other comparable economies. Active Internet

user base of 70-80 Million users is roughly 10% of the Mobile user base (700 Million).

People from 3300 distinct locations made online transactions in 2010, indicating mass appeal.

Valuations (See Section Financial Analysis) are high even by global standards (See Appendix 2:

Fundamental Analysis of Global Ecommerce Players). However this report attempts to identify

niches within the Apparel and Deals Categories which present opportunities to invest in. Group

Deals are doing very well globally with Groupon, LivingSocial, etc... Claiming 25% SME

marketing budget in the US. Given the unorganized and technologically challenged service

sector in India the scope for growth is even higher. JustDial (catering to a similar audience) has

proven a strong need for such Aggregators. Apparel (branded and unbranded) is interesting

because latest technologies around Augmented Reality, Flexible return policies, Cash On

delivery and Deep discounts will lead to explosive growth in this category. Additionally, margins

available in this space (25% - 200%), lend themselves very well to a quality offering and

fantastic customer experience. (http://vizisense.com/html/press/newAgeShopaholics.html)

Source: Vizisense

Source: Vizisense

Measuring E-Commerce Success

As per current trends none of the Ecommerce players will operationally break even before 2014. The question then is how to differentiate the winners from the laggards. Based on expert opinion the following may be used as surrogate success criteria

a. Transactions per Day An Ecommerce player which can consistently grow and cross 5000 Tx/day by 2012 will be well poised to succeed in the long term

b. Customer Acquisition cost. A consistent linear reduction in Acquisition cost

demonstrates Customer satisfaction and repeat purchase. This would be essential to scale

c. Team A Company which can hire and retain top level vertical specific domain experts

will naturally scale well.

d. Gross Merchandise Volumes Growth in GMV is a good sign; however this needs to be tracked in conjunction with changes in Unit Profitability

Ecommerce Verticals

Ecommerce in India Can be divided into 21 broad verticals (See Appendix 5: List of Ecommerce

players by category). The Top 4 comprise Travel, Books/Electronics/DVD’s, Apparel and Deals.

The rest include Gifts, cakes, Custom memorabilia, Sweets and bakery items, Artwork auction,

Baby Care, Movie ticket booking, Airlines portals, Horizontal Players, Movie Rentals, Footwear,

Jewellery, Lingerie Straps and Strings, Sports, Health, Fitness, Beauty, Wellness, Perfumes,

Groceries, Vegetables, Fruits

Demographic Trends

Across verticals

1. 15-24 age group gets 40% traffic. Early adoption amongst this Age group which will lead

consumption in the coming decade is a good sign.

2. Low –Middle Income earners dominate

3. City wise traffic is Maximum from Mumbai, Delhi, and Bangalore. About 40% traffic is

outside metro and tier 1 cites.

4. Primary customers are Young Graduate Adults.

Vertical Specific

Vertical Unique Users / Day

Annual Growth

All India Reach

Time Spent/Visit (Minutes)

Sites Considered

Travel 150,000 100% 4% 8 Makemytrip.com, Cleartrip.com, Yatra.com, Tripadvisor.in

Books Electronics/DVD’s

40,000 80% 1.5% 7 Flipkart.com, Infibeam.com, Naaptol.com, Letsbuy.com

Apparel 30,000 220% 1.25% 9.2 FashionAndYou.com,Yebhi.com, Myntra.com, 99labels.com

Deals 425,000 3000% 13% 3.7 Snapdeal.com

1. Amongst Books/Electronics/DVD’s offline players with Online presence such as

FutureBazaar.com and HomeShop18.com receive as many visits as the pure play

Ecommerce players. Amazon.com still receives twice as many visits as Indian players

within India.

2. Amongst apparel, offline brands such as Shoppersstop.com lag pure Ecommerce

players.

3. Among deals, there is a clear monopoly with Snapdeal accounting for more than 90% of

the traffic. Deals also have a secondary demographic group – Students.

Source: Google Trends for Websites & Vizisense

Market Size The Total Ecommerce Market for 2011 Is estimated to be 50,000 Crores (GMV), an impressive

growth rate of 47 per cent YoY. This is on the back of 5 Crores ‘active’ internet users in India.

Implying a revenue of Rs 1000 per active User. People from more than 3300 Villages and Cities

have purchased something online, including 1100 rural locations.

Through an average of Top Down, Bottom Up and Comparable Geography Market Size, I expect

Indian E-Commerce to grow at 30-40% Annually and be a Rs 260,000 Crores(GMV) market by

2016 (See Appendix 3: Revenue Growth Projections).

Financial Analysis

Branded E-tailing (Books, Electronics, Music,

Movies, etc…)

a. Globally Etailing platforms run on profitably

margin of 1.3 – 2.58%, Indian Ecommerce

platforms may run on even lesser margins

given Infrastructural and Payment processing

difficulties

b. A Future Multiple based valuation technique

values the Etaiing Market at INR 4200 Crores

c. It is rumored that Flipkart is valued at INR

4800 Crores, this may be a strategy to deter

Amazon from entering India alone. (http://www.vccircle.com/500/news/flipkart-set-to-

raise-150m-from-general-atlantic-at-1b-valuation)

d. There are concerns around overvaluation and a bubble in Ecommerce. (See:

http://www.pluggd.in/stop-blowing-our-ecommerce-bubbles-297/,

http://blog.kamadolli.com/2011/08/india-e-commerce-joining-the-rant-wagon/)

Travel

a. MMYT (and other Indian players) need to ramp

up hotel and Package bookings in order to reach

global margin standards.

b. Reported Revenues are $124.72M for FY11

c. Gross bookings $742.5 million for FY11

d. MMYT just released Q1’12 reports showing healthy growth in Revenues

(http://investors.makemytrip.com/releasedetail.cfm?ReleaseID=598162)

Amazon DangDan

g.comP/S (ttm) 2.24 1.88Return on Equity (TTM): 15.24% NAEV 85.48B 526.24M

Profit Margin (TTM): 2.58% 1.30%

Expedia Ctrip.com MMYT

P/S (ttm) 2.14 11.55 5.62

Return on

Equity (ttm)

15.59% 18.87% 18.82%

EV 7.24B 5.32B 664.47M

Profit Margin

(ttm)

12.09% 35.07% 3.87%

Value Metrics (2016) INR Crores

Total Retail Sales (GMV) 260000

GMV to Revenue 20%

Revenue 52000

% Share of Etailing 15%

Total Etailing Sales 7800

P/S 2.02

Future Valuation 15756

Discount Rate 30%

Current Valuation(2011) 4243.549

Source: Google Finance

Source: Google Finance

The Three Facets of Ecommerce

Ecommerce can be broadly divided into three distinct modules Customer Facing, Supply

Networks and Delivery Channels (See Appendix 1: Evolution of an ECommerce Startup / ECommerce

Org Chart)

Customer Facing 1. Web Product Design. User friendly interface is crucial to converting Visitors into Buyers.

Typical Ecommerce conversions are 4-6%. China/US Ecommerce sites convert at > 10%

levels.

2. Customer Acquisition. Digital Marketing channels including SEO, SEM, Social Media,

SMS, Emails, Mobile Ads; Offline channels include Print, Radio and TV. Typical Cost per

Acquisition range from Rs 400 to Rs 2000. Marketing through Digital Channels is clearly

not cheap. (See Appendix 7: Google AdWords CPC by Segment)

(http://www.alootechie.com/news/google-targets-triple-digit-revenue-growth-through-

local-ads-indian-smbs) .

3. Customer Support (Social Media and Inbound Call Centers)

4. Payment Processing. E.g. Avenues.com, ItzCash. Costs can vary from 2-5% depending on

volumes and form of payment. Failure rates and Fraud have considerably reduced to an

acceptable level

Supply Networks Supply networks have evolved differently for each vertical. Merchandiser- Vendor negotiations

greatly determine Payment terms and Supply Time/reliability. In general the more consolidated

an industry the more organized the network (E.g. Flight Ticketing).

1. Books, Electronics & Apparel

Most brands/publishers work with national level distributors, who then distribute to regional

dealers. Ecommerce players can work with either Regional Dealers or National Distributors.

With volume these can be removed and direct brand relationships need to be built.

Ecommerce

Players such as

Flipkart,

Infibeam, F & You

National

Level

Distributor

Regional

Dealers

Brands:

Samsung, LG, Rupa,

Levi’s, Van Heusen

2. Travel Ticketing: Ticket Aggregators such as GDS provide fairly straightforward

integration into flight availability and booking.

3. Hotel Booking: A challenge exists in streamlining the various layers of intermediaries

/aggregators which exist without adding any real value between the Customer and

Hotel. Myriad layers of intermediaries with vested interests are not allowing this

category to take off in spite of huge margins and high volumes. However as OTA’s gain

volumes they are replacing some of these aggregators and there is an opportunity to

consolidate the value chain.

4. Deals: There are no existing networks for aggregating deals. Thus it is a challenge to

build a Business Development team to collect deals. At the same time it is an

opportunity given that margins do not need to be shared with intermediaries.

Delivery Channels Needed only for product delivery, deals/ticketing can forgo this expense

1. Inventory Management, Warehousing, Packaging and Shipping:

Technology enabled CRM systems and demand forecasting are vital to optimize delivery

time & cost.

2. Couriers and Last mile delivery channels:

(E.g. Aramaex and AFL Couriers) Negotiations determine freight costs, time to deliver, attempts

at delivery, etc.. COD greatly boosts market size; however it comes with its own challenges

around Returns, Incorrect Address, etc... Hence this is more expensive (even excluding freight)

than traditional Payment processors.

Hotel Side

Aggregators

Such As Hbsi

Agent Side

Aggregators

Such as Via,

Travelocity,

Expedia

Affiliates Such

as Ixigo

OTA’s such as Cleartrip,

Travelguru, Yatra, MMT

Travel Agents

Market share & Competition

Non travel Retail related sites reach

about 54% (up 14% YoY) of the Online

Audience in India. With the bulk of the

reach coming from Computer Software

downloads, Consumer Electronics,

Hardware, Comparison shopping and

Books

Travel related sites reach 40% (up 13%

YoY) of Indian Online users, dominated

by Railways booking sites, followed by

OTA’s

Of the 7.1 million people visiting the top three OTAs, MakeMyTrip, Yatra Online and

ClearTrip.com, 71 percent of visitors checked in at only one of the three sites,

demonstrating relatively strong brand loyalty among the top players.

Competitive Landscape for Travel based ECommerce

Souce: Comscore

Competitive Landscape of Consumer Ecommerce: Products Source:Vizisense

Share of Retail Categories by Geography Source: Comscore

Key Growth Drivers 1. Scale through a superior service quality and high repeat business and referrals.

2. Horizontal play, Number of categories served

3. Reduce operational expenses by investing in warehouses / Logistics.

4. Supplier relationships over other brands and potential new entrants

5. Variety of products available under each category.

6. Conversion rates for major players are still in the middle single digits, contrast with

US/China where they are above 10%.

7. COD consists of 80% of Ecommerce transactions in China, India has much lesser.

8. South East Asia represents a huge opportunity for Indian Ecommerce companies to

expand into. Snapdeal is one of the Companies considering going global.

Key Challenges / Barriers 1. Accounting practices at most ecommerce sites still report revenues

as Gross Merchandise Value. Further deep discounts are treated as

long-term amortisable marketing expenses

2. 20 % of the Users account for 64% of the total time spent on the

Internet. In order to scale it is important to increase internet

consumption across existing Internet users

3. Core network infrastructure in India is not capable of handling a

huge surge in Internet traffic. Only 20% of the Intra Telco network is

over robust fiber networks, While Telco’s concentrate on individual

networks, there aren’t sufficient peering points for traffic crossover.

4. Payment system infrastructure continues to be woefully

inadequate.

5. It is rumored that SEBI is considering imposing Capital gains tax on

Venture capital investments.

6. Global players such as Amazon looking to enter India

7. Local Language Content – Local Search Engines Like Baidu

Internet Distribution System &

structure

Shared-access (Cyber Cafes / Mobile Phones / Universities)

population in India is almost as large as the Internet

population accessing from work and home

Internet Usage Patterns: Source: Comscore

44

Figure 1 Unique Visitors (Million) Independent Vs Shared

Online Usage Behavior trends & Key Opportunities 1. Internet Audience in India skews dramatically

young, three-quarters of the web audience is

under the age of 35. This skew can be

attributed to the demographic profile of the

country, Younger population has access to

better devices and connectivity .

2. 41% of Indian Internet users visited an

Education site

3. 14% of Indian Internet users visited a Personal’s site

(Dating/Matrimony, etc..)

4. 40% of Indian Internet users visited a Career services and

development site

5. 77% of Indian Internet users visited a Entertainment

site (Music/Movies/Videos). However, Online video

viewing in India is still lower than the World Average

6. This Age group also has disposable incomes, hence

could be the drivers for Ecommerce

7. Comparison shopping is used by only 10% of the

Indian Online users, give the price sensitive mindset

this should increase ( Argentina/Brazil has more than 50% adoption of comparison

shopping)

Major Investments in the industry

Company Company

Description

Investor Amount

raised

Date

1 Flipkart Online Services Pvt Ltd

Ecommerce for Books, Electronics, Music, Movies

General Atlantic Partners

$150 Million, ($1B Valuation)

Not Yet declared

2 Ixigo.com Travel Metasearch SAIF Partners, MakeMyTrip

$18.5 Million August 10, 2011

2 Snapdeal (Jasper InfoTech)

Group deals portal Bessemer Ventures, Nexus Venture Partners and IndoUS Venture Partners

$40 Million July 26, 2011

3 Yebhi.com (Bigshoebazaar)

Online shoes, apparel, bags, accessories and gift items

Nexus Venture Partners and Catamaran Ventures

$9 Million July 21, 2011

4 Zovi.com Private Label Apparel SAIF Partners & Others $5.5 Million July 5, 2011

5 Global Online Apparel (FashionAndYou,

Apparel, Deals, etc… Mangrove Capital Partners

$4.4 Million July 5, 2011

Netflix Youku.com

P/S (ttm) 4.81 30.88

Return on Equity

(ttm)

83.62% NA

EV 12.68B 2.34B

Profit Margin (ttm) 8.04% -27.96%

Source: Google Finance

2Internet Audience Age Group. Souce:

Comscore

DealAndYou,

6 JustDial Local business listings site

Sequoia Capital Global Equities and SAP Ventures

$10 Million June 6, 2011

7 Exclusively.in Fashion flash sales Tiger Global Management LLC, Accel Partners and Helion Ventures

$16 Million May 27, 2011

8 ThePrivateSales.com Fashion flash sales Undisclosed $5 Million May 20, 2011

9 Redbus.in (PilaniSoft) Bus Tickets Helion Ventures, Inventus and Seedfund

$6.5 Million May 16, 2011

10 Yatra Online Pvt Ltd, online travel company

Intel Capital Undisclosed May 13, 2011

11 99labels.com Fashion flash Sales InfoEdge $3.5 Million May 11, 2011

12 Quickr a horizontal classifieds player

Nokia Growth Partners (NGP), Norwest Venture Partners and eBay Inc.

$8 Million May 9, 2011

13 Policy Bazaar Financial Products comparison

InfoEdge, Intel Capital $10 Million April 21, 2011

Success stories / Important Exits

MakeMyTrip

The MakeMyTrip (MMYT) stock surged 89% on its listing on 12th August’2010, and has been the

best IPO to list in the US since Athena health Inc’s IPO in 1997 which surged 97% on listing.

Justdial

Just Dial’s consolidated total income stood at Rs 189.91 Crores in FY11, representing a CAGR of

39.4 per cent. Its profits after tax increased from Rs 1.64 Crores in FY07 to Rs 28.62 Crores in

FY11. In FY 2011, the company addressed over 180 million search queries from millions of users

across platforms. For the year ended March, Just Dial reported a profit after tax of Rs 28.6

Crores, up from last year’s Rs 18.4 Crores. Mumbai’s Just Dial plans to go down the IPO path

and has filed documents with SEBI. It seeks to raise Rs 360 Crores through sale of fresh shares

and some more via sale of shares by private equity (PE) investors. PE companies such

as SAIF Partners (21.58 per cent), Sequoia (12.73 per cent) and Tiger Global (21.84 per cent)

own large stakes.

Yatra

Emboldened by the success of MakeMyTrip (MMYT) Ltd’s listing on Nasdaq, the US exchange,

Yatra.com, one of MMYT’s major competitors, may also go the public offer way. Industry

sources peg the IPO figure at $50-80 million (Rs 230-370 Crores). Yatra.com has a market share

of about 30 per cent, while about 48 per cent of the $1 billion (Rs 4,600 Crores) in online travel

reservations made in India last year were booked through MMYT.

Regulatory Advantage & legal frameworks

As per regulations, foreign companies cannot enter into retail business directly (they can engage in B2B

trading though) – and that’s precisely the reason why you won’t see Yahoo Shopping/Amazon running

their operation in India.

FDI up to 100% permitted for e-commerce activities subject to the condition that such companies would

divest 26% of their equity in favor of the Indian public in five years, if these companies are listed in other

parts of the world. Such companies would engage only in business to business (B2B) e-commerce and

not in retail trading

Appendix 1: Evolution of an ECommerce Startup / ECommerce Org Chart 1. Get ECommerce site up to take transactions (Typically 3-6 months since start)

a. Get website ready (either build from scratch or use a hosted shopping cart)

b. Setup payment gateway

c. Setup a shipping partner

d. Upload and manage initial list of products

e. Setup and manage initial supplier list for products to be drop shipped (or ship from own simple

warehouse)

Team needed: Business (customer service, supply chain, operations, legal, etc) + Engineering (1-2 folks should

suffice)

2. Get to 100 transactions / day & unit profitability (Typically 9 months to 1.5 years since start)

a. Optimize website for SEO, put an affiliate marketing program, pay for SEM, social media

b. Expand product list and supplier list

c. Setup small warehouse (if customization is required) and manage inventory costs

Team added: Digital marketing, Procurement manager, Supply Chain and Logistics Managers and Customer

Service, Increase engineering (User experience, Scalability experts, etc.)

3. Get to 500 transactions / day & scale (Typically 2-4 years from start)

a. Include brand marketing efforts including TV, print and billboard advertising

b. Expand into adjacent vertical products spaces, add new suppliers

c. Keep refining website to include up sell, cross sell and analytics efforts

Team added: Head of brand marketing, Category manager (Merchandise Manager) for each category, Catalog

manager (write product descriptions, take product photos, etc.)

4. Show gross profitability and scale beyond 1000 transactions

a. Manage inventory and costs and ensure optimization of logistics and warehousing

b. Recruit and manage team for growth

c. Look for non-linear sources of traffic to the website, possibly add corporate sales

Figure 3 Source http://www.pluggd.in/author/mukund/

Appendix 2: Fundamental Analysis of Global Ecommerce Players

Figure 4 Source: http://blog.kamadolli.com/

Appendix 3: Revenue Growth Projections 1. US Ecommerce Growth rates have been in the 20-30% range over the past decade

2. In India, Broadband Penetration

Growth(Source:

http://rtn.asia/347_indias-broadband-

growth-slows-65-december-quarter) >

20%, Plus Revenue Per User Growth >

10 % will support sustained Ecommerce

growth > 30%

3. Related technologies such as Mobile

penetration have grown faster

(although later)in India than in US

4. Globalization and Cultural convergence

will lead to higher consumption

aspirations

5. Adoption amongst Tier3 cities and

villages as well as amongst low income

groups suggests mass appeal

6. Recent technology Innovations have

reduced digital fraud to below retail

cash fraud rates

7. There is an immediate opportunity to

win customers buying offline after

looking for Information Online

8. We are looking at an opportunity to

create the next Airtel / Tata / Reliance

The total retail sales in India will grow

from US$ 395.96 billion in 2011 to US$

785.12 billion by 2015

http://www.ibef.org/industry/retail.aspx).

Currently 3% of retail transactions occur

online, which will grow to 7-9% by 2016.

%Age Transactions Online (2016) Ecommerce market (INR Crores)

5 157024

6 188429

7 219834

8 251238

9 282643

10 314048

11 345453

12 376858

Figure 5 Ecommerce Market Size Vs Online as a %age of total retail

Appendix 4: Current Revenue

Projections Sensitivity of Yearly Revenues (INR Crores)to

Conversion rates and Average Transaction

Size. These tables are drawn using Average

Visitors from Appendix 7.

Appendix 5: List of Ecommerce players by category 1. Gifts, cakes etc. Infibeam.com, Fernsnpetals.com, IndianGiftsPortal.com, Talash.com GlimGifts.com

2. Books Flipkart.com, Landmarkonthenet.com, A1books.co.in

3. Custom designed T-shirt, mug, calendar etc Myntra.com,Zoomin.com, Snapfish.in, Picsquare.com

4. ApparelsPantaloons, Shoppersstop.com, Inkfruit.com,UtsavSarees.comGlobusZovi.com

5. Sweets and bakery items Mithaimate.com

6. Artwork auction Saffronart.com

7. A-Z items for Babies Hushbabies.com, Firstcry.com, BalGopal.com, Kidloo.comBabyoye.com

8. Movie ticket bookingBookmyshow.comPVRCinemas.com

9. Online travel ticketing and hotel booking Irctc.co.in, Redbus.in, MakeMyTrip.com, Yatra.com,

TripAdvisor.in, ClearTrip.com, Travelguru.com,Expedia.co.in, Ezeego1.co.in, Ixigo.com, TravelMasti.com,

Hotels.com

10. Airlines portals Goindigo.in, Indian Airlines, Jetlite.com, Flykingfisher.com, Goair.in, Spicejet.com,

Jetairways

11. B2C ( Multiple products ) Ebay.in, IndiaTimes, Rediff Shopping, Bigbazar, Homeshop18.com,

Shop.zapak.com, Shop.in.com, Tradeus.in, Indiaplaza.in, Egully.com, 20north.comTimtara.com

YepmeShopping.comBigadda.com

12. Rent a movie BigFlix.com,Seventymm.com

13. FootwearYebhi.com,Metro ShoesBata ShoesBeStylish

14. Deal a day SnapDeal.com, Dealsandyou.com, Mydala.com, Koovs.com, Grabbon.com,

BindaasBargain.com, Taggle.com, SoSasta.com, Dealivore.com, Grako.in, Dealsonline4u.com

Bagittoday.com 99labels.com Fashionandyou.com Timesdeal.com Rediff-DealHoJaye Dealface.com

DealYantra.comBuzzintown DealsDealsNow (For Corporates)

15. Electronics, Gadgets, PhonesDell.co.in, Ezone, EDigiWorld, BitFang.comLetsbuy.com

LootSpot.comNext.co.in, infibeam.com

16. Jewellery Caratlane.com, Suratdiamond.com Ddamas.co.in

17. Lingerie Straps and Strings, Ngal Originals, Victoria’s Secret India

18. Sports Playgroundonline.com Esportsbuy.com

19. Health, Fitness, Beauty, Wellness Health Shoppe, Urbantouch

20. Perfumes Perfume2Order, Beautymart.in,PerfumesDirect

21. Groceries, Vegetables, Fruits AaramShop.com Mandifresh

Sensitivity 3% 4% 5% 6% 7%

300 13 17 22 26 30

400 17 23 29 35 40

500 22 29 36 43 50

600 26 35 43 52 60

700 30 40 50 60 71

Figure 6, Revenue projections for Books/Electronics/Music/Movies

Appendix 6: Vertical specific demographics

OTA & Hotel Booking

Figure 7 Daily Unique Visitors by Month

Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3 %Users by Age

Table 1 %Users by City

0 20 40 60

< 2

2 - 4.99

5 - 6.99

7 - 9.99

10 - 14.99

> 15

0 20 40 60

below 15

15 - 24

25 - 34

35 - 44

45 - 60

above 60

0.25 0.25 0.50 0.75 0.75 0.75 2.25 2.25 3.50 4.75 4.757.25

12.00 12.50

47.5

Each Web property

receives on an average

150,000 Unique Users /

Day (Growing > 100%

annually).

In a month these

properties reached

around 4% of the Indian

Population

Users spent about 8

minutes per visit, enough

time to research and buy.

Primary customers are

Young Graduate Males,

Middle Income Groups.

Long tail in terms of

lower Income groups is

also visible

Early adoption amongst

the Under 15 and 15-24

Age group who will lead

consumption in the

coming decade.

Metro’s and Tier one

cities account for roughly

half the traffic, with the

remainder distributed

across India. Showing the

long tail of users

Books & Electronics

Figure 8 Daily Unique Visitors by Month

Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3 %Users by Age

Table 2 %Users by City

0 20 40 60

< 2

2 - 4.99

5 - 6.99

7 - 9.99

10 - 14.99

> 15

0 20 40 60

below 15

15 - 24

25 - 34

35 - 44

45 - 60

above 60

0.5 0.5 0.5 0.5 0.5 0.8 1.0 1.3 1.3 1.3 1.3 1.3 1.8 2.55.0 6.5 7.5

10.0 10.0

46.3

Each Web property receives

on an average 40,000

Unique Users / Day

(Growing > 80% annually).

Amazon still gets 80,000

Unique visits indicating

opportunity for growth,

Homeshop18 and

Futurebazaar also get similar

number of visits

In a month these properties

reached around 1.5% of the

Indian Population.

Users spent 7 minutes per

visit, enough time to

research & transact.

Primary customers are

Young Graduate Males &

Females, Middle Income

Groups. Long tail in terms of

lower Income groups is also

visible

Early adoption amongst the

Under 15 and 15-24 Age

group who will lead

consumption in the coming

decade.

Long tail in city traffic

Typical Conversion rates are

4-6%. i.e. revenues of INR

36-52 Crores (Appendix 3)

Apparel

Figure 9 Daily Unique Visitors by Month

Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3 %Users by Age

Table 3 %Users by City

0 20 40

< 2

2 - 4.99

5 - 6.99

7 - 9.99

10 - 14.99

> 15

0 20 40 60

below 15

15 - 24

25 - 34

35 - 44

45 - 60

above 60

0.25 0.25 0.25 0.50 0.75 0.75 0.75 0.75 0.75 1.00 1.50 1.75 2.258.25 8.25 9.50 9.50

53.00

Each Web property receives

on an average 30,000

Unique Users / Day

(Growing > 220% annually).

Established offline Brands

such as Shoppers stop are

lagging the New entrants

In a month these properties

reached around 1.25% of

the Indian Population.

Users spent 9.2 minutes per

visit, this is higher than

travel, books and electronics

indicating a more engaging

experience

Contrary to perception

males (60%) outnumber

females (40%)

Primary customers are

Young Graduate Adults,

Middle - High Income

Groups. Long tail in terms of

lower Income groups is also

visible

Early adoption amongst the

15-24 Age group who will

lead consumption in the

coming decade.

Long tail in city traffic

Daily Deals

Figure 10 Daily Unique Visitors by Month (TTM)

Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3 %Users by Age

Table 4 %Users by City

0 20 40 60

< 2

2 - 4.99

5 - 6.99

7 - 9.99

10 - 14.99

> 15

0 20 40 60

below 15

15 - 24

25 - 34

35 - 44

45 - 60

above 60

1.00 1.00 1.00 2.00 2.00 5.00 6.00 6.00 8.00 8.00

68.00

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

Snapdeal is a clear winner

receiving on an average

425,000 Unique Users / Day

(Growing >3000% annually).

Remaining websites are far

behind at 30,000 UU’s/Day

In a month Snapdeal

reached around 13% of the

Indian Population.

Users spent 3.7 minutes per

visit, indicates casual

browsing, not enough time

for purchase

Primary customers are

Students/Young Graduate

Adults, Middle - High

Income Groups. Long tail in

terms of lower Income

groups is also visible

Early adoption amongst the

15-24 Age group who will

lead consumption in the

coming decade.

Long tail in city traffic

Appendix 7: Google AdWords CPC by Segment

Clearly, CPC are highest for Deals and Electronics, whereas Apparel has very low CPC’s