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					e-Commerce Market – India
November 2011
Executive Summary
              e-Commerce market in India is witnessing an exponential growth rate over the years and with
              the emergence of better marketing techniques, this market is expected to grow by leaps and
              bounds
              The e-Commerce market in 20-- was valued at INR a tr and is expected to grow at a CAGR of x%
  Market      to reach INR b tr by 20--
              The market space can be segregated into multiple segments such as online retail, online travel,
              online financial services, online digital and online other services
              Having a combined market share of more than y%, online travel and retail players mainly
              dominate the market space
              Drivers:


                                      PLE
                   Increased Spending Power
                   Extensive Usage of Plastic Money
                                                                         Challenges:
                                                                              Secure Payment Concern
  Drivers &
 Challenges        Users


                                   SAM
                   Increasing Internet Penetration and PC

                   Ease of Transaction
                   Government Initiative
                                                                              Lack of Confidence




              Purchase Decisions are Brand Oriented
  Trends      Social Media Involvement
              Increasing BPO Tie Ups

                                                  Major e-Commerce Vendors
Competition    Player 1                Player 2                    Player 3                 Player 4
               Player 5                Player 6                    Player 7                 Player 8


                                    E-COMMERCE MARKET INDIA 2011.PPT                                            2
•Introduction
•Market Overview
•e-Commerce Market Segments
•e-Commerce Ecosystem
•Types of e-Commerce
•Technology used in e-Commerce
•Drivers and Challenges
•Demand and Supply Perspective
•Trends
•PE Investments
•Major Players
•Strategic Recommendation

          E-COMMERCE MARKET INDIA 2011.PPT   3
An example of e-Commerce system work model

     Regional Logistics Support                Regional Warehouse                      Logistics Support




                                            PLE
                           Internet Enabled Devices




     Consumers


                                         SAM              e-Commerce
                                                             Space
                                                                                                           Warehouse




                                                                                                     e-Commerce
                                                                                                        Vendor




                                                          Financial Service Provider

                                           E-COMMERCE MARKET INDIA 2011.PPT                                            4
An illustration of the transaction flow within an
e-Commerce system

Consumer Bank Account


                                               PLE                                                             Vendor Bank Account




                                            SAM
                    Transaction via credit/debit cards


                                                                                            Transaction

                   Authorization                           Third Party
                                                             Vendor




                        Notification                                                            Notification




      Consumer                                                  Product                                              Vendor

                               Product Delivery                                      Logistics Support



                                                  E-COMMERCE MARKET INDIA 2011.PPT                                                   5
 Presence of extremely affordable and desirable
 e-Commerce options is driving the market in India
 e-Commerce Market – India Overview
 • Indian e-Commerce market is currently undergoing through a phase where it is experiencing a strong growth rate
        Factors such as increased disposable income coupled with a surge in internet penetration is primarily driving growth in the market
 • Market size of e-Commerce is estimated to grow at a dynamic growth rate of x% to reach INR a tr in 20-- from INR b tr
   in 20--
 • The market can be broadly classified into several segments which include ‘Online Travel’, ‘Financial Services’, ‘Digital
   Downloads’, ‘e-Retailing’ and ‘ Other Services ‘



                                                              LE
 • Players in the market are following several strategic moves to lure and attract customers, some of which are enlisted
   as below:


                                                             P
        Easy availability of EMI schemes and lucrative offers on e-Commerce, provided by players in the market happen to be a major source of
        attraction for customers



                                                            M
        Often customers are offered a scheme of earning loyalty points which can be redeemed to claim discounts on commodities or services
        availed online



                                                          SA
 • Increasing tendency to save time and energy, especially amongst the working population will further intensify the e-
   Commerce market by a large extent
 e-Commerce Market Growth - India                                          e-Commerce Market Share (2010)
  INR tr
  c
                                                      f                                                            Segment 1
  b                            xyz
                                             e                                                                     Segment 2
                                     d                                                                             Segment 3
  a               b        c
            a                                                                                                      Segment 4
  0                                                                                                                Segment 5
        2010    2011e   2012e    2013e    2014e    2015e
Source: x

                                                          E-COMMERCE MARKET INDIA 2011.PPT                                                   6
 e-Commerce Segments (x/x)

 e-Commerce – Segment 1
 • Online travel segment enjoys a lions share of a% of the overall e-Commerce market in India and is flourishing at an
   unprecedented growth rate


                                                            E
        Market size of Online travel registered a growth rate of b% in 20-- to reach a whooping market size of INR abc bn as compared to INR



                                                           L
        def bn in 20--
 • Aspects such as the proliferation of internet, increased medical tourism, higher disposable income, availability of low
   cost carriers mainly catalyze the market
 • Major trends identified are listed below:

                                                         MP
                                                        A
        Railway booking is the most popular amongst all categories



                                                       S
        Religious and pilgrimage traveling is growing exponentially
        Frequent use of search tools for gathering ticket availability and price related information
 • Major three sub segments of the online travel industry has been illustrated below:



                                                                        xyz



              Subsegment 1                                        Subsegment 2                                    Subsegment 3


                    xxx                                                  yyy                                             zzz



Source: x

                                                          E-COMMERCE MARKET INDIA 2011.PPT                                                     7
 An example of e-Commerce ecosystem

  Ecosystem       Internet          Application                                     e-Commerce
    Layers
                                                                   Intermediaries
               Infrastructure      Infrastructure                                    Companies




                                   PLE
 Description         aaa



                                SAM      bbb                            ccc             ddd




   Company
                     eee                  fff                           ggg             hhh
     Type




 Examples of
                    www                   xxx                           yyy             zzz
 Companies


Source: x

                                E-COMMERCE MARKET INDIA 2011.PPT                                 8
 e-Commerce in India has diversified immensely wherein
 various methods of transaction has evolved
 •Currently, there are several types of e-Commerce methods prevailing which has witnessed tremendous
  acceptance amongst customers and sellers
 •A list of e-Commerce types and their relevant vendors are mentioned below:


                                                 E-Commerce




                                            E
            B2B                                      B2C                                   B2E




                                          PL
                                         M
 • xxx                                   • xxx                                     • xxx




                           C2B         SA                                    C2C



                   • xxx                                             • xxx




Source: x

                                        E-COMMERCE MARKET INDIA 2011.PPT                               9
 e-Commerce website development is carried out in phases
 so as to ensure proper and efficient functioning

                                     LE
 e-Commerce – Website Development Phases

                                    P
      Developing an e-Commerce website is a step by step approach, consisting of various phases, so as to

                                   M
                          ensure proper and efficient transaction over the internet


                                 SA
                       •Aaa                                                     • Bbb
            Research   •Sss                                       Development   • Ccc
                       •Ttt                                                     • Yyy




                       • Ddd                                         Website    • Ggg
            Planning   • Eee                                                    • Hhh
                       • Zzz                                         Launch     • Lll




                       • Mmm
             Design    • Nnn
                       • Ooo



Source: x

                                           E-COMMERCE MARKET INDIA 2011.PPT                                 10
Drivers & Challenges – Summary




  Drivers

  Increased Spending Power
                                                                     Challenges

  Extensive Usage of Plastic Money                                   Secure Payment Concern

  Increasing Internet Penetration and PC
                                                                     Lack of Confidence
  Users

  Ease of Transaction

  Government Initiative




                                           E-COMMERCE MARKET INDIA 2011.PPT                   11
 A comparison between the supply and demand side of e-
 Commerce system

            e-Commerce Vendors
                                             PLE                                      e-Commerce Users
                (Supply Side)


                                          SAM                                           (Demand Side)




                                                                                     Consumer Objectives
                                                 e-Commerce                  • Round the clock availability of products
                Perception
                                                    Space                      / services
 • Generate higher revenues
                                                                             • Hassle free product / services
 • Utilize existing resources
                                                                               comparison
 • Offer enhanced customer satisfaction
                                                                             • Reduced time requirement
 • Maintain healthy brand image
                                                                             • Nullification of Fuel and transportation
 • Provide full fledged virtual store
                                                                               expenses
   facilities to consumers
                                                                             • Benefits from loyalty programs offered
                  Requirements
                                                                               by vendors
 • xxx
                                                                                            Requirements
                                                                             • yyy



Source: x

                                          E-COMMERCE MARKET INDIA 2011.PPT                                           12
 Online purchase decisions are mostly brand oriented and is
                                                SAMPLE
 mainly influenced according to the area of living
 • Indian e-Commerce market is witnessing some phenomenal                                      Top 10 Cities involved in e-Commerce
   trends, which reflects the shopping pattern of consumers
 • These trends can listed as:                                                  Rank               Name              Rank              Name
     • States including Maharashtra, Delhi, Tamil Nadu, Karnataka
       and Andhra Pradesh happen to be most acquainted with e-                    1                City 1              6               City 6
       Commerce
     • Metros, tier II and III cities and rural areas accounts for x%,            2                City 2              7               City 7
       y% and z% of the overall market
     • Purchase patterns are purely brand driven                                  3                City 3              8               City 8
     • Jewellery & Accessory segment witnessed a continual
       increase in the number of women shoppers                                   4                City 4              9               City 9
     • Majority of products purchased belonged to the electronic
       goods while lifestyle products accounted for a%
                                                                                  5                City 5             10              City 10


                        AAA & BBB – Products                                            Brand Preferences – Across Categories
                AAA                                   BBB
                                          Solitaire
  Cell Phones      Blu -ray DVDs          Pendants          Lamp work             a                  b                 c                d
                                                              Crystal
    Stamps          Men’s shoes        Wrist Watches          Items
                                      Commonwealth                                e                  f                g                 h
    Watches           Netbooks           Stamps             PC Games
    Natural
   Diamonds       Digital Cameras      Medical Items          DVDs                                            H happens to be the only Indian
                                                                                  h                         brand to find substantial popularity
                       Laptop             Sarees &           Mineral                                              in e-Commerce market
  Sunglasses          Batteries           Apparels          Specimens
Source: x

                                                            E-COMMERCE MARKET INDIA 2011.PPT                                                       13
 PE investments in the e-Commerce market is witnessing a
 major growth over the past years
                             Overview                                               PE Investments – Online Ventures
  • Owing to the lucrative aspects in the e-Commerce
    market in India, it is attracting major domestic and                       INR bn



                                                     LE
    international PE funds                                                     c
        The market received a total of xxx investments in FY 11 as                                         xyz        c


                                                    P
        compared to yyy in FY 10
                                                                               b
  • PE investments made in the recent years has facilitated
                                                                                                 a

                                                   M
    modernization and betterment of services by a large                        a
    extent


                                                  A
  • Primarily, only the online retail players benefited from
    the investments

                                                 S
                                                                               0



                                 Recent investments in the Indian e-Commerce market (2009 -2010)
                                                                                                20--                20-- e



              Investor                Amount (INR bn)           No. of Deals                    Some Key Targeted Companies
 Investor 1                                   xxx                    y          Abc, def, ghi

 Investor 2                                   xxx                    y          Ijk, klm, npo

 Investor 3                                   xxx                    y          Qrs, tuv, wxy

 Investor 4                                   xxx                    y          Abc, def

 Investor 5                                   xxx                    y          Ghi, jkl

 Investor 6                                   xxx                    y          Abc, def
Source: x

                                                        E-COMMERCE MARKET INDIA 2011.PPT                                      14
 Major e-Commerce Players (1/8)
                                  SAMPLE                Online Retail Players
      Company Name                    Company Snapshot                                           Business Description
            Player 1   Headquarter:                 x                           • Possess the license for online portal abcxyz
                                                                                     Offers foot wears, apparel, bags and accessories, jewellery,
                       Parent Company:              x                                sunglasses, winter wears and sports apparels
                                                                                • Caters to the need of individuals as well as retailers
                       Industry Classification:     x
                                                                                     Currently, serves to about 3000 retailers across India
                       Website:                     x                           • In July, the company has received a fund worth INR
                                                                                  xyz mn, from abc and def in its second round of
                       Phone:                       x                             funding
                                                                                     The company had earlier announced in Dec 2010, to have
                       Key Person:                  x                                received an investment of INR asd mn, from xxx


            Player 2   Headquarter:                 x                           • Primarily operates as an online e-commerce portal
                                                                                  wherein it offers lucrative deals for individuals,
                       Parent Company:              x                             specific to an individual’s location of interest
                                                                                • Its areas of operation comprise of Bangalore,
                       Industry Classification:     x                             Chennai, Delhi, Hyderabad, Kolkata, Mumbai and
                                                                                  Pune
                       Website:                     x                           • Till Jun 2010, the company was known as abc
                                                                                • Currently, the company is anticipated to be valued at
                       Phone:                       x
                                                                                  INR xxx mn and is expected to receive investments
                       Key Person:                  x                             from international investors
                                                                                     More than a% of the share in the company is withheld by
                                                                                     the European firm ABC, while the remaining shares are
                                                                                     segregated amongst xyz, yyy and zzz



Source: x

                                                  E-COMMERCE MARKET INDIA 2011.PPT                                                             15
Strategic Recommendations

                                  xyz




   AAA
             • aaa




                        PLE
   BBB       • bbb
                     SAM
   CCC       • ccc




                     E-COMMERCE MARKET INDIA 2011.PPT   16
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                                                                  E-COMMERCE MARKET INDIA 2011.PPT                                                                       17