JANUARY 2021 EDITION
E-COMMERCE SECTOR ANALYSIS
IN THIS ISSUE Revenue Models Growth Drivers and Trends Recent M&A Activity Covid-19 Impact The Way Forward
JANUARY 2021
INTRODUCTION & REVENUE MODEL
Types of ECommerce Businesses
Electronic commerce or e-commerce is a business model that enables businesses and people on the internet to purchase and sell products. In all four of the following broad business segments, e-commerce operates; Business to Business Business to Consumer Consumer to Consumer Consumer to Business Snapshot of E-Commerce Industry: The Indian e-commerce sector has been on an upward growth trend and is predicted to overtake the US by 2034 to become the world's second largest e-commerce industry. By 2024, India's e-commerce market will cross US$99 billion from US$30 billion in 2019, rising at a CAGR of 27 percent, with food and fashion/apparel expected to be the main drivers of exponential expansion. The Indian e-commerce sector is ranked 9th in the world in cross-border development.
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Indian e-commerce is expected to grow from 4% of overall retail trade in food and grocery, clothing and consumer electronics in 2020 to 8% by 2025. Due to Covid-19 pandemic, people have shifted from traditional purchases to online shopping. According to the McKinsey survey, ~96 percent of customers have tried a new purchasing behaviour; ~60 percent of customers are expected to switch in the festive season to online shopping and continue shopping online beyond the COVID19 pandemic. In the e-commerce market, massive investments from global players, such as Facebook, which invests in Reliance Jio, are being registered. In Jio Networks, Google has announced its first investment worth US$ 4.5 billion. This deal was followed by Reliance Retail's acquisition of Future Group, extending the Ambani Group's footprint in the e-commerce space.
A significant part of the industry's growth was attributed to expanded usage of the internet and smartphones. The number of Internet connections in India increased considerably to ~760 million as of August 2020, powered by the 'Digital India' initiative. If the total Internet connections, approximately 61% of the connections were in urban areas, of which 97% were wireless. Regulation and regulatory mechanisms such as B2B E-commerce 100% FDI and B2C E-commerce 100 percent automatically FDI are projected to promote more development in the industry under the market model of B2C E-commerce. In compliance with the current FDI regulation, online companies cannot include goods offered by merchants that have a shareholding by foreign investment.
"E-Commerce isn't the cherry on the cake, it's the new cake" - Jean Paul Ago
JANUARY 2021
COMPETITIVE LANDSCAPE
Shares of segments in Ecommerce retail (By Value) (2020P)
"Competition stimulates demand in your industry" - M. Cobanli
JANUARY 2021
REVENUE MODELS
Various ECommerce Revenue Models
Ecommerce business models of all types are thriving. Sales from online stores are expected to increase 385% this decade. It’s easy to get caught up and excited in the latest ecommerce trends, but it is also important to know how these e-commerce businesses are generating revenue for themselves. Advertising Revenue Model: It represents an indirect way of revenue generation through a digital platform. The classic principle being followed for the businesses categorized as Advertising Revenue model is that advertisers are charged a commission to put their advertisements on online marketing platforms, especially platforms which see heavy traffic. The visitors of this platform see the advertisement and are redirected to the actual site, creating leads. The payments are made to the hosting platform based on a fixed commission or decided upon the traffic driven to the business. The income structure is based on the invoices raised against Cost Per Click (CPC) or Cost per Action (CPA). Affiliate marketing and search engine marketing are alternatives to the above-mentioned display marketing strategy. Google Ad words and Ad sense are options that allow you to place your ads through the Google Search engine allowing you to bring your business website to the top of the search results when searched with the related keywords. Subscription Revenue Model: In this model, e-commerce businesses charge their users or rather subscribers based on a certain interval of time to avail their services like Netflix and Amazon Prime. These offerings include, but are not limited to videos, TV shows, movies, music, magazines. Some platforms allow users to access their content or services for a limited period of time before charging them subscription, others let free users access a part of their offerings for free and the rest are paid. Sales Revenue Model: In a transaction fee revenue model the e-commerce business model charges a fee to a seller for every transaction made through them. They are the payment companies that provide payment gateway services to other e-commerce business platforms. Generally, profit is derived through enabling or executing transactions. The operator provides a platform for the marketplace through which a transaction is completed. Example of such a model is PayPal, it charges a transaction fee to the sellers of the product once the transaction is completed.
Affiliate Revenue Model: An Affiliate revenue model that deals with businesses that follow the principle of commission. Vendors and merchants partner up with notable e-commerce platforms to promote and sell their products giving them a percentage of profit as commission. The process basically works as a link that is hyperlinked to the affiliate and is archived on a host platform that gets regular traffic. Any user who clicks to the affiliate link is redirected to their website where the product or service is catalogued. The affiliate or the merchant thus pays an agreed commission to the host operator who’s carrying the link for every traffic driven. For each lead driven to your website, you need to pay a certain percentage to the e-commerce platform as commission. Some company’s charge a nominal fee for listing the vendor and the products. It is known as listing or insertion fees. Fees depend on various factors like value of the item, numbers of days of listing etc. Conclusion: Physical shopping is still an option which a large part of the population opts for, but in reality every shopper doesn’t belong to the offline or online market. Most shoppers shop in both the markets and businesses are constantly trying to find new ways to dominate both the online and offline marketplaces. This means more business models are yet to be known for the e-commerce industry.
"Write your principles in pen and your business model in pencil" - Josh Kopelman
JANUARY 2021
GROWTH DRIVERS
Availability of multiple payment methods is fuelling growth
Evolution of New Payment Solutions In Indian e-commerce purchases Cash on Delivery has become the most common way of payment. Even for e-commerce firms, cash purchases contribute to high operating costs. New digital payment systems are therefore emerging to overcome these problems. Furthermore, the move by the Indigenous government expanded banks to provide them with access to electronical payments through the 'Jan Dhan Yojana' program, which added more than 110 million Debit cards. In order to simplify the payment process in the e-commerce sector, the electronic wallets have been introduced and even the digital payment products of conventional banking. Partnerships of Logistics Space with Hyper-local Companies and India Post Customers are receiving the next-day shipping of goods. Owing to difficulties in terms of return orders, higher customer care requirements and the processing of vast volumes of deliveries, the sector has seen the rise of a range of third-party distribution service companies handling last-mile deliveries. There is a growing number of collaborations between e-commerce firms and third-party logistics service providers, primarily in two and three cities. Often leading e-commerce companies to provide their own distribution arms for improved customer service and better control of delivery. Gaining Momentum of Government Initiatives The Government of India has been instrumental in exploiting and welcoming emerging e-commerce channels to turn and coordinate existing offline markets such as agricultural goods. The Government has launched an e-commerce portal to connect farmers to the vegetable markets of different countries in order to sell agricultural commodities. In addition, flagship programs such as Start-up India, Digital India, Expertise India and the Innovation Fund are contributing to the development of the e-commerce market.
Automation Automation has made both B2B and B2C business models more simplified, effective, straightforward and less error-prone, creating better growth for brands. The B2B e-commerce market is rising at a 200 percent higher pace than the B2C ecommerce segment. Growing Demand E-commerce firms posted US$ 4.1 billion in revenue across channels in October 2020 because of the festive week (October 1521). 55% of the gross revenue was generated from Tier-II cities such as Asansol, Ludhiana, Dhanbad, and Rajkot. Convenience & Trust It took some time for e-commerce players to gain the trust of the consumer and shed the initial belief that products available at some of the largest online marketplaces were used products. This is because, for a long time, the Indian e-commerce space was dominated by e-bay which used to sell used products in India, operating in a marketplace environment. However, as prominent players entered the market backed by a solid supply chain and great marketing & communications, the quintessential Indian consumer realized the convenience of e-commerce and developed a trust with the portal.
"Chase the vision, not the money; the money will end up following you" - Tony Hsieh
JANUARY 2021
CURRENT TREND ANALYSIS
Graph mapping online penetration across different sectors
Online travel agencies MakeMyTrip, Yatra & ClearTrip are the big Indian online travel agencies (OTAs) · · · · ·
Growth in India’s tourism & travel industry is the second fastest worldwide as per recent trends It can be classified as the largest component of the Indian e‐Commerce sector with a market share of about 80% It enables India to be poised to feature amongst the top 10 civil aviation market in the world over the next decades The entry of low-cost carriers (LCC) in the country made air travel affordable for a large number of people The driver for online ticketing market is domestic air tickets, as we witness the entry of international players in this industry OTAs have taken a physical form, with the establishment of new Makemytrip retail outlet in Mumbai, to leverage their brand
From the chart given above, one can clearly see the first mover advantage that Makemytrip enjoyed for a year before other firms for a year into this segment. Despite being a market leader, its position is constantly under threat due to innovative marketing techniques & erratic client�base. Both Yatra & Cleartrip can be seen as having eaten in to the market share of MMT.
E- Retail There are mainly players in this segment but the significant players are Flipkart & Amazon Online retailers are moving to the marketplace (consignment) model from the inventory�holding model They are also developing inhouse logistical capabilities The warehousing decisions are being made difficult for these players owing to complex tax structures Over 60% of the transactions are done under COD method which has emerged as a preferred payment method by the customers Due to the cap of 51% FDI allowed in B2C sector, dilution or complete exit is prohibited, which proves to be a hindrance to foreign investors or buyers It has attracted investments of over $3bn due to the promising high growth nature of the business from PE Funds &VCs (domestic & international) Underpenetrated segments, such as groceries, PCE (plumber, carpenter & electrician) services are expected to grow
Classifieds There are many players in the said segment, the noteworthy ones being OLX, Naukri, Cardekho & Shaadi.com The online classifieds segment has overtaken the offline segment in 2013 Subscription revenues constitute the main source of revenues for the online classifieds segment Online recruitment is the largest category in the online classifieds segment, followed by online matrimonial with online recruitment players are increasing their focus on providing enhanced search functionalities and value�added services The evolution of the real estate classifieds segment is dependent on how well it piggybacks the growth in Indian real estate The auto classified markets are still in the nascent stage The primary target for the classified market is the urban population because of the availability of both buyers & sellers Even the leading newspapers like TOI, Business Standards have now come into the classified market to leverage their brand image and reader base Most of the contents are being disseminated in local vernacular languages to engage with the wider group of audience also localizing of the content is the route taken by many players for this purpose
What can be observed here is thatShaadi.com has had a steady search interest over the years due to regular advertising Carwale.com has steady but very low search due to potentially low advertising It is also evident that Naukri.com had a steady rate but a big spike in the 2009-11 period owing to huge unemployment during that time due to economic scenarios Olx.in has been steadily rising and becoming a preferred choice for advertisement of used goods Justdial.com has too been steadily capturing user interest as it aggressively began campaigning using Amitabh Bachchan as its brand ambassador and after it went public in 2012
"Wonder what your customer really wants? Ask. Don’t tell" - Lisa Stone
JANUARY 2021
MERGERS & ACQUISITIONS
Top 9 recent Mergers & Acquisitions in E- Commerce Industry
1. Flipkart Myntra deal (2014): Motivation for Flipkart– Myntra is a leader in the fashion category and has good rapport with a lot of lifestyle brands Motivation for Myntra– Myntra was stagnating in growth with major bottleneck being technological weaknesses. So, the deal helped Myntra grow using the advanced e- commerce setup and technology of Flipkart Current Status– Flipkart can focus on electronics sales segment, which it currently leads in, on its existing platform and target fashion related growth through the separate Myntra platform 2. Snapdeal-Unicommerce deal (2015): Motivation for Snapdeal– Snapdeal planned on forward supply chain integration by acquiring the e-commerce warehouse management company Unicommerce in 2015. To support this acquisition, Snapdeal had also acquired a 20% stake in Gojavas which is a logistics management company. These acquisitions were done out of the USD 1.1 billion funding raised from various investors including Softbank, the Japanese multinational group Motivation for Unicommerce– This deal with Snapdeal gave Unicommerce additional funding and cost reduction capabilities through backward integration Current Status– Snapdeal has sold the stake in Unicommerce to Infibeam in 2018 in an effort to reduce business diversification and focus on building core e-commerce capabilities. It was sold as a part of Snapdeal’s effort to build a leaner and more robust organisation 3. Snapdeal- Free Charge deal (2015): Motivation for Snapdeal– Snapdeal planned on forward supply chain integration by acquiring the digital payments platform Free Charge in 2015. This acquisition (also Unicommerce and Gojavas) was done out of the USD 1.1 billion funding raised from various investors including Softbank, the Japanese multinational group Motivation for Free Charge– Free Charge sold a stake in the company with an intention to expand operations, it was not done with the intention of raising funds or making an exit from the market Current Status– Snapdeal has sold the stake in Free Charge to Axis Bank at 90% discount in 2018 in an effort to reduce business diversification and focus on building core e-commerce capabilities. It was sold as a part of a major overhaul effort within Snapdeal to build a leaner and more robust organisation.
4. Flipkart- PhonePe deal (2016): Motivation for Flipkart– This acquisition was made at a time when UPI (Unified Payments Interface) was recently announced by the NPCI (National Payments Council of India) PhonePe was a start-up back then which was founded by former Flipkart executives only, which further motivated the deal where Flipkart could gain the early mover advantage in the UPI space. Motivation for Free Charge– Free Charge was a six-month old, 20-member start up when it got acquired in 2016. Also, the CXOs being ex-Flipkart executives further aided the success of the deal. PhonePe did not have a lot of downloads and active user base. This acquisition gave PhonePe a platform to integrate into and rapidly develop a user base through the Flipkart app. Current Status– After Walmart acquired a majority stake in Flipkart in 2018, it now wants to partially spin-off the PhonePe business to allow independent growth and funding (including an IPO by 2023) 5. Myntra-Jabong deal (2016): Motivation for Myntra– Flipkart, through the Myntra acquisition in 2014, had started strengthening its market position in the fashion industry. Myntra further consolidated its position in the fashion segment by acquiring Jabong. This made Myntra the exclusive e- tailer in India for many international brands such as Forever 21, Dorothy Perkins, Tom tailor etc Motivation for Jabong– Jabong had been struggling with maintaining its market position after Myntra started a major market penetration push post the Flipkart acquisition. Before the acquisition, the owner of Jabong, Global Fashion Goup (GFG) had pumped in additional capital to keep the business afloat but to no avail Current Status– In the merger process which continued till mid 2018, a total of 150 employees (around 8 to 9% of the 1,500 strong employee base at Jabong) were laid off. In February 2020, Flipkart decided to shut down the Jabong platform and merge the offerings together on the Myntra platform alone to consolidate the customer base and focus on maintaining limited platforms. This decision was further supported by the consistent drop in downloads and daily active user (DAU) base of Jabong
6. Walmart-Flipkart Deal (2018): Motivation for Walmart– The Indian e-commerce market is expected to grow to $200bn by 2026 and Walmart already had significant brick and mortar experience through their US chains. The Flipkart acquisition provided Walmart the opportunity to enter the Indian market and combine the significant e-commerce capabilities of Flipkart with the intensive experience of Walmart in brick and mortar supermarket stores, supply chain and logistics. Motivation for Flipkart– Flipkart had had a successful run in expanding their business till 2018 through multiple acquisitions and building significant capabilities in the fashion e-commerce space. However, Amazon, India’s second largest e-commerce player and the biggest competitor, was giving tough competition to Flipkart through a more diverse range of products and the unique Prime membership strategy which allowed free and fast delivery on eligible products along with a bunch of other benefits. Thus, Flipkart had to rely on the expertise of Walmart to take on Amazon directly. Further, in an interview with CNBC in 2019, Binny Bansal, one of the co-founders of Flipkart, said that the primary inclination of the founders was to help and finance entrepreneurs. Thus, they had already worked since 2017 to make Flipkart “founder-proof” which further aided business continuity and fetching a record valuation of $22 billion for Flipkart. Current Status– Touted as one of the biggest deals in the e-commerce space, Walmart had acquired 77% stake in Flipkart for $16 billion. Post acquisition, certain changes were made in the board composition when new directors from Walmart were introduced. However, the management team at Flipkart was continued under the existing CEO and his team. Flipkart is now taking on Amazon in the Indian market and now these two are the biggest players in the Indian e-commerce market. Further, Walmart has taken certain decisions to make Flipkart into a leaner, focussed organisation by shutting down the Jabong platform and leveraging Myntra and PhonePe, two of the most significant acquisitions done by Flipkart prior to the stake sale to Walmart.
7. Zomato-Uber Eats deal (2020): Motivation for Zomato– Prior to the Uber Eats acquisition, Swiggy had a higher market share in the online food delivery market in India. Zomato was struggling to break the significant dominance of Swiggy in South India. The combined entity would hold a market share of 50-55% hence, it was a highly lucrative deal for Zomato and it marked the start of consolidation in the food delivery space. Motivation for Uber Eats– Uber Eats had been struggling to further develop their business in India since Uber, the holding company, had its core services in the ride hailing business. Moreover, while its major competitors Zomato and Swiggy clocked around 2-2.5 million orders per day, Uber Eats was a distant third with around 2.5-3 lakh orders. Further, this deal provided Uber the opportunity to realign its strategies in India and focus on the ride hailing service, the core offering of Uber. Further, this being an all stock deal, it provided a 10% stake to Uber, the holding company, in Zomato which was much more lucrative than trying to run a failing, distant third business in the long run. Current Status– Currently, the Uber Eats platform has been shut down and all Uber Eats customers are routed to the Zomato platform. Zomato has not absorbed the workforce at Uber Eats, hence they will either be realigned to some other functions within Uber or laid off. 8. Flipkart-ABFRL deal (2020): Motivation for Flipkart– Flipkart has already been trying to consolidate its lead in the fashion e-commerce market through Myntra and subsequent acquisition of Jabong. Through this deal, Flipkart would acquire a minority stake of 7.8% in Aditya Birla Fashion and Retail Limited, the fashion segment of the Aditya Birla group which would further help them to improve their offerings in the fashion segment. The deal also provides a Right of first Refusal (ROFR) to Flipkart. Right of first refusal is the right of the acquirer (in this case, Flipkart) to match the bid for a majority stake acquisition and refuse the deal with the third party. Motivation for ABFRL– Being a minority stake sell, the promoter group would still retain a majority holding of 55.13% in ABFRL. However, this deal would provide ABFRL with additional funds to improve their balance position and a strategic partnership with Flipkart to further develop business synergy in the fashion space. Current Status– This was the second biggest acquisition in 2020 in the e-commerce space after the Reliance-Future Group deal. This deal was approved by the Competition Commission of India (CCI) on 20th January 2021. 9. Reliance-Future Group deal: Motivation for Reliance– Reliance has been eyeing the retail space in India through the launch of JioMart. The strong infrastructure provided by the Jio network across India and the expertise of the Reliance group with the Indian market could be leveraged through the Future Retail acquisition. This deal would result in the big retail push for Reliance. Motivation for Future Group– The Future Group was primarily reliant on the Big Bazaar stores chain for the growth in the Retail division. However, the Covid-19 lockdown adversely affected the revenues and profitability of Future Retail. High leverage combined with dropping market share prompted the sale of Future Retail. Current Status– The Singapore International Arbitration Centre (SIAC) had granted a stay on the Reliance-Future group deal on the plea of Amazon which claimed that Future Group had violated the agreement made between Amazon and a Future group company which also granted a right of First Refusal (ROFR) to Amazon on Future Retail. However, this deal has now been approved by SEBI and a no objection certificate has been issued. Due to this approval, Amazon has filed an appeal on 26th January 2021 with the Delhi High Court to detain the Future Group founder, Mr. Kishore Biyani, his family members and seize their personal assets for the violation of the SIAC arbitration order. This being a developing story, the status till 26th January 2021 has been provided in this analysis.
"We get talent and scale from Mergers and Acquisitions" - Angela Braly
JANUARY 2021
THE PANDEMIC IMPACT
E-Commerce fulfilling shopping needs during the pandemic times
COVID-19 pandemic has been exceptionally different from what we have ever witnessed. As lives across the world were forced into complete shutdown, it’s safe to say that e-commerce was the saving grace, helping millions stay home and get what they wanted to be delivered at their doorstep. The pandemic has disrupted how people buy services and products and how their perception of e-commerce. The lockdown rules across India and the growing hesitation among consumers to step outside and shop for essential goods have pushed the nation towards e-commerce. Consumers have switched from supermarkets, shops, and shopping malls to online platforms for the purchase of products, ranging from branded goods to essential commodities. The initial days of complete lockdown stretched the industry to its limits, as the entire sector was at a standstill, and the movement of goods across state borders was restricted. Almost all the major players like Flipkart, Amazon, and even food delivering apps like Zomato pivoted to delivering essential goods to weather the storm. Flipkart and Amazon were able to recover only about 20% of their sales a week after May 4 order that allowed business in green and orange zones. As the people started observing time in self-isolation, they got ample time to spend in their way to be naturally attracted towards the skincare and beauty products to stay fit and active. As a result, these products were on the rise, which directly helped the E-commerce sector flourish compared to other businesses.
When the lockdown norms were relaxed, the industry started picking up steam and witnessed order-volume growth of 17% as of June 2020. The buying patterns of consumers and their preferences have also changed significantly with categories like pharma & health and agriculture & FMCG seeing a surge and exponential growth, with a rise in first-time online Shoppers. A Bain & Company-PRICE survey of about 3000 households across income groups and geographies, conducted between April and June, revealed that about 13% of respondents buying online for the first time, while about 40% of respondents reported to be buying more online. Driven by lower data prices and investments to improve customer experience, the Indian e-commerce market is primed to reach nearly 300 to 350 million shoppers over the next five years. Though the transaction volumes on e-commerce platforms such as Flipkart, Amazon, and Snapdeal returned to the pre-Covid levels, high-value transactions would take a bit of time to reach the past highs. These players are burning a lot of cash to retain customers who were spending money mainly on low-value transactions as Covid-19 severely impacted their purchasing power. However, with its impact on consumer behaviour, the pandemic is expected to help up-lift the Indian e-commerce market almost threefold to around $85 billion by 2024. The market opportunities for ecommerce are expected to touch $200 billion by 2028 from $30 billion in 2018.
"Any deep crisis is an opportunity to make your life extraordinary in some way" - Martha Beck
JANUARY 2021
TECH OF E- COMMERCE
E-Commerce fulfilling shopping needs during the pandemic times
Growing with a CAGR of 11.34%, the global e-commerce market is expected to reach US $6.07 trillion by the end of 2024, and these numbers are only predicted to go in the next decade. So, let's delve a bit deeper into how and what technology is helping in enhancing customer experience to help in this rise. Augmented Reality: Augmented Reality (A.R.) has become the biggest game-changer when it comes to online shopping, substantially closing the gap of ambiguity. It helps online shoppers visualize the products that they find interesting, whether it's a clothing item or some gadget. Shoppers can now see how they would look wearing a particular item or how nice their house might look with a specific paint colour, all before hitting the "Buy" button. This helps online customers to overcome the hurdle of not being able to feel and see the product first hand, bringing comparison shopping to an entirely new level. Voice search: It is forecasted that 75% of U.S. households will own a smart speaker by 2025. People are increasingly relying on voice assistants like Amazon Alexa, Google Assistant, or Apple's Siri to do everything from checking the weather to buy products online. It saves time on browsing, entering your payment details and shipping information, and the device remembers past purchases, making it very easy to repeat the order. With the technology being integrated into almost all the smart devices, voice search is undoubtedly the future. On-site Personalization: As mentioned above, the influence of A.I. is increasing in e-commerce and with numerous applications. One way AI is being used is to gather information about visitors and then make adjustments to the site according to their needs and wants. Humans highly value products and experiences that have been tailored to them. This is something that was feared to be lost in the switch to online, self-service shopping. Providing personalized experiences on-site or in marketing efforts has been shown to have a substantial effect on revenue, with one study finding that it had a 25% impact on revenue. Studies also show personalization efforts can reduce bounce rates by up to 45%.
A.I. helps to improve customer experience: Another aspect of the brick-and-mortar shopping system that has historically been lost in online shopping is the helpful in-store staff who used to offer product recommendations and personalized guidance based on the shopper's requests or needs. The prevalence of Artificial Intelligence (A.I.) and machine learning is going to increase as sellers target new methods to enhance personalization and improve customer service, which is why all online businesses are investing in this development. A.I. also helps companies learn about their customers and provide them with the personalized experiences they demand. Companies are connecting customer data with real-time insights to improve the shopping experience by optimizing pricing, discounting, and demand forecasting. Leading brands also use A.I. to make smarter choices for their digital advertisement spending. Chatbots: At the centre of personalization and A.I. capabilities is the friendly chatbot, which can play the role of the brick-and-mortar salesperson and greeter. They allow stores to communicate with thousands of customers simultaneously while giving them the feel of personal attention and thoughtful suggestions based on their responses. A growing number of shoppers prefer to converse with these chatbots and other digital self-service tools. Studies have found that around 60% of customers report preferring having websites, chatbots, or apps answer their simple queries. One of the key reasons for this is because of the faster response time that these provide.
"There is no reason and no way that a human mind can keep up with an artificial intelligence machine by 2035" - Gray Scott
JANUARY 2021
THE WAY FORWARD
Marketplace Dominance by GMV
The e-commerce sector in India has directly impacted micro, small and medium-sized enterprises (MSMEs) by providing finance, technology, and training resources. It has a beneficial cascading effect on other industries as well. The Indian e-commerce industry has been on an upward growth path and is predicted to exceed the US by 2034, becoming the world's second-largest e-commerce market. Technology-enabled technologies such as digital payments, hyper-local logistics, customer engagement powered by analytics, and digital ads are likely to support market growth. Growth in the e-commerce sector would also boost jobs, increase export sales, improve ex-cheque tax collection, and provide consumers with better goods and services in the long term. By 2022, smartphone use growth is projected to grow by 84% to hit 859 million. The e-retail market is expected to continue its strong growth, with over 35% CAGR hitting Rs. 1.8 trillion (US$ 25.75 billion) in FY20. The Indian e-retail industry is expected to exceed ~300-350 million shoppers over the next five years, propelling the Gross Merchandise Value (GMV) online to US$ 100-120 billion by 2025. Consumer Behaviour Patterns: Marketplace dominate Brands: Brand development has never been more critical or more challenging in a world where marketplaces dominate, and the quest is often unbranded. Half of all global e-commerce revenues are on markets, and the sheer scale forces brands to participate. About $2 trillion is spent on the top 100 markets globally, and the world's largest retailers are joining the ring. China is home to the largest markets worldwide, including Taobao, Tmall, and JD.com, as measured by gross merchandise volume (GMV). Although markets are brand discovery gateways, customers don't come to markets to look for products. Consumers browse by types, advantages, and ratings with the buying journey gradually starting on Amazon. Search has become the latest brand, according to analysts. Offering Livestream Shopping events: Live Stream is more social and interactive as a shopping medium, which leads to a deeper understanding by the user of product attributes. Also, there is a related confidence factor, since live stream allows shoppers to get closer to products and hear someone explain what a product sounds, looks, or smells like. This makes it possible for shoppers to experience the product through the person on the screen. It is also a fun and entertaining type of shopping where, when showing the product, consumers can see people talking about their experience. This instantly stimulates interest and trust in the item to be purchased.
JANUARY 2021
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