e Commerce Market India e‐Commerce Market – India April 2013
Executive Summary Electronic commerce (e‐Commerce) market in India has registered a growth rate of over xx% in the year 20‐‐ from the year 20‐‐
Market
ee‐Commerce Commerce market size was pegged at INR yy tn in 20 market size was pegged at INR yy tn in 20‐‐ and is projected to attain a CAGR of and is projected to attain a CAGR of about yy% to reach INR zz tn by 20‐‐ Online travel and retail segment continued to contribute the most in the market size for the year 2012, followed by online financial services, ‘other services’ and digital downloads
Market Opportunity
The e‐Commerce market is brimming with opportunities for vendors, which when tapped The e Commerce market is brimming with opportunities for vendors which when tapped effectively, will provide vendors with a scope to build a sustainable future Some of the major opportunities in the market include the following: Social Network Domain Tier II & III Cities Tier II & III Cities Mobile Platforms Some of the prominent trends identified in the market include the following:
Trends Trends
Changes in Business Models g Refreshed Strategies Major e‐Commerce Vendors
Competition p
Flipkart Online Services Flipkart Online Services
Thomas Cook India Thomas Cook India
Amazon
eBay India eBay India
Times Business Solutions
Infoedge India
Monster Worldwide
Expedia India
E‐COMMERCE MARKET IN INDIA 2013.PPT
2
•Macro Economic Indicators •Introduction •Market Overview •e‐Commerce Technology •Market Boosters M k tB t •Issues Hindering Profitability of Players •Trends •Trends •Competitive Landscape •Consumer Insights •Consumer Insights •Market Opportunity Strategic Recommendations Recommendations •Strategic •Appendix E‐COMMERCE MARKET IN INDIA 2013.PPT
3
An example of e‐Commerce system work model Regional Logistics Support
Regional Warehouse
Logistics Support
Internet Enabled Devices
Warehouse
Consumers e‐Commerce Space
e‐Commerce Vendor
Financial Service Provider E‐COMMERCE MARKET IN INDIA 2013.PPT
4
e‐Commerce in India is fast evolving and is expected to mature further in the ensuing years e‐Commerce Market – India Overview • Registering a y‐o‐y (Year‐on‐Year) growth of over xx% in the year 2012, e‐Commerce market is set course for a bright future in India • Currently, the market is dominated by the online travel and retail segments followed by financial services, digital downloads, amongst others • Factors such as a huge presence of internet users coupled with a continual increase in purchasing power of the Indian population is mainly boosting the market population is mainly boosting the market
e‐Commerce Market Split (20‐‐) – India
e‐Commerce Market Size & Growth – India INR tn a b
xxx
Segment 1
c
Segment 2 Segment 3
d
Segment 4 Segment 5
0 20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐ E‐COMMERCE MARKET IN INDIA 2013.PPT
5
SAMPLE
e‐Commerce Market India (x/x) – Online xxx Overview Online xxx – Snapshot
Online xxx – Benefits for Players
• Commanding, a market share of about , the online xxx segment drives the e Commerce market online xxx segment drives the e‐Commerce market • Mainly comprises of abc, def & ghi • xxx currently happen to be the most visited online xxx website
• xxx
The website manages to book an average of xxx per month th
Online xxx – Market Size & Growth (2012) M k Si Market Size
Major Online xxx Websites – (2012) W b it Website
Y YG Y‐o‐Y Growth th
R h % 3 months Reach % ‐ 3 th
Website A
0.0181%
Website AB
0.0357%
Website ABC Website ABC
0.0458%
Website ABCD
0.0550%
Website ABCDE
0.0627%
Website ABCDEF
0.1240%
Website ABCDEFG
0.1915%
E‐COMMERCE MARKET IN INDIA 2013.PPT
6
e‐Commerce Market India (x/x) – Online xxx Overview – India Statistics (x/x)
SAMPLE Online xxx Demand – India
Demand – North India
Demand – d East India d
Demand – West India
Demand – d Central India l di
Demand – South India
E‐COMMERCE MARKET IN INDIA 2013.PPT
7
Growth in individual disposable incomes is boosting the e‐Commerce market significantly
SAMPLE
Increased Spending Power
Impact
• Owing to a steady rise in the country’s GDP, the disposable income amongst the Indian population is also showing signs of tremendous improvement A greater proportion of the overall Indian population now have considerably higher spending power as a result of which e‐Commerce is gaining mass momentum
• Entry of new players in the market result in a stiff competition and consequently vendors resort to price cuts which in turn further strengthens the purchase power of the Indian population
Aggregate Annual Disposable Income
Total No. of Household (mn) mn Per household annual income (INR ‘000)
a
INR tn a
b c
Globals
>1000
b
d
Strivers
500‐1000
c
Seekers
200‐500
Aspirers
90‐200
e f
Deprived <90
0 2005
2015e
d Core target consumer groups
e 0 2005
2025e
E‐COMMERCE MARKET IN INDIA 2013.PPT
2015e
2025e 8
…will open doors for e‐Commerce vendors to tap the lurking potential in the nation
SAMPLE
Increasing Internet Penetration and PC users (2/2) Number of Broadband Subscribers – India mn a b
xxx
c d 0 2010
2011
2012
Internet Users Growth – BRIC Nations
Sl. No.
mn xxx
a b c d
xxx
xxx
xxx
0 Brazil
Russia xxx
India xxx
2013e
China
Country
1
China h
2
USA
3
India
4
Russia
5
Indonesia
6
Mexico
7
Turkey
8
China
2014e Internet User Base 2011 (mn)
2015e Y‐o‐Y Growth
Population Penetration
World Average E‐COMMERCE MARKET IN INDIA 2013.PPT
9
Expenses incurred in online advertising and customer acquisition is on the higher side
SAMPLE
Cost per click
Average cost per click refers to the expenses f t th incurred by e‐ Commerce vendors in order to generate one click from the consumer
Minimum desired no. of clicks
• Refers to the average click to purchase li k t h conversion ration • On an average 1 out of every 100 clicks gets converted to purchases in India purchases in India
Amount shelled out
It refers to the amount invested by e‐ db Commerce vendors in order to facilitate at least one successful transaction
Impact
This amount severely This amount severely damages the profit margins, especially when brand loyalty amongst customers is almost zero in the market
xxx
• xxx
E‐COMMERCE MARKET IN INDIA 2013.PPT
10
COD has its own set of pros and cons, however of late it has started taking a heavy toll on the profitability
SAMPLE
Losses Incurred for COD
Impact
• The concept of COD was an immediate success in gaining customer confidence, however it levied its own set of hurdles on e‐Commerce vendors • The biggest risk factor associated with COD is the chances of product return, which in turn alleviates the overall expenses beared by vendors • Consequently, these additional costs add up to the overall expenses of the vendors thereby bringing down the profit margins by manifolds
Transaction Split – e‐Commerce India (2012)
COD Expenses – e‐Commerce Vendor India xxx xxx
e‐Commerce Vendor
45%
COD Charges
Customer
55%
yyy
xxx
These costs add up to a vendor’s expenses for a single product delivered via COD mode
E‐COMMERCE MARKET IN INDIA 2013.PPT
Product Return
11
SAMPLE
An example of e‐Commerce ecosystem Ecosystem Layers
Internet Infrastructure
Application Infrastructure
Description
Comprises of companies offering basic IT infrastructure and equipment required for equipment required for going online in the World Wide Web
Comprises of vendors which produce softwares intended to facilitate online transactions and other web services
Intermediary companies provide a proper and organized platform for e‐ Commerce so as to Commerce, so as to facilitate online transactions
Companies which act as the interface for online sellers as well as prospective buyers fall under this category
Company Type
Networking, Hardware ki d and Software Manufacturers, IT peripheral vendors, Internet Service Providers
Web based commerce bb d app, databases, search engine software, online consultancy and multimedia application developers
Industry specific d ifi companies such as online travel players, financial service providers, web based ad developers and content provders content provders
Online e‐Tailers, web based media and entertainment companies, online ticketing companies
Examples of Companies
xxx
xxx
xxx
xxx
Intermediaries
E‐COMMERCE MARKET IN INDIA 2013.PPT
e‐Commerce Companies
12
SAMPLE
Porter’s Five Forces Analysis
Impact xxx Threat of New Entrants • xxx
Impact xxx xxx
Bargaining Power of Suppliers • xxx
Impact xxx
Impact xxx
Bargaining Power of Buyers • xxx
Competitive Rivalry • xxx
Impact xxx Threat of Substitutes • xxx
E‐COMMERCE MARKET IN INDIA 2013.PPT
13
SAMPLE
Major Public Companies ‐ Summary Net Profit/Loss 3,500
Size of the Bubble represents Market Capitalization in INR mn 3,000 2,500 2,000 00 1,500 1,000
38,535.4
500
10,604.3
0
6,530,703.4 32,747.4
‐500 ‐1,000 ‐4,000
‐2,000
0
2,000
4,000
6,000
8,000
10,000 12,000
14,000
16,000
18,000
20,000
22,000
24,000
Total income Player 1
Player 2
Player 3
E‐COMMERCE MARKET IN INDIA 2013.PPT
Player 4
14
SAMPLE
Public: Foreign Company – Company ABC (x/x) Company Information
Offices and Centres – India
Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange
Hyderabad
Head Office
Products and Services Products and Services Category
Products/Services
Key People N Name
E‐COMMERCE MARKET IN INDIA 2013.PPT
D i ti Designation
15
SAMPLE
Public: Foreign Company – Company ABC (x/x) Financial Snapshot i i lS h Total Income
INR bn
K Key Ratios i
Net Profit/Loss
INR bn
a
60
b
40
c
20
d
0
0
‐20
2009
2010
2011
2012
Financial Summary • The company reported total income of INR xxx bn in FY 2012, as compared to INR xxx bn in FY 2011 to INR xxx bn in FY 2011 • The company earned an operating margin of xxx% in FY 2012, a decrease of xxx percentage points over FY 2011 • The company reported debt to equity ratio of xxx in FY 2012, an increase of xxx% over FY 2011
Total Enterprise Value (INR mn) EPS (USD) EPS (USD) PE Ratio (Abs)
2011
2010
2009
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio b i l i Interest Coverage Ratio
Key Financial Performance Indicators Indicators
y‐o‐y change 2012 (2012‐11)
Cost Ratios
• The company incurred a net profit of negative INR xxx bn in FY 2012, as compared to net profit of INR xxx bn in FY 2011
Market Capitalization (INR mn)
Particulars
Value (15/03/2013)
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover Improved
E‐COMMERCE MARKET IN INDIA 2013.PPT
Decline
16
SAMPLE
Public: Foreign Company – Company ABC (x/x) Key Business Segments
Key Geographic Segments
Online Retailers
xxx
100% 50%
xxx 100%
xxx
100%
52%
55%
56%
57%
48%
45%
44%
43%
2009
2010
2011
2012
50% 0%
0%
2012
Business Highlights (1/2) Description
News
E‐COMMERCE MARKET IN INDIA 2013.PPT
17
Public: Foreign Company – Company ABC (x/x) – Traffic Statistics (x/x)
SAMPLE Traffic Statistics – xxx
Ranks
Most Viewed Sub‐Domains
Global Rank 100.0%
India Rank xxx
Reach
Audience Snapshot
Technical Details
Age (Years)
Unique Page Views/Day
Gender
Search Engine Redirection (%)
Time (mm:ss)
Average Load Time Average Load Time (Secs)
E‐COMMERCE MARKET IN INDIA 2013.PPT
18
Public: Foreign Company – Company ABC (x/x) – SWOT Analysis
SAMPLE
• xxx
• xxx
• xxx
S
W
O
T
E‐COMMERCE MARKET IN INDIA 2013.PPT
• xxx
19
SAMPLE
Consumer Insights: e‐Commerce Segments (1/3) e‐Commerce Segments – Split (2012) Segment 1
Segment 2
Segment 3
Segment 4
Segment 5
Segment 6
e‐Commerce Segments – Overview
•x
e‐Commerce e Commerce Consumption Consumption – Gender Split (2012) Gender Split (2012) xxx
xxx
a
100%
b c d e 0% Segment 1
Segment 2
Segment 3
Segment 4
E‐COMMERCE MARKET IN INDIA 2013.PPT
Segment 5
Segment 6
20
Thank you for the attention The e‐Commerce Market – India 2013 report is a part of Netscribes’ Information Technology Series. For more detailed information or customized research requirements please contact:
Phone: E‐Mail:
+91 33 4027 6214 / 6215 info@netscribes.com
Follow us on:
About Netscribes Netscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.
Disclaimer: This report is published for general information only. Although high standards have been used in the preparation of this report, Netscribes is not responsible for any loss or damage arising from use of this document This document is the sole property of Netscribes. and Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction.
E‐COMMERCE MARKET IN INDIA 2013.PPT
21