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Retail Marketing (English) 1st Edition 2007

ISBN-10

8174465758

Author: A Sivakumar
Language: English

eTailing India and Internet

Retailer to rank Indias biggest
online retailers
BY BILL BRIGGS Senior Editor

Coming in February 2015, the India 100 will rank India's top 100 web
merchants by annual web sales and other metrics.
Ranking Indias 100 largest online retailers for the first time is the aim of a joint research
project being launched by eTailing India and Internet Retailer.
Slated for a February 2015 release at the eTailing India Expo 2015 in Mumbaithe
largest India e-commerce conference and exhibitionthe India 100 will rank India's top
100 web merchants by merchant type and main product category based on annual web
sales and other key operating metrics. Combining eTailing India's market expertise and
extensive list of contacts with Internet Retailer's deep understanding of global ecommerce trends and proven research methodology, the India 100 will provide e-retail
executives around the world an in-depth analysis of the leaders and trends driving
India's multibillion-dollar e-commerce market.
"This is mission-critical data that will enable web merchants, vendors, investors and
interested parties the world over to truly understand the trends and leaders that are
growing the e-commerce market in India," says Ashish Jhalani, founder of eTailing India.
"With leading e-retailers such as Flipkart and others competing for a massive base of
middle-class consumers with mobile devices, e-commerce in India is a force to be
reckoned with. The India 100 reflects our continuing commitment to bringing competitive
e-commerce information to this fast-growing market," he says.
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In 2013 e-commerce in India, including travel, totaled an estimated $13 billion and could
reach an estimated $20 million in 2020, according to PricewaterhouseCoopers LLP. Ecommerce is poised for an exciting period of exploding growth in a period of three to five
years, PricewaterhouseCoopers LLP says. There are about about 10 million online
shoppers in India, and that number is growing at about 30% annually, the Internet and
Mobile Association in India, a research organization.

"The guide will serve as a ready reference for additional insights on the top 100 web
merchants in India," Jhalani adds. "Keeping to our mission as a knowledge, educational,
and advisory organization on e-commerce in India, this research will be circulated
widely in India and elsewhere around the world."
Under the partnership, eTailing India will take the lead in identifying, researching and
contacting India's leading web merchants. Internet Retailer, publisher
ofTop500Guide.com, the largest global database of e-commerce business intelligence,
will provide data management and analysis expertise and other publishing services.
"We're investing heavily in bringing global e-commerce research and data analysis to
Indian executives and others considering investing in India because of India's
undeniable and growing importance in global online retailing," says Mark Brohan, vice
president of research, Vertical Web Media, LLC, which publishesInternet
Retailer magazine and the brand's suite of global e-commerce research publications.
The India 100 report will be available in a digital, downloadable format from the eTailing
India web site and InternetRetailer.com.

The quest for e-commerce

dominance in India
BY BLOOMBERG NEWS

Blackouts and dodgy sellers come with the territory as Snapdeal tries to
build its version of Amazon and Alibaba.
(Bloomberg)The blackouts dont faze Rohit Bansal. The co-founder of Snapdeal.com
is talking in a worn conference room at his companys New Delhi headquarters, and
when the lights go out he simply flicks on his smartphone to illuminate the room.
Outside, employees feel their way through darkened hallways.
Bansal is fixated on the prospects of building an online retailer in India comparable to
Amazon.com Inc., No. 1 in the Internet Retailer 2015 Top 500 Guide, or Alibaba Group
Holding Ltd. Commerce in the country is chaotic, he explains, while the population of
more than a billion people has rising incomes and is desperate for a better way to shop.
We didnt realize we were sitting on this massive opportunity, said Bansal, a gangly
32-year-old who co-founded Snapdeal five years ago with high school pal Kunal Bahl.

Hes not the only who thinks so. Big-money backers are swarming into India in hopes of
imitating the success of Chinas Alibaba, which last year held the largest initial stock
offering ever. SoftBank Group, the primary backer of Alibaba, is betting on Snapdeal,
leading investments of almost $1 billion. New York- based investment firm Tiger Global
Management LLC and Accel Partners, the venture firm behind Facebook Inc., are
supporting market leader Flipkart, which has raised nearly $2.5 billion. Amazons Jeff
Bezos has pledged $2 billion to build his India business.
The trio is targeting an e-commerce market thats projected to surge in the next five
years like Chinas has in the past five. The winner could see a payoff like the $200
billion-plus valuation bestowed upon Alibaba after it unlocked the potential of ecommerce in China. The risk? The market is quashed by the dizzying difficulties of
India, from poor payment systems and dishonest merchants to woeful roads and
unreliable electricity.
China epiphany
This is where China was eight to 10 years ago, so the foreign funds want a piece of the
action, Krishnan Ganesh, a local entrepreneur who has started several businesses
including an online learning service that he sold to Pearson Plc. In the next five to 10
years, you will see an explosion.
Bansal and Bahl started Snapdeal in 2010 as an online seller of coupons, much like
Chicagos Groupon Inc. They were focused on building that business, pretty much
convinced that e-commerce in India was overcrowded with few opportunities.
Then they went to China. In 2011, they saw how Alibaba was using a model unlike
Amazons -- and different from Indian companies such as Flipkart. While Amazon and
Flipkart built warehouses and stocked their own products, Alibaba never touched the
goods. Instead, it simply acted as a digital marketplace, letting buyers and sellers
connect over the web. The advantage of no inventory or infrastructure was obvious.
Doing it wrong
We felt like everyone was doing it wrong, said Bansal during the interview in one of
Snapdeals seven buildings, clustered within South Delhis Okhla industrial zone. We
realized e-commerce in India was too inspired by the U.S.the world had moved on.
In 2012, the pair shifted Snapdeal to a marketplace similar to Alibaba. The approach let
them focus on building the website and adding sellers, instead of stocking goods. More
than rivals, Snapdeal has pushed to add merchants quickly, reasoning that customers
will be drawn by a broader selection.

The company also set up a nursery program to help sellers understand everything
from how to pack products to when to replenish inventory. Many merchants are selling
online for the first time, said Bansal.
After three years, the site boasts 150,000 merchants, the most among the top three eretailers. Bansal contends the number of registered sellers is Snapdeals biggest
strength. Amazon India has 4,500 merchants, while Flipkart has 30,000.
Shipping bricks
The website makes clear Snapdeals ambitions go beyond traditional e-commerce. You
can buy a toilet or a car, pre-order an apartment, apply for a home loan and pay your
phone bill. There are shirts for $2 and golden wedding gowns for $5,400.
The approach helped Snapdeal close the gap on Flipkart. The value of merchandise
sold on its site hit an annualized rate of $3.5 billion in May, more than triple the total a
year earlier. Flipkarts annualized rate that month was $4 billion.
Snapdeals strategy has risks. Ensuring all those sellers deliver on their promises and
adhere to quality standards is proving a constant challenge. Angry customers have
taken to Facebook and Twitter to complain about delayed or stolen orders. One man
who ordered a Samsung phone for his wife got a brick instead. Regulators have taken
action against the company for selling sex toys and pharmaceutical drugs, both not
permitted for online sale in India.
Flipkart is putting more emphasis on screening merchants before letting them offer
products on its site. Mukesh Bansal, who oversees Flipkarts marketplace operations,
said in an interview at his Bengaluru office the e-retailer is focused on high-quality
sellers.
Cars, rain
In trying to be the Alibaba of India, Snapdeal is trying to do everything at once -- it puts
an operational challenge on the organization, said Sandeep Murthy, a partner in
Mumbai- based Lightbox Ventures.
The challenges can be seen around Snapdeals cramped offices in Okhla, a
neighborhood designed to house small businesses but now crowded with drugmakers,
apparel factories and software developers. The lack of parking garages means roads
are crammed with haphazardly parked cars; poor drainage means a 30-minute rain
shower leaves the area flooded for hours.

In a country that has 39 million people shopping on the Internet, one eighth the number
in China, drawing more of these reluctant online shoppers is the biggest challenge,
according to Snapdeals Bansal.
Who are the people who shop online in India now? he said. We want to bring the
others whove never shopped online into this market.
War of attrition
E-commerce companies are offering heavy discounts, cash incentives and free delivery
to entice customers. Goldman Sachs estimates Snapdeal and its rivals lose on average
$1.35 for every dollar in sales. Together, theyll need at least $20 billion in fresh funds to
reach a steady state by 2020, the firm said in a report on India e-commerce.
Bansal likes his odds if the competition becomes a war of attrition. He points out that
SoftBank founder Masayoshi Son waited more than a decade for his payoff from
Alibaba.
They are very patient, he said. They know this is a business you build for the long
term.
After five years battling in the trenches of Indias e- commerce market, Bansal says he
feels like a veteran compared with younger entrepreneurs now entering the business.
He and Bahl are investing in other Internet startups, including a food delivery app and a
local Uber competitor, in part to stay on top of the business.
Weve barely scratched the surface, he said. There is enormous growth ahead.