State Of Indian Ecommerce Report Q3 2023

Page 1

STATE OF THE INDIAN ECOMMERCE

Q3-2023

InFocus

Unlocking D2C Opportunities In Tier II & Beyond Markets

01 02 03 04 TABLE OF CONTENTS INDIA’S DIGITAL ECONOMY IN A NUTSHELL ECOMMERCE MARKET IN INDIA: A SNAPSHOT INDIA’S ECOMMERCE LANDSCAPE: KEY PLAYERS INDIA’S ECOMMERCE OPPORTUNITY 05 INDIA’S ECOMMERCE ECOSYSTEM India Vs China Vs The US: A Comparison Ecommerce Funding Trends Ecommerce M&A Trends 10 Biggest Funding Rounds Raised By Ecommerce Startups In Q2 2023 06 UNLOCKING D2C OPPORTUNITIES IN TIER II & BEYOND MARKETS 07 ECOMMERCE STARTUPS’ STOCK PERFORMANCE 08 KEY CHALLENGES OF ECOMMERCE IN INDIA The Market Opportunity Key Factors Supporting Rise Emerging Hubs’ D2C Landscape Top Funded D2C Brands & Categories In Emerging Hubs Opportunities & Challenges Market Size Ecommerce Shoppers In India Ecommerce In India: Key Growth Drivers Top Ecommerce Sub-Sectors In Q2 2023 Top Ecommerce Startup Hubs In Q2 2023 Notable Ecommerce Investors In Q2 2023 Celebrities Backing Ecommerce Startups © INC42 MEDIA | NOT FOR DISTRIBUTION / 2

India’s Digital Economy In A Nutshell

44% Increase In Internet Users From 2022 To 2030 61% Internet Penetration In India 1.3 Bn+ Internet Users By 2030 600 Mn+ Number Of Smartphone Users 4.7 Hours Average Hours Spent On Mobile Per Day Per User $0.17 Per GB Internet Cost 373 Mn+ Estimated Rural Internet Users In 2022 350 Mn+ Number Of Users Transacting Online $3.8 Tn+ Total Value Of UPI Transactions Till July 2023 Source: TRAI, NPCI, Bain & Company, Data.ai Internet Users (Mn) 0 500 1,000 1,500 2020 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 846 749 932 1,008 1,075 1,134 1,186 1,132 1,273 1,310 1,343 © INC42 MEDIA | NOT FOR DISTRIBUTION / 3

India’s $400 Bn Ecommerce Opportunity

The ecommerce market in India is expected to grow at 19% CAGR from 2022-2030

Market Opportunity ($ Bn) 0 100 200 300 400 2022 2023 2024 2025 2026 2027 2028 2029 2030 19% Source: Inc42, BCG and Multiple Secondary Sources © INC42 MEDIA NOT FOR DISTRIBUTION / 4

India To Have 500 Mn+ Online Shoppers By 2030

Paid users expected to grow at 12% CAGR from 2022-2030

0 100 200 300 400 500 2022 2023 2024 2025 2026 2027 2028 2029 2030 12% Source: Inc42, Bain and Flipkart Report 2020 © INC42 MEDIA | NOT FOR DISTRIBUTION / 5

Ecommerce Market In India: Decoding The $400 Bn Market Opportunity

Source: Inc42, BCG, Other secondary sources

Note: The market size depicted here is the estimated total addressable market for ecommerce players in India.

Market Size (2022) $100 Bn+ $20 Bn+ $33 Bn+ $20 Bn+ $11 Bn+ $4 Bn+ $6 Bn+ $5 Bn+ Overall Ecommerce Market Fashion & Apparel Smartphones Electronics & Appliances Food & FMCG Beauty & Personal Care Furniture & Home Décor Others Market Size (2030) $400 Bn+ $112 Bn+ $72 Bn+ $68 Bn+ $68 Bn+ $28 Bn+ $24 Bn+ $28 Bn+ CAGR (2022-2030) 19% 24% 10% 16% 25% 27% 19% 19%
© INC42 MEDIA NOT FOR DISTRIBUTION / 6

India’s Ecommerce Ecosystem: Key Facts

Fashion & Apparel 28% Electronics & Appliances 17% Food & FMCG 17% 7% Beauty & Personal Care Active Ecommerce Startups 10K+ Funded Ecommerce Startups 1K+ Total Funding $33.4 Bn+ Deal Count 1,573+ Unicorns In India 25 Soonicorns In India 14 Combined Valuation Of Unicorns $87 Bn+ Combined Valuation Of Soonicorns $4 Bn+ ESTIMATED MARKET OPPORTUNITY (2030) VENTURE CAPITAL (2014-Q2 2023) UNICORNS & SOONICORNS Source: Inc42, BCG and Multiple Secondary Sources © INC42 MEDIA NOT FOR DISTRIBUTION / 7

Global Ecommerce Ecosystem: India Vs China Vs The US

Total Funding (2014 - 2022)

5-Year Funding CAGR

Number Of Unicorns

Average Ticket Size In 2022

Estimated Ecommerce Market Volume In 2027

Source: Inc42, Crunchbase

Note: Ecommerce funding data for The United States & China have been taken from Crunchbase | Number of Chinese ecommerce unicorns has been taken from CFTE

$60 Bn+ 7% 38+ $29 Mn+ $2.3 Tn+ $80 Bn+ 48% 40+ $32 Mn+ $1.6 Tn+ China USA
© INC42 MEDIA | NOT FOR DISTRIBUTION / 8

India’s Ecommerce Landscape

B2C ECOMMERCE B2B ECOMMERCE

RECOMMERCE ROLL UPS AFFILIATES

Source: Inc42

Note: This is not an exhaustive list

D2C
© INC42 MEDIA | NOT FOR DISTRIBUTION / 9

India’s Ecommerce Landscape: Key Players

Source: Inc42

Note: The list of ecommerce growth stage startups is not an exhaustive list

UNICORNS Total Unicorns: 25 Combined Valuation: $87 Bn+ Total Funding: $29 Bn+ Top Hub: Delhi NCR GROWTH STAGE Total Funded Startups (2022): 61+ Total Funding (2022): $947 Mn+ Top Hub (2022): Delhi NCR SOONICORNS Total Soonicorns: 14 Combined Valuation: $4 Bn+ Total Funding: $2 Bn+ Top Hub: Mumbai
© INC42 MEDIA | NOT FOR DISTRIBUTION / 10
Seed Stage Funded Startups Growth Stage Funded Startups Late Stage Funded Startups Total Funded Startups $747 Mn+ $5.5 Bn+ $27 Bn+ $33.3 Bn+ 684+ 421+ 88+ 1573+ Funding Amount Number Of Startups Source: Inc42 Note: Based on funding data for the period between 2014 and Q2 2023 © INC42 MEDIA NOT FOR DISTRIBUTION / 11
Indian Ecommerce Startups: Funding Pyramid

Ecommerce Funding Trends In Q2 2023: A Snapshot

$408 Mn+

Total Funding Raised By Ecommerce Startups

$3.5 Mn+

Median Investment In Ecommerce Startups

43+ Mumbai

Number Of Funding Deals Startup Hub With Maximum Funding Deals

Most Active Investors In Indian Ecommerce Startups

Source: Inc42

© INC42 MEDIA | NOT FOR DISTRIBUTION / 12

$33 Bn+ Raised By Indian Ecommerce Startups Since 2014

Funding Amount ($ Bn) Deal Count 0 10 20 30 40 0 500 1000 1500 2000 2014 2015 2016 2017 2018 2019 2020 2021 2022 H1 2023 Funding Amount Deal Count
Inc42
Based on startup funding deals recorded between 2014 and H1 2023 © INC42 MEDIA | NOT FOR DISTRIBUTION / 13
Source:
Note:

Ecommerce Funding For Indian Startups Stumbles In

Funding deals recorded a 67% YoY decline in Q2 2023

Q2 2023
Funding Amount ($ Mn) Deal Count 0 2000 4000 6000 8000 0 25 50 75 100 125 Q1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020Q3-2020Q4-2020Q1-2021 Q2-2021Q3-2021Q4-2021Q1-2022Q2-2022Q3-2022Q4-2022Q1-2023Q2-2023 Funding Amount Deal Count Source: Inc42 © INC42 MEDIA | NOT FOR DISTRIBUTION / 14

The State Of Ecommerce Funding In India

Total Funding Funding Deals Mergers & Acquisitions Average Ticket Size $633 Mn+ (-67%) YoY 38+ (-62%) YoY 2 (-91%) YoY $20 Mn+ (-17%) YoY $408 Mn+ (-71%) YoY 43+ (-50%) YoY 3 (-75%) YoY $17 Mn+ (-14%) YoY $424 Mn+ (-88%) YoY 59+ (-48%) YoY (-89%) YoY $9.4 Mn+ (-78%) YoY 5 Q2 2023 Q1 2023 Q4 2022 Source: Inc42 © INC42 MEDIA | NOT FOR DISTRIBUTION / 15

Majority Of Ecommerce Funding Deals Valued Less Than $4 Mn In Q2 2023

Lenskart, with $100 Mn funding, was the only ecommerce mega deal recorded in Q2 2023

Funding Amount ($ Mn) 5.0 10.0 15.0 20.0 Hopscotch Purple Style Labs XYXX OfficeBanao HYPD Store Good Flippin Burgers Zyod TagZ Foods Mainstreet The Yarn Bazaar Koparo French Crown
Inc42
Source:
| Mega
© INC42 MEDIA NOT FOR DISTRIBUTION / 16
Note: Any deal with value above $20 Mn and less then $1 Mn is considered outlier
Deal refers to deals greater or equal to $100 Mn value

Median Ticket Size For Ecommerce Funding Deals Report Uptick After Continuous Decline

However, from its highest value of $6.5 Mn in Q4 2019, the median ticket size declined by 46% in Q2 2023

Median Ticket Size ($ Mn) 0.00 2.00 4.00 6.00 8.00 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023
© INC42 MEDIA NOT FOR DISTRIBUTION / 17
Source: Inc42

Most Funded Ecommerce Sub-Sectors In Q2 2023

Others 7.0% B2B Ecommerce 7.0% B2C Ecommerce 4.7% D2C 81.4% D2C 88.9% B2C Ecommerce 0.5% Others 9.3% B2B Ecommerce 1.3%
D2C dominated both funding and deal count in Q2 2023 363 38 $408 Mn+ Ecommerce Funding 35 2 3 3 43+ Ecommerce Deals Source: Inc42 © INC42 MEDIA | NOT FOR DISTRIBUTION / 18

Ecommerce Funding — A Stagewise Outlook [Q2, 2023]

Funding Amount Investment Stage YoY Change % $234 Mn+ Bridge Funding Growth Stage Deal Count 5 -71% YoY Change % -64% $150 Mn+ 6 -63% -73% $10 Mn+ 9 -79% -90% -40% $14 Mn+ 23 -34% Source: Inc42 Late Stage Seed Stage © INC42 MEDIA | NOT FOR DISTRIBUTION / 19

Mumbai Bagged Most Ecommerce Startup Funding In Q2 2023

Funding Amount ($ Mn) Mumbai Delhi NCR Bengaluru 0 50 100 150 Deal Count Mumbai Delhi NCR Bengaluru 0 5 10 15 Source: Inc42 © INC42 MEDIA | NOT FOR DISTRIBUTION / 20

Most Active Indian Ecommerce Investors In Q2 2023 Startups Funded

Investor’s Name

Source: Inc42

Note: The list includes only publicly disclosed deals

© INC42 MEDIA | NOT FOR DISTRIBUTION / 21

Slowdown In Exits Through M&As Continues

M&A in ecommerce sector reported 80% YoY decline in Q2 2023 0 10 20 30 40 50 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023
Inc42 © INC42 MEDIA | NOT FOR DISTRIBUTION / 22
Source:

The State Of Ecommerce Startup IPOs

Headquarters IPO Size Source: Inc42, multiple media reports 1 USD= INR 80 Bengaluru Delhi NCR Delhi NCR Pune Delhi NCR Delhi NCR NA INR 1,250 Cr ($156 Mn) INR 2,000 Cr ($250 Mn) INR 8000 Cr ($1 Bn) INR 3000 Cr ($375 Mn) INR 1600 Cr ($200 Mn) IPO Timeline Deferred To Next Year Deferred To Next Year Dropped On Hold On Hold SEBI Approval © INC42 MEDIA | NOT FOR DISTRIBUTION / 23

Celebs Turn Investors — Most Active Backers For Ecommerce Startups

Notable Investments

Alia Bhatt

Deepika Padukone

Shilpa Shetty

Virat Kohli

Sachin Tendulkar

M.S. Dhoni

Suniel Shetty

Source: Inc42

Note: This is not an exhaustive list

© INC42 MEDIA | NOT FOR DISTRIBUTION / 24

Unlocking D2C Opportunities In Tier II & Beyond Markets InFocus

Market Opportunity In Tier 2 Cites And Beyond ($ Bn) 0 50 100 150 200 250 2022 2023 2024 2025 2026 2027 2028 2029 2030 19% CAGR From (2022-2030) Source: Inc42, Unicommerce © INC42 MEDIA | NOT FOR DISTRIBUTION / 26
Tier II & Beyond Cities To Present A $240 Bn+ Ecommerce Opportunity By 2030

Online Shopping Boom: Tier II & Beyond Cities Lead The Way

Share Online Shoppers 0% 20% 40% 60% 2021 2025 2030 Metro Tier 1 Tier 2, Tier 3 and Tier 4 Source: BCG © INC42 MEDIA | NOT FOR DISTRIBUTION / 27

MSMEs In India — A Geographic Distribution

State/UT Micro (In Lakh) Small (In Lakh) Medium (In Lakh) MSMEs (In Lakh) Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh 33.74 0.22 12.1 34.41 8.45 9.25 0.7 32.67 9.53 3.86 0.13 0 0.04 0.04 0.03 0.11 0 0.5 0.17 0.06 0 0 0 0 0 0 0 0 0 0 33.87 0.23 12.14 34.46 8.48 9.36 0.7 33.16 9.7 3.92
© INC42 MEDIA | NOT FOR DISTRIBUTION / 28
Source: MSME.GOV
State/UT Micro (In Lakh) Small (In Lakh) Medium (In Lakh) MSMEs (In Lakh) Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Megahlaya Mizoram Nagaland 7.06 15.78 38.25 23.58 26.42 47.6 1.8 1.12 0.35 0.91 0.03 0.1 0.09 0.21 0.31 0.17 0 0 0 0 0 0 0 0 0.01 0 0 0 0 0 7.09 15.88 38.34 23.79 26.74 47.78 1.8 1.12 0.35 0.91
© INC42 MEDIA | NOT FOR DISTRIBUTION / 29
Source: MSME.GOV
State/UT Micro (In Lakh) Small (In Lakh) Medium (In Lakh) MSMEs (In Lakh) Odisha Punjab Rajasthan Sikkim Tamil Nadu Telangana Tripura Uttar Pradesh Uttarakhand West Bengal 19.8 14.56 26.66 0.26 49.27 25.94 2.1 89.64 4.14 88.41 0.04 0.09 0.2 0 0.21 0.1 0.01 0.36 0.02 0.26 0 0 0.01 0 0 0.01 0 0 0 0.01 19.84 14.65 26.87 0.26 49.48 26.05 2.11 89.99 4.17 88.67
© INC42 MEDIA | NOT FOR DISTRIBUTION / 30
Source: MSME.GOV
State/UT Micro (In Lakh) Small (In Lakh) Medium (In Lakh) MSMEs (In Lakh) A & N Islands Chandigarh Dadra & Nagar Haveli Daman & Diu Lakshadweep Puducherry Total 0.19 0.56 0.15 0.08 0.02 0.96 630.52 0 0 0.01 0 0 0 3.31 0 0 0 0 0 0 0.05 0.19 0.56 0.16 0.08 0.02 0.96 633.88
© INC42 MEDIA | NOT FOR DISTRIBUTION / 31
Source: MSME.GOV

Unlocking The Future: Why Tier II and Beyond Cities Hold The Key For D2C Brands

Untapped Market Potential in Smaller Cities

D2C brands have immense growth opportunities, particularly in Tier II cities and beyond. These markets are still largely unexplored by traditional brick-and-mortar stores, offering fertile ground for online expansion.

The Ripple Effect of Rising Disposable Income

Thanks to the nation's economic growth, a trickle-down effect has increased incomes for the middle class across the country. This upturn in disposable income has naturally led to higher consumption rates among middle-class consumers, boosting the D2C market.

Limited Physical Retail Options Fuel Ecommerce Growth

Unlike their metropolitan counterparts, Tier II cities and beyond often have limited access to various physical retail stores. Ecommerce platforms have stepped in to fill this gap, offering a diverse range of products and brands. This inclusion grants consumers in these areas access to goods that were previously hard to find or altogether unavailable locally.

A Surge in Internet User Base Expands Market Reach

The internet user base in Tier II cities and smaller is expanding rapidly. More people are joining social media platforms and engaging online, creating a fertile landscape for ecommerce companies to target. Significantly, a growing portion of online orders now comes from these less urbanized areas, indicating the vast market potential in expanding to these regions.

Source: Inc42 and multiple secondary sources

© INC42 MEDIA | NOT FOR DISTRIBUTION / 32

Reshaping Entrepreneurship: Unveiling The Dynamics Behind Startup Expansion Beyond Metro

Half of India's Registered Startups Sprout Beyond Metropolitan Zones

Increased availability of skilled workforce

Human Resources

Lower attrition across experience levels

Attractive commercial propositions

Tier -2 Cities

Cost Elements

Lower cost of living and real estate

Increased availability of commercial space

Improved quality of connectivity

Improved standard of living and quality of life

Infrastructure

Lower pollution levels

Social Factors

Business Environment

Source: EY

Local duty incentives and tax exemptions

Promotion of special economic zones (SEZs)

© INC42 MEDIA NOT FOR DISTRIBUTION / 33

Comparative Analysis Between Tier I And Tier II Cities

Cost play an important role for startups springing outside Tier I cities

Source: EY

Human resource

Cost elements

Business environment

Infrastructure

Social factors

Tier
Low Moderate Tier - 1 cities
- 2 cities High
Parameters
© INC42 MEDIA | NOT FOR DISTRIBUTION / 34

Source: Inc42

EKAM RecodeStudiosNativeSpecialKraftInnYearbookCanvasPolestar

D2C Startups From Emerging Hubs

Phool.co All That Dips

LahoriZingavitaJustHerbs

SuperClusterTABPSnacks

Spirulina

TABPSNaario Pets

Jaipur Lucknow
Raipur
Kanpur Vadodara Udaipur Tiptur Silvassa Ranchi Patna NajafgarhMangaloreLudhianaKarurJorhatJodhpurJalandhar Dehradun Cochin Wooden Street EatBetterYuftaVoyllaMinimalist Keeros
Pets
Crown Bebe Burb
Coimbatore
MohaliChandigarh
Zoivane
French
Pi Prolgae
Juicy
Augrav Ras Luxury Oils Zoff Shri
Drools
Chemistry
Chyawan
LetsShave
GoodDot
FreshSharpBetterBeauty
Himshakti Bumberry
Akshayakalpa MYFITNESS Puresh Daily
© INC42 MEDIA NOT FOR DISTRIBUTION / 35

F&B Emerges As The Hottest Segment For Tier II & Beyond Expansion

Beauty & Personal Care 25.0% F&B 37.5% Others 10.0% Pet Products 7.5% Home & Decor 10.0% Fashion 10.0%
10 15 4 4 3 4 40+ Funded D2C Brands Source: Inc42 Note: Based on startup funding data between 2015 and H1 2023 | F&B stands for food and beverages © INC42 MEDIA | NOT FOR DISTRIBUTION / 36

Pet Care Category Emerged As The Most Funded D2C Category In Tier II & Cities

Beauty & Personal Care 15.7% F&B 18.9% Fashion 8.9% Pet Products 33.0% Home & Decor 23.5%
29 35 16 44 61 $185 Mn+ Funding Amount In D2C Sector Source: Inc42 Note: Based on startup funding data between 2015 and H1 2023 © INC42 MEDIA | NOT FOR DISTRIBUTION / 37

Top Funded D2C Brands In Tier II & Beyond Cities

Note: Based on startup funding data between 2015

Startup Name Sub Sector Pet Product Home & Decor Fashion Beauty & Personal Care F&B F&B Home & Decor Beauty & Personal Care Beauty & Personal Care Baby Products Headquaters Raipur Jaipur Jaipur Jaipur Mohali Tiptur Kanpur Coimbatore Raipur Cochin Investors Funding Amount ($ Mn) 60 35 15 15 15 15 8 6 4 3 Alia Bhatt
Source: Inc42
H1
© INC42 MEDIA | NOT FOR DISTRIBUTION / 38
and
2023

D2C Brands' Funding Highly Skewed Towards Tier I Hubs

Bengaluru 51.8% Others 11.8% Delhi NCR 18.9% Mumbai 17.5%
1116 377 408 255 $2.1 Bn+ Founding Amount Source: Inc42 Note: Based on startup funding data between 2015 and H1 2023 © INC42 MEDIA | NOT FOR DISTRIBUTION / 39

Unveiling The Districts With Untapped D2C Opportunities In India

Jaipur (Rajasthan)

$1.38 Bn

Gems And Jewellery

Surat (Gujarat)

$9.69 Bn

Gems And Jewellery

Mumbai Suburban (Maharashtra)

$7.71 Bn

Gems And Jewellery

Dakshina Kannada (Karnataka)

$2.48 Bn

Petroleum Products

Gautam Buddha Nagar (Uttar Pradesh)

$3.76 Bn

Electronic Goods

Jharsuguda (Odisha)

$1.96 Bn

Engineering Goods

Visakhapatnam (Andhra Pradesh)

$2.75 Bn

Engineering Goods

Kanchipuram (Tamil Nadu)

$4.58 Bn

Top commodity Total Export Of District

Source: PIB

Engineering Goods

© INC42 MEDIA | NOT FOR DISTRIBUTION / 40

The Reason For Funding Gap for Startups In Tier II Cities and Beyond

Limited Investor Presence In Smaller Cities

Venture capitalists, angel investors, and other funding sources are generally more abundant in metro cities. Investors often prefer to invest in startups within close proximity for easier monitoring and support, which can result in less attention being paid to startups from Tier II cities and beyond.

Fewer Networking Opportunities

Big cities provide a rich ecosystem for startups to connect with potential investors, mentors, and industry experts. In contrast, such networking opportunities are less frequent in Tier II cities, making it more difficult for startups to gain visibility and secure funding.

Risk Perception Affects Investment

Investors may see startups in Tier II cities as riskier investments due to challenges like limited access to skilled talent, infrastructure issues, and smaller market reach. This perception of increased risk can make investors hesitant to commit capital to startups in these areas.

Regulatory Hurdles

Investors may feel more at ease investing in startups located in cities with familiar regulatory landscapes. Startups in Tier II cities may face additional compliance and business regulation challenges that can deter investment.

Limited Access To Tech Ecosystem

Founders in Tier II cities often miss out on the tech ecosystem, industry events, and conferences predominantly taking place in major cities. This lack of exposure can limit their ability to engage with potential investors and industry experts.

Source: Inc42 and multiple secondary sources

© INC42 MEDIA | NOT FOR DISTRIBUTION / 41

Cross Border Commerce: Cities Leveraging Amazon Inc The Most

Top Categories

Region

Apparel

Surat,Jaipur, Kolkata, Amritsar

Toys

Mumbai, Jodhpur, Bengaluru, Roorkee

Jewellery

Mumbai, Delhi, Jaipur, Lucknow

Home Decor

Noida, Erode, Mumbai, Jaipur

YOY Growth (2020-2021) 82% 55% 47% 32%
© INC42 MEDIA | NOT FOR DISTRIBUTION / 42
Source: Amazon Exports Digest 2022

Top Indian Cities And Products Sold Via Cross Border On Amazon Inc

Region

Cities

Emerging Product Categories

Top Product Categories

NORTH INDIA

Amritsar, Roorkee, Delhi NCR, Jodhpur, Jaipur

Leather Goods, Jewellery, Toys, Office Products, Wireless

Books, Watches, Camera, Pet Products, Home Decor

EAST INDIA

Patna, Siliguri, Guwahati, Kolkata, Cuttack, Bhubaneswar

Watches, Furniture, Personal Care application, Tools, Electronics

Books, Apparel, Health & Personal Care, Beauty, Home Decor

SOUTH INDIA

Hyderabad, Chennai, Bengaluru, Coimbatore, Trichy, Madurai

Board games, Shoes, Home Entertainment, Sports Gear, Camera accessories

Books, Apparel, Kitchen, Lawn And Garden, Home Decor

WEST INDIA

Source: Amazon Exports Digest 2022

Bhopal, Indore, Mumbai, Pune,Ahmedabad

Arts & Craft, Music, Video & DVDS, Luggage, Personal Appliances

Jewellery, Apparel, Kitchen, Office Products, Home Decor

© INC42 MEDIA NOT FOR DISTRIBUTION / 43

Financial Analysis Of Key D2C Brands

Source: Company Filings, Inc42 Calculations

Note: (+/- X%) depicts year-on-year change | INR to USD exchange rate is 80

Founding year Brand Name 2010 2016 2015 2016 2011 Total Revenue (FY22) $195Mn (+55%) $117 Mn (+102%) $28 Mn (+76%) $43 Mn (+241%) $60 Mn (+89%) Profits/Loss After Taxes(FY22) +$0.7Mn (-90%) +$2 Mn (102%) -$10 Mn (-261%) -$17 Mn (-14x) -159 Mn (-3929%) EBITDA YoY change in FY 2022 -4% +103% -30% -33% -13159%
© INC42 MEDIA | NOT FOR DISTRIBUTION / 44

Source: Company Filings, Inc42 Calculations

Note: (+/- X%) depicts year-on-year change | INR to USD exchange rate is 80

Profits/Loss After Taxes(FY22)

Founding year 2016 2015 2015 2013 2015 2013 Total Revenue (FY22) $17 Mn (+104%) $46 Mn (+361%) $21 Mn (+270%) $23.5 Mn (+105%) $5 Mn (+61%) $41 Mn (+35%)
-$7 Mn (-583%) -$13 Mn (-74%) -$28 Mn (-488%) -$4 Mn (-900%) -$49 Mn (-253%) -$7 Mn (+17%) EBITDA YoY change in FY 2022 -578% -78% -464% -1373% -265% -44%
© INC42 MEDIA NOT FOR DISTRIBUTION / 45
Brand Name

Brand

Name

Source: Company Filings, Inc42 Calculations

Founding year 2016 2010 2016 2011 2015 2013 Total Revenue (FY22) $360 Mn (+119%) $8 Mn (+27%) $80 Mn (+53%) $16 Mn (+34%) $13 Mn (+165%) $10 Mn (-8%)
+$10 Mn (-8%) -$4 Mn (-3%) -$13 Mn (-175%) -$8 Mn (-104%) -5 Mn (+196%) -$3 Mn (-291%) EBITDA YoY change in FY 2022 +12% -10% -184% -55% -199% -250
Profits/Loss After Taxes(FY22)
Note: (+/- X%) depicts year-on-year change | INR to USD exchange rate is 80 © INC42 MEDIA | NOT FOR DISTRIBUTION / 46

Traditional Indian Retail Stocks Performed Better Compared To New Age Stocks

NYKAA CARTRADE ₹134.70 ₹522.05 -₹258.35 -₹979.00 65.73% 65.22% DMART INDIAMART ₹3,520.95 ₹3,144.90 ₹2904.05 +₹2,482.12 470.75% 374.50% Last Traded Price (LTP) (YTD) Price diff. (YTD) % change 800% 600% 400% 200% 0% -200% 2018 2020 2022 DAILY STOCK PRICE CHANGE % Source: NSE, Inc42 calculations Note: The latest stock market data used in this slide is as on 14 August 2023 © INC42 MEDIA | NOT FOR DISTRIBUTION / 47

Ecommerce In India: Key Challenges

The Cycle of Competition & Costs

Intense market competition and saturation push ecommerce companies into a cycle of high spending to attract customers and skilled talent. This continuous expenditure, coupled with pricing pressures, erodes profitability, making sustainable financial success an elusive target for many firms.

Rise In Ecommerce Frauds

Ecommerce fraud has surged, with the volume of orders increasing by 37% in 2022 alone. To combat this, ecommerce startups are enhancing supply chain transparency and investing in technology to minimise fraudulent activities and other mishaps.

Navigating Omnichannel Adoption

Embracing an omnichannel approach presents challenges for brands, as selling across multiple platforms necessitates meticulous planning to maintain brand integrity and avoid losses. As omnichannel strategies are expected to dominate in 2023, startups must identify accurate data metrics for monitoring and evaluating various distribution channels.

Hurdles in Cross-Border Expansion

Indian eccommerce companies face complex logistics issues related to customs and delivery when expanding overseas. Additional challenges include a limited understanding of foreign markets, regulatory complexities, diverse consumer preferences, and resource limitations for effective market adaptation and localisation.

Source: Inc42 and multiple secondary sources

© INC42 MEDIA | NOT FOR DISTRIBUTION / 48

Methodology

Funding data is for the period between 2014 and H1 2023

Seed stage: Startup at angel or seed stage

Growth stage: Startups at Series A and B funding stage

Late stage: Startups at Series C or above funding stage

Bridge funding: Connecting funding rounds (in this case primarily Pre Series A & B)

Unicorn refers to any digital / tech company valued at or above $1 Bn (we also include companies which have ever received $1 Bn valuation, even if they lost the unicorn status later)

A soonicorn is any public or private digital/tech company valued at or above $200 Mn.

Data in some sub sectors may differ from previous reports because our sector thesis was updated in 2023

The survey is based on 50 C-level executives of leading D2C brands

Standalone financials are used for financial analysis

Inc42 Ecommerce Sub Sector Segmentation:

B2C Ecommerce: Online sales transactions between businesses and individual consumers.

B2B Ecommerce: Online sales transactions between businesses, often involving larger orders and longer-term contracts.

Rollups: A type of business in which multiple smaller companies are acquired and merged into a larger entity.

D2C: A business model in which a company sells its products or services directly to consumers, bypassing traditional retail channels (online and offline).

Social Commerce: The use of social media platforms to facilitate online sales transactions.

Recommerce: The buying and selling of secondhand or used products through online platforms.

© INC42 MEDIA | NOT FOR DISTRIBUTION / 49

www.inc42.com

Inc42 is India’s largest tech media & information platform on a mission to build & serve India’s tech, startup & internet economy. From breaking the latest news to discovering the hottest startups, from spotting upcoming trends to simplifying complex concepts, we cover everything tech in India’s internet economy.

CREDITS

Born in January 2015, Inc42 has become the leading source for news & analysis on India’s rapidly growing tech, startup & internet economy. Inc42, with over 35,000+ published stories, 80+ research reports, 120+ conferences & events & having featured 1000s of entrepreneurs, now reaches over 25 Mn+ tech leaders & professionals every month.

Contact: editor@inc42.com

Inc42 Media, 59/16, 4th Floor, Jujhar Tower, RD Marg, Kalkaji, New Delhi, Delhi 110019

ADDRESS SABITH DESIGN

Disclaimer

The data provided in this report has been obtained from public and private sources. We have made every attempt to ensure that the information presented in this report is accurate and free from any discrepancies. Ideope Media Pvt Ltd, the parent company of Inc42 Media and Inc42 DataLabs, is not responsible for any inaccuracy in the information presented or for any damages caused by the use of information provided in this report. In case of any discrepancy or errors in the data, you can contact us at editor@inc42.com and we will try our best to update the information in the digital version of the report. We are constantly updating our database of startups due to new person using or relying on any information in this publication.

This report has been prepared in good faith on the basis of information available at the date of publication without any independent verification. Ideope Media Pvt. Ltd. does not guarantee the accuracy, reliability or completeness of the information in this publication. Readers are responsible for assessing the relevance and accuracy of the content of this publication. While this report talks about various individuals and institutions, Ideope Media Pvt. Ltd. will not be liable for any loss, damage, cost or expense incurred or arising by reason of anyperson using or relying on any information in this publication.

This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Ideope Media Pvt Ltd and is not intended to represent or imply the existence of an association between Ideope Media Pvt Ltd and the lawful owners of such trademarks. Information regarding third-party products, services and organisations was obtained from publicly available sources, and Ideope Media Pvt. Ltd. cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. The views and opinions in this report should not be viewed as professional advice with respect to your business.

Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.