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e-Tailing Market – India March 2014


Executive Summary  e-Tailing market size in India was valued at INR xxx bn in 20-- and is expected to reach INR xx bn by 20--

Market

 The market is expected to attain a CAGR of approximately xx% during the period 20-- – 20- Emergence of m-Commerce, improving customer experience, online reputation management and informing customers about products were the major trends followed by the players

Drivers and Challenges

Trends

 Challenges  Online Advertising and Customer Acquisition Costs  Losses incurred for COD  Costs Stack-ups

 Drivers  Increased Spending Power  Increasing Internet Penetration and PC Users  Ease of Transaction  Need to save time  Changes in Business Models  Refreshed Strategies

Major e-Commerce Vendors

Competition

Player 1

Player 2

Player 3

Player 4

Player 5

Player 6

Player 7

Player 8

E-TAILING MARKET IN INDIA 2014.PPT

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•Macro Economic Indicators •Introduction •Market Overview •e-Commerce Technology •Drivers & Challenges •Trends •Competitive Landscape •Consumer Insights •Market Opportunity •Strategic Recommendations •Appendix E-TAILING MARKET IN INDIA 2014.PPT

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Online Retailing – Evolution in India Is considered to be the oldest and the largest online B2B marketplace, wherein, it broke even in the first year of its launch and has been registering a profitable growth since then

1996

• Indiamart.co m started operations as a B2B online marketplace in India

It is estimated to be growing by 40-50% on a monthly basis and boasts of having more than 400 employees thereby establishing its presence in 50 cities across the country

2007

2001

2006

• Rediff.com started its online shopping portal in 2001, focusing on electronic market

• Network18 Group started its Homeshop18.c om and compareIndia.c om

• Future Group started its online shopping portal FutureBazaar .com in 2007

It registered revenues of INR 12.2 mn which constituted 1.5% of the total sales of the Future Group

E-TAILING MARKET IN INDIA 2014.PPT

2010

2011

2012

• Snapdeal was launched and is deemed as one of the most successful daily deals website in India

• Taggle.com, a deal website closed its operations in the country citing reasons such as unprofitable price wars in the industry

• Amazon.com has entered India through Junglee.com in the etailing territory, and current FDI scenario is becoming stringent

4


High Internet penetration coupled with rise in disposable income is driving growth in the market e-Tail Market Overview – India • Currently, this segment is the fastest growing category out of the overall Indian e-Commerce market • At the beginning of the third quarter of 20--, the market had over 35 mn unique visitors spread across the nation • Some of the fastest growing product segments in the market comprise apparels, accessories, home & electronic appliances, books and consumer goods to name a few • Eyeing the immense growth opportunity, several players have entered the market resulting in stiff competition

e-Tail Market – Major Players India

e-Tail Market Size & Growth – India

Website

INR bn f

a xxx

b c a

b

20--

20--e

c

e d

0 20--e

20--e

20--e

20--e

Market Reach - (2012)

Player 1

Xxx

Player 2

Xxx

Player 3

Xxx

Player 4

Xxx

Player 5

Xxx

Player 6

Xxx

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The 4P’s summarize the pressure points of how, what , where and how the e-tailing ecosystem works E-tailing – 4P’s of Marketing

SAMPLE

• In close tandem with the general marketing activities, e-tailing concerns also conform to the same 4P’s of marketing activities • Just as physical retail chains need to follow certain tactics in order to promote their products at the right place at the right price, e-tailing concerns also follow the same in order to sustain in the competitive scenario

Price

Product

xxx

xxx

Place

Promotion

xxx

xxx

E-TAILING MARKET IN INDIA 2014.PPT

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Cost Stack-ups have emerged as one of the major hurdles for e-Commerce vendors in recent times Cost Stack-ups

SAMPLE

Impact

• Unlike the initial days of e-Commerce’s inception in India, vendors are now taking a toll due to the continuous cost stack-ups that occur while operating in the market  These cost stack-ups are tough to avoid, however players are keen on minimizing them without hampering the growth of their businesses

• Some of the major costs that add up and consequently lower the operating margin can be illustrated as below:

Cost of items

Free Shipping

Discounts

Inventory & Write-offs and Warehousing

Packaging

Manpower Costs

E-TAILING MARKET IN INDIA 2014.PPT

Gross Margins

After taking into account all the cost stack-ups an eCommerce vendor witnesses a significant decline in its gross margins, thereby resulting in lower profitability 7


SAMPLE

Porter’s Five Forces Analysis

Impact xxx

Threat of New Entrants • xxx

Impact xxx

Bargaining Power of Suppliers • xxx

Impact xxx

• xxx

Impact xxx

Bargaining Power of Buyers • xxx

Competitive Rivalry

Impact xxx Threat of Substitutes • xxx

E-TAILING MARKET IN INDIA 2014.PPT

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SAMPLE

Public: Foreign Company – Player 1. (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 Category

Products/Services

Key People Name

E-TAILING MARKET IN INDIA 2014.PPT

Designation

9


SAMPLE

Public: Foreign Company – Player 1. (x/x) Financial Snapshot Total Income

INR bn 4000 3000

Key Ratios

41.9

51.4

Net Profit/Loss 33.5

1140.6

0

2009

1531.8

60 40

2000 1000

INR bn

2558.5

3355.5 -2.1

2010

2011

2012

• The company incurred a net profit of negative INR 2.1 bn in FY 2012, as compared to net profit of INR 33.5 bn in FY 2011 • The company reported total income of INR 3355.5 bn in FY 2012, as compared to INR 2568.5 bn in FY 2011 • The company earned an operating margin of 1.11% in FY 2012, a decrease of 0.68 percentage points over FY 2011 • The company reported debt to equity ratio of 0.19 in FY 2012, an increase of 867.92% over FY 2011

Indicators Market Capitalization (INR mn) Total Enterprise Value (INR mn)

Value (dd/mm/yyyy)

y-o-y change (2012-11)

2012

2011

2010

2009

-0.68

1.11%

1.79%

4.09%

4.80%

-1.37

-0.06%

1.31%

3.35%

3.67%

-1.28

0.64%

1.91%

4.38%

4.70%

-5.08

-0.24%

4.84%

10.83%

10.37%

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

-3.32

4.99%

8.30%

16.69%

18.30%

-3.76

29.47%

33.23%

41.66%

48.50%

-1.33

2.08%

3.41%

7.48%

8.54%

-7.84

7.05%

14.90%

50.78%

77.79%

0.69

98.89%

98.21%

95.89%

95.19%

1.64

15.92%

14.28%

12.86%

12.49%

0.02

0.15%

0.14%

0.11%

0.14%

-4.55%

1.12

1.17

1.33

1.33

-6.28%

0.60

0.64

0.84

0.86

867.92%

0.19

0.02

0.02

0.01

729.66%

0.16

0.02

0.02

0.01

-44.59%

7.35

13.26

36.05

34.71

Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)

Liquidity Ratios Current Ratio Cash Ratio

Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio

Key Financial Performance Indicators

PE Ratio (Abs)*

0 -20

Financial Summary

EPS (USD)*

20

Particulars

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

-23.27%

6.38

8.31

12.35

16.16

-1.33%

1.88

1.90

1.82

1.77

4.36%

2.87

2.75

2.49

2.50

43.69%

26.63

18.53

10.13

10.07

-12.83%

3.16

3.62

3.16

2.78

Improved

E-TAILING MARKET IN INDIA 2014.PPT

Decline

10


SAMPLE

Public: Foreign Company – Player 1. (x/x) Key Business Segments

Key Geographic Segments

xxx

xxx

100% 50%

xxx

xxx

100% 52%

55%

56%

57%

48%

45%

44%

43%

20--

20--

20--

20--

50%

100%

0%

0% 20--

Business Highlights (x/x) Description

News

E-TAILING MARKET IN INDIA 2014.PPT

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SAMPLE

Public: Foreign Company – Player 1. (x/x) Business Highlights (x/x) Description

News

E-TAILING MARKET IN INDIA 2014.PPT

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Public: Foreign Company – Player 1. (x/x) – SWOT Analysis

SAMPLE

• xxx

• xxx

S

W

O

T

• xxx

• xxx

E-TAILING MARKET IN INDIA 2014.PPT

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SAMPLE

Private: Foreign Company – Player 1. (x/x) Company Information

Offices and Centres – India

Corporate Address

Tel No. Fax No. Website

Mumbai Head Office

Year of Incorporation

Products and Services Category

Products/Services

Key People Name

E-TAILING MARKET IN INDIA 2014.PPT

Designation

14


SAMPLE

Private: Foreign Company – Player 1. (x/x) Shareholders of the Company

Ownership Structure Foreign Holdings

Name

No. of Shares held

Xxx

Xxx

Xxx

Xxx

Xxx

Xxx Total

100.00%

Xxx

Note: Foreign Holdings include foreign institutional investors, foreign companies, foreign financial institutions, non resident Indians, overseas corporate bodies or others

E-TAILING MARKET IN INDIA 2014.PPT

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SAMPLE

Private: Foreign Company – Player 1. (x/x) Financial Snapshot Total Income

Key Ratios

Net Profit/Loss

INR mn

Particulars INR mn

-15.3

600

0

500 -50

400 300 200 100

508.6

-100

303.4 -129.0

0

-150

2011

2012

• The company incurred a net profit of negative INR 15.3 mn in FY 2012, as compared to net profit of negative INR 129 mn in FY 2011 • The company reported total income of INR 508.6 mn in FY 2012, as compared to INR 303.4 mn in FY 2011 • The company earned an operating margin of negative 30.07% FY 2012, an increase of 12.92 percentage points over FY 2011

2012

2011

2010

2009

12.92

-30.07%

-42.99%

N.A.

N.A.

12.47

-30.07%

-42.54%

N.A.

N.A.

12.92

-30.07%

-42.99%

N.A.

N.A.

-30.19

-91.70%

-61.51%

N.A.

N.A.

-29.53

-91.70%

-62.17%

N.A.

N.A.

-389.15

-468.48% -79.33%

N.A.

N.A.

-28.71%

-20.17%

N.A.

N.A.

841.28

-166.44% -1007.7%

N.A.

N.A.

-12.92

130.07% 142.99%

N.A.

N.A.

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

-8.54

Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)

Financial Summary

y-o-y change (2012-11)

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

-21.41%

1.10

1.39

N.A.

N.A.

-37.74%

0.70

1.13

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

-76.39%

5.54

23.44

N.A.

N.A.

103.49%

0.95

0.47

N.A.

N.A.

159.69%

1.35

0.52

N.A.

N.A.

744.33%

15.58

1.85

N.A.

N.A.

110.89%

3.05

1.45

N.A.

N.A.

Liquidity Ratios Current Ratio Cash Ratio

Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

Improved

E-TAILING MARKET IN INDIA 2014.PPT

Decline

16


SAMPLE

Private: Foreign Company – Player 1. (x/x) Key Recent Developments Description

News

E-TAILING MARKET IN INDIA 2014.PPT

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Private: Foreign Company –– Player 1. (x/x) – SWOT Analysis (x/x)

SAMPLE

• xxx

• xxx

S

W

O

T

• xxx

• xxx

E-TAILING MARKET IN INDIA 2014.PPT

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Consumer Behavior & Preferences: e-Commerce Segments (x/x) e-Commerce Usage Frequency

SAMPLE Low

Med

xxx

xxx

High

xxx

Mobile Usage Low

Med

xxx

xxx

High

xxx

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SAMPLE

Consumer Behavior & Preferences : Analysis

• xxx

e-Commerce User’s Gender Split – Age Wise

Product Mix Strategy

xxx

100%

xxx

90% 80% 70%

When targeting the consumers of 18-24 years

70%

60%

• xxx When targeting the consumers of 25-34 & above 35 years • xxx

43%

50%

~100%

40% 30%

57%

20%

30%

10% 0%

18-24 Years E-TAILING MARKET IN INDIA 2014.PPT

25-34 Years

35+ Years 20


SAMPLE

Social Media Domain (x/x)

Social Networking Penetration – India v/s Global India

Global

India

7.1%

12.5%

Global

8.3%

10.0%

xxx

xxx

Google Plus – User Base India forms the 2nd largest user base standing at 13.7% of the total user base of Google Plus which stands at 90 mn , ranking behind the US

% 40 30 20 10 0

31.5

13.7

xxx xxx

Google Plus User Base – Top Cities Global Rank

Rank in India

Cities

1

1

xxx

4

2

xxx

8

3

xxx

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SAMPLE

Mobile Platforms (x/x)

• xxx

Smartphone Minimum Price Point - India

Market Size – Smartphone in India mn units e

a b

+61%

c c

d e

d

a

b

0 20--

20--e

20--e

20--e

INR’000 a b c d e f g 0

20--e E-TAILING MARKET IN INDIA 2014.PPT

a

b

20--

20--

c

20-22


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E tailing market in india 2014 sample