20
An eCommerce Association of India Initiative
An eCommerce Association of India Initiative
2
e-Commerce has seen a sporadic growth in India witnessing a revolutionary change in the both consumerism and businessdom. The industry, through various estimates, is currently a USD 15 billion in India with a conservative YoY growth of 35%. Prevalent view amongst the stakeholders that this growth can be sustained over a long period of time as e-Commerce will continue to reach new geographies and encompass new markets. One of the biggest factors of growth that even though the goods and services ordered online, payments need not be made electronically, this was hitting the nail on the head on the psyche of the Indian consumers. Also the high rate on internet penetration throughout has pulled up the sales online. e-Commerce is one of the most dynamic sectors in India that sees new trends and developments almost every day. The industry is giving birth to a new wave of entrepreneurship and innovation covering across various demographics. e-Vyapar, an initiative of the e-Commerce Association of India (ECAI), aims to project this change by covering various trends, views, industry interactions, insights etc. Being a monthly issue, e-Vyapar would aim to be a connect for the industry, across industries, institutions and Government for the exchange of ideas. We hope to make e-Vyapar a platform where the industry can voice opinions and share ideas and concerns with the rest of e-Commerce fraternity. Look forward to your support and suggestions.
Nasir Jamal Vipul Sharma Secretary General Editor (e-Vyapar) e-Commerce Association of India (ECAI) Director - ECAI
Foreword
3
Table of Contents
1. About ECAI……………………………………………. 4
2. From the Corner offices………………………………. 6
3. Straight from the horse’s mouth……………………. 11
4. Insights 101……………………………………………. 15
5. Out of the box………………………………………….. 16
6. Across the Border……………………………………… 18
4
ECAI (eCommerce Association of India) is the only association in India that intends to dedicatedly work towards promoting the business of eCommerce in India. The association shall encompass the entire eCommerce eco-system including, the service providers, suppliers, PE & VCs, supply chain companies and as well as the consumers. Some of the objectives & services of ECAI are:
• To press forward the interest of B2C and B2B e-commerce industry with relevant stakeholders and institutions
• To provide with new brand recognition and membership engagement at all
levels.
• To collaborate and associate with related National and International Organizations for update on technologies and latest practices the ecommerce and online business in India.
• To provide an avenue and forum for an open and constructive framework for the
discussion of trends, forecasts, policies, directions and challenges of ecommerce industry in India
• Political and legislative community supervision & engagements through
analyzing and following up on political and regulatory developments. Public +affairs initiatives and actions to Indian institutions, engaging with institutions and relevant e-commerce stakeholders.
About ECAI
5
6
From the Corner Offices
Infibeam.com 1. What trends are you seeing in the online space, what are your growth projections for 2014-2015? Two major trend drivers this year will be mCommerce & the Lifestyle category. The ecommerce growth in India has come majorly from online ordering through computers. Imagine the numbers that will be possible when better network connectivity kicks in and ecommerce starts happening from the 150M+ internet enabled mobile phone users (Ref: IAMAI). Similarly, till recently majority transactions were happening in Books & Electronics categories. Lifestyle is growing very fast and as a category is very interesting. Categories like apparel, personal care are daily necessities (vis-a-vis books & electronics) and
will enable better profitability. We expect to continue growing at 300% annually. 2. Is it the right time for thinking about consolidations in the Digital Industry in India? The consolidations in Indian ecommerce industry are majorly investor driven i.e. to leverage all their investments to control the operational costs as they drive further growth. We believe its too early for consolidations with several large players continuing to build out their vision. In fact with customers hooking onto ecommerce and infrastructure becoming better by the day we see a lot more retailers & brands going online this year to leverage the digital channel as part of their omni-channel retail initiatives. (Ref: Infibeam's digital commerce platform Buildabazaar)
7
3. What are your views about FDI being allowed in e-Commerce in India? FDI activation in any industry brings in much more than just capital. We believe that there is good amounts of capital available in India for eCom companies that have a fundamentally sound business model. However, FDI will bring in global partners to India which in turn drives higher competition and hence better selection, standards, infrastructure & service for the buying consumer. Also, as we grow and learn from these partners, it gives opportunity to the Indian Retail companies to go global.
4. Keeping in mind the demographics of our country and growth prospects of the industry, Is this a good time to be an ecommerce employee in India? Definitely. Its just a 10-15 year old industry. As the industry starts picking up scale, it gives tremendous amounts of opportunities in innovation in every vertical be it technology, finance, supply chain, digital marketing & sales etc. 5. As per your experience what has been the impact, in terms of revenue and customer base, of Social Media on ecommerce industry in India? Social Media has served as a good engagement medium for ecommerce industry. It has not been a significant revenue driver as compared to other channels such as search or digital ads. 6. What according to you are the 3 factors that shall aid the growth of e-Commerce Industry in India? 1. A seamless tax structure across various states of India 2. A transparent & practical structure to move goods across state borders.
Mr Sachin Oswal Co-founder Infibeam.com & Member, ECAI
3. A better payment infrastructure in India where more and more citizens have access to digital payments whether through banks or parallel partners. The first 2 will help in providing faster delivery to the customer and the third will bring in more scale & profitability due to moving away from setups such as cash on delivery
Harish BijoorBrandCEO, Harish Bijoor Consults Inc
1. What trends are you seeing in the online space, what are your growth projections for 2014 Online today is an experience that spans literally every physical realm there is to explore. From vegetables to advanced electronics, online is today both a B2B and B2C exploration. This exploration has seen ups and downs as players have explored, failed and succeeded in equal measure. I see the terrain of pure-play e-commerce that relies on the Internet for the entire chain from exploration to delivery to be the first to succeed with impact. Anything that you can search, explore, see, tocuh, feel and buy with an immediate online delivery capability will succeed the most. To an extent this kind of a product or service decimates geography, distance and product-delivery wait-time. The purchase of theatre tickets, music and e-books work in this terrain.
8
Harish Bijoor Brand-expert & CEO, Harish Bijoor Consults Inc
What trends are you seeing in the online space, what are your growth projections for 2014-2015?
Online today is an experience that spans literally every physical realm there is to explore. From vegetables to advanced electronics, online
a B2B and B2C exploration. This exploration has seen ups and downs as players have explored, failed and succeeded in equal
commerce that relies on the Internet for the entire chain from
o be the first to succeed with impact. Anything that you can search, explore, see, tocuh, feel and buy with an immediate online delivery capability will succeed the most. To an extent this kind of a product or service decimates geography, distance
time. The purchase of books work in this
The second big success arena I see for ein the country is in the rural terrain. India is a land of 6,43,500 plus villages. Distance is a big issue. These markets are widelocated across difficult terrain. There is a great degree of rural prosperity that is around us. There is therefore a great degree of desire build up for products and services in the Indian rural market. This desire is not met by availability. Ecommerce today has the ability to bridge this gap. This is a humongous opportunity one can capitalize upon. The big trend I see in online space is the opening up of rural India. With e-commerce, geography is history in a real a
The second big success arena I see for ecommerce in the country is in the rural terrain. India is a land of 6,43,500 plus villages. Distance is a big
hese markets are wide-spread and are difficult terrain. There is a great
degree of rural prosperity that is around us. There is therefore a great degree of desire build up for products and services in the Indian rural
not met by availability. E-commerce today has the ability to bridge this gap. This is a humongous opportunity one can capitalize upon.
The big trend I see in online space is the opening commerce, geography
in a real and final sense.
9
2. Is it the right time for thinking about consolidations in the Digital Industry in India? I do not believe this is the right time. Expect a lot of frenetic action in this space over the next two-three years. The time for consolidation in the Indian digital space will emerge ripe and right then. Valuations are likely to be more exciting then than now. Those who wait will see a better and more exciting number play. 3. What are your views about FDI being allowed in e-Commerce in India? I am personally excited about this. This will open up the market like never before. 4. Keeping in mind the demographics of our country and growth prospects of the industry, Is this a good time to be an ecommerce employee in India? Yes it is. e-commerce is going through its early learning phase as of now. Even though we are all excited about what is happening in this space, believe it or not, this is like a small trailer of the real big movie that is to come about. Those who train and learn in this space will be rich in their experience profiles. E commerce is also a frenetic terrain. Those who focus on learning and understanding the norms of Big Data and what
it can achieve in the space of e-commerce will emerge true blue specialists who will be chased by employers for who they have become. 5. What according to your experience has been the impact, in terms of revenue and customer base, of Social Media on ecommerce industry in India? Social media is yet to monetize its ability. Expect this to happen when true traction is gained when we can boast of an Internet audience of approximately 500 Million. This should happen over the next three years at the latest. When this number is hit, Social Media will get leveraged by marketers better. That will be the time to see monetization effort result in big moneys.
Contd…..
10
6. What according to you are the 3 factors that shall aid the growth of e-Commerce Industry in India? The first is the potential of what I call the supply-distanced markets. By this I mean the potential of rural India. At last, there is a level playing field for the marketer who wishes to reach rural markets. E-commerce in its pure avatar, as well as assisted e-commerce, where an I-Pad toting salesman will wander into our villages on a route-plan, show-casing the allure of products and services that can be bought on the Net, will open up the vast and untapped rural opportunity. The second is the very low Internet penetration levels in the country as of now. After all these years we are still all of 225 Million people on the Net. The remaining 1 Billion opportunity is what brings further excitement and potential.
The third is the morph of India from the cash to the card and virtual money concept. India is a huge cash-market. Everyone buys everything with cash. This is bound to change and morph. Cash will be considered passe, cumbersome and even corrupt in the future. As this happens, and as the credit card movement grows, expect greater comfort levels with e-commerce and its transactional profile of credit cards. This will give a good boost to the market at large. 7. Can eCommerce be considered the easiest way to businessdom in India? Not really. Nothing really is. Everything takes hard work. There are no short-cuts. I work and advise in this space to some 35 and odd e-commerce players, and nowhere have i seen a lazy comfort level. Everyone is slogging their rear-ends off, and there is no easy way to businessdom in any case. Ecommerce is a tough space to operate in, and those who operate in this space in India are the toughest of them all!
Straight from the horse’s mouth
Every month ECAI as a part of industry engagements invites views and opinions from the e-commerce fraternityMembers on the burning issues that are affecting the industry. ECAI after collating these sends it across to the concerned Ministries & government Departments for their perusal. In this issue we sought views from the industry on the much talked about FDI (Foreign Direct Investments) in ecommerce and if it is allowed what shall be its impact on the industry.
The Government of India directivedate, is that FDI is “not” allowed in the B2C eCommerce sector in India. However, a large fraction of the ecommerce community believes that opening up of the sector shall be beneficial to the industry inways by creating more competition, bringing in greater transparency and allowing a very viable exit option for entrepreneurs. Leading market research company IMRB has hit the nail on its head when it says that “There seems to be a logical confluence in the growth of the online buyers and the suppliers and thinflexion point seems to be immediate. Investments from foreign private players might just be the fillip required to further the growth of the eCommerce industry. The investments, however,
11
Straight from the horse’s mouth
ECAI as a part of industry engagements invites views and opinions
commerce fraternity/ Members on the burning issues that are affecting the industry. ECAI after collating these sends it across to the concerned Ministries & government
for their perusal. In this issue we sought views from the industry on the much talked about FDI (Foreign Direct Investments) in ecommerce and if it is allowed what shall be its impact
directive, as of FDI is “not” allowed in the
B2C eCommerce sector in India. However, a large fraction of the ecommerce community believes that opening up of the sector shall be beneficial to the industry in a lot of
more competition, transparency and
allowing a very viable exit option for
Leading market research company has hit the nail on its head when it
There seems to be a logical confluence in the growth of the online buyers and the suppliers and the inflexion point seems to be immediate. Investments from foreign private players might just be the fillip required to further the growth of the eCommerce industry. The investments, however,
need to be channeled towards the areas which could lead to socialinclusive development of the overall ecosystem of various industries. Mr. Manish Kalra, MakemyTrip.com
writes that “I guess it is apt to allow 100% FDI in E-commerce as this will ensure customers get a fair choice of best products across the world as well initiate healthy competition which will ensure that customers get the Best rates and Services in India. Ultimately all policy should be evaluated considering the customer in mind.”
TOTAL FDI INFLOWS (in all
sectors- from April,
2013): US $ 301.78 Billion
need to be channeled towards the areas which could lead to social inclusion and inclusive development of the overall ecosystem of various industries.”
Mr. Manish Kalra, MakemyTrip.com also I guess it is apt to allow
commerce as this will ensure customers get a fair choice of
across the world as well healthy competition which will
ensure that customers get the Best rates and Services in India. Ultimately all policy should be evaluated considering
TOTAL FDI INFLOWS (in all
from April, 2000 to July,
2013): US $ 301.78 Billion
(Dipp stats)
12
Allowing foreign investments will help in introducing transparency in fund flows and
company structure, generate significant employment and promote Investment in back-
end infrastructure – with a significant impetus to warehousing, stocking, logistics &
transportation industry and development of related software i.e. introduction of
automated systems to track & monitor inventory, transportation & delivery of goods
from start to end.
However, treading with caution is also
on the radar of many entrepreneurs and
rushing into allowing FDI is not
advisable. Mr Vishal Mehta , Founder CEO
Infibeam.com while highlighting the similar
perceived benefits very appropriately states that
“since the India organized retail market is still
in its early stages vs. developed geographies, a
clear set of rules and guidelines need to be laid
down so that small and medium size retailers
and traders do not get displaced from trade
ecosystem. If there are appropriate check and
balances to ensure that there is trickle down
effect at every level of economic pyramid.”
In addition to the suggestion of local sourcing by the foreign players (like in the case of
FDI in retail), government should evaluate incentives for small and medium enterprises
to keep them competitive. According to IMRB views “It is a well-researched fact that
MSMEs/SMEs utilizing web for its distribution have experienced higher growth in
sales than the ones not using it. As per recent industry reports, these MSMEs/SMEs
have experienced growth of 19% compared to 13% among MSMEs/SMEs not using
web as distribution channel.”
A very valid point highlighted by one of the
experts working in the industry was that of
“Outsourcing back-end operations to India
–Possibility of foreign e-commerce
companies also moving their global back-
end operations related to their global e-
commerce business to India such as
customer support, catalogue management,
third party risk management systems etc. to
India due to the already existing strengths
of the IT & ITeS sector in India.”
Before 2006: Foreign direct investment (FDI) in singlebrand retail prohibited
2006: FDI in cash-and-carry (wholesale) brought under ‘automatic route’. Earlier, it was allowed under ‘approval route’. 51 per cent investment in single-brand retail permitted
April 2010: Cash-and-carry wholesale trade subject to 25 per cent intragroup sales restriction
December 2011: Union Cabinet proposes 51 per cent FDI in multibrand retail
January 2012: FDI in single
February 2012: Amazon sets up online marketplace waiting for FDI in multi-brand retail to open up
14 September 2012: The government opens FDI in multi brand retail up to 51 per cent (subject to conditions)
20 September 2012: The government clarifies emulti- and single-brand retail is not permissible for companies with FDI
January 2014: Dipp releases a discussion paper on “Ecommerce in India, highlighting the pros and cons of allowing FDI in the sector
A strong case can be made for
companies to be set-up outside the municipal limits and lead to development in semi
urban and rural areas including generating local employment.
13
Foreign direct investment (FDI) in singlebrand retail
carry (wholesale) brought under ‘automatic route’. Earlier, it was allowed under ‘approval route’. 51 per cent
brand retail permitted
carry wholesale trade subject to 25 per cent intragroup sales restriction
Union Cabinet proposes 51 per cent FDI in multi-
FDI in single-brand retail increased to 100 per cent
Amazon sets up online marketplace — Junglee after brand retail to open up
The government opens FDI in multi brand retail up to 51 per cent (subject to conditions)
The government clarifies e-commerce in both brand retail is not permissible for companies with
Dipp releases a discussion paper on “Ecommerce in India, highlighting the pros and cons of allowing FDI in the sector
for most of the warehouse/fulfillment centre for e
up outside the municipal limits and lead to development in semi
urban and rural areas including generating local employment..
FDI Timeline
centre for e-commerce
up outside the municipal limits and lead to development in semi-
14
No risk to kirana stores –completely
different profile of goods sold by kirana
stores – typical kirana stores do not sell
consumer electronics, apparel, books, music
etc. And what they do sell is not sold online
by e-commerce companies (like groceries,
fruits or vegetables). Small convenience
stores in residential areas will continue to
thrive as they continue to offer smaller units
to customers who buy on a more frequent
basis and want easy accessibility to a store
within walking distance. Unorganized
retail, which constitutes majority of the
Indian retail sector, does not engage in e-
commerce – target user is totally different
Wider reach of material like books – where
e-commerce platforms will sell reading &
educational material such as books,
including in multiple Indian languages, it
can give additional impetus to consumer
access to information across states which is
a significant positive.
Investment by way of state of the art
technology & expertise in improving the
supply chain will bring efficiencies and
economies of scale. Therefore, FDI targets,
of minimum US$ 100 million and out of
which at least 50% in back-end
infrastructure, can be met by serious long-
term players
Employment generation in areas such as
customer care (BPOs), IT and ITeS,
warehousing,logistics/transportation,
shipping and administration. Some
indicative figures are:
A) In warehousing business, an average
warehouse/fulfilment centre of 1
lakh sq.ft. size would require
approximately 250-300 employees,
direct or contract, including from a
facilities manager, to operate &
manage it
B) In the transportation & logistics
area, for a e-commerce company
operating in even restricted areas,
over a period of 3-5 years it is
estimated that a work-force of 5000-
6000 employees could be engaged in
managing transportation services
offices, deliveries and related
administrative services (this does
not take into account business that
will be generated for third party
delivery service providers including
the Indian Postal department).
However the industry can keep their
fingers crossed and hope that with the
advent of the new government, in the
coming months, shall open up greater
avenues for the ecommerce industry in
India and paint a much clearer picture
on these Investment Regulations
0
2
4
6
8
10
12
14
16
18
20 19
1211 11
No. o
f Deals
15
109
8 8
Insights 101
Most Active Investors in 2013
Highest funding clinchers
Insights 101
Most Active Investors in 2013
funding clinchers till date
Alma Connect
• Works with institutions to help them build a strong alumni community by creating a social-professional ecosystem among alumni, faculty, students and management of an institution
bluegape
• Increases your business by generating more fans, leads and sales from yourFacebook pages using cutting
BedBathMore
• Online shopping portal dedicated to home furnishings
Cashkaro
• India’s leading cashback and coupon website, who have partnered with many big brands like Flipkart, Jet Airways, Myntra, Expedia
CrudeArea
• Online graphic art marketplace. world and India
CultureAlley
• Helps you learn languages for free with scientifically designed audiointeractive practice
DocSuggest
• Website where you can search for doctors in your city
16
Works with institutions to help them build a strong alumni community by creating a professional ecosystem among alumni, faculty, students and management of an
Increases your business by generating more fans, leads and sales from yourFacebook pages using cutting-edge software technology
Online shopping portal dedicated to home furnishings
India’s leading cashback and coupon website, who have partnered with many big brands like Flipkart, Jet Airways, Myntra, Expedia
Online graphic art marketplace. Transform your world with gorgeous art from around the
Helps you learn languages for free with scientifically designed audio
Website where you can search for doctors in your city
Out of the Box
Works with institutions to help them build a strong alumni community by creating a professional ecosystem among alumni, faculty, students and management of an
Increases your business by generating more fans, leads and sales from your
India’s leading cashback and coupon website, who have partnered with many big brands
Transform your world with gorgeous art from around the
Helps you learn languages for free with scientifically designed audio-visual lessons and
Out of the Box
Flat.to
• Will connect you to the best brokers and owners around your college with the coolest bachelors pads
Giveter
• Portal with unique gift ideas for Valentine`s Day gifts,birthday gifts, anniversary gifts, diwali gifts and rakhi gifts
Milaap
• Milaap invites you to champion for hardstruggling to make ends meet
Online Prasad
• It connects you to your faith. They offer & home deliver prasad from 50+ temples
Qyuki
• Social media platform for artists. Founded by Shekhar Kapur and A R Rahman, a social media site where people will be able to collaborate on stories that could take the form of video, audio or something else
SayShaadi.com
• Aims at creating an elegant onewedding planning website that will change the way we plan
Whit Collar Hippie
• The portal is about bringing you incredible off
17
Will connect you to the best brokers and owners around your college with the coolest
Portal with unique gift ideas for Valentine`s Day gifts,birthday gifts, anniversary gifts, diwali gifts and rakhi gifts
Milaap invites you to champion for hard-working mothers in rural India, who are struggling to make ends meet
It connects you to your faith. They offer & home deliver prasad from 50+ temples
Social media platform for artists. Founded by Shekhar Kapur and A R Rahman, a social media site where people will be able to collaborate on stories that could take the form of video, audio or something else
Aims at creating an elegant one-stop premium online solution for Indian weddings, a wedding planning website that will change the way we plan our wedding day needs
The portal is about bringing you incredible off-beat travel and outdoor experiences
Will connect you to the best brokers and owners around your college with the coolest
Portal with unique gift ideas for Valentine`s Day gifts,birthday gifts, anniversary
working mothers in rural India, who are
It connects you to your faith. They offer & home deliver prasad from 50+ temples
Social media platform for artists. Founded by Shekhar Kapur and A R Rahman, a social media site where people will be able to collaborate on stories that could take the
stop premium online solution for Indian weddings, a our wedding day needs
beat travel and outdoor experiences
18
FIFA World Cup and Olympics to propel ecommerce growth in Brazil
Brazil, one of the key members of the
BRIC countries, is the world’s seventh
largest economy in terms of GDP and also
purchasing power parity. The country of
Sports, growing consumerism and most
sought travel destination makes Brazil big
market for ecommerce with a growth rate
of more than 12%.
Online shopping, though still not the most
preferred, is catching up fast. While still in
a relatively early stage of ecommerce
development, these numbers place Brazil
as the 10th largest market worldwide in
2014 ranked by retail ecommerce sales,
trailing South Korea by $3.47 billion and
leading Denmark by $4.64 billion. India,
the world’s second most populous
country at 1.2 billion, does not make the
Top 30, because of low Internet
penetration (10 percent) and poor
financial and logistical infrastructure
compared to other countries. The sheer
size of Brazil’s internet space already
makes it a sizeable market. A study
conducted by eMarketer estimates Brazil
will have 107.7 million internet users in
2014, 37.7% of whom will make a digital
purchase. This represents a market of 32.9
million consumers buying via digital
channels and amounts to 36.4% of all
digital buyers in Latin America.
The upcoming 2014 World Cup and 2016
Olympics in Brazil will result in a need for
the country to expand their aviation and
ground transportation infrastructure to
support the influx of tourists. These
events will likely have an indirectly
positive effect on Brazil eCommerce.
Across the Border
19
As in other countries, digital travel
sales have played a major role in the
growth of ecommerce in Brazil. Travel
represented close to a third of the
country’s total ecommerce sales in 2012,
eMarketer estimates. Brazil’s sheer size
means that air travel is required to get
from place to place, and airline tickets
can be expensive.
Retail sales will rise in part on the heels of
a greater number of internet users buying
via digital channels. In Brazil, where even
small percentage changes equate to tens of
millions of consumers, the size of the
middle class is the key to ecommerce
growth.
eMarketer estimates that Brazil will have
26.7 million digital buyers in 2013, equal
to 36% of internet users. That penetration
level is a far cry from the US, where the
figure is 73%, but Brazil outpaces Latin
America as a whole, for which the average
is 33.2%.
Brazil, being progressive to the e-
commerce sector, presents an example for
India to follow. Internet penetration in
India is still a very long way from its
capacity. A conducive business
environment with a focus on building e-
infrastructure and better resources
management can help take the India story
break into the top 10 market for
ecommerce in the world. With the proper
streamlining of the growth story and
resource management, our country can
not only replicate but better the Brazil
model for ecommerce growth.
20
For interviews, voicing
opinions,
Advertisements and
Membership please feel free to
write in at
eCommerce Association of India 122, 1st Floor, Devika Tower, Corporate Business District, Nehru Place,New Delhi – Telefax: 011 41582722 Email: [email protected]@[email protected]
For interviews, voicing
opinions, articles,
Advertisements and
Membership please feel free to
write in at
eCommerce Association of
Floor, Devika Tower, Corporate Business District, Nehru Place,
110019 Telefax: 011 41582722
