This PPT consists of basic study on 1.Total Market Size 2. Drivers of growth 3. Growth retarders 4. Aggregate consumer behaviour 5. Major players and market share of players 6. Major product categories and their share in total sales ( for each player) 7. Business model of e-commerce players 8. Funding sources for e-commerce players in India 9. Latest updates on mergers, new entrants, sell-outs and acquisitions 10. Future outlook and what factors would take the industry to another level

1. Market Study on E-Commerce
industry in India
Prepared By:-
Nidhi Kumari Agarwal
Roll – 1220003
MBA (Finance)

2. Total Market Size
• In the year 2009, India’s e-
commerce market was worth
about USD 3.9 billion which
grew up to USD 12.6 billion in
2013 [1].
• A study from Internet and
Mobile Association of India
states that the e-commerce
sector is expected to reach
INR 211,005 Crore (USD
31.572 billion) by December,
2016 [2].
• By the year 2020, India is
expected to generate USD
100 billion online retail
revenue.
0
20
40
60
80
100
2009 2013 2016 2020
E-commerce Market Size in India
USD Billion
E-Commerce holds 1% of the total market share of the Indian
Retail Industry [9].

3. Drivers of Growth
Funding
Regulatory
Factors
Growth in
Infrastructure
Internet Usage
Increase in
Disposable
Income
Increase in
Urbanization
Business
Model

4. Drivers of Growth
• Funding - Growth in Financial services organization has increased the number
of potential investors such as Angel Investor, Venture Capitalists etc. According
to the report, angel investment in India in FY16 stood at Rs.113.6 crore across
69 deals, a rise of about 62% in deal value and 47% in deal volume from the
previous financial year [4].
• Regulatory factors such as recent amendments in FDI policies has created a
significant opportunities for the growth in e-commerce in India [9].
• The rapid growth in infrastructure along with significant growth in technology
for secure online transaction has also contributed towards the growth of e-
commerce [9].
• Rise in disposable income with increase in urbanizations has also contributed
towards the growth in e-commerce in India [9].
• Internet Usage - The number of active mobile Internet users grew about 99%
to 80 million by October 2015 and is expected to reach 87 million by December
and 109 million by June 2016 [5].
• Business Model - Innovation in business model such as 7 days-30 days return
policies, free product deliveries, cash on delivery and product compare
features [6].

5. Growth retarders
• Infrastructure – Internet penetration in India is as low as 0.5% of the
population as compared to the 50% of that in Singapore. It is difficult for
e-commerce to reach to 1,000 million population spread over 37 million
households in 6, 04,374 odd villages and 5,000 towns and cities [7].
• Digital Illiteracy – The major language at which e-commerce operates is
English which is not the commonly used language. Another issue is
education with respect to using and handling is not reachable to the
remote villages and out-skirts of the major cities and town [7].
• Huge diversification in terms of geography, culture, language, perception,
preferences, income base. It makes e-commerce difficult to cater to all the
needs.
• More reliability over an old network at local level with SMEs, traders and
shopkeepers [6].
• Privacy and security concerns regarding online transactions [7].
• Issues related to tax administration in India [7].

6. Aggregate Consumer Behavior
• Improved Technology - Technology advancements such as has bridged the
gap between sellers and buyers. Emergence of blogs in past 4-5 years have
created more awareness and acts as a two way communication channel for
online retailers and vendors.
• Secure online shopping model with secured bank transaction and online
payment facilities have created a sense of trust. Improved fraud prevention
and detection technologies with safe and secured business environment in
preventing credit card frauds, identification of theft and phishing [6].
• Youth - The youth or the young population find it much easier and safe [6].
• The 24x7 service facility, rapid delivery, ease of transportation of goods
purchased, ease of availability, experience of product before purchasing etc
has increased the usefulness and ease of use for the users [8].
• Although the physical infrastructure (internet and computer/mobile) is often
unavailable or inaccessible at the bottom of the pyramids in the developing
market, the rapid change in external environment has increased an affinity
towards online shopping among the consumers.

7. Major players and market share of
playersCurrently, the Indian e-commerce market is dominated by three players who
command more than 90% share in this market —
•Flipkart
•Snapdeal
•Amazon.
Furthermore, two product segments (viz., electronics and appliances and
fashion products) dominate nearly 80% of this market [13].
Source – Forbes.com

8. Major product categories
The major product category
of ecommerce in India
comprises of following along
with their major players.
Category Company
Clothing Jabong, Flipkart,
Myntra
Electronics Amazon, Flipkart
, Snapdeal
Non-merchandise Flipkart,
Shopclues,
Amazon
Durgs and Health
aids
Computer Hardware Flipkart,
Shopclues,
Amazon
Office supplies ebay
Furniture
Personalized Gifts Ferns and Petals
Travel and Tourism Makemytrip,
Tripadvisor, Ibibo
Source – Trak.in

9. Business model of E-Commerce
players
• Marketplace Model (seller will handle inquiry, order, shipping, return etc). They will only
promote their site and products.
• Also Amazon and Flipkart has dual business model- Seller (they also sell products directly on
their site) and Marketplace.
For example - SnapDeal Business Model Sequence
1. List Sellers – Today SnapDeal claims of having 100,000+ Sellers on its platform.
2. Get Sellers to become Active – By Listing of the Products
3. Sellers Agree to the Terms and Conditions of SnapDeal and agree on a selling commission on
every order [Ranges fro5-30% of the Sale Value depending on the item listed to be sold.]
4. When ever any order is put up on SnapDeal by a customer, SnapDeal passes that to the seller
and arranges for the pick up and delivery [if fulfilled by SnapDeal] or else the Seller directly
ships it to the customer.
5. At the end of a certain pre – agreed period of settlement of payments to Sellers, SnapDeal
aggregates the total sale achieved by a particular seller, and after deducting the sale
commission and service tax, they wire transfer the rest of the money to the seller.
The sale happens via channels (such as website sales, mobile app, direct via tele-sales etc.) &
For the entire amount of sale achieved by SnapDeal for particular seller SnapDeal will charge
a percentage (%) cut on the total sale amount excluding VAT / CST.

10. Funding sources for e-commerce
players in India
• Foreign Direct Investments – Amazon.com
• Investment fund from Foreign Governments – USD 75 million investment
fund of the Government of Malaysia for Yepme
• Crowd-funding
• Angel Investors or seed investor or informal investor.
• Venture Capitalists (Series A, B, C)
• Incubation Centers
• Established Firms or entrepreneurs etc.

11. Ratan
Tata 2.0:
Start-up
mentor
and
angel
investor
Source –
HindustanTimes.com

12. Latest updates on mergers, new
entrants, sell-outs and acquisitions
• MakeMyTrip and Ibibo, online travel market agreed to combine their
business to become a dominant player–announced on 19th October, 2016[10].
• Another announcement was made on 26th July 2016, Flipkart owned Myntra
has acquired Jabong from Global Fashion Group for an undisclosed amount
[11].
• Online fashion marketplace Voonik Technologies recently made three
acquisitions — Zohraa, a marketplace for designers and boutiques, Styl and
Picksilk — that helped it enter the premium ecommerce segment [12].
• Bengaluru-based online gifting platform Giftxoxo recently acquihired
BookMyInterest, a marketplace for hobbies and leisure activities [12].
• InnerChef, a Gurgaon-based food technology startup, has acquired two firms
in the same space to expand their presence to other cities. Its cofounder
Rajesh Sawhney said it is looking at more acquisitions in the future [12].
• Voonik officials said the company is now looking to acquire from the fields of
machine learning and artificial intelligence [12].

13. The e-commerce acquisition spree
continues in 2015
Source – Yourstory.com

14. Future outlook and what factors
would take the industry to another
level
• As illustrated in the initial topics, the growth potential of ecommerce in
with the advancement of the reach of technology is quite high in India.
• The major giants has created a potential barrier to obstruct the threat of
new entrant in to market but along with that a sustainable development
can be assured more with the retention of customers.
• For this ecommerce giants need to provide more comfortable shopping
experiences driven with the money-savings innovations.
• The industry could be taken in to another level with a potential
warehouse connected with quick delivery services to meet the impatient
demands of the Indian Consumers.
• This can be illustrated with outlook of an example of Reliance retail
industry entering into ecommerce, might be in any future.

15. Thank You
eCommerce
1%
Indian Retail
Industry
99%
Market Share
In March 2016, after the approval of 100 percent foreign investment in
Market place ecommerce companies, Bank of America Merrill Lynch
has forecast Indian e-commerce will surge to $220 billion in value of
goods sold by 2025 from about $11 billion last year, outpacing growth
in bricks and mortar retail [13].