In GMV run rate terms, the Indian e-tailing market reached $ 10.5 billion in size in March 2015; horizontal players captured majority of the share

E-tailing market segmentation

Overview, market sizes in $ billion

Key insights

• Horizontal players i.e. players selling products across verticals, dominate the e-tailing market
• The major horizontal players Amazon, Snapdeal and Flipkart contribute ~75-80% of sales to the e-tailing market
• Major verticals which vertical players operate in includes fashion, furniture and home furnishings, eye care products, healthcare products etc.
• These niche players constitute a small share of the market currently, but are growing rapidly

Flipkart has a ~40% share of the Indian e-tailing market but is lagging behind its rivals Amazon and Snapdeal in terms of GMV growth

Market share of horizontals

As % of total e-tailing market

Key drivers of Amazon India growth

• Focus on developing the widest product selection coupled with aggressive discounting policies
• High investment in and rapid expansion of Amazon Transportation Services network to enable a high degree of control over last mile delivery
• Strong focus on customer and seller satisfaction and high investments in technology

Key drivers of Snapdeal growth

• Focus on aggressively launching new and innovative categories including services
• High marketing spends on celebrity endorsements and on discount burns
• Strong focus on the mobile platform, which enabled it to grow the fastest amongst all e-tailers in Tier 2+ cities

Flipkart is lagging behind Amazon and Snapdeal in growing its seller count as well

Seller count for leading horizontals

Seller growth rates

• Flipkart has a predominantly inventory based model through WS Retail which has prevented it from increasing selection/categories as rapidly as its competitors
• Flipkart is now focusing on moving away from the WS Retail model gradually and hence its seller count is increasing
• Snapdeal has been aggressively onboarding sellers across India by setting up regional offices and by targeting smaller sellers of niche product categories
• Amazon has been onboarding sellers rapidly through a third party entity called Prione, which is a JV with Catamaran

Flipkart has the highest monthly cash burn of ~USD 60 Million; key cash burn areas across players are supply chain and marketing expenses

Player Cash Burns

USD Millions

• Supply chain costs hovers around 6-8% of GMV and account for a significant share of cash burn
• Marketing spends of 3-5% of GMV and discounting spends of 10+% of GMV further increase cash burn across players

This document covers insights on the e-tailing market in India, covering the key strategies implemented by the players.

DOWNLOAD HERE

Select Region
INDIASEAMEA

Company Type PE VC Corporates Startups Investment Banks Journalists other

Enter Other Company Type

Subscribe to our newsletter

Thank You

Here is your requested download!