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Electronics

Published in June, 2020

Executive Summary

Performance Benchmarking

Why is it relevant?

Over the past six years, India has emerged as one of the most exciting markets for start-ups in the world. Billions of dollars have been poured into start-ups since 2014, which have been spent by e-commerce companies, transportation apps, food delivery firms and others on attracting customers to their platforms.

Increasing internet penetration, fast mobile internet connectivity and rising incomes will continue to drive capital into internet start-ups that are attempting to unlock the potential of the country’s large consumer base. However, it seems like the thoughtless spending and funding of losses is coming to an end. Now investors are pushing their portfolio start-ups to urgently focus on building sustainable business models, reach profitability and abandon a growth-at-all-costs approach.

This new push toward profits involves identifying the key levers for creating a sustainable business model, which can then lead to a transparent and shorter path to profitability. Thus, it is important for platform and investors to keep regular update of the operational and bottom-line metrics across category and player segments to assess their relative positioning.

What Platform Benchmarking Product offers?

Platform benchmarking product is relevant for internet players across various stage of growth including mature players, growth stage players and new entrants. It is also relevant for existing investors and new investors willing to explore the growing Indian internet ecosystem. Our platform benchmarking product will offer comprehensive range of solutions to customers including:

1. Comprehensive Assessment of Unit Economics – View on unit economics of a category across size of the platform and business model of the platform.
2. A Competitive Edge – See which platform is leader/ laggard on various metrics across top-line, operational and bottom-line metrics.
3. Potential Targets for Investment– View on top-line growth and profitability metrics across categories and business model to identify potential area for investment.
4. Assessment of Investment Portfolio- View on performance of various internet sectors within the portfolio and identifying the winners.

What is our Category Benchmarking Product?

1. Single-Click User Snapshot – An intuitive dashboard with holistic assessment of topline, operational, and bottom-line performance of players in various internet sectors. Updated quarterly, this tool is powered by Microsoft BI and available as subscription and custom requirements.
2. Customizable Dashboard – Our product will reveal the unit economics of internet sectors by platform size and business model which can be customized at the click of a button.

How is it different?

1. Deep expertise in Internet – RedSeer has deep expertise and experience in the internet space. With several years of research and analysis of e-tailing players, RedSeer has helped its clients in various business areas and made them to scale.
2. Rich with primary and actionable data- With more 25 quarters worth of primary driven data and 5000+ hours of e-tail expert interactions, we gather rich analysis around performance of various categories across platform in overall e-tailing making our product reliable and actionable.

  • See: Inside the Report

    1. Top-line Performance
    1.1. Gross Merchandise Value (GMV)
    1.2. Net Merchandise Value (NMV)
    1.3. Gross # Orders
    1.4. Shipped # Orders
    1.5. Average Order Value (AOV)
    1.6. Average Selling Price (ASP)

    2. Operational Metrics
    2.1. Shipped as a %age of GMV
    2.2. Fulfilled as a % of GMV
    2.3. RTO as a % of Shipped Orders
    2.4. RVP as a % of Shipped Orders
    2.5. % Pre-paid share
    2.6. % Private Label Share

    3. Bottom-line metrics
    3.1. Revenue as a % of NMV
    3.2. Supply chain costs as a % of NMV
    3.3. PG costs as a % of NMV
    3.4. Platform Discount as a % of NMV
    3.5. Contribution Margin
    3.6. Customer support costs as a % of NMV
    3.7. Advertising and marketing costs as a % of NMV
    3.8. People and Admin costs as a % of NMV
    3.9. Cash Burn as a % of NMV

    4. Segmentation of Topline, Operational and Bottom-line Metrics via Size of Platforms
    4.1. Small Players
    4.2. Mid-Size Players
    4.3. Large Players
    4.4. Very Large Players

    5. Segmentation of Topline, Operational and Bottom-line Metrics via Type of Platforms
    5.1. Horizontal Players
    5.2. Fashion Verticals
    5.3. Furniture Verticals
    5.4. Super Verticals
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