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Dec, 2016      |     By Anil Kumar, Ujjwal Chaudhry

State of e-tailing in India

Indian e-tailing GMV Performance grew to USD 14.5 Bn in 2016.


Anil Kumar

CEO

ujjwal chaudhry

associate director

Introduction to Report

Report Structure

Seven key dimensions for assessing sector performance

E-Tailing Sector Assessment Scorecard- CY 2016

GMV Performance- Indian e-tailing grew to USD 14.5 Bn in 2016, but growth slowed down significantly compared to 2015

However, growth slowdown in 2016 was driven by external factors; none of the speed breakers were fundamental in nature

Key reasons behind industry slowdown in 2016

Top 2 players slow down ( but their GMV quality improves)
Govt. regulations prove to be a roadblock and shift e-tailer's focus away from growth

Demonetization was another headwind for the industry

A very successful festive season in Oct'16 brought cheer to the industry; GMV jumped to highest ever levels

Beyond GMV growth, the festive season also delivered positive news on other fronts

Marketing ROI for players improved significantly y-o-y

Customers satisfaction with sales experience improved

Sellers also reported being more satisfied with sales experience

Driven by a strong festive season, Q4'16 turned out to be a blessing for the industry inspite of demonetization

Category Mix- Share of high margin/high repeat categories did not increase in CY16, as players focused on mobiles

Mobiles growth was driven by exclusives; large appliances showed offshoots of growth during year

High focus on exclusive deals in mobiles

Large appliances category shows early signs of pickup

FMCG remains small inspite of Amazon's experiments

Customer Adoption - Overall online retail adoption grew slowly in CY16

Customer Satisfaction Scorecard- Overall customer satisfaction saw an improvement during CY16

Customers were satisfied by price attractiveness and product variety available online in CY16

Ease of shopping also improved during the year; however, post delivery experience still left a lot to be desired

Due to improved experience on key parameters, overall customer NPS improved marginally during CY16

Seller Satisfaction Scorecard- Overall seller satisfaction showed limited improvement in CY16

Sellers were unhappy with lack of sales growth and increased online selling costs in CY16

However, sellers reported an improvement in panel usage experience over the year

Delivery Excellence- While delivery time remained same y-o-y in CY16, delivery reliability and % fast deliveries improved

Delivery Excellence- Key Takeaways from CY16

Captive logistics takes centre stage

Warehouse orders become the norm

Large Appliances supply chains start expanding

Industry unit economics improved in CY16- primarily due to cost side improvements

CY16- Summary

What went right for the sector

What went wrong for the sector

Player Scorecard CY16- Amazon emerged as industry leader on most dimensions for CY16, with Snapdeal lagging far behind

Flipkart

Key takeaways from CY16 and Expectations from Q1'17 - Flipkart

Key takeaways from CY16

Expectations from Q1'17

Amazon

Key takeaways from CY16 and Expectations from Q1'17 - Amazon

Key takeaways from CY16

Expectations from Q1'17

Snapdeal

Key takeaways from CY16 - Snapdeal

Indian e-tailing is still nascent with a large growth potential -> barely 2% of overall retail spending is currently online

Online shoppers in India currently constitute a very small % of total online population, which should grow rapidly in next few years

Growth in online shoppers to be enabled by a fall in common barriers to online shopping by 2020- per RedSeer consumer research

In an aggressive scenario, we expect the market to move to USD 80 Billion by 2020

Industry financials also likely to improve by 2020- driven by increased sales of higher margin fashion categories

For RedSeer Offerings please write to us at query@redseer.com