Embed Size (px)
DESCRIPTION
For the complete report, get in touch with us at : [email protected] Online shopping has caught the fancy of the common people in a phenomenal way in recent years. As the significant changes in modern lifestyles are leading people to become increasingly hard pressed for time, they are constantly on the lookout for quicker alternatives for practically every kind of activity and shopping online has earmarked a new trend in this time-saving effort. Indian retail has been quick to capitalize on this new concept, thereby heralding a new era of e-tailing. Although e-commerce has been prominent in the online domain for quite some time now, yet it is different from e-tailing in the sense that while the former includes sale of goods and services, the latter pertains to only goods. Despite certain prevalent inhibitions regarding the prospects of e-tailing in the country, this form of shopping has suddenly received a new lease of life and is well on its way towards further growth due to the increasing internet and credit card penetration and general tendency among consumers to explore new avenues of shopping. The report begins with an introduction of the retail market in India primarily because e-tailing is an online variant of retailing. This is followed by the introduction of the parent industry for e-tailing which is the e-commerce sector. A brief introduction is provided on the e-commerce sector along with the market size and growth as well as market segmentation. The focus then shifts to e-tailing deliberating on the concept, followed by its evolution and a trade-off between physical retailing and e-tailing, elaborating on the advantages associated with the online variant. The report then focuses on the e-tailing market in India detailing about its market size and growth. A brief snapshot of the sector is also provided with this overview that is immediately followed by a segmentation of the e-tailing market. The section concludes with a value chain analysis of the sector. The report then proceeds to give a briefing about the e-tailing formats that are present in the sector. A section on the benefits associated with e-tailing comes next that precedes the 4P’s of marketing for the sector and the key success factors. The following section speaks about the product categories that find maximum off-take in this sector. Brief descriptions of the drivers that help the sector to prosper include increase in internet users, boost from social media, changing demographics, increase of internet-enabled computing devices, soaring real estate costs and the need to save time. A considerable proportion of the growth of the sector depends on the growth of the internet user base. As internet users increase with the passage of time, activities such as e-tailing that depend on net connectivity also derive their growth from the same. Social media has helped the sector to grow in the sense that it acts as an effective marketing vehicle
Citation preview
E‐tailing Market in India
October 2012
2
Executive Summary
Market
The Indian e‐commerce market is growing at a CAGR of a1% and can broadly be categorized into a2 and a3The e‐tailing sector is a subset of the e‐commerce market and is deemed to be growing at a CAGR of a4%Huge growth registered by e‐tailing concerns in terns of VC investments hint at the growth potential of the sector
Drivers & Challenges
Competition
Drivers– Internet penetration–Boost from social media–Changing demographics– Increase of internet enabled computing devices
–Soaring real estate costs–Need to save time
Challenges–Negative consumer perspective related to cyber security
–High cost of customer acquisition
– Issue of reverse logistics
–Lack of touch and feel element
Major Players
Flipkart Jasper Infotech Myntra
NSI Infinium TV 18 Home Shopping Xerion Retail
Consolidation seen as a trendPrivate labels going e‐tailing wayCash on delivery as a payment option Introduction of brand storesEmergence of kids’ e‐tailing
Trends
E‐TAILING MARKET IN INDIA 2012.PPT
3
•Introduction•Market Overview•E‐tailing Formats•Benefits •Suitable Product Categories•Drivers & Challenges•Government Regulations•Trends•Mergers & Acquisitions•Major Players•Strategic Recommendation•Appendix
E‐TAILING MARKET IN INDIA 2012.PPT
4
Availability of products coupled with ease of selection have led to the proliferation of e‐tailing in India
E−tailing Market – Overview
E‐tailing Market – Growth in India
•The need to save time by urban India and the plethora of options and choices offered by online stores have been deemed as the chief drivers for the growth of e−tailing market in India
•The growth and optimism in this arena has resulted in the spurt of private equity investments in online and e −commerce ventures in the market
•As the burgeoning internet penetration continues aided with flexible payment modes, physical retail majors are also treading the lines of setting up online stores
•Trends suggest that metros are not the only area of operation for the players, tier I and II cities are also fast catching up owing to their evolved brand consciousness and lack of availability of products in their vicinity
Online Shoppers – Growth in India
mn
0
2016e2015e2014e2013e2012e2011
INR bn
0
2015e2014e2013e2012e20112010
E‐TAILING MARKET IN INDIA 2012.PPT
5
Challenges
E‐tailing Formats (1/4)
• xxx
• xxx • xxx
• xxxx
Business Model & Target Segment Scalability
Strengths
• Xx• Xx
F1
E‐TAILING MARKET IN INDIA 2012.PPT
6
E‐tailing – Suitable Product Categories
• Xx• Xx• Xx
Low
Low
High
High B1
B2
B3
B4
B5
B6
B7
B8
B9
B10
B11
B12
B13
B14
B15
B16 Supply Chain Complexity
Value
xxxxx
4
1
3
2
E‐TAILING MARKET IN INDIA 2012.PPT
7
Drivers & Challenges – Summary
Drivers
Increase in internet users
Boost from social media
Changing demographics
Increase of internet enabled computing devices
Soaring real estate costs
Need to save time
Challenges
Negative consumer perspective related to cyber security
High cost of customer acquisition
Issue of reverse logistics
Lack of touch and feel element
E‐TAILING MARKET IN INDIA 2012.PPT
8
As internet reach ramifies into remote spaces, e‐tailing derives growth from it
Increase in internet users Impact•The ever increasing figure of internet users in India is considered to be one of the key drivers for this market
•The introduction of internet as an alternative channel for shopping has changed the consumers’decision making process inadvertently
• Internet has aided the consumers to frequent the retail websites more often not only for deriving product information but also for making the final purchase
•Advent of internet has brought the ambit of retail products within the purview of consumers at their fingertips
•Today, consumers can browse through different products, seek their information and make purchases sitting at their convenient places without requiring to go to a physical store
mn
0
2015e2014e2013e2012e20112010
Total Internet Subscribers – India Number of Broadband Subscribers – India
As of Jul 2012, India had ‐mn internet users
2011
mn
0
2015e2014e2013e2012e
Urban SubscribersRural Subscribers
E‐TAILING MARKET IN INDIA 2012.PPT
9
Impact of FDI cap on e‐tailing firms
D
E
a5
a6
B a3
A a2
a4C
a1
b1
c1
d1
e1
Category Example Impact
E‐TAILING MARKET IN INDIA 2012.PPT
10
`
Consolidation seen as a trend
Private labels going e‐tailing way
Emergence of kids’ e‐tailing
Cash on delivery as a payment option
Trends – Summary
Key Trends
Introduction of brand stores
E‐TAILING MARKET IN INDIA 2012.PPT
11
Kids’ e‐tailing is fast growing as a major category that is deemed to be having great potential
E‐tailing sites specifically targeting kids’ products have mushroomed in the Indian online domain over the last year and has emerged as a latest trend that is shaping the e‐tailing sector in the country
c4
Emergence of kids’ e‐tailing
c5
c3
c2
c1
c9
c10
c8
c7
c6
• The opportunity for children’s products including apparel, footwear, toys, bathing products have been on the anvil for a considerable period of time
• However, with the advent of specialty retail formats, the sector has seen major breakthroughs
• Lack of presence of physical retail stores selling kids’ products in majority of areas have translated into a huge opportunity generation for e‐tailing sites selling such products
Baby Products – Purchase (2011)
2013e2011 2012e2010
INR bn
0
2015e2014e
Kids’ E‐tailing – Market Size & Growth
q
pOffline
Online
E‐TAILING MARKET IN INDIA 2012.PPT
12
Investments in the E‐tail Sector
Year Buyer Target Deal Size (INR ) Type of Transaction
x x x x x
x x x x x
x x x x x
x x x x x
x x x x x
x x x x x
x x x x x
E‐TAILING MARKET IN INDIA 2012.PPT
13
Private: Domestic Company – Company 1 (1/3)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Tel No.
Website
Year of Incorporation
Category Products/Services
Retail
Name Designation
Note: The list of products and services is not exhaustive
Place
Head Office
E‐TAILING MARKET IN INDIA 2012.PPT
14
Financial Snapshot Key Ratios
Financial Summary
• The company incurred a net loss of INR 240.1 mn in FY 2011, as compared to net loss of INR 8.9 mn in FY 2010
• The company reported total income of INR 430.9 mn in FY 2011, as compared to INR 116.1 mn in FY 2010
• The company earned an operating margin of ‐53.63% in FY 2011 a decrease of 46.77 percentage points over FY 2010
Particulars y‐o‐y change (2011‐10)
2011 2010 2009
Profitability RatiosOperating Margin ‐46.77 ‐53.63% ‐6.86% N.A.
Net Margin ‐47.99 ‐55.73% ‐7.74% N.A.
Profit Before Tax Margin ‐46.77 ‐53.63% ‐6.86% N.A.
Return on Equity ‐15.08 ‐16.79% ‐1.70% ‐137.85%
Return on Capital Employed ‐15.49 ‐17.04% ‐1.55% 0.00%
Return on Working Capital ‐18.88 ‐21.06% ‐2.18% ‐23.79%
Return on Assets ‐15.08 ‐16.79% ‐1.70% ‐11.63%
Return on Fixed Assets ‐448.79 ‐643.83% ‐195.04% ‐47.02%
Cost RatiosOperating costs (% of Sales) 46.77 153.63% 106.86% N.A.
Administration costs (% of Sales)
N.A. N.A. N.A. N.A.
Interest costs (% of Sales) N.A. N.A. N.A. N.A.
Liquidity RatiosCurrent Ratio ‐48.21% 16.29 31.45 13.03
Cash Ratio ‐61.16% 14.35 36.95 0.00
Leverage RatiosDebt to Equity Ratio N.A. N.A. N.A. 10.85
Debt to Capital Ratio N.A. N.A. N.A. 0.92
Interest Coverage Ratio N.A. N.A. N.A. N.A.
Efficiency RatiosFixed Asset Turnover ‐54.14% 11.55 25.19 0.00
Asset Turnover 36.82% 0.30 0.22 0.00
Current Asset Turnover 29.95% 0.35 0.27 0.00
Working Capital Turnover 34.05% 0.38 0.28 0.00
Capital Employed Turnover 36.82% 0.30 0.22 0.00
Improved Decline
2011
0
INR mn INR mn
0
20102009
Net Profit/LossTotal Income
Private: Domestic Company – Company 1 (2/3)
E‐TAILING MARKET IN INDIA 2012.PPT
15
Business Highlights
Description News
Overview
•Has earned its name as one of the leading e‐commerce players in India boasting of over ‐mn book titles and ‐ different categories
• It has more than ‐mn registered users and sale of ‐ items per day
• It has its footprint in ‐ cities and is looking at expanding its reach in near future
• It hit a new milestone by clocking INR ‐ bn in gross merchandise value shipped in a month for the first time in ‐
• The number of daily orders has also hit ‐ or ‐ orders per minute which represents a five‐fold rise after the company clocked ‐ orders a day for the first time in ‐
Acquisition • It has announced about its acquisition of local company xx for an undisclosed sum in ‐
Funding
•Has secured its finances for the coming ‐ years after it raised INR ‐ bn from new investors
namely xx and xx along with the existing ones in xx and xx
‐, the founders of the company earlier controlled about ‐% of ‐ equity, while the xx and xx together
controlled ‐% and the management held the remaining ‐%
Private: Domestic Company – Company 1 (3/3)
E‐TAILING MARKET IN INDIA 2012.PPT
16
SWOT Analysis – Company 1
• Xx
• Xx
• Xx
• Xx
• Xx
• Xx
• Xx
• Xx
SWOT
STRENGTH WEAKNESS
OPPORTUNITY THREAT
E‐TAILING MARKET IN INDIA 2012.PPT
17
Thank you for the attention
About Netscribes, Inc.Netscribes, Inc. is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes Inc. is a one‐stop shop designed to fulfil clients’profitability and growth objectives.
Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction.
Phone: +91 33 4027 6214/6215E‐Mail: [email protected]
Follow us on:
The E‐tailing Market – India 2012 report is a part of Netscribes, Inc.’s Information Technology Industry Series.For more detailed information or customized research requirements please contact:
E‐TAILING MARKET IN INDIA 2012.PPT
