Indian Internet Survivor & Leaders Get More Funding in 2017

Funding environment for internet/e-commerce companies in India seems to be reviving after the lull in 2016. Boosted by a few large deals, PE/VC funding has reached US$6.7 bn in 2017 (till August), compared with US$2.3 bn in 2016 and US$5.4 bn in 2015. However, unlike 2015 when funding was more broad based, PE/VCs are now making concentrated bets in a few large companies in order to have stakes in eventual market leaders.

Large investors such as Softbank, Alibaba, Tencent and others have led relatively large funding rounds in e-commerce companies such as

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Indian E-commerce Hype – The Reality check

Indian Ecommerce - Reality CheckWe have already covered the phase of Indian eCommerce Startup Valuations breaking through the roof between 2013 to 2015. The year 2016 saw funding crunch, the sector has had a reality check. GMV is no longer the holy grail and the focus has now shifted to metrics such as the net promoter score, user monetisation and customer experience. Also, there is a growing recognition of the fact that India is different from China and may not necessarily mirror the early e-commerce trends and trajectory in China.

Indian e-commerce firms have pursued several initiatives including increasing the commission rates (at an overall portfolio level), controlling the logistics costs (particularly returns), rationalising discounts and shifting the portfolio mix in favour of high-margin categories to curtail the losses and create a foundation for achieving profitability. Regulations have so far been

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Rise and Fall of Indian eCommerce 1.0 Startups Valuations

Indian eCommerce Storry 2013 to 2015The Indian eCommerce Saga trails the Americas by a decade. 2013 to 2015 were eventful years for the Indian internet sector. Overall, 2015 GMV growth for the e-commerce sector saw the fastest pace in the past five years, despite a higher base. Funding activity, too, peaked in 2015. Investor optimism was high as well valuations doubled in many successive rounds of funding within a gap of just a few months. There were several large funding rounds such as Flipkart’s US$1 bn one, followed by a couple of US$700 mn funding rounds over the next six months, valuing the company at US$15 bn. Snapdeal raised over US$600 mn in 2014 and followed it with another US$500 mn round in mid-2015, while Paytm raised US$680 mn in Sep-15 from Alibaba and Ant Financials (Alipay). Ola also raised over US$1.1 bn between Oct-14 and Nov-15, in three rounds of funding

The Flawed GMV Based Valuations Model
GMV was the most widely tracked key performance indicator for ecommerce companies — not only internally, but for investors as well. Companies expanded GMV without focusing much on unit economics. This led to an increase in discounting and marketing

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How eCommerce Impacted Logistics Business in India?

eCommerce Logistics IndiaECom Express is a logistics company catering to the needs of e-commerce industry, which is growing at a fast pace in India. The company was launched in early 2013 focused on providing the last mile delivery services to the eCommerce companies. ECom Express started with 311 employees in 35 cities. It has grown to 653 delivery centers in 180 cities with 15,000 employees and 450,000 Shipments/day. 90% of the staff are delivery people.

Logistics is a relatively large part of cost for eCommerce players and they intend to rationalize it. However, ECom Express believe that the quality of services in terms of timely delivery, reliability and lower product returns are key factors for eCommerce player to select a logistics company and not necessarily pricing. ECom Express is confident that given the quality of its services and its ability to delivery products to even less-accessible areas places it well in the market. The company

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Flipkart Vs Amazon Vs Snapdeal Performance in Festival 2015

eCommerce IndiaWe’d like to compare the eCommerce strategies of the Big 3 in India during the recent festival season.

Instead of a single Big Billion Day sale last year, Flipkart held this year’s sales over 5 days between October 13-17. Flipkart sold products worth Rs. 20bn (c. $300mn) this year (vs 6bn sold last year), with a total of 8 mn units being sold, compared to 2.7million units being sold last year. The company saw 150mn visits over five days in comparison to 40mn traffic registered last year. Mobile remained the highest selling product registering $200mn worth mobile sales (vs $60mn sold last year) with 250 mobile phones sold every minute during the 5 day sale. Flipkart clocked 5million app downloads over the course of the sale.

Amazon held its Great Indian Festive Sale overlapping the Flipkart sales (over October 13-17). While Amazon did not share specific

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Jabong & FabFurnish Sales / Profit Metrics

Jabong Sales MetricsIn an industry where not much data is available given most companies are unlisted, we have got some details from Rocket Internet which has stake in Jabong (fashion) & FabFurnish (furniture).

Jabong’s Gross Merchandise Value (GMV) rose 136% yoy in CY14 leading to a 136% yoy increase in net revenue. Encouragingly, Jabong indicated that majority of the orders are being placed by repeat customers. FabFurnish’s GMV too rose 125%yoy during the same period. Jabong’s gross loss expanded to Rs1.6bn (+400%yoy), indicating high competition. Capex intensity has risen from 3.7% capex/sales in CY13 to 4.8% in CY14 on investment in IT and infrastructure. Net working capital too rose by ~250%yoy driven by

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Mobile Powers Chinese Rural e-Commerce

Mobile Commerce Rural ChinaAccording to research recently released by bjbusiness, roughly 64% of netizens in rural China shop via mobile phone, far in excess of those who shop by PC (~36%). In many of China’s less developed markets, the smart phone is indeed the key gateway to internet access rather than the PC due to the lower device cost when compared with the PC. E-commerce penetration in rural areas has risen substantially, as key e-commerce players such as Alibaba and JD shift their strategic focus from top-tier cities to rural areas. Mobile usage meanwhile has come to embrace online shopping quite rapidly and seamlessly.

Roughly 74% of rural netizens indicate Taobao and Tmall as their most frequently visited e-commerce sites, while

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E-Commerce GameChanger Marks an Inflection Point

eCommerce in IndiaeCommerce in India has disrupted and scared several Retailers as it is being chased by Technocrats & Investors from across the Globe. WE attended a conference of Consultants, investors and companies shared research on the pervasiveness of e-commerce across every industry and service in India and the conflation of telecom and technology that is enabling this change. The dizzy rate of change in the sector and the tricky business of determining e-valuation drivers are the challenges faced by Venture Capitalists. Here are some of the Views of the Top Most Guys in the Indian eCommerce Space

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3 Key e-Commerce eco-system enablers in India

e-commerce ecosystem enablesIn a survey of around 25 industry participants such e-commerce companies operating in the fields of classifieds, online travel, e-tailing, mobile advertising, logistics, payment and data analytics, we found the Top 3 eco-system enabler for e-commerce to be grow leaps & bound in India as under.

Affordable mobile devices/tariffs
Declining smartphone prices, falling mobile data tariffs and improving 3G coverage will help accelerate the adoption of e-commerce in India. We expect the mobile opportunity in India to be bigger than fixed-line as many first time users of e-commerce will access the internet via a mobile device given the faster pace of smartphone penetration than PC penetration. As such, we expect

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State & Scope of Online Travel Market in India

Online Travel IndustryThe travel market size in India is US$19.6bn, of which 35% is transacted online, which puts the size of online travel market in India at US$6.9bn. Interestingly, in India, after air travel, it is rail transportation which draws maximum online bookings. Out of the US$6.9bn in online sales, air travel constitutes $4.1bn and rail transportation $2.2bn.

How Indian online travel market differs from the US market?
Hotel reservation and packaged tours are the biggest online travel spend segments in the US aggregating to 56% of total online travel spends, followed by air tickets which constitute 37% of the spends. As against this, in India, air tickets constitute 58% of online travel spends with Hotels & Packages, being a nascent

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