#Outlook14: What Indian E-Commerce Companies Plan To Do


As a part of our #Outlook14 series, we asked heads of e-commerce companies – HomeShop18, Snapdeal, Amazon India, Lenskart, Infibeam, Myntra and DotZot (e-commerce logistics company) about their focus areas for 2014, and the challenges that the e-commerce ecosystem needs to address.

MediaNama: Which according to you were the top developments and roadblocks with respect to the e-commerce segment in 2013? Why?

Sundeep Malhotra, HomeShop18

- Shopping from tier-2 cities (non-metros)
- People continue to buy gadgets and electronics but clothing and fashion are gaining momentum
- The shift to the marketplace model by most leading etailers
- The rise of m-commerce and the way ahead for this segment
- The entry of Amazon. It has upped the competition a few notches
- Increasing focus on better interface for shopping through product videos to compensate for the lack of touch-and-feel

Vishal Mehta, Founder CEO Infibeam

- The industry registered huge shift of shoppers from offline to online.
- Sales and traffic both increased by almost 300% – 500 %.
- Industry witnessed traffic from non-urban cities.
- More and more retail categories showcased
- Some major roadblocks to be pointed is policy framework for retail industry in specifically online, logistics, taxation etc.

Kunal Bahl, Snapdeal

- Overall, this year saw a front and center battle between the two business models of e-commerce – Inventory-led and Marketplace Model.

Amit Agarwal, Vice President & Country Manager, Amazon India

- The mobile internet traffic now outweighs PC traffic. With increasing penetration of smartphones, India is all set to be a massive market for m-commerce.

- With online marketplaces finding a lot of traction in India, over the next year, we expect more and more enterprising SME sellers to go online and reach out to a much larger customer base pan-India.

Mukesh Bansal, Myntra

- In 2013, ecommerce in general came out from being early adopters to mainstream. We saw the transformation where more people have started to shop online.

- With increased and massive communication through Television and other platforms, there has been constant education on the advantages of online shopping and have now become a big part of their consideration.

Sanjiv Kathuria, Co-founder and CEO DotZot

- In 2013,we saw increasing demand for specialized ecommerce logistics solutions.

- E-commerce is venturing now into areas which were considered remotest place in India. We are seeing demands from Kashmir valley, Andaman & Nicobar island & the interiors of North east region.

- Paper work requirement of states is a major road block in expansion and growth of e-commerce and logistics.

- States such as Kerala, West Bengal & Uttar Pradesh has stringent laws.

Peyush Bansal, CEO & Founder, Lenskart.com

- Lot of consolidation has happened in the market business which helps the customer understand the product and have clarity on it.

- Investment sentiments have been a barrier in the e- commerce business.

Ashish Hemrajani, Founder & CEO, BookMyShow

- I still think payments inclusion, connectivity as well as distribution are the biggest challenges. For BookMyShow specifically, its payment and mindset of consumers who still prefer to go to the box office.

MediaNama: What has changed from 2012 to 2013? How?

Sundeep Malhotra, HomeShop18

- Social media has gained a lot of prominence as an apt medium for Online Reputation Management. It’s also an important source of traffic for most sites
- More players – wider spectrum of etailers – both Indian and international
- Customer service is leading the charge and greater benefits are now being passed on to the online shoppers
- Shift to marketplace model

Vishal Mehta, Founder CEO Infibeam

- There were huge apprehensions among consumer regarding some retail categories to be shopped online like lifestyle, footwear, apparels, which has registered good response in 2013 and now the category is high on agenda by the shoppers online.

- The industry players have designed various mechanism like COD, convenience, best brand and quality product, logistic to beak the myth of touch and feel and apprehension of receiving products in same condition.

Kunal Bahl, Snapdeal

- Companies are realizing that the only way to make money is by solving a real need. And while that real need was earlier understood to be only catering to the needs of buyers, it is becoming clearer that the real need is for the long tail of small businesses that need access to national distribution.

Amit Agarwal, Vice President & Country Manager, Amazon India

- As per comScore over 600 new online shopping sites were launched between August 2012 and September 2013.  Clearly today there is a huge choice for customers and a correspondingly huge appetite for online shopping.

- At first internet penetration is increasing and so is smartphone penetration.  As a result there is a surge in m-Commerce and an increased traffic from mini metros and tier II towns.

- This coupled with the convenience of shopping online anytime and from anywhere from a   huge selection at great prices.

- This proliferation of online shopping platforms has meant that consumers now need a shopping guide that can help them navigate through the maze of options. One in four online shoppers now visit a comparison shopping site before completing a purchase on a seller website.

- Needless to say, this has also meant that a large number of retailers and sellers of all sizes have gone online.  So there has been a marked increase in adoption of hybrid sales channels and a learning curve with respect to a new business model.

- As a result the logistics industry has also benefited.

Mukesh Bansal, Myntra

- Early this year, e-commerce companies started investing heavily in the back-end infrastructure to deliver hassle-free service to its customers and evolving the whole shopping experience online.

- Fashion has pulled women shoppers and new target groups to ecommerce, making it mainstream and contributing drastically to the next growth phase of this sector. Today, all the big e-commerce players have developed a strong Fashion offering to tap this opportunity.

- We saw books and electronics driving the growth in the sector as they were easier and safer products to purchase online.

- Rapid rise of mobile as a channel for shopping which has begun to contribute in double digits now.

Sanjiv Kathuria, Co-founder and CEO DotZot

- Now it is not the top 10 cities which is attracting e-commerce load, large number of buyers belong to tier 2 & 3 cities. Around 50% of the load is going to these locations.

- There are two reason for that – internet & mobile penetration, COD and unavailability of products on offline retail counters in these cities.

- Consumers in the age group 15 to 25 constitute the major portion of the online buyer segment.

Peyush Bansal, CEO & Founder, Lenskart.com

- Companies like us have gone to the next level of solving the next set of problems. For example, Eye check up program. Most of the people are not aware of the issues and resolution to various eye problems we help them understand these.

- Once a customer purchases a product portals now ensure that the customer takes the right steps to attain full customer satisfaction.

Ashish Hemrajani, Founder & CEO, BookMyShow

- For BookMyShow, it was two things – live entertainment/sports and mobile. While live entertainment grew for the large scale events, it was the micro events that added a lot of colour.
- Also, the mobile focus gave BookMyShow a lot of lift including the launch of the new app for iOS and Android to be launched in a few days.

MediaNama: Which are the consumption patterns (online & mobile) that you observed in 2013?

Sundeep Malhotra, HomeShop18

- Shopping from tier-2 cities (non-metros)
- Mobile is contributing to traffic but transactions are lower than website transaction percentage
- From mobiles/books to clothing/ fashion/lifestyle.
- Increased browsing and shopping through mobile and tablets
- Increased sale of combos and super deals
- Star categories: Home Décor, Home & Kitchen and Clothing

Vishal Mehta, Founder CEO Infibeam

- Mobile has the fastest and has deeper penetration when compared to internet and mobile commerce will surely going to be next big thing and will provide better accessibility and convenience.
- Online consumer are those who spend more time in comparing and discovering best deal across all the platform and they are more seen during leisure hour.
- Unlike mobile consumer which is in age bracket of 18 -25 years, online consumers are from 18- 35 years and now the upper age bracket is also increasing.

Kunal Bahl, Snapdeal

- Every year henceforth will be a landmark year for e-commerce in its growth and scale. 2013 was no different vs. 2012 as it saw a discontinuous increase in customer trust and acceptance with regards to online shopping.
- One of the big drivers was mobile, where-in we have seen a 20x year on year increase in sales over the mobile, with 30%+ of our orders coming over mobile now, a number which was 5% a year ago.
- The other trend which is interesting, is that a large number of consumers are now shopping online for their core needs. This is a very strong leading indicator for things to come as we will see a larger basket of shopping move online.

Amit Agarwal, Vice President & Country Manager, Amazon India

- Books and consumer electronics of course remain top of the pack, but there has been a huge surge for  fashion and lifestyle products like  apparel, watches and jewellery.
- There has been a burgeoning traffic from tier 2 and tier 3 cities, and a sizeable increase in customers accessing online shopping sites through mobile devices.
- Fashion and Home & Lifestyle categories witnessed sharp year-over-year growth.
- While top 6 metro cities including New Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad comprised majority of the customer traffic to Junglee.com, tier 2 cities such as Pune, Chandigarh, Ahmedabad witnessed over 200% year-over-year growth.
- Interest levels in categories such as Car Accessories, Hair & Skin care products, Exercise equipment, and Pet Care products also witnessed strong growth.
- Online gifting too has increased considerably over last year.

Mukesh Bansal, Myntra

- With poor distribution and limited access to various brands in Tier II and III cities, we have seen faster adoption and growth in these markets as compared to top 10 cities in India.
- Most players were in the low single digits in the beginning of this year and now many are in the high teens, approaching 20% in terms of sales that is coming from mobile phones.
- Cash on Delivery continues to be the most preferred mode of payment with close to 2/3rd of all transactions happening over cash.

Sanjiv Kathuria, Co-founder and CEO DotZot

- More companies today are moving to marketplace; which means you have to pick up a parcel from the seller who could be from any town or any place. Earlier it was mostly top 4 or 5 cities where the pickup was happening.
- This requires smooth flow of information and streamlined processes, which can only be done by a strong technology backed system.

Peyush Bansal, CEO & Founder, Lenskart.com

- We have observed a steep growth in ordering products through the use of mobile phones and tablets.

Ashish Hemrajani, Founder & CEO, BookMyShow

- While obviously web continues to grow, our category is an impulse purchase category and is a digital product. Our goal is to make it as convenient and easy to purchase and track the behavior to keep enhancing that purchase experience.

MediaNama: What kind of transition have consumers made from offline to online in 2013? Why? What are your observations?

Sundeep Malhotra, HomeShop18

- With features like CoD, easy returns, consumers have gained trust in online shopping
- Frequency of shopping has increased because of the ease online shopping provides.
- Cash on Delivery orders are steadily being replaced with internet payments.

Vishal Mehta, Founder CEO Infibeam

- With the increase in internet penetration and more and more people adopting internet technology and partially in recent past credit goes to e-commerce as they have attracted many new users to be part of online platform.
- Apart from youth and internet savvy population even non internet population are attracted to come over online to meet their shopping need.

Amit Agarwal, Vice President & Country Manager, Amazon India

- Customers around the world always want a vast selection at low prices and a reliable and trustworthy shopping experience. Indian customers are no different.
- Even online they continue to review several options by visiting comparison shopping sites and then make an informed choice. One out of every four customer is visiting an online shopping comparison site.

Sanjiv Kathuria, Co-founder and CEO DotZot

- Earlier the purchase was mostly for books, laptops, apparel & mobile phones but they were mostly in the range of low or mi value products. Now people are also spending on high value brands & products.
- Apparels category has gone up in a big way. Consumers are more comfortable than earlier buying fashion apparel online.
- Diamond and gold jewelry is also available online and very much in demand.

Peyush Bansal, CEO & Founder, Lenskart.com

- E-commerce has brought those Brands closer to the consumers which were previously inaccessible or not easily available
- There have been instances where consumers check / try brands at retail shops and then buy them online
- Consumers these days are much more aware. They read and share a lot online and it’s not easy to get away with things now.

Ashish Hemrajani, Founder & CEO, BookMyShow

- Well hard to predict and each of the various categories of e-commerce have seen 25-100% growth rates.
- It really is a function of building more e-commerce users, banking more customers and improving distribution. Overall, all go together to build confidence and trust for new users.

MediaNama: What are the likely trends that you expect to see in 2014? Why?

Sundeep Malhotra, HomeShop18

- Ecommerce companies starting their own payment gateways and logistics network, controlling major part of supply chain
- Consolidation in ecommerce
- Re-emergence of flash sale sites
- Re-emergence of vertical sites
- Private label products

Vishal Mehta, Founder CEO Infibeam

- The role of smart phone technology is going to be seen in bigger and ecommerce will see altogether a different thrust on over all performance.

Kunal Bahl, Snapdeal

- Certain e-commerce companies will start hitting scales which are quite significant, and from being a “start-up” industry, it will start becoming an integral way of life for buyers and sellers.
- Pureplay marketplaces will continue to outpace inventory led businesses in their velocity of growth and return on invested capital.
- Mobile commerce will start hitting 50%+ of all orders happening on certain e-commerce platforms.
- We will start hearing more often from consumers, that they are shopping online for a large part of their consumption basket, a trend that took over a decade in the US to happen.
- The share of business of sellers on an e-commerce marketplace, will outpace the share of their offline goods sales in their overall turnover, given the relative reach, ease and efficiency.

Amit Agarwal, Vice President & Country Manager, Amazon India

- You will see a lot of innovation at various levels, especially customer experience, in the e-commerce industry in the next few years.
- On the sellers front too there is great potential for innovation.

Mukesh Bansal, Myntra

- In 2014, there is going to be a large focus on driving profitability.
- With consumers upgrading to smart phones and telco’s slashing their internet connectivity costs to almost 90%, we will see almost 30-40% of business for ecommerce players coming from mobile phones in the next 2 years.
- Online is expected to drive almost 25-30% of business for brands which is currently at 10-20%.

Sanjiv Kathuria, Co-founder and CEO DotZot

- E-commerce market will grow faster than what we had seen in the past.
- Earlier the shipping was free but it has changed now. Now many companies are charging or semi-charging for shipping.
- Same day delivery or time definite delivery can be some of the premium services, which will come for offing.

Peyush Bansal, CEO & Founder, Lenskart.com

- More consolidation of business
- Clear leaders emerging in terms of specific categories

Ashish Hemrajani, Founder & CEO, BookMyShow

- Payments and mobile are going to be two key drivers.
- As handsets and connectivity get cheaper and faster and payments get more accessible to people, this will fuel a whole new set of customers.
- Fighting for the wallet share of the same customer will saturate beyond a point. So new cities and town to be developed is important.

MediaNama: What are the challenges in the e-commerce segment that would need to be addressed in 2014?

Sundeep Malhotra, HomeShop18

- Logistical infrastructure needs to be strengthened to boost  services and delivery
- Eliminating the gap between the customer and the product for better conversion
- Building more confidence in internet transactions

Vishal Mehta, Founder CEO Infibeam

- The challenges would be to regularly find and form strategy to engage consumer and deliver best services.

Kunal Bahl, Snapdeal

- The talk of exits will start increasing, and with that will come an expectation of profitability from the ecosystem, and companies will have to either take a stance of balking that expectation, or putting in place  a believable, relatively near term, path to profitability. The former approach carries significant risk however, with special sensitivity to market conditions, which today are valuing growth, not profitability, but we all know that the next cycle is usually around the corner. Until companies realize who and what constitutes their ecosystem, and that unless their ecosystem makes money, they will not make money, a business may witness short term growth on the back of large investments in people and marketing, but it will be very tough to build long term, profitable, sustainability.

Amit Agarwal, Vice President & Country Manager, Amazon India

- Customer Trust: For any e-commerce company in India building customer trust is essential.
- Delivery Infrastructure: The biggest advantage of e-commerce is the instant nationwide reach it enables for sellers of all sizes.
- From a business perspective, Getting SMEs going online

Sanjiv Kathuria, Co-founder and CEO DotZot

- The more we move into tier 2 & tier 3 cities, smooth and faster flow of shipment, information & COD money will be a challenge and need to be tackled.

Peyush Bansal, CEO & Founder, Lenskart.com

- Delivering the products at a given time frame will be the major challenge which needs to be addressed. We need to have better logistics services from courier companies
- Better management of return and areas that cause dissatisfaction

Ashish Hemrajani, Founder & CEO, BookMyShow

- Legislation and laws are one big challenge. And the law makers need to wake up to the new normal of India. Our laws are old and for another era. While private enterprises have moved on, sometimes our laws haven’t. That needs to happen, else the golden egg i.e internet, IT and services are all in trouble of plateauing.

Note: Answers have been edited for brevity