The curious case of India's e-commerce

Newbie Flipkart rules the market. What happened to the original e-shopping first-movers
like Rediff, Yahoo!, Indiatimes, Sify, HomeShop18, eBay?
Sounak Mitra | New Delhi
April 25, 2015 Last Updated at 22:39 IST
http://www.business-standard.com/article/companies/the-curious-case-of-india-s-e-commerce115042500594_1.html
E-commerce has lately become a keenly watched sector in India, especially with a handful of
home-grown successful ventures being valued at billions of dollars. While domestic players
Flipkart and Snapdeal rule the market, the sector has also caught the fancy of global giants like
the US Amazon and Chinas Alibaba all are competing hard for a bigger share of the cake.
The countrys e-commerce market was worth $2.3 billion in October last year and retail
consultancy Technopak has estimated its value will increase more than 10 times to $32 billion by
2020. More, since the online market at present accounts for less than five per cent of Indias
retail business, there still is a huge untapped space in e-commerce. The $15-billion valuation that
Flipkart is eyeing in its next round of funding seems to reflect this potential, and aspirations of
the
existing
and
start-up
e-commerce
ventures.
Flipkart co-founders Sachin Bansal and Binny Bansal (not related to each other) today are role
models for Indias aspiring entrepreneurs mostly millennials hoping to make it big in ecommerce.
But it was not the Bansals or the now-successful e-retail companies that ushered in Indias ecommerce boom. Way back in 2000, a handful of shopping sites like Rediff Shopping, Yahoo!
Shopping, Indiatimes Shopping, Sify Shopping and HomeShop18 were doing roughly the same
thing.
In fact, Indias e-commerce potential as we know it today was first spotted by the $18-billion
(revenue) US firm eBay, which entered the country in 2004 three years before Flipkarts lowkey start as an online bookseller by acquiring local auction platform Bazee.com for about $55
million. It was eBay that brought the concept of online marketplace, where sellers and buyers
engage
directly.
However, neither eBay nor the hit shopping sites of the 2000s could get a first-mover advantage,
despite their healthy parents, technology, favourable business model and brand equity they
were ahead of their time, say some experts. At the time eBay entered India, less than 10 million

people in the country had access to the internet, and most of them were wary of shopping online,
for
want
of
clarity
and
trust.
All those shopping sites, as well as eBay, continue to operate in India but do not figure among
top e-commerce players. All of these companies had lost the plot by the time e-commerce (as we
know
it
today)
took
a
shape
here.
In an interview last year, eBay India Managing Director Latif Nathani had conceded his
company not in the valuation game despite having the largest number of sellers on its
marketplace. According to its filings with the registrar of companies (RoC), eBay Indias revenue
stood at Rs 81 crore in 2012-13, about 60 per cent higher than the previous year.
By comparison, Flipkart was reported to have grown about 476 per cent in value of goods sold
during the period. According to market estimates, eBay India sold goods worth Rs 1,000 crore in
2013, not much less than Flipkarts Rs 1,180 crore that year. But their growth rates varied vastly.
Details of other shopping sites Rediff Shopping, Yahoo! Shopping, Indiatimes Shopping, Sify
Shopping and HomeShop18 were not available, as their parent companies did not give break-ups
of
their
shopping
portal
business.
Things seem to have changed dramatically in the past few years definitely a lot since eBays
entry. Today, India has more than 94 million broadband users, and an internet-connected
population of close to 300 million. Of them, about 39 million shop online, according to an April
research
report
by
consulting
firm
AT
Kearney.
Milan Sheth, partner & technology sector leader (advisory services), EY, says there are several
reasons why traditional e-commerce firms might have lost out. These sites were positioned
more as content providers or at best platforms for digital advertising. They never marketed
themselves as e-tailers aggressively. Their product range was limited, because they did not
collaborate with a wide range of suppliers and brands. Also, payment options were limited.
PricewaterhouseCoopers India technology sector leader, Sandeep Ladda, believes one of the key
reasons for the failure of shopping sites from the pre-boom era was that they were more focused
on sellers than consumers. Other challenges were limited ability to carry out product quality
check
and
very
limited
product
catalogue.
There was no control on serviceability and product fulfilment cycle, and the focus was only on
getting the user to transact. The actual inventory owners were responsible for shipping but did
not have interactions with the user. With the user being directly involved with the website alone,

there were increased communication gaps and information leakages. From a business
perspective, most of these players were more of technology or internet media companies, with
limited exposure to retail, and lacked defined organisational structures to operate intricate retail
processes
in-house,
adds
Ladda.
According to EYs Sheth, those like Rediff, Indiatimes and Sify did not evolve their business
models with the internet-mobile revolution. They did not make any investments in
understanding the consumer behaviour and adapting their offerings to suit them. Their failure to
build an ecosystem around online shopping in terms of suppliers, payment options, logistics, and
to understand and target customers effectively, led these companies to losing out to new-age,
dynamic,
focused
e-commerce
companies
like
Flipkart.
Another reason for the huge success of e-commerce companies in India is introduction of the
cash on delivery option, which helped e-commerce companies gain consumer trust.
When contacted by Business Standard, Rediff, Sify, Yahoo! and Indiatimes said they did not
wish
to
comment.
HomeShop18 founder & CEO Sundeep Malhotra says mobile and web are complementary and
supporting channels to television for HomeShop18. The television business is profitable, and
we are recording strong sequential growth of nearly 100 per cent on our mobile platform. The
reach of TV in India continues to be 8-10 times that of internet. So, TV Home Shopping will
ensure mass reach and high volume sales, while the web business will continue to attract the
more
discerning
digital
consumer,
adds
Malhotra.
Ladda says, in the past decade or so, there have been several changes in consumer behaviour
with respect to buying, especially in Tier-II and III cities. The convenience of sitting at home
and comparing prices, features and products has brought new dynamics to the shopping
experience.
The increase in disposable income levels has led to bigger online order sizes, and changes in
lifestyle. Shoppers prefer online channels to physical ones, for saving time and wider variety,
says
Ladda.
At the same time, growth has been driven further by a rapid proliferation of technology
increasing adoption of devices like smartphones and tablets, and access to the internet through
broadband and 3G data connections. Another fillip is likely when 4G telephony becomes a
reality. These enablers were not there when the original shopping sites had started their
operations
back
in
the
2000s.

The big difference now is that the competition is too intense and almost all players are capable of
spending big. While the first-movers could not reap the benefits of early start, it might still not be
too late, given that all of them are still operating.

E-commerce companies' surging valuations: Realistic, or just one big bubble?

Jwalit Vyas & Ranjit Shinde, ET Bureau Apr 20, 2015, 04.25AM IST
http://articles.economictimes.indiatimes.com/2015-04-20/news/61339567_1_current-valuationsamazon-india-bubble
With every round of funding, valuations of some ecommerce companies keep surging
exponentially to blockbuster levels. Is this realistic or just one big bubble? There's no one answer
to that as yet but a recent arbitrage opportunity serves to illustrate the intriguing possibilities that
arise in such a situation. A bullion supplier to a large online retail player recently found a way to
make some extra money.
Having first sold gold coins to his client, he bought them back in the name of another buyer
when the company offered a discount. For the website, this was a means of winning new
customers and increasing market share. Similar exercises abound across the market as
ecommerce firms burn through funding money to gain customers but will this ensure the longterm viability of online retailing? The factors cited in support of high valuations include
improving internet access, greater affordability due to rising incomes, wider choice and the
expected long-term profitability of ecommerce.
According to a recent report by UBS Securities India, the nation's ecommerce market will grow
10 times by 2020 to $50 billion from current levels.
According to news reports, Flipkart's valuation touched $12.5 billion in March 2015 from $1.6
billion in October 2013, an eightfold jump in just 18 months. Snapdeal's implied valuation has
risen from about $1 billion to $5 billion in a year.
While industry trackers agree about the potential of the sector, there's no unanimity on the
fairness of valuations. "Evaluating ecommerce companies requires a change in the traditional
valuation mind set," said Rachna Nath, leader, retail and consumers, PwC India.
"Digital assets can create value just like physical assets and therefore may attract valuations that
may look high at present." Valuations appear to be aspirational, said GT Thomas Phillippe,
associate partner at law firm Khaitan & Co. "I am not surprised with the comparisons being
made with the dotcom bubble," he said.

"Both involve unclear profitability models, though the dotcom bubble was characterized by
highly questionable revenue models as well. Currently, revenue is being ramped up rapidly in eretailing largely on the back of discounts funded by abundant venture capital. However, the
roadmap to profitability remains unclear as ever on account of discounting as well as core
operational reasons."
Some believe valuations reflect potential. "Current valuations appear to be high but they reflect
upbeat sentiments about potential of ecommerce based on expected economic growth, improving
lifestyle, increasing internet connectivity and expanding consumer base," said Hemant Joshi,
partner, Deloitte Haskins & Sells.
According to the USB report, Flipkart, Amazon India and Snapdeal reported a combined revenue
of $85 million and a loss of $163 million in FY14. At the risk of over simplification, this means
these companies spent nearly $3 to earn revenue of $1. Rising operational charges and discounts
are the main reasons for costs spiralling. At some point, such incentives may be rolled back.
"Discounts are offered as a means to acquire customers on hopes that they will continue to shop
online and at some point there will not be a need to offer discounts to retain customers," said
PWC's Nath. Meanwhile, ecommerce adoption is spreading rapidly, said Rajat Wahi, partner and
head of retail sector, KPMG India.

"It is being driven by factors such as positive sentiment for India, increased valuations for
ecommerce across the world, including the US and China, and the opportunity investors see in
India to tap 350 million middle and upper class consumers," he said.
It will be recalled that a similar buoyancy accompanied the initial public offer of Just Dial, a
telephone and online information service provider, which was oversubscribed 12 times in June
2013. Stock trebled within six months to Rs 1,650.

But with sales growth slowing from 40% in the three years prior to the IPO to less than 30% in
the first nine months of FY15, stock has fallen 29% in the past six months.
Amazon.com, the world's biggest online retailer, has not shown sustained earnings growth after
nearly two decades of operations. It became profitable in 2007 but since then earnings have been
dwindling. It reported a net loss of $241 million in 2014. However, sales have grown from $34
billion in 2010 to $89 billion in 2014.
"Retail is a long-gestation game and even many offline/brick and mortar retailers are not making
profits after many years of operations in India and other markets," said KPMG's Wahi.
Mehul Savla, executive director at Ripple Wave Equity, a boutique investment bank, feels these
businesses will easily sail through with some consolidation along the way.
"If you observe, none of the top Indian corporate groups have invested much in this space,
probably because there is the fear of unknown," he said. "They are comfortable taking Rs 30,000
crore worth debt to set up power plants, which also has a long gestation period and enough risks
but no one wants to explore the ecommerce space because there is fear of the unknown.
In that sense, the good part is ecommerce is growing on equity and the fear of the unknown may
not be for the investors, who have more skin in the game than the promoters and know where
they are headed."
Figuring out the correct valuation of such companies is tricky, with higher valuations lead to a
corresponding bump up in the next fund-raising round.

More mobile, fewer flash sales: The state of e-commerce

Hilary Milnes | April 28, 2015
Turn on tldr
http://digiday.com/brands/3-ways-e-commerce-advancing-2015/
Online retail is a rapidly evolving landscape, and even the best educated forecasters cant always
keep up. That doesnt stop them from trying: In the past, Forrester Research reports described the
shipping club (loyalty programs for frequent online shoppers) as a hot new online market. It
didnt exactly pan out that way.

Now comes the latest round of predictions. Published this week, Forrester Researchs new fiveyear e-commerce forecast attempts to guess what the e-commerce industry will look like by
2019. One big projection: The e-commerce industry will top the $300 billion mark in sales this
year and keep growing to nearly $500 billion by 2019 a slightly faster rate of growth than
what was projected by Forrester in a similar study performed in 2010.
The report, written by analyst Sucharita Mulpuru-Kodali, also forecasts which online ecommerce categories are fast growing, which wont catch on, and the importance of omnichannel
retail. Heres a breakdown of predictions for the coming years as well as an assessment of
how accurate the rest of the 2010 report ended up being.
Advertisement
The

$300

billion

mark

is

approaching.

According to Forresters 2010 report, e-commerce wouldnt become a $300 billion industry until
2017. However, the latest forecast shows that the industry is moving at a slightly accelerated
pace, with sales projected to hit $334 billion in 2015.

This is thanks to the online shoppers who have become more comfortable making larger
purchases, like furniture and auto parts. These growth spots which also include sectors like
clothing come after previous growth leaders in online purchasing have slowed. Those leaders,

like media and software, havent gone back offline; rather, theyve gone almost entirely online,
leaving no room for expansion.
Two industries that Forrester doesnt foresee making a larger entry into e-commerce: grocery and
home improvement.
Mobile

commerce

will

continue

to surge.

Mulpuru-Kodali, who said that as an industry, [retail is] never short on hype, suggested that the
tablet, same-day shipping and in-store beacons failed to live up to the excitement of five years
ago.
In 2010, e-commerce was becoming ubiquitous, as shoppers spent time making purchases
outside of the workplace and on their phones, tablets and gaming consoles. But in the years
following, the tablet reached maturity as mobile commerce exploded and still continues to
grow. Mulpuru-Kodali said that the tablet was supposed to have gotten greater scale, but its
mobile thats gaining strength.
According to the 2015 report, mobile transactions are set to make up 10 percent of all ecommerce transactions this year, climbing from 6 percent in 2013 and 3 percent in 2012.
Same-day shipping and in-store beacons were much talked about at the beginning of the decade
but, five years later, still have a long way to go until they hit their potential.
Flash

sale

sites

fade, brick-and-mortars

hang

on.

Five years ago, flash sale sites were an emerging e-commerce model, having generated
excitement and grown rapidly, according to the 2010 report; Forrester predicted that the sites,
which sell designers brands at marked-down prices for a closed window of time, would become a
main fixture in retail over the next decade.
Today, the flash sale model has shown that its quick to gain momentum, but difficult to
maintain: Following a $1 billion valuation, Fab sold for a measly $15 million in 2014; the same
year, Gilt Groupe was in talks to buy out competitor Rue La La.
Forrester also foresaw e-commerce cannibalizing in-store shopping, predicting that by 2015, 11
percent of overall sales would happen online. That prediction has proven accurate: About 90
percent of transactions are offline today. But the research firm didnt see a current trend coming:

the move from e-commerce-only to brick-and-mortar. Major e-commerce-only players, like

Warby Parker and Birchbox, have recognized the value in a storefront and expanded their online
presence to include traditional storefronts.
Im hearing from landlords that theyre getting a huge number of lease requests from these kind
of companies that started as dot-com, said Mulpuru-Kodali. Still, she doesnt see this trend as
easily scalable.
Theres a bigger risk when opening a store rather than a website, but the reward of the online
store is smaller than the physical store, said Mulpuru-Kodali.
E-retailers too focused on 'hyped' tools: report
By Daphne Howland | April 29, 2015

print

http://www.retaildive.com/news/e-retailers-too-focused-on-hyped-tools-report/392166/
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Dive Brief:
Mobile is in, and it's all about the older shopper these are among the predictions set
forth by Forrester Research in its predictive five-year e-commerce report, The Future of
Shopping, written by Forrester Research retail analyst Sucharita Mulpuru. E-commerce
(and omnichannel commerce), restaurants, education, health care, manufacturing, and
luxury retail will thrive, leaving the rest to struggle, Mulpuru writes.

Retailers may be overly concerned right now about pleasing younger consumers when
larger economic forces could be more important, including the fact that household
incomes have declined for decades, the report says. Such basic economics affects
consumers of all ages and must be addressed, according to the report.

The report hints that location technologies, mobile payments, and delivery disruptions are
no more than overly hyped distractions keeping retailers from addressing more pressing
issues and more useful tools like dynamic pricing, and more transformative technologies
like remote customer service and biometrics. Mulpuru says these tools will ultimately
ensure retailers' survival.

Dive Insight:
Forrester in this report says that, while e-commerce will continue to gain traction, economic
forces are best not ignored as retailers contemplate their future. Flash-sales and tablet sales
created great excitement, but have fizzled, while challenges to consumer spending have
remained.
Location technologies, mobile payments, and same-day delivery are similarly shiny objects
distracting retailers from more important issues, Mulpuru says. And, she says, even as ecommerce grows, the physical store does have a role, as it has already bounced back somewhat.
Theres a bigger risk when opening a store rather than a website, but the reward of the online
store is smaller than the physical store, says Mulpuru.
The report singles out dynamic pricing as one important way to give consumers power as they
contemplate purchases a major element, its worth noting, of the approach by soon-to-launch
Jet, which has promised to take retail commerce by storm.
Recommended Reading
Forrester
Research: The
Future
Digiday: More mobile, fewer flash sales: The state of e-commerce

Of

Shopping

Global B2B e-commerce market will reach $6.7 trillion by 2020

By ECONOMICTIMES.COM | 29 Apr, 2015, 08.48PM IST
1 comments |Post a Comment
READ MORE ON Wholesale price index | Visionary Innovation Group Analyst | united states
|
The
move
|
Scalability
|
o ..
http://economictimes.indiatimes.com/tech/ites/global-b2b-e-commerce-market-will-reach-6-7trillion-by-2020/articleshow/47099425.cms
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more
http://economictimes.indiatimes.com/articleshow/47099425.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

at:

Business-to-business (B2B) online retailing has been witnessing strong growth due to the rapid
migration of manufacturers and wholesalers from legacy systems to open, online platforms. As

legacy systems involve the use of electronic data interchange, which is expensive and
cumbersome to handle, B2B models will continue to move towards ubiquitous online platforms
that allow buyers and sellers from anywhere in the world to transact goods and services with
ease. In fact, the B2B online retail market is expected to reach double the size of the business-toconsumer (B2C) online market, generating revenues of 6.7 trillion $ by 2020, according to a
report
by
Frost
&
Sullivan.
New analysis from Frost & Sullivan, Future of B2B Online Retailing, reveals that B2B online
sales will account for close to 27 per cent of total manufacturing trade, which is likely to hit 25
trillion $ by 2020. Geographically, China and the United States will lead the B2B online retailing
market. The latter is anticipated to double its revenue contribution to 1.2 billion $ by 2020.
As marketplaces and cross-industry public platforms such as Alibaba and Amazon become
popular, B2B online relationships are likely to move from a one-to-many to many-to-many
business model. Instead of a model where one company invests and builds an e-platform for its
suppliers, the preference will be for a solution in which anybody integrates an e-procurement
process
and
facilitates
the
purchase
of
goods
online.
"As such, private industrial networks, where specific companies come together to exchange
products, and public market places that are employed for on-the-spot purchasing, have gained
prominence over the last decade," explained Frost & Sullivan's Visionary Innovation Group
Analyst. "With businesses buying more than selling online, these seller-driven B2C-type open
public networks will help provide more visibility and storefront capabilities to sellers."
Retailers will, however, face certain challenges while implementing B2B e-commerce strategies.
Unlike the B2C setting, in the B2B e-commerce setup, prices are variable and order volumes are
high and of a wide range, necessitating a flexible shipping and logistics solution. Tax and
regulatory concerns also impact sales highly, and providers typically employ large staff whose
only responsibility is delivering products and services within these restrictions. Moreover,
executing marketing or educational initiatives in the B2B setting is complex, as clients need to
understand the way products work and interact with other systems that they already have or are
considering for purchase. The black box effect, wherein a customer buys a device without a real
interest in learning how it works, barely exists in the B2B context.
"Nonetheless, with technological advancements facilitating the procurement of goods on the
move through smartphones and tablets, business use of online platforms will rapidly grow,"
noted the Analyst. "The emergence of cloud platforms that offer more scalability, both as a
software and infrastructure service, too is pushing businesses towards B2B online retailing."
Government not considering proposals to review FDI e-commerce policy

PTI | Apr 29, 2015, 06.18 PM IST

http://timesofindia.indiatimes.com/tech/tech-news/Government-not-considering-proposals-toreview-FDI-e-commerce-policy/articleshow/47097766.cms
NEW DELHI: The government has said there is no proposal under consideration to review the
foreign
direct
investment
policy
on
the
e-commerce
sector.
"At present, there is no proposal under consideration of the government to review the FDI policy
on business to consumer (B2C) e-commerce," commerce and industry minister Nirmala
Sitharaman
said
in
a
written
reply
to
the
Rajya
Sabha.
Global retail giants like Amazon wants India to relax the foreign investment norms in ecommerce
space.
India's Foreign Direct Investment (FDI) policy restricts e-commerce companies from offering
services directly to retail consumers. At present, 100% FDI is allowed in business -to-business
(B2B)
e-commerce
but
not
in
retail
trading.
In a separate reply, the minister said the government has not taken any decision with regard to
implementation
of
FDI
policy
in
the
multi-brand
retail
trading.
Currently, as per the policy, 51% FDI is allowed in the multi-brand retail sector.
In another reply, Sitharaman said an action plan has been developed for improvement of
regulatory environment and increasing ease of doing business in the states.
"States

have

been

requested

to

complete

action

by

June

30,"

she

said.

The government has said it wants to improve India's position to top-50 in terms of ease of doing
business from 142nd currently, as per the latest World Bank report in this regard.

As retailers spend on technology to counter ecommerce, tech firms like IBM, SAP brace for
revenue growth
Sales analytics, customer analytics and web analytics lead the way in priority order for
retailers with marketing analytics not far behind," said an expert.Jochelle Mendonca&Neha
Alawadhi | 30 April 2015, 8:00 AM IST
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MUMBAI|DELHI: Brick-and-mortar retailers are beginning to spend more on technology and

omni-channel strategies to combat the growing threat from ecommerce, a boon for tech firms
who had seen revenue growth from retail decelerate in the last few years.
About 39 million Indians shop online, according to an April report by research firm AT Kearney.
Though it is a small proportion of overall population, it is growing fast. Traditional retailers are
realising it is a market they cannot afford to miss. Technology firms such as IBM, Oracle and
SAP
are
gearing
up
to
win
new
business.
"In last two years, since the recent ecommerce business started, we are seeing brick-and-mortar
stores are realising the need for omni-channel offerings. They have started making investments
on omni-channel strategies," Kamal Singhani, executive director - enterprise applications and
mobility leader at IBM India, told ET. Singhani added that Indian retailers would need another
12-18
months
before
strategies
become
competitive.
An omni-channel strategy implies that a retailer's customers get the same buying experience and
treatment in both physical stores, online and through mobile devices. It requires significant
investment in the back-end to tie-in inventory and logistics to make it work.
Future Group has been the most vocal with its plan to spend Rs 100 crore on its omni-channel
strategy over the next year. CEO Kishore Biyani has said that to implement the strategy, the retail
business would have to become more technology and big data-focused. Future Group partnered
with SAP to drive its omni-channel venture. Reliance Retail, Shoppers Stop, Pantaloons, and
even the Tata Group are investing to win a slice of the online shopping space.
But experts say these are baby steps and retailers still have work to do on technology to compete
with deeppocketed online players such as Flipkart and Amazon. "While retailers are investing in
systems, the kind of capital expenditure required to actually build the whole omni-channel
experience has not happened yet," said Devangshu Dutta, chief executive at retail and consumer
products
consultancy
Third
Eyesight.
"One of the first things is that they should look to move away from in-house hosted systems to

cloud-based solutions. Otherwise it is very, very large investment, and time taken is significant.

" A sales executive with a multi-national technology firm said the competition to win deals in the
retail space has become increasingly fierce, as companies expect retailers to spend several
hundred
crores
of
rupees
to
boost
their
online
sales.
"For Indian retailers, the writing is on the wall. They have seen some electronics retailers
struggle in India since e-commerce arrived, and now they want to defend their turf. Most haven't
pulled the trigger (on giving out contracts) but they will start," a sales executive with a multinational technology company said. He declined to be identified because he is not authorised to
speak
to
media.
Companies with analytics offering are expected to benefit greatly when the buying process
begins. "According to an industry study, the company website is the most-used method for
communicating
with
shoppers.
Sales analytics, customer analytics and web analytics lead the way in priority order for retailers
with marketing analytics not far behind," said Mukesh Mathur, executive director at Oracle
Retail.
The Indian analytics market is expected to reach $2.3 billion by 2018, according to Nasscom,
driven by increasing adoption in retail, ecommerce, banking and telecom.
Flipkart, Paytm arent mobile friendly websites: Google
Google's new formula will have a huge impact on how and where people spend their money,
provided more people are relying on their smartphones.Business Insider | 23 April 2015, 8:29
AM IST
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Google has introduced a change in the way its search engine recommends websites on
smartphones wherein it will favour those websites that Google qualify as 'mobile-friendly' and
make them appear at the top of the rankings. Some have labeled the changes as "Mobilegeddon."
According to the Google company, websites that do not meet the description will be demoted in
Google search results on smartphones while those meeting the criteria will appear in top
rankings. The algorithm will start favoring mobile-friendly websites (ones with large text, easyto-click links, and that resize to fit whatever screen they're viewed on) and ranking them higher
in search. Websites that aren't mobile-friendly will get demoted.
Google's new formula will have a huge impact on how and where people spend their money,
provided more people are relying on their smartphones to compare products in stores and look
for restaurants.
As Medianama reports, according to Google's new mobile friendly test, Flipkart.com is not
mobile friendly and so is Paytm. On the other hand, JustDial and Zomato supposedly have
mobile friendly websites. One can take the test here.
However, some mobile-unfriendly sites could still get favorable search placement as Google's
algorithm judges sites based on numerous criteria, of which mobile-friendlness is just one. The
company's aim is to provide the most relevant results, even if it's to a site that isn't optimized for
mobile.
About 60% of online traffic now comes from mobile and Google wants users to have a good
experience whenever they click on a mobile link. The company announced its impending
changes back in February, giving webmasters nearly two months and plenty of information to
make the changes necessary to keep their sites from disappearing from mobile search results. But
the update is still expected to cause a major ranking shake-up. It has even been nicknamed
"Mobile-geddon" because of how "apocalyptic" it could be for millions of websites, Itai Sadan,

CEO of website building company Duda, told Business Insider.

"I think the people who are at risk are those who don't know about it," Sadan says. To him, that
mostly means small businesses. "Come April 21, a lot of small businesses are going to be really
surprised that the number of visitors to their websites has dropped significantly. This is going to
affect millions of sites on the web," he says.
It's not only small businesses that are going to be affected by mobilegeddon though. Marketing
company Somo released a study last week that found that a bunch of big brands, like American
Apparel, The Daily Mail, and Ryanair, will all get punished when the change takes place, unless
they update their sites before Tuesday.
On-demand delivery: How startups are making money as they challenge established firms
In Indias hottest ecommerce segment -on-demand delivery - a slew of startups are bagging
tonnes of money as they challenge the established cos.Aditi Shrivastava&Evelyn Fok | 24
April 2015, 7:54 AM IST
NewsletterA AShare on email
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http://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/on-demand-deliveryhow-startups-are-making-money-as-they-challenge-established-firms/47034799

Albinder Dhindsa
and Saurabh Kumar were bouncing off business ideas two years ago when they observed how
while ecommerce had transformed India's retail sector for electronics and apparel, grocery was a
different ball game - customers made repeat purchases every week, and yet only a few online
players were able to crack the segment. "The experience of a customer buying a lot of groceries
online is not that great," said Dhindsa, 32, former head of international operations at Zomato

who cofounded online grocery delivery startup Grofers along with Kumar at the end of 2013.
"If we standardized (grocery sales), it would really disrupt the way local retail is done right
now." Dhindsa and Kumar had been colleagues previously at another company. Fast forward to
2015, when Grofers and its peers PepperTap, ZopNow and LocalBanya have raised hundreds of
crore in what has become India's hottest ecommerce segment.
These startups run on a simple model: They deliver from neighbourhood stores for a fee and do
not own any inventory, posing a serious challenge to pioneering Internet grocer BigBasket,
which sources and maintains its own inventory. Groceries and household staples represent the
last challenge to bringing India's retail sector online - a $338 billion industry that makes up 69%
of India's retail wallet and which has established supply chains that are particularly difficult to
disrupt.
Delivering food and other perishables at scale is fraught with difficulties and is capitalintensive.
Stock-keeping units, or product lines, figure in the tens of thousands, and have special
requirements for storage and delivery. Such hurdles exist even for the new wave of online
grocers, who pursue a hyper-local strategy through tie-ups with local grocers and promise to
deliver within an hour or two. "You have to set up the right kind of infrastructure for cold chain
products and fresh produce, which are temperature-sensitive.
You also have to get across enough range and rates to make sure you can deliver all the products
to consumers," said Karan Mehrotra, cofounder and chief executive of two-year-old LocalBanya,
which sources from local grocers and packs the goods in a central facility for dispatch.
Bengaluru-based BigBasket, founded in 2011, has had a stronghold on the online grocery
segment with a warehouse-based model that guarantees control over customer experience and
allows for a nearperfect fillrate, a measure of how effective it is in fulfilling orders.
"Single point stocking helps control shrinkage and write-off, and direct buying helps us with
advertising income," said Hari Menon, cofounder and CEO of BigBasket, who previously
cofounded Indian ecommerce pioneer Fabmall. Even so, BigBasket, too, is buying into the
hyperlocal strategy. Recently, the company announced partnerships with 1,800 neighbourhood
stores across the country to deliver goods in under an hour. The stores double as pick-up points
for customers. "Customers buy most of their monthly needs in the beginning of every month,
followed by 'top-ups' through the month.

It
is very unlikely that this behaviour is going to change, unless you throw money at it," Menon
said. While BigBasket is still far ahead of the pack - it receives more than 10,000 orders a day,
compared with an average 1,000 or fewer for its younger rivals - the valuations of new-age
grocers have soared disproportionately. Grofers' valuation tripled to about Rs 728 crore in six
months; BigBasket is valued at Rs 1,519 crore.
Their hyper-local business model is lauded for saving not only time but also capital - ZopNow
has been able to expand to three more cities spending less than $20,000 (Rs12.6 lakh) at each.
This also translates into benefits for customers, said Mukesh Singh, the company's cofounder and
CEO, a PhD dropout from the Massachusetts Institute of Technology who previously held top
positions at MakeMyTrip and Amazon India. "Our warehouse was carrying around 10,000
products, but HyperCity stores (ZopNow's onground partner) carry over 100,000," he said.
Amazon's grocery initiative does not hold any stock either. Its recently launched 'Kirana Now'
programme allows neighbourhood stores to list their inventory on its website.
"The next generation of ecommerce is hyper-local mobile commerce for frequent-use cases such

as groceries and food," said Shailendra Singh, managing director of Sequoia Capital India, which
backs PepperTap and Grofers as well as their American counterpart Instacart. "Larger portfolio
companies such as Ola and Zomato focusing on hyper-local is further validation that this is a
very large opportunity." Several brick-and-mortar retailers like Aditya Birla, Spencer's, and Trent
have been expanding in the space, but their collective losses crossed Rs 13,000 crore in fiscal
year 2014, according to credit rating agency Crisil.
Reliance Fresh has launched online grocery delivery in Mumbai. BigBasket, which also sells its
own brand of staples online, has been able to maintain profit margins above 20% and is on
course towards profitability, said Menon. Newcomers in pure logistics plays, where margins are
thinner at between 2% and 4%, have to play to their strengths and scale up quickly.
And experts say, unlike with online marketplaces that can afford to compete with each other with
deep discounting, the online grocery battle will have to be fought also with product quality and
range, packaging, delivery times and customer service. Consolidation has already started in the
segment. Grofers bought Gurgaon-based competitor Mygreenbox earlier this month. Offline
gourmet retailer Godrej's Nature Basket recently acquired Ekstop.com as part of its online
strategy, and has tied up with ecommerce giants Snapdeal and Amazon to bring its offerings
online.
"When national or regional players with a technological edge enter a smaller city, they can buy
out local players and get a ready customer base," said Seema Gupta, assistant professor of
marketing at IIM-Bangalore, who also cofounded industry newcomer YouMart. At the end of the
day, all players agree that the larger war being fought is on customer loyalty. For now, all hands
are on deck to figure out exactly how to keep the customer in the bag.
Why retailers like Amazon, Reliance Retail are wooing kirana stores
Kala Vijayraghavan & Sagar Malviya, ET Bureau Apr 23, 2015, 12.28PM IST
http://articles.economictimes.indiatimes.com/2015-04-23/news/61457910_1_kirana-onlinegrocers-amazon-india

(Big retail has not killed)

Hareshwar Gopichand runs a 450-square feet grocery store in Borivali in the western suburbs of
Mumbai. He is now fielding calls almost every day from a steady stream of modern trade
formats and e-commerce players seeking his support to come together to form what they call a
'fruitful partnership.'
Amazon wants kiranas like his to serve as delivery points for products purchased on its site. It
has also listed a few kiranas as sellers on its portal. BigBasket.com wants kiranas to sell its
private labels. Reliance Retail is exploring partnerships with local neighbourhood shops to reach
consumers better. Big Bazaar wants them to become its franchisees to sell its home and fashion
products.
Everybody loves the kirana. But Gopichand is not giving in to all the attention.
"My business is quite fruitful without any one's support; I am planning to expand it more," he
says ruling out partnerships for the moment. The truth is big and online retailers need kiranas
more than the latter needs the former.

Modern trade, which accounts for 7 per cent of the market size, saw a sharp deceleration in
growth rate to 5.4 per cent in 2014 from 32 per cent growth in 2012, according to market
researcher Nielsen. In comparison, kiranas, which control 74 per cent of the market, grew 7.1 per
cent despite a large base.
For years, kiranas lost sleep over worries that new-age retailers would put them out of business.
But the tables have now turned. New-age retailers are the ones wooing the mom-and-pop stores
for support to reach consumers.
Several online grocery stores such as BigBasket, LocalBanya, ZopNow, EkStop, AaramShop,
MyGrahak, VeggiBazaar, Fresh N Daily and Farm2Kitchen are experimenting with different
business and delivery models. Some of these online grocers are hyperlocal, catering to single
cities, sometimes even to only certain neighbourhoods of a city.
Stumped by the challenges of scaling up the competitive grocery business, online grocery
retailers have begun following in the footsteps of Kishore Biyani, India's largest modern retailer,
to seek partnerships from kirana, or traditional grocers, to scale up their businesses.
It is completely unviable for online grocers to compete without scaling up, says Kishore Biyani,
chief executive of the Future Group. "Most of them have high operational costs in a low-margin
business. Their customer acquisition costs including technology is 20 per cent, which is huge in
this business," he adds.

Is that why even he is wooing kiranas as partners. "We have 700-800 kirana stores who are our
partners; we have invested in training them," Biyani says.
The idea is to simplify last-mile distribution and kirana stores are the closest channel to
consumers. "We also want them to source merchandise from us so that quality is maintained and
at the same time it boosts our B2B segment," says Vipul Parekh, co-founder of Big-Basket.com.
Amazon India kicked of pilots in April last year using kirana stores as entrepreneur-partners
across the city to serve as its delivery points. This has now evolved to the 'I have space'
programme," says Amit Agarwal, country manager, Amazon India.
In this programme, kiranas work with Amazon as it's last-mile delivery partners and help
packages reach the customer's door step.
"We have currently scaled this pilot to over 500 points spread across 28 cities. It grows a bit each
day," says Agarwal.
Everybody is wooing the kiranas who though are reluctant to partner with modern formats.
"Except maybe 1-2 per cent of our fl ock, none of us are keen to go ahead and partner with
modern trade," Chandrakant Gala, secretary of Bombay Suburban Grain Dealers Association.
"Their terms and conditions of the modern retailers are not acceptable to us. We are no longer
afraid of them. Most of us are growing well," he adds.
But why is everyone seeking partnerships with kiranas?
Scaling up an e-grocery business is capital-intensive, venture capitalists say. And partnerships
help scale up faster and with less investment. "Grocery is not an easy business in India," one
venture capitalist said.
Online consumers in India are deal-seeking value-hunters, UBS said in an April 2015 research
report on India's consumer sector. But trade margins are already low leaving little room for
discounts. "Therefore, convenience and availability of niche products may be the only reasons to
buy consumer staples online," the UBS report added. This is where kiranas can help the others.
They are closes to consumers and can reach them faster and cheaper.
On the other hand, kiranas cannot say no to fresh business that large retailers and online stores
can feed them. "All formats can fl ourish together," says Damodar Mall CEO of Reliance Retail.
"But it's low-cost, last-mile connection to the consumer and his knowledge of servicing the
Indian family is something unique to the kirana," he adds.
Which is why the humble, ubiquitous kirana will remain the fi rst among equals in the retail
ecosystem.
Surpluss.in bags Specialty e-Retailer of Year Award
21 Apr, 2015, 10.33PM IST
0 comments |Post a Comment
READ MORE ON Surpluss.in | Mr Amit Gupta | Hotel Hyatt Regency | Congress

http://economictimes.indiatimes.com/industry/services/retail/surpluss-in-bags-specialty-eretailer-of-year-award/articleshow/47031407.cms

NEW DELHI: Surpluss.in, the debutant e-commerce brand, has bagged the 'Specialty e-Retailer of the Year Award
2015'. The award was given during a ceremony held in Hotel Hyatt Regency, Gurgaon, on the first day of the Indian
e-Retail Congress and Awards 2015, recently.
Surpluss.in is a leading store for unboxed, refurbished, surplus and new product deals. It has received this award for
niche proposition, great deals, fast growth, high loyalty among users and excellent user experience. ..
With this award, Surpluss.in has firmly established itself as the most reliable and efficient way to purchase authentic
global brands at the most competitive pricing.
The award was received by Mr Amit Gupta, Promoter and Director Surpluss.in. He said, "This win is very prestigious
for us and it inspires us to continue our unrelenting journey in the space of specialty e-retail and innovation. This
award is a heartening recognition of our efforts in the realm of specialty e-retail."

Comparatively a younger player in the burgeoning ecommerce industry, Surpluss.in retails handpicked genuine
products adhering to brand's international standards and quality parameters. The product range covers mobile
phones, tablets, laptops, LED TVs as also high street fashion labels.
The Indian eRetail Awards recognize excellence in eRetail and multi-channel initiatives by retailers and confer
national recognition to awardees as the best digital retail businesses in the country. The category of 'Specialty
eRetailer' sought to identify and facilitate the most creative initiatives in the online retail space, ranging from site
design, usability, customer experience, service, need fulfillment or any other area of the eRetail discipline.
BUSINESS, COMMUNICATION, GADGETS, INFORMATION TECH, INTERNET, RETAIL

INDIAN E-COMMERCE NEARLY

QUADRUPLED IN FIVE YEARS
STUDY
2015-04-08 13:09 DEEPTI RAJAN

http://rtn.asia/d-r/10899/indian-e-commerce-nearly-quadrupled-in-five-yearsstudy
e-commerce in India is set to cross $16 billion in sales by the end of this
year, according to an ASSOCHAM- Deloitte joint study released today.
The digital commerce market in India has grown steadily from $4.4 billion in
2010 to $13.6 billion in 2014 and likely to touch $16 billion by the end of
2015 on the back of growing Internet population and increased online
shoppers, Future of e-Commerce: Uncovering Innovation found.

e-commerce includes activities such as online retail, travel, tourism, food and
beverages.
Online travel accounts for nearly 61% of e-commerce business while etailing contributes about 29%. Visa India spend data showed 53% growth in
the number of e-commerce transactions in 2014, adds the joint study.
E-Commerce players from the US, Europe and Japan are seeing slower
growth in home markets.
They are increasingly looking to enter developing economies of India, Brazil
and China which have forecasted growth rates of more than 20% over
coming years, the study said.
Most popular e-commerce categories are non-consumable durables and
entertainment related products.

image: http://rtn.asia/wp-content/uploads/2015/04/e-commerce-india.png

Internet penetration is rapidly increasing with around 300 million users in

2014. The smartphone is steadily growing and consists of 35% of the overall
mobile phones market in the country and success rate of some of the
technologies is directly connected to the success of e-commerce.

The e-commerce companies are concentrating their efforts on increasing the

penetration of their mobile apps for higher growth. Big players in this space
claim to have more than 50% of their revenue coming from mobile apps.
More than 235 million people in India access internet through mobile
devices, the primary reason for e-tailers to focus their efforts on mobile app
penetration across the country. The mobile applications are helping to reach
more customers located even in remote and rural areas. E-commerce
companies have been able to bridge the service gap considerably by sending
service updates and other communication via their mobile app, e-mail, and
SMS, adds the study.
The availability of e-commerce applications on various mobility devices is
helping to drive sales and revenue. E-tailers like Flipkart, Amazon and Jabong
generate nearly 50% of their revenues from consumers shopping using
mobile phones.

image: http://rtn.asia/wp-content/uploads/2015/04/e-commerce-india-1.png

The digital advertisement industry is also growing rapidly as there is a

growth in digital communication devices around the world. The increase in
smartphones, tablets is enabling advertisers to reach a wider audience.
According to study, the Indian online ad market will grow year-on-year at
30% to reach Rs. 36.75 billion by April 2015, adds the paper.

Every 30 seconds, global e-commerce industry generates $1.2 million

revenue with Facebook, Pinterest and Twitter contributing $5,483, $4,504
and $4,308 respectively, reveals the study.
The valuation of Flipkart sharply increased from $1.9 billion at the start of
2014 to reach $11 billion by the end of the year. It raised $1.9 billion in three
rounds of fund raising despite incurring losses of around Rs 4 billion.
Similarly, Snapdeal saw its valuation increase from $350 million to $3 billion
after raising funds of $850 million. Snapdeal also posted losses of Rs 2.64
billion in FY14. 14 The valuation can play a major role for an e-commerce
player irrespective of the profitability of the company.
The big retailers are trying to complement the traditional retailing with digital
commerce by tying up with big e-tailers. The partnership between Snapdeal
& Croma or Amazon & Future Group owned Big Bazaar is no more a
partnership between two retailers. It has extended to a vendor and
technology partners offering technology and logistics services.
Reliance retail is planning to launch its e-commerce website seeking to
attract people from online retailers. Shoppers Stop is revamping its digital
platform, which currently contributes 1% of the revenue. The extended reach
of the online channel is the primary reason for offline retailers to launch ecommerce offerings.
The rapid spread of mobile internet, especially of smart phones could unlock
a significant market beyond the Tier-1 cities for the online retail segment.
Undoubtedly, mobile retailing is expected to continue to grow aggressively.
In the next three years, global e-commerce sales made via mobile devices
are expected to top $638 billion, adds the study.

Read more at http://rtn.asia/d-r/10899/indian-e-commerce-nearly-quadrupled-in-fiveyears-study#TKAZgtMyvGUFwpex.99

April 14, 2015 21:00 ET

Convince & Convert! Four Things Your Online Retail Returns

Policy Should Be Doing Revealed in TrueShip's Newest Guide

http://www.marketwired.com/press-release/convince-convertfour-things-your-online-retail-returns-policy-should-be-doingrevealed-2009816.htm

SCOTTSDALE, AZ--(Marketwired - April 14, 2015) - TrueShip's

(http://www.trueship.com) has just released a new guide designed to help eretailers create a more ideal online retail returns policy. The guide entails the
four most important elements of the return policy, in the eyes of the
consumer, so that e-retailers can gain more insight on what shoppers are
looking for in an online retail returns policy.
Recent studies about online retail returns have found that a majority of the
shoppers take the time to read the return policy. What's more, a large
percentage of shoppers' buying decisions are influenced by said policy.
Conducive and contributing elements include things like the cost of return
shipping, associated restocking fees, length of time from purchase that
shoppers are able to return products, and even the convenience of returning
an item that they've purchased via the existing returns management system.
In the newest guide on online retail returns by TrueShip, the following points
are covered:

Assuring that there's communication to the customer about the return policy.
Making the return policy convenient for shoppers.
Designing a return policy with a price point in mind that doesn't contribute to
shopping cart abandonment.
The importance of offering flexibility in an online retail return policy.
Infographic on the "Consumer Mindset with Online Shopping."

TrueShip's newest guide can be found by visiting this web address

at:http://www.trueship.com/blog/2015/04/14/convince-convert-with-an-online-returnspolicy-before-its-too-late/#.VS2mYZMY21k.
A detailed assortment of related ecommerce guides can also be found at
TrueShip's website at: http://www.trueship.com/blog.

"Your online retail returns policy is a critical element in your sales strategy,"
explained Michael Lazar, Director of Online Marketing at TrueShip. "But a lot
of e-retailers are unaware of just how much a factor this policy can be. In this
new guide, businesses can learn how to create a more efficient returns
model that helps them encourage confidence in consumers to realize lasting
profit windfalls via improved retention and loyalty; something that can allow
them to reduce shopping cart abandonment rates across the board."
TrueShip makes an automated online retail returns system called
ReadyReturns (http://www.trueship.com/online-retail-returns). It drops into almost
any website with no coding, allowing e-retailers to accept, process and track
automated returns. Consumers are able to generate return shipping labels by
filling out a short form online. After the package has been sent back,
ReadyReturns provides e-retailers with a variety of returns-related analytics
and reporting.
New users can get a 30-day complimentary trial to test drive the software for
themselves.
Learn more by visiting TrueShip online at: http://www.trueship.com.
About TrueShip
#ShipSmarter -- TrueShip is the original architect of multicarrier ecommerce
shipping software. ReadyShipper shipping software integrates into the most
widely used shopping carts and online marketplaces. It is an easy-to-use
order fulfillment solution designed to save e-retailers time and money.
About ReadyReturns
#ReturnsHappen -- ReadyReturns is a customer-facing, self-service online
product returns software solution. It integrates into virtually website without
any programming. ReadyReturns lets customers make returns from a website
by filling out a simple form and printing the return shipping label. E-retailers
set the rules of the returns, including things like return shipping and
restocking fees.
Embedded Video Available: https://www.youtube.com/watch?v=iT61wv8wud8

CONTACT INFORMATION

Press Contact
Director of Online Marketing
Michael Lazar
Tel: (877) 818-7447 ext: 5007
Email: mike@trueship.com