Macro Indicators
All Values in USD
Indian GDP- 1890 bn
Private Consumption- 1080 bn
Out of Which Retail- 525 bn
- Rural: 273 bn (52%), Urban: 252 bn (48%)
- Traditional Retail:479 bn (91%), Organised Retail:46 bn (9%)
- Merchandise:488 bn (93%), Service 37 bn (7%)
- Food and Grocery (350 bn), Apparel (46), Jewellery and Watches (40), Consumer Electronics (26), Pharmacy (15), Furnishings and Furniture (19), Footwear (6), F&B Service (11), Beauty Services (2), Health/Fitness Services (3), Others (9)
Present GMV of Etail: USD 7b
Etail ( % of total Retail): 1.2%
E-tail ( % of organised retail): 13%
Across Cities
- 12% of the total population contributes of 38% of total spends in top 74 cities
- Delhi and Mumbai account for 9% of total retail spending.
- Top 22 cities account for 29% fo the total retail spending
- North India contributes to 23% of the total retail opportunity
- Karnataka & AP: Contributes $72 billion
Success of Apparel and Life Style products is limited by
- Limited Penetration of brands in tier 2 and 3
- Lack of Standardised Products
- Discounted Pricing
Business Model Options for E-commerce
- Positioning Focus:
- Pure online retail brand
- Online MBOs
- Aggregators
- Brands going online
- Inventory Approach
- Own
- Third Party
- Merchandise Format
- Horizontal: Has many categories- Flipkart, Infibeam
- Vertical- Limited Category - Exhaustive Range- Health Kart
- Inventory Approach
- Inventory Led
- Outright Purchase
- Consignment/SOR
- Advantages
- Visibility of Stock
- Higher Fulfilment Rate
- Faster Dispatch Time
- Better brand Credibility
- Customer Confidence
- Higher Margins
- Disadvantes
- Capital Tie-up
- Increased Inventory Mark Down Risk
- Building Non selling Inventory
- Managed Market Place
- Drop Ship
- Back to Back
- Advantages
- No Inventory
- Higher Quality Control
- Low Margins
- Favourable government policies
- Disadvantages
- Lower Delivery cycle
- Higher logistics cost
- Multiple Listing
- System Integration with Vendor required
- Lower Margins
- Pure Market Place
- Any one can post
- Advantages
- No Inventory/storage and Handling cost
- Wider product offering
- Favourable Government policies
- Disadvantages
- Non standard customer service
- Multiple listing
- Poor Vendor service
- System Integration challenges
E-tailing Participants
1. Web Only (98%), Multiple Channels (2%) ( Note in USA Multiple channels is 40%)
E-tailing Impact Categories
- High Impact
- Small Electronics
- Fashion and Life Style
- Why
- Greater Standardisation
- Low Involvement
- Discretionary
- Medium Impact
- Home Improvement
- White Goods
- Health
- Jewellery
- Why
- High Involvement
- Higher Investment
- Lower Product Life
- Low Impact
- Brown Goods
- Food
- Why
- Need Based
- Logistics Issues and Capability
Existing Vendor Universe
1. Authorised Distributors
2. Dealers/Subdistributors
3. Small Brands
Key Need Gaps
- Customer Trust
- Merchandise and Range Building
- Expertise Centred around Technology
- Price Based Positioning
- Fulfilment
- Challenge of Tapping semi Urban and Rural Population. 90% sale of the retailer is coming from top 100 cities.
Source