e-commerce in India

5 Characteristics common to almost all successful online businesses

Not all websites are doing well because understanding the core of the online market is not easy and requires certain characteristics and features will enhance the website and its offerings.

The online e-commerce market has been catching up in India like wildfire and is growing leaps and bounds. However, where some players in the market are doing very well, the others are struggling to keep up. The reputation a business builds in the local as well as the national market is crucial for its sales and the clientele it attracts.

With advancements in the field of technology and growing consumer awareness, the online markets are dynamic and changing with time. Almost all walk-in stores are trying to expand markets by going digital as it is more convenient and offers better outreach. But, not all websites are doing well because understanding the core of the online market is not easy and requires certain characteristics and features will enhance the website and its offerings. One name that you can vouch for is Amazon. This is the biggest place where you can sell your products across the world using the option of Amazon vendor central.

Here are 5 things common to almost all successful online businesses:

1. Good image of the online brand in the minds of the consumers

The online businesses which are very successful have built a positive perception in the mind of their consumer base which is why they keep coming back for repeat purchases. Also, through their existing base and communication strategies, they attract a potential target audience.

Amazon.in, BookMyShow and Swiggy are online business in different markets which are successful because of the positive image and great service rendered out to customers.

Even though Snapdeal is a leading market player, people don’t perceive Snapdeal to be great because of repeated late deliveries and low quality of products faced by some customers.

2. Shopping cart abandonment solutions

Every Online business has faced the shopping cart abandonment issue where customers just add things to their cart but never really purchase them. This happens due to various reasons- the customer might change his/her mind, better deals on other sites, coupons not working etc. Installation of live chats has hit the online markets by a storm and businesses are trying to use this method to stop customers from abandoning their cart during checkout.

Offers like “30% off on shipping if you complete this transaction in the next 30 minutes” along with cart abandonment e-mailers sent out can also reduce this problem. Also, offer you customers the option of wish list so that they can save items for later.

3. Live chat services

Customers feel more satisfied if they have someone to live chat with while shopping as they might require assistance. This also plays with consumer behaviour as the customer believes that he can avail real-time assistance whenever he wants to. in this way, the business is connected to the customer and can provide solutions instantly.

This is an easy method to gain more customers as a chat window is all it takes to make the customers more likely to buy your products.

4. Customer satisfaction

For an online business to prosper and do well, it is very important to focus on the customer satisfaction aspect as a loyal base assures repeat purchases. When people have a good shopping experience with a website, they are more likely to come back and shop for more products the next time.

For instance, Amazon.in gives utmost importance to customer service through prompt e-mails and query solutions.

5. Constant growth and expansion

Because the online markets are so dynamic, a business cannot afford to become stagnant in the scenario. Hence, all business keep launching new products and venturing into new markets to expand their business.

For instance, OYO rooms started off with offering rooms at budget hotels but has now expanded into OYO prime and OYO cafe as well.

E-commerce market in India growing at a fast pace might touch USD 84 billion in 2021

The fast-growing e-commerce market in the country will touch USD 84 billion in 2021 from USD 24 billion in 2017.

The fast-growing e-commerce market in the country will touch USD 84 billion in 2021 from USD 24 billion in 2017. The reason for this hike is mainly the rise in the number of internet users and increase usage of smartphones. About 28 per cent of millennial’s purchase products due to social media recommendations.

It’s almost impossible to calculate the indirect influence that social media has on consumer spending.

Business always follows where there is a concentration of people. Earlier these places of concentration used to be places, towns, and cities but now it is the Social Media platforms. People spend so much of their time on these platforms that the businesses were forced to take proactive steps to reach out to them.

The number of online shoppers is expected to increase from the current 15 per cent of the online population to 50 per cent by 2026.

Smartphone users in India are expected to increase from 260 million in 2016 to around 450 million by 2021, which is also likely to drive the m-commerce sales from $10.5 billion in 2016 to $38 billion in 2020.

“India continues to hold a strong position as far as it’s market potential is concerned and is on its way to becoming the third largest consumer market in the world, poised to grow close to USD 1.2 trillion by 2021,” Anil Talreja, Partner, Deloitte India said.

Binny Bansal may log out from Flipkart following Walmart’s log in

Binny Bansal is looking to sell his stake and exit the company following Walmart-Flipkart deal.

One of the co-founders of India’s largest e-commerce firm Flipkart, Binny Bansal is looking to sell his stake and exit the company following Walmart-Flipkart deal.

Sachin Bansal and Binny Bansal are both planning to sell their stake once the deal goes through, but Sachin is still interested in hanging around in the firm they founded 11 years ago, said a Factor Daily report quoting independent sources.

At present, Bansals reportedly claim to own 5.5 percent each in Flipkart. The upcoming Walmart investment is likely to value the online marketplace to the tune of $20 billion. Hence, both Bansals will make $1.10 billion (or Rs 7344 crore) each.

Walmart, as per the latest report, is likely to acquire 51 percent stake, paying anything between $8 billion (Rs 53,450 crore) and $12 billion (Rs 80,180 crore), in Flipkart as early as next week.

The US retail giant has been in talks with Flipkart for months to acquire a controlling stake in the firm as it looks to take on rival Amazon.com Inc head-on in India, a market where e-commerce is tipped to grow to $200 billion in an upcoming decade.

Two another sources added that some of these things can change at the last moment as nothing is final. But Binny exit seems more likely.

Current shareholding structure of Flipkart

SoftBank which owns one-fifth of the Bengaluru-based marketplace had appeared as a major hurdle in the deal. However, the Japanese tech titan has given a green signal to it and slated to bag $4 billion exits.

Earlier, in August last year, Flipkart had closed the deal with SoftBank, which bought the stake worth at least $2.6 billion. Post pouring in a massive round, SoftBank owns about 21 percent of the firm.

The New York-based Tiger Global, one of the major backers of Flipkart, witnessed its shareholding reduced from 33.6 percent to 20.5 percent as it sold out 13 percent stake to SoftBank in the secondary purchase.

The Japanese conglomerate invested roughly $1.4 billion directly in the e-commerce company.

Meanwhile, Binny Bansal shareholding fell from 7.6 percent to 5.2 percent, when he sold shares worth $30-35 million in the secondary buyback led by SoftBank last year.

Sachin and Binny investments in startups

Besides building and scaling Flipkart, both founders also have backed many startups in personal capacities.

So far, Sachin has invested in seven ventures including Inshorts, Ather Energy, Unacademy, and SpoonJoy (not operational) with a total funding of $26 million, while Binny Bansal has invested about $32 million across 17 companies.

Apart from co-investing with Sachin, Binny also wrote cheques for fashion portal Roposo and gaming company MadRatGames.

Bansals in December, have incorporated Sabin Advisors, a new company, which could include venture capital funding and insurance.

Flipkart burns half of $6.1 Bn raised from SoftBank, Tencent, Tiger Global

The overall losses increased by 68 percent in FY17 to Rs 8,771.4 crore as compared to the previous fiscal

In a tug of war between Amazon and Flipkart, the latter, supported by various reports, claims to be the market leader in e-commerce space in India.

Flipkart, apparently, has more than 50 percent of the e-commerce market share alone. And another half is distributed among online platforms such as Amazon, Paytm Mall, Snapdeal, and several others.

However, to maintain the pole position, the Indian e-commerce major has borne accumulated losses of nearly Rs 24,000 ($3.6 billion) as of March 2017, according to its filings in Singapore, said a BloomberQuint report.

The loss reportedly widened 1.4 times from nearly Rs 10,000 crore a year ago.

So far, the total loss incurred by the company is equivalent to half of the $6.1 billion it raked in from investors since inception 11 years ago.

The overall losses increased by 68 percent in FY17 to Rs 8,771.4 crore as compared to the previous fiscal. The losses soared after the company raised capital led by Chinese Internet conglomerate Tencent at a much lower valuation of $11.6 billion in April 2017.

The fall in valuation raised the borrowing cost of the company to Rs 4,308 crore. The fair value loss on derivative financial instruments stood at Rs 3,412 crore in FY17.

During the year, Flipkart managed to push upward sales by only 29 percent. On an average, it sold goods worth Rs 54.4 crore every day in the 12 months through March 2017 compared with Rs 42.20 crore in the previous year.

The overall revenue of the platform grew to Rs 19,855 crore. Interestingly, in FY16, it had witnessed 50 percent revenue growth from a year earlier.

Seven months ago, Flipkart raised a massive sum of $2.5 billion from Softbank. Currently, it’s also negotiating a gigantic funding deal with Walmart.

The inflow of funds, however, has put a new lease of life into the company and it has once again charged up to go berserk on the Indian e-commerce market with discounts and freebies.

The recent report claimed it has captured 35 percent market share in the online fashion segment and achieved $1 billion actual sales (not GMV) in FY18. Besides, it claimed to have over 75-80 percent market share in the online fashion space through its affiliates – Myntra and Jabong.

Meanwhile, in an effort to give a push to online sales, another online retailer, Amazon, is pumping massive investment into the ecosystem. It has outrun its rival Flipkart in terms of total investments in India.

It has nearly doubled its authorized capital to $4.74 billion in the Indian arm of its marketplace. It had committed to invest $5 billion in the Indian market in June 2016.

5 reasons why your e-commerce start-up isn’t making profits

50% of the e-commerce companies which are being set up are headed towards failure.

The most popular kind of start-up in today’s day is e-commerce as people in India are gradually shifting from in-store shopping to e-commerce shopping. However, 50% of the e-commerce companies which are being set up are headed towards failure because of various reasons.

Listed below are a few probable reasons why your e-commerce start-up isn’t making any profits:

i. Poor quality images

When the customers shop online, they tend to focus more on the visual aspects of the products. If the images of the product seem damaged or unappealing to the viewer, s/he might choose to not buy the product. For more outreach, display the products with a multiple-angle view of the product.

ii. Bad product descriptions

For products which are uncommon, a product description needs to be unique and crisp in order to interest the customer. If you are solely depending on technical descriptions of the products, you won’t really be able to sell your product as the viewer wants more meaty stuff like ratings and more quirky descriptions which help him understand the product better.

iii. Undisclosed shipping rates

You should make the customer aware of the shipping rates for a product before s/he puts it in the cart. Hidden shipping charges make the customer feel like s/he has been deceived and they tend to abandon their cart midway. This results in loss of a sale. You can add features like a pin code zipper which helps the customer calculate the shipping rates.

iv. Poor promotion

Since it is an e-commerce website, you should be promoting it more on social media and via digital marketing. If there isn’t enough hype about your page, you will not garner enough traffic for your site to make sales. Inorganic and organic forms of social media marketing can help you promote your page and products better.

v. Pricing

Since the Indian market is heavily price-sensitive, you need to focus on pricing. If the products are priced too low, then the customers will think that your products are of inferior quality. Hence, you need to strike a balance in terms of pricing to interest more people in your website.

Why India’s digital commerce players need better growth model

None of the digital commerce companies in India are profitable. They typically earn between 5-15 percent commissions but massive discounts and need to expand to more geographies saw those companies losing money. This can be a serious problem when the capital market tightens up.

Digital commerce sales in India have remained flat, so digital commerce companies need to identify a sustainable growth model that can be achieved in a defined time frame, according to Gartner, Inc. One of the challenges was that leading marketplaces cut back on promotions and discounts after the regulation banning price competition came out in March 2016.

“Digital commerce is at an early stage in India, and consumers are value-conscious, so they are enticed when there are big promotions and steep discounts.” said Gene Alvarez, managing vice president at Gartner.

“However, sales stalled once incentives were not present, challenging the performance of digital commerce players. This is partially a result of the continuous discounts at online marketplaces that are competing fiercely to gain market share, and which sets them to an incentive-driven growth model.”

None of the digital commerce companies in India are profitable. They typically earn between 5-15 percent commissions of product sales, but the massive discounts on top of the investment needed to expand to more geographies saw those companies losing money. This can be a serious problem when the capital market tightens up.

“The problem is being neglected when there is plenty of funding, and companies can live off sufficient capital. Once the market tightens, it is a survival game that only those that watch the bottom line and cash flows will win in the end”, said Mr. Alvarez. “There is a need to go back to the basics, that is, to operate on a sustainable growth model. Of which, customer experience and data-driven incentives are two fundamental factors.”

First factor is customer experience: This is the most important differentiator of a digital commerce service as price becomes transparent across sites. Discounts will only retain customers as long as the promotion lasts, while good customer experience will make people come back and purchase more even when there is no promotion. Good customer experience will also entice new customers as word-of-mouth spreads, and visitors experience the service themselves. Customer experience goes beyond a frictionless shopping experience on the website or in the mobile app, and includes delivery, custom service, returns, retail discovery, customer ratings and reviews.

The other is data-driven incentives: Promotions and discounts are still important techniques to drive sales. However, they need to have positive return on investments (ROIs). Businesses can not only recover the cost of incentives but also make a profit. This requires businesses to personalize incentives based on shoppers’ profiles and purchasing propensity, and only give out the amount that is enough to trigger a purchase but not too much to lose money. This capability takes time to build as it requires data analytics and personalization of technologies, built on the data collected about the shoppers.

Image credit: MyCityWeb

5 ways Amazon is nailing the e-commerce business in India

Here are a few things Amazon India has done to gain a competitive edge.

Amazon which aims at improving customer service globally has been cutting competitors out of the e-commerce race by providing killer service. There are certain things all other companies can learn from Amazon and aim at improving.

Here are a few things Amazon India has done to gain a competitive edge:

Lower prices

Unlike other e-commerce websites in the country, Amazon.in has done its ground research beautifully which helped them gain a competitive edge over other websites. They realised the importance of pricing and offer believable discounts on the website which has lead their sales treble in the festive season.

Amazon Prime

The company has come up with a loyalty programme which aims at improving customer experience. For INR 499, subscribers in 100 cities can avail single day delivery and have to pay no extra charges. The members of this programme also get to view the lightning deals about 30 minutes before everyone else.

Brilliant return and refund services

For returns and refunds, Amazon offers brilliant customer service. All you need to do is shoot a mail or call up their toll free number which is answered by trained Amazon officials who try and solve your problems in the most polite and courteous way possible. Unlike other websites, availing these services is really convenient for the customers.

Perfect delivery of orders

While other websites have often been reported to mess up orders and deliver bricks instead of the real product, Amazon has stressed on their delivery and nailed it each time. They also deliver orders on time and are rarely late. In this way, Amazon has been able to build a brand value which they have managed to sustain upon very successfully.

User-friendly app

Amazon mobile app was the first e-commerce app to be launched which allowed them to use a first mover advantage. The app is also very user friendly which attributes to 40% of the e-commerce giant’s sale.

Why Big Bazaar tied up with Paytm

With the latest partnership announced with mobile payments and commerce platform Paytm, Kishore Biyani is making an effort to go online without taking on the risks and huge costs associated with the e-tail business.

Kishore Biyani has been extremely critical of the business model followed by e-commerce companies in the past. The founder and group CEO of one of India’s largest organised retailer Future Group, however, cannot close his eyes to the potential of e-commerce and the ever-growing base of customers shopping online.

With the latest partnership announced with mobile payments and commerce platform Paytm, Biyani is making an effort to go online without taking on the risks and huge costs associated with the e-tail business.

Under the deal announced by the two partners on 4 August, customers will be able to shop for Future Group’s hypermarket chain Big Bazar’s merchandise on Paytm’s marketplace and also, get them delivered to their homes.
Explaining the rationale behind his tie-up with Paytm, Biyani said: “The cost of customer acquisition in the e-commerce space is more than 20%, the cost of fulfilment is more than 20% and the cost of running operations is 8-10%. This totals to almost 50% as the cost of operation. At this cost, you can’t sell any goods on this medium.”

Biyani, indeed, isn’t speaking through is hat. Almost all e-commerce companies, including the market leaders such as Flipkart or Snapdeal and even global companies such as Amazon, have been running massive losses in their operation with no signs of profit in sight yet.

Since, market pundits have been predicting that at some point, online retail transaction will become big enough to command a viable business model with a huge potential for growth, Biyani did make a few attempts at hopping on to the e-commerce bandwagon in the past.

In 2014, for instance, the Future Group had tied up with Amazon India to sell its merchandise, primarily private fashion labels. The same year, it had also launched shop.bigbazaardirect.com, the online platform for its direct selling offshoot Big Bazar Direct.

Both experiments, however, failed to deliver desired results.

The deal with Paytm

The tie-up with Paytm is Biyani’s yet another attempt at going online. Is he late to the e-commerce party? He doesn’t think so.

“We are not entering late. We were unable to do business online because unit economic wasn’t working,” he told Techcircle, adding: “We didn’t want to spend considerable amount in the acquisition of customers, in fulfilment or administrative obligations.”

Biyani said in Paytm, the Future Group has found a partner that can “bring the unit economics into the business. Besides, we don’t have to worry about payment gateway cost. In that sense, it is a great fix for us.

“Biyani’s optimism may not be misplaced. To begin with, the tie-up with Paytm comes just a few days ahead of Future Group’s hypermarket chain Big Bazar’s yearly flagship sale, Maha Bachat that will run during 13-16 August this year. A hugely popular format, Maha Bachat contributes around 3% to Big Bazar’s annual revenue. With its discounted offers moving online during the four days, Biyani is hoping to reach out to a new set of customers outside of his loyal set.

Big Bazaar’s online avatar

Under the deal, an anchor store has been created for Big Bazaar on the Paytm app. Customers will not only be able to browse and buy Big Bazaar merchandise on offer, they will get a further 15% cash back on all purchases using Paytm’s wallet facility.

Paytm, too, sees the partnership with Future Group as a win-win deal. “Together (with Future Group), we see a fantastic opportunity to create a mobile first, omni-channel retail and payment solution for our wide consumer base,” Vijay Shekhar Sharma, founder and CEO of Paytm, was quoted as saying in a PTI report.

In a chat with Techcircle, Sharma said the partnership is an attempt at bringing a high frequency, large offline platform, online. “They (Future Group) do not have a very active e-commerce strategy as publicly visible. This (the partnership) will allow them to get mobile and internet customers to shop for Big Bazaar merchandise. Everything that is available offline will be available on the anchor app,” he added.

This article was originally published in TechCircle VcCircle

Top 5 pitfalls Indian e-commerce sellers should look out for

Here are 5 most common pitfalls that you, as an e-commerce seller, should look out for.

It goes without saying that the online retail and e-commerce market is continuously evolving and heading in new directions. This has led to tremendous competition between online sellers, and those retailers who do not adapt and keep up the pace tend to disappear very quickly.

Keeping this in mind, here are 5 most common pitfalls that you, as an e-commerce seller, should look out for:

1. Steep competition on pricing

Usually hundreds of online sellers and merchants list identical products on marketplaces and quite often the only differentiator is the price-point. It’s this sort of price competition that especially hurts retailers who do not have the purchasing power to compete with large online sellers.

One of the ways to compete on price is to procure larger quantities in a single order and get bulk discounts; this comes with its own problem, namely working capital finance to pay for such orders.

2. Managing returns

Marketplace policies are highly favourable for buyers. The usual 30 days return policy provides a lot of time and often buyers return used products to the seller within that time frame. The seller would have to pay commission to the marketplace even if the product is returned in a damaged state.

Also, generally it’s the seller who pays for the return charges. The biggest challenge is to resell the product, once the label or the packaging are significantly damaged. To solve this problem, e-commerce sellers can connect with various refurbished goods sellers, who are more than willing to buy such products, although at discounted prices.

3. Lack of working capital finance

The recent trends in the Indian e-commerce industry has seen mostly established, large, offline retail outlets doing well online due easy access to capital from traditional banks & NBFCs; since they have physical assets to use as collaterals, large turnovers & multiple years of vintage. A new entrant to the vibrant e-commerce space does not generally have easy access to any of these.

Here again a financer can help them out. Their loans are completely collateral free and do not require extensive financial documentation. All that is needed is proven e-commerce marketplace sales of 6 months, and the seller is given a multiplier of his sales as a loan. These loans can go upto big amount.

4. Competition with OEMs

Many small online stores buy products at wholesale prices from distributors or manufacturers to sell at retail prices. This is the classic business model for retail stores.

Unfortunately, e-commerce’s low barrier to entry has encouraged numerous manufacturers to start selling directly to customers. This means that the same company that sells your products may also be your competitor. As more manufacturers start selling online this problem will likely become worse.

5. Customer loyalty

Simply put, it’s easier and much more profitable to sell to loyal customers than it is to constantly search for new ones. Smaller e-commerce sellers rarely have resources to drive loyalty for their products or store. Also, the loyalty built is generally towards the marketplace, and not the actual e-commerce seller.

The best way to tackle this is to create a delivery experience which is memorable for all customers and drives them to give high ratings on the marketplaces. Positive reviews can also be sought by connecting with the customer post-delivery via SMS/emails.

How Crown-it spun a childhood game into a cashback app and raises 5.5 million

When Sameer Grover was younger, he would collect the crowns of soda bottles and exchange them for discounts at local restaurants. It was like a game for him and his friends.

When Sameer Grover was younger, he would collect the crowns of soda bottles and exchange them for discounts at local restaurants. It was like a game for him and his friends – they’d finish their drinks, twist off the crowns, and explore new items on menus. For restaurants, it meant that customers were spending more money and coming back more often.

Making a game out of discounting worked so well on Sameer that the concept lay dormant in his mind for years. “I watched the Indian market for a long time,” he says. “Couponing is huge in the USA, but it’s not big here. Once you get a discount from a restaurant, you end up getting bad service. It’s not respected.”

He waited and waited, until one day, the ecommerce craze hit India. Suddenly, people wanted to make it easy for Indians to buy things on the internet. As they built up ecommerce sites, though, they all came across the same conundrum: most people were too used to buying things from the country’s many small and medium businesses to move online. And, if customers did move online, all of those small and medium businesses would go bankrupt.

Related Post: 8 Start-up ideas for Indian entrepreneurs

That’s when Sameer realized his childhood game might come in handy. With his co-founder Ashish Munjal, he built out Crown-it.

Sameer describes it as an offline-to-online (O2O) marketing platform that helps local businesses make more money. It sounds complicated, but works simply.

When you buy things at registered stores, you get money back straight into Crown-it’s wallet. The wallet is closed, which means that it can only be used on chosen sites. This includes ecommerce sites Amazon, Flipkart, and Jabong, as well as budget room aggregator OYO Rooms, eBay, and ticket-booker BookMyShow.

The app works in Delhi, Mumbai, and Bangalore, and claims to have 800,000 people across 10,000 local markets using it after just 18 months.

“It’s a US$50 billion market across India’s top 25 cities,” he says. “The potential is huge.”

Challenges aplenty

At first, it was tough for Sameer to get people to sign on because the concept was very new. Most store owners weren’t used to visualizing online discounts and, plus, who would be willing to pay Crown-it’s per-transaction fee?

“Once they started seeing a value add, things changed,” Sameer says. “It wasn’t hard after the first few merchants, and we don’t charge them if they have no transactions on Crown-it.”

The other batch of people that Crown-it had to convince were consumers. This also wasn’t a big deal, explains Sameer.

“We really do offer good deals for consumers,” he says. “For a 1000 rupee (US$15) meal, you can get 200 crowns, which can mean a 500 rupee (US$7.50) shopping voucher from Flipkart. If you do two more transactions, you’ll still have extra crowns left, so the next time you’ll reload and pay for a movie ticket. It keeps people hooked in that way.”

It’s also a social app – if you refer a friend, you get free crowns. And, as a shiny little bonus, you can donate crowns to good causes. “There was a recent natural disaster where customers came up with lakhs of rupees,” Sameer says.

Oh, the places you’ll go

The idea seems simple, but the opportunity is anything but. Crown-it has already raised US$5.5 million from Accel and Helion Ventures, so it’s reasonable that Sameer is pretty excited for his startup’s future.

“By 2019, we plan to be in 25 cities, as well as launch multiple categories like gyms, diagnostic centers, hotels, and other retailers,” he says. “We want to sign up big stores. Our proposition is that we can give them huge amounts of unique data, like customer analytics information.”

It’s not a new concept. There are plenty of other ways that startups are trying to win over the conjunction of the offline and online worlds.

Groupon India’s Nearbuy has one strategy, but “group buying won’t get anywhere because people have no incentive to return,” Sameer says. Another is Paytm and Tiger Global-backed Little, a site that helps merchants post local deals so customers can discover them.

Mydala is another popular daily deals site that’s been pushing cashback when people use wallets like MobiKwik. The startup replicates China’s Meituan-Dianping’s strategy, which raised a record-breaking US$3.3 billion in January.

Still, nobody has entirely taken the lead in India, and Sameer hopes that gamifying discounts will be what he needs to win.

He explains that he plans to eventually create an entire ecosystem around Crown-it. “There are vertical players and horizontal players,” he says. “We’re focused on a bunch of different segments, which is what makes us horizontal players. Once you have a few million customers hooked on one sector, it’s easy for us to add another.”

He cites an example of the many-headed WeChat in China, explaining that there will soon be a similar “super app” trend in India where a fast-moving single provider will dominate many services. Who knows, maybe the WeChat of India will start as a cashback app.

Image Credit: Crown-it

Flipkart journey: How a modest online bookstore became a multibillion-dollar e-commerce platform

Flipkart is among the first batch of India’s biggest startups to have achieved a billion-dollar valuation today. Its success story has inspired many entrepreneurs to start their own startups.

Flipkart is India’s biggest e-commerce platform, founded in 2007 by Sachin Bansal and Binny Bansal. Below is the infographics of their complete journey explaining how they started as a small book e-retailer with $6,500 in their pocket and became a $11-billion company.

Below are some highlights from Flipkart’s journey.

Origin of Flipkart:

It all started with two friends Sachin Bansal and Binny Bansal, working at Amazon,brainstorming ideas for a startup, as they found their regular jobs mundane.

They both were techies and wanted to build something where they don’t have to deal with marketing and sales. So they thought of building a comparator search engine for e-commerce. But soon they realised there weren’t enough e-commerce sites to compare and found a better opportunity in opening an e-commerce platform.

Soon after, they left their job at Amazon to give their idea a shape. That was the genesis of Flipkart.

Why the name ‘Flipkart’:

They wanted a name that could speak of more than books, so that it could suit any category of products that they may add in the future. At the same time they wanted the name to be catchy and simple. So they arrived at the name ‘Flipkart’ that in simple terms means,’Flipping things into kart’.

Flipkart’s in-house products:

Flipkart is not only just an e-commerce platform it also has its own in-house products.

July 2014: Flipkart launched its own set of tablets, mobile phones, phablet and networking router, under its own brand name, DigiFlip.

Sep 2014: Flipkart launched a wide range of home appliances and personal healthcare products under brand name ‘Citron’.

Acquisitions that made Flipkart stronger:

2010: Flipkart acquired WeRead, a social book recommendation tool. WeRead already had three million readers and 60 million books at the time of acquisition.

2011: Mime360, a digital content platform company. Flipkart acquired Mime360 to enter the digital distribution domain.

2011: Chakpak.com, a Bollywood news site. Flipkart acquired the rights to Chakpak’s digital catalogue, which includes 40,000 filmographies, 10,000 movies, and close to 50,000 ratings.

2012: Letsbuy.com, an Indian e-retailer in electronics. Flipkart has bought the company for an estimated $25 million.

2014: Acquired Myntra.com for an estimated $300-million deal. The deal was expected to help Flipkart strengthen its apparel portfolio, as Myntra was the leader in fashion e-commerce industry.

2015: Flipkart acquired a mobile marketing startup Appiterate to strengthen its mobile platform.

Today, Flipkart has 75 million registered users and delivers eight million shipments/month. The app is the first Indian app to cross 50 million users. Flipkart has come a long way from where it started and there is a longer journey ahead of it.

Amazon pips Snapdeal to become India’s 2nd largest online marketplace after Flipkart

Amazon was India’s second-largest online marketplace by shipments last month, industry estimates show, as it dislodged Snapdeal to become the only major player to increase share from a year ago.

Market leader Flipkart’s share of shipments fell to 37% in March from 43% in the same month in 2015, and Snapdeal’s fell to 14-15% from 19%, show estimates by an investor tracking the logistics market and the chief executive officer of a logistics company that handles shipments for online retailers. Amazon India’s unit market share surged to an estimated 21-24% from 14%. Although the data are snapshots of shipments a year apart, they definitely point to a drop in the volume market share for the India-based companies. Other industry experts and analysts corroborated the numbers.

Also read: Indian e-commerce war: Flipkart’s Sachin Bansal & Snapdeal’s Kunal Bahl involved in Twitter spat

They said the data were evidence of the larger unit market share trend in India’s ecommerce industry, although at least one recent estimate pegs Flipkart and Snapdeal ahead of Amazon India by sales. “Amazon is very rapidly taking market share from companies like Snapdeal and other smaller players.

If there is no new entry, it will be a two-horse race (between Flipkart and Amazon) by the end of the year,” said Satish Meena, a senior analyst with Forrester Research. “If Flipkart is not able to get its act together in the next 6-12 months, Amazon can overtake Flipkart also.”

Morgan Stanley estimates that India’s online retail market, including delivery of food and grocery, will be worth $119 billion by 2020 from $16 billion in 2015. Flipkart said in June 2015 that it was aiming to sell goods worth up to $12 billion in a year; Snapdeal had claimed it would do better than Flipkart; and Amazon has not disclosed a sales target.

Also read: Top 10 Indian Startups and how they took off

If Amazon is gaining market share, it will be another instance of a multinational internet company showing signs that it can become the dominant player in India. In the ride-hailing business, San Francisco-based Uber says it is catching up fast with market leader Ola, which in turn contests the claim. Online retailers shipped 8-9 lakh products a day in March this year, with Flipkart, Amazon and Snapdeal accounting for about three-fourths of the shipments, the estimates show. ShopClues and Paytm rank next.

Flipkart, Amazon and Snapdeal did not reply to specific queries from ET on their shipments, market share and average order values. The gains by Seattle-based Amazon, which launched in India a little less than three years ago, follow aggressive investing in its local unit — CEO Jeff Bezos has so far committed to pump in at least $2 billion in India. Flipkart and Snapdeal, meanwhile, are forced to trim expenses and wean customers away from heavy discounts as they struggle to raise money from investors at present valuations.

A new element has been introduced to the equation by the government’s ‘guidelines’ earlier this month on ecommerce marketplaces.

Also read: 11 Times when Indian startup wars got very real

One of the main requirements is that no seller can account for more than a quarter of sales on a marketplace, and this could affect each company differently – Amazon and Flipkart have greater reliance on large sellers but not Snapdeal. Amazon has infused at least Rs 6,700 crore since January 2015 into its India unit, Amazon Seller Services, with over half of that amount being invested since December.

The company has channeled a lot of that money into improving the shopping experience for customers in terms of delivery and aftersales service, say investors and analysts. Amazon is also expected to introduce its successful Prime subscription programme in India.

“In 2015, we grew by more than 250% over 2014,” a spokeswoman for Amazon India said in an email. “We are on a momentum to deliver similar levels of growth this year but on a much larger base.”

In terms of gross merchandise value, though, Morgan Stanley in a February report estimated Flipkart’s market share at 45%, Snapdeal’s at 26%, and Amazon India’s at 12%. The GMV metric reflects the total value of all the goods sold on a platform but does not factor in discounts or reflect the actual commissions digital marketplaces earn on those sales.

Even with those estimates, entrepreneurs and investors say this year will mark a heightening of rivalry between Amazon India and Flipkart. Snapdeal is increasingly betting on diversification to try to monetise its existing users by entering into or partnering with other firms to offer services such as payments, travel bookings and food and grocery delivery that could bring repeat transactions. “We already have more than 1 million users transacting across our platforms daily, which is more than Flipkart and Amazon put together,” said a spokesperson for Snapdeal.

Also read: How Sachin Bansal started: Life of Flipkart founder

The battle between Flipkart and Amazon has primarily been in electronics, including smartphones, but the action is likely to shift to fashion where the former has made significant headway with Myntra that it acquired in 2014. Electronics accounts for a large portion of shipments but fetch commissions of 2-7% whereas gross margins in fashion can top 45-50%, according to Morgan Stanley.

“We have clear leadership of the online market in India with over 60% market share in three of the largest segments — smartphones, fashion and electronics,” said a Flipkart spokeswoman. “Our focus will be to consolidate this leadership position by continuing to build world-class customer experience, innovate retail in India and build a technology powerhouse out of India.”

Flipkart, under new CEO Binny Bansal, is pulling resources urgently to improve customer experience. Saikiran Krishnamurthy, who heads the service product group including after-sales services, was in March given additional charge of Ekart, Flipkart’s logistics unit, to improve customer experience by making the two divisions work together.

“Flipkart has to win back customers’ trust that they had till two years ago,” said Meena of Forrester Research.

Flipkart had targeted GMV of $10-12 billion for 2015-16. The company did not say if it met the target.

This article was originally published in The Times Of India

Image credit: www.indiatvnews.com