Posts tagged ‘online’

E-commerce – Proportional contribution by categories

Our last post was on the penetration of e-commerce and the proportion of retail sales contributed by e-commerce , across 5 countries. After reading it, one of our loyal readers asked us for some more information about e-commerce in India. Hence, this time we’re looking at the total value of e-commerce sales contributed by various categories of purchase / transaction.

India Ecom Contrib v2

 

The pie-chart above shows the proportion of e-commerce sales contributed by various categories in India :

(Data source: IAMAI IMRB Icube 2015 )

  • In India, the total value of e-commerce transactions was a whopping Rs. 125, 732 cr in 2015, and it grew at 28% CAGR between 2012-15.
  • That online travel drives a bulk of e-commerce revenue in India is a fact that anyone who reads a newspaper is aware of ; this chart adds the details – 61% of the total e-commerce revenue of Rs. 1.25 lakh crore was driven by online travel. Of this, domestic air tickets are the largest chunk, followed by railway tickets, and then international air tickets.
    • While online travel grew at a CAGR of 30% over the three years from ’12 to ‘15, rail tickets (17% CAGR) and domestic ticketing (22% CAGR) are slowing down the growth
  • What we typically call e-commerce and should more accurately be termed e-tailing – i.e. the purchase of various types of products online – is actually just 30% of the total value of e-commerce transactions.
    • However, e-tailing grew at a CAGR of 80% from ’12 to ‘15
    • The 3 categories within ‘e-tailing’ that are driving the growth are ‘Mobiles phones’ (126% CAGR),’consumer durables’ (135% CAGR) and ‘home furnishings’ (94% CAGR).
  • The ‘Food delivery’ segment , albeit relatively small at just 1.4% of total e-commerce, also grew by leaps and bounds with an 89% CAGR from ’12 to ‘15.

 

Now that we’re familiar with the data for India, let’s compare the proportional split of e-commerce sales in India by category with that in the U.S. :

India, US Ecom Contrib v2

(Data source: IAMAI IMRB Icube 2015 ; eMarketer Apr 14 for US showing 2015 projection, validated through other sources  )

  • In e-tailing in India, there is an over-dependence on ‘computers, durables and consumer electronics’ as compared to the U.S. – almost 50% of total e-tailing in India vs. 22% in U.S.
  • If we benchmark to U.S., most categories in India – e.g. ‘apparel’, ‘personal care’, ‘home furnishings’, ‘books’, ‘auto and parts’ – have the scope to grow faster than ‘computers, durables and electronics’. Of course, benchmarking to the U.S. is something that could led to wrong conclusions too, as so many e-commerce firms in the hyperlocal space have seen recently ; hence the need to tread carefully after investigating consumer needs, current satisfaction levels and the nature of the gap
    • Interestingly, ‘Auto and components’ is something that hasn’t taken off in e-commerce in India at all, while in the U.S. it is 10% of e-commerce by value. The Indian online car market is limited to ‘second hand cars’ which is mostly a ‘classifieds’ business.

 

  • Ravindra Ramavath

August 22, 2016 at 10:36 am Leave a comment

India – Internet Statistics

India-Internet

Since we’ve received some questions after the last two posts, we felt that it was time to share some more data on this topic. As this info-graphic is quite detailed, we may write a post or two on some of the implications of the numbers in this one , but you’ll have to wait a week or two to read those.

  • Ravindra Ramavath

 

September 9, 2014 at 5:52 am 1 comment

From the mouths of babes and sucklings – technology and toddlers

My five year old nephew was chatting with me during a journey once, bubbling over with curiosity and a million questions about everything. Instead of entertaining myself by warping his mind with made-up answers the way Calvin’s dad does (for examples, see this link), I tried to answer his questions as simply and logically as possible. However, reality is often stranger than fiction, and some answers related to geography and astronomy sounded far-fetched to him. So the young man turned his gimlet eyed gaze on me and warned me, “Are you really sure ? Don’t lie, ok. We can go home, open the laptop and check on googil too.” Once kids relied on older and wiser ones for information, now we’re redundant since there’s good ol’ googil.

Another young 3 year old – a friend’s son, gave me the next anecdote for this blogpost. He gets confused reading books because once he’s done reading the page he swipes his finger across to get to the next page – the way he’s used to doing with pics on the iphone; needless to say, that doesn’t work at all with a book and it leaves him confused, frustrated and cranky.

While on the topic of young ones and technology, there’s an interesting anecdote in this blogpost – as an aside, you should follow the link and read the whole post, interesting example of communication going awry due to incorrect assumptions. The comments on that post are also worth reading.

But I digress, the anecdote follows :

Setting, San Francisco, where some friends recently told me how their five year old went up to a framed picture in their living room and started pinching at it with his fingers, the exact same gestures one would use on an iPhone to zoom in and out of a picture. “Broken, broken” is all the five year old said after that disappointing experience.

How much and in how little time technology is changing the reading and viewing habits of this generation of toddlers ! Paraphrasing the headline of this Forbes article, does this change herald just the death of print or will it also eventually lead to the death of reading too ? I fear that it may be the latter. What’s your point of view ?

  • Zenobia Driver

November 28, 2012 at 3:59 pm Leave a comment

Who is using the Internet & Social Media?

Internet user & usage

  • Age – 19-40 years age group constitutes nearly 85% of Internet users

        In India, ~50% users of Facebook are between ages 18-25 years; another 25% are between ages 26-35 years

  • Gender/ Working status – 85% of Internet users are male, 11% are working women, 6% non-working women and 2% are housewives

        Out of a total 25 million Facebook users in India, 16 million are male

  • City tiers – Top ten cities (Mumbai, Delhi, Bangalore, Kolkata, Chennai, Pune, Hyderabad, Surat and Nagpur) have only 37% of the total numbers of Internet users in India. 36% of all internet users can be found in small towns (like Udaipur, Belgaum, Mangalore, Nellore, Kozhikode, etc.) with a population of less than half a million.

        Out of the total 25 million Facebook users in India, 16 million users on Facebook are located in the top 10 cities using internet

  • Place of access – 40 million people in India access the Internet from work (confess now – you’re reading this blog while at office, aren’t you ? ), and 30 million from cafes, apart from 11 million households that have a broadband connection installed

        The percentage of people accessing the internet from office might explain why time spent on a site / blog / page is typically low, and the necessity for communication on the net to be in bite-sized chunks of information (we know this and yet we natter on and on in our posts! Put it down to self-indulgence.)

  • Usage – 97% are regular users (i.e. 2-3 times/ week), of these 79% of internet users use it daily 
  • Purpose of usage – 94% of internet users use the internet for email purposes, 73% use to download music followed by 56% for chatting. Other major purposes for using Internet are job searching (56%), social networking sites (54%) and finding information on search engines (52%)

 (Sources:  IGF, IMRB-IAMAI internet study, iCube report, Facebook) 

By,

Roshni Jhaveri

April 12, 2011 at 4:42 am 1 comment

Babudom Goes Social

From Facebook

Census Mascot

At some point in time, I had read about social media channels being deployed by governments in developed countries but never gave much thought to what our government may be doing in the same domain. Then recently, while researching about the Census 2011 study, I came across the Census Facebook page and I have to admit, I was surprised (pleasantly) to see one!

Who would have expected that the central government would use social media channels to garner awareness and emphasize importance of the exercise? Seems like social media has spread so far and so fast, that it hasn’t gone unnoticed by anyone! Facebook, Twitter & YouTube are the channels deployed by Census 2011.

Varsha Joshi, Director of Census Operations in Delhi said “Facebook is being increasingly accessed by the youth and the upwardly mobile section of the society, and it was necessary to reach out to them … and attempt to make them understand why it is so important to be counted. That is why there are posts giving out information about the census.

So far, the Facebook page has 14,324 fans and the Twitter page has 497 followers. To keep followers engaged, Census 2011 also ran a national photography contest with the theme “Strength in Numbers”. They received an overwhelming response with over 600 entries submitted and hundreds of people voting for each entry.

Census 2011 also used a YouTube channel to upload commercials and videos covering various themes in various languages. So far they have uploaded 76 videos on the channel which garnered 8,837 views.

In addition to social media, Census 2011 also used the digital space to post ads across popular websites in India such as Yahoo.co.in, MSD India, Rediffmail, Makemytrip, and news websites.

The 360⁰ marketing campaign is estimated to have cost Rs.30 crores which includes outreach, PR, digital & mass media (including these Sachin Tendulkar and Priyanka Chopra ads) ,

Though viewership figures seem a bit low, well begun is half done, as the popular saying goes.

Keep up the good work!

By,

Roshni Jhaveri



March 23, 2011 at 4:44 am 2 comments

Flash Sales – Marketing

To conclude our series of posts on Flash Sales, here’s a post on how these sites market themselves:

Flash sales are a brilliant example of viral marketing. Access to such sites is ‘by invitation-only’ which lends an air of exclusivity (although anyone can get an account if an invite is requested).  It gets referrals through users’ personal networks and offers incentives (e.g. $25 credit, Rs.1000 credit, free designer bags, etc.) to current members to invite their friends to join the community.

One of the most critical things in such a sales model is that the shopping interface be user-friendly and convey premium-ness. So most websites have used rich, deep colours to give it that exclusive feel, and ensured that the website is very easy to navigate. These websites, preferably called “premium shopping clubs” are targeting 20-35 year olds who spend a lot of time on the internet. These websites have a strong presence on social networking websites like Facebook and Twitter, which act as daily reminders, discussion forums for the on-going sales as well as forums to generate interest through contests, etc.

In response to the concerns of members about the site getting too crowded, the ‘Gilt Group’ even created ‘Gilt Noir’, an exclusive loyalty program, which gives big spenders and VIPs advance access to sales, and brings private promotions from designers who refuse to sell on regular Gilt.

For differentiation, some of the websites have deviated from the original model, for instance, those visiting the ‘DesiCouture’ website do not need an “exclusive membership” to view the merchandise on sale. ‘DesiCouture’ also offers the option of special ordering – either by size or if the product is sold out. In addition, it also has the option to sort the products by product type, price, designers, etc. While most other websites sell previous season Indian designer wear, ‘DesiCouture’ works towards promoting upcoming designers by commissioning garments to be made at a price point as low as Rs.1500 alongside established designer prêt lines.

Marketing expenses are at a minimum; sales are announced by email a day to a week in advance and an email reminder is sent at the time of the start of the sale. All sales start at the same time, so as to condition members to log onto their website at the same time every day – almost making it a routine for customers – simply a brilliant way to achieving repeat visits by customers. According to New York Magazine “During the hour after its weekday sales kick off, between noon and 1 pm…its site (Gilt.com) is visited by an average of roughly 100,000 shoppers.

Most such sites have tied up with certain designers, celebrities, stores, fashion magazines and blogs, TV shows and events. These tie-ups vary from a features spread in a fashion magazine saying “available on 99labels.com”, to a small spread on upcoming sales on popular fashion blogs like highheelconfidential.com or purseblog.com. Sites also have tie-ups with TV shows like ‘LaunchMyLine’ – a show that encourages new talent in fashion designing, and with Film Festivals and fashion events, for instance, ‘Fashion and You’ partnered with Lakme Fashion Week as their official online partners. This gains them sufficient mileage without having to spend much on marketing.

These websites also have their own blogs which talk about the latest fashion trends, upcoming designers, as well as top picks for the month from their merchandising head and leading fashionistas. The blogs also link back to relevant sales that may be going on at the time. This is also a great way to keep readers returning back to the website. Here are some links…

http://www.gilt.com/blog
http://connect.fashionandyou.com/
http://blog.99labels.com/
http://www.ruelala.com/blog

By,

Roshni Jhaveri

February 1, 2011 at 5:09 am 3 comments

Flash Sales – Procurement

More on the theme of Flash Sales, which was discussed in the last two posts, here and here :

One of the challenges for such a business model is procurement.

Two years ago, Gilt did 3 sales a week and now it does about 70 sales in each week. When Gilt started, its aim was to just move the sample or private sales to the virtual world; they soon found that these were few and far – flung. They lucked out due to the financial crisis that hit the US (and the world) in 2008-2009 when loads of designer goods remained unsold and fashion houses were more than willing to liquidate their inventory.

But now, with the economy bouncing back, Gilt has adopted a new approach for procurement, utilising the relationships they have built. Now that there is far less overstock to go around for all these flash sales, it’s obvious that liquidation alone won’t suffice for the business growth. So while last season goods and liquidation stock makes up about 60% of the merchandise sold, 35-40% of the merchandise sold is acquired through specially commissioning or manufacturing merchandise to be sold through this route.

As membership keeps growing, the companies have had to work frantically to keep pace with new appetites, and to come up with creative ways to expand their pipeline. So now, Gilt acquires its merchandise directly from the fashion houses instead of buying from wholesalers (as most discounters do). For instance, the company is now sending buyers to place orders with designers at the beginning of the season. Closer home, ‘Fashion and You’ has partnered with Lakme Fashion Week, where they propose to sell the prêt lines of participating designers “fresh off the ramp”.

Some designers are reported to be creating special lower cost lines for such websites by using slightly poorer quality fabrics, locally sourced fabrics, less detailing, lesser stitching, and leftover or sample fabrics from earlier seasons. Typically, neither designers nor flash sale sites disclose that there are certain products have been made especially for the websites since this would dilute the retail price that is quoted on the products and the feeling of getting a steal. (Source: New York Magazine)

That said, this is a win-win situation for both the flash sale sites and the designers because when designers reach a certain production threshold, their cost per unit goes down, while the sale price remains the same. Therefore, they make relatively higher margins on the merchandise that sells at retail and make up for the margins lost on the merchandise sold through flash sales.

Other advantages it provides to designers and manufacturers is larger geographical presence, liquidation of last season stocks without diluting the brand, increased brand presence, alternative sales channel with minimal marketing and holding costs as well as opportunity to interact more closely with customers through blogs and advice sessions on such websites.

(Sources : News Reports – Indian Express, Outlook India, NYT, etc)

By,

Roshni Jhaveri

January 28, 2011 at 5:12 am 4 comments

Flash Sales – Who is buying?

According to AT Kearney’s India Luxury Review Report of 2008-09, the market for luxury products in India will be in the US$25-30 billion range by 2015 and non-metro India would account for at least US$10 billion of that.

Online flash sales seem to follow the same trend, with around a third of the business coming from non-metros:

Some quotes given below are ample proof of buying power in non-metros…

Our clientele can basically be divided into three categories. The metros, the tier 2 – tier 3 cities and then the clients from abroad. The second category has the highest number of members,” said Nilesh Saxena, the director of the luxury portal, ‘Brandmile’.

Before Valentine’s day, we received a big order for Victoria’s Secret lingerie from a place outside of Patna. One of our most regular clients is from Bhatinda. In the small towns of India, there are plenty of people who can afford the brands but don’t have access to them, and that is where our website steps in,” said Ishita Swarup, CEO and founding partner, ‘99 Labels’.

Meghna Reddy from ‘DesiCouture’ says “I was overwhelmed with the response in the first few months from places like Coimbatore, Vizag and Ludhiana.”

“To our surprise, we have orders coming from places such as Bhubaneswar, Jalandhar, Ludhiana, Guwahati, Jammu and Lucknow. Sites like ours are making luxury brands more accessible, as most of these brands don’t have stores in non-metros,” says Pearl Uppal, CEO of ‘Fashion and You’.

Recently, when ‘Fashion and You’ had a high-tea event during the Lakme Fashion Week, they invited their most valuable members to attend the event and their highest spender turned out to be a very fashionable lady from Guwahati!

These shopping clubs are an excellent example of e-tailing particularly targeting ‘middle India’ for well-known premium brands. They provide fodder for the aspirational yearnings of small-town India which have no outlet for fulfilment, until of course, online flash sales redefined how fashion and designer goods were marketed and distributed in India.

Data Sources: News Reports – Indian Express, Outlook India, New York Times, etc.

By,

Roshni Jhaveri

January 24, 2011 at 10:41 am 9 comments

Flash Sales – Bringing Designer Goods to Bargain Hunters Online

After sales and promotions through websites, facebook and blogs, the next online phenomenon in the fashion world is FLASH SALES. Flash sales (sales that come and go in a flash!) offer branded merchandise at compelling prices (as much as 70% discounts) only for a limited time (typically 2 days).

My first tryst with the websites offering these occurred when I suddenly got a flurry of emails from friends in the US inviting me to join the ‘Gilt Groupe’. At first I ignored them since they didn’t ship goods to India, but over the next 6 months I received more such invitations to join other shopping clubs and curiosity got the better of me. I joined the original, Gilt.com and was completely hooked – although I couldn’t really shop, it kept me abreast of trends in the market and lusting after those luxuries; all I prayed for then was either for them to start shipping to India or for someone to start a similar website for Indians. And soon enough, ‘Fashion and You’ came about….

But, a little bit of history first:

The originator of the concept – ‘Vente-Privee’, started in 2001, is over US $1 billion in revenue in 2009 and present across France, Germany, UK, Italy and Spain. Inspired by this highly successful venture, the ‘Gilt Groupe’ was established in the US in 2007 and brought about a revolution of sorts. Starting off with women’s apparel and accessories, the ‘Gilt Groupe’ has also launched ‘GiltMan’ and ‘Jetsetters’ to sell different product ranges such as menswear, children’s clothing, home furnishings, gifts and travel packages.

Following the success of the ‘Gilt Groupe’, many others – ‘HauteLook’, ‘TheOutnet’ (a net-a-porter initiative), ‘RueLaLa’, ‘Ideeli’ etc. – have joined the flash sale bandwagon. The latest product lines to be sold through flash sales are high-end personalised skin care and pet fashions.

Their popularity is reflected in their membership figures – ‘Gilt’ today has over 2 million members; ‘Ideeli’ has 1.3 million members; and all growing rapidly.

And then in India:

A similar trend set foot in India in end-2009 with the likes of ‘Fashion and You’, ‘99 labels’, ‘Brandmile’ & ‘DesiCouture’ which make available both Indian and Western brands for the Indian markets, while ‘Exclusively.in’ sells Indian designer goods in the US market.

‘Fashion and You’ got about 528,000 members within the first 100 days of operation and registered a 50% month-on-month growth in revenue; ‘99 labels’ has over 2 lakh members already and still has about 500-1000 people registering on their website each day. ‘Fashion and You’ ships out almost 1,500-2,000 products a day while ‘99 Labels’ boasts of 600-1,200 transactions per day.

Surprisingly though, given that Gilt is US based and has been around for longer than its Indian counterpart, Gilt has only about 65,000 followers on Facebook while ‘Fashion and You’ has a whopping 375,000 followers!!! This difference could be due to the large number of flash sale sites in the US which have fragmented the market, while the availability of fewer options in India has allowed ‘Fashion and You’ to have a larger fan following.

The success of such websites, both in India and abroad, isn’t surprising, they cater to every woman’s (and almost every man’s – although they may hate to admit it) two basic instincts – to look good, trendy and fashionable and to get it all at a hefty discount.

By,

Roshni Jhaveri

January 20, 2011 at 5:45 am 5 comments


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