Etailing

E-tailingTransactions that are conducted over an

electronic network, where the buyer and merchant are not physically present.

sale of goods and services through the Internet. Electronic retailing, or e-tailing, can include business-to-business and business-to-consumer sales.

Distinguished from content or service advertising revenue model

Types of E-tailersPure play e-tailers: It uses internet as its

primary means of retailing. Ex:www.fashion&you.com, www.myntra.com,www.flipkart.com

Brick & mortar etailers: Stores which have physical presence and uses internet to sell its goods & services.Ex: www.futurebazar.com,

Models of etailingDeal based etailers:These sites focus on

providing lucrative deals across product and service categories. e.g. www.snapdeal.com

Club based –These sites position themselves as private shopping clubs and are open to members only. Eg. www.fashionandyou.com

‘Standard’ - This is the basic model wherein products are listed on the web portal, and customers browse and buy the products. e.g. www.flipkart.com

Marketplaces - These sites essentially bring together buyers and sellers and serve as a platform for their interaction. e.g. www.ebay.in

Drivers of etailingChanging demographicsHigh real estate costIncreasing penetration of technologyIncrease in social mediaIncreasing disposable incomeMultiple payment optionsAvailability of brands & private labels

Challenges of etailingHigher cost of customer acquisitionThreat of cyber crimeLack of touch and feel elementReverse logisticsNo bargaining/negotiation

Benefits of etailingHighly discounted pricingBetter interfaces and deliveryHigh decibel media campaignsSaves time and effortsConvenience of shoppingAbility to compare prices and product

E- Tailing in IndiaIndia e-tailing market in 2011 was about 

$600 Mn and expected to touch $9 Bn by 2016 and $70 Bn by 2020 – estimated CAGR of 61%.

The organized retail market is estimated at $26 Bn and is projected to grow to $84 Bn by 2016 and $200 Bn by 2020 – estimated CAGR of 26%.

In 2011, total VC investments in e-tailing space in India stood at $650 Mn.

China e-tailing market has grown from $20 Bn in 2008 to $120 Bn in 2011, and it is expected to reach $200 Bn by 2013. It will be bigger than US e-tailing market ($188 Bn in 2008) in next few years.

Players in Indian e-tailingIndian e-tailing market leader is flipkart.com

whose valuation is $1 Bn.Flipkart’s revenues were $10 Mn in 2010-

11 and $150 Mn in 2011-2012. It’s >20% of Indian online retail market.

Flipkart is aiming to achieve $1 Bn in next 2-3 years.

Indian e-tailing is dominated by pure play internet companies with no serious play by any existing retailers. Futurebazaar is $35 Mn revenue today and Croma has recently entered e-commerce