Battle Of The Indian Ecommerce Marketplaces – In Depth Comparison

Owing to rapidly changing consumer behaviour and shopping patterns, Indian ecommerce market has seen a bullion growth. Gone are the days when people used to say – Will the order reach on time? What are the delivery charges? Will the sites misuse their card information? And so on. The touch and feel factor is no longer an issue while shopping.

There are many researches conducted on the the size of Indian ecommerce market in the coming future. The IT Industry trade body, Nasscom in its report said, Indian ecommerce industry will be a $100 Bn market by 2020 and Internet as a business model can service both domestic and international markets with no geographical restrictions. E-retailing, online travel, advertisement and financial services along with mobile and Internet services would be the key drivers.

Observing a shift from offline retail to eretail many independent offline retail stores have started tying up with ecommerce companies to sell their products and marginalize their income, this is where the concept of the marketplace comes in. A marketplace connects Sellers and Buyers and provide one-stop solution for companies wishing to offer their products for sale. On the marketplace platform, product or service information is provided by multiple third parties, whereas transactions are processed by the marketplace itself. Companies are charged with fees for using the marketplace’s platform – either through an initial listing fee or through a transaction-based fee or a combination of the two.

Growth Drivers

The rising internet penetration, smartphone wave, ease of shopping, rising standards of living and rapid technology adoption by middle class and most importantly doorstep product delivery with Cash On Delivery (COD) payment option are the driving force behind the growth of marketplaces in India. Moreover, the entry of ecommerce behemoths such as Amazon and Alibaba along with homegrown players like Flipkart and Snapdeal, ecommerce companies experimented their marketing strategy and business development to conquer the entire consumer territory. In mid-2013 and early 2014 ecommerce industry saw unprecedented growth.

Why Marketplaces Are Now The Favorite Destination For Sellers

According to industry resources, presently there are more than 900 ecommerce venture in the Indian digital space with many ecommerce startups opening every month.

The question that arises is why do sellers opt for an aggregator or marketplace for selling their products. Let us look at a few reasons:

• Online shopping is all about internet traffic. The online marketplaces have millions of visitors browsing the site which serves as a wide customer base and huge web traffic for the sellers to tap from the site.
• Opening own website involves higher investment in selling and promoting. Online marketplace given an edge to manage high investments.
• The marketplace provide hassle free uploading of products in a catalog and allows seller to compare vis-à-vis other brands to manage price and other aspects of their product.
• Consumers search for the product and not for the marketplace in particular. Incase the sellers are selling in the category that requires frequent purchase then they can win customers and build their business. 

The Timeline of Marketplaces

Since 2010 India has seen a launch of numerous ecommerce marketplaces which have made big over the years.

Ebay, an American MNC started as an online auction and shopping website for collectibles which moved over to a complete marketplace and entered India in 2005.

Indiatimes Shopping is the ecommerce division of the The Times of India Group that started as early in 2000.

Then came Homeshop18 (Founded in 2008), Snapdeal (Founded in 2010), Shopclues (Founded in 2011), Jabong (Founded in 2012) and Flipkart (changed its working model and launched as a marketplace in 2013). Another marketplace in the ecommerce front is Tradus.

Since then there has been no turning back for these players who are trying to create a big marketplace ecosystem. We now compare a few of the leading market places in the table below:

The basics You Should Know About
Marketplace	Year Of Launch	People You Should Know	Total Number of Sellers	Number of Products
Ebay India	1995; entered India in 2005	Pierre Omidyar,Latif Nathani-Managing Director, India head	30,000+	1.5 Mn+
Indiatimes	2000	Saurabh Malik-GM & Business Head eCommerce	2500+	15 Mn +
Snapdeal	2010	Rohit Bansal-Co founder & COO, Kunal Bahl-CEO	100,000	1 Mn
Shopclues	2011	Sanjay Sethi-Co founder & CEO, Radhika Ghai Aggarwal	+100,000 listed merchants	16 Mn +
Flipkart	Founded in 2007 and launched as marketplace inApril 2013	Binny Bansal-Co Founder, Sachin Bansal-Co Founder & CEO	30,000+ Sellers	20 Mn
Amazon India	1994; Launched in India in June 2013	Jeff Bezos CEO, Amit Aggarwal, Country Head India	16000+	19 Mn
Paytm	2010, launched as marketplace in 2014	Vijay Shekhar Sharma- Founder	15, 000 Merchants	6 Mn

Ecommerce marketplace have innumerable products sorted in either structured or unstructured category. Amazon India offers 13, Indiatimes Shopping offers 25, Flipkart offers 70 and Paytm and Snapdeal offer 500 product categories. Whereas, Shopclues has unstructured categories enlisting total 5000 categories.

Let us see below which marketplace holds its forte in which category out of the total categories offered.

Categories
Marketplace	Number of categories	Most sold categories
Ebay India	30+	Collectibles and Apparels
Indiatimes	25+	Fashion Apparel, Footwear and Health & Beauty
Flipkart	70	Apparels & footwear, home decor & furnishing, jewellery and mobile accessories
Snapdeal	500	Lifestyle and Electronics
Paytm	500	Lifestyle and Electronics
Shopclues	+5000 listing categories	Home & kitchen, apparel, small electronics, auto accessories, health & nutrition, etc
Amazon India	13 departments	Books, Consumer Electronics, Baby Products, Shoes, Watches

Being in such a clutter and cut throat competition each marketplace is offering lucrative discounts and deals to hook customers. Let us see how these marketplaces incur daily traffic in a month.

Marketplace	Monthly Visits (Avg)
Ebay India	N/A
Indiatimes	6.5 Mn
Flipkart	10Mn/Daily
Snapdeal	40 Mn registered users
Paytm	25 Mn registered users
Shopclues	40 Mn
Amazon India	N/A

Shipping and Logistics

Though selling on a marketplace seems easy as there is less hassle for retailers, still the retailers must watch out for the perfect marketplace basis their needs. To reach out to the correct audience and maintaining their brand proposition the retailers must look out for the marketplace that provides them with:

• Frequency of orders that are placed
• Legible shipping cost
• Product pricing based on commission fee and referral fee

Below given is the comparative layout of various marketplaces that offers different pricing and shipping cost to the sellers so that sellers can make their own choice.

Marketplace	Product listing fees	Referral Fee	Monthly Subscription Fee	Delivery Partner	Cost of Shipping	Delivery Locations
Flipkart	Free	4%-20%	N/A	Uses eKart	INR 35/ 500 gms (approx.)	1,000+
Snapdeal	Free	4%-20%	Free	N/A	N/A	5,000
ShopClues	Free	4%-20%	Free	ShopClues Velocity	INR 45/ 500 gms for SCVB	25,000
Indiatimes	Free	5%-50%	Free	Courier Partners like Delhivery, Fedex, Bluedart, Aramex	N/A	19000 +
Amazon India	Free	5%-15%	INR 499/ Month	Uses Fulfillment by Amazon (FBA)	Rs 40 to Rs 45/ 500 gms + 1% of Item Value	N/A
Paytm	Free	N/A	Free	Empaneled courier partners	N/A	N/A
Ebay India	Free for first 100 products	1%-7%	INR 499/Month	N/A	Rs. 40 – 49/ 500 gms	N/A

Mcommerce Domination

Nowadays leading online retailers are using mobile platform to amplify their sales and deliver exceptional responsive shopping experiences. Mobile commerce (MCommerce) has become the default way to shop. The rise in mobile phone traffic is fuelled by Social media as the major marketing channel. Gartner’s report states Indian ecommerce market pegged at $3.5 Bn on mobile platform, which will grow around 70% to $6 Bn. Presently the sales contribution through mobile is at a niche stage. Earlier in February Myntra planned to shut down its website to take mobile traffic from 60% to 90%.

• Flipkart’s sale accounts to 70% of the total traffic through mobile.
• Facts shared by Snapdeal reported 65% of all orders received by Snapdeal originate on mobile phones.
• Shopclues verifies that out of the total customer base of 40 Mn only 40% of its traffic comes through mobile
• Indiatimes ascertains that out of 6.5 Mn user base is on web and 2 Mn is on mobile platform.
• Paytm claims a total user base of 25Mn and 33% of orders come from Mobile platform whereas Amazon India does not reveal the stats basis their policy.

 Social Reach

Over the time these marketplaces have become so popular that consumers have started building a connection with the companies over social media. Some are popular and others are still gaining customer’s trust, and not to forget the social network is playing an important role in driving sales for these marketplaces. Let us look at the social reach of various marketplaces: 

Comparison of social media presence
Marketplace	Facebook Likes	Twitter Followers
Ebay India	7,914,69	75,420
Indiatimes	852,345	14,345
Flipkart	4,468,405	2,60,687
Snapdeal	3,064,869	1,10,337
Paytm	693,821	26,775
Shopclues	2,340,418	10,449
Amazon India	4,601,725	2,869

*as on February 26, 2015

Total Funding & Valuation

From an investment perspective, the market is at a nascent stage, with maximum traction in early-stage deals. Such early stage funding is helping companies develop strong foundation and inspiring investor community to help many more ecommerce companies to enter coveted billion-dollar club. Marketplaces like Flipkart and Snapdeal have been breaking funding records in Indian ecommerce.

Marketplace	Total Funding	Acquisitions	Valuation
Ebay India	Public Company	N/A	$70.5 Bn (Ebay)
Indiatimes	N/A	N/A
Flipkart	$2.45 Bn	WeRead, Mime360, Chakpak.com, LetsBuy, Myntra,	$11 Bn
Snapdeal	$1.1 Bn	Grabbon.com, esportsbuy.com, Shopo.in, Doozton.com, Smartprix,  Exclusively.in	$2-2.5 Bn
Paytm	$665 Mn	Plustxt	$1.5 – 2 Bn
Shopclues	$115Mn	N/A	$350 Mn
Amazon India	Public Company	QwikCilver	$179 Bn (Amazon)

Ecommerce industry is fast rising and if experts are to be believed then the ecommerce businesses will continue to attract investor interest. Many India-based blue-chip PE firms, which previously avoided investing in ecommerce, are now looking for opportunities in the sector. Apart from the traditional online formats of retail and lifestyle newer online business segments such as classifieds, real estate, grocery and healthcare were also tapped. Similarly, lingerie and Indian jewellery has also been in great demand among customers outside India.

It is expected that premium and international brands are likely to join eTail. We hope a broader audience purchases from Tier 2 and 3 cities which is still untapped and will interest the companies to boost their sales. After raising many rounds of funding from venture firms, ecommerce firms are now eyeing to raise money through IPO.