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Battle Of The Indian Ecommerce Marketplaces – In Depth Comparison

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
MarketplaceYear Of LaunchPeople You Should KnowTotal Number of SellersNumber of Products
Ebay India1995; entered India in 2005Pierre Omidyar,Latif Nathani-Managing Director, India head30,000+1.5 Mn+
Indiatimes2000Saurabh Malik-GM & Business Head eCommerce2500+15 Mn +
Snapdeal2010Rohit Bansal-Co founder & COO, Kunal Bahl-CEO100,0001 Mn
Shopclues2011Sanjay Sethi-Co founder & CEO, Radhika Ghai Aggarwal+100,000 listed merchants16 Mn +
FlipkartFounded in 2007 and launched as marketplace inApril 2013Binny Bansal-Co Founder, Sachin Bansal-Co Founder & CEO30,000+ Sellers20 Mn
Amazon India1994; Launched in India in June 2013Jeff Bezos CEO, Amit Aggarwal, Country Head India16000+19 Mn
Paytm2010, launched as marketplace in 2014Vijay Shekhar Sharma- Founder15, 000 Merchants6 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
MarketplaceNumber of categoriesMost sold categories
Ebay India30+Collectibles and Apparels
Indiatimes25+Fashion Apparel, Footwear and Health & Beauty
Flipkart70Apparels & footwear, home decor & furnishing, jewellery and mobile accessories
Snapdeal500Lifestyle and Electronics
Paytm500Lifestyle and Electronics
Shopclues+5000 listing categoriesHome & kitchen, apparel, small electronics, auto accessories, health & nutrition, etc
Amazon India13 departmentsBooks, 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.

MarketplaceMonthly Visits (Avg)
Ebay IndiaN/A
Indiatimes6.5 Mn
Flipkart10Mn/Daily
Snapdeal40 Mn registered users
Paytm25 Mn registered users
Shopclues40 Mn
Amazon IndiaN/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.

MarketplaceProduct listing feesReferral FeeMonthly Subscription FeeDelivery PartnerCost of ShippingDelivery Locations
FlipkartFree4%-20%N/AUses eKartINR 35/ 500 gms (approx.)1,000+
SnapdealFree4%-20%FreeN/AN/A5,000
ShopCluesFree4%-20%FreeShopClues VelocityINR 45/ 500 gms for SCVB25,000
IndiatimesFree5%-50%FreeCourier Partners like Delhivery, Fedex, Bluedart, AramexN/A19000 +
Amazon IndiaFree5%-15%INR 499/ MonthUses Fulfillment by Amazon (FBA)Rs 40 to Rs 45/ 500 gms + 1% of Item ValueN/A
PaytmFree N/AFreeEmpaneled courier partnersN/AN/A
Ebay IndiaFree for first 100 products1%-7%INR 499/MonthN/ARs. 40 – 49/ 500 gmsN/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
MarketplaceFacebook LikesTwitter Followers
Ebay India7,914,6975,420
Indiatimes852,34514,345
Flipkart4,468,4052,60,687
Snapdeal3,064,8691,10,337
Paytm693,82126,775
Shopclues2,340,41810,449
Amazon India4,601,7252,869

*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.

MarketplaceTotal Funding AcquisitionsValuation
Ebay IndiaPublic CompanyN/A$70.5 Bn (Ebay)
IndiatimesN/AN/A
Flipkart$2.45 BnWeRead, Mime360, Chakpak.com, LetsBuy, Myntra,$11 Bn
Snapdeal$1.1 BnGrabbon.com, esportsbuy.com, Shopo.in, Doozton.com, Smartprix,  Exclusively.in$2-2.5 Bn
Paytm$665 MnPlustxt$1.5 – 2 Bn
Shopclues$115MnN/A$350 Mn
Amazon IndiaPublic CompanyQwikCilver$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.

Author

Team Inc42

Inc42 Staff

Inc42 Media is a digital media startup known for its end-to-end coverage of the Indian Startup Ecosystem. Inc42 has published 15,000+ stories so far and touch the lives of over 10 million people every month. Join us and be the part of the startup revolution.

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