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
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.

Author

Team Inc42

Inc42 Staff
Inc42 Magazine is an online startup magazine that covers some of the best startups and entrepreneurs in the India ecosystem. We also feature numerous guest posts and resources by leading experts from across the industry, including many from the Silicon Valley and Bay Area.
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