Indian e-commerce is booming. VC investment continues to pour in but some observers are cautioning about an overheated market. We update VC investments, new developments in the Indian e-commerce market and highlight some of the challenges and what’s ahead.
India’s PM Modi announced a $1.5 billion fund and four-year tech action plan. Amazon plans to invest another $250 million to build its business in India. Softbank CEO Masayoshi Son has already invested $2 billion in India and plans another $10 billion over the next four years. A new Bank of America report says India will be a global e-commerce leader with sales expected to reach $220 billion by 2025. Boston Consulting Group estimates retail and ecommerce will grow rapidly to $140-160 billion and $45-50 billion respectively by 2020.
After 14 tech investments in 2015, billionaire Ratan Tata invested in cashback and coupon company Cashkaro. Tata also invested in mobile payment leader Paytm which is a goal of 100 million mobile wallet users by year-end 2016. 2015 e-commerce sales in India were estimated at more than $7.69 billion with Flipkart popular with 35% of consumers, Amazon 32%, Paytm 27% and Snapdeal 4%.
Flipkart co-founder Sachin Bansal says India is not yet ready for a large internet IPO so that has not prevented Indian startups from getting large VC investments. Automated grocery cart service SnapBizz raised $7.2 million in VC capital from Jungle Ventures, Taurus Value Creation and others for expansion into new cities. DIY e-commerce platform KartRocket received $6 million led by Bertelsmann India Investments.
Start-Up India: Enough fuel to go the distance?
On the evening of Saturday, 16 January, in New Delhi, when Prime Minister Narendra Modi unveiled measures to boost the growth of Indian start-ups, investors and entrepreneurs in attendance cheered him on like rock music fans listening to their favourite band. The measures included a Rs.10,000-crore ($1.5 billion) fund to be deployed over the next four years, exemptions from capital gains tax on investments, favourable labour policies, faster and cheaper patent applications and easy registration for new firms. The measures were announced by Modi at an event called Start-up India, a government initiative that brought young entrepreneurs, venture capitalists and policymakers under one roof.
In August, while delivering his Independence Day address from the ramparts of the Red Fort, Modi coined the slogan “Start-up India, Stand up India” to encourage innovation and entrepreneurship among the young. Modi’s aim is to make India a top destination for all kinds of start-up businesses. The government invited some of the world’s biggest start-up names to the event on Saturday, including SoftBank Corp.’s founder Masayoshi Son, taxi-hailing service Uber Technologies Inc.’s founder Travis Kalanick and collaborative workspace provider WeWork founder Adam Neumann. Apart from them, all the top Indian entrepreneurs were present. Via dealstreetasia.com
Amazon injects $250m into Indian unit to take on local rivals Flipkart, Snapdeal
Amazon.com Inc., the world’s largest online retailer, has infused an additional Rs.1,696 crore ($250 million) into its Indian unit, arming it with more ammunition in its battle with local rivals Flipkart and Snapdeal to become the country’s largest e-commerce firm. The latest infusion, which came in December, is the single largest tranche of funds received by Amazon Seller Services Pvt. Ltd, the Indian unit of Amazon, since 2014, according to documents filed with the Registrar of Companies.
Amazon India has now received Rs.5,699 crore ($848.8 million) since July 2014, when Jeff Bezos, co-founder and chief executive officer (CEO) of Amazon, promised to invest $2 billion in India over time, the documents show. In comparison, rivals Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd) have raised $2.1 billion and $1.3 billion, respectively, from investors in that period. Via dealstreetasia.com
Startup India: SoftBank to scale up investment in India to $10b. Masayoshi Son says startups must consolidate before listing
Indian startups should look to consolidate their position in the first five to ten years of their operations and not rush for filing an initial public offering to get access to the equity market, Softbank head Masayoshi Son said on Saturday.
Speaking at the launch of the government’s ambitious Startup India programme, Son said in the initial phase startups, should focus on customer acquisition and building the overall business model. “They should try to be the big fish in their area,” Son said.
Reiterating that he remains aggressive about India, Son said if at all he rescales his investment plans for India, it will be upwards. Son has already invested $2 billion in Indian startups including Snapdeal and OYO Rooms and has plans to invest $10 billion over a period of 10 years. Via dealstreetasia.com
India”next e-commerce battleground”
In 2016, India will be “the next e-commerce battleground,” analysts from Bank of America Merrill Lynch write in a note summarizing all of their new year predictions.
Although Amazon made its intentions in Indian known throughout 2015 — participating in several profiles and commenting on its plans in company earnings calls — this will be a year of increased investments, BofA predicts. Right now there are three big players in Indian e-commerce: Flipkart, Snapdeal, and Amazon’s subsidiary. Via businessinsider.com
India’s retail mkt has potential to touch $1,200 bn by 2020: Boston Consulting Group
India’s retail market has the potential to grow from USD 630 billion in 2015 to USD 1,100-1,200 billion in 2020 on the back of rising income levels and increased urbanisation, according to a Report.
“The overall retail market has potential to grow from $630 billion in 2015 to 1,100-1,200 billion in 2020. Retail sector will reap the benefits of a large, young population adding to the workforce, 70 per cent increase in income levels, nuclearization of families and increasing urbanization,” the CII-BCG report said. The report forecast the organized retail and e-commerce to grow rapidly to USD 140-160 billion and USD 45-50 billion respectively by 2020. Via articles.economictimes.indiatimes.com
CashKaro gets more than cash, bags Ratan Tata as investor
Cashback and coupons site CashKaro is the latest company to join industrialist and angel investor Ratan Tata’s rapidly growing portfolio of startups. The over two-year-old company is Ratan Tata’s third investment of 2016. The business icon invested in about 14 startups in 2015, including UrbanClap, CrayonData and Paytm. The two investments in January were in Tracxn and Dogspot.
Gurgaon-based CashKaro was founded in 2013 by entrepreneur couple Swati and Rohan Bhargava. The same year it raised angel funding of $750,000 from a group of London-based investors. The announcement of Ratan Tata’s investment comes just two months after CashKaro raised Rs 25 crores ($3.69 million) in Series A funding led by early-stage investor Kalaari Capital.
The startup works with over 1,000 online shopping portals like Amazon.in, Paytm, Jabong, and ShopClues. Users who log in to CashKaro and then do their shopping on its affiliate sites get up to 30 per cent additional cashback. CashKaro works on a commission model. The company claims to be the largest cashback site in India with over 10 lakh-registered users and over five million page views a month. The firm, which is targeting to cross Rs 1,000 crore ($147.54 million) in gross merchandise value in the next few months, also claims to have credited Rs 30 crores ($4.43 million) worth of cashback to its members. Via yourstory.com
Paytm secures funding from Ratan Tata, plans to have 100M wallet users by year-end
After Alibaba backing, mobile focused marketplace Paytm has raised an undisclosed amount of funding from Ratan Tata. This is the second investment secured by the Noida-based company within a month. Following the round, Ratan Tata will join the company as advisor.
Last month, it had announced a strategic agreement that will see Ant Financial take a 25 percent stake in One97 to support the growth of mobile payment and commerce platform in India. At present, the company is doing $1 billion Gross Merchandise Value (GMV) with only 15% customers choosing Cash on Delivery (COD) option. In 2014, Paytm became the largest digital commerce company in India. Paytm is available across many popular mobile apps (like Uber, Bookmyshow, MakeMyTrip and FoodPanda) as preferred payment method. Via yourstory.com
The Glorious Winners of the E-commerce Battle
The Indian E-commerce sector is nothing short of a battle ground- price cuts, huge discounts, seasonal sales as well as festival oriented sales are a regular feature with retailers trying to gain footing in the e-commerce domain. E-commerce players leave no stone unturned to catch the eye of potential customers.
Their efforts have certainly not gone in vain as 2015 saw an estimated sales worth $7.69 Billion Dollars through e-commerce websites. A lot of factors are responsible for this surge in online shopping trends which includes sales and discounted prices, payment options, cashback and coupons, variety and of course the convenience that follows online shopping.
While there are over hundreds of retailers out there, a few have emerged victorious in various facets of e-commerce and here’s a look at which websites performed efficiently and delivered apt customer service and satisfaction: Via magpress.com
Flipkart says India not yet ready for large Internet listing
The co-founder of Flipkart, India’s biggest e-commerce company, said on Saturday that the country’s stock markets were not yet ready for a large Internet listing.
Sachin Bansal’s comments at a startup conference in New Delhi came days after a rejig in the top management that was viewed by some as a step toward a stock market listing. “Indian markets are not yet ready for a large Internet company listing but we would absolutely love to list here when the time comes,” he said. Via dealstreetasia.com
SnapBizz gets $7.2M from Jungle, others for grocery automation play
SnapBizz Cloudtech Pvt Ltd, which provides an Android-based connectivity platform to local offline grocers, has raised $7.2 million (around Rs 48.7 crore) from Jungle Ventures, Taurus Value Creation and other VC firms. Konly Venture and Blume Ventures also participated in this round, the startup said in a statement.
SnapBizz will use the funds raised to expand across key cities in India. At present, SnapBizz works with mom-and-pop retail outlets in Mumbai, Pune, New Delhi, Bangalore and Hyderabad. “Large retail and online players account for only 10-15% of any brand’s business. The remaining 90% happens through traditional trade and there is zero or minimal last mile connectivity between brands, consumers and retailers. We are on a mission to address this big gap while addressing the pain points of the kirana stores,” said Prem Kumar, founder and CEO, SnapBizz. Via techcircle.vccircle.com
KartRocket raises $6 million from Bertelsmann India and others
Do-it-yourself e-commerce platform KartRocket has raised $6 million funding led by Bertelsmann India Investments (BII) and participation from existing investors Nirvana Digital India fund, 500 Startups and Singapore’s Beenext.
The company plans to use the funds raised for product development, talent acquisition, seller ecosystem development and performance marketing, KartRocket CEO and co-founder Saahil Goel said. KartRocket had earlier raised $2 million in Series A funding from Nirvana Venture Advisors, 500 Startups and Beenos in October 2014 and seed funding from 5Ideas Startup Superfuel and 500 Startups in July 2013. Via tech.economictimes.indiatimes.com
What’s ahead for retail in 2016?
Tomorrow, we take a look at retail developments and predictions following the national retail Federation show in New York City. Lots of experts, lots of opinion and, as always, news you can use.