B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Flipkart $1 billion
eWars
If you search Flipkart for
Amazon, you will get several
categories Kindle cases (not the
Kindle itself, of course), books
(Amazonia: thats about the river;
Jeff Bezos and the Age of Amazon:
thats about the founder and ceo)
and even a hoko flip cover.
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2018
23
($ billion)
19
8
0.5
Travel
Source: Nomura
1.7
1
Digital advertising
2
E-Tailing
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Amazon $2 billion
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
71
E-tailing
16
Others
Classifieds
Financial services
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
THE MONEYSPINNERS
How the e-tailing buck is divided (%)
Others
Home
furnishings
Computers
Apparel
25
21
Mobiles
Cameras
Appliances
14
19
Jewellery,
Personal,
Health
4
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market?
India is home to lakhs of small
and medium entrepreneurs
who have a rich catalogue
and expertise at building
great products that deserve
to be showcased on a larger
platform. These sellers often
have a limited footfall and
geographical presence. That
is something that bothers
us and thats the reason we
have been tying up with various organisations that help
in enabling sme s improve
their living standards and
scale their businesses.
Are you likely to go in
for more mergers and
acquisitions?
We are always looking for
exciting opportunities. We
are actively looking at acquisitions across areas like supply-chain, technology and
seller enablement.
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
MONEY TO BURN
Top 10 PE/VC investments in the e-commerce space (in the last 12 months)
Company
Flipkart
Investors
Tiger Global, Iconiq Capital,
DST Global, others
Flipkart
Amount ($ million)
Date
210
May 2014
200
Jul 2013
Flipkart
160
Oct 2013
Snapdeal.com
134
Feb 2014
Snapdeal.com
100
May 2014
Myntra
50
Feb 2014
Jabong.com
CDC Group
28
Jan 2014
21
Jul 2014
Cardekho
15
Nov 2013
FirstCry
15
Jan 2014
but also competing with the biggies of the world. Hopefully, some
will chuck their suited and booted
corporate jobs, give up the five-star
perks and business class travel and
start becoming an employer rather
than an employee. For the common
man, there will be more employment opportunities; most new jobs
come from startups. For investors,
its great confidence-building. It
spurs them to bet more on India and
Indias consumptions story and the
large middle class and their spending power which has been much
talked about but not translated into
reality. The policy paralysis, the retrograde steps like retrospective tax
and angel tax notwithstanding, the
large money inflow into the Indian
startup sector will boost their faith
and confidence.
IbiboGroups Kashyap has a
slightly different take. First, these
investments will go into building a
larger consumer market for product
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
e-commerce. Second, these investments will create a healthy ecosystem on the supply side and will give
rise to lots of entrepreneurs on the
manufacturing and trading side.
Third, these investments will create a big startup ecosystem that will
breed on platforms such as Amazon
and Flipkart. Fourth, this also means
that verticals and niche e-commerce
category startups can potentially get
exits. All this will create an ecosystem network effect.
We believe that the funding/
investments will be utilised to
improve logistics and infrastructure
facilities, primarily in Tier II and III
cities, as well as to augment technology to improve the customer experience, says Ajay Srinivasan, director
of crisil Research. The Tier II and
III cities account for 50-60 per cent
of the current revenues of leading e-commerce players. In future
also, these will be the main growth
engines. Furthermore, the pace of
BIGGER DEALS
PE/VC investments in the e-commerce space
Amount ($ million)
No. of deals
658
553
311
2014 YTD
2013
2012
23
36
49
Source: Nomura
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Buyer
Target
Flipkart
Myntra
Babyoye
Hoopos
Tradus
BuyThePrice
Zovi
Inkfruit
BookAd
Boo
kAdda
kAd
da
BookAdda
KoolSk
kool
KoolSkool
Source: Technopak
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B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
small and medium enterprises Amazon and Flipkart are talking about.
It also entered the US this March.
An Indian entry can be expected
after the ipo goes through. Flipkart
has a market share of less than 5 per
cent (Alibaba has 85 per cent of the
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But
werent
people
unhappy that they didnt get
part of the Ibibo largesse?
Perhaps. But people dont
feel the same any more,
says Kashyap. Those with
negative feelings have been
out since the past one year.
Sangam says its business as
usual. Recently, redBus hit
the milestone of clocking
30 million seats sold since
inception. Adds Kashyap:
redBus is the largest online
bus ticketing platform in
India. When we acquired
redBus, it was 4x the size of
the nearest competitor. We
are now easily 10x.
The redBus story highlights an issue that is going
to increasingly occupy centrestage as more startups find buyers. People
in India dont understand
equity, says Sumat Chopra,
cofounder & ceo, EkStop,
an online grocer. At EkStop,
only a handful of
people have esops.
Most
employees would prefer
a 5 per cent increase in salary rather than esops. But
he agrees that at redBus, the
vesting schedules were probably unfavourable.
Chopra, who was with
Goldman Sachs in New York
before he turned entrepreneur, is an expert on esops.
He says that he has started
an education programme for
his staff. As an industry, we
have to educate our people,
he says. It wont be easy holding classes on underwater
options, accelerated vesting
and cliffs. Too many people
will fall off midway.