e tailing market in india 2014 - sample
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e-Tailing Market – India
March 2014
2 E-TAILING MARKET IN INDIA 2014.PPT
Executive Summary
Market
e-Tailing market size in India was valued at INR xxx bn in 20-- and is expected to reach INR xx bn by 20--
The market is expected to attain a CAGR of approximately xx% during the period 20-- – 20--
Emergence of m-Commerce, improving customer experience, online reputation management and informing customers about products were the major trends followed by the players
Drivers and Challenges
Trends Changes in Business Models
Refreshed Strategies
Competition
Major e-Commerce Vendors
Player 1 Player 2 Player 3 Player 4
Player 5 Player 6 Player 7 Player 8
Drivers
Increased Spending Power
Increasing Internet Penetration and PC Users
Ease of Transaction
Need to save time
Challenges
Online Advertising and Customer Acquisition Costs
Losses incurred for COD
Costs Stack-ups
3
•Macro Economic Indicators
•Introduction
•Market Overview
•e-Commerce Technology
•Drivers & Challenges
•Trends
•Competitive Landscape
•Consumer Insights
•Market Opportunity
•Strategic Recommendations
•Appendix
E-TAILING MARKET IN INDIA 2014.PPT
4
Online Retailing – Evolution in India
1996 2011 2010
• Indiamart.com started operations as a B2B online marketplace in India
2012
• Rediff.com started its online shopping portal in 2001, focusing on electronic market
2001
• Network18 Group started its Homeshop18.com and compareIndia.com
2006 2007
• Future Group started its online shopping portal FutureBazaar.com in 2007
• Snapdeal was launched and is deemed as one of the most successful daily deals website in India
• Taggle.com, a deal website closed its operations in the country citing reasons such as unprofitable price wars in the industry
• Amazon.com has entered India through Junglee.com in the e-tailing territory, and current FDI scenario is becoming stringent
Is considered to be the oldest and the largest online B2B marketplace, wherein, it broke even in the first year of its launch and has been registering a profitable growth since then
It registered revenues of INR 12.2 mn which constituted 1.5% of the total sales of the Future Group
It is estimated to be growing by 40-50% on a monthly basis and boasts of having more than 400 employees thereby establishing its presence in 50 cities across the country
E-TAILING MARKET IN INDIA 2014.PPT
5
High Internet penetration coupled with rise in disposable income is driving growth in the market
• Currently, this segment is the fastest growing category out of the overall Indian e-Commerce market
•At the beginning of the third quarter of 20--, the market had over 35 mn unique visitors spread across the nation
• Some of the fastest growing product segments in the market comprise apparels, accessories, home & electronic
appliances, books and consumer goods to name a few
• Eyeing the immense growth opportunity, several players have entered the market resulting in stiff competition
e-Tail Market Overview – India
b
a
c
0
c b
20--e
e
20--e
f
20--e 20--e
d
INR bn
xxx
20--e 20--
a
e-Tail Market Size & Growth – India
E-TAILING MARKET IN INDIA 2014.PPT
e-Tail Market – Major Players India
Website Market Reach - (2012)
Player 1 Xxx
Player 2 Xxx
Player 3 Xxx
Player 4 Xxx
Player 5 Xxx
Player 6 Xxx
6
SAMPLE The 4P’s summarize the pressure points of how, what , where and how the e-tailing ecosystem works
• In close tandem with the general marketing activities, e-tailing concerns also conform to the same 4P’s of marketing activities
• Just as physical retail chains need to follow certain tactics in order to promote their products at the right place at the right price, e-tailing concerns also follow the same in order to sustain in the competitive scenario
E-tailing – 4P’s of Marketing
Product
xxx
Place
xxx
Price
xxx
Promotion
xxx
E-TAILING MARKET IN INDIA 2014.PPT
7
SAMPLE Cost Stack-ups have emerged as one of the major hurdles for e-Commerce vendors in recent times
Cost Stack-ups Impact •Unlike the initial days of e-Commerce’s inception in India, vendors are now taking a toll due to
the continuous cost stack-ups that occur while operating in the market These cost stack-ups are tough to avoid, however players are keen on minimizing them without hampering
the growth of their businesses
• Some of the major costs that add up and consequently lower the operating margin can be illustrated as below:
Cost of items Free Shipping
Discounts Inventory &
Write-offs and Warehousing
Packaging Manpower
Costs
Gross Margins
After taking into account all the cost stack-ups an e-
Commerce vendor witnesses a significant decline in its
gross margins, thereby resulting in lower profitability
E-TAILING MARKET IN INDIA 2014.PPT
8
SAMPLE Porter’s Five Forces Analysis
Bargaining Power of Buyers • xxx
Impact xxx
Threat of New Entrants • xxx
Impact xxx
Bargaining Power of Suppliers • xxx
Impact xxx
Threat of Substitutes • xxx
Impact xxx
Competitive Rivalry • xxx
Impact xxx
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Public: Foreign Company – Player 1. (x/x)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Name Designation
Head Office Hyderabad
Category Products/Services
E-TAILING MARKET IN INDIA 2014.PPT
10
SAMPLE Financial Snapshot Key Ratios
Financial Summary • The company incurred a net profit of negative INR 2.1 bn in FY 2012, as
compared to net profit of INR 33.5 bn in FY 2011
• The company reported total income of INR 3355.5 bn in FY 2012, as compared to INR 2568.5 bn in FY 2011
• The company earned an operating margin of 1.11% in FY 2012, a decrease of 0.68 percentage points over FY 2011
• The company reported debt to equity ratio of 0.19 in FY 2012, an increase of 867.92% over FY 2011
Key Financial Performance Indicators
Indicators Value (dd/mm/yyyy) Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
EPS (USD)*
PE Ratio (Abs)*
Particulars y-o-y change
(2012-11) 2012 2011 2010 2009
Profitability Ratios Operating Margin -0.68 1.11% 1.79% 4.09% 4.80%
Net Margin -1.37 -0.06% 1.31% 3.35% 3.67%
Profit Before Tax Margin -1.28 0.64% 1.91% 4.38% 4.70%
Return on Equity -5.08 -0.24% 4.84% 10.83% 10.37%
Return on Capital Employed -3.32 4.99% 8.30% 16.69% 18.30%
Return on Working Capital -3.76 29.47% 33.23% 41.66% 48.50%
Return on Assets -1.33 2.08% 3.41% 7.48% 8.54%
Return on Fixed Assets -7.84 7.05% 14.90% 50.78% 77.79%
Cost Ratios Operating costs (% of Sales) 0.69 98.89% 98.21% 95.89% 95.19%
Administration costs (% of Sales)
1.64 15.92% 14.28% 12.86% 12.49%
Interest costs (% of Sales) 0.02 0.15% 0.14% 0.11% 0.14%
Liquidity Ratios Current Ratio -4.55% 1.12 1.17 1.33 1.33
Cash Ratio -6.28% 0.60 0.64 0.84 0.86
Leverage Ratios Debt to Equity Ratio 867.92% 0.19 0.02 0.02 0.01
Debt to Capital Ratio 729.66% 0.16 0.02 0.02 0.01
Interest Coverage Ratio -44.59% 7.35 13.26 36.05 34.71
Efficiency Ratios Fixed Asset Turnover -23.27% 6.38 8.31 12.35 16.16
Asset Turnover -1.33% 1.88 1.90 1.82 1.77
Current Asset Turnover 4.36% 2.87 2.75 2.49 2.50
Working Capital Turnover 43.69% 26.63 18.53 10.13 10.07
Capital Employed Turnover -12.83% 3.16 3.62 3.16 2.78
Improved Decline
Net Profit/Loss Total Income
33.5
0
1000
2000
3000
4000
-20
0
20
40
60
2012
-2.1
3355.5
2011
2558.5
2010
51.4
1531.8
2009
41.9
1140.6
INR bn INR bn
Public: Foreign Company – Player 1. (x/x)
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Public: Foreign Company – Player 1. (x/x)
Key Business Segments Key Geographic Segments
100%
50%
0%
20--
100%
48% 45% 44% 43%
52% 55% 56% 57%
0%
50%
100%
20-- 20-- 20-- 20--
xxx xxx
Business Highlights (x/x)
Description News
xxx
xxx
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Public: Foreign Company – Player 1. (x/x)
Business Highlights (x/x)
Description News
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE • xxx • xxx
• xxx • xxx
T O
W S
Public: Foreign Company – Player 1. (x/x) – SWOT Analysis
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Private: Foreign Company – Player 1. (x/x)
Key People
Products and Services
Company Information Offices and Centres – India
Name Designation
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Category Products/Services
Head Office Mumbai
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Private: Foreign Company – Player 1. (x/x)
Shareholders of the Company Ownership Structure
Name No. of Shares held
Xxx Xxx
Xxx Xxx
Xxx Xxx
Total Xxx
100.00%
Foreign Holdings
Note: Foreign Holdings include foreign institutional investors, foreign companies, foreign financial institutions, non resident Indians, overseas corporate bodies or others
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Financial Snapshot Key Ratios
Particulars y-o-y change
(2012-11) 2012 2011 2010 2009
Profitability Ratios Operating Margin 12.92 -30.07% -42.99% N.A. N.A.
Net Margin 12.47 -30.07% -42.54% N.A. N.A.
Profit Before Tax Margin 12.92 -30.07% -42.99% N.A. N.A.
Return on Equity -30.19 -91.70% -61.51% N.A. N.A.
Return on Capital Employed -29.53 -91.70% -62.17% N.A. N.A.
Return on Working Capital -389.15 -468.48% -79.33% N.A. N.A.
Return on Assets -8.54 -28.71% -20.17% N.A. N.A.
Return on Fixed Assets 841.28 -166.44% -1007.7% N.A. N.A.
Cost Ratios Operating costs (% of Sales) -12.92 130.07% 142.99% N.A. N.A.
Administration costs (% of Sales)
N.A. N.A. N.A. N.A. N.A.
Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A.
Liquidity Ratios Current Ratio -21.41% 1.10 1.39 N.A. N.A.
Cash Ratio -37.74% 0.70 1.13 N.A. N.A.
Leverage Ratios Debt to Equity Ratio N.A. N.A. N.A. N.A. N.A.
Debt to Capital Ratio N.A. N.A. N.A. N.A. N.A.
Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.
Efficiency Ratios Fixed Asset Turnover -76.39% 5.54 23.44 N.A. N.A.
Asset Turnover 103.49% 0.95 0.47 N.A. N.A.
Current Asset Turnover 159.69% 1.35 0.52 N.A. N.A.
Working Capital Turnover 744.33% 15.58 1.85 N.A. N.A.
Capital Employed Turnover 110.89% 3.05 1.45 N.A. N.A.
Private: Foreign Company – Player 1. (x/x)
Improved Decline
Financial Summary
• The company incurred a net profit of negative INR 15.3 mn in FY 2012, as compared to net profit of negative INR 129 mn in FY 2011
• The company reported total income of INR 508.6 mn in FY 2012, as compared to INR 303.4 mn in FY 2011
• The company earned an operating margin of negative 30.07% FY 2012, an increase of 12.92 percentage points over FY 2011
Net Profit/Loss Total Income
-15.3
0
100
200
300
400
500
600
-150
-100
-50
0
-129.0 303.4
508.6
INR mn INR mn
2011 2012
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Key Recent Developments
Description News
Private: Foreign Company – Player 1. (x/x)
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE • xxx • xxx
• xxx • xxx
T O
W S
Private: Foreign Company –– Player 1. (x/x) – SWOT Analysis (x/x)
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Consumer Behavior & Preferences: e-Commerce Segments (x/x)
e-Commerce Usage Frequency
Med Low High
Mobile Usage
Low High Med
E-TAILING MARKET IN INDIA 2014.PPT
xxx xxx xxx
xxx xxx xxx
20
SAMPLE Consumer Behavior & Preferences : Analysis
• xxx
e-Commerce User’s Gender Split – Age Wise
57%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
35+ Years
~100%
25-34 Years
70%
18-24 Years
43%
xxx xxx
When targeting the consumers of 18-24 years
• xxx
When targeting the consumers of 25-34 & above 35 years
• xxx
Product Mix Strategy
E-TAILING MARKET IN INDIA 2014.PPT
21
SAMPLE Social Media Domain (x/x)
Social Networking Penetration – India v/s Global
12.5%
xxx
India Global
7.1%
India Global
8.3%
xxx
10.0%
India forms the 2nd largest user base standing at
13.7% of the total user base of Google Plus which stands at 90 mn , ranking
behind the US
Global Rank Rank in India Cities
1 1 xxx
4 2 xxx
8 3 xxx
Google Plus – User Base
Google Plus User Base – Top Cities
31.5
13.7
0
10
20
30
40
%
xxx
xxx
E-TAILING MARKET IN INDIA 2014.PPT
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SAMPLE Mobile Platforms (x/x)
• xxx
a
b
c
d
e
0
mn units
+61%
20--e
e
20--e
d
20--e
c
20--e
b
20--
a
Market Size – Smartphone in India
a
b
g
c
d
e
f
0
INR’000
c
20-- 20--
b
20--
a
Smartphone Minimum Price Point - India
E-TAILING MARKET IN INDIA 2014.PPT
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Thank you for the attention The e-Tailing Market – India 2014 report is a part of Netscribes’ Information Technology Series. For more detailed information or customized research requirements please contact:
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