India E-Commerce Industry Report: Investment Opportunities in Apparel and Deals Categories

State of the E-Commerce
Industry in India
A study on the Current Trends, Domain Insights,
Success Criteria & Investment Opportunities
Abhishek Mathur
8/24/2011
Given the MakeMyTrip & JustDial IPO’s, Interest in Consumer Driven Ecommerce has increased both
from Investors and Entrepreneurs. At the same time reports of Accounting Harakiri & Amazon’s
announced Entry have cast a doubt on the monetization capabilities. This report studies Ecommerce in
India and attempts to draw parallels within Sectors and Geographies to identify Investment
opportunities

Table of Contents
Investment Hypothesis............................................................................................................... 3
Measuring E-Commerce Success.............................................................................................. 4
Ecommerce Verticals ................................................................................................................. 4
Demographic Trends.................................................................................................................. 5
Market Size................................................................................................................................ 6
Financial Analysis ...................................................................................................................... 6
The Three Facets of Ecommerce............................................................................................... 7
Customer Facing .................................................................................................................... 7
Supply Networks .................................................................................................................... 7
1. Books, Electronics & Apparel....................................................................................... 7
2. Travel Ticketing ........................................................................................................... 8
3. Hotel Booking .............................................................................................................. 8
4. Deals ........................................................................................................................... 8
Delivery Channels .................................................................................................................. 8
1. Inventory Management, Warehousing, Packaging and Shipping:................................. 8
2. Couriers and Last mile delivery channels:.................................................................... 8
Key Growth Drivers...................................................................................................................10
Key Challenges / Barriers .........................................................................................................10
Online Usage Behavior trends & Key Opportunities ..................................................................11
Major Investments in the industry..............................................................................................11
Success stories / Important Exits ..............................................................................................12
MakeMyTrip...........................................................................................................................12
Justdial..................................................................................................................................12
Yatra .....................................................................................................................................12
Regulatory Advantage & legal frameworks................................................................................13
Appendix 1: Evolution of an ECommerce Startup / ECommerce Org Chart...............................14
Appendix 2: Fundamental Analysis of Global Ecommerce Players............................................15
Appendix 3: Revenue Growth Projections.................................................................................16
Appendix 4: Current Revenue Projections.................................................................................17
Appendix 5: List of Ecommerce players by category .................................................................17

Investment Hypothesis
India, in the last decade has seen rapidly
increasing disposable incomes leading to
increasing demand for branded goods.
However, traditional retail channels are
encumbered by inefficient distribution
networks which can be optimized further
through cutting edge technology enabled
platforms.
The last 2-3 years have seen a rapid growth in Internet/Mobile as a channel for Retail Sales.
This has led to a widespread belief that the Ecommerce platform has come of age in India and
will leapfrog organized retail as the primary retail channel. Political will has been against
supplanting traditional Middlemen. A fact which hampers organized direct to consumer retail
and strengthens the case for ECommerce
A closer look at 2011 data, demonstrates that
primary drivers for increased Ecommerce
usage have been Services (Deals, Ticketing,
etc...), whereas Products (Books, Electronics,
and Apparel) have been stagnant.
Macro Trends are extremely positive.
The current real Revenues of the Ecommerce
market is estimated at $1B, which is
considerably lesser than China ($ 70B) and other comparable economies. Active Internet
user base of 70-80 Million users is roughly 10% of the Mobile user base (700 Million).
People from 3300 distinct locations made online transactions in 2010, indicating mass appeal.
Valuations (See Section Financial Analysis) are high even by global standards (See Appendix 2:
Fundamental Analysis of Global Ecommerce Players). However this report attempts to identify
niches within the Apparel and Deals Categories which present opportunities to invest in. Group
Deals are doing very well globally with Groupon, LivingSocial, etc... Claiming 25% SME
marketing budget in the US. Given the unorganized and technologically challenged service
sector in India the scope for growth is even higher. JustDial (catering to a similar audience) has
proven a strong need for such Aggregators. Apparel (branded and unbranded) is interesting
because latest technologies around Augmented Reality, Flexible return policies, Cash On
delivery and Deep discounts will lead to explosive growth in this category. Additionally, margins
available in this space (25% - 200%), lend themselves very well to a quality offering and
fantastic customer experience. (http://vizisense.com/html/press/newAgeShopaholics.html)
Source: Vizisense
Source: Vizisense

Measuring E-Commerce Success
As per current trends none of the Ecommerce players will operationally break even before
2014. The question then is how to differentiate the winners from the laggards. Based on expert
opinion the following may be used as surrogate success criteria
a. Transactions per Day An Ecommerce player which can consistently grow and cross 5000
Tx/day by 2012 will be well poised to succeed in the long term
b. Customer Acquisition cost. A consistent linear reduction in Acquisition cost
demonstrates Customer satisfaction and repeat purchase. This would be essential to
scale
c. Team A Company which can hire and retain top level vertical specific domain experts
will naturally scale well.
d. Gross Merchandise Volumes Growth in GMV is a good sign; however this needs to be
tracked in conjunction with changes in Unit Profitability
Ecommerce Verticals
Ecommerce in India Can be divided into 21 broad verticals (See Appendix 5: List of Ecommerce
players by category). The Top 4 comprise Travel, Books/Electronics/DVD’s, Apparel and Deals.
The rest include Gifts, cakes, Custom memorabilia, Sweets and bakery items, Artwork auction,
Baby Care, Movie ticket booking, Airlines portals, Horizontal Players, Movie Rentals, Footwear,
Jewellery, Lingerie Straps and Strings, Sports, Health, Fitness, Beauty, Wellness, Perfumes,
Groceries, Vegetables, Fruits

Demographic Trends
Across verticals
1. 15-24 age group gets 40% traffic. Early adoption amongst this Age group which will lead
consumption in the coming decade is a good sign.
2. Low –Middle Income earners dominate
3. City wise traffic is Maximum from Mumbai, Delhi, and Bangalore. About 40% traffic is
outside metro and tier 1 cites.
4. Primary customers are Young Graduate Adults.
Vertical Specific
Vertical Unique
Users /
Day
Annual
Growth
All
India
Reach
Time
Spent/Visit
(Minutes)
Sites Considered
Travel 150,000 100% 4% 8 Makemytrip.com,
Cleartrip.com, Yatra.com,
Tripadvisor.in
Books
Electronics/DVD’s
40,000 80% 1.5% 7 Flipkart.com, Infibeam.com,
Naaptol.com, Letsbuy.com
Apparel 30,000 220% 1.25% 9.2 FashionAndYou.com,Yebhi.com,
Myntra.com, 99labels.com
Deals 425,000 3000% 13% 3.7 Snapdeal.com
1. Amongst Books/Electronics/DVD’s offline players with Online presence such as
FutureBazaar.com and HomeShop18.com receive as many visits as the pure play
Ecommerce players. Amazon.com still receives twice as many visits as Indian players
within India.
2. Amongst apparel, offline brands such as Shoppersstop.com lag pure Ecommerce
players.
3. Among deals, there is a clear monopoly with Snapdeal accounting for more than 90% of
the traffic. Deals also have a secondary demographic group – Students.
Source: Google Trends for Websites & Vizisense

Market Size
The Total Ecommerce Market for 2011 Is estimated to be 50,000 Crores (GMV), an impressive
growth rate of 47 per cent YoY. This is on the back of 5 Crores ‘active’ internet users in India.
Implying a revenue of Rs 1000 per active User. People from more than 3300 Villages and Cities
have purchased something online, including 1100 rural locations.
Through an average of Top Down, Bottom Up and Comparable Geography Market Size, I expect
Indian E-Commerce to grow at 30-40% Annually and be a Rs 260,000 Crores(GMV) market by
2016 (See Appendix 3: Revenue Growth Projections).
Financial Analysis
Branded E-tailing (Books, Electronics, Music,
Movies, etc…)
a. Globally Etailing platforms run on profitably
margin of 1.3 – 2.58%, Indian Ecommerce
platforms may run on even lesser margins
given Infrastructural and Payment processing
difficulties
b. A Future Multiple based valuation technique
values the Etaiing Market at INR 4200 Crores
c. It is rumored that Flipkart is valued at INR
4800 Crores, this may be a strategy to deter
Amazon from entering India alone. (http://www.vccircle.com/500/news/flipkart-set-to-
raise-150m-from-general-atlantic-at-1b-valuation)
d. There are concerns around overvaluation and a bubble in Ecommerce. (See:
http://www.pluggd.in/stop-blowing-our-ecommerce-bubbles-297/,
http://blog.kamadolli.com/2011/08/india-e-commerce-joining-the-rant-wagon/)
Travel
a. MMYT (and other Indian players) need to ramp
up hotel and Package bookings in order to reach
global margin standards.
b. Reported Revenues are $124.72M for FY11
c. Gross bookings $742.5 million for FY11
d. MMYT just released Q1’12 reports showing healthy growth in Revenues
(http://investors.makemytrip.com/releasedetail.cfm?ReleaseID=598162)
Amazon DangDan
g.com
P/S (ttm) 2.24 1.88
Return on Equity (TTM): 15.24% NA
EV 85.48B 526.24M
Profit Margin (TTM): 2.58% 1.30%
Expedia Ctrip.com MMYT
P/S (ttm) 2.14 11.55 5.62
Return on
Equity (ttm)
15.59% 18.87% 18.82%
EV 7.24B 5.32B 664.47M
Profit Margin
(ttm)
12.09% 35.07% 3.87%
Value Metrics (2016) INR Crores
Total Retail Sales (GMV) 260000
GMV to Revenue 20%
Revenue 52000
% Share of Etailing 15%
Total Etailing Sales 7800
P/S 2.02
Future Valuation 15756
Discount Rate 30%
Current Valuation(2011) 4243.549
Source: Google Finance

The Three Facets of Ecommerce
Ecommerce can be broadly divided into three distinct modules Customer Facing, Supply
Networks and Delivery Channels (See Appendix 1: Evolution of an ECommerce Startup / ECommerce
Org Chart)
Customer Facing
1. Web Product Design. User friendly interface is crucial to converting Visitors into Buyers.
Typical Ecommerce conversions are 4-6%. China/US Ecommerce sites convert at > 10%
levels.
2. Customer Acquisition. Digital Marketing channels including SEO, SEM, Social Media,
SMS, Emails, Mobile Ads; Offline channels include Print, Radio and TV. Typical Cost per
Acquisition range from Rs 400 to Rs 2000. Marketing through Digital Channels is clearly
not cheap. (See Appendix 7: Google AdWords CPC by Segment)
(http://www.alootechie.com/news/google-targets-triple-digit-revenue-growth-through-
local-ads-indian-smbs) .
3. Customer Support (Social Media and Inbound Call Centers)
4. Payment Processing. E.g. Avenues.com, ItzCash. Costs can vary from 2-5% depending on
volumes and form of payment. Failure rates and Fraud have considerably reduced to an
acceptable level
Supply Networks
Supply networks have evolved differently for each vertical. Merchandiser- Vendor negotiations
greatly determine Payment terms and Supply Time/reliability. In general the more consolidated
an industry the more organized the network (E.g. Flight Ticketing).
1. Books, Electronics & Apparel
Most brands/publishers work with national level distributors, who then distribute to regional
dealers. Ecommerce players can work with either Regional Dealers or National Distributors.
With volume these can be removed and direct brand relationships need to be built.
Ecommerce
Players such as
Flipkart,
Infibeam, F & You
National
Level
Distributor
Regional
Dealers
Brands:
Samsung, LG, Rupa,
Levi’s, Van Heusen

2. Travel Ticketing: Ticket Aggregators such as GDS provide fairly straightforward
integration into flight availability and booking.
3. Hotel Booking: A challenge exists in streamlining the various layers of intermediaries
/aggregators which exist without adding any real value between the Customer and
Hotel. Myriad layers of intermediaries with vested interests are not allowing this
category to take off in spite of huge margins and high volumes. However as OTA’s gain
volumes they are replacing some of these aggregators and there is an opportunity to
consolidate the value chain.
4. Deals: There are no existing networks for aggregating deals. Thus it is a challenge to
build a Business Development team to collect deals. At the same time it is an
opportunity given that margins do not need to be shared with intermediaries.
Delivery Channels
Needed only for product delivery, deals/ticketing can forgo this expense
1. Inventory Management, Warehousing, Packaging and Shipping:
Technology enabled CRM systems and demand forecasting are vital to optimize delivery
time & cost.
2. Couriers and Last mile delivery channels:
(E.g. Aramaex and AFL Couriers) Negotiations determine freight costs, time to deliver, attempts
at delivery, etc.. COD greatly boosts market size; however it comes with its own challenges
around Returns, Incorrect Address, etc... Hence this is more expensive (even excluding freight)
than traditional Payment processors.
Hotel Side
Aggregators
Such As Hbsi
Agent Side
Aggregators
Such as Via,
Travelocity,
Expedia
Affiliates Such
as Ixigo
OTA’s such as Cleartrip,
Travelguru, Yatra, MMT
Travel Agents

Market share & Competition
Non travel Retail related sites reach
about 54% (up 14% YoY) of the Online
Audience in India. With the bulk of the
reach coming from Computer Software
downloads, Consumer Electronics,
Hardware, Comparison shopping and
Books
Travel related sites reach 40% (up 13%
YoY) of Indian Online users, dominated
by Railways booking sites, followed by
OTA’s
Of the 7.1 million people visiting the top three OTAs, MakeMyTrip, Yatra Online and
ClearTrip.com, 71 percent of visitors checked in at only one of the three sites,
demonstrating relatively strong brand loyalty among the top players.
Competitive Landscape for Travel
based ECommerce
Souce: Comscore
Competitive Landscape of Consumer Ecommerce: Products
Source:Vizisense
Share of Retail Categories by Geography Source: Comscore

Key Growth Drivers
1. Scale through a superior service quality and high repeat business and referrals.
2. Horizontal play, Number of categories served
3. Reduce operational expenses by investing in warehouses / Logistics.
4. Supplier relationships over other brands and potential new entrants
5. Variety of products available under each category.
6. Conversion rates for major players are still in the middle single digits, contrast with
US/China where they are above 10%.
7. COD consists of 80% of Ecommerce transactions in China, India has much lesser.
8. South East Asia represents a huge opportunity for Indian Ecommerce companies to
expand into. Snapdeal is one of the Companies considering going global.
Key Challenges / Barriers
1. Accounting practices at most ecommerce sites still report revenues
as Gross Merchandise Value. Further deep discounts are treated as
long-term amortisable marketing expenses
2. 20 % of the Users account for 64% of the total time spent on the
Internet. In order to scale it is important to increase internet
consumption across existing Internet users
3. Core network infrastructure in India is not capable of handling a
huge surge in Internet traffic. Only 20% of the Intra Telco network is
over robust fiber networks, While Telco’s concentrate on individual
networks, there aren’t sufficient peering points for traffic crossover.
4. Payment system infrastructure continues to be woefully
inadequate.
5. It is rumored that SEBI is considering imposing Capital gains tax on
Venture capital investments.
6. Global players such as Amazon looking to enter India
7. Local Language Content – Local Search Engines Like Baidu
Internet Distribution System &
structure
Shared-access (Cyber Cafes / Mobile Phones / Universities)
population in India is almost as large as the Internet
population accessing from work and home
Internet Usage Patterns:
Source: Comscore
44
Figure 1 Unique Visitors (Million) Independent Vs Shared

Online Usage Behavior trends & Key Opportunities
1. Internet Audience in India skews dramatically
young, three-quarters of the web audience is
under the age of 35. This skew can be
attributed to the demographic profile of the
country, Younger population has access to
better devices and connectivity .
2. 41% of Indian Internet users visited an
Education site
3. 14% of Indian Internet users visited a Personal’s site
(Dating/Matrimony, etc..)
4. 40% of Indian Internet users visited a Career services and
development site
5. 77% of Indian Internet users visited a Entertainment
site (Music/Movies/Videos). However, Online video
viewing in India is still lower than the World Average
6. This Age group also has disposable incomes, hence
could be the drivers for Ecommerce
7. Comparison shopping is used by only 10% of the
Indian Online users, give the price sensitive mindset
this should increase ( Argentina/Brazil has more than 50% adoption of comparison
shopping)
Major Investments in the industry
Company Company
Description
Investor Amount
raised
Date
1 Flipkart Online Services
Pvt Ltd
Ecommerce for
Books, Electronics,
Music, Movies
General Atlantic
Partners
$150 Million,
($1B
Valuation)
Not Yet
declared
2 Ixigo.com Travel Metasearch SAIF Partners,
MakeMyTrip
$18.5 Million August
10, 2011
2 Snapdeal (Jasper
InfoTech)
Group deals portal Bessemer Ventures,
Nexus Venture Partners
and IndoUS Venture
Partners
$40 Million July 26,
2011
3 Yebhi.com
(Bigshoebazaar)
Online shoes, apparel,
bags, accessories and
gift items
Nexus Venture Partners
and Catamaran Ventures
$9 Million July 21,
2011
4 Zovi.com Private Label Apparel SAIF Partners & Others $5.5 Million July 5,
2011
5 Global Online Apparel
(FashionAndYou,
Apparel, Deals, etc… Mangrove Capital
Partners
$4.4 Million July 5,
2011
Netflix Youku.com
P/S (ttm) 4.81 30.88
Return on Equity
(ttm)
83.62% NA
EV 12.68B 2.34B
Profit Margin (ttm) 8.04% -27.96%
2Internet Audience Age Group. Souce:
Comscore

DealAndYou,
6 JustDial Local business listings
site
Sequoia Capital
Global Equities and SAP
Ventures
$10 Million June 6,
2011
7 Exclusively.in Fashion flash sales Tiger Global
Management LLC, Accel
Partners and Helion
Ventures
$16 Million May 27,
2011
8 ThePrivateSales.com Fashion flash sales Undisclosed $5 Million May 20,
2011
9 Redbus.in (PilaniSoft) Bus Tickets Helion Ventures,
Inventus and Seedfund
$6.5 Million May 16,
2011
10 Yatra Online Pvt Ltd, online travel
company
Intel Capital Undisclosed May 13,
2011
11 99labels.com Fashion flash Sales InfoEdge $3.5 Million May 11,
2011
12 Quickr a horizontal
classifieds player
Nokia Growth Partners
(NGP), Norwest Venture
Partners and eBay Inc.
$8 Million May 9,
2011
13 Policy Bazaar Financial Products
comparison
InfoEdge, Intel Capital $10 Million April 21,
2011
Success stories / Important Exits
MakeMyTrip
The MakeMyTrip (MMYT) stock surged 89% on its listing on 12th
August’2010, and has been the
best IPO to list in the US since Athena health Inc’s IPO in 1997 which surged 97% on listing.
Justdial
Just Dial’s consolidated total income stood at Rs 189.91 Crores in FY11, representing a CAGR of
39.4 per cent. Its profits after tax increased from Rs 1.64 Crores in FY07 to Rs 28.62 Crores in
FY11. In FY 2011, the company addressed over 180 million search queries from millions of users
across platforms. For the year ended March, Just Dial reported a profit after tax of Rs 28.6
Crores, up from last year’s Rs 18.4 Crores. Mumbai’s Just Dial plans to go down the IPO path
and has filed documents with SEBI. It seeks to raise Rs 360 Crores through sale of fresh shares
and some more via sale of shares by private equity (PE) investors. PE companies such
as SAIF Partners (21.58 per cent), Sequoia (12.73 per cent) and Tiger Global (21.84 per cent)
own large stakes.
Yatra
Emboldened by the success of MakeMyTrip (MMYT) Ltd’s listing on Nasdaq, the US exchange,
Yatra.com, one of MMYT’s major competitors, may also go the public offer way. Industry

sources peg the IPO figure at $50-80 million (Rs 230-370 Crores). Yatra.com has a market share
of about 30 per cent, while about 48 per cent of the $1 billion (Rs 4,600 Crores) in online travel
reservations made in India last year were booked through MMYT.
Regulatory Advantage & legal frameworks
As per regulations, foreign companies cannot enter into retail business directly (they can engage in B2B
trading though) – and that’s precisely the reason why you won’t see Yahoo Shopping/Amazon running
their operation in India.
FDI up to 100% permitted for e-commerce activities subject to the condition that such companies would
divest 26% of their equity in favor of the Indian public in five years, if these companies are listed in other
parts of the world. Such companies would engage only in business to business (B2B) e-commerce and
not in retail trading

Appendix 1: Evolution of an ECommerce Startup / ECommerce Org Chart
1. Get ECommerce site up to take transactions (Typically 3-6 months since start)
a. Get website ready (either build from scratch or use a hosted shopping cart)
b. Setup payment gateway
c. Setup a shipping partner
d. Upload and manage initial list of products
e. Setup and manage initial supplier list for products to be drop shipped (or ship from own simple
warehouse)
Team needed: Business (customer service, supply chain, operations, legal, etc) + Engineering (1-2 folks should
suffice)
2. Get to 100 transactions / day & unit profitability (Typically 9 months to 1.5 years since start)
a. Optimize website for SEO, put an affiliate marketing program, pay for SEM, social media
b. Expand product list and supplier list
c. Setup small warehouse (if customization is required) and manage inventory costs
Team added: Digital marketing, Procurement manager, Supply Chain and Logistics Managers and Customer
Service, Increase engineering (User experience, Scalability experts, etc.)
3. Get to 500 transactions / day & scale (Typically 2-4 years from start)
a. Include brand marketing efforts including TV, print and billboard advertising
b. Expand into adjacent vertical products spaces, add new suppliers
c. Keep refining website to include up sell, cross sell and analytics efforts
Team added: Head of brand marketing, Category manager (Merchandise Manager) for each category, Catalog
manager (write product descriptions, take product photos, etc.)
4. Show gross profitability and scale beyond 1000 transactions
a. Manage inventory and costs and ensure optimization of logistics and warehousing
b. Recruit and manage team for growth
c. Look for non-linear sources of traffic to the website, possibly add corporate sales
Figure 3 Source http://www.pluggd.in/author/mukund/

Appendix 2: Fundamental Analysis of Global Ecommerce Players
Figure 4 Source: http://blog.kamadolli.com/

Appendix 3: Revenue Growth Projections
1. US Ecommerce Growth rates have been in the 20-30% range over the past decade
2. In India, Broadband Penetration
Growth(Source:
http://rtn.asia/347_indias-broadband-
growth-slows-65-december-quarter) >
20%, Plus Revenue Per User Growth >
10 % will support sustained Ecommerce
growth > 30%
3. Related technologies such as Mobile
penetration have grown faster
(although later)in India than in US
4. Globalization and Cultural convergence
will lead to higher consumption
aspirations
5. Adoption amongst Tier3 cities and
villages as well as amongst low income
groups suggests mass appeal
6. Recent technology Innovations have
reduced digital fraud to below retail
cash fraud rates
7. There is an immediate opportunity to
win customers buying offline after
looking for Information Online
8. We are looking at an opportunity to
create the next Airtel / Tata / Reliance
The total retail sales in India will grow
from US$ 395.96 billion in 2011 to US$
785.12 billion by 2015
http://www.ibef.org/industry/retail.aspx).
Currently 3% of retail transactions occur
online, which will grow to 7-9% by 2016.
%Age Transactions Online (2016) Ecommerce market (INRCrores)
5 157024
6 188429
7 219834
8 251238
9 282643
10 314048
11 345453
12 376858
Figure 5 Ecommerce Market Size Vs Online as a %age of total retail

Appendix 4: Current Revenue
Projections
Sensitivity of Yearly Revenues (INR Crores)to
Conversion rates and Average Transaction
Size. These tables are drawn using Average
Visitors from Appendix 7.
Appendix 5: List of Ecommerce players by category
1. Gifts, cakes etc. Infibeam.com, Fernsnpetals.com, IndianGiftsPortal.com, Talash.com GlimGifts.com
2. Books Flipkart.com, Landmarkonthenet.com, A1books.co.in
3. Custom designed T-shirt, mug, calendar etc Myntra.com,Zoomin.com, Snapfish.in, Picsquare.com
4. ApparelsPantaloons, Shoppersstop.com, Inkfruit.com,UtsavSarees.comGlobusZovi.com
5. Sweets and bakery items Mithaimate.com
6. Artwork auction Saffronart.com
7. A-Z items for Babies Hushbabies.com, Firstcry.com, BalGopal.com, Kidloo.comBabyoye.com
8. Movie ticket bookingBookmyshow.comPVRCinemas.com
9. Online travel ticketing and hotel booking Irctc.co.in, Redbus.in, MakeMyTrip.com, Yatra.com,
TripAdvisor.in, ClearTrip.com, Travelguru.com,Expedia.co.in, Ezeego1.co.in, Ixigo.com, TravelMasti.com,
Hotels.com
10. Airlines portals Goindigo.in, Indian Airlines, Jetlite.com, Flykingfisher.com, Goair.in, Spicejet.com,
Jetairways
11. B2C ( Multiple products ) Ebay.in, IndiaTimes, Rediff Shopping, Bigbazar, Homeshop18.com,
Shop.zapak.com, Shop.in.com, Tradeus.in, Indiaplaza.in, Egully.com, 20north.comTimtara.com
YepmeShopping.comBigadda.com
12. Rent a movie BigFlix.com,Seventymm.com
13. FootwearYebhi.com,Metro ShoesBata ShoesBeStylish
14. Deal a day SnapDeal.com, Dealsandyou.com, Mydala.com, Koovs.com, Grabbon.com,
BindaasBargain.com, Taggle.com, SoSasta.com, Dealivore.com, Grako.in, Dealsonline4u.com
Bagittoday.com 99labels.com Fashionandyou.com Timesdeal.com Rediff-DealHoJaye Dealface.com
DealYantra.comBuzzintown DealsDealsNow (For Corporates)
15. Electronics, Gadgets, PhonesDell.co.in, Ezone, EDigiWorld, BitFang.comLetsbuy.com
LootSpot.comNext.co.in, infibeam.com
16. Jewellery Caratlane.com, Suratdiamond.com Ddamas.co.in
17. Lingerie Straps and Strings, Ngal Originals, Victoria’s Secret India
18. Sports Playgroundonline.com Esportsbuy.com
19. Health, Fitness, Beauty, Wellness Health Shoppe, Urbantouch
20. Perfumes Perfume2Order, Beautymart.in,PerfumesDirect
21. Groceries, Vegetables, Fruits AaramShop.com Mandifresh
Sensitivity 3% 4% 5% 6% 7%
300 13 17 22 26 30
400 17 23 29 35 40
500 22 29 36 43 50
600 26 35 43 52 60
700 30 40 50 60 71
Figure 6, Revenue projections for Books/Electronics/Music/Movies

Appendix 6: Vertical specific demographics
OTA & Hotel Booking
Figure 7 Daily Unique Visitors by Month
Figure 2 %Users by Income (INR Lakhs/Yr) Figure 3
%Users by Age
Table 1 %Users by City
0 20 40 60
< 2
2 - 4.99
5 - 6.99
7 - 9.99
10 - 14.99
> 15
0 20 40 60
below 15
15 - 24
25 - 34
35 - 44
45 - 60
above 60
0.25 0.25 0.50 0.75 0.75 0.75 2.25 2.25 3.50 4.75 4.75
7.25
12.00 12.50
47.5
Each Web property
receives on an average
150,000 Unique Users /
Day (Growing > 100%
annually).
In a month these
properties reached
around 4% of the Indian
Population
Users spent about 8
minutes per visit, enough
time to research and buy.
Primary customers are
Young Graduate Males,
Middle Income Groups.
Long tail in terms of
lower Income groups is
also visible
Early adoption amongst
the Under 15 and 15-24
Age group who will lead
consumption in the
coming decade.
Metro’s and Tier one
cities account for roughly
half the traffic, with the
remainder distributed
across India. Showing the
long tail of users

Books & Electronics
%Users by Age
0 20 40 60
< 2
2 - 4.99
5 - 6.99
7 - 9.99
10 - 14.99
> 15
0 20 40 60
below 15
15 - 24
25 - 34
35 - 44
45 - 60
above 60
0.5 0.5 0.5 0.5 0.5 0.8 1.0 1.3 1.3 1.3 1.3 1.3 1.8 2.5
5.0 6.5 7.5
10.0 10.0
46.3
Each Web property receives
on an average 40,000
Unique Users / Day
(Growing > 80% annually).
Amazon still gets 80,000
Unique visits indicating
opportunity for growth,
Homeshop18 and
Futurebazaar also get similar
number of visits
In a month these properties
reached around 1.5% of the
Indian Population.
Users spent 7 minutes per
visit, enough time to
research & transact.
Young Graduate Males &
Females, Middle Income
Groups. Long tail in terms of
lower Income groups is also
visible
Early adoption amongst the
Under 15 and 15-24 Age
group who will lead
consumption in the coming
decade.
Long tail in city traffic
Typical Conversion rates are
4-6%. i.e. revenues of INR
36-52 Crores (Appendix 3)

Apparel
%Users by Age
0 20 40
< 2
2 - 4.99
5 - 6.99
7 - 9.99
10 - 14.99
> 15
0 20 40 60
below 15
15 - 24
25 - 34
35 - 44
45 - 60
above 60
0.25 0.25 0.25 0.50 0.75 0.75 0.75 0.75 0.75 1.00 1.50 1.75 2.25
8.25 8.25 9.50 9.50
53.00
Each Web property receives
on an average 30,000
Unique Users / Day
(Growing > 220% annually).
Established offline Brands
such as Shoppers stop are
lagging the New entrants
In a month these properties
reached around 1.25% of
the Indian Population.
Users spent 9.2 minutes per
visit, this is higher than
travel, books and electronics
indicating a more engaging
experience
Contrary to perception
males (60%) outnumber
females (40%)
Young Graduate Adults,
Middle - High Income
Groups. Long tail in terms of
lower Income groups is also
visible
15-24 Age group who will
lead consumption in the
coming decade.

Daily Deals
Figure 10 Daily Unique Visitors by Month (TTM)
%Users by Age
0 20 40 60
< 2
2 - 4.99
5 - 6.99
7 - 9.99
10 - 14.99
> 15
0 20 40 60
below 15
15 - 24
25 - 34
35 - 44
45 - 60
above 60
1.00 1.00 1.00 2.00 2.00 5.00 6.00 6.00 8.00 8.00
68.00
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Snapdeal is a clear winner
receiving on an average
425,000 Unique Users / Day
(Growing >3000% annually).
Remaining websites are far
behind at 30,000 UU’s/Day
In a month Snapdeal
reached around 13% of the
Indian Population.
Users spent 3.7 minutes per
visit, indicates casual
browsing, not enough time
for purchase
Students/Young Graduate
Adults, Middle - High
Income Groups. Long tail in
terms of lower Income
groups is also visible
15-24 Age group who will
lead consumption in the
coming decade.

Appendix 7: Google AdWords CPC by Segment
Clearly, CPC are highest for Deals and Electronics, whereas Apparel has very low CPC’s

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