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Roller-Coaster Ride - From 1999 To 2021
The ecommerce sector in India has undergone several changes from its early days to become the behemoth it is today, becoming core to all consumer facing businesses
Photo Credit : Shutterstock
I was first enamoured by the opportunity of ecommerce in India back in 1999, so much so that I had blocked a potential website domain, that expired eventually, by the name of Munafa.com. Such was the flurry of activity in the dot-com era, which marked the second half of 1999 when everyone with an idea wanted to do something.
At the time, I was at Microland when Pradeep Kar had envisaged the big internet opportunity and PlanetAsia was one company that I thought had massive potential though several of his ventures were much ahead of its time. However, some of the biggest names of the industry came from Microland as entrepreneurs so I am very proud of being part of such an alumnus.
At Microland, I was introduced, for the first time, to a company called Fabmart.com and I made my first-ever online purchase. It was an audio cassette. Having broadband at the office made life easy, a speed of 100 kbps was like god’s gift to mankind then; today we know that such speed means nothing but back then it enabled me to complete a transaction online using my first ever credit card from ICICI Bank. I still remember the audio cassette I purchased — it was Hum Dil De Chuke Sanam and I got it delivered in four days. I think it cost me Rs 60; I am not quite sure about the price, but it made me feel highly empowered.
The Ecommerce Pioneer
That is when I first heard of K. Vaitheeswaran who was also referred to as the Father of Ecommerce in India. I have had the opportunity of meeting him several times and I will never forget the one meeting while I was at Yahoo, when I had gone to Bangalore to visit him. The struggle was evident at the time, despite them being in the business for a decade but his enthusiasm for the future of ecommerce and what it could be like always had a positive shine during our discussions.
We had Buyasone.com, a group buying portal that wound up in early 2001, and Baazee that was launched by Avnish Bajaj and team and eventually became eBay. The seeds were sown back then to what we see today as a mature business. Had it not been for Vaithee, Avnish and a few others, none of what we see today would have happened.
After this burst, in 2008, Sachin and Binny Bansal launched Flipkart, the Indian version of Amazon by beginning to sell books and quickly went on to launch several other categories to become household names. Some of the biggest names in the investment world ploughed billions of dollars, which enabled them to build a market in India eventually. The big growth story happened when cash on delivery or COD was introduced, propelling the sales in Tiear 2 and Tier 3 markets, thus paving the way for a revolution to begin.
A Way of Life
Fast forward 2021: India is the fastest-growing ecommerce market in the world with estimated transactions worth $80 billion in 2021, and seen going to $200 billion by 2027-28. This is visible thanks to the infrastructure laid down by Jio and the government policies around FDI (foreign direct investment) and the Digital India revolution that has ensured payments are seamless, making ecommerce a way of life even for the common man. It is no longer restricted to a privileged few who have credit cards in this country.
To this effect, PayTM, Google Pay, PhonePe, etc. have played a pivotal role, backed by some of the strategies adopted by companies such as One Plus and Xiaomi who launched their products just at the right time when smartphones were the need of the hour to power the digital revolution.Who would have ever thought that a mobile phone would be launched on a Flipkart or an Amazon in 2000s? But today that is the reality and if you look at the fastest-moving consumer goods, the definition has changed for the category with mobile phones leading the march even today, when festive sales happen on most platforms.
There have been some incredible stories around some of the turnarounds in the category. Look at Snapdeal, a company that has been the most resilient. From the point of getting sold to Flipkart to holding off hostile takeovers, Kunal Bahl and Rohit Bansal have shown how companies can rise like a phoenix even from the brink of bankruptcy, clearly indicating that Indian entrepreneurs are made of absolute steel and a vision can never be compromised if you have the right intent.
The Next Big Push
Today we have a plethora of ecommerce companies in India, and categories are expanding from groceries to pet care. However, the next big push is coming from the kirana stores right next to you. With JioMart, O2O is born! Online to Offline is a big deal in India given the number of kirana stores that operate in the country. Connecting them to a platform like JioMart ensures that absolute complementing of a model, that did not exist until about two years ago, takes place. Such is the pace at which innovation is happening given the size of the market that India is.
With JioMart, Reliance Retail is roping in kirana stores as partners to sell products while completely moving away from the direct-to-consumer approach in the packaged food, grocery and FMCG products.
This is a big game changer and is visible in its adoption too. It is reported that they have more than three million active users and over a million downloads daily, which means they have already taken the numero uno spot in the grocery category beating both BigBasket and Grofers. BigBasket now is owned by the Tatas and Grofers saw an infusion of more than $100 million from Zomato recently.
What All This Means
Of the 1.3 billion Indians, 700 million are connected to the internet through a smartphone, and only 200 million from these are enjoying ecommerce, which effectively means there is an addressable audience of at least 500 million more. Though only 25 per cent of them may be immediate targets while the rest are nurtured in time. India has tremendous potential.
With Walmart-owned Flipkart and Amazon being frontrunners, Indian entrepreneurs are no less; given the grand opening we are seeing for Zomato, PayTM and the likes with their IPOs ecommerce in India has truly arrived.
Did you know how important advertising is for all the ecommerce brands we are talking about? As per eMarketer, Amazon grew its ad revenue globally by 77 per cent to a whopping $7 billion, which is 7x higher than Twitter’s revenue, making it the third-largest ad platform after Google and Facebook.
This clearly indicates the kind of power in the audience it has, and how important advertising as a vertical is for them. We are seeing massive traction in India too on these platforms and with the kind of opportunities they present, ecommerce advertising will possibly be the fastest growing avenue for brands to capitalise from.
There is enough evidence about the opportunity and scale at which we are operating and some mind-boggling data points that might lead you in getting an idea around any potential ancillary business pivoting around ecommerce, giving birth to the power of entrepreneurship in you.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.