eCommerce & evolution of Snapdeal.
com
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eCommerce
e-commerce, is the buying and selling of product or service over electronic systems such as the Internet and other computer networks. Amazon: Started with books mainly Started marketplace model. More than 40% revenue from this Powerful search & reviews and ratings Dell: Sold assembled computers online More than 50% revenue comes from website eBay: Online auction site Seller ratings
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eCommerce
Power of eCommerce:
Unlimited assortment Search Reviews and ratings Convenience of ordering from home / office Usually, cheaper prices Extremely easy to compare prices online
Challenges with eCommerce:
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Concerns related to transacting online Building entire supply chain Monitoring quality Compete with several players at once Buying a product without physically touching it
eCommerce in INDIA
eCommerce in INDIA
Key factors influencing eCommerce growth in India:
Extremely low cost of PCs Ever growing use of internet Rising middle class with high disposable income Limited reach of certain brands to people in tier 2 cities Cash on Delivery Change in mindset: Irctc.co.in Matrimony sites Job sites Online travel agents (makemytrip.com) .
eCommerce in INDIA
Growth of eCommerce in India.
(Internet and mobile association of India)
eCommerce in INDIA
%reach (travel)
eCommerce in INDIA
%reach (retail)
eCommerce in INDIA
%reach (retail across categories)
eCommerce in INDIA
Evolution of snapdeal : Plan A
MoneySaver: A printed booklet
In US, 400 billion coupons were sold in 2007, in India this was 0.
In few months, coupons expired leading to useless inventory
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Evolution of snapdeal : Plan B
Coupon on mobile.
Buy a scratch card worth 99 & get coupons on mobile. Internet penetration was quite low compared to mobile (2008) In free trial, 1 lac customers signed up, but barely a few paid.
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Evolution of snapdeal : Plan C
Money Saver prime card was launched.
Distributed through CCD Limited customer touch points Also offered to corporates, to pass on to employees (B2B2C) Corporate & Snapdeal co-branding
A good relationship with merchants was built
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Evolution of snapdeal : Plan D
Snapdeal.com was launched (Feb, 2010)
A merchant partner suggested this to CEO Goal was to achieve 100 transactions / day after 3 months. It happened in 3 weeks Acquired grabbon in June 2010
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Evolution of snapdeal : Plan E
And we decided to be even closer to customers !!!
By offering them products across 17 categories Products sold across 12,000 pincodes in India
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Evolution of snapdeal : Plan F
The grandest of them all MARKETPLACE model !!!
Brand stores Many brands do not have ecommerce site Or, dont have the expertise to handle backend 3000 brand stores already in, expected to reach 10,000 Allowing vendors to upload and manage products
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Evolution of snapdeal : Plan F
Brand store for Apple
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Evolution of snapdeal : Plan F
And off course a revamped mobile site !!!
Doubled the revenues within one week Still it seems there is a lot of untapped potential
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Culture at Snapdeal.com
Making complex decisions
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You are leading the engineering team
Its Christmas time and marketing head approached you to put Christmas theme on website Director of production systems is skeptical to do any changes on the website considering huge traffic Product Head wants to get this done asap as this will directly increase conversion ratio and traffic on site
YOU have to decide on what to do !
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Culture at Snapdeal.com
Managing stress and being solution oriented
You are Release manager You are managing a big feature release which is expected to boost revenue by 20 lacs per day
Feature releases will usually happen after 00:00 hrs since traffic is lesser then
At 5:00 AM, test manager has discovered some issue
What do YOU do now ?
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Culture at Snapdeal.com
Be flexible and agile
You are in the middle of a feature release Suddenly iPhone 5 is launched and your Business Development team has tied up with a telco for exclusive launch on your site If you launch iPhone 5, you are jeopardizing other features If you do not launch iPhone 5, you are giving up a good chunk of revenue
What do YOU do?
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Culture at Snapdeal.com
Dealing with Trouble
You are Project Manager responsible for all engineering deliverables Product head and sales teams say that targets can not be met because of engineering team You know that is not true and you are being urged to stop supporting other departments. Give it back to them.
What do YOU do?
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Future of eCommerce & Snapdeal.com
900 million mobile users Mobile users expected to touch 1200 million by 2015 27 million active internet users Currently, only 3-4% are buying on mobile. Expected to be 20%
Mobile
Internet
124 million internet users (all devices) 10% penetration 75% of online audience is between 15-34 years of age Retail has grown by 43% online and reaches 60% penetration among online users
Others
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eCommerce revenues expected to increase from USD 1.6 billion in 2012 to USD 8.8 billion in 2016 52 eCommerce companies raised USD 700 million from VCs in last 3 years Currently more than 80% revenue is from travel, but abroad this is around 35%. Online retail is expected to grow
Future of eCommerce & Snapdeal.com
Factors influencing growth
VCs are bullish on eCommerce growth: Invested US$ 177 million in 2011
Online grocery shopping is starting to appeal to upper and middle class consumer eCommerce is expanding into non metropolitan India More than 50% of sales of Myntra.com are from outside top 10 cities in India Social media and mobile are helping accelerate eCommerce adoption India is Facebooks third largest audience in the world
Large retailers are looking to build online presence Chroma
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Future of eCommerce & Snapdeal.com
Challenges
Payment gateways are terribly inconsistent (35% failures) Upto 70% transactions of some eCommerce companies are through COD
23% online shoppers prefer COD. Mainly first time shoppers In Myntra, 60% transactions are through COD Return rate for COD is upto 25% in some categories
Card on Delivery in also provided by several players Logistics remain an issue Flipkart chose in house delivery solution. A model used in China and Russia as well. Several payment methods are a must to keep your business going, Credit Card, Debit Card, Net Banking, Pay Pal, COD
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Future of eCommerce & Snapdeal.com
Challenges
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Future of eCommerce & Snapdeal.com
Expectations of customers in India
Consumers are already trained to expect low prices online
Free shipping and quick delivery
Homeshop18 offers free shipping
Return process to be seamless and convenient
At home pick up for returns
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Future of eCommerce & Snapdeal.com
Look forward to following in future:
Increase in online shopping, since credibility is built now
Comparison of features and prices online will grow tremendously
Users will go online for reviews and ratings
Social networking and search will contribute significantly in eCommerce growth in India
References:
State of Ecommerce in India - Sept 2012 (A research report by comScore for ASSOCHAM INDIA). Trends in Indias eCommerce Market By Forrestor research for ASSOCHAM INDIA.
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Future of eCommerce & Snapdeal.com
Mobile will play a crucial part as it will grow significantly
References:
Mobile internet in India - IMRB
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Future of eCommerce & Snapdeal.com
Number of mobile internet users is now more than desktop internet users (June 2012 onwards)
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Thank You
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