The year 2014 for e-commerce companies was about survival and emergence of startups like Flipkart, Snapdeal and forcing Amazon to enter the Indian E-commerce scene. It was about competing with offline shopping stores, struggling to change consumers’ perspective about shopping expensive electronics and clothes online which for Indians was still a new idea. But in 2015, the e-commerce market very successfully excelled the shopping space overthrowing the dominance of offline stores in Tier 1 and Tier 2 cities of the country with the ease to shop and discounts which these sites had to offer.
According to tracxn, a company that deals with information on start-ups, in 2015 Venture Capitalists invested $5.7 billion in Indian start-ups which is a 39% of increase from 2014. Who said the e-commerce market today is saturated for new businesses? With the trending news of offline retail giants like Reliance, TATA and foreign investments from Alibaba making an entry into the e-commerce space in 2016, the competition for existing players will get stiffer and this sector will definitely be the one to look upto.
Reliance will be launching in e-commerce industry by the end of this fiscal year, entering the competition with expected 1,50,000 small and mid-sized vendors. It is interesting to note that Amazon after its 2 years of operations in India has 50,000 vendors whereas Snapdeal after 3 years in marketplace is said to have 2,00,000 vendors. As reported by Economic Times, Reliance will be starting its operations with electronics products which will be ready with 30,000 vendors by the end of December. Further they plan to operate into online grocery marketplace by the fourth quarter.
Alibaba entered the e-commerce scene in India through its financial arm Ant Financial, making an investment of about $575 million in Paytm, owned by One97 Communication for a stake of 25% making the total investment of about %1.2 billion from Alibaba.The company which is already operating in B2B online business in the country is now shifting its focus on B2C business model.
Alibaba plans to raise SME sellers in India from 4.5 million to 10 million next year. The company also invested in Bangalore based mobile and analytics solutions company Globals earlier this year.
Online clothing companies like Jabong and Myntra saw a new competitor abof.com, an Aditya Birla Group venture in October this year. The company sells 55 brands along with the parent brands like Louis Philippe and Van Heusen and is also introducing an amazing new concept of 3D trial rooms where customers can try clothes online. The fashion store aims to cover 15% of the market share of country’s online clothing sector in the coming 5 years.
TATA is the next biggie expected to invest Rs.1,000 crore in its the online retail venture by the end of this fiscal year which will be offering Tata and other brands’ products. TCS is reported to be the software backbone of the venture. The group has included 80 brands under its venture which will be offered on its website and omni-channel options. The company’s integration with online and offline channels will give the venture an added advantage above the obvious TATA’s brand name.
The e-commerce space accounted upto $17 billion in 2014 which rose to $20 billion in this year and
is expected to grow upto $60-70 billion by 2019. As reported by Goldman Sachs, the e-commerce market is growing so fast that it will account to 2.5% of the country’s GDP by 2030, increasing 15 times to reach upto $300 billion.
To sum up, in the new year 2016 E-commerce marketplace will definitely be an interesting space to look forward to with the existing market players dominating the sector and the entry of corporate Giants spicing things up!
Wish you all a Happy New Year! May this New year bring you with more savings and heavy discount offers! :p