Wednesday 30 December 2015

2015: When ecommerece grew, despite the bumpy ride

With a big push from smartphone-driven Internet growth, 2015 was the year in which e-commerce in India came on its own. Apparels and electronics slowly started overpowering, till now the dominant travel segment. As per Mary Meeker’s State of Internet report, 41 per cent of traffic for these sites comes from mobile, the highest for any country.
India also saw a growth of tech-startups around food, hyper-local services and digital payments as well, but the focus for most of these was firmly around mobile. So what were the trends for tech and commerce space in India in 2015 ? Here’s a quick recap.

App-only vs rest
  The ‘app-only’ debate occupied a central space in India’s e-commerce discussion in 2015. Flipkart-owned Myntra shut-down the desktop and mobile sites and went app-only in May. It was reported that Flipkart would follow soon; even its Big Billion Day sale in October was an app-only affair.
Many questioned whether it was wise for Myntra to deny users an option of using desktop, but most agreed that it was a bold move.
But in November, we saw a u-turn of sorts, with Flipkart re-launching its mobile website restricted to Chrome on Android. In December, Myntra’s mobile website was also back, but only for some sections, with actual purchase option still limited to the app. Rival platforms like Snapdeal said that for them it would never be a case of app vs the rest.
While Flipkart’s desktop website is still very much here as 2016 begins, the app-only debate is likely to continue. After all, many of India’s first time Internet users will be mobile only.

Smartphone exclusives
  Online smartphone sales grew in a big way in 2015 and along with this came exclusive tie-ups between e-commerce portals and smartphone manufacturers. The flash sale model, first introduced in India in 2014, gained ground with limited stocks helping build hype around these products. 

Fashion retailers
   Even as Amazon became the most visited e-commerce site in India for October 2015, comScore numbers showed that Jabong, a fashion-only retailer, was also in top four, along with the big boys like Flipkart, Snapdeal. A Google report in March 2015 said that online fashion retail will be worth $35 billion in India by 2020, and of course nobody wants to miss out on a share of this pie. While Myntra and Jabong have become the biggest names for only fashion portals in India, others like Limeroad, YepMe, Zovi have also managed to carve a space for themselves. Investors also backed these portals: Limeroad raised $30 million in series C funding, while YepMe got $75 million from investors in Malaysia. Most noticeably, the Aditya Birla Group entered the space by launching its own fashion online portal called Abof said it won’t focus on just offering discounts and will keep the number of brands restricted.

Discounts, discounts 
   Big Billion Day sale, Dil ki deal, Great Indian Freedom sale; discounts are what reigned supreme in India and e-tailers are happy to make these the focus. Fashion portals in particular specialise on giving alerts, notifications to highlight the deals of the day and for the customers, this is mostly a win-win situation. Most of us know, if Flipkart is hosting a big sale, be assured that the rest (read Snapdeal and Amazon) will follow. Discounts and sales also mean a big boost for these business. Flipkart claimed that its Big Billion Day sale hit a target of $300 million GMV, while Amazon claimed that its Great Indian Festive Sale saw a 400 per cent increase in traffic with over 65 per cent of orders coming in from tier-II and tier-III cities. For most e-commerce portals, the next level of growth is definitely in these towns and discounts are the way to acquire more customers. Even online food-delivery start-ups focused on discounts. FoodPanda gained popularity through discount coupons, deals on orders and even Zomato offered discounts as it entered the online food-ordering space. Bubble fears, spate of firings But it wasn’t all good for the tech start-up and e-commerce scene in India. Flipkart reportedly transferred around 300 lower level employees to BPO firm Serco, in a bid to restructure, which sparked resignations from those affected. Zomato laid off around 300 employees in November. Then there was’s CEO Rahul Yadav, who decided to feed journalists two different sets of information to have some fun and sparked a serious debate in media about how start-ups were being valued. Yadav also had a very public tussle with his investors, which eventually led to his sacking. TinyOwl became a case study of how not to handle firings at start-ups, as angry sacked employees held one of co-founders hostage for nearly two days. LiveMint published a devastating report on FoodPanda, showcasing a lot of what was wrong at start-ups with very little accountability. The story alleged that company’s own employees had been manipulating accounts, along with charges of fake orders and fake restaurants. Just this week, FoodPanda laid off 300 people. While most reports say that e-commerce will be big for India in the coming years, the spate of firings have raised concerns that they are all sitting on a bubble. No doubt India has seen a mushrooming of these new age companies with many offering exactly the same services, and some being modelled on the bigger ones prevalent abroad. For consumers, the number of options have increased but the question remains: which ones are actually useful and will be around, say even five years from now. But given that investor funding has continued and big players announcing support for start-ups, for upcoming tech entrepreneurs the party is likely to continue well into 2016. 

1 comment:

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