Press Release | May 3rd, 2018
Here are some insights on Indian Consumer Internet Industry:
E-tailing: Indian e-commerce Industry has the two-fold challenge of “Fewer people buying” and “People buying less”
According to RedSeer, “India has one of the lowest online shopper penetration in comparison to other countries which signifies that a small share of internet users is buying online. However, the penetration in metro and tier-1 cities is growing at a faster pace than tier-II cities.”
“Also, the annual spend per shopper on online shopping is still very low in comparison to US and China. This is not so much a sign of worry as Indian e-commerce is on a growth phase and the new consumer coming to the platforms, shops for lower price standardized products. We feel going forward the online shopper penetration will increase and the e-tailer will be able to provide a good experience resulting in the consumer buying more,” said RedSeer.
Retail: 64% local restaurant/bakery in metros and 52% local restaurant/bakery in T2 cities are willing to use software for managing business
The local restaurant/bakery shops have become the target market for a bunch of upcoming startups who are trying solve the day-to-day business problems for them. With about 64% local restaurant/bakery in metros and 52% local restaurant/bakery in T2 cities willing to use software/technology for managing business there is a huge market potential for these offerings. We feel going forward this segment would be interesting to look at as a number of startups would target it by trying to solve various problems like inventory management, account management etc.
Online Mobility: The industry has drastically reduced the average fare of share rides to increase adoption
The online cab aggregators are focusing big time on the pool/share category. As it is a category that is valuable to the consumers and provides better utilization of the fleet. The cab aggregators have hence slashed the prices of this category by more than 30% across the top cities in the last one year to increase the user adoption. The consumers, on the other hand, have started using the share/pool category for shorter distances thus bringing down the average fare levels.
Food-tech: The Indian Online Food Delivery is a ~$0.74 bn market with a high concentration in the top 6 metros
The Indian Online Food Delivery industry is highly concentrated in the top six metros. The top six metros have a total market size of $ 700 mn roughly 94% of the overall market. The key reasons for this have been urbanization and changing lifestyle coupled with increasing affordability and growing online penetration. We feel going forward the online food delivery players will focus on increasing their presence outside the top six metros to fuel their growth plans.