Watch Out! These 5 Indian E-com Players Can’t Stop Growing

Is e-commerce 2.0 over in India? Going by the recent ripple of mergers and closures, impacted by an overall volatile economy, we often assume the worse. Investors’ loss of trust in the Indian ecosystem has become a litany for some time now but in spite of the downtime, a handful of Indian e-commerce firms have hit the headlines in 2013 for fast-paced growth and the big bucks they have managed to raise. Their operations vary widely – it can be as simple as business listing, as predictable as selling books and lifestyle items online or as unique as creating a whole new platform for a consumer requirement. But routine or innovative, these six Indian companies have gained both investors’ support and consumer trust that keep them going. Find out what’s making them tick while we bring you a tongue-in-cheek account of possible mergers & acquisitions that may happen on their way.


JustDial: What’s next after a roaring listing business?
Forget MakeMyTrip and its iconic NASDAQ listing – here is one success story just as good. Fresh from a mind-blowing IPO that was oversubscribed 12 times, this India-focused local business listing site has already entered online food ordering space and has some more projects in the pipeline. Of course, the Rs 950 crore IPO – a pure offer for sale in which founder VSS Mani and investors, including Tiger Global, Sequoia Capital and SAP Ventures, sold some 1.75 crore shares – is the largest on the Indian bourses this year and one of the biggest by an Indian Internet firm.

However, the start-up had done its fair share of tight-rope walking earlier in the day. Since his first-ever business directory service AskMe failed in the early 90s, Mani made sure to make the next initiative failure-proof – taking one cautious step at a time (initially answering consumer queries over phone, then graduating to web queries and next moving on to mobile apps). Finally, India got its biggest business listings company, built from a paltry seed capital of Rs 50,000. And here is another interesting bit of information. Since 1999, Mani had taken six shots at the bourses and the last one has gone right home.

Road ahead: What feels good about this start-up is that, JustDial is already up and about, looking at new businesses. In a recent media interview, Mani confirmed that the company would soon expand its online service range – diversifying into cab, movie ticket and doctor appointment booking.

If consolidation happens: What if... search giant Google wants to focus more on India and requires a local partner that has scale and reach across multiple businesses? In fact, Google India has already introduced Product Listing ads that will display features like product images, pricing and more, to highlight merchant offerings. Will it thrive more if JustDial comes on board?

Snapdeal: All about pivots, deals & marketplace, but can it do a TaoBao?
Talk about pivots and you have Kunal Bahl who has done it as many times as Robert Bruce and courted success. His business pivoted seven times as Bahl started by selling restaurant deal vouchers (and printed ones at that); came up with a daily deal site and finally pivoted to a zero-inventory, e-commerce marketplace just like Amazon, with a B2C (business to consumer) focus. That definitely makes it different from eBay India where the focus is C2C. Snapdeal claims to be doing it big – with 20 million registered users and around 14-15 million visitors each month, according to his recent interaction with AllThingsD. And a total funding of $114 million or so (eBay is an existing investor in the company as well) definitely speaks a lot in terms of investor confidence. Snapdeal is not profitable yet, but it is eyeing an annual GMV of $400 million this fiscal and wants to do a billion dollar in GMV by 2015.

Road ahead: Media reports say Bahl is all set to do a TaoBao Mall (a dedicated B2C e-commerce marketplace run by China’s Alibaba Group) right here in India. The seasoned entrepreneur prefers to call the marketplace a vast product discovery platform with fast and furious growth and has recently introduced a customer protection service called TrustPay – a service that ensures 100% money-back guarantee in case of any issue with product quality, size or delivery. It also serves as a seller protection service against any kind of consumer fraud. Snapdeal’s agility to move ahead of the market could be its USP, especially now that it has started working on ad revenues, but can it really achieve the momentum and the scale in the Indian context?

If consolidation happens: That eBay is one of the investors in Snapdeal is an interesting fact. If the company ever considers a readymade marketplace with a B2B focus, this will be a good deal. Then there is Amazon India who could be buying out all competition. But given a choice, would it buy Flipkart or Snapdeal? Well, your guess is as good as ours.

Flipkart: Big bucks are rolling in, but is the business booming?
Don’t shop, Flipkart it – that’s the new mantra of this prolific e-com player, founded by Sachin and Binny Bansal (they are not related). They started as a book e-tailer, but soon expanded into all possible categories – from fashion to fitness and accessories, gadgets & electronics to home & lifestyle products, baby care items, toys and more. The success mantra is simple – best pricing and speedy delivery, backed by a dedicated logistics team. Understandably, the traction is awesome – the company claims to have 10 million registered users and over 1 million unique visitors a day.

Flipkart has recently raised a fifth round of funding worth $200 million from its existing investors – Tiger Global, Accel Partners, ICONIQ Capital and South African Internet company Naspers – taking the total funding to more than $380 million. But that doesn’t mean all is well in paradise. It has recently shut down some digital businesses like Flyte (a much-hyped MP3 store launched only a year ago) and cut down on a number of electronics categories. On the plus side, it has launched its own payment gateway called PayZippy, introduced a voice-based search on the site, started selling e-books and has come up with a marketplace where third party vendors can sell directly to consumers. Flipkart has also entered a deal with the US-based indie e-book distributor Smashwords, Inc., which gives it access to Smashwords’ eBook store – a catalogue of 2 lakh-plus vetted and formatted e-books from more than 60,000 authors and publishers.

Road ahead: Ambitious, to say the least, especially after the Series E booster. Just like Snapdeal, this e-com biggie wants to reach an annual GMV of $1 billion by 2015 besides doubling up the number of sellers on the marketplace to 1,000 by the end of this year. Although Flipkart is constantly harping on global level hiring, the biggest chunk of the funds raised is bound to be spent on technology, supply chain and (don’t be shocked) product development. PayZippy could be just the beginning and going ahead, Flipkart may evolve into a technology enabler for offline businesses keen to have an online presence. Infibeam’s Build A Bazaar, SmartStore from BigFoot Retail and PayU India’s PayUPaisa are doing just the same, but Flipkart can actually do a PayUPaisa by integrating the proprietary payment gateway with the Web stores for additional revenues (just like PayUPaisa does).

But it is the Smashwords deal that intrigues us most. According to Nielsen BookScan Retail Panel data, in 2013, Flipkart holds an average of 40-45% in terms of value when it comes to the organised books market in India and the company has plans to grow it substantially. If that happens, it will become the undisputed market leader in the books category – both online and offline. And before we forget, Flipkart may focus even more on private labels – it already markets a private label brand called Digiflip for digital accessories such as laptop bags and camera pouches. But the biggest challenge is to get over the few setbacks, bring back the positive drive and get ready for a much-anticipated IPO.

If consolidation happens: A head-on between Snapdeal and Flipkart or Amazon and Flipkart will be extremely interesting. However, the company is not losing much sleep over the competition from existing marketplaces. Another possibility is Flipkart acquiring Tradus since they have a common investor in Naspers and such deals have taken place before.

Jabong: Fashion e-tailing on a roll, but for how long?
Shun the incremental and go for the leap, said Jack Welch of GE. And if there’s one online retailer in the fashion and lifestyle segment that has literally fallen for this mandate, it’s Jabong.com, the dark horse in the fiercely competitive Indian e-commerce space. In less than 20 months, the Rocket Internet-backed venture has banged into the top rung – the third most-visited online shopping site after Myntra.com and Flipkart.com, according to a recent report by comScore. Reasons for such eyeballs? Huge inventory, aggressive marketing, speedy delivery and best-in-class customer care (including third-party logistics services). The deep pockets of the Samwer brothers help it burn the cash left, right and centre, and around 50-60% of its sales are coming from small towns, its founder, Arun Chandra Mohan, said in a recent media interaction.

Road ahead: Could be bleak, going by Rocket’s reputation of creating hype and disposing its assets at the earliest. Jabong claims to do around 14,000 orders a day (average ticket size not disclosed), but it is yet to hit profitability. The company is said to be experimenting with private labels, but does not seem to be pushing it big time in spite of potential big margins. Moreover, just like Flipkart, Jabong has also handed out the pink slips. At the end of the day, it has to find a viable business model and we hope that the third-party logistics can bring in some hard cash as e-tailing spreads across the country.

If consolidation happens: A takeover bid, either by Myntra or by Flipkart, will definitely put the bidder on the top. However, Flipkart is an unlikely candidate as its late initiative to enter fashion and lifestyle space is yet to gain traction and scale. Of course, it is not lacking in funds, but considering that the firm has already launched a marketplace in April this year and facing some stiff competition from Amazon India and other desi e-com marketplaces, will it really invest in an inventory-led model? Myntra, on the other hand, could be game if it is seriously considering a No. 1 slot. Interestingly, Bangalore-based Myntra is one of the heaviest funded players in the e-commerce space and has raised around $64 million till date. It has also made some interesting acquisitions and a shot at a competitor might not be unlikely.

Just Zomato it: You can’t find a spicier chunk of food business
Is this online restaurant guide doing a Jabong in terms of fast and furious growth? Well, apparently, going by the latest report card. Just five years into the business, this Gurgaon-based firm has expanded to 28 cities across 8 countries (India, the UAE, Qatar, Sri Lanka, the UK, the Philippines, South Africa and New Zealand) – with listings of over 1,18,000 restaurants and 15 million monthly users (web and mobile). And it all happened because founder Deepinder Goyal, while working for Bain & Co. in Delhi, decided to do something about easy access to food joints, rather than stomaching an overcrowded office cafeteria or flying blind to find nearby eateries.

Zomato’s USP is its user-generated reviews (pretty stringent, going by the new parameters set up not too long ago). Moneywise, it is pretty well-funded. Info Edge (India) Ltd, which runs a string of consumer internet portals including the coveted job listing site Naukri.com, is the majority stakeholder in Zomato and invested around Rs 86.06 crore in the company.

Road ahead: Next destinations are Brazil and Turkey, to say nothing of the recent tie-up it had with UK-based toptables for restaurant booking in London, Manchester and Birmingham. And for a change, this start-up has reached break-even in India and Dubai could be next on the cards. As of now, revenues roll in via ads, event ticketing and restaurant booking.

If consolidation happens: If you are not on Zomato, you are not really there – that’s how the saying goes for restaurants. So the next logical step is to expand into restaurant booking (it has already done it in the UK) and online food ordering. Zomato has reportedly declined such expansion plans in India, but going by JustDial’s latest foray into the online food ordering space, a look at Foodpanda (India), a food ordering platform backed by Rocket Internet, or other homegrown restaurant reservation sites like TableGrabber.com, Dineout.co.in, PoshVine.com and Tablewalla.com may just work out well for Zomato.