eCommerce Bazaar
IDFC held eCommerce Bazaar” on Day 3 of the conference, hosting 8 private companies (apart from Info Edge among the listed names). These eight companies were from different segments of eCommerce – C2C online classifieds (Quikr), travel portal (ClearTrip), insurance portal (PolicyBazar), niche aggregators (FoodPanda, Urban Ladder, Local Baniya and Suvidha) and delivery specialist (Delhivery).
Brief takeaways from the AN OVERVIEW OF DISCUSSION AT E-COMMERCE BAZAAR:
CLEARTRIP
- Cleartrip is one of India’s leading online travel agencies (OTA) with a comprehensive suite of travel offerings. The company has been the first to market key travel innovations.
- OTA is a USD9bn market in India (2015E) and has been growing at 25% CAGR. Cleartrip is present in 6 other markets (largely in the Middle-East) apart from India.
- It is one of top3 OTAs in India and is the no.1 OTA player in the UAE. The company has much better profitability metrics than most of its peers.
- Cleartrip has cumulatively raised US$60m from multiple rounds of funding.
DELHIVERY
- Founded in 2011, Delhivery is a leading transportation/ logistics company, with a focus on delivering eCommerce goods. The company served 620m requests in FY14 and is set to serve over 2.3bn requests in FY15 (GMV of US$1.5bn), compared with 5.5m in FY12 and 170m in FY13.
- The company gets ~85% of its revenues from pure transportation and ~15% from fulfillment and technology back-end.
- As of Oct’14, the company delivered 3000 tonnes of load and was making operating profits. In terms of volume of delivery loads, the company could be either the No.1 or No.2 eCommerce logistics company (BlueDart being the other) in the Indian market. By value, Delhivery is the No.2 logistics company.
- Its top5 clients are FlipKart, Amazon, Snapdeal, Myntra and Jabong. The company has yet to figure out ways to partner with classified players like Quikr, OLX and JustDial.
FOOD PANDA
- Food Panda is an online food delivery marketplace with significant presence in Asia and Europe.
- The company has tied up with 10,000+ Indian restaurants and over 25,000 global restaurants. It does not compete with JustDial or Zomata, rather partners with portals like those for meal delivery.
- The key value proposition for customers is Choice, Convenient and Quality. The value proposition for restaurants is online presence and incremental revenues.
- The company has raised US$100m cumulatively from three rounds. The last round of funding got it US$60m, which was used for inorganic expansion (one each in Russia, LatAm and India).
LOCALBANYA
- LocalBanya is an online grocery retailer with operations in Mumbai, Navi Mumbai and Thane. Six more cities are expected to be operational over the next few quarters.
- The company does not maintain inventory and largely partners with both Cash & Carry agents (like Metro in Mumbai) and modern trade retailers (Hypercity) to provide a wide range of SKUs (~15K currently, targeted to increase to ~35K in few quarters) at a right price.
- LocalBanya provides the technology platform (for customer interface, delivery routing, etc) and controls last mile customer delivery with trained sourcing and delivery teams at key locations.
- In Mumbai, the company maintains inventory for one-fifth of sales for fast moving SKUs; in other cities, operations would depend on smaller distribution centers. Focus is on providing a wide range of SKUs with perfect delivery experience.
- Pricing is at par with modern retailers. The average cart size is ~Rs1500 with 20 items. Less than 1% of orders placed are returned; a return policy is in place with sourcing agents depending on product category/ SKU. Bigbasket is its only relevant competition in India.
POLICYBAZAAR
- Policybazaar is India’s largest online financial services platform. It sells motor insurance, health and medical insurance and life insurance.
- Almost a tenth of motor and medical insurance policies sold in India are from the online platform. On the other hand, a significant share of term policies and low-cost ULIPs are largely sold on the online platform as commission hungry offline agents do not sell term and low-cost ULIPs aggressively.
- Policybazaar enjoys almost 50% of the online insurance market, with the rest largely with online portals of insurance companies.
- The company gets revenues in the form of agent commission in selling policies and advertising on its website. The company clocked revenues of US$14m with positive EBITDA.
- The company has raised Rs880m from three rounds of funding.
QUIKR
- Quikr is one of the India’s top2 online and mobile C2C classifieds portals. Quikr services 900 cities across India and is seeing rapid growth as it gains customers from offline classifieds.
- The company has three revenue streams – premium listings, lead generation for SME businesses and advertising. SME contributes ~75% of revenues, advertisement ~15% and premium C2C listing ~10%.
- The company generates an annualized double-digit revenue run-rate in USD terms. The actual revenue figure is confidential.
- The company has raised close to USD200m from multiple funding rounds.
SUVIDHA
- Suvidhaa is targeted at ~92% of the population who cannot transact online. It is a real time extension of service providers’ (bill payments, telecom recharge, travel bookings, insurance premiums and cash remittances) window. Remittances account for ~60% of the transactions by value; other segments have a largely equal share.
- Suvidhaa currently has a network of 70-75K retailers to provide 300 services across 20 categories; however, only one-third of this is active. Retailers benefit from higher footfalls, an additional revenue stream and customer retention due to value-added services.
- The network processes ~3m transactions per month with a monthly run-rate of ~Rs5bn in terms of value. Suvidhaa charges ~1.5% commission on an average, of which ~70% is given to the retailer. The company makes a post-tax net commission of ~30bp.
- The company has grown ~2x yoy for the last 5 years and has an annual revenue run-rate of Rs180m; its net loss stands at ~US$2m annually.
- It has raised ~US$25m till date from three rounds (last in 2011) and is considering raising another round of US$10m-15m in the near term.
URBAN LADDER
- Urban Ladder specializes in online sale of home décor items. Its initial focus was on furniture. The company closely works with suppliers and ensures high quality at reasonable prices.
- The company serves seven cities. Till a few quarters back, it was focused on Bengaluru, Mumbai and Delhi and recently added Hyderabad, Chennai, Ahmedabad and Pune. The company has plans to expand its reach to 15 and 25 cities in next two expansion rounds over the next 1-2 years.
- As per the company, the Indian retail market is US$500bn, with home decor accounting for US$30bn-35bn (expected to grow to US$40bn-42bn in the next three years).
- The company’s focus is on products, customer service and long-term sustainability. While ensuring the right product mix and high quality, the company has maintained financial discipline. The company neither doles out aggressive discounts nor prices its products too low.
- Urban Ladder’s average ticket size is Rs20,000. Sofa, beds and wardrobes account for the bulk of sales. The current annualized revenue run-rate is US$15m. The current number of visits is over a million per month and has been growing by 20% mom.
SOURCE: IDFC Securities “The Stock called India”
