Multi-billion dollar investments in eCommerce Sector
Internet penetration in India has been increasing exponentially – in 2006 there were only 21 million active internet users, which rose to 243 million users by June 2014. Simultaneously, the number of active mobile internet users grew to 185 million. The significant rise not only brought heavy data usage in the form of social networking, but it also gave a thrust to the e-commerce in India. India’s ecommerce market is estimated to have reached reached about $10-16 billion last year, with an annual increase of 88% and analysts project that by 2020 it could be worth a whopping $60-80 billion.
In a way, e-Commerce in India was kick-started in 2004 when eBay started its operations in India by acquiring Avnish Bajaj’s Baazee.com, which was India’s largest online auction portal. This was followed by two IIT-Delhi and ex-Amazon employees Sachin Bansal and Binny Bansal starting Flipkart in 2007 by investing 2 lakh rupees each as an online book retailer. In the same year, Mukesh Bansal, Ashutosh Lawania and Vineet Saxena started an online portal to customize goodies called Myntra. These pioneering companies had to undergo many a hurdle and pivot countless times to arrive at the optimal model for reaching out to the Indian market, with its own unique user behaviour. With perseverance, these e-commerce portals started winning the trust and confidence of Indian population and people gradually started shopping online. But the game changer that provided the much needed growth steroid was Cash on Delivery, which made online shopping very accessible in a country like India where the credit and debit card penetration is extremely low.This unique payment collection model even gave birth to startups like Gharpay. In 2010, Snapdeal an online platform started providing daily deals but pivoted into an e-commerce company via the marketplace model. Snapdeal is one of the first online marketplaces in India.