Unveiling the Thriving E-commerce Startup Landscape: A Gateway to Digital Success

Summary of Report "State of Indian E-commerce" published by Inc42 Media

1.) The current E-commerce market is valued at $100 Bn in 2022 and is expected to become $400 Bn by 2030 growing at 19% CAGR and shopper base will become 2x i.e. 500 Mn+.?

2.) There are a total 10K startups in this sector and only 7.5% are funded ones. 24 Startups have achieved the status of Unicorn i.e 0.2%. India has received $32 Bn total funding in the last 5 years, highest after the US and China. Beauty & Personal Care, Food & FMCG, Fashion & Apparels, Electronics & Appliances are top categories growing at the highest CAGR of 27%, 25%, 24% and 16% respectively.

3.) E-commerce startup landscape is divided into 6 parts - B2C (Flipkart, Snapdeal), B2B (Udaan, Indiamart), D2C (Lenskart, Boat), Recommerce (Car 24, Cardekho), Social Commerce (Meesho, Bulbul), Roll ups (Goat, Mensa brands).?

4.) Snapshot on Q1 2023: $633 Mn+ total funding with 38+ deals with median deal size of $2 Mn. Deal count declined by 64% however, total funding amount has increased by approx 50% as compared to Q4 2022. Omnichannel strategy is expected to be a key theme for ecommerce startups in 2023.?

5.) Riding the wave of digital disruption, the D2C sector continues to command the lion's share of funding (87%) and deal count (68%) in Q1 2023, revolutionizing the way consumers connect with brands.

6.) Lenskart, with $500 Mn funding, was the only ecommerce mega deal recorded in Q1 2023 and majority of the deal valued less than $2.5Mn. Other notable deals are Zetwerk, The Ayurveda Co., Gynoveda, Bike Bazar.?

7.) Delhi NCR remains the top destination surpassing Bengaluru in Q1 2023 with 80% of total funding. Most Active Investors are Aman Gupta, Veneeta Singh, Alteria Capital, Anupam Mittal.?

8.) Exit Landscape: The M&A landscape in the ecommerce sector witnessed a significant downturn in Q1 2023, with a staggering 60% quarter-over-quarter decline leading to only 2 exits, highlighting the shifting dynamics and challenges faced by industry players.?

9.) Upcoming IPOs: Flipkart, Snapdeal, Firstcry, Droom, Mamaearth?

10.) Opportunities Ahead: Global cross border e-commerce market is valued at $991 Bn in 2022 and growing at a CAGR of 25% to become $5908 Bn by 2030. India has 22% market share with exports valued $750 Bn+ in FY 2022-23. USA, UAE and China, were the countries where India has exported the most in 2022.?

11.) Value Chain in Cross border: D2C/ B2C brand - Shipper - Pickup center - Regional/ National distribution center - Origin country gateway - Recipient - Delivery center - Regional/ National distribution center - Destination country gateway - International distribution center?

12.) Apparels, Jewellery, Toys and Home Decor items are the top categories of products selling cross border through Amazon Inc.?

13.) Financials FY22 of key D2C brands: Nykaa - $472 Mn (+55%), Boat - $360 Mn (+119%), Lenskart - $195 Mn (+55%), Wakefit - $80 Mn (+53%), WOW - $43 Mn (+241%), Sugar - $28 Mn (+76%)?

14.) Factors consider while going cross border are - Identify the target market right, Knowledge of laws and regulations of particular country, Build local support in terms of teams/ infrastructure/ investors, understand the consumer behaviour and nuances through data

15.) Key Initiatives for Cross border e-commerce:?

- New Foreign Trade Policy

- Cross Border Inward Bill Payment services?

- "Districts as Export Hubs" programme

- The RBI has extended the interest equalisation scheme for pre and post-shipment rupee credit for MSME exporters until March 2024

16.) Challenges Ahead: Fear of layoffs during funding winter, Investor skepticism for listed e-commerce companies due to uncertainty in profitability, Rollout of E-commerce draft policy has been delayed, High customer acquisition and retention cost.