I’m on the India trail this month and seeing the action up close, meeting with venture investors doing deals at a frantic pace and dynamic entrepreneurs trying to make their startups catch on in fast-growing but increasingly crowded market categories with huge potential. China deja vu?
Take the booming area of e-commerce as an example. Just like in China a few years ago, e-commerce in India today is getting flooded with pushy startups even while web-based sales remain a sliver of the overall retail market. In an echo of China too, the e-retailing race is all about bulking up fast with superior execution to beat rivals and emerge the clear number one. In both markets, the competitor to beat is/was an Amazon-owned local contender.
Sudhir Sethi at IDG Ventures India reasons that e-commerce is set to take off now that Indian e-retailing sales are about to tip past the $1 billion mark. He predicts that several e-commerce companies from India will go public — again taking a cue from China.
In China, e-retailer Dangdang caught the lead against Amazon-owned local player Joyo after a several-year run, while in slower-evolving India, the battle is still so young that no clear winner has emerged yet. In India, the Amazon-like Flipkart started in late 2007 — some five years behind its Chinese comparable Dangdang – but has been moving at hyperspeed against dozens of competitors, including the leader in e-retailing web traffic, Amazon-owned Junglee.com.
As a sign of how fast the market is moving now in India, when I interviewed Flipkart CEO Sachin Bansal in Bangalore for my book Startup Asia, he told me Flipkart was aiming for $150 million in sales and a 50% market share by 2015. Then, Flipkart had raised only one round of finance, from Accel India, and was about to bring in more venture capital.
Fast forward just two years, and Bansal has today upped his estimate for Flipkart to reach $1 billion revenues by 2015. The e-retailer started off 2012 with a bang, raising $150 million from Accel, IDG, IndoUS and Tiger Global, and then expanding into new turf by acquiring Letsbuy, a specialized e-commerce site selling digital gadgets.
In a sign of the Indian e-commerce market’s growing maturity, specialized e-commerce sites have now emerged too in India. There’s a whole host of social commerce (think GroupOn) players, with Snapdeal being the most visible and the one to beat. Another e-commerce specialist on my radar (also interviewed for Startup Asia) is Bangalore-based Myntra, an online retailer of Indian fashion and lifestyle brands that handles the processing from an on-site warehouse and production facility. Myntra’s CEO Mukesh Bansal (see my photo above) just raised $20 million more in capital, from brand-name investors Accel, IDG and Tiger Global.
Whether the Indian startups will generate some of the enviable returns of the Chinese e-commerce companies remains to be seen. You have to wonder when no company has followed the lead of MakeMyTrip, which went public on NASDAQ in mid-2010. We’ll be talking about India venture and startup trends at a Startup Asia event I’m moderating in Mumbai with TiE on Feb. 21. If you happen to be in Mumbai, stop by and hear investors from Sequoia, Nexus and IDG sound off. Here’s the link to sign up.