India’s Massive Omni-Channel Retail Opportunity
India’s ecommerce market continues to grow at a dramatic pace. Its largest ecommerce site, Flipkart and the big American competitor, Amazon, continue to battle to dominate the world’s second largest contiguous market. And this is only the beginning. By some estimates, by 2020, India’s online retail revenue will be $100 billion and its retail market will be $850 billion. These are big numbers. If the eventual real numbers turn out to be anywhere near their projections, than we talking about a market that is still in its virtual infancy. And Amazon and Flipkart, although locked in a long-term battle with each other, may only comprise a fraction of the overall potential of India’s online and offline spending. This means there is still massive opportunity across the country for getting products into the hands of customers. Omni-channel is one of those simultaneously futuristic and transitionary models.
As much as we tech enthusiasts love to tout the oncoming storm of ecommerce and how it is wrecking retail, the truth is that the customer experience is evolving into a hybrid experience, where we interact and remember products both online and offline. Consumers now move from desktop to mobile to store all within 24 hours and this presents a big opportunity which retailers would be remiss to miss out on.
Walk down any high street in India and you will see physical storefronts for brands that started out being online only. This includes brands such as Lenskart, PepperFry, Urban Ladder and Vertex portfolio company, FirstCry. Myntra recently opened its first offline store in Bangalore for its 14 private labels. The traditional online brands have correctly recognized the need to be Omni-Channel. The reverse unfortunately is not true for the offline brands. Most offline brands do not even have a branded website active in India. This includes global brands that have several hundred physical stores in India but still do not sell directly online. They rely on third party marketplaces to sell a limited catalogue of their products. The same holds true for much of South East Asia and the Middle-East.
Broadly defined, Omni-Channel Retail refers to brands and retailers selling both online and offline. This includes stores in a mall, branded online stores and online marketplaces. Omni-Channel enables a seamless and consistent consumer experience across channels, which enables the consumer to explore on any channel and convert on any channel.
Against this backdrop, there is Ace Turtle, a rapidly growing company based in Bangalore and Singapore that just announced a Series A investment from Vertex Ventures and CapitaLand.
Today, Ace Turtle is working with several brands in India and South East Asia to enable Omni-Channel Retail. Soon, you will be able to search for and order a product from your favourite ecommerce app and have it delivered to you within 4 hours because it was sourced from a store in your neighbourhood. Alternatively, you could walk into a store and find that they do not have the product you need but have it delivered the same day from a store across town. As the multi-brand marketplaces move to an inventory light model, the ability to source a product from any location, be it the ecommerce warehouse, the brand warehouse or a store becomes critical.
As you dig deeper into this big opportunity, you’ll easily find that it is full of nuance. Parents shop differently than non-parents, males different than females, etc. That means that the optimization around securing the right customers is increasingly complex. It’s exacerbated by how much data online retailers are able to capture over time. The solutions are more hybrid than simple and the customers continually want more. These are early days and the industry will continue to evolve in this part of the world.
We at Vertex look forward to working with Nitin, Berry and the Ace Turtle team in this journey.
