Indian e-commerce in 10 charts

Indian retail is predominantly unorganised and highly fragmented with thousands of local brands controlled by local distributors. This structure makes it easier to let vendors list on a platform, rather than build inventory ground up.

The marketplace model is also more profitable than the inventory-led model. For a gross merchandise value (GMV) of Rs 1,000, the marketplace model loses about Rs 50 or half of what the inventory-led model does.

The one factor that will have a maximum impact on profitability is cutting down on discounts. At 30%, it's second only to the cost of goods sold.

However, the low prices are the topmost reason that customers cite for shopping online. The good news is that the convenience comes a very close second.

Yet another feature Indian e-commerce firms can do better without is cash on delivery. It adds to both cost and complexity.

E-commerce players expect cash on delivery (COD) to come down, and mobile payments, coupled with Aadhaar, can be a game changer.

Irrespective of these limitations, the gross merchandise value (GMV) of goods sold online is expected to grow in the coming years.

If the trends in the West is any indicator, it will also be driven by the offline players, if they play their cards right.

Given the cash burn at e-commerce firms, they will have to raise about $17 billion in the next four years to touch a GMV of $47 billion by 2020.

Raising that amount from VCs is likely to get tougher. The concentration of e-commerce in the unicorn club in India is 55%, at the cost of other segments. Globally there are 20, 14 and 9 unicorns in the fintech, big data and on-demand space, respectively. India has just one each (if we include Mu Sigma). There are 24, 11, and 8 unicorns in the internet software, healthcare and cybersecurity space globally. India has none.