Tale of 20 E-tailers: Dataquest's list of the 20 Hottest E-commerce Start-ups in India

20 Hot E-Commerce Start-ups

What is common to diamonds, spiritual products, sports goods, fashion accessories and condoms? There are online stores selling these products exclusively to Indians. And most of them have come up during the last 12-24 months. All of us who use credit cards, online bank accounts, independent loyalty programs like i-mint, or simply use applications like Facebook have been bombarded with online deals that look so attractive, offering sometimes, as much as 85% discount. Slowly but steadily, the e-commerce market in India is seeing resurgence. Indians who have, through all these years, gotten comfortable with the ideas of transacting online to buy air tickets, or book a hotel, or occasionally buy a travel or car insurance, are no longer afraid to buy on the Net. The new online retailers are cashing in on that new-found freedom of Indians. A testimony to the rise of this new channel is the significant marketing money and energy that offline retailers such as Shoppers Stop, Croma, and Future Group are putting on this. Our story, The Second Coming of E-commerce goes deeper into how exactly the story is unfolding.

But no story of an emerging opportunity is complete without the players who are making it happen. These are the entrepreneurs who believe in the story and put their money, time, and career on it. When we decided to do the story, we knew we have to tell the story of these people for sure. And it is then that the idea of presenting a list of hot e-commerce start-ups stuck to us.

Like many entrepreneurs themselves, we knew we were doing broadly what we wanted to do, but knew little beyond that. We knew we were going to make a list. But that was it. The questions were many.

 

 

 

Should we do a big, comprehensive listing of as many companies as possible? Should we have a small list? If yes, what should be the ideal size? Should we rank the companies? If yes, on what parameter(s)? Of course, any ranking or shortlisting need to have some scientific basis, even though it may not be 100% formula driven. Should we include all types of players?

While our research (mostly secondary, on Google, various blogs on start-ups, and the marketing partnership providers like credit card companies and i-mint) was on, we spoke to some of the leading players, industry associations, and other stakeholders that helped us to take a decision. Take a decision on what to do, that is. There was still no magic formula. But we arrived at some decisions fairly fast. That was done by the inputs received by the edit team and was driven by senior correspondent Drishti.

Methodology

So, here is what we decided to do. We would advise anyone who wants to deliberate on the list/criticize it (we love criticism) to read this carefully, because this explains a big whywhy is a big name like dell.co.in or a Futurebazaar missing from the list. This lists the categories we decided to exclude.

We have excluded

• All brand-owned sites. So, an Amway or a Dell is out.
• All non-Indian companies selling in India. So, an eBay and Tradus are not in the list.
• Media sites whose primary revenue is not e-commerce but who are doing e-commerce. It removed a lot of large e-tailers such as Indiatimes Shopping, Sify Shopping, Bagittoday (though, now India Today has divested a large part), and Homeshop18.
• The online ventures of large offline retailers such as Croma, Shopperstop.com, Landmarkonthenet and Futurebazaar. We did include those companies that have small offline stores locally in one city but have gone big online.
• Primarily service sellers such as travel sites, insurance sites, online photo printing sites, and ticket booking sites. So, companies like makemytrip, yatra, itaseveer, zoomin, bookmyshow were out.
• And finally, to call it start-up, we had to have a cut-off date. We fixed that as January 1, 2007. We took only the companies started after that date. This, incidentally, did not exclude too many companies with significant exception of indiainfoline.comthe lone survivor of the first wave. It is a great site but not a start-up.

If that seems to you like we have excluded a lot, you are probably right. The idea of the list was to focus on the hottest start-ups and not a market report on Indian e-commerce with listing of players with highest market share.

But guess what. Even after removing all those categories, we were left with 136 sites that were eligible for the ratingof course, after removing a few sites which we found were static, are inactive or do not work all the time.

One hundred and thirty-six was a big number. This was the time when we decided on what broad parameters we wanted to evaluate them. A revenue based ranking of start-ups was a no-no, as it often is in direct co-relation to how many months you have been in operations. That is when we decided on 3 broad parameterssomething around business that we could judge them on, something around the user-friendliness of sites that they run, and the actual traction that they have on users and pageviews.

Based on these broad parameters, we did a filtering and reduced the list to about 60. We took into our shortlist any company that was really good in one broad parameter and has a minimum standard in others.

We roped in SapientNitro, one of the worlds top interactive agencies, to partner us in the process of evaluating the sites on user experience parameters. The experts at the company evaluated all these sites across 26 parameters in 7 broad areas within user experience: credibility and trust; addressing motivation, brand promise and value proposition, product presentation including product evaluation and selection, checkout process, and Indian context. The team at SpaientNitro worked almost round the clock during Christmas holidays to meet our deadline.

 

 

 

 

While we did a lot of secondary research in-house, we wanted an expert for both validating and closing the gaps. Who other than the guys who track India online? We requested JuxtConsult, the research firm whose India Online is the most referred research on the state of Internet in India to partner us in this.

The team of Sudhindra Venkateshamurthy, head of experience design, SapientNitro India; Mrutyunjaya Mishra, director, JuxtConsut and Shyamanuja Das, editor, Dataquest decided on the broad parameters. These were

• Business Model (Weightage 40%): The sites and their owners were rated on estimated actual revenue, positioning, funding received, and their relative positioning within a category.
• User Experience (Weightage 40%): The team at SapientNitro rated each of the shortlisted companies on 26 parameters. We took the overall score for our final score.
• Traction (Weightage 20%): We used Google Analytics audience measurement data for this purpose. Through the positioning sub-parameter within the business model parameter, we ensured that more specialized e-tailers do not suffer because of their comparative lower audience traction.

After rating each of these sites, the team met physically in Gurgaon to validate the list for a final time. And why 20? Well, at Dataquest, we just love this number. DQ Top 20, Top 20 Best Employers....More seriously, our rating clearly provided us a list of 22 sites who came within a range. The nearest round figure to that was 20.

And here we present the Dataquest 20 Hottest E-commerce Start-ups 2011, in partnership with SapientNitro and JuxtConsult...

Shyamanuja Das
shyamanujad@cybermedia.co.in