Online Marketplaces in India to Reach $350 Billion in Gross Merchandise Value by 2027

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Online Marketplaces in India to Reach $350 Billion in Gross Merchandise Value by 2027

December 16th, 2022 Accel and Bain & Company Leave a comment

Upstream business-to-business (B2B), fintech, and shipping and logistics are emerging as the most exciting areas for future growth

With a large addressable market, growing online shopper base, and increasingly digitized MSMEs, online marketplaces in India contribute more than $100 billion in gross merchandise value (GMV), with B2C e-commerce marketplaces being the single largest segment, contributing $50 billion. Over the next five years, the marketplaces sector is expected to more than triple, to reach $350 billion in GMV. These marketplaces will be creating $400–$500 billion in enterprise value, contributing more than 5% to India’s GDP, enabling more than 15 million micro, small, and medium enterprises (MSMEs) to grow their businesses online, and creating 7 million jobs by 2027. These are among the findings of a new report “The Rise of Digital Bazaars in India”, released by Bain & Company and Accel today.

Marketplaces have created tremendous value for individual buyers, for businesses, and for the economy alike. Arpan Sheth, Partner at Bain & Company and co-author of the report said “Marketplaces have contributed to India’s growth story by offering greater access to capital and innovative financing solutions for traditionally underserved segments; enabled MSMEs to transact online, with an increased pan-India reach; and have provided employment opportunities to more than 3 million gig workers in India.”

India has cultivated a vibrant and successful marketplace landscape, demonstrated by the sheer breadth of more than 300 funded marketplaces across multiple categories like retail, education, healthcare, travel, financial services, etc. Almost 20 marketplaces reached more than $1 billion in GMV and many players are turning profitable.

While online marketplaces will continue to be dominated by B2C e-commerce with 40% of the total GMV in 2027, the B2B e-commerce marketplaces GMV is slated to grow by five times its current size to reach $55 billion, followed closely by online food delivery which will almost triple in size to reach nearly $22 billion.

Not just for buyers and sellers, marketplaces have also seen significant traction with investors in recent years, having received cumulative funding of $30 billion between 2018 and October 2022. B2C e-commerce, B2B e-commerce, and online food delivery were among the highest- funded marketplaces sectors, together accounting for close to 60% of total funding received in the last 5 years. From B2C e-commerce marketplaces leading the share of deal volumes in 2018, B2B e-commerce marketplaces emerged as the frontrunner in 2022, with deal volumes growing to 31% of the total deals in the year so far.

2021 was a landmark year, which saw funding in marketplaces reaching $16 billion, growing four times compared to 2018 and deal volumes doubling in the same period. However, in 2022 year-to-date (YTD) marketplace funding activity has been moderate at $4.5 billion, given the tempering of 2021 highs, valuation corrections, and muted sentiments in global public markets.

Prabhav Kashyap, Partner at Bain and Company and co-author of the report said, “Dealmaking in the short to medium term is likely to be more measured and valuation multiples will see some degree of rationalization. The future of marketplaces, on the other hand, is robust and with strong growth in their GMV and continued interest from investors, we expect the segment to see ample opportunities and a strong pick up. While the marketplace model is popular across multiple categories, upstream business-to-business (B2B), fintech, and shipping and logistics are some of the most exciting areas. These sectors show evidence of successful marketplaces as well as significant headroom for growth of new or emerging players.”

Upstream B2B presents as a $1 trillion+ opportunity and a high margin potential; with fragmented supply, need for disintermediation, and government initiatives being key growth drivers. Fintech marketplaces have also grown owing to the low penetration of financial/insurance products, digitization of user base, and availability of easy-to-use digital platforms. An approximately $200 billion addressable market and supply chain inefficiencies have resulted in a surge of tech-based shipping and logistics marketplaces.

Anand Daniel, Partner at Accel and co-author of the report said, “India is one of the world’s fastest growing and most dynamic emerging markets. Our report on the country’s digital bazaars reveals the extent to which marketplaces have grown in this market across both business-to-consumer and business-to-business segments. More than 1/3rd of large outcomes in our start-up ecosystem have been marketplaces and contribute to more than

$100 billion in GMV. Accel India is fortunate to have partnered with many of these marketplaces from seed to scale. We have invested more than $700 million in these companies, and continue to look for more such opportunities.”

The report highlights that the next wave of scale marketplaces has the potential to emerge in two additional major categories— (1)‘Bharat-first’ models driven by participation from tier- 3+ cities, and (2) global cross-border models addressing the export potential India has.

Gaming, caregiver services, creative content, Web 3.0, have large-scale marketplaces in mature markets, but are currently nascent in India. They represent future trends in the Indian marketplace landscape, and are a precursor for these segments to grow large in India given proof of scale in US and China, where multiple unicorns are present in these areas.

About Bain & Company

Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future. Across 64 cities in 39 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10- year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development, and the environment. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.

About Accel

Accel is a global venture capital firm that aims to be the first partner to exceptional teams everywhere, from inception through all phases of private company growth. Accel has been operating in India since 2008, and its investments include companies like BookMyShow, BrowserStack, Flipkart, Freshworks, FalconX, Infra.Market, Chargebee, Clevertap, Cure Fit, Musigma, Moneyview, Mensa Brands, Myntra, Moglix, Ninjacart, Swiggy, Stanza Living, Urban Company, Zetwerk, and Zenoti, among many others. We help ambitious entrepreneurs build iconic global businesses.

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India’s Acetic Acid Imports Doubled in the Past Decade

November 24th, 2021 IndexBox Leave a comment

IndexBox has just published a new report: ‘India – Acetic Acid – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

In the past decade, India doubled acetic acid imports in physical terms. In 2020, they grew by +7.7% y-o-y to 953K tonnes. Malaysia, Singapore and China constitute the most significant suppliers, accounting for 70% of India’s acetic acid imports. Taiwan featured the highest growth rate of exports to India in 2020. Last year, the average acetic acid import price dropped by -22.9% y-o-y to $349 per tonne.

India’s Acetic Acid Imports by Country

India’s acetic acid imports increased twofold, from 457K tonnes in 2010 to 953K tonnes in 2020. In 2020, imports grew by +7.7% on the previous year’s figure. In 2020, imports grew by +7.7% on the previous year’s figure. In value terms, acetic acid imports dropped notably from $401M in 2019 to $333M (IndexBox estimates) in 2020.

Malaysia (294K tonnes), Singapore (220K tonnes) and China (153K tonnes) were the leading suppliers of acetic acid imports to India, with a combined 70% share of total imports. These countries were followed by Taiwan (Chinese), Saudi Arabia, Iran and South Korea, which together accounted for a further 28%.

Taiwan saw the highest growth rate of export volume among the key exporters. Indian imports from Taiwan rose from $50M in 2019 to $136M in 2020.

In value terms, the largest acetic acid suppliers to India were Malaysia ($104M), Singapore ($79M) and China ($53M), together comprising 71% of total imports. These countries were followed by Taiwan (Chinese), Saudi Arabia, Iran and South Korea, which together accounted for a further 27%.

The average acetic acid import price stood at $349 per tonne in 2020, waning by -22.9% against the previous year. Average prices varied noticeably amongst the major supplying countries. In 2020, the highest prices were recorded for prices from Singapore ($358 per tonne) and South Korea ($355 per tonne), while the price for Iran ($326 per tonne) and Saudi Arabia ($337 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by China, while the prices for the other major suppliers experienced a decline.

Source: IndexBox Platform

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Asia’s Beef Market 2020 – Positive Outlook for China, Negative Expectations for India

August 9th, 2020 IndexBox Leave a comment

IndexBox has just published a new report: ‘Asia – Beef (Cattle Meat) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The coronavirus pandemic continues to negatively impact the Asian beef market, holding back production and international trade. However, it can be predicted that the strength of the impact will depend on how quickly countries return to normalcy. In China, which was the first to recover from the pandemic, positive dynamics are expected in the second half of the year. In contrast, India, the second-largest beef producer after China, will face significant losses in production and exports.

The expected increase in China’s beef production is driven by rising cattle herds, particularly on large farms, and strong domestic demand to offset the ongoing pork shortage. In addition, China will continue to increase its imports, fueled by new accreditations granted to meatpacking plants in Brazil, Argentina, and Uruguay, as well as new trade agreements with these countries.

In India, cattle production may be reduced due to a pandemic shutdown, especially since collection of animals is usually carried out in the form of home visits. Given that most of the production is destined for foreign markets, slowing economic growth in many countries could further undermine the Indian cattle sector.

Import growth is likely to slow in almost all other Asian markets, as widespread recession restricts consumption in middle- and low-income households, while restrictions and physical distancing reduce restaurant turnover, dampening demand for high-quality meat products.

Beef Consumption by Country in Asia

China (7.5M tonnes) continues to be the largest cattle meat market in Asia, accounting for 35% of the total volume. Moreover, beef consumption in China exceeded the figures recorded by the second-largest consumer, Pakistan (1.9M tonnes), fourfold. India (1.5M tonnes) ranked third in terms of total consumption with a 7.1% share.

From 2009 to 2019, the average annual growth rate of beef consumption in Сhina was +1.5%. Pakistan enjoys the highest growth (+3.2% per year), while India suffers from decreasing demand (-2.8% per year).

In value terms, China ($93.3B) led the market, alone. The second position in the ranking was occupied by Turkey ($7.5B). It was followed by Pakistan.

The countries with the highest levels of beef per capita consumption in 2019 were Uzbekistan (29 kg per person), Kazakhstan (27 kg per person), and South Korea (14 kg per person).

From 2009 to 2019, the biggest increases were in Turkey, while beef per capita consumption for the other leaders experienced more modest paces of growth.

Production in Asia

In 2019, Asia’s production of cattle meat expanded modestly to 19M tonnes, with an increase of 2% on the previous year’s figure. The total output volume increased at an average annual rate of +1.7% from 2009 to 2019; the trend pattern remained consistent, with only minor fluctuations throughout the analyzed period. The pace of growth appeared the most rapid in 2010 when the production volume increased by 3.8% y-o-y. Over the period under review, production reached the peak volume in 2019 and is likely to continue growing in the immediate term. The generally positive trend in terms output was largely conditioned by a mild increase in the number of producing animals and a relatively flat trend pattern in yield figures.

Production by Country in Asia

China (6.5M tonnes) is the largest cattle meat producer in the region, accounting for 34% of the total output. Moreover, beef production in China exceeded the figures recorded by the second-largest producer, India (2.6M tonnes), twofold. Pakistan (2M tonnes) ranked third in terms of total production with an 11% share.

In China, beef production was relatively stable over the past decade. The remaining producing countries recorded the following average annual rates of production growth: India (+0.6% per year) and Pakistan (+3.4% per year).

Producing Animals in Asia

In 2019, the number of animals slaughtered for beef production in Asia reached 116M heads, standing approx. at 2018. This number increased at an average annual rate of +1.1% from 2009 to 2019. The pace of growth appeared the most rapid in 2010 when the number of producing animals increased by 2.9% year-to-year. Over the period under review, this number hit record highs in 2019 and is expected to retain growth in the near future.

Exports in Asia

In 2019, the amount of cattle meat exported in Asia totaled 1.3M tonnes, approximately equating 2018. In general, exports continue to indicate a prominent expansion. The most prominent rate of growth was recorded in 2011 when exports increased by 67% against the previous year. Over the period under review, exports hit record highs at 1.7M tonnes in 2013; however, from 2014 to 2019, exports remained at a lower figure.

In value terms, beef exports declined to $4.1B (IndexBox estimates) in 2019.

Exports by Country

India dominates beef trade, accounting for 1.1M tonnes, which was near 85% of total Asian exports in 2019. Hong Kong (84K tonnes) held a 6.6% share (based on tonnes) of total exports, which put it in second place, followed by Pakistan (4.5%).

From 2009 to 2019, the average annual rates of growth with regard to beef exports from India stood at +9.5%. At the same time, Pakistan (+9.8%) and Hong Kong (+8.1%) displayed positive paces of growth. Moreover, Pakistan emerged as the fastest-growing exporter exported in Asia, with a CAGR of +9.8% from 2009-2019. While the share of India (+51 p.p.), Hong Kong (+3.6 p.p.) and Pakistan (+2.8 p.p.) increased significantly, the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, India ($3.1B) remains the largest beef supplier in Asia, comprising 77% of total exports. The second position in the ranking was occupied by Hong Kong ($289M), with a 7.1% share of total exports.

In India, beef exports expanded at an average annual rate of +12.0% over the period from 2009-2019. The remaining exporting countries recorded the following average annual rates of export growth: Hong Kong (+10.9% per year) and Pakistan (+15.2% per year).

Export Prices by Country

The beef export price in Asia stood at $3,158 per tonne in 2019, falling by -4.5% against the previous year. Over the period from 2009 to 2019, it increased at an average annual rate of +2.6%. The most prominent rate of growth was recorded in 2011 when the export price increased by 21% year-to-year. The level of export peaked at $3,306 per tonne in 2018 and then shrank in the following year.

Average prices varied somewhat amongst the major exporting countries. In 2019, the country with the highest price was Pakistan ($3,815 per tonne), while India ($2,831 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by Pakistan, while the other leaders experienced more modest paces of growth.

Imports in Asia

In 2019, purchases abroad of cattle meat decreased by -12.7% to 3.9M tonnes for the first time since 2008, thus ending a ten-year rising trend.

In value terms, beef imports contracted to $19.9B (IndexBox estimates) in 2019. In general, imports, however, enjoyed prominent growth. The most prominent rate of growth was recorded in 2010 when imports increased by 22% y-o-y. Over the period under review, imports attained the maximum at $21.3B in 2018 and then shrank in the following year.

Imports by Country

In 2019, China (1.1M tonnes), distantly followed by Japan (617K tonnes), South Korea (444K tonnes), and Hong Kong (365K tonnes) were the major importers of cattle meat, together committing 63% of total imports. The following importers – Malaysia (147K tonnes), Indonesia (141K tonnes), Taiwan (137K tonnes), the United Arab Emirates (133K tonnes), the Philippines (125K tonnes), Iran (119K tonnes), Israel (114K tonnes) and Saudi Arabia (86K tonnes) – together made up 25% of total imports.

From 2009 to 2019, the biggest increases were in China, while purchases for the other leaders experienced more modest paces of growth.

In value terms, the largest beef importing markets in Asia were China ($5B), Japan ($3.5B), and South Korea ($2.9B), with a combined 57% share of total imports.

Import Prices by Country

The beef import price in Asia stood at $5,039 per tonne in 2019, rising by 6.9% against the previous year.

Prices varied noticeably by the country of destination; the country with the highest price was Taiwan ($7,898 per tonne), while Malaysia ($3,172 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by South Korea, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Archives, Global Trade Daily, International Trade

U.S.-INDIA TRADE TIES CONTINUE TO DEFY GRAVITY

May 12th, 2020 Richard Rossow Leave a comment

Despite economic headwinds and each country’s zero-sum approach towards trade, India is firmly among the United States’ ten largest goods trade partners. And it’s a fair bet that the best years for U.S.-India economic cooperation lie ahead.

Sometime within the next two decades, India is likely to become the world’s third-largest economy. Within the next five years, India will surpass China to become the world’s most populous nation and a key global market. Thus, it is no surprise that India is already among the world’s most attractive markets for foreign investment.

U.S.-India Trade in Numbers

Presently, India is the United States’ ninth-largest goods trade partner and has the potential to be U.S. seventh largest goods trade partner in the next decade. In March 2019, bilateral goods trade crossed the $90 billion mark for the first time during any 12-month period. From India’s perspective, the trade relationship is even more important. In 2018-2019, the United States replaced China as India’s top goods trade partner, a position it had lost over a decade earlier. India’s goods trade surplus with the United States in fiscal year 2018-19 was $16.9 billion, more than double the surplus with the next highest trade partner, Bangladesh.

However, this positive story hides a difficult truth — trade did not grow evenly between the first half and second half of the calendar year. Bilateral trade grew 5.2 percent over the full year but contracted over the last six months of 2019 by nearly eight percent. The U.S. goods trade deficit with India widened during the year, from $18.5 billion in 2018 to $23.2 billion in 2019. While that number obviously pales in comparison to the $346 billion goods trade deficit with China or the $100 billion deficit with Mexico, it is the 11th-largest deficit with any U.S. trade partner.

Caught in Global Headwinds

Globally, economic growth remains relatively depressed – even prior to COVID-19. The International Monetary Fund dropped its prediction of India’s economic growth by nearly a full point between July and October 2019 to 6.1 percent. Moody’s had downgraded India’s outlook to negative, “partly reflecting lower government and policy effectiveness at addressing long-standing economic and institutional weaknesses.”

COVID-19 has plunged the Indian economy to 1.9 percent growth this year, though with a forecasted recovery of 7.4 percent growth. Some of the drop in growth and trade over the second half of this year are outside the control of either nation, but the imposition of trade barriers can be controlled, particularly as Prime Minister Modi wishes to attract more foreign direct investment to boost post-COVID-19 recovery.

The government of Prime Minister Narendra Modi came to office in May 2014 for its first five-year term. The government quickly moved on significant reforms, touching on taxation, legal, foreign investment liberalization, and other key investment impediments. However, since its re-election in May 2019, the Modi government has been much less aggressive in pursuing economic reforms while also considering restrictions in areas like data flows and e-commerce that can seriously undermine investor confidence in India.

Similarities Causing Friction

Trade deficits continue to occupy an important place in policymaking in Washington and New Delhi. Both nations’ leaders approach trade as more of a zero-sum proposition and are deeply concerned about protecting — and growing — domestic manufacturing. The worry about a widening trade deficit has often sparked protectionist tendencies from both sides.

In the recent past, Prime Minister Modi has adopted local content mandates in sectors with high levels of imports, raised customs duties in sectors he seeks to protect, adopted price controls on pharmaceuticals and medical devices as well as on credit card fees and airline tickets, and imposed limitations on foreign direct investments in sectors including e-commerce. For its part, the United States included India as part of new tariffs on steel and aluminum, revoked India’s trade benefits under the Generalized System of Preferences (GSP) program and threatened further actions, including placing new limits on technology worker visas.

Rebounding into a Stronger Relationship

Trade was beginning to slow prior to COVID-19 and the economic effects of the pandemic are yet to be fully realized as the future remains uncertain. But U.S.-India relations have shown surprising resilience and improvements in the face of serious speed bumps.

How policymakers respond to these challenges – whether they choose to erect trade barriers or continue to liberalize – will determine whether both countries can use the opportunity to rebound into a stronger commercial relationship or whether each will retreat, potentially hampering long-term recovery.

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Richard M. Rossow is the Wadhwani Chair in US-India Policy Studies at The Center for Strategic and International Studies (CSIS) in Washington DC.

This article originally appeared on TradeVistas.org. Republished with permission.

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Asia’s Salt Market – India is the Largest and Fastest Growing Exporter in the Region

March 13th, 2020 IndexBox Leave a comment

IndexBox has just published a new report: ‘Asia – Salt – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the salt market in Asia amounted to $8.3B in 2018, approximately equating the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +3.8% from 2007 to 2018; the trend pattern indicated some noticeable fluctuations being recorded over the period under review.

Consumption By Country

China (74M tonnes) remains the largest salt consuming country in Asia, comprising approx. 57% of total consumption. Moreover, salt consumption in China exceeded the figures recorded by the region’s second-largest consumer, India (16M tonnes), fivefold. The third position in this ranking was occupied by Japan (5.7M tonnes), with a 4.4% share.

From 2007 to 2018, the average annual rate of growth in terms of volume in China stood at +1.5%. The remaining consuming countries recorded the following average annual rates of consumption growth: India (+0.8% per year) and Japan (-0.9% per year).

In value terms, China ($5.3B) led the market, alone. The second position in the ranking was occupied by Pakistan ($435M). It was followed by Japan.

In 2018, the highest levels of salt per capita consumption was registered in Taiwan, Chinese (134 kg per person), followed by Turkey (63 kg per person), Saudi Arabia (61 kg per person) and South Korea (53 kg per person), while the world average per capita consumption of salt was estimated at 28 kg per person.

In Taiwan, Chinese, salt per capita consumption remained relatively stable over the period from 2007-2018. The remaining consuming countries recorded the following average annual rates of per capita consumption growth: Turkey (+5.3% per year) and Saudi Arabia (+0.7% per year).