India’s e-tail industry is different in many ways
- E-tail contributes less than 5% of retail spend (~20% in China)
- 65% of spend is from mobile & electronics categories (16% in China)
- Tier-3 & beyond contributes to less than 10% of e-tail spend (40% in China)
One line of argument is that India’s per capita GDP is 1/4th of China’s, and that explains the difference. While this argument holds true to some extent, we believe current models haven’t yet captured the full potential, and there is an opportunity create new models that
- Can drive larger share of digital spend in categories other than non-mobile & electronics categories
- Can penetrate e-tail beyond Tier-3 towns
With this thesis, we invested in 3 companies Milkbasket, Shop101 and Mall91. These are businesses built on a new paradigm of product, supply-chain and distribution.
Mall91 aspires to be a unique one-stop e-tail & digital transaction platform for Indians from Tier-3 & beyond. When we met Nitin from Mall91 he had unique insights into what would it take to build an e-tail platform for Tier-3 & beyond.
- These users don’t like a complicated browsing and search based online shopping experience offered by current platforms.
- These will be low AOV users, and that will require
- Innovative logistics approach to deliver low AOV products
- Product hooks to drive viral growth of users to keep CAC near to zero
With these principles Mall91 has built a platform on which a typical tier-3/4/5 consumer comes, plays games, consumes content, earn rewards, participate in group buying & re-selling activities, and purchase online goods. Within 6 months of launch company has reached ~250k monthly users, 45 minutes time spent per day per user, and ~3 e-commerce orders per transacting user per month.
We invested in the company from K-start, and currently Kalaari is participating in a Series-A round that company is in the process of closing.
