Deal activity in Indian e-commerce sector grows amidst decline in US, China

A sign of China's e-commerce company JD.com is seen at CES (Consumer Electronics Show) Asia 2016 in Shanghai, China, May 12, 2016. REUTERS/Aly Song/File Photo

Indian e-commerce startups such as Flipkart and Snapdeal have become increasingly important contributors to e-commerce deal activity, along with their early-stage counterparts.

Such companies currently account for one-fifth of e-commerce deals globally, and that level might rise to a new record this year going by the current run-rate data from CB Insights.

That makes India a bright spot in contrast with the Chinese and US markets, where the pace for deals has declined this year, both in respect to number of deals and dollar funding. In fact, global e-commerce deal activity is headed for a decline in 2016, and dollar funding is on pace for its worst year since 2012.

As the chart below illustrates, in 2015 both China and India saw increased deal counts and narrowed the gap with the US, which dropped from peak levels seen in 2014.

ecomm by top 3 countries w projection

Indian deals soared 124 per cent, to a new high of 148. This year, India’s e-ecommerce firms are on track to surpass that figure while e-commerce deal activity in the US has continued to be weak.

The share of US companies in global e-commerce deals has infact been on the decline since 2012, when they attracted more than half of worldwide deals. But that share dropped to 41 per cent in 2015, and is at 39 per cent this year.

The beneficiaries have been Indian companies which have got more funding. India’s startups attracted just 8 per cent of deals in 2012, and 16 per cent in 2015. The trend has continued in 2016 — India’s share of deal activity has been 21 per cent year-to-date. Meanwhile China’s deal share peaked last year at 8 per cent.

 

deal share by country by year

 

In terms of funding though, India is still lagging behind China, which is in top spot, with 30 per cent of the global e-commerce dollar share, according to CB Insights data.

Chinese companies have raised 33 mega-rounds since 2012, including a massive $2.8 billion raised by China Internet Plus Holdings, $700 million by Jingdong and a similar amount raised by Meituan.

In comparison, the US companies’ biggest deal was a $500 million Series B raised by Jet.com, and a Series C of the same amount to Wish.

dollar share by country

India took third place with a 17 per cent dollar share, as investors wanted to capture the opportunity of the world’s only large market still untapped. Flipkart and Snapdeal raised 12 major rounds since 2012, and other players also attracted significant funding. These players, many of which are smaller, have kept the momentum going in 2016.

China had more deals Series A and B deals in e-commerce companies. In India, 53 per cent of deals were at the seed and angel levels, compared with just 7 per cent in China. China also had the highest share of Series C,D, and E deals, which were very few in India.

 

Also read: 

Indonesia’s e-commerce players Kaskus, Bukalapak explore IPO plans

E-commerce platform Shopmatic in advanced talks to raise upto $10m funding

 

 

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.