The entire nation of India is currently an investor’s haven, especially in the flourishing E-commerce market. As the Internet continues to penetrate into the country like never before, we expect to see a tremendous uptick in the number of Indians who shop online. Companies and entrepreneurs are eager to take advantage of all that ample opportunity. VC-funded startups are springing up by the thousands, and foreign investors are battling it out for a slice of the luscious Indian E-commerce pie.
We expect to see the fastest growth in the E-commerce sectors of beauty and wellness. That’s exactly where vertically integrated company Quantified Commerceis situated. It has been building it’s digitally native vertically integrated brands (DNVBs) in this space for the past four years. Where many companies have failed, they’ve has seen extraordinary real growth of 100%- 300% per year over the last four years. We spoke to them about how they’ve stayed ahead of all the other companies hoping to digitally open up shop in the growing market.
Investors, domestic and foreign, are excited about the growing E-Commerce market mainly because of increased Internet expansion and smartphone adoption. By the year 2021, the number of people with Internet access in India will more than double from 400 million to 829 million people. By 2022, these smartphone users are expected to hit 476 million. Some publications are calling this colossal increase India’s “smartphone revolution.” Since Indians access the Internet through their phones 80% of the time (30% above the global average), this represents abundant opportunities for mobile commerce. Indeed, the E-commerce market is expected to grow 1,200% by 2026.
So, while China still remains the largest E-commerce market in the world, India is the fastest-growing. That’s why India is being fought over by Chinese and American investors. Recently, Chinese tech-behemoth Alibaba just acquired a $200 million stake in India’s major E-commerce grocery, BigBasket, and Alibaba’s payments affiliate Ant Financial just did the same with the food-delivery app Zomato.
U.S conglomerates, Walmart and Amazon are also duking it out for a piece of the E-commerce market. Amazon India has been trying to overtake Indian domestic E-commerce giant, Flipkart, for a few years. Last year, it invested $2.7 billion into it’s Amazon India Seller Services branch. Amazon also doubled its authorized capital to $4.74 billion last year in its war on Flipkart. But, Flipkart just got some serious ammunition in the battle from another major U.S. retailer: Walmart. Walmart is currently in a deal with Flipkart, which would increase the Indian E-commerce company’s valuation to as high as $20 billion.
Last year, India also experienced an all-time high in terms of VC-funded Investments. Funding into Indian companies reached $17.6 billion. With all of this investment, both foreign and domestic, it’s not difficult to see why India is one of the most expensive stock markets in the world, only slightly falling behind the United States.
But, while nearly 1,000 of the startups that tried to secure its footing in the growing Indian economy failed, Quantified Commerce has experienced incredible success. This is in part thanks to its vertically integrated business model.
By owning every single stage of the supply chain, Quantified Commerce has been able to reinvest the revenue that would have gone to third-party manufacturers and distributors into the company. It also means that the company is completely bootstrapped, and not dependent or flying through VC funds.
“We are able to spend more on the actual product, allowing it to be high-quality while offering it at a lower price,” says Quantified Commerce founder, Agam Berry. “This is absolutely essential for the price-sensitive consumer base we find in India. If a company isn’t vertically integrated, they have to compensate for the costs spent on third-parties by selling their product at a higher cost. Indian consumers simply will refuse and opt for a less-expensive alternative. We give them an inexpensive first-rate product.”
Not only is the quality and the price of the products offered by Quantified Commerce so appealing to the Indian consumer, the company also knows how to perfectly target their audience. Instead of outsourcing to marketing agencies, Quantified Commerce markets to their consumers where they are most frequently found: social media. In fact, 70% of all mobile traffic in India is spent on social media sites, especially Facebook. “We work with social media influencers to create 60-second video clips, which our research shows is the most impactful and successful in terms of sharing,” Berry says.
India is a hotbed of investment activity because of its booming E-commerce market. Quantified Commerce knows how to stay a step ahead of their competitors through its highly-efficient vertically integrated model and perfectly targeted advertising.