India is developing to one of the most dynamic digital ecosystems. Already today numbers are impressive - and it is just the beginning. Smart phones and e-commerce are among the driving forces.

1. The Digital Opportunity
AECAL Asian E-Commerce Alliance GmbH
Prof. Peter Kabel

2. Digital Opportunity India
The Digital Customer

3. Indian GDP is growing strong and outpacing otherAsian major markets
China
Indonesia
China
Asia
India
Korea
Japan
7.7
7.3
5.8
FORECASTS
5.2
4.4
2.8
1.5
1.0
3.8
5.6
5.8
6.4
#1 US $ 17.63B
Population GDP Rank
India #2 1.24B
#4 US $ 7.27B
EU #3 0.51B
#1 1.34B
#2 US $ 17.61B
US #4 0.32B
#3 US $ 17.46B
Indonesia #5 0.25B
#10 US $ 2.55B
Brazil #6 0.20B
#8 US $ 3.10B
• India with its huge population (3,8x US, 2,4x EU and 0,9x China)
and strongly growing GDP (approx. 40% of GDP China, US or EU)
• Population is young, growing fast and consumer oriented
FromtheBRICpromiseonlyIndiaremainsasrealisticopportunity
2013 2014 2015
Source: IMF
Size and economical strength Economic growth

4. While Western countries and China are evolving into a more
mature stage of E-Commerce India is at a starting point
0%
1990 1993 1996 1999 2002 2005 2008 2011 2014 2017E 2020E
20%
40%
60%
PopulationPenetraion(%)
Internet User Penetration Curve, USA / China / India, 1990-2020E
Source: World Bank, Hillhouse Capital forecast for India beyond 2014
Catalyst Companies
Netscape
Yahoo!
Amazon.com
eBay
USA China India
Catalyst Companies
Tencent
Alibaba
JD.com
Catalyst Companies
Snapdeal
Amazon.in
Flipcart
Facebook
WhatsApp
80%
100%

5. India will be a real internet giant very soon
3
10
2
243,000,000
243,000,000
243,000,000
Internet UsersRank
14%
14%
14%
1 Year
Growth
+ 1.22%
+ 1.22%
+ 1.22%
1 Year
Populaiton
Change
19.19%
19.19%
19.19%
Penetration
(% of Pop. with
Internet)
17.50%
17.50%
17.50%
Country‘s share
ofWorlds
Population
8.33%
8.33%
8.33%
Country‘s share
ofWorlds
Internet Users
India is #3 in Internet users already …
… but only #10 in Internet penetration …
… and catching up extremly fast! The strong growth
of US, EU and China in the past 10 years is expected
to happen in India now!
Internet users in India 2014
Source: internetlivestats.com, KPMG, AECAL analysis

6. India is a mobile and social media game – traditional desktop
computer to be leap frogged
70%
Mobile Subscription Penetration
28%
Mobile Penetration
Mobile in India 2014
19%
Internet Penetration
31%
Urban
69%
Rural
1,255,777,000
Total Population
♂349,000,000
Mobile Users (#2 worldwide)
243,199,000
Internet Users
13 %
Smartphone Penetration
159,000,000
Smartphone Users
13%
Social Media Penetration
160,000,000
Active Social Media Users
886,300,000
Active Mobile Subscriptions
Source: KPMG

7. Onlythe 4 biggest cities alone have more smartphone users
than whole Germany
M
um
bai
12
8.1
4.7
4.5 29.3
4.4
3.8
2.8
2.7
Delhi
Hyderabad
Chennai
Germ
any
Kolkata
Bangalore
Ahm
edabad
Pune
+ 45 cities with
over 1 million inhabitants
Source: IAMAI
Smartphone users
(in Million)

8. Smartphones, non-metro, female and rural India will drive future growth
to over 500 million internet users by end of 2017
2013 2018
• 60% under 25 • 54% over 25Older
Rural
Gender balances
Mobile
Vernacluar
• 29% rural • 40-50% rural
• 2.6 men online for every woman online • 1.9 men for every woman among 18-24 years old
• 60-70% of users
• 45% of users use vernacular content
• 70-80% of users
• 62% print media market vernacular in 2013
• 70-90% Indians do not speak English, less
than 1% speak as primary language
Source: BCG

9. Smartphone users are continously connected
and spend their time in social networks
Global
Global
42%
18%
18%
31%
12%
11%
23%
23%
26%
15%
35% 18%
26%
18%
21%
22%
28%
46%
39% 36%
47%
54%
25% 22%
15%
31%
42%
51% 58%
40%
7%
13%
17% 18%
6%
17%
7% 9% 6% 7%
US
US
Germ
any
Germ
any
China
China
India
India
Frequency of connection
(% of respondents)
Ranking of activities based on
time spend online(% of respondents)
Source: A.T. Kearney analysis
All day long Every hour (> 10 times a day)
2-4 times a day Once a day or less
Social networking Shopping
Online Entertainment Transactional services

10. Spending will play a major role in very near future
Digital and eCommerce is
and will even more become
a large economical factor!
2012 2016
US $ 650B US $ 1,110B
Spending by the
urban population
Spending by the
urban population
with internet access
Spending by the
digitally influenced
population
Digitally influenced
spending
Value of online
purchases
US $ 225B US $ 650B
US $ 115B US $ 450B
US $ 30B US $ 150B
US $ 8B US $ 50B
Source: BCG
Customer spending
1.7x
2.9x
3.9x
5.0x
6.3x

11. Underdeveloped retail structure will lead to a complete leap frog
of traditional retail structures as we knowthem in the West
US
85%
81%
30%
20%
8%
15%
19%
70%
80%
92%
Taiw
an
Indonesia
China
India
Unorganised Organised
Organised retail penetration
Source: KPMG
Interpretations
• no disruption required as no structure exists
• eCommerce has ability to grow much faster than franchise retail
• eCommerce cost efficient vs. traditional western retail

12. Big global eCommerce players have identified this potential and
perceive India as their primary growth source
Recent activities
• Amazon announces additional US $ 2B Investment in India (July 30th
, 2014)
• US $ 190M investment in 21st
fulfillment center in India
• US $ 3.15B in 12 Financing rounds
• US $ 700M in July 2015 at last financing round: US $ 15B valuation1
• Receives its 6th
round of financing with and investment worth US $627M in Oct 2014
and additional US $ 500M in Auf 2015
• Alibaba enters Indian market with Paytm
• Rocket Internet’s Jabong raises US $ 100M round (Feb 2014)
1) Benchmarks Metro Group valuation US $ 8,8B, Zalando valuation US $ 7,6 B (as of 12/10/2015)

13. Big global investors perceive India as one of their growth and
innovation sources
Recent activities
• >100 investments thereof 37 in technology and 34 in consumer
• US $ 740M Indian fund (latest US $ 210M added in April 2015)
• Only location outside US/UK is India
• 60 investments in India
• New US $ 305M Indian fund in March 2015
• 27 investments in India (one exit)
• New US $ 200M Indian fund in Feb 2015
• 1/3 of outside US investments go to Israel and India
• US $ 627M in Snapdeal and US $ 210M in Ola (Taxis)
• US $ 1B (!) investment into Indias eCommerce, telecom and
aviation industry
Source: http://yourstory.com/2015/03/accel-partners-india-iv-fund-startups/
http://timesofindia.indiatimes.com/business/india-business/Sequoia-tops-up-India-fund-with-210m/articleshow/46857736.cms
http://articles.economictimes.indiatimes.com/2015-02-20/news/59339673_1_venture-partners-pension-funds-vc

14. Major E-Commerce KPIs show accelerating and viral effects
that support overall E-Commerce growth
2012
Internet users in India
140M
213M
400M
2013 2016E 2012
Conversion from visitors to buyers
3%
2.7%
2.9%
2013 2016E
2012
Number of orders per month
4M 5M
12M
2013 2016E 2012
Average order value
US $ 18
US $ 31
US $ 60
2013 2016E 2012
Annualized online shopping GMV
US $ 816M
US $ 1,983M
US $ 8,519M
2013 2016E
2012
Orders per buyer per month
1.59 1.55
1.70
2013 2016E
• Disposal income grows by. 6.5% p.a. and ratio shifts towards discretionary consumption
• More people are shopping
• Shoppers are buying more often
• Shopping karts have higher values
eCommerce in India is aboutto explode
Source: AECAL

15. Digital Opportunity India
The Digital Customer

16. Kaleidoscope India.

17. Kaleidoscope India. There is not
one India, but many.

18. Kaleidoscope India. There is not
one India, but many. Society
lives in different times side by
side – from hyper modernityto
mid ages. Unifying seemingly
incompatible beleifs and
behaviors.

19. Kaleidoscope India. There is not
one India, but many. Society
lives in different times side by
side – from hyper modernityto
mid ages. Unifying seemingly
incompatible beleifs and
behaviors. Many shades of rich
and poor. Metro Areas, Tier II, Tier
III and rural.

20. Kaleidoscope India. There is not
one India, but many. Society
lives in different times side by
side – from hyper modernityto
mid ages. Unifying seemingly
incompatible beleifs and
behaviors. Many shades of rich
and poor. Metro Areas, Tier II, Tier
III and rural. Different age cohorts
with different backgrounds and
different digital abilities.

22. India will never be the same.

23. India will never be the same.
Enjoying the merrits of
anonymity.

24. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out.

25. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out. Leveling differences
and intransparencies.

26. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out. Leveling differences
and intransparencies. Think of:
Banking, Health services, Rural
services, Information and
decision making on every level,

27. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out. Leveling differences
and intransparencies. Think of:
Banking, Health services, Rural
services, Information and
decision making on every level,
E-Commerce and the unleash of
entrepreneural power.

28. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation

29. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation
Active Aspirer
2013
28M

30. Name Age City Occupation
Varun 22 Delhi Student
Owns Device(s)
Samsung smartphone, Dell Alienware Laptop
Spends
8-10 hours online
Just bought running shoes through Amazon and recharged is phone via
paytm, where he received a cashback.
Varun is a final year student of Delhi University. He lives with his small famliy in
southern Delhi. His dad is a banker and mom is a teacher. He gets limited pocket
money. For him, being cool and trendy maters but at the lowes cost possible. He
always hunts for discounts.
Online Activity
Playing games, reading news, music/video streaming, shoping - gadgets apparel,
video games, movie tickets booking, chatting, dating, browsing, deals/discounts,
online courses, jobs/internships
Mostly uses boradband connection at home/university. Uses
mobile internet when he is not in WIFI-zone with a prepaid data plan.
Active Aspirer
2013 28M
2018 55M

31. Name Age City Occupation
Anusha 20 Jamshedpur Student
Owns Device(s)
Xiaomi smartphone, HP Laptop
Spends
7-8 hours online
Just bought a red top online through Jabong and received a bonus for
another buy.
Anusha is a second year college student. She lives away from her family in the
college hostel. She uses internet mainly for social media, shopping, deals hunting
and knowledge. She aspires to look trendy and fashionable.
Online Activity
Browsing information, Music/videos streaming, Shopping (gadgets apparel, lin-
gerie, books), Chatting, Social media, Browsing Deals/Discounts, Online Courses,
Jobs/Internships
Mostly uses broadband connection at college and has access to a shared WIFI at
her hostel. She has a data mobile plan but has to manage cost carefully.
Active Aspirer
2013 28M
2018 55M

32. Name Age City Occupation
Arjun 14 Kochi 9th grade Student
Owns Device(s)
Xiaomi Phablet, HP Laptop from older brother
Spends
7-8 hours online
No funds for buying right now ;-(
Although he comes from a well of family, he doesn‘t have a lot of money now.
He tries out lots of different types of apps for games, sports, media and for net-
working. He is keen to learn tips and tricks and shares those on his various social
media accounts.
Online Activity
Chatting, Music/videos streaming, Chatting, Social media, Browsing Deals/Dis-
counts,
Mostly uses broadband connection at home or at friends. He knows every WIFI
between home and his school. On the go he has to be quite cautious because
limited data plan.
Selfie Kid

33. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation
Novel Networkers
2013 7M
Entertainment Enthusiasts
2013 23M
Social Shoppers
2013 4M
Professional Pros
2013 7M
Active Aspirer
2013
28M

34. Name Age City Occupation
Neha 25 Chitoor School teacher
Owns Device(s)
Lenovo A6000 smartphone, hp Laptop
Spends
5-6 hours online
Just bought lingerie online on Clovia and a special medical cream for her
mother.
Neha is a school teacher of a private school based in Chitoor (AP). She lives with
her parents. Neha uses internet to keep in touch with her friends. She is a fashion
junkie and keeps an eye on latest fashion trends. She usually shops for brands not
available in her town and is actively researching with reviews before buying.
Online Activity
Browsing information, Shopping (gadgets apparel, lingerie, books), Chatting,
Dating, Social media, Browsing Deals/Discounts, Online Courses,
Streaming Music
Mostly uses the home connection to access the internet. Uses mobile internet
when she is outside with a pre paid plan.
Novel Networker
2013 7M
2018 30M

35. Name Age City Occupation
Sikhander 28 Jabalpur Sales manager
Owns Device(s)
Micromax smartphone, Acer laptop
Spends
8-9 hours online
Just bought bus tickets online through Redbus and unlocked pay-level in
Implosion his favorite game app.
Sikhander is a sales manager at Mahindra Tractors. He lives in the small town of
Jabalpur. He is getting married in 3 month. He is a ardent fan of Indian music and
cricket. Most of his time on internet is for chatting, social media and watching vi-
deos. He likes shopping online but most of the ecommerce companies don‘t ship
to his place
Online Activity
Information browsing, reading news, music/video streaming, social media, chat-
ting, playing games
Uses the office broadband conncection to access the internet. Uses mobile internet
when he is on the go on a prepaid plan where he consumes more then 2Gb/month
and gets some reimbursement from his employer.
Entertainment Enthusiast
2013 23M
2018 95M

36. Name Age City Occupation
Shalini 31 Bangalore Stay-at-home-mother
Owns Device(s)
Samsung S2, Lenvolo Laptop from her former employer.
Spends
7-8 hours online
Just bought a Saree online and a pink handbag on Myntra
Shalinni is a stay-at-home mother of a 1-year old kid. She is an experienced IT
professional and is currently on a motherhood break. For her, convenience and
quality matters the most. Also, she is the kind of person who loves sharing her
updates with her social media firends.
Online Activity
Shopping (gadgets, apparel, lingerie, baby products, grocery), Information
browsing, reading news, chatting, social media, , online courses, freelance pro-
jects, music/videos streaming,
Mostly uses the home boradband connection to access the internet. uses mobile
internet when she is outside home with postpaid plan from her husband.
Social Shopper
2013 4M
2018 10M

37. Name Age City Occupation
Rohit 28 Chennai IT Professional
Owns Device(s)
IPhone 5s, Apple Powerbook (company), SonyVaio laptop (from college days)
Spends
4-5 hours online beside work
Just bought a present for his girldfriend on snapdeal and booked a flight
trip to Ladakh.
Rohit did his bachelors from BITS Pilani and MBA from IIM Ahmedabad and lives
together with two of his colleagues. He thinks about a digital destination to each
and every tasks of his life and loves travelling and recently did a trip to Ladakh
with his girlfriend, whom he found on the internet.
Online Activity
Information browsing, reading news, music/video streaming, shopping (gadgets,
apparel, books, movie ticktes), social media, chatting, playing games, travel
tickets, banking, taxi services (he loves Olacab)
Mostly uses the home/office broadband connection to access the internet. Uses
mobile internet when he is on the go but tries to stay below the 1GB/month limit
his prepaid plan is allowing him.
Professional Pros
2013 7M
2018 15M

38. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
Novel Networkers
2013 7M
Entertainment Enthusiasts
2013 23M
Social Shoppers
2013 4M
Professional Pros
2013 7M
Active Aspirer
2013
28M

39. Name Age City Occupation
Ajit 54 Pune Business Owner
Owns Device(s)
Nexus smartphone, HCL desktop at office.
Spends
2-3 hours online
Just bought replacement knife set online through Indiamart
Ajit is a businessman who lives with his wife in Pune. He has a small processed
food business. Internet helps him to stay updated regarding the market trends
and prices and for banking. He does not shop online much, but he appreciates the
market transparency coming with the internet. He uses internet to book travel
tickets and read news. And just recently he discovered Whatsapp to exchange
with his family.
Online Activity
Information browsing, reading news, exchanging with family (chatting),
travel tickets booking, procurement for his business.
Mostly uses the office connection to access the internet. Uses mobile internet
with pre paid plan, which his son is recharging for him at the booth in the street.
Late Learner
2013 15M
2018 20M

40. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Data Discoverers
2013 49M
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
Novel Networkers
2013 7M
Entertainment Enthusiasts
2013 23M
Social Shoppers
2013 4M
Professional Pros
2013 7M
Active Aspirer
2013
28M

41. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Data Discoverers
2013 49M
2018 280M
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
2018 20M
Novel Networkers
2013 7M
2018 30M
Entertainment Enthusiasts
2013 23M
2018 95M
Social Shoppers
2013 4M
2018 10M
Professional Pros
2013 7M
2018 15M
Active Aspirer
2013
28M
2018
55M

42. Name Age City Occupation
Ifran Ali 26 Rural UP Garment business owner
Owns Device(s)
Micromax smartphone, Dell Desktop at office
Spends
3-4 hours online
Just bought train tickets online through IRCTC
While he travels to collect his garment, he buys tickets online, uses Google maps
to find addresses. He uses facebook and Whatsapp permanently and shares a lot
of content on those platforms. He exchanges messages in his local language. Pre-
sently he is not buying things online, because of lack of delivery in his area. But he
does a lot of business via Whatsapp with suppliers, who share the latest produtcs
as images with him.
Online Activity
Information browsing, Reading news, Music/Videos streaming if bandwith
allows, chatting, playing games.
He uses the office connection to access the internet. At home bandwith is very
poor. When on travel he enoyes higher bandwidth of mobile networks on a pre-
paid data plan. Because of frequent power cuts his mobile phone became the
main device for him.
Data Discoverer
2013 49M
2018 280M

43. Fundamental change
Common belief Reality
• Most users are from metropolitan areas.
• Most users are 18 to 25 years old and affluent.
• 34% of internet users are from smaller urban
areas (tier 2, tier 3 and tier 4 cities), and 25%
are from rurals areas.
• 57% of urban users are older than 25 and
will make up 70% of the urban internet
population.
Who is online?
How do users
access the
Internet?
Why are Indian
users online?
What drives
online traffic?
What impact
does the
Internet have?
• Mobile Internet activity is small and irrelevant. • 45% of urban consumers with access to the
Internet use only mobile devices to connect.
• Most online users are discount driven.
• Deals and discounts dominate online sales.
• Discounts drive 30% of online purchases, but
convenience (37%) and variety (29%) are also
critical.
• Social media create a positive buzz. Internet
users spend most of their time on social media.
• The commercial impact of the Internet is over
stated.
• eCommerce is very limited.
• Search engines drive traffic more than 40%
of the time.
• The impact of social media is limited, driving
just 25% of traffic.
• Among urban internet users, 40% engage in
digital activity at some point in the purchase
process, and 13% purchase online.
Source: BCG

44. AECALwas founded and established by a team with
complementing skills and backgrounds
Prof. Peter Kabel, Managing Director
Marketing and Sales
• Teaching Professor for Media Communications at Hamburg University of Applied Sciences
• Serial Internet- and Media Entrepreneur (Kabel New Media, Trendbüro, Büro Hamburg,
Tone Consultants)
• Experienced Investor in European and Indian Startups (i.a. Ixigo)
• Active in India for 15 years
• Professional background in Consulting, Design and Marketing
Get in touch: peter.kabel@aecal.de +49 1714715606
Dominik Gyllensvärd, Managing Director
Finance and Operations
• Consultant with focus on Digital Transformation with project engagement in over 20 countries
• Active investor in various digital and E-Commerce ventures
• Accenture (strategy consultant)
• Frontlineshop (CFO)
• dgroup/ diligenZ management consulting
Get in touch: dominik.gyllensvaerd@aecal.de +49 1735278789

45. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Data Discoverers
2013 49M
2018 280M
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
2018 20M
Novel Networkers
2013 7M
2018 30M
Entertainment Enthusiasts
2013 23M
2018 95M
Social Shoppers
2013 4M
2018 10M
Professional Pros
2013 7M
2018 15M
Active Aspirer
2013
28M
2018
55M

46. Why India is hot, hot, hot?
AECAL Asian E-Commerce Alliance GmbH
Prof. Peter Kabel und Dominik Gyllensvärd