Schulte Research is an independent research service provided by IND-X Advisors Limited. Paul Schulte has 27 years of experience as an analyst. He has experience in economic policy, sell side research, buy side, and academia. His research integrates analysis of banks and liquidity with corporate credit to get a clear and robust view of equity markets. For more information, visit the company's website at www.schulte-research.com.

1. Paul Schulte, MA, MALD
Paul@schulte-research.com
www.schulte-research.com
(+852) 9705 0777
Gavin Liu, CFA – Senior Analyst
BABA, AMZN, WALMART, TENCENT IN INDIA:
A PETRI DISH FOR A GLOBAL BATTLE IN 020 FIN TECH

2. 2
SchulteResearch
India E-Commerce Overview: Great Growth Potential:
Analog India becomes digital
Source: eMarketer, Statista, Schulte Research
98%
2%
INDIAN RETAIL SALES
IN 2017
Physical Stores E-Commerce
10000
20000
30000
40000
50000
60000
70000
80000
2016 2017 2018E 2019E 2020E 2021E 2022E
Indian E-Commerce Sales (in Millions of
Dollars)
Although India’s e-commerce
makes up only 2% of the total
retail sales in India, it may rise to
50% by 2023.
Indian e-commerce sales estimated
growth rate in 2018 is 31%. The
estimated CAGR from 2018 to 2022
is 23%. By 2022, India’s ecommerce
sector will be worth $70 billion.
CAGR: 23%

3. 3
SchulteResearch
Alibaba has stake in the biggest online grocer in India: Indian
agriculture and groceries has 0 online & 30% of food is lost in delivery.
Source: Statista, Reuters, Schulte Research
Founded: October 2011
Net Sales: $190 million (2017)
Users: 6 million
40%
Market Share
~20%
Alibaba Stake
Alibaba has
largest stake
Competitors
Two competitors command
~30% market share each
Huge untapped potential for online grocers
Other retail
spending Groceries Online Groceries
Retail Spending in India (2017)

4. 4
SchulteResearch
Indian Beauty Products: All cash market.
Source: Redseer, Schulte Research
Market Share
2%
98%
Beauty Product Market Share in India
Online Offline
33%
27%
25%
13%
12%
Online Cosmetic Market Share in India
Nykaa Amazon Flipkart Purplle Others
• Amazon India is already selling 2 million beauty products across
19,000 brands. $500 mn market

5. 5
SchulteResearch
B. India e-Commerce is growing rapidly, driven by smartphone penetration
Source: eMarketer, Schulte Research
E-Commerce Sales: ↑42%
(#2 Fastest in Asia)
CAGR 45.1%
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E
Billion(USD)
Retail E-Commerce Sales in India
Two Key Figures from 2017
72% of E-Commerce
from Mobile Phones
1. 2.

6. 6
SchulteResearch
Amazon in India

7. 7
SchulteResearch
Amazon’s Acquisitions in India. Watch Amazon transform Indian agriculture
Online Payment
Lending
Insurance
Finance
E-Commerce
Home Services
Agriculture
$700 mn
May
2018
2015
2016
Apr
2018
May
2018
2015
2016
May
2018
Sept
2017
2015
Publishing

8. 8
SchulteResearch
Amazon India VS Standard Chartered India

9. 9
SchulteResearch
The Amazon moment for banks has arrived: Standard
Chartered Stock Price trashed. It’s trading at 0.4 x book.
52 WEEK RANGE: 52.00-94.80
In 2018, it is down 46% from its high
Does Standard Chartered have a plan?
So far, I think not.
India is (was) a $1 bn revenue business.
Will Stan Chart suffer the same Amazon fate
as B&N, Sears, JC Penney?

10. 10
SchulteResearch
Alipay & Paytm have nearly identical user interfaces: Alibaba
gets 250 mn new customers in 24 months with Pay TM
Alipay Paytm

11. 11
SchulteResearch Paytm app covers a comprehensive array of needs for the Indian consumer:
Alibaba has migrated to India. Pay TM IS Alibaba in India as of Jan 2019.
Source: paytm, Schulte Research
Transportation
Government
Ecommerce
Utilities & Bills
Entertainment
Financial Services

12. 12
SchulteResearch
Paytm Mall brings to India the same hot strategies used by Taobao &
Tmall. PLUS, the ease of O2O retail delivery. People want value.
Source: Bloomberg Quint, Indian Times, Forrester, Schulte Research
Founded: February 2017
Net Sales: $47 million (2017)
Users: 80 million
Competitors
15%
Market Share
57%
Alibaba Stake
Market Share
Uphill battle against
Amazon and Flipkart
Paytm Mall gained 15%
market share in one year
BUT
Alibaba has proven
record of e-commerce
success in Asia-Pacific
AND

13. 13
SchulteResearch
Walmart in India

14. 14
SchulteResearch
History of Flipkart - NOW Walmart
Source: Flipkart, Schulte Research
(Credit)
(Content) (Electronics)
(Delivery)
(Fashion)
(White Goods)
(Advertising)
(Remittance)
(Payments)
(E-Commerce)
(Quality Assurance)

15. Tencent In India

16. 16
SchulteResearch
Walmart in China So Far…
Source: Walmart, Statista, Schulte Research
• Walmart entered the Chinese market in 1996 under a joint venture
• Since 1996, Walmart has opened 424 retail stores in China & 15 wholesale
• Walmart China accounts for only 3% of total revenue
So what are the reasons for the sluggish growth?

17. 17
SchulteResearch
Tencent and Flipkart (10 Apr 2017) - $1.4 bn for Amazon of India
Source: Flipkart, Reuters, Techcrunch, Schulte Research
• Flipkart is India’s leading e-commerce marketplace (40% market share)
• Tencent participated in Flipkart’s $1.4 Bn funding round (w/Microsoft &
eBay in April 2017)
• In the same month, Alibaba invested $45 Mn more in Paytm.
• Tencent continues to be an investor in Flipkart (6% shareholder post
Walmart deal)

18. 18
SchulteResearch
Tencent and Ola (11 October 2017) – $1.1 bn for ride sharing app
Source: Ola, Reuters, Medianama, Schulte Research
• Ola is India’s leading ride-hailing service, operating in 110 cities
• Uber operates in 30 cities
• Ola FY17 Total Revenue – $110 Mn USD
• Tencent lead Ola’s $1.1 Bn funding round (w/Softbank in October 2017)
• Ola money, is Ola’s own payment system
• Ola is also investing in AI and machine learning as well as in-car
entertainment (Ola Play)