Baskets Shrinking in E-Commerce

Take a look at the Average Order Values (AOV) on the most popular e — commerce platforms in India (SnapDeal, FlipKart, Amazon & ShopClues in case you forgot).

Either way, considering that CAC at scale is constant across platforms –LTV per customer for ShopClues is significantly lower than its competitors.

Maybe as a result of falling prices of consumer electronics & smart phones — cart sizes have fallen across the board in 2016. The implications of falling GMVs on e-commerce firms wrt to Gross Margins and Cost of delivery are particularly compelling.

E-Commerce investors should be worried since logistics costs for laggards tend increase over time. In the long term the benefits of scale tend to accrue to the leader — delivery optimization and supply chain efficiencies create a virtuous cycle that’s hard to break. For those falling behind, the same forces work in the opposite manner. With lower efficiency and decreasing market share, cost per delivery increase in the long term.

Thanks for your time,

Ashish
- Team KG

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You can reach me on ashish@kalagato.com

KalaGato is an automated audience profiling, segmentation and targeting platform that helps brands reach their customers.

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