E-commerce Startups Get Investors’ Love in India, Will Indonesia Follow Suit?

It seems like e-commerce is the hot property in India right now, judging by where the money has been flowing in recent months. I’m not just talking about the big boys like Flipkart, SnapDeal or Homeshop18. The smaller players like OfferGrid, Freecharge, and Fashion and You are also getting a lot of love from the investors too. Like it or not, investors in India are pouring money into e-commerce.

On Monday, IDG Ventures India put $14 million into Brainbees Solutions Pvt Ltd. Guess what they do? You guessed it: e-commerce. Brainbees Solutions runs FirstCry.com and GoodLife.com, both of which are vertical e-commerce stores for baby and beauty products, respectively.

IDG’s Manik Arora said in a statement that they are delighted to invest in Brainbees Solutions. He explained that the baby and beauty products market is a $10 billion market. Most importantly, the industry is well placed to move online.

Right on. I think that sums up everything. There’s a ready demand in the market. And e-commerce stores, to put it bluntly, are just a window of convenience for consumers. So demand + supply + convenience looks like a good formula to bring visitors to the site, make them pay, and you make the profit. That also explains why entrepreneurs in India are setting up various vertical e-commerce stores ranging from lingerie shops, members-only shopping to deal aggregators to capitalize on the boom. Even the western big boys, Amazon, are setting up shop in India; their Indian branch will be called Junglee.com.

I believe China is going through a similar stage, although the “big boys” there aren’t boys so much as giants like the Alibaba Group and 360buy. Other than that, we’re also seeing a lot of vertical e-commerce stores getting investments and doing well in China: lingerie, bags, private shopping, etc. There’s a similar trend in the two biggest markets in Asia.

That got me thinking. Will Indonesia go through the same cycle? It probably will, and it is perhaps in the early stage of the cycle now. We’re even seeing some big boys emerging; I’m often pointed to Tokobagus, Blibli, and Tokopedia as up and coming e-commerce stars in Indonesia.

Now, these are online stores that are selling almost anything. If the trend stays true, more vertical stores should pop up soon in Indonesia and we will see more investors pumping money into e-commerce startups.