COMPANY LIMEROAD is a social commerce platform operated by A.M. Marketplaces Pvt.

Ltd. Headquartered in Gurugram started on 07th June 2012i.

INDUSTRY E-COMMERCE (Earlier it was E-Commerce and Apparels but recently from
March onwards it became specifically E-Commerce)

Industry Analysis

Earlier as LimeRoad was dealing only in womens apparels its industry were more of ecommerce sites focusing on apparels and women wear. So, LimeRoad dealt with the likes
of yebhi, yepme, myntra, jabong as competitors.
But now recently as it has also started Mens apparel, home dcor and kitchen products,
LimeRoad is aspiring to step into the league of big players like amazon, flipkart, ebay,
snapdeal, etc. But as of now with the range of products LimeRoad has, it is more of a
company dealing in fashion and lifestyle products.
Below mentioned data and charts show the Retail-Industry and E-Retail Industry
performance with the projections for next 3 years i.e. till 2019. We are here also
considering the performance with projections in the earlier product group of apparel ecommerce.

e-retailing as a % of retailing
35
30
25
20
15
10
5
0

2010.0

2011.0

2012.0

2013.0

2014.0

2015.0

2016.0

2017.0

2018.0

apparel e-retailing as a % of e-retailing

30
25
20
15
10
5
0

2010.0

2011.0

2012.0

2013.0

2014.0

2015.0

2016.0

2017.0

2018.0

CAGR
2
1
0
2010.0

2011.0

2012.0

2013.0

2014.0

2015.0

2016.0

CAGR-retailing

CAGR-eretailing

CAGR-mobileretailing

CAGR apparel e-retailing

2017.0

2018.0

iv

In the above shown graphs, we could find the data till 2015 from the reference mentioned and
based on the data we have estimated the further values. Graph-1 shows the expected rise in the
E-retailing business as compared to the Retailing business. Graph-2 shows that although the
Apparel E-Retailing is rising but then too it as a ratio to overall E-retailing is falling as there are
many major players in market with a broad variety of products for the same. Graph-3 depicts the
CAGR data for all categories. After 2015, being on a very conservative side we have considered
the market to be stable and a little stagnant with the constant CAGR as of previous years for all
four segments we considered. For retailing, mobile retailing, and apparel e-retailing we have
very little variations in CAGR over the past 5 years and thus we considered them as having
constant CAGR from 2015 as it is easy to model. To ensure consistency on modelling we took
CAGR forecast for e-retailing as also constant with 2015 value.

PESTLE analysis for LimeRoad

Political factors
The current Central Government has introduced a campaign of Startup India providing impetus
to the startup ecosystem and thus has increased competition for LimeRoad in the e-commerce
sector.
Economic factors:
Taxation in India:
LimeRoad is an aggregator for its various vendors but does not have any
inventory and is only a platform for customer to vendor interactions which is facilitated here
following a marketplace model. Thus under the present tax scenario in India according to Section
65B(44) of Sales Tax Act the company has to pay no tax as it provides only a service as goods
change hands directly from the vendor to the customer.
However the company being headquartered in Gurgaon, Haryana might need to register
with the excise and taxation department for payment of Value Added Taxv.
The coming GST bill would have repercussions for the continuing business activities as
firstly the definition of 'aggregator' suggests it applies only for services and that too, only for
'listing' of sellers. The definition of operator is when they facilitate payment which has separate
tax liabilitiesvi. Also we have GST at source and thus there might be an increase in taxes to be
paid by LimeRoad
Interest rates:

As can be seen from the above plot, we have since 2010 seen a rising trend in interest
rates which has only in the past year started coming down. Thus though the cost of borrowing for
the company was high during its inception in 2012, it is slowly coming down. Also the customers
would have more money to spend and thus sales by e-commerce would increase.
Inflation:

The coming down of inflation rate over the past few years with it being stabilizing in
between 4-6% is a boon for the e-commerce industry as the sales are increasing.

Social factors:
Internet usage

Internet Subscribers (Million)

350.000
300.000
250.000
200.000
150.000
100.000
50.000
0.000

vii

As can be seen from the chart, the usage of internet in India has increased quite a lot and
thus increasing the sales prospects of e-commerce sites like LimeRoad.
Internet usage demographic:

viii

This shows that the maximum usage of internet is in the age group 15 to 44 which are the
target market of LimeRoad and thus is a good market for sales.

ix

This shows that the percentage usage of internet for women is lower than that of men.
LimeRoad initially was a womens only store and thus could capture only womans part of the
market and the male market only for gifting to a significant other. This drawback has been
removed with LimeRoad providing mens category.
Technological Factors:
The technological changes occurring in India especially as regards smart phone market have
provided a direction for e-commerce sites like LimeRoad to provide a shopping app as an
alternate way of shopping on LimeRoad. This change can be seen as

Sales via medium

16000
14000
12000
10000
8000
6000
4000
2000
0

2010.0

2011.0

2012.0

2013.0

e-retailing

2014.0

2015.0

2016.0

2017.0

2018.0

mobile internet retailing

Legal Factors:
E-commerce websites operating in India are required to follow many laws of India including the
Information Technology Act, 2000 (IT Act 2000). As per the IT Act, 2000 these e-commerce
websites operating in India are Internet intermediaries and they are required to comply with
cyber law due diligence requirements as well.
The Bombay shops and Establishments act, 1948 defines shops as those having premises
which are absent for e-commerce sites and thus these may not be valid as shops.

Ecological factors:
The conversion to Bharat-IV standards for fuel emissions by 04/2017 and Bharat-VI by
04/2020 has put a lot of pressure on the transportation sector and led to increased cost of
transportation for goods thus affecting the margins of e-commerce sites.

Porters Five Force Model

Supplier Power:
LimeRoad is working on a zero inventory marketplace model and is thus completely dependent
of the companies which list their products on the site. Also these suppliers can list in any of the other eretailers and thus there is very high supplier power in determining the prices of the goods.
LimeRoad is working on making at least 50% of the listings as exclusive to the site xi to improve
which would require some incentives to the suppliers and thus their power increases.

Buyer power:
There are a lot of e-commerce sites like Myntra, Voonik, Craftsvilla etc. and thus
customers have a lot of options for buying items in the e-market scenario. There is also
competition from brick and mortar stores which have a touch factor for increasing sales. Thus the
buyer power is also more in this sector.
Competitive Rivalry:

Large numbers of E-commerce companies have opened up adding to existing sites

(Myntra, Voonik, Craftsvilla etc) and each one of them is trying very hard to increase their
market share by providing lucrative offers. Thus there is high competition.
Threat of substitution:
Instead of Buying the Apparels online, the customers can buy it directly from a retail store as they
will have the benefit of trying the apparels out. The other e-commerce sites are also substitutes for those
listings which are common. However the exclusive listings have no such threat.

Threat of new entry:

There are few barriers of entry into the e-commerce market in the current legal scenario and thus there
are many new entries tapping into the same market. Thus the threat of new entries is ever present.

Past Performance
Past analysis for LimeRoad

xii

As can be seen from the above Revenue figures, the sales have increased highly in the financial
year 2014-2015 which can be seen as a validation of the market model. This momentum is
further carried by the ad released in September 2015 xiii. The introduction of home dcor products
and mens range is the strategy of increasing the product mix. The exclusive offers available
from the designers and scrapbook feature has ensured that the user activity in the site has
increased ensuring that the consumers would use them.xiv

xv

The expenses have increased to INR 48.1 crores from INR 16.9 Crores in 2013 to 2015 with a
major increase going to advertisement and freight which are both necessary for expansion of the
brand image and delivery of stock.
SWOT analysis for LimeRoad

Strengths
1. Scrapbook This is a social tool where
users can create full wardrobe from
items in catalogue and share it on social
media ensuring publicity for LimeRoad.
2. Exclusive listings for items especially
designs
3. Zero-inventory model
Opportunities
1. To expand into tier two cities
2. Further increase their product mix in
lifestyle segment

Weakness
1. Available in tier I cities onlyxvi
2. The offerings for Men and Home Dcor
are not advertised months after
introduction
3. Perception as a women apparel store
only

Threats
1. M&As of major players like Myntra
and Jabong have strengthened Flipkarts
position in apparel e-commerce.
2. Most of the offline retail gaints in
apparels have come up with online sales

Segmentation, Targeting and Positioning

SEGMENTATION
Market Segmentation is the first basic thing required to be done by a company
before launching a product or starting any business. We need to know on what basis
can our market be segmented and what all people to focus on. There can be many
ways of segmenting the market which a company can take up.
Specifically if we talk about LimeRoad, they have segmented their market on the
following basis:

Demographics Age and Gender

Geography Cities or Countries where the products of the company are
targeted.
Taste & Preferences of People What kind of product a person desires. In our
case main focus is on Designer Apparels.

xvii

TARGETING
Market targeting is nothing but where exactly to reach out in the segments which a
company sets for itself. In our case LimeRoad has segmented its market on the
basis of the following:

Demographics
Geography
Taste & Preferences of People

Coming to Demographics, LimeRoad targeted majorly females in the beginning and

that too majorly ladies which are more towards fashion and of the age group 24-35.
The following clippings from their official website strengthen this argument.

xviii

Both the snippets from their website show designer dresses being endorsed by
Bollywood Divas which shows class, age factor i.e. early 30s and love for fashion.

Next based on Geography, LimeRoad is present only in Tier-I cities i.e. Mumbai,
Delhi, Bengaluru, Ahmadabad, Jaipur, Hyderabad and Lucknow.
Next LimeRoad focused on selectivity and socialism. They preferred to go zeroinventory and a social e-commerce site. They focused on people with high fashion
sense and sense of exclusivity.

POSITIONING
The Market positioning of LimeRoad and its products was beautifully designed and
set. It was positioned as a site which provides a platform for designers to come and
sell their products and also helped providing the costs low to the customer. Both the
fashion houses and few new entrants can design and sell their designs by getting
them registered here. Also the people who want exclusive designs to wear and
monetary worth of the product is secondary were kept in mind while positioning it.

i http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=223308316
ii http://www.portal.euromonitor.com/portal/analysis/related
iii http://www.portal.euromonitor.com/portal/analysis/related
iv http://www.portal.euromonitor.com/portal/analysis/related
v http://www.business-standard.com/article/economy-policy/haryana-to-tap-e-commercereal-estate-for-taxes-113062801089_1.html
vi http://www.business-standard.com/article/economy-policy/gst-may-stifle-innovation-ine-commerce-space-iamai-116062901066_1.html
vii http://www.indiastat.com/table/telecommunication/28/internet/143/395675/data.aspx
viii http://www.statista.com/statistics/272394/age-distribution-of-internet-users-in-india/
ix http://www.statista.com/statistics/272438/gender-distribution-of-internet-users-in-india/
x http://www.portal.euromonitor.com/portal/analysis/related
xi https://yourstory.com/2013/03/limeroad-com-an-ecom-portal-for-women-is-bullishabout-the-future/ press release
xii https://www.tofler.in/companyinfo/U74140DL2012PTC237075
xiii http://www.limeroad.com/blog/limeroads-first-tv-ad-isnt-actually-commercial-suchimukherjee-ceo-limeroad/
xiv https://techcrunch.com/2015/03/30/limeroad-seriesc/
xv https://www.tofler.in/companyinfo/U74140DL2012PTC237075
xvi http://www.bloomberg.com/research/stocks/private/snapshot.asp?
privcapId=223308316
xvii http://www.limeroad.com/house-of-design?f_ref=nav

xviii http://www.limeroad.com/women