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Global economy overview and outlook

The outbreak of novel the coronavirus in 2020 sent many countries into strict lockdowns leading to the closure of non-essential brick & mortar retail, widespread disruptions in supply chains & manufacturing and job losses across the world. This resulted in the global GDP declining by 3.4%2 in 2020. Despite major headwinds due to the rise of the delta variant, labour shortages in developed countries leading to supply chain disruptions and inflationary pressures, the global economy recovered in 2021, growing at 5.5%1 driven by strong consumer spending, fiscal support, uptake in investments and growth of goods trade. While a recovery is expected to continue over the next two years, growth is expected to slow down due to persistent supply chain bottlenecks, labour shortages in developed economies, disruptions caused by a rise in cases due to the Omicron variant, impact of war on Ukraine on global investments and economic activity, and growing inflation leading to a tightening of monetary and

fiscal policies. Global GDP is projected to grow at 2.9% in 2022.

US economy overview and outlook

In line with the global economic trend, the US GDP declined by 3.4% in 2020 due to depressed consumer spending and business investment. The resurgence of consumer spending owing to pent up demand and USD 1.9 trillion fiscal stimulus spent by the US government led to a strong GDP growth of 5.7% in 2021. In 2022, the economic recovery is expected to continue but at a slower rate of 2.3% due to a normalisation in consumer demand, rise of the Omicron variant, inflationary pressures due to tight labour markets and supply chain disruptions, and expected interest rate hikes & asset purchase programme by the Federal Reserve to combat inflation3.

Global retail and e-commerce overview

Worldwide retail sales witnessed a decline of 2.8% to USD 23.6 trillion in 20204 with non-essential physical stores remaining

shut during the lockdowns and reduction in consumer spending due to job losses. While retail sales declined, e-commerce sales witnessed exponential growth in 2020. With lockdown restrictions and safety concerns, millions of consumers preferred to shop from the convenience of their homes.

Physical retail made a strong comeback in 2021 driving global retail sales to USD 26 trillion, 9.7% increase over 2020. This growth is much higher than what was anticipated and can be attributed to the pent-up demand from in-store shoppers as the world began to regain normalcy and consumers got vaccinated3.

Global e-commerce continued its strong growth streak, growing 16% over 2021 to reach USD 4.9 trillion. This growth was however lower than the 26% growth in 2020, partly because so much growth was shifted to 2020 and partly because of a reopening of physical stores. China and the US continue to dominate global e-commerce sales, accounting for nearly 70% of global e-commerce sales and comprising about 50% of the worlds online shopper population in 20213.

Source: eMarketer

Global retail e-commerce sales growth is expected to slow further in 2022 as demand normalises but could still grow in double-digit percentage terms and faster than physical retail. Global retail e-commerce sales are expected to reach USD 5.5 trillion by growing at 12% over 20215.

US retail and e-commerce industry

Over the last decade, there has been a remarkable shift from the traditional brick and mortar space towards e-commerce

This astonishing growth is a result of a proliferation of smartphones, affordable internet, demand for convenience and e-commerce giants, which offered a wide assortment of options across millions of products and worked towards providing a seamless customer experience with innovations in technology and supply chain.

The share of e-commerce in total retail sales in the US rose sharply as the e-commerce industry quadrupled and outpaced the overall retail growth.

2010 2020
Share of e-commerce in retail 5% 20%
Retail e-commerce sales USD 165 bn USD 763 bn

Source(s): Digital Commerce 360, red stag fulfilment

2020 was an inflection point for the e-commerce industry in the US. COVID-19 catapulted e-commerce sales growth to 32% in 2020, double that of 14% growth in 2019. The market size reached levels - USD 763 bn in 2020 - which were otherwise expected to be reached in 20226.

In line with the global trend, the US e-commerce industry saw smaller -

compared to 2020 - yet significant growth in 2021. After a record breaking 2020, the growth in 2021 normalised to pre-pandemic levels as in-store sales bounced back and supply chain disruptions impacted e-commerce. However, the long-term change in habits towards online shopping brought about by the pandemic helped the industry sustain a double-digit percentage

growth rate in 2021. The US e-commerce industry grew at 14% to reach USD 871 bn in 2021. The share of e-commerce in retail remained flat at 19% in 2021 as the retail sales grew at 14% to reach USD 4.55 trillion - on par with that of e-commerce sales and double the pace compared to 20206.

Supply chain adversities plagued the US e-commerce industry in 2021

The industry experienced unprecedented supply-chain disruptions in 2021. With a shortage of raw-material and shipping containers, sellers could not keep up with the upsurge in demand for online products. The US ports were congested with cargo ships waiting for days outside

major ports to dock. Shortage of labour meant lower number of drivers to drive transport trucks. Goods took twice as long to reach warehouses - 80 days up from 40 days in January 20207. Consumers experienced massive delays in delivery on account of these disruptions.

Increased freight and working capital costs, slowdown in imports, raw-material and labour shortages led to a steep increase in retail prices.

During the US holiday season, consumers saw 6 billion out-of-stock messages, three times compared to

pre-pandemic and 10% higher when compared to 2020. Weaker discounts and higher prices due to inflation, along with supply chain disruptions, led to slower growth in US holiday sales. The US holiday sales in 2021 (November - December) grew at 8.6% compared to

that of 2020 - the slowest from 2014 - to reach USD 204bn in 2021. This growth was mainly driven by increase in prices than volume. The big promotional days - Cyber Monday and Thanksgiving - were not as much in spotlight as brands and sellers encouraged consumers to spread

purchases to combat product shortages and reduce shipping delays. As a result, the Cyber Week (five days between Thanksgiving and Cyber Monday) sales witnessed a slight de-growth of 1.4% from USD 34.4 bn in 2020 to USD 33.9 bn in 20218.

Going forward

Supply chain woes are expected to continue into 2022, causing Inflation to remain high. Growth in e-commerce sales is expected to be similar or slightly lower than in 2021 at 12 to 14%. US retail e-commerce sales are expected to reach USD 980 bn - USD 1 trillion.

Top e-commerce retailers

Amazon remains the undisputed leader in the US e-commerce market - constituting around 44% of the US e-commerce market

The e-commerce behemoth is significantly larger than its nearest competition, with its gross market value being ~6x that of Walmart and ~8x of eBay.

Note: The above numbers represent the gross value of products or services sold on each website listed (through browser or app). In the case of Amazon, the sales include direct and marketplace sales, excluding travel and event tickets, Amazon Web Sales (AWS), advertising services and credit card agreements

Source(s): eMarketer, Digital Commerce 360

Third-party sellers

Amazon reported that it has nearly 2 million sellers across its marketplaces around the world, out of which 500,000 sellers are present on its US marketplace9. Third-party sellers contribute to a majority of Amazons revenue. The share of third-party sellers in Amazon GMV worldwide has been on the upward trend reaching 65% in 2021 with revenue from Amazon marketplace growing faster than Amazon first party sales10

Source(s): Digital Commerce 360; In the above graph Q1 refers to time period between January to March, Q2 refers to the time period between April and June, Q3 refers to time period between July and September, Q4 refers to time period between October and December.

Walmart also saw significant growth in sales by third party sellers. In just a year, the number of third-party sellers on Walmart doubled from 70,000 in December 2020 to 130,000 in December 2021.11

Digital shoppers in the US

US has 263 mn digital shoppers, constituting an enormous 80% of its population12. Gen Z overtook millennials as the largest generation in the US in 2020.

Key growth drivers of the US retail e-commerce industry: Growing smartphone penetration

Smartphones increase convenience and provide easy access to information regarding products, shipping, and delivery status. Enhancement of GPS tracking features in smartphones enables users to track product deliveries. As of February 2021, 85% of the population of the US owned a smartphone. An increase in smartphone usage enabled e-commerce companies to reach a wider customer base, one of the major factors of e-commerce market growth13.

Advanced technologies

Big Data Analytics, artificial intelligence and machine learning have benefitted e-commerce. BDA, with machine learning, allows the identification of an optimal price, determination of the most profitable customer category and related goods, and helps decide the ideal inventory. AI helps in capturing data from all avenues (social media, chatbots, customer service interactions and mobile messaging), fed into a BDA software to facilitate accurate data analysis.

Growing internet penetration

The US had an estimated 302 mn internet users in 2021, which is expected to reach 321 mn by 2025. The internet penetration in population stood at 90.8% in 2021 and is expected to reach 94% by 202512. About 77% of US adults have high-speed broadband connections at home, which is expected to grow further in the coming years14. Rise of internet/ broadband penetration will expose more users to online shopping, leading to significant growth in retail e-commerce.

New generation of shoppers

The tech savvy millennials and Gen-Z constitute 51% of the US population and form the majority of online shoppers in the US. This generation demands convenience in their busy lifestyle, wider variety, better prices and brand

communication through social media. Going ahead, e-commerce sales will be driven by millennials who are already in the workforce and Gen-Z, which will enter the workforce15.

Key trends in the US retail e-commerce industry Advanced technologies are underpinning the growth of e-commerce

Blockchain: Blockchain is a system of recording information that makes it difficult or impossible to change, hack or cheat the system. Blockchain makes transactions safer and faster. This technology enables users to share and securely store digital assets automatically/manually. It has the capacity to handle user activities such as payment processing, product searches, product purchases and customer care. Hence, e-commerce sites integrate robust data-encryption software to keep consumers personal data safe from cyber criminals.

Artificial intelligence: With the

help of AI technology, e-commerce websites are making smarter product recommendations to enhance customer experience. AI is enabling e-commerce businesses to analyse trends with respect to sales channels and buyer behaviour to ascertain the best time, price and place to list their products.

Big data and analytics: Data analytics harnesses large data derived from marketplaces to identify hidden patterns, trends and customer preferences. There is a growing emphasis among e-commerce companies to employ big data analytics. The value uncovered from mountains of data generated by consumers can be game changing. E-commerce Companies are using big data to:

• Predict the next-best selling products and forecast demand applying patterns from historical data

• Identify optimal pricing for wide ranging products sold by tracking

transactions, competitors, cost of goods sold and other variables

• Provide personalised experiences to customers through analysis of their preferences

• Optimise customer service by creating a 360-degree view of the customer

• Ensure more secure online payments by setting up alerts for fraudulent activities based on underlying data trends16

Emerging technologies in user interface and supply chain Headless and API-driven commerce

In headless commerce the front end of the e-commerce application/platform is decoupled from the back-end. In essence, the front-end and back-end can function independently, allowing increased agility and adaptability. Typically front-end designers and backend developers have different objectives in mind, therefore adopting headless enables the front- end to be creative and build an engaging experience while backend developers can focus on making critical enhancements to the application. Headless architecture enables brands to adapt to the dynamic changes and deliver engaging content in their e-commerce store, enabling the growth of organic traffic.

Progressive web apps (PWA)

One of the key trends in the e-commerce industry is the use of PWA, a website that has the form of a mobile application. Instead of developing and launching high-cost native mobile apps, e-commerce businesses can take advantage of PWAs to provide a better mobile experience, improve sales and enhance the customers online experience.

Augmented reality (AR)

AR adds digital elements to the real world with the help of a camera on a smartphone, tablet, etc. AR enables consumers to visualise how the product

they want to purchase can fit into their homes physical space. AR experiences are therefore particularly valuable in home decor and furniture space. For example, Wayfair offers an AR function on its app with which the users can take a photo of their room and add various products virtually in the space.

AR already has a wide user base in the US with 83 million users using the technology at least once a month. The number is expected to increase to 95 mn in 202217.

Virtual reality (VR)

VR offers a fully immersive experience in a completely simulated environment to users unlike AR which has real life elements. Dedicated hardware is required for users to experience VR. One of the key reasons cited by consumers for returns in e-commerce is the product received was not how they expected it to be in terms of feel, size, design, etc.

VR helps create a virtual storefront environment in which the consumers can examine the product and therefore make more informed purchased decisions.

Amazon, Shopify and Walmart invested in VR to enhance the consumer shopping experience. VR devices are owned by ~26 million households (10% of households) in US18 and are expected to grow rapidly, leading to a wider demand for and the adoption of VR shopping.

Internet of Things (loT)

I or in e-commerce is becoming mainstream due its wide-ranging benefits. I or enables smart devices to connect and send data to each other through the internet. The technology has enabled e-commerce companies

to improve inventory and supply chain management through better tracking of products using RFIDs and deliver personalised experiences to customers by collecting data.

Drones in delivery

E-commerce companies are investing in drones to reduce delivery times. Drones are unmanned aerial vehicles which are controlled remotely through software- controlled plans. Amazon has invested in Prime Aid deliveries through drones aiming to deliver products in 30 minutes.


Chat-bots are intelligent assistants integrated into websites and apps that communicate with consumers through messaging.

They are gaining popularity due to their ease of use, 24-hour service and faster response time, enhancing the customer experience.

Chat-bots automate repetitive tasks, save costs for companies by reducing need for manpower in customer service and also help gather valuable consumer data and insights.

It is estimated that 80% of companies worldwide were using chat-bots as of 202019.

Voice search

Voice search technology uses AI voice recognition which combines linguistics and computing to understand and process the voice command.

Consumers are increasingly relying on voice assistants to search for products and complete the orders as it is significantly faster than typing and more convenient.

According to the research firm Gartner, almost a third of browsing sessions in 2020 were predicted to have been through voice search.

Growing purchases of smart speakers (Alexa, Google Home), smartphones enabled with virtual assistants and the popularity of voice assistants such as Apples Siri and Microsofts Cortana are aiding the growth of shopping through voice search.

Key trends in consumer purchase behaviour

Rise of mobile shopping

With tech savvy millennials and Gen-Z constituting a majority of the shopper population, the mobile phone has emerged as a major channel for shopping. In US, the time spent by consumers on mobile phones per day increased from 188 minutes in 2016 to 234 minutes in 2021, a marked 24.5% increase in just five years20. Convenience, increase in mobile payment options and enhancement in mobile shopping interfaces are the key factors driving a growth in mobile e-commerce. In 2021, the US retail commerce revenue from smartphones was estimated at USD 221 bn and is projected to surpass USD 400 bn by 20 2421.

Multi-channel selling

Multi-channel strategy implies selling products through various sales channels including apps, websites, e-mails, online marketplaces, comparison sites and social media. Presence on multiple channels increases touchpoints with potential customers and exposes products to a wider range of customers, leading to increased sales. Multichannel retail e-commerce sales in US were estimated at USD 351 bn in

2020, constituting 44% of total retail e-commerce sales in US, and are expected to grow at 18% CAGR to USD 576 bn in 202322.

Omni-channel strategy

An omni-channel strategy recognises that a customer may start the search for purchase in one channel and progress towards other channels during theonline purchase journey. An omnichannel approach delivers consistent brand messaging and experience across all selling channels. In essence, an omni-channel approach optimises and completes the multi-channel strategy. In this digital era, companies are increasingly adopting this strategy to build customer relationships, understand customers better and drive brand value.

Social commerce

Social commerce means that the entire process of an online purchase, from product finding to check out, happens on a social media platform. Shopping on social media is expected to grow three times faster compared to that of traditional e-commerce23. The surge in social media shopping is being driven by Gen Z and millennial social media users. In the US, there were an estimated 80 million social buyers who spent USD 27 bn. Going ahead, social commerce in US is expected to reach USD 80 bn by 202520. Clothing, electronics and home decor categories are expected to constitute the majority of social commerce purchases.

Live commerce

Live commerce is selling of products live where consumers can interact with the sellers in real-time. The live

streams typically watched by millions of consumers enable brands to build trust, brand awareness, better understanding about the product and its functionalities, promote better engagement among consumers ultimately leading to higher sales. Successful livestreams incorporate active live chats, omni-channel streaming - making video available on websites, social media, YouTube, and live Q & A sessions. Live streaming started off in China where it witnessed massive growth. The trend is now being adopted in the US as well as other Western markets. Live commerce sales were estimated at USD 6 bn in 2020 and are expected to grow at a CAGR of 55% to reach USD 35 bn in 202424 .

Buy now pay later

Buy now pay later (BNPL) allows consumers to break down a purchase (large or small) into smaller interest-free chunks. BNPL is an interest-free mode of payment, which allows easy access to credit without the use of credit cards. The solution grew extremely popular during the pandemic as many consumers were short of credit due to pay cuts and job losses. The option is also highly popular among Gen Z consumers as the majority of them do not have access to credit cards. E-commerce businesses have tied up with fintech companies such as PayPal, Klarna, Afterpay and Affirm to offer BNPL solutions to consumers. BNPL is popular during the holiday season and, in 2021, sales through BNPL increased by 27% over the previous holiday season25 .

Company overview

Our Companyis an e-commerce retailer, enabling brands to maximise revenue on key marketplaces in the US. We currently

offer 150,000+ products of our brands across all major categories - home & kitchen, garden & outdoor, tools & home, sports & outdoor. Our solution is rooted in robust & scalable technology and rich marketplace expertise. Our consistently strong marketplace credentials, wide product assortment, efficient demand fulfilment and prompt marketplace customer support have positioned us as one of the leading sellers in the US e-commerce industry.

Business performance, 20212022

Our focus on strengthening our solution through investments, in making our technology robust and scalable over the last few years, has enabled us to deliver our services in a seamless and efficient manner to our brand partners unhindered by the supply chain and COVID challenges. COVID-19 induced a paradigm shift in consumer shopping behaviour, propelling them to rapidly adopt online shopping. Even as the pandemic wanes, the ingrained online shopping habits among consumers is enabling a sustainable strong growth of e-commerce.

Our long-term vision is in sharp focus, as we continue to make investments in our people, processes and technology to grow the company. The Board approved the raising of funds through a rights basis to fund growth. While we work through near-term macro challenges like supply chain congestion and related inflation, we remain well-positioned to capitalise on the continued global acceleration of e-commerce adoption and expanding market opportunities over the longterm.

Financial overview

The Companys consolidated Profit and Loss Account for the year ended 31 March 2022 is provided below:

Consolidated statement of Profit and Loss Account for the year ended March 2022

2021-22 2020-21
Revenue from Operations 42,166.01 61,313.38
Cost of goods sold (incl. Shipping) 32,090.54 49,741.89
Gross profit 10,075.47 11,571.49
Sales & marketing expenses 5,686.80 7,860.08
Employee benefit expenses 1,882.39 1,677.32
General & administration expenses 1,244.82 1,194.51
Earnings from operations 1,261.46 839.58
Other income (Net) 478.37 635.16
Earnings before interest, tax, depreciation & amortisation 1,739.83 1,474.74
Depreciation & amortisation 137.55 281.65
Earnings before interest & tax 1,602.28 1,193.09
Finance costs 352.05 325.14
Profit before tax (PBT) 1,250.23 867.95
Tax expenses -32.05 33.68
Profit after tax (PAT) 1,282.28 834.27

Risk management

1. Continuous upgradation of technology

The Companys operations are driven by technology; our failure to innovate, adapt or respond effectively to the rapidly changing technology and market needs could impede our ability to function efficiently.


The Company pro-actively invests in technology upgradation and improvement to strengthen its value proposition to brand partners, adapt to the dynamic market requirements and maintain its competitive advantage.

2. Festive season demand

The US festive season falls in the third quarter of our financial year, leading to a greater e-commerce revenue in the quarter vis-a-vis other quarters. In the event of any operational bottlenecks or infrastructure constraints, we may not be able to take advantage of the festive demand.


The Companys backbone is its proprietary technology, which enables the Company to efficiently service the demand spike in the third quarter of the fiscal. This allows the Company to scale in line with the increased festive season demand.

3. The continuing effect of the COVID-19 pandemic and its unprecedented nature.

While the pandemics effects have subsided as consumers got vaccinated, the emergence of new variants has not stopped. COVID-19 cases could increase at any time and if any of the variants emerging in the future pose serious health risks, it could impact our operations.


The Companys employees have adapted to new processes and protocols to serve brand partners. The teams, both in India and the US, will continue to work remotely across the foreseeable future, and are well equipped to do so as our

technology scales on the cloud. We will continue to monitor the impact of the pandemic, if any, and take necessary steps to ensure smooth business functioning.

Internal control systems and their adequacy

Our integral and robust internal control system ensures efficient utilisation and conservation of resources, compliance with policies, procedures and statutory requirements. The Company has developed well-documented regulations and guidelines for authorisation and approvals. Internal audit is a crucial backbone of the internal control systems and it is conducted on a regular basis to check and authenticate that all systems and processes are in compliance with the relevant guidelines and appropriate in safeguarding the assets from unauthorised use or losses. An Audit Committee of the Board evaluates the existing internal control systems, ensures compliance and takes corrective measures as and when required. The

management also regularly reviews all vital processes and control systems which strengthens the organisation. The emphasis on internal controls is imposed across all units, departments, functions and processes. All the measures are undertaken to ensure that the controls implemented are both adequate and equivalent with the size and nature of our operations.

Human resources

The Company believes that its intrinsic strength lies in dedicated and motivated employees. The Company provides competitive compensations, an amiable work environment and acknowledges employee performance through a planned reward and recognition programme. The Company aims to

create a workplace where every person can achieve his or her true potential. The Company encourages individuals to go beyond the scope of their work, undertake voluntary projects that enable them to learn and devise innovative ideas. The Group employed 88 individuals as of 31 March 2022.