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Many Massive Marketplaces Are Waiting To Be Built

A narrative that has taken hold of late is that there are no whitespaces left in consumer marketplaces.

The word on the street is that every nook and cranny has been filled—food, travel, e-commerce, you name it, it's been done.

But what if there's more to it, and big, game-changing marketplaces are still out there, just waiting to be built?

We believe there are plenty of opportunities left, ripe for the audacious to seize.

Marketplaces benefit significantly from network effects, creating strong reinforcing moats that lead to increasing consolidation in their target markets

India’s GDP per capita by 2031

2.3x

Est. $5,200

By 2031, India’s GDP per capita is expected to hit $5,200 (2.3x current), creating an acceleration in discretionary consumer spends. Consequently, this will lead to greater channel organization, as consumers tend to prefer organized markets for their discretionary purchases.

$140 Billion

The online consumer spend pool in India stood at $140 billion in 2023, estimated to more than double to $300 billion by 2030.

While the spends are spread across many large categories, what stands out is that a lion’s share (>80%) is captured by consumer marketplaces.

We see marketplaces shaping our consumption across various categories, including shopping, travel, grocery, mobility, health, education, local services, and real estate.

One of the major axes where there is room for builders to disrupt would be complex categories that conventional online marketplaces have not adequately served.

These categories would require concentrated efforts to digitize the entire supply chain and deliver deep value to end consumers.

We’ve had a ringside view of the creation of such marketplaces in cars, local services, and grocery through Spinny, Urban Company, and Country Delight.

Playbooks of the Pioneers

Spinny

Despite the emergence of numerous car listing platforms, the used car scene was still dominated by local dealers.

Spinny leaned heavily into trust as its core proposition and pioneered a full-stack model to guarantee verified, high-quality used cars for buyers.

It developed deep capabilities across car sourcing, refurbishment, and distribution through its Spinny Hubs. Today, Spinny stands as India’s largest

Country Delight

Despite numerous grocery options, finding high-quality fresh produce remained a challenge.

Country Delight tackled this by delivering farm-fresh milk directly to homes, creating a robust collection, processing and last-mile distribution network to ensure freshness.

Over time, Country Delight diversified its offerings to include fresh fruits and vegetables, continuing to build upon its value proposition.

Urban Company

In local services, while platforms offered a directory to find providers, the post-discovery experience often fell short.

Urban Company addressed this by launching a full-stack platform, starting with at-home beauty and salon services from highly-trained professionals, and consistently replicating this user delight across more categories.

Today, Urban Company's business is larger than Lakmé Lever, which has over 400 salons nationwide.

We believe that there are more such complex categories where consumer purchase journeys continue to be broken.

Given below are some of these spaces where we believe new-age consumer tech companies can materially elevate consumer experience:

Emerging

Opportunities

“Spinny”
for Homes

Home
Furnishing

New Consumer
Archetypes

“Spinny”
for Homes

Secondary home transactions are a $30 billion market and constitute ~66% of the overall sales of homes.

Market size of Secondary sales in residential homes

However, the discovery and purchase process of homes in this market continues to be driven by small brokerage firms.

For homebuyers, this results in a long-drawn process of interacting with multiple brokers since inventory with any single broker is limited. Homebuyers are also uncertain about the genuineness of the seller.

On the other hand, for sellers looking to liquidate the property in a hassle-free manner, there is no alternative in the market.

We believe that an intermediary platform that solves for trust for the buyers and helps sellers liquidate their ownership swiftly would add immense value to both sides.

Companies such as Opendoor, Casavo, Loft have done this in multiple geographies.

Home
Furnishing

Home furniture is a $16 billion market today and is expected to reach $23 billion in 2028 growing at a CAGR of 9.4%.

India Furniture Market Size

Home furniture continues to be a category with one of the lowest e-commerce penetrations.

Largely unorganized supply, lack of standardization in products, and complex logistics are some of the reasons why this category has been slow in moving online.

However, over the past few years, there has been an emergence in consumer brands across categories related to home

We believe that a consumer marketplace that brings visibility to these small emerging brands and that works closely with supply to co-create high-quality products could create a vertical marketplace.

In the US and Europe, ~40% of the online sales in home furnishing and furniture is contributed by vertical marketplaces such as Wayfair and Perigold.

New Consumer
Archetypes

Gen-Z Consumer Bharat Consumer

The other major axis for creating novel consumer marketplaces is the emergence of new consumer archetypes

Globally we observe that as the next generation of consumers come online and start contributing to a meaningful share of consumption, older consumer marketplaces are slower to capture changing trends, thereby leaving the space open for new consumer platforms to emerge.

The GenZ Consumer

One such shift in consumer archetype currently underway is the rise of digitally native GenZ consumers.

Born in the digital age, the average time spent online by the average GenZ individual is 8 hours daily versus a national average of 5 hours

GenZ forms 27% of India’s population.

Globally, there have been platforms such as Shein and Temu that have emerged to cater to the unique needs of this consumer cohort.

By innovating on the supply chain to increase the velocity of product iteration, Shein brought access to affordable and very trendy apparel in the hands of the US GenZ consumer.

GenZ Characteristics

46%

Contribution of Gen-Z + Gen Alpha to India population by 2030

8hrs

8 hours of daily avg. time spent online vs all-India average of 5 hours

8sec

Average attention span of 8 seconds

More affluent and better educated - likely to spend more on retail and entertained vs. previous generation

More value driven and try to find deeper meaning in their actions as consumers

Unlikely to sacrifice present consumption for the future

Strong drive to buy new things and try new experiences

The Bharat Consumer

The other consumer archetype which has been emerging is the value-conscious Bharat user

We believe that marketplaces for Bharat and India will be starkly different.

Companies such as Meesho, Ixigo, and Rapido have emerged over the past few years to cater to the e-commerce, travel, and mobility needs of Bharat users.

Meesho’s reseller-first GTM allowed it to access these users at a low cost. At the same time, Meesho had to onboard a very different supply base to cater to the needs of this growing segment.

Today, Meesho is the fastest-growing horizontal e-commerce platform in India

Ixigo started with a focus on railway bookings and was the first to market with features such as PNR prediction to solve the pain points around railway bookings. Over time, Ixigo has also added airline, bus and hotel bookings to capture allied spend pools of this consumer.

Rapido started out by focusing on the Bike Taxi market which solved for access to on-demand mobility at much lower price points than the incumbent ride-hailing players. This attracted a very different audience compared to Ola and Uber, and while the AOVs were lower, the number of people that Rapido could serve was much larger. After establishing itself as the leader in that space, Rapido is now adding more segments such as Auto and Cabs to its product and has become the fastest-growing mobility player in the country.

It's clear that the future of consumer marketplaces is yet to take shape. While we've highlighted specific opportunities, the truth is that the playbooks are ever-evolving and the journey of innovation is far from over. As we move forward, expect to see more marketplace opportunities emerge, each challenging and reshaping traditional retail ecosystems.