E-commerce in India

As per IAMAI, the current number of Internet users in India is around 150 million users (~50 million in Rural) growing at a CAGR (2010-12) of 40%. This number is expected to grow to around 300-350 million by 2015. This means 30% of India is online covering most of the Urban India, which is where 60-70% of the consumption happens in this country.

Youth are increasingly adopting e-commerce

India has the biggest youth market that is adopting technology quickly.  Indian youth are comfortable using technology and are preferring to shop online. From books and apparel  to FMCG goods, everything is being sold online today. The apprehensions of buying online are subtly fading away for the Indian consumers and online retail is showing positive signs for the future.

India online retail is growing at 35% which would take its value of around 3000 crores ($ 600 million) currently to around 7000 crores ($ 1.5 billion) in 2015. Some of the largest retailers in terms of unique visitors are – Amazon, Flipkart, Jabong, Myntra, Indiatimes, Snapdeal, and Homeshop18 (in decreasing order).

Great signs for online retailing:

  • Indian online retail is growing at 35% though the overall size is only 3000 crores.
  • Sites such as Flipkart have their apps loaded in 40-50% of the smart phones in India.
  • As per Assocham, 58% of the online shoppers shop using debit cards inspite of the cash on delivery option.
  • Increase in assortment in online retailing ranging from books, apparel, shoes, electronics, to specialized FMCG, furtniture, etc.
  • Categories such as apparel have witnessed strong acceptance and growth in online buying
  • Increasing time spent on smart phones in browsing online retail websites. In 2012, upto 20% of the traffic for Snapdeal came from smartphones.

Category-wise growth

According to Assocham, apparel and consumer goods are the fastest growing categories in e-commerce.

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Source: Assocham and comScore

Browse offline, Buy Online

Consumers who are comfortable and convinced to buy online are popularly using the method of browsing items in the shop and then buying the item online. This is especially observed in books, shoes, electronics, etc. Consumers are reaping the benefits of both the trades (look and feel from the brick and mortar stores, and discount benefits from online) and this is an important clue for the retailers.

Online retail has made a dent in the $ 500 billion Indian retail market. However, there is a long way to go and it is a big task to even reach the modern retail market size of $ 30 billion. Indian consumers are simultaneously witnessing three revolutions – modern retail revolution, smart phone revolution, and e-commerce revolution. With FDI in retail, increasing smart phones and internet penetration there is strong optimism for the growth of all the three and how these three revolutions converge into a giant consumption basket.

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