India’s e-commerce market was worth about $3.8 billion in 2009, it went up to $12.6 billion in 2013. In 2013, the e-retail market was worth US$ 2.3 billion. India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of sales. E-commerce in India is estimated to reach $20 billion by 2015 (via – IndiaTimes).
Key drivers in Indian e-commerce are:
- Increasing broadband Internet(growing at 20% MoM) and 3G.
- Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes
- Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers
- Busy lifestyles, urban traffic congestion and lack of time for offline shopping
- Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs.
- Increased usage of online classified sites, with more consumer buying and selling second-hand goods.
- Evolution of the online marketplace model with sites like jobang, Flipkart, Snapdeal, and Infibeam.
India’s retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by 2016 and $850 Bn by 2020, – estimated CAGR of 7%. According to Forrester, the e-commerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012–16.
As per “India Goes Digital”, a report by Avendus Capital, a leading Indian Investment Bank specializing in digital media and technology sector, the Indian e-commerce market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion (87%) of this market today. Online travel market in India is expected to grow at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015.
On 7 March 2014 e-tailer Flipkart claimed it has hit $1 billion in sales, a feat it has managed to achieve before its own target (2015).
Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$24 billion) by the year 2015 with both online travel and e-tailing contributing equally. Another big segment in e-commerce is mobile/DTH recharge with nearly 1 million transactions daily by operator websites.
India’s e-commerce market set for 70% growth in revenue
According to an October report by Gartner, an American information technology research and advisory firm, ecommerce in India is likely to cross $6 billion in revenues in 2015, recording a 70 percent increase from a year ago. This makes India one of the fastest-growing ecommerce markets in the Asia-Pacific region.
The growth is being aided by the fact that more than 30 percent of traffic on ecommerce platforms is now coming from mobile phones and tablets. “There is increasing traction in mobile shopping. Marketplaces, consumer product goods, and food and beverage companies have started investing in mobile commerce,” the report says
Online Grocery Shopping on the Rise in India
The Indian e-commerce space is getting increasingly competitive, as consolidation and huge investments are tying up the mature business verticals like electronics, books, apparel and toys. With Amazon and Flipkart growing rapidly, more and more companies are starting to look in new directions for growth – and this isn’t just limited to startups. Tradus, which was regarded as a popular electronics marketplace not too long ago, recently shifted its focus towards food and groceries.
One business vertical which has not seen too much growth in India till now is the food and groceries segment. Most of the sites operating in this category, such as BigBasket, AaramShop, LocalBanya and Ekstop are startups, a majority of which are operational in a handful – sometimes even just one – of cities. However, there are some exceptions to this rule – both Tradus and HomeShop18 also sell food and groceries, and are active across India.
India Post joins with E – commerce sites
Within a year of joining the e-commerce bandwagon as a distribution channel, government entity India Post has transacted business worth Rs 280 crore in the Cash-on-Delivery (CoD) segment alone for firms like Flipkart, Snapdeal and Amazon.
While the amount of revenue generated for itself could not be ascertained, government officials said India Post is very keen on developing its e-commerce related services as a major revenue model going ahead.