Warc Blog

Mobile drives Indian online retail growth

16 June 2014
BANGALORE: The online retail market in India will record a compound annual growth rate (CAGR) of 55.7% from 2013 to 2018, new research has predicted.

This growth will be driven by increased adoption of smartphones and other mobile devices in the country, the popularity of social media networks, as well as better e-commerce payment options, stated TechNavio, the global tech-research firm.

"Internet access from cellphones has witnessed a quantum leap in India in the last few years," said Faisal Ghaus, vice-president of TechNavio, who noted that 81% of the Indian population – or 910m people – used a mobile phone in 2013, including 105m who used them to access the internet.

He said retail sales via these devices will account for a significant proportion of total online retail sales over the next four years and the growing popularity of social networks will also make an impact.

Mobile users in India are thought to spend more than 25% of their total time on social networks and, with roughly 100m Facebook users, the country is expected to surpass the US in the near future for usage.

Further encouraging news for retail brands came with indications that the Indian government is reportedly poised to use its forthcoming budget to announce an easing of restrictions for foreign online retailers, Australia Network News reported.

An unnamed senior official said the Indian government was looking to open up the online retail market "completely", which it is hoped will boost manufacturing, consumption and economic growth.

If the initiative goes ahead – and it is thought it could happen as early as July – then it is expected that it will lead to lower costs as middlemen are cut out of the supply chain.

It could also help domestic online retailers, such as Flipkart and Snapdeal, by improving their logistics network and by driving down capital costs.

Data sourced from TechNavio, Australia Network News; additional content by Warc staff

 
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