Warc Blog

India's ecommerce sector grows

23 May 2013
BANGALORE: Online retailers and consumer brands such as Nike, Puma and Wrangler are finding themselves in an increasingly interdependent relationship as India's ecommerce sector grows beyond the main cities.

Technopak, the advisory services firm, has predicted that online retail will be worth $76bn by 2021 and account for 5% of total retail sales.

And individual brands are already registering a sharp growth in sales through this channel.

"Three years ago, about 1% of total sales came from online channels. Now, that number stands at 15%," Rajiv Mehta, Puma's managing director for South Asia, told the Economic Times.

"Today, no brand can ignore the online channel," he declared, noting that e-sales were growing almost twice as fast as the brand overall.

Wrangler, the denim clothing brand, currently garners 3.5% of sales from online sites but anticipates this will increase significantly. "Online channels have grown by many multiples in recent months. It has been amazing," said Puneet Khosla, a business head for Wrangler.

Footwear brand Nike works only with online retailers such as Jabong and Myntra. Ganesh Subramanian, chief merchandising officer at Myntra, explained the benefits of being the preferred online partner of a large brand.

"The brand's marketing and planning team work closely with our team," he said. "The brand also invests resources, gives us pick of products, does exclusive launches and promotions."

Etailers have also noted a change in attitude. "Earlier, top brands were sceptical about online retail," said Mukesh Bansal, co-founder of Myntra. "Now, it has become part of their mainstream strategy."

One of the drivers of growth has been consumers in lower tier towns and cities starting to buy online since they do not have access to physical stores stocking top-end brands.

"About 50% of sales for online sites come from cities and towns beyond the top eight metros," said Pragya Singh, associate director at Technopak.

Data sourced from Economic Times; additional content by Warc staff

 
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