Get a demo Do I subscribe? News sign-up
Print

Indian e-commerce set to soar

News, 10 January 2017

NEW DELHI: The number of Indian consumers shopping online is predicted to leap by 45% in 2017 as a combination of factors accelerate the advance of the e-commerce industry.

According to a study by trade body ASSOCHAM and consulting firm Resurgent India, some 60m people purchased online during 2016, but it expects that figure to top 100m during 2017.

It pointed to the rise of digital natives, better infrastructure in terms of logistics and broadband and the growing penetration of internet-ready devices as reasons for its assessment.

The value of online retail is forecast to hit $17.5bn in 2018, representing a doubling in just four years of its share of all retail sales. But that share will still account for only a sliver – 1.4% – of the total of $1,245bn.

Within e-commerce, mobile commerce is becoming increasingly important: mobile already accounts for 30-35% of e-commerce sales and its share is projected to jump to 45-50% in 2017.

That is in part due to a surge in the number of people shopping via mobile in lower tier cities, especially Tiers II and III, many of whom are doing so for the first time.

Bangalore, however, leads the way in terms of cities in India shopping online: the study revealed that 69% of its population chose to buy daily routine products through e-shopping in 2015-16 and expected that this figure would hit 75% in 2017 across the apparel, gift articles, magazines, home tools, toys, jewellery, beauty products and sporting goods categories.

In Mumbai, 65% of people were reported to have shopped online in 2016, rising to 70% in 2017, while in New Delhi the comparable figures were 61% and 65-68%.

Currently, computer and consumer electronics, along with apparel and accessories, account for the bulk of India's online retail sales.

While the government's demonetisation policy has opened up new opportunities for the e-commerce sector, the study noted that it still faces significant challenges in coping with rapidly changing business models. Furthermore, recruitment, while retaining customer loyalty, has proven difficult in a deal-driven environment.

Data sourced from ASSOCHAM; additional content by Warc staff