State of Ecommerce in India

A chapter to be included very soon in the history books! The Indian ecommerce market looks aggressive, and considering its performance in the last 1-2 years, it is predicted that we’re not far from the day it will hit the $850 Billion mark.

Growing internet users, convenient payment options and hardcore ecommerce marketing strategies are a few aspects that have played a greater role in the ecommerce explosion. Currently, 10% Indians shop online and spend 5.4% more time online as compared to last year. Moreover, the internet penetration in India also remains close to 10% and shows a promising growth in the coming years, which has led to a strong drift towards online retailing with more investors and businesses joining the bandwagon. It is expanding with a growth rate of 40%-45% CAGR.

About 50%-80% of online retail sales are believed to have generated from the Cash on Delivery option. Similarly, Assured Delivery, No-questions-asked replacement policy, Zero cancellation fee, free shipping, EMI option and regional language preferences are driving extreme sales and engagement while unique offerings like freebies, discounts and coupons are already eating into the profits of offline retail.

Major Players

Three top ecommerce players seem to have emerged from this bubble burst, Amazon India, Snapdeal & Flipkart. Though it is too early to predict their success and penetration in the scenario of Indian online marketplaces, it is likely that they will be retaining their positions in the coming years as competitors.

According to Harminder Sahni, founder and managing director of Wazir Advisors, “Ecommerce players either try to kill competition or merge with each other- to reduce consumers’ options so as to ultimately leave them with only one option and force them to be loyal”.

Ecommerce players

Major Categories

Among all the categories, Fashion and Apparel Category topped the charts leaving behind the all-time forerunner ‘Mobile & Technology’. After a fabulous year, Fashion category is expected to grow 400% in the next 3 years and a $2811 Million GMV is projected by the end of 2016.

All the major categories suggest a favorable incline in online sales and are expected to grow exponentially. Categories like Consumer electronics, FMCG, Toys, baby products, Books, Sports, Home Furnishing, and Retail Food & Movies etc. are slowly embarking towards the Multi-billion Dollar market but are still under average penetration in comparison to global trends. Factors which remain influential in market performance like User base, Engagement, Capital influx, lifestyle, Technology, Market adoption, Demography, Fulfillment and disposable income are critical to the overall growth and drive a larger portion of online retail.

Key Finding - Ecommerce

Source: Accel

To conclude, ecommerce in the last 12 months has seen explosive growth. The path of social media has helped online retailers and marketplaces to generate high traffic and engagement. It is definitely a learning curve for India’s ecommerce market and it seems that we are riding it the right way.

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