Ecommerce in India
India has an internet user base of over 100 million [1] users. The penetration of e-commerce is low compared to markets like the US and the UK but is growing [2] at a much faster rate with a large number of new entrants [3]. The industry consensus is that growth is at an inflection point [4] with key drivers being:
- Increasing broadband Internet (growing at 20% [5] MoM) and 3G penetration [6].
- 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
Market Size & Growth
India’s e-commerce market was worth about $2.5 billion in 2009. About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million[7]as of 2009). India has close to 10 million online shoppers and is growing at an estimated 30% [8] CAGR vis-à-vis a global growth rate of 8-10%. Electronics and Apparel are the biggest categories in terms of sales.
Unique to India
Some of the aspects of Indian e-commerce that are unique to India (and potentially to other develping countries) are:
- Cash on Delivery as a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be Cash On Delivery (COD).
- Direct Imports constitute a large component of online sales. Demand for international consumer products (including long-tail) is growing much faster than in-country supply from authorized distributors and e-commerce offerings like eBay Global Easy Buy [9], Amazon Global [10] and 20North.com [11] use sophisticated E-commerce and Logistics technology to create a cross-border supply chain that allows consumers to shop online for international products that are Delivered Duty Paid to their doorstep.
See Also
References