Despite having several glitches on national, governmental, technological and economy fronts, Indian ecommerce has bloomed into a powerful industry. The last few years have seen tremendous growth in the number of online users and their shopping demands. Here is a complete account of India’s ecommerce success story and essential figures that points to its future growth.
- The Indian E-commerce market scale was evaluated around $16 Billion in 2013 and is expected to reach $56 Billion by the fall of 2023.
- The growth rate has touched 85% mark till now and in next ten years, it is projected to acquire 6.5% of the total retail market if India.
- India has secured position in top 10 countries list of ecommerce chosen by online buyers.
- In a research conducted by eMarketer, it is stated that India crossed $1.08875 trillion of ecommerce sales internationally. It recorded 21.9% yearly growth as compared to 2011 and 19.3% jump in global sales.
- More than 7.6 million people are found visiting deals and discounts based websites, which is a proof itself of their growing fad for online shopping.
- As per a study, Indian ecommerce is emerging as the biggest B2C marketplace of Asia after recording an increase of 355 and by 2020 it is likely to appear as the central point for startups, investors and entrepreneurial activities.
This tremendous growth and trending shopping habits have brought a surge of new online companies that have created a competitive atmosphere. The attention grabbing ads, tempting offers and discounts, free gifts, endless deals sites, easy return & exchange and many such feats are the result of this brewing competition.
According to Alexa
Flipkart, Ebay, Snapdeal, Jabong, Home Shop 18, Yebhi, Myntra, Naaptol, Tradusin, and Fashionandyou are the Top 10 e-commerce websites in India.
There are multifarious factors, which have led to this massive ecommerce boom in India. Various economists, analysts and researchers trace back its root to the internet fruition in India but there are many other factors too, like increase in spending power, the influx of more payment options with debit & credit cards, smartphone penetration etc. Here are the ecommerce dynamics, which are leading to its superfluous growth in India:
1. Commercial Factors
Cheaper Rates – The scale on which ecommerce operates is huge thus sellers are able to offer great discounts and slashed prices. It excites a budget-wary consumer as well as the random shoppers.
The developing logistics – Advanced logistics solutions have made the delivery process easier and faster making the people more thrilled about online shopping. Retailers are succeeding enough in reaching the doorsteps earlier than promised.
Segment specific growth – The biggest impact in Indian online shopping has been made by the travel industry. Around 75% of it is encompassed by hotels booking, air ticketing, holiday packages etc.
Internet Progression – Web is a place that allows users to find, compare and explore things that satisfy their needs. There are many brands which are not easily and nearly available in each city of India. To shop them online is thus the best and favored option as internet is widely available to people now. The cheaper rates of internet have significantly added to trending ecommerce.
Smartphones Industry on rise – The rise in smartphones and tablets demand has pushed the price down. The market is bound to grow even more as more than 8,000 new smartphones are being sold each day. The tablet market is evaluated to have sold 1 million of it in 2013 alone.
2. Technical Factor
The faster & accessible Internet – Advancement in New media technology has boosted the accessibility, which in turn supports the buying needs. The internet was in its budding state ten years ago but today it is better & faster with 3G and 4G entering Indian domain. So, the ecommerce sellers are guaranteed to make headway in business too.
Smartphones advanced technology – The more technologically advanced Smartphones have come forward as the biggest promoter of e-shopping trend and lifted the online sales figure up. The ease they deliver makes the online shopping experience pleasurable for buyers.
Extending Mobility – A report published by Ernst and Young states that 4G and smartphone revolution in India is going to change the face of media reach in India. India is said to have 1 billion wireless subscribers, as of May 2012. This extending mobility has created a situation where reaching out to rural India is not a trouble anymore. Mobiles are more accessible than newspapers and electricity today.
Faster+cheaper Broadband – 2G, 3G and now 4G, this development chain has created many netizens in India. People are found to have caught the fancy of staying online and that’s a positive sign for ecommerce consumption.
3. Demographic Factors
Consumer stance – The success of ecommerce platforms like OLX and Quickr has heightened the trusts of Indian consumers in online buying & selling. They have generated a positive outlook towards online marketplace that supports ecommerce industry.
‘Online’ means ‘onlife’ nowadays – Almost every activity takes place online these days, whether it is ordering food, mailing a friend, searching a job or booking a bus ticket. The average time spent per month has increased from 12.9 to 17.4 and by 2015 it is expected to touch the mark of 21.
Rise in disposable income – It has significantly added to this sea-change. The spending power has risen and people are more willing to indulge in regular shopping.
Computer literacy rate – With overall improvement in education rate, the number of people disposed to computers is also increasing. Educated people are seen to be more active in online purchase than the less educated group.
4. Social Factor
Boom of Social Media – The social bombardment on web is pushing the online shopping industry by making the consumer savvier. Brands are getting a way to bridge the gap with its potential buyers through these networks. India has the Facebook’s third-largest audience population in the world after the US and Brazil. According to statistics, there is a big fraction of people who use internet first time for just using social networks and turn into regular internet users soon.
Changing Lifestyle – Urbanization has changed the lifestyle and people’s needs have changed too. As per United Nations, more than 31% of India’s population resides in urban areas and the shopping needs of urban people are quite more than the rural ones.
Globalization- The socio-economic structure of India is heavily influenced by Globalization. Development on trade, economy & communication grounds have led to a state where people think globally and act uniformly.
Young population – India has a major segment of young people that is likely to reach 64% by 2020. Hence, younger generation is the key factor behind this immense growth. With youngest generations growing tech savvy, the eldest of families too are motivated to explore internet.
Product Line – The bigger portion of these online stores consists of Apparel and other consumer goods which people do not feel apprehensive to spend on.
Media Reach – FM, Television and outdoors reach in people’s lives is a chief cause of Indian consumers’ growing inclination towards online shopping. It impacts their buying tendencies to a great measure.
Digitalization – The state of National growth and everything being digitalized is evoking confidence and attraction in people to go online for fulfilling their routine needs.
“India has a young, well-educated and professional population, core customers. It has a very good market. We chose to be in India before China,” as per Mr Jonathan D Caplan, President and Chief Executive, Genesco Inc.
Other factors that influence Ecommerce growth
Time saver – Online market place is looked upon as a convenient option when it comes to save time. There is no need to take special time out of a busy schedule and run from shop to shop to find the best. Everything is just a click away and that suits the metro culture of India.
Cash on Delivery (COD) – The COD availability is a stirring factor that gave steep push to online selling. It is not available in most of other countries as there debit/credit cards are more in use. In India many people still feel hesitant to share their credit card information online; so cash on delivery is a must here.
Delivery and return policies – The availability of home delivery and numerous options attached for return and exchange have extended the consumer base in India.
Endless options – Indian consumers are made wonted by plethora of options served by various Ecommerce owners. These choices have spoilt them profusely and made them reliant on online shopping websites.
Future of Ecommerce in India
Indian ecommerce has seen a marvelous growth in last one decade and the same is expected to get doubled in near future. Here are the two factors, on which basis the further growth will take place:
- Macro-economic factors (disposable income, internet penetration, inflow of investments etc.)
- Segment specific factors (geographical, behavioral etc.)
Rise in Personal Disposable Income
The purchasing power of people is bound to rise with changing economies. With a rise in their standard of living, the needs of goods and services are certain to go up. Hence the ecommerce sector has this benefit of fetching their interest and attention with more convenient options.
Active Internet users in India are certain to rise
The internet user base has shockingly increased and with improved connectivity infrastructure it is going to trend even better. The addition of unique users will add to the growth of ecommerce sector.
The market is going to rise with more specific sellers joining the industry and more buyers expecting online services. Targeting the smaller towns and creating a definite market for varied products and new services will increase the number of online consumers.
E-shopping is going to be the leading phenomenon by 2020. The current growth promises a spectacular change in online buying trends of India and that is going to be the zenith point of Indian ecommerce.
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