eCommerce in India – Fueling a billion digital dreams

With revenue of USD 1.5 trillion in 2014 and an annual growth rate of 20 per cent, the global eCommerce industry is rapidly evolving and driving technology adoption across the world. As the ecosystem is maturing, the emerging markets tend to become more lucrative and hence, pushing the providers to extend their capabilities further.

Global

  • China is the behemoth of eCommerce: China and the US remains the world’s leading eCommerce markets in terms of revenues, combining for more than 55% of global internet retail sales in 2014
  • India, a key geography in the under penetrated Asian market: The $14 billion Indian eCommerce market promises to be extremely massive in the near future, but remains early-stage today
  • Latin America is rising in importance: Increasingly hitting the radar of global brands selling online with big brands launching eCommerce sites in Mexico and Brazil etc.

India is moving up the technology maturity curve, and is already a well-connected digital economy – a trend driven largely by the consumers. More than 75 per cent of the population is mobile-enabled, a growing base of ~300 million internet users (2nd largest after the US) and a rapidly multiplying online population with an ever growing usage via mobile (~173 million users) is reinvigorating demand and catalyzing growth in the USD 14 billion Indian eCommerce market, which is growing at an average of >30 per cent year on year.

eCommerce

The country is on the cusp of an inflection point for consumption shifting online, as digital transformation commences, and alters the way people live. Today, customers are able to get anything and everything via the internet –from books, toys, jewellery to electronics/ consumer products, apparels, local groceries to buying homes online. Growth of eCommerce in India is set to increase radically as key enablers for hyper growth in this segment are falling in place.

  • Growing internet penetration, entry of global majors, rise in smartphones adoption, innovations in mobile technology, security, and payments, and access to funding are helping accelerate the growth of eCommerce
  • eCommerce is catalyzing growth in the Indian retail industry, in addition to unlocking value in India’s economy by tapping untapped customer segments, driving innovation and fostering entrepreneurship
  • The increased internet access spurring online shopping across regional and income levels; lower price and convenience are the primary benefits cited by current online shoppers
  • Today, above 60 percent of start-ups are focused on digital; nearly 500 are in the e-commerce space itself

eCommerce 1.0 shifting to eCommerce 2.0

In the near future, we will see the largest shift in the country’s population towards the online segment. Further, India’s diverse demographics – with one of the youngest population in the world (75% below 35 years of age) – should lead to 300mn+ new online shoppers in the next 15 years. The times are changing now! Deep discounts and low price war is likely to over soon and the industry is gradually moving from eCommerce 1.0 model which focused on price, to the eCommerce 2.0 model which is distinctly different, with quality (of product, platform, service) replacing discounts and low prices; rich user experience replacing convenience and ease of shopping; curation replacing selection and enabling discovery of right products; personalization replacing availability of everything “online” and digital payments replacing COD model.

This ever-growing industry which had its humble beginnings in online job portals and matrimonial sites is likely to cross USD 200 billion in gross merchandize value by 2030 from 14 billion USD current market size, driven by augmented transaction values, increased data usage and higher online shopping penetration. The new trends emerging in this model will rely heavily on technology enabled differentiation along with exploring new ways of dealing with growing expectations of customers.

More in-depth analysis is available in the report which you can download here: eCommerce in India – Fueling a billion digital dreams 

- See more at: http://www.nasscom.in/ecommerce-india—fueling-billion-digital-dreams

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  1. MallFort

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