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India’s online retail market is expected to witness a significant surge in the coming years

India’s base of online shoppers has been expanding steadily, given the rising population, rising income levels and easy accessibility to the internet. The online retail market in India is likely to double in size to more than USD 3 billion within the next three years, and is expected to grow to touch USD 15 billion by 2017.

This report: Online Retail Market in India 2014-2018 shares a comprehensive overview of the market and examines the key market drivers, the prevailing competition and presents a detailed overview of the market.


Market overview

The size of India's online retail market in 2013 was close to USD 13 billion, as suggested by extensive studies on the online retail industry in India. While the online travel segment contributed over 70 percent of the total market share, product segments such as books, clothing, electrical, and electronics, food and groceries have also been witnessing a steady growth in online retail.

Market statistics suggest that the online shopper base in India is mostly constituted by women who are expected to shop with an increasing frequency. The average consumer in India who presently shops online does two or three transactions per month and this number is expected to rise to four or five per month in the next couple of years.


Market trends

Driven by increasing competition, clothing and footwear retailers are now providing options based on gender and age segmentation. In the urban markets, clothing and specialist retailers are also looking to expand their services to tier-II and tier-III cities to improve their sales. Market analysis indicates that the greatest surge of online purchases happen during festivities and holiday seasons. Due to the ethnic diversity of the country, the major festive seasons and holidays are spread across the year, unlike western nations where the main shopping seasonal events are restricted to the last month of the year. Big value purchases such as consumer durables, jewelry, and furniture are normally bought during these festivals, while clothes and footwear sales also see an increase during these periods.


Market drivers

Inspite of some slowdown in the GDP growth over the last couple of years, changing fundamentals of the economy and a population of over 1 billion, is providing a host of opportunities for organized national and international players in the online retail segment. Although India has always primarily been an agricultural driven economy, the steady growth of the services industry continues to create a class of consumers who have higher spending levels, thereby segregating the market.


Key players

Leading players in the market include e-commerce giants like Flipkart (in books, music and electronics) and Myntra and Jabong (in apparel). In the perishables market, e-commerce companies such as BigBasket and Localbanya are posing a strong challenge to the traditional marketplace with their ‘call-order-deliver’ model.


Market outlook

From a market share of close to 8 percent of the organized retail market in India now, online retailing will touch around 18 percent by 2016. But as a proportion of the overall retail industry, including the massive unorganized segment, it will be just over 1 percent at the end of that year. Yet the potential is huge and the market is expected to continue to grow steadily over the coming years.  


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SOURCE:  Researchonindia.com