Indian online retail market is estimated to grow over 4-fold to touch USD 14.5 billion (over Rs 88,000 crore) by 2018 on account of rapid expansion of e-commerce in the country, says a PTI report.
According to research and consultancy firm RNCOS, the online retail market is projected to grow at a compound annual rate of 40-45 per cent during 2014-18.
"The Indian online retail market has been striding leaps and bounds over the past few years on account of digital revolution. The trend is expected to continue as the online retail market in India is estimated to touch the mark of USD 14.5 billion by 2018," a report by RNCOS said.
The current market size of online retail sector has been pegged at USD 3.5 billion (over Rs 21,000 crore), it added.
As per the 'White paper on Indian Online Retail Industry: The War of Clicks', India is among the most swiftly emerging online retail market across Asia-Pacific region although the expanse of e-commerce is at a sprouting stage.
"The major reasons for this growth will include the increasing penetration of mobile Internet, higher purchases of smartphones, need for ease of shopping, time convenience and higher mobility," the study paper said.
Heavy discounts offered by online portals will also propel the market growth, it added.
In terms of product segments, at present electronic gadgets claim the highest share followed by apparel and books.
"But it is likely that few years down the line, apparel and accessories will take over the top slot from electronic gadgets. In addition to this, home decor and furnishing will mark an increase in its share," RNCOS said.
The research firm said this increase will be primarily on account of growing acceptance of home grown apparel brands of online shopping portals and openness towards buying home decor and furniture online.
"Better payment and return policies will further fuel the increase," it added.
Some other factors helping the online retail industry seeing good growth include smartphones offering accessibility to online shopping, aspirations of tier II & III cities, women becoming more tech savvy, evolving perception around branded products, impulsive buying and logistical convenience.
RNCOS, however, said there are certain challenges which are hindering the industrial growth such as absence of proper Internet connections in many rural areas.
Moreover, some consumers are still sceptical about the security of online financial transactions, it added.
"Despite these glitches and predicaments, the future of the Indian retail online retail industry looks robust.
"There are more and more efforts from government and private players' end to meliorate the facility of logistics, increase the Internet penetration and facilitate better services for the end consumer," the report said.