Indian e-commerce industry is flourishing. According to a study by Forrester Research, approximately 1/5th of total retail sales will take place online by 2021 in Asia Pacific, with 78% of that coming from mobile, up from 63% in 2016. The study adds that online retail via mobile will grow at a CAGR of 15.6%, to reach $1 trillion in 2020, up from $539 billion in 2016. The growth in the e-commerce sector is also attributed by growing share of consumer to prefer to shop on line. As per data released by a joint study conducted by ASSOCHAM-Resurgent study India will surpass 120 million consumers who will shop online by 2018. This exponential number is expected to register annualized growth of 115 per cent in 2018 as the e-commerce platforms slug it out with discounts and other attractive deals in a wide range of products from clothes, mobile phones, air-conditioners to a whole lot of consumer items, according to ASSOCHAM-Resurgent joint study.
The growth in the online consumption is attributed to improvement in logistics. If we look at last year’s data, India witnessed more than 108 million consumers shopped online in the year 2017. Also, mobile was highly penetrated category in the 2017 as over 60-65 per cent of online shoppers would opt for placing their orders on mobile phones from the present 40-45 per cent, the study projected In 2017, the frequency of purchase was also higher for categories like apparels & accessories (54%), beauty & personal care (43%) products in comparison to electronics (33%), adds the report.
"Since the base is still quite low, there is a huge scope for growth year on year for quite some time. With improvement in logistics and more and more delivery channels, the online shopping is bound to grow. No wonder, a huge amount of foreign investment is coming in the sector. It has become a multi-billion investment business. Investment in back end delivery channels, brand building, consumer research and building trae partners would be the key drivers," said ASSOCHAM Secretary General Mr D S Rawat.
Online ticket buyers were also seen to be more comfortable with the use of debit cards (23%), credit card (17%) and cash on delivery (58%). For regular internet users - cash on delivery was the most preferred mode of payment (74%), followed by debit card (18%) & credit card (5%), noted the study.
In terms of motivators to shop online, the consumers’ highlighted cash back guarantee as the number one benefit, ability to give cash on delivery, fast delivery, great deals and access to branded products.
The consumers also highlighted some barriers that deter them from shopping online - the number one factor was inability to touch and try the goods before purchase, fear of faulty products, fear of posting their personal and financial details online and the inability to bargain were cited among the other reasons. Online apparel sales continue to capture a greater share of Indian retail e-commerce as a category along with the computer and consumer electronics sector, fuelling the overall market growth.
There is a surge in the number of people shopping on mobile across India with tier II and III cities displaying increased dominance. In fact, 50% of our traffic is coming from mobile and a majority of them are first time customers, adds the paper.
The year 2018 will see large scale growth in the Indian e-commerce sector with increased participation from people across the country. This industry will continue to drive more employment opportunities and contribute towards creating more entrepreneurs through the e-commerce marketplace model, noted the study.
Top reasons given by shoppers in buying through Internet:
• Good discounts / lower prices
• Saves time and efforts
• Convenience of shopping at home
• Wide variety / range of products are available
• Get detailed information of the product
• You can compare various models / brands
• An insight into some of the problems stated by customers
(As many as 89 per cent of the consumers covered in the study are heavy users of the Internet. The respondents were across Delhi, Mumbai, Kolkata, Bangalore, Ahmedabad, Hyderabad, Pune & others.)