2014 has gone down as the year of ecommerce, firing the aspiration of the Indian youth and middle class while 2015 is expected to be even more promising both for the consumer and marketers, with average annual spending on online purchases projected to increase by 67 per cent to INR 10,000 from INR 6,000 per person, according to a study by industry body, ASSOCHAM-PwC.
In the last year, about 40 million consumers purchased something online and the number is expected to grow to 65 million by 2015 with better infrastructure in terms of logistics, broadband and internet-ready devices that will be fuelling the demand in ecommerce.
According to the study, local ecommerce platforms such as Flipkart and Snapdeal were seen enjoying edge over the global players like Amazon. Online apparel sales continued to capture a greater share of India retail ecommerce sales. Further, computer and consumer electronics sector also helped fuel the overall market growth.
Computer and consumer electronics, as well as apparel and accessories, account for the bulk of India retail ecommerce sales, and will contribute 42 per cent of total retail ecommerce sales in 2015 from the current level of 39 per cent.
According to market estimates, the industry is valued at USD 17 billion, growing at an compound annual growth rate of about 35 per cent each year and is expected to cross USD 100 billion in the next five years, noted the ASSOCHAM-PwC study.
“The smartphone and tablet shoppers will be strong growth drivers, “said D.S. Rawat, Secretary General of ASSOCHAM. Mobile already accounts for 11 per cent of ecommerce sales, and its share is expected to jump to 25 per cent by 2017.
The steady growth in the number of web shoppers also is helping to boost ecommerce sales. About 52 per cent of shoppers said they made purchases online rather than in stores because online retailers offered better deals.
Other factors contributing to the growth of e-commerce include aggressive merchandising and discounting from flash sales and daily deals, more online loyalty programs and increasing popularity of smartphones and tablet computers among consumers also contributed to spending more on the ecommerce platform.
Moreover, India’s travel and tourism are second fastest growing travel and tourism industry in the world. Almost, 75 per cent of total travel related business has migrated to ecommerce. The main businesses are online air ticket booking, train ticket, bus ticket, hotel booking, tour packages and movie booking. Among this online air ticket booking contribute the major part.
Interestingly, online shoppers and buyers starting with a base age of 18 are become more involved with ecommerce in their early teens. With nearly one-third of internet users already making purchases online, the ecommerce growth will rely more on increased spending from existing buyers than first-time online buyers.