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India’s digital commerce to grow by 33% in 2015

The digital commerce market In India was valued at INR 81,525 crores by the end of December 2014, and spiked 53 per cent over 2013. According to IAMAI-IMRB estimates, the industry is estimated to grow further at a rate of 33 per cent and cross INR one lakh crores by the end of 2015.

The year 2014 was highly attributed as the year of internet for the Indian market and research by industry bodies only reiterated the positive sentiment for the same with the increase in number of mobile and internet users in the country, which was further nurtured by digital initiative by the government. The impact of internet penetration has seen a huge spurt in digital commerce, according to Internet and Mobile Association of India.

Latest research by IAMAI, points that internet has reached an inflection point and internet in India is now becoming inclusive, which will augur well for the industry and society at large.

The internet growth story is encouraging on the mobile front. A research by the IAMAI expects exponential growth in mobile internet. India had 159 million mobile Internet users as on October 2014. Out of this, 119 million users were from urban India and the rest 40 million were from the rural region. The numbers suggest that there has been a growth of 45 per cent from October 2013 as mobile Internet users reached 213 million by June 2015.

The online advertising industry was projected to run with 30 per cent growth annually and touch INR 3,575 crores by March 2015. Meanwhile in March 2014, the industry was valued at INR 2,750 crores.

Search and display are the top two contributors to the total digital advertisement spends in India. Of the INR 2,750 crore in digital advertisement in March 2014, search ads constituted 38 per cent of the overall ad spends followed by display ads which contributed 29 per cent and social media 13 per cent of overall digital advertising spends during the period.

Earlier researches by IAMAI have stated that local language content on internet will guide 39 per cent in the current internet user base in India. Rural India will be the primary driver with 75 per cent growth while in urban India, the growth is expected to be at 16 per cent. The local language user base was projected at a growth rate of 47 per cent annually to reach 127 million users in June 2015.

Interestingly, social media usage has grown by an impressive 100 per cent during the last one year with 25 million users in rural India. On the other hand, urban india registered a relatively lower growth of 35 per cent with the total number of users at 118 million as on April 2015. According to IAMAI and IMRB estimates, there are 143 million social media users in India as on April 2015.

The digital industry is fuelled largely by digital payment industry in India which is gathering steam with more players entering the ecosystem and launching incentives to push offline consumer online. The digital payments industry was clocked at 40 per cent growth to INR 120,120 crores by December 2014 and was pegged at INR 85,800 crore in December 2013.

The IAMAI study suggest that top four metros – Delhi, Mumbai, Kolkata and Chennai are forming lion’s share i.e. 60 per of the total digital payment market size against 25 per cent put together by Bangalore, Hyderabad, Ahmedabad and Pune.