The eCommerce industry in the India which grew by 33% last year and saw goods and services worth $3.5 billion exchanging hands is poised for bigger growth and touch new highs. Gartner predicts a 70% growth rate for the sector and expects $6 billion worth of business in 2015. Praveen Sengar, research director at Gartner, however, lamented over the fact that inspite of the rapid boom in the industry, it is still at a nascent stage. "Digital commerce is at a nascent stage in India. However, India is one of the fastest-growing e-Commerce markets in Asia/Pacific, "said Sengar. "India represents a $3.5 billion market, growing at approximately 60-70 percent every year. It represents less than 4 percent of the total retail market. B2C eCommerce leads the market in India, while B2B is limited to organizations that drive online channels to integrate with their partners and distributors." This segment of the industry can be seen lagging behind most developed and various developing countries, with less than 4% of the total retail sales coming from eCommerce as compared to a much healthier figure of 6.4% in the USA.
Key drivers towards this burgeoning growth have been:1. A steep rise in the number of smartphone users, as a result of which 5% transactions are carried out through mobiles and tablet devices.
2. Increased internet access and the ever dropping rates of internet surfing. Though a large percentage of Indian population is still deprived of internet access, we are ranked at number three in the world going by the number of internet users, with only China and US ahead of us. As more and more people get access to the internet, e-commerce sector will only get bigger. While India is expected to leapfrog the US by the end of 2014, Accel Partners expects 300 million users to have internet access by 2015, and none could be happier with the rapidly growing internet user base than the e-retailers.
3. A rapidly growing middle-class in the country. Not only do they love to splurge and flaunt, they are constantly pressurized by the lack of time.
4. Increased use of plastic money- both debit cards and credit cards.
5. A greater percentage of new users coming from Tier II and Tier III cities.
Indian eCommerce scene at PresentIndia and China are the most rapidly expanding segment of the already bustling-with-activity Asia-Pacific region, which is estimated to account for nearly 35% of the total B2C online sales in 2014, as per figures released by eMarketer. This is the first time when Asia-Pacific will surpass US as the online buyers in the Asia Pacific will spend more on online sales than their counterparts in North America. India, sitting at the top of the list along with China and Indonesia, augurs well for online sellers in India
The exploded growth in the India, eCommerce market is also a bringing more employment to the country. The industry is reportedly creating 50,000 new jobs in the next five years.
In what is being seen as a positive development, the key players are strengthening their bases. "The digital commerce platform market is maturing; incumbent vendors are investing in building out their commerce platforms, and those in adjacent areas, such as search, order management and marketing — both through organic development and acquisition," said Mr. Sengar. "Vendors are increasingly focused on execution and winning new customers, sometimes at the expense of articulating future vision. Merger and acquisition activity is increasing, resulting in fewer digital commerce platform options in the market, but also serving to extend the commerce platforms of the established vendors."
The big sellers who can and will spend on digital marketing, personalization, web analytics and follow the buyer pulse will ultimately rule the roost. Social media will play an increasingly important role, with more than 200 million users in India hooked on to various networking sites, claims Gartner.
By-Ambika Choudhary Mahajan Oct 20 2014
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