E-commerce market in India is likely to reach $38 billion in 2016, a huge 67 per cent jump over the $23 billion revenues for 2015, says ASSOCHAM.
The industry has witnessed an unprecedented growth of 52 per cent over 2015 and has emerged as one of the fastest growing sectors. “Increasing internet and mobile penetration, growing acceptability of online payments and favorable demographics has provided the e-commerce sector in India the unique opportunity to companies connect with their customers”, adds an ASSOCHAM paper.
With the buying trends during 2015 have witnessed a significant upward movement due to aggressive online discounts, rising fuel price and wider and abundant choice will hit the e-commerce industry in 2016.
Releasing the paper D S Rawat, Secretary General ASSOCHAM said, India's e-commerce market was worth about $3.8 billion in 2009, it went up to $17 billion in 2014 and to $23 billion in 2015 and is expected to touch whopping $38 billion mark by 2016.
On the other hand, mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry. Shopping online through smart phones is proving to be a game changer, and industry leaders believe that m-commerce could contribute up to 70% of their total revenues.
The paper reveals that Mumbaikars have left behind all other cities in India shopping online in 2015. While Delhiiets ranks second, Ahmedabad ranks third, Bangalore ranks fourth and Kolkata ranks fifth in their preference for online shopping in 2015.
Rawat further said, “The customer is connected 24x7 through their smart phones, tablets and other mobile devices which is leading to a gradual evolution of e-commerce into mobile commerce and there is an issue of convenience which also leads to impulsive buying.”
The browsing trends, which have broadly shifted from the desktop to mobile devices in India, online shopping is also expected to follow suit, as one out of three customers currently makes transactions through mobiles in Tier-1 and Tier-2 cities. In 2015, 78 per cent of shopping queries were made through mobile devices, compared to 46 per cent in 2013, said Rawat.
As per the paper, in 2015, the highest growth rate was seen in the apparel segment almost 69.5 per cent over last year, followed by electronic items by 62 per cent, baby care products at 53 per cent, beauty and personal care products at 52 per cent and home furnishings at 49 per cent.
The most important contributing factor to the rapid growth of digital commerce in India is the increase in the use of smart phones. Mobiles and mobile accessories have taken up the maximum share of the digital commerce market in India, adds the ASSOCHAM paper.
Almost 45% of online shoppers reportedly preferred cash on delivery mode of payment over credit cards (16%) and Debit Cards (21%). Only 10% opted for Internet Banking and a scanty 7% preferred cash cards, mobile wallets, and other such modes of payment.
As per the ASSOCHAM findings many small companies have also established online stores for group buying, which enable customers to obtain goods at a discount so long as a certain number of people make the purchases. Rawat said, shopping centers, whole sale markets and supermarkets should create their online stores to reduce costs and develop product-tracking systems.
Among the above age segments, 18-25 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments, adds the ASSOCHAM paper.
The survey highlights that 38% of regular shoppers are in 18-25 age group, 52% in 26-35, 8% in 36-45 and 2% in the age group of 45-60. 65% of Online Shoppers are male as against 35% female.
The products that are sold most in 2015 are mobile phones, iPAD and accessories, MP3 players, digital cameras and jewellery, among others, points out the paper.
As per the ASSOCHAM study, there would be more than a five to seven fold increase in revenue generated through e-commerce as compared to last year with all branded apparel, accessories, jewellery, gifts, footwear are available at a cheaper rates and delivered at the doorstep.
The most popular among the e-commerce websites - Snapdeal, Myntra, Flipkart, Amazon, Jabong etc have been doling out massive price cuts or discounts on purchase of popular brands of apparels, footwear, electronic goods, coinciding with the year end, adds the paper.
According to paper, the one of the driving factors for the online shopping is the age profile of the consumers who are young between 15-35 years. This segment is quite a net savvy and enjoy doing new type of shopping experience, virtually from their desk top in office, lap tops at home or even android based phones.
ASSOCHAM paper highlighted, in India roughly 60-65% of their total sales are being generated by mobile devices and tablets, increased by 50% than the last year and also likely to continue upwards. The big brands are in tie up with popular e-commerce retailers and selling through full page advertisements, internet and television, adds the paper.
Of those who are reluctant to shopping online cited various reasons like prefer to research products and services online and then actually buy them from a store (30 per cent), find delivery costs too high (20 per cent), don’t want to share personal financial information online (25 per cent), lack of trust on whether products would be delivered in good condition (15 per cent), don’t have a credit/debit card (10 per cent).