The burgeoning e-commerce retail industry in India is likely to achieve a Compounded Annual Growth Rate (CAGR) of 35% and will cross the $100-billion mark over the next five years, according to a study.
Valued at $17 billion now, the combined study by Associated Chambers of Commerce and Industry of India (ASSOCHAM) and PricewaterhouseCoopers (PwC), predicted that the E-commerce would continue its strong growth momentum of 2014 and would achieve 67 per cent growth in the average annual spending on online purchases per person in 2015 from Rs 6000 in 2014 to Rs 10,000 in the coming days.
Estimating that around 65 million consumers would adopt online mode in 2015 to execute purchases as against 40 million in 2014, the study stated that with advancement in infrastructure such as broadband, logistics and internet-ready equipment, there has been a significant rise in the number of consumers making onlinepurchases.
The study titled 'Evolution of e-commerce in India' further said, with about one-third of net users already buying through online, the e-commerce sector’s growth will witness increased spending from existing buyers than first-timebuyers in the coming months.
On the controversy triggered by e-tailers by giving steep discounts which threaten the brick and mortar retail shops, the study, however, said such marketing strategies actually played a major role in the growth of e-commerce in India. The hike in adoption of smartphones and tablets has also helped the e-commerce growth.
“More consumers now-a-days prefer web to bricks-and-mortar retail shops because of attractive deals, about 52 per cent of the respondents said that they made online purchases because they got better deals,” the study further noted.
On popular shopping preferences, the study showed that apparel caught the attention of online shoppers more followed by computer and consumer electronics items. All these three would account for 42 per cent of total e-commerce retail sale in 2015-16 as against 39 per cent in 2014-15 fiscal so far, it said. The report also pointed out that tourism and travel account for about 75 per cent of the total retail industry spending via online mode with major portions of sales and services happening through air, bus, train, movie ticket bookings, tour packages and hotel reservation.
The report has estimated that the e-commerce industry will bring 100,000 workers in logistics and warehousing sections in addition to the existing 25,000 people working in the segment presently.