The E-commerce market in India is likely to grow at a staggering 67 per cent to reach $38 billion mark in 2016 from the current level of $23 billion, reveals ASSOCHAM’s latest research report.
The E-commerce 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 have provided a unique opportunity to e-commerce companies to connect with customers”, said the top industry body.
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, the report noted.
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 which is now expected to touch whopping $38 billion mark by 2016.
On the other hand, mobile 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.
Mumbai tops the chart
Revealing further on shopping pattern in different parts in India, the ASSOCHAM paper has put Mumbaikars on top in terms preference for online shopping in 2015 followed by Delhi, Ahemdabad, Bangalore and Kolkata.
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, he said.
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 percent, 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 smartphones. Mobiles and mobile accessories have taken up the maximum share of the digital commerce market in India, adds the ASSOCHAM paper.
Cash on delivery most-preferred mode
Almost 45 per cent 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.
Youth rules the roost
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, added the 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.
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, added the paper.
Top reasons given by shoppers in buying through Internet:
- Good discounts / lower prices
- Saves time and efforts
- Convenience of shopping at home
- Wide variety / range of products are available
- Get detailed information of the product
- You can compare various models / brands
- An insight into some of the problems stated by customers