Indian online shoppers set to cross 100 million in 2017

Better Internet connectivity and growing middle class pushes e-commerce in India

Digital News

News - Biz@India

January 10, 2017

/ By / Kolkata



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Online sales in India is growing at an impressive rate of 15 pc year after year

Online sales in India is growing at an impressive rate of 15 pc year after year

Surged by the improving infrastructure in the online space, Internet logistics and the rising number of handheld devices used in India, a recent study predicts that the number of online shoppers will cross 100 million by the end of 2017.

The Associated Chambers of Commerce & Industry of India (ASSOCHAM), in a joint study with Resurgent India, stated that there were about 69 million consumers in the country that purchased online in 2016 and the number is going to cross 100 million by 2017. The rise of digital natives, infrastructural improvement in terms of logistics, broadband, and internet-ready devices will add to the demand in e-Commerce, the study finds.

In 2017, mobile commerce will become more important as most of the companies are shifting to m-commerce. Mobile already accounts for 30-35 pc of e-commerce sales, and its share will jump to 45-50 pc by 2017, adds the report.

Bangalore leads the trend

As the reduction of money transactions in all the sectors and net banking facilities across the country has seen improvement, Bengaluru emerges as the most e-commerce friendly city in the country. As per the findings of the joint study, Bengaluru has left behind all other cities in India shopping online in the year 2016. While Mumbai ranks second, Delhi ranks third in their preference for online shopping.

In other cities like Bengaluru, 69 pc of its population chose to buy day-to-day products through e-shopping in 2015-16, which will go to 75 pc this year for apparel, gift articles, magazines, home tools, toys, jewellery, beauty products and sports goods categories.

Walking on the same route, Mumbai shared 65 pc in the last year, which might go up another 70 pc this year for electronic gadgets, accessories, apparel, gifts, computer peripherals, movies, hotel booking, home appliances, movie tickets, health & fitness products and apparel gift certificates etc.

In Delhi, 61 pc of the shoppers chose to buy routine products through e-shopping in 2015-16, which will go up to 65-68 pc by the year end.

Challenges and opportunities

A crucial finding of the research paper states that 50 pc of the traffic is coming from mobile and a majority of them are first time customers. This is a result of the surge in the number of people shopping on mobile devices across India in the tier II and tier III cities. However, the heavy growth in the e-commerce sector also comes with some imperative challenges. Absence of e-commerce laws in the country, rapidly changing business models, low entry barriers that might lead to reduced competitive advantage and shortage of manpower are critical hindrances.

On the other hand, the government’s encouragement to cashless mediums, the demonetisation policy and the renewed banking and financial regimes are expected to boost the online shopping habit of India’s newbie netizens.

Additionally, the increasingly hectic lifestyle of Indians is adding to the cause of retail therapy where people are finding solace in material accomplishments. Thus, the year 2017, the study noted, is expected to witness large-scale growth in the Indian e-commerce sector with increased participation from people across the country. This industry will continue to drive more employment opportunities and contribute towards creating more entrepreneurs through the e-commerce marketplace model.

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