The Indian e-tail market across categories, income segments, and geographies will be around $ 60 billion in gross merchandise value (GMV), by 2020, according to a research study conducted by Google & AT Kearny, covering primary research among 3,000 consumers and qualitative interactions with over 60 consumers. Goldman Sachs had projected a value of $ 69 billion for the same sector with their prediction of the overall e-commerce market being over $100-billion.
Grow at a CAGR of more than 36%
“India E-commerce Market Forecast & Opportunities, 2020”, a report by TechSci Research, a research- based global management consulting firm states that the country’s e-commerce market will grow at a CAGR of more than 36% during 2015 – 2020. The e-services segment, which includes online travel, online payments, online classifieds, etc., is expected to be the largest, however, the e-tail segment comprising electronics, apparels & accessories, health and personal care, etc., is expected to grow at a higher rate than the e-services segment.
The Google-AT Kearny report surmises that e-tailing would contribute around 25% of total organized retail sales by 2020, with consumers – online buyers – being open to paying a premium for value-added services like fast delivery, trouble-free returns and extended warranty.
175 million online buyers by 2020
The number of online buyers is expected to hit 175 million by 2020 – driven by increased internet penetration, rise in the number of e-commerce websites, increasing sophistication and diversification of small businesses, ease of online shopping, massive discounts offered by online retailers, availability of a wider range of private labels, brands, competitive pricing, increasing per capita disposable income and growing youth population, expanding smartphone user base.
While innovative delivery mechanisms and multi-channel presence is expected to expand the base of online buyers, the report also indicates a massive upsurge in the number of women online buyers. These consumers would be likely to patronize lifestyle categories such as apparel and accessories, especially the latest trends and brands-in-vogue. Flexible delivery options and choice of pick-up locations would increase online purchases for this segment of consumers.
Lifestyle products category
The Google-AT Kearny report also predicted that the lifestyle products category would grow at an accelerated speed and comprise 35% of total online spends – the largest online sector – by 2020. Electronics, the largest online purchase category today will drop to a 20% market share by 2020. Cashless transactions in 2020 will account for 55% of online sales volumes as opposed to 40% today while mobile wallet share is expected to go up from 8% now to 15% in 2020.
The Indian market obviously has huge potential and is poised to grow at a burgeoning rate. With a majority of young consumers who prefer online purchases over going out and shopping at regular brick and mortar stores, this becomes more of a reality. This will create a tremendous impact on a market as big as India. Moreover, great offers and discounts by the leading e-commerce players further increase consumer interest towards the products.