Associated Chambers of Commerce and Industry of India (Assocham) and Forrester has conducted a joint study on Indian ecommerce market, and the result brings positive news to investors and entrepreneurs in India.
Annual growth rate of Indian ecommerce market reaches 51%, way ahead of China
The joint report says, currently, Indian ecommerce market is already the fastest growing in the whole world, with a staggering 51%, way ahead of China with 18% growth rate, Japan 11%, and South Korea 10%.
According to the report, Indian ecommerce market will value at 120 billion US dollars by 2020, while current statistics from Assocham says the market values at 30 billion US dollars. Therefore, the report is to say within four years, the market sector will be four times bigger.
It is also in the report that in terms of new users, India is way ahead of other BRICS countries. 400 million Indian uses Internet now, and 2.5 million add in each year. In comparison, Brazil has 210 million, and in Russia, the number is 130 million.
75% of Indian Internet users are between age 15 to 34, making India one of the youngest Internet market in the world
In an earlier report published by Assocham and Deloitte in the middle of 2015, Indian ecommerce market was said to grow at a 37% compound annual rate of growth since 2011. Looking to the whole world, B2C ecommerce sector grew 20% in 2014, and became a big market worth 1.5 trillion US dollars. Indian market generated 13.6 billion US dollars in one year’s time in 2014, 53% increase from the previous year. The impressive grow in both Indian and the world proved estimation of Forrester. Indian ecommerce will likely maintain its growth and its top position in world ecommerce in the coming years. Now, 38-40 million Indian Internet users have purchased online. 75% of Indian Internet users are between age 15 to 34, making India one of the youngest Internet market in the world.
Huge user base is definitely a boost for ecommerce market. Google India Director for Ecommerce and Online, Nitin Bawankule analyzed search request on Google and predicted that until 2020, Indian will home to 5000 million Internet users, and more than half of them, 2800 million will access to the Internet from their smartphone. In addition, the prediction is about half of the entire Internet population will shop online.
For investors and entrepreneurs, the most important point in the prediction to be noticed is that mobile will become the future of the Internet. Currently, prediction on Indian Internet looks at the market as a whole. As CEO of Yeahmobi, Peter Zou said before, the Indian market is still a blue ocean, especially in terms of Mobile Internet. Many niches are open to entrepreneurs and investors. For Chinese enterprises, they could look into Indian market, in accordance with experience accumulated in Chinese market. They could understand trends of Indian market better, and locate opportunity within.
61% of ecommerce revenue generated by travel sector, but fashion sector has huge potential
Currently, 61% of ecommerce revenue in Indian was generated in travel sector. Though it still is the emphasis of the market, fashion sales is catching up with considerable speed.
According to Nitin, Indian fashion market will worth 35 billion US dollars in 2020. The prediction is also based on search requests Google collected. One in every three search requests initiated in India was related to fashion and accessory. This type of search also grows with an annual rate of 65%.
Though the two reports inject faith on the remarkable growth on global and Indian mobile ecommerce, Assocham appears to be more cautious. The organization emphasized that in order to reach the prediction, there are still reforms to be executed on mobile end. The features like price comparison, better search function, and better navigation are the improvements to start from.
In Indian ecommerce market, Flipkart which was founded in 2007 is the biggest ecommerce portal site in the country. PayTM has 20 million users, and is now the biggest mobile wallet and mobile ecommerce company in India. BookMyShow occupies 90% of the market and is the country’s biggest ticket aggregation and selling site.
However, Indian market did see some setbacks. This February, Morgan Stanley devalued Flipkart, dropping from 15 billion US dollars to 11 billion US dollars. Last week, HSBC decreased Zomato’s value by a staggering 50%. Despite the fact that the two Indian-born unicorn’s devaluation made a considerable blow on investors and entrepreneurs’ faith in India, Forrester’s prediction remains positive. As it says, the Internet industry does not only grow vertically, but also expand in all directions.
Yeahmobi’s VP on investment, Jessica Wong said, India is an important market for Yeahmobi. After Yeahmobi provides service to almost all of the first-tier ecommerce companies in Indian, the company will still penetrate the market and understand it, in order to further improve service to Indian and Chinese partners.