The digital commerce or e-commerce market in India is expected to cross US$50 billion mark by the end of 2018 on the back of growing Internet penetration and increased online shoppers from the current level of US$ 38.5 billion, a joint study conducted by ASSOCHAM and Deloitte has estimated.
The digital commerce market in India has grown steadily from US$19.7 billion in 2015 to US$13.6 billion in 2014. Devices like smartphones, tablets and technologies like 3G, 4G, Wi-Fi and high speed broadband is helping to increase the number of online customers. Banks and other players in e-commerce ecosystem are providing a secured online platform to pay effortlessly via payments gateways.
Increasing mobile and internet penetration, m-commerce sales, advanced shipping and payment options, exciting discounts, and the push into new international markets by e-businesses are the major drivers of this unprecedented growth, noted the joint study.
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 2017, 82 percent of shopping queries were made through mobile devices, compared to 76 percent in 2016, adds the joint study.
According to the paper, in 2017, the highest growth rate was seen in the apparel segment almost 72 percent over last year, followed by food items by 65 percent, electronic items at 63 percent, beauty and personal care products at 52 percent and home furnishings at 49 percent.
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. The shopping centers, whole sale markets and supermarkets should create their online stores to reduce costs and develop product-tracking systems.
The survey highlights that 28 percent of regular shoppers are in 18-25 age group whereas 42 percent in 26-35, 28 percent in 36-45 and 2 percent in the age group of 45-60. In terms of gender, 65 percent of online shoppers are male as against 35 percent female.
The products that are highest sold in 2017 are mobile phones, apparel, food items and jewellery, among others, points out the paper.
As per the ASSOCHAM study, there would be more than a seven to 10 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.
E-commerce companies have been able to bridge the service gap considerably by sending service updates and other communication via their mobile app, e-mail, and SMS, adds the joint study.
Customers can get alerts, view product catalogues, purchase and pay with a simple mobile application offering a compelling user experience. Also, from mobile usage, the e-tailers get valuable customer information which can be used for analytics to improve their services and sales.
The greater adoption of Internet and smartphones is the biggest driver of e-commerce in India. The smartphone is steadily growing and consists of 55 percent of the overall mobile phones market in the country. The success rate of some of the technologies is directly connected to the success of e-commerce.
The world is moving from cash to digital money and thus there is a need of payment gateway for sustainable future of e-commerce. The Indian e-commerce sector is heavily dependent on Cash on Delivery (CoD) mode of payment as it is the most preferred choice for Indian consumers due to lack of trust in online transactions, limited adoption of credit and debit cards, and security concerns among others. More than 50 percent of online transactions are done on cash on delivery method and it is available across 600 cities and towns of India.