Tuesday, January 6, 2015

In India, Ecommerce Takes Tiny Share of Retail Sales

Ecommerce to account for less than 1% of retail sales this year 

Retail ecommerce sales reached $5.30 billion in India in 2014, according to the latest eMarketer estimates of digital and brick-and-mortar retail sales around the world. This year, retail ecommerce sales, including all products ordered over the internet except travel, will grow 45.2% to $7.69 billion—but still account for just 0.9% of total retail sales in the country.

Though solid double-digit growth will continue in retail ecommerce sales throughout the forecast period, eMarketer still expects ecommerce to account for just 1.4% of all retail sales in India by 2018. Sales growth overall, while slower than that via digital channels, is still high.
Digital buyer penetration in India is low, however. Fewer than one-quarter of internet users in the country made a digital purchase during 2014, eMarketer estimates, and by 2018, that figure will still be just 29.0%. That compares with over 81% last year in Japan and 55.2% in China.
As India’s ecommerce landscape matures, various platforms have jockeyed for market share and dominance. In a survey of online shoppers conducted by Jana in March 2014, 36.7% named homegrown platform Flipkart as their favorite online retailer. Amazon’s local outpost, Amazon.in—which functions only as a marketplace for local sellers due to government regulations—ranked second, named by 14.5% of respondents. Another domestic platform focusing on fashion and lifestyle products, Myntra, was No. 3 at 9.3%.

August 2014 data from comScore found that fashion-focused platform Jabong.com drew the largest number of total unique visitors for the month, at 27.6 million. Next were Amazon sites (18.8 million), Flipkart (17.2 million), Snapdeal (11.3 million), eBay (10.8 million), Myntra (9.2 million) and Homeshop18.com (5.8 million), the website of the TV shopping channel of the same name.
Thus far, the entry of foreign ecommerce players has been somewhat limited by government regulations restricting the operation of foreign-funded retailers in India. While international platforms like Amazon and Japan’s Rakuten are clearly interested in establishing a business-to-consumer presence in India, they face an uphill battle to do so.

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