Indian eCommerce Will Grow 700% In 5 Years, Mobile Transactions At All Time High

Indian eCommerce market, which is currently pegged at Rs 78,000 crore ($13 billion) is all set to cross Rs 5,40,000 crore ($90 billion) by 2019, an increase of 700% in 5 years. As per a research by eTailing India, such a huge jump in overall digital industry in India will lead to tectonic shift in the way advertisements are done, audiences are profiled and messages conveyed.

As per a statement released by them, “Much like Apple changed the music industry, e-commerce will not only impact retail, but also the advertising industry.”

And the most interesting aspect in the incredible growth story is that, mobile will hold the key to this growth.

Interestingly, Gartner’s report mentioned some very modest figures in their report a few days back. They mentioned that the Indian ecommerce market is currently pegged at USD 3.5B and will grow around 70 percent to USD 6B.

We will analyze how much mobile transactions does Indian eCommerce companies currently operate, and how much volume of sale does mobile contribute.

Flipkart: In a blog post written by Sachin Bansal earlier this year, he had shared that one out of three customers of Flipkart arrive via mobile: “At Flipkart, one in every three new customers comes through mobile and this is increasing year on year. We are seeing a lot of growth in orders from non-metros cities via the mobile channel. Tier II and Tier III cities in the country are big for online retail because of an un-organized retail sector.”

Considering that Flipkart reported revenues of $1 billion (Rs 6000 crore) during the period March, 2013 – March 2014, we can safely calculate that around $300 million (Rs 2000 crore) of Flipkart revenues is originating via mobile based transactions. Certainly a huge, very encouraging number.

Snapdeal: 60% of all orders received by Snapdeal originates on mobile phones, and people who order them belong to Tier 2 and Tier 3 cities. These facts were shared by Kunal Bahl, founder of Snapdeal recently, as he said, “Currently, around 60 per cent of our orders come through our mobile platform. We are hoping to receive 75 per cent of our transactions through mobile within the next one year. The same is expected to touch 90 per cent over the next three years.”

Considering that they are expecting 90% of orders to come from mobile in the next three years, it speaks volume about the growth opportunity which exists in the niche. Incredible to say the least.

Jabong: During the second quarter of 2014, 27% of all orders received on Jabong came from mobile devices, a trend which is increasing at a rate of 25-35% every month. Please note that Jabong introduced their official mobile app in April this year, and after that, this number must have gone up exponentially.

And overall speaking, 62% of orders come from Tier 2 and Tier 3 cities, just like Snapdeal’s customer demographic. The huge explosion of smartphones sales all over the country, and lack of branded showrooms in such cities has been cited as the factors of mobile revenues growth for the ecommerce portal.

Last year, in a comprehensive study conducted by SAP concerning mobile adaptation and usage for shopping had predicted that Indians are loving it. As per that study, more than 97% of respondents prefer and ask for mobile based platform to deal with banks, telcos, retailers, utilities and other businesses. Around 80% of respondents admitted that besides calling and messaging, they are increasingly using mobile for other activities such as Internet browsing, online purchase and online dating.

Although there exists several challenges and obstacles before mobile based shopping is fully embraced by the Indian shoppers, the trend and the growth clearly signifies that the mobile revolution has already begin; and things will only improve from this point.