Indian Retail Ecommerce Sales Boom: From $7.69B in 2015 to $17.52B By 2018

Leading research firm eMarketer predicts the retail ecommerce sales in India will grow at a phenomenal rate during the CY 2015 and touch $7.69 billion. That would be a huge leap from the $5.30 billion sales made by this sector in the year just ended, and an impressive increase of 45.2%. But there is more to this than meets the eye!

And here is the comparison of Total Retail sales vs Retail Ecommerce sales as published by eMarketer.

A closer look at this growth chart of total retail and retail ecommerce sales in India over the 2013-18 period shows:

• The total retail sales in India will increase from the $717.73 billion level touched by it during CY 2014 to $818.33 billion during 2015 and go on to touch $1,244.58 billion by 2018.
• The total retail sales is growing at an impressive rate, registering a double digit growth figure year after year. Emarketer predicts the rate of growth to pick up by the end of this year and the total retail sales to grow consistently at a rate of 15% from 2016 onwards.
• Retail ecommerce looks even more promising. Up from $3.59 billion in 2013 to $5.30 billion in 2014 (a phenomenal increase of 47.6%), it is expected to grow by 45.2% this year and reach $7.69 billion. By the end of 2018, it is expected to touch $17.52 billion.
• The retail ecommerce sales (which includes all products ordered over the internet except travel) continues to register an unprecedented growth and increase by leaps and bounds over the 2013-2018 period covered by the report.
• However, inspite of the amazing rate at which ecommerce sector is growing, it continues to form only a very small part of the total retail sales in the country.
• Online retail sales which account for only 0.7% of the total retail sales in 2014 are expected to grow marginally to 0.9% during this year and remain a miserable 1.4% even after the next four years. The ecommerce share continues to hover around a very very dismal looking 1% mark.

Ecommerce sector in the country which is still at a nascent stage is bubbling with activity at the moment. Major international players like Amazon are thriving here inspite of the FDI restrictions, while leading Indian portals like Flipkart and Snapdeal are also trying to get bigger and better.

The year 2014 saw Flipkart attract nearly $1.8 billion from foreign investors inspite of analysts raising a huge question mark about it being over-valued at $11 billion. Similarly, Snapdeal got a $627 million boost from one of its biggest investors Softbank.

Amazon which is relatively new on the Indian scene inspite of having firmly established itself as the king of online retail at the global level has already firmly entrenched itself here. Even though it operates on the marketplace model due to FDI restrictions, the leading online retailer does not want to quit the Indian market. Infact, they are looking forward to improve their presence in India by further pumping in $2 billion in the Indian leg of their operations this year, as promised by their founder owner Jeff Bezos during his visit to India in 2014.

Why Indian Ecommerce scene looks bright & promising?

The online retail sector is completely dependent on the internet. As more and more people in the country are getting connected to the internet, the sector is getting a huge shot in the arm. Though the rate of internet penetration in the country is among the poorest in the world, the number of those connected is rising rapidly. An IAMAI report had already mentioned India crossing the 300 million user mark last year and is expected to touch the half a billion mark by 2016.

Besides that, the smartphone penetration in India is increasing at very fast clip. Cheaper entry level smartphones have made it easier for people to get connected to the internet from their handheld devices. Add to it the fact that the percentage of young population in India (who are the most active online buyers) is extremely huge. The internet is also getting cheaper. All these factors together make the future look bright for the online retail industry.