Ecommerce is big and it is here to stay. How much is the potential for growth? The retail sector in India is set to grow to grow to $1.3 trillion by 2020.
Of this $120 billion is expected to come from ecommerce. Ecommerce has witnessed tremendous growth and has grown from $17 billion in 2014 to $23 billion in 2015. It is expected to see a 67% jump in 2016 from $23 Billion to $38 Billion.
According to Google, mobile searches have taken over desktop queries and a similar trend is expected to follow in the ecommerce searches as well. It is estimated that m-commerce can contribute up to 70% of the total revenue of the players in the industry.
According to a McKinsey & Co. estimate, about 1 billion people in India are yet to connect to the internet. This also presents a great opportunity for the major ecom players to tap into.
Currently, Amazon is the most visited ecommerce site in the country (according to comScore) followed by Flipkart, Snapdeal and Paytm. These belong to the ‘horizontal ecommerce’ category as they sell products from a large number of categories. On the other hand are the vertical players that are specialists in one or a few categories of products only. The most visited sites among this category are Jabong, Limeroad followed by Myntra.
Current Ecommerce Landscape in India
According to data from Morgan Stanley, Flipkart is the dominant player in the Ecommerce industry. All the major players continue to bleed as far as losses are concerned, the major contributor being the advertising and marketing expenses. However, Jabong which is a Global Fashion Group Company, might be routing their advertising expenses through a different channel or its parent entity, hence a much smaller figure for the same.
The major investors are depicted in the following graph. Amazon and Shopclues have routed funds through their holding companies which are registered outside of India.
While global investors have backed the major players, it still remains to be seen who will emerge as the dominant player as far as profitability and market share are concerned.
[About the Authors – Vishal and Anchal form the team that runs the Tofler blog. They like to explore and track companies, their performance and senior management. Tofler (tofler.in) is a Business Research Platform.]
[…] Ecommerce in India has witnessed tremendous growth and has grown from $17 billion in 2014 to $23 billion in 2015. It is expected to see a 67% jump in 2016 from $23 Billion to $38 Billion. […]