Google Report Predicts 175 Mln Online Shoppers & $20 Bln Ecommerce GMV by 2020; Discounts Not a Factor For Indians

In March this year, Indian Govt. introduced new FDI policy for online marketplaces which prohibited them from influencing customers via discounts. Portals like Flipkart and Amazon found themselves on a back foot, as they were luring e-shoppers with special shopping festivals and exclusive sales as price is the biggest USP when it comes to offline vs online retail.

But it seems, that eventually, discounts won’t hamper the growth of ecommerce in India.

A new study by Google and management consultancy firm AT Kearney has revealed that by 2020, India will have 175 million e-shoppers, and the total sales via online platforms or gross merchandise volume will cross $20 billion. And the best part is that, lack of discounts won’t be an obstacle.

Paradigm Shift Will Be Witnessed In eCommerce

As per the report, around 25% of the overall retail market in India will switch to ecommerce by 2020, and 90% of this shift would happen due to value-added services and offering, and not discounts which is the driving force for ecommerce surge right now.

If we believe this optimistic report, then 46% of the online shoppers in India will happily pay extra for faster delivery; 37% would willingly pay for ‘hassle-free’ return policy and 35% would not mind paying additional cost for extended warranty.

eShopping Turning Into Habit?

Interestingly, one-third of overall online shoppers in India will execute two-third of online shopping; which means that online shopping would soon become a habit, a regular flow of action for 33% of all online shoppers.

The report observed that lack of touch and feel before purchasing a product is the biggest obstacle for Indian ecommerce; 40% of all e-shoppers from Tier2-3 cities cited lack of touch and feel as the main factor for not purchasing products online; while 38% of e-shoppers from metropolitan areas (Tier 1) faced disappointment after getting their products.

Digital Payments On The Rise

Another optimistic observation from the report: mobile wallets will contribute 15% of all online payments by 2020, which is right now stuck at 8%; and 55% of all transactions would be digital, compared to 40% right now.

This means less CoD and less overheads for ecommerce industry.

In fact, if we believe this report, then 50% of the overall retail market would be heavily influenced by digital by 2020 (due to rise in cashless transactions); and 25% of the retail would shift entirely to ecommerce.

The Rise of Women in eShopping

Google has predicted that women will increase their share of online shopping, as their contribution will grow by 5 times in the next 4 years. And due to this factor, lifestyle products will overtake consumer electronics to become the largest segment within ecommerce.

Thus, the report is assuming that men are the most active shoppers of electronics products on the Internet.

Note here, that report has been created based on inputs from 3000 e-shoppers across 20 cities; hence should be consumed with a pinch of salt.

You can read the full report here.