India remains an underdeveloped retail ecommerce market, with digital commerce accounting for only a small piece of the country’s total retail sales. However, strong growth is expected over the coming years as increasing numbers of consumers go online for the first time, largely through smartphones, as explored in a new eMarketer report, “India Retail Ecommerce 2016: The Relentless Rise in Mobile Sales” (eMarketer PRO customers only).
eMarketer estimates retail ecommerce sales in India will reach $23.39 billion (INR1.500 trillion) this year, an increase of 75.8% over 2015. The forecast period will see strong growth over the next few years, with sales hitting $79.41 billion (INR5.092 trillion) in 2020.
Despite the strong growth rate, retail ecommerce will account for just 2.5% of total retail sales in 2016 and 5.0% by 2020. That puts India well behind China, where retail ecommerce will constitute 18.4% of total sales in 2016. eMarketer expects the annual growth rate of total retail sales will easily remain in the double digits between 2016 and 2020.
While Western markets, along with China, have seen slowdowns in their economies, India is expected to experience healthy GDP growth due in part to infrastructure investment and ongoing economic reforms. In addition, India has a massive population with a relatively young median age. As this cohort joins the labor force, they will also add to the country’s new, expanding consumer class.
India differs from most developed markets, where consumers are making the shift from desktop to mobile for shopping online; those in the country instead have skipped the desktop phase altogether. They are increasingly accessing the web for the first time via smartphone, and therefore have shown a willingness to make purchases on their mobile devices.
India’s status as a mobile-first market is reflected in its retail mcommerce figures. eMarketer estimates that retail mcommerce sales will total $15.27 billion (INR979.16 billion) this year, up 96.3% from 2015. Growth will be markedly high throughout the forecast period, declining to a still-impressive 25.7% by 2020 when mcommerce sales will hit $63.53 billion (INR4.073 trillion).
Mobile’s share of ecommerce will continue to grow over the new few years, accounting for 65.3% of all retail ecommerce this year and 80.0% in 2020. The implementation of robust 4G networks by mobile carriers (which is already underway) will drive increasing digital purchases made via smartphone. In addition, the declining costs of 4G devices and service plans will make it much easier for consumers to research, browse and buy on smartphones.
The number of digital shoppers—those who browse or research products online but who haven’t necessarily completed a transaction—will also see their ranks grow over the coming years. eMarketer estimates that digital shoppers in India will total 159.6 million in 2016, a figure equal to 53.6% of internet users. By 2020, more than three-quarters of internet users, or 352.0 million people, will be digital shoppers.
The number of digital buyers—those who complete a transaction digitally—will also see a strong increase over the forecast period. In 2016, 130.4 million people in India will make at least one purchase digitally, which is equivalent to 43.8% of internet users. Digital buyers will number 329.1 million by 2020, when 70.7% of internet users will have made a purchase online.
-Thanks https://www.emarketer.com
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