Online retailing landscape in India and future of e-Retailing business

10,000 crores (or $ 1.64 billion )- this is the size of current online retailing business (the products sold in retail online - not includes Hotels, travel, telecom, banking products and services)  in India which is expected to touch 1,20,000 crores (or $ 19.67 billions) by 2020 with 39%  compound annual growth rate in account of growing penetration of smart phones & tablets, higher shopping for lifestyle products which is bundled with facilities like cash-on-delivery, discounts and offers.

The total E-commerce industry (product or services sold over internet) is in excess to $ 10.6 billion in 2013 (various media and research reports, IAMAI & IMRB)

As per a study done by Forrester research, the e-commerce market size is predicted to be  $ 854 billion in 2018 from China, India, Australia, Japan and South Korea.  As per a research figure in Asia pacific region, over 35% people of total internet users shop online -which is roughly about 52 million customers in India alone.

Growth rate- industry leaders i.e. the e-commerce poster boys’ of India (Flipkart  & Snapdeal clocking  closely  60 %  to 100% growth rate) with industry average of 39% .

Lets look at the potential it offers in the years to come:
·     150 million internet users in India
·         23 million Digital Natives (young and connected individuals in the age group of 15-24 years) out of a total  Digital Natives population of 363 million worldwide ( out of total worlds' population of 7 billion)
·         China leading the pie with 75 million Digital Natives
·         US with 41 million of digital natives
·         Placing India as 3rd biggest digital natives
·         Brazil with 20 Million and Japan with 12 million stays at 4th and 5th position respectively

As per the fifth round funding of $ 360 million into Flipkart, the market cap values the company at $1.6 billion or approx 9760 crores and delivery touching 160 millions and sales touching $ 1 billion  in 2013, this places e-commerce poster boy  far ahead from the branded modern retail chains (source various media publications)

Market capitalization of few modern retail brands

  •  Tata Global Beverages 9613 crores (or $ 1.57 billion )
  •  P&G Hygiene 8635 crores (or $ 1.41 billion )
  •  Trent  3085 crores ( or $ 505 millions)
  • Shoppers stop 2852 crore (or $ 467 millions)
  • Future Retail 1660 crores ( or $ 272 million )

 Whats the future- Key drivers
·         New payment tools like Payzippy (more to come in this space)
·         E-commerce highways (the product is infused with funds in the first 5 years and then for the next 10 years the profits are made)
·         Industry is to pick innovative and technology driven products and technologies
·         No of millionaires in India would be 3,02,000 by 2018
·         CAGR 9.3%
·         Wealth per adult is projected to be above $ 6600 in 2018
·         Money transfer using Mobile Phones would become a great enabler

 RBI has already appointed a technical panel on mobile banking and evaluating the feasibility of using technologies like encrypted SMS based fund transfer using mobile phone, will become a great enabler in this space.

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