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Indian E Commerce Industry to Hit $20 Billion Next Year: Report

Indian E-Commerce Industry to Hit $20 Billion Next Year: Report

By Press Trust of India | Updated: 10 November 2014 14:45 IST

The e-commerce market in the country is expected to grow 37 percent to reach $20 billion by next year on the back of growing Internet population and increased online shoppers, a report has said.

"E-commerce in India is a $11 billion (roughly Rs. 67,600 crores) market, and is estimated to reach $20 billion (roughly Rs. 1,22,900 crores) by 2015, growing at a CAGR of 37 percent over 2013-15," Motilal Oswal Securities said in its report on e-commerce.

The research firm said there are multiple enablers for this growth, which include an increase in the number of Internet users, an increased proportion of online shoppers within those users, growth in the per-shopper transaction value, and the continued flow of capital by willing investors.

The report said currently online travel dominates the e-commerce market, but in the future online retail will drive the growth.

Online travel constituted 71 percent of the e-commerce market in India, followed by online retail (16 percent). Travel has grown at a CAGR of 32 percent over 2009-13.

"However, going forward, e-tailing will be the biggest growth driver, with expected CAGR of over 60 percent to $7 billion (roughly Rs. 43,000 crores) in 2016 from $1.7 billion (roughly Rs. 10,400 crores) in 2013. Within e-tailing, fashion is likely to be the driving segment," it said.

Fashion was $559 million (roughly Rs. 3,400 crores) in 2013, and estimates peg the growth in fashion online retailing to anywhere between $3 billion (roughly Rs. 18,400 crores) and $6 billion (roughly Rs. 36,800 crores) by 2016.

The research firm said heavy discounts on online sales is a direct reflection of the industry's competitive intensity.

"The amount of money raised by Flipkart, lately Snapdeal, and that committed by Amazon is all yet to be invested, indicating that we may not be anywhere near the end of round-the-clock discount seasons at online stores," it added.

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