According to a whitepaper published by the management consulting company, Technopak, although in 2012, the size of India’s e-commerce market was USD 10 bln, while that of the internet retail market was USD 0.6 bln, this is changing now. The same source mentions that due to the growing internet user base in India, the internet retail sector is going to grow as well.
Results show that the growth of internet retail is going to be complementary to the growth of offline retail stores. This means that even though it is going to grow a hundred times, the traditional retail is still going to hold a major share in 2021. The retail market is going to grow from USD 490 bln in 2012 to USD 1440 bln in 2021, and in that, internet retail’s share is going to increase to 5.3% from 0.1% currently.
The primary reason for the growth of internet retail in India is the growth of internet users, across all the diverse areas in India. And this trend is attributed to India’s demography, Indians are predominantly young and in 10 years, over 40% of Indian population would have been born after internet’s inception and thus internet penetration would be high. Also, urbanization is another factor, by 2020, 35%, or 465 mln, of Indians will reside in urban India, compared to the current 31% (375 mln), the standard of urban living will result in an ad to the growth of internet retail.
According to the source, internet access is no longer dependant on the availability of computers anymore. Mobile phones are acting as the key player in the spread of Internet in India. After surfing, emailing and chatting, online shopping is just a few steps away. Although the spread of internet available devices is inevitable, the maximum penetration is going to be seen in the smartphone market, with an increase of 1025% by the year 2020, in the number of smartphone users in India.
Also, the report finds that even though other categories like apparel, footwear, electronics are already doing well online, the impact on brick-mortar sales isn’t significant. The rise of Internet retail will complement existing corporatized retail.
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