Wishing You a Fabulous 2012. Year has begin with a SaaS Cloud Application for which everything else is sacrificed. Do or Die. Here is a quick update on the e-commerce / e-retailing market in India with projections from various sources. Business research suggests that the most attractive space in Indian Internet is e-retailing, owing to low penetration (it comprises less than 0.5% of India’s total retail as against 8%+ in the US / 4% in China). According to various data points, India’s e-retail market is projected to be over USD12bn in the next 5 years from the current USD 600mn (2011) implying a 80% CAGR. This would still imply less than 2% of overall retail sales and 3.5% of per capita income.
It is well known fact that Travel / Reservations is single largest chunk of Indian e-commerce [Grew at 50% CAGR in the last 3 years]. Apart from that apparels and lifestyle products, books, consumer electronics and computer hardware, software and peripherals are the major revenue grossers.
What are the Key Trigger Points ?
- The most required thrust is coming from Telecom operators connecting Indians to the WWW at affordable prices / devices, thus making Internet another utility in every house.
- Shift in buying patterns i.e. online consumption driven by mass marketing by e?commerce players and adoption by traditional brick?and?mortar retailers [FDI in Muti-Brand Retail will also encourage them to simultaneously open e-fulfillment]. Specialty retail sites could piggyback on the growth in e-commerce in India
- Conducive eco-system [Entrepreneurs & Venture Capitalists]- This is due to the emergence of savvy start-ups, capitalised by a thriving venture capital industry and increasing internet and electronic payment penetration
- Matured Websites – I am really happy to see good quality websites with focus on UI Design and Experience. The websites of newer Indian e-commerce players are highly polished and offer a similar experience compared with their Western counterparts.
- Success Stories – Emerging [LetsBuy Electronics, Flipkart – Books to Mobile, SnapDeal – Daily Deals] and are Encouraging others to take the Take the Big Leap as the addressable market is Big Monster.
However, e-retailing comes with its own hurdles and challenges that need to be addressed. Key among them are – Payments [ Credit Cards, Cash on Delivery, Online Banking etc], Developing and Winning consumer Trust, Brand Building and finally Improvement in logistics network is critical for the success of e?tailing. e-retailing is competing with organized retailing in India which has few years ahead. Who will Grow Faster hence ? Any guess ?
I know I have to write a little more on Telecom M&A under current regulations. Just FYI, I have some short posts and updates on Web 2.0 Forum and Telecom Policy/ Regulatory Forum.