Indian e-commerce set to boom

Warc, 31 January 2013

NEW DELHI: Some 8m Indian shoppers bought products online in 2012 as consumer interest in this sector grew 128% over 2011, according to a new report.

Google India combined data from Google Trends and TNS, the market research firm, to establish a shift in sentiment, as Indian consumers become less reluctant to spend online.

"Currently the industry is worth about $10bn," said Rajan Anandan, Managing Director of Google India, "but in the next three to four years is expected to rise to $30 to $40bn", as reported by Business Today.

He added that there are only around 70 e-commerce companies in the country and "we need a lot more".

Two categories currently account for the majority of online sales: consumer durables with 34% and apparel and accessories on 30%.

Other significant sectors include books, on 15%, beauty and personal care, on 10%, home and furnishing, on 6%, healthcare, on 3% and baby products, on 2%.

"We expect 2013 to be a strong growth year for players who're focused on fast-growing categories like apparels and accessories," said Anandan, adding that he also expected to see growth in "niche product categories like baby products, home furnishings, and health nutrition."

More than half the growth in ecommerce is projected to come from outside the main eight metropolitan centres. This will be driven by an increase in smartphone penetration beyond main urban hubs (Google noted a doubling of the number of search queries from mobile phones between 2011 and 2012) and consumers becoming more fashion and brand conscious.

Consumers are also likely to be drawn to e-commerce because it is effortless, takes away the need to travel for purchases and the product is home delivered.

The Google study also found that 90% of online shoppers intend to buy more online, suggesting a positive experience for the great majority of users.

Data sourced from Business Today/ZDNet; additional content by Warc staff