India: ecommerce spending to jump by 67% in 2015

These are the estimates of a study conducted by Associated Chambers of Commerce and Industry of India (Assocham) along with consultancy company PricewaterhouseCoopers (PwC) and cited by business-standard.com. In 2014, nearly 40 million consumers purchased products or services online and this number is expected to jump to 65 million by 2015 with better infrastructure in terms of logistics, broadband and internet-ready devices driving the demand in ecommerce.

The Indian ecommerce industry is likely to register a compounded annual growth rate (CAGR) of 35% and cross the USD 100-billion mark in value over the next five years, the same study indicates.

The Indian ecommerce industry is currently valued at USD 17 billion. With an improvement in infrastructure such as logistics, broadband and internet-ready devices, a significant increase in the number of consumers making purchases online is expected. While there have been concerns over steep discounting by e-tailers, these flash sales and daily deals have played a major role in contributing to the growth of e-commerce. The increasing adoption of smartphones and tablet consumers has also aided to the e-commerce growth.

Among popular shopping categories, the study showed that apparel sales capture the biggest share of Indian ecommerce retail, along with computer and consumer electronics. The two categories are likely to continue fueling the market in the future as well.

Travel and tourism are also fast growing segments with as much as 75% of the total industry having migrated to online commerce. Among other things, a major portion of services such as air, train, bus, movie ticket bookings, hotel reservation and tour packages have moved to the internet.

The report added that between 2017 and 2020, the ecommerce industry could spend around 2-6% of the revenue on warehousing and sortation centers, which would translate to USD 450-900 million.

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