Friday 19 August 2016

Online shopping to account for 2/3rd of ecommerce market by 2020: NASSCOM report

The National Association of Software & Services Companies (NASSCOM) in association with Akamai Technologies recently released a report on ‘The Future of Internet in India’.
The report revealed that by 2020, India’s internet base will touch 730 million and that rural consumers will drive this growth.

Power of Internet

In a study conducted by IAMAI and IMRB in November 2015, it was reported that India has the third largest Internet user base in the world; first and second being China and US, respectively. According to NASSCOM, India has surpassed US’ number and is now at the second position.
“India’s Internet consumption has already exceeded USA to become No. 2 globally. Keeping into consideration the massive impact that the Internet is creating across sectors, it has become the greatest disruptor of our age by changing the way we work, interact socially and live life in general. By 2020, the Internet is expected to penetrate deeper in the hinterlands of the country, helping to create more opportunities for everyone,” asserted R Chandrashekhar, President at NASSCOM.

According to NASSCOM-Akamai, the surge in Internet users is due to:

  • The start-up ecosystem in India
  • Government’s initiatives
  • Increased adoption of smartphones
  • Rise of online services and devices
“This is also a great opportunity for enterprises to harness the power of the Internet to innovate and scale operations,” stated Sidharth Malik, VP & MD, India, Akamai Technologies.

Online shopping to exceed travel by accounting for 2/3rd of the total ecommerce market

Travel dominates the Indian ecommerce market with nearly 70% share. But this will change by 2020 according to NASSCOM’s report. Online shopping will replace travel in the next 4 years to become the dominating sector.
“..the overall e-Commerce market in India was valued $17 billion in FY 2016, and by 2020, India will have an estimated 702 million smart phones in use and mobile phones will emerge as the preferred device for shopping, accounting for 70% of total online shopping. The fashion and lifestyle segment will emerge as the largest e-tailing category with a 35% contribution to e-Commerce GMV by 2020, overtaking the consumer electronics segment, which dominates the sales of Indian e-Commerce industry at present,” the report pointedout.

Some of the 2020 predictions mentioned in the report are:

  • 730 million Internet users in India  
  • 75% of new Internet user growth from rural areas  
  • 70% of ecommerce transactions through mobile phones  
  • 75% of new Internet users to consume data in local languages  
  • India will continue to be the fastest growing Internet market
  • India’s fintech market is expected to grow 1.7x between 2015 and 2020
  • With rise of ecommerce and online transactions, demand for security technologies and professionals is rising
Indian ecommerce industry’s growth is heavily dependent on Internet penetration. If the findings of this study are to be believed, then etailers have every reason to be happy. What remains to be seen is how ecommerce players will utilize this opportunity. Will etailers focus on finding new ways to give discounts or will they concentrate on building digital infrastructure?

No comments:

Post a Comment