E-commerce market in India may touch $100 billion by 2020

       E-commerce market is likely to grow ten-fold in next five years to reach USD 100 billion on the back of increasing penetration of Internet, smartphones and spread of digital network in rural areas, says a study.

According to a report titled 'Direct selling; Mapping the industry across Indian states', the country's e-commerce sector, which is around USD 10 billion (Rs 65,000 crore) at present, can even touch USD 250 billion in next ten years as digital network would spread in the rural areas.

By end of the decade, by 2020, e-commerce would be USD 100 billion industry... Presently China has a USD 450 billion e-commerce (market) and India is just USD 10 billion.

"India in next 10 years, in my mind 10 years, would be close to USD 250 billion of e-commerce," DIPP Secretary Amitabh Kant said while releasing the report on direct selling by industry body FICCI and consultancy firm KPMG.

This boom will happen because the broadband would take over and digital network will spread into the rural areas, Kant added.

According to him, e-commerce market would be driven by the local languages and broadband Internet penetration into rural India.

By 2017, India will have 350 million smartphones and it will create demand, the report said.

Meanwhile, e-retailing and various other formats of retail such as direct selling could co-exist and grow as there are several models growing in retail across the world.

"We would see several trends growing, while e-commerce has mushroomed in India recently... by 2017, we would have 500 million Indians connected to Internet and it would create huge consumer opportunity," Kant said.

India will also witness rapid urbanisation and create an economy driven by the middle class.

"By 2030, we would have 350 million people moving from rural to urban areas and by 2050, 700 million people would move to urban areas... by 2025, India's middle class would drive India's 50 per cent economy," he said.

The state governments should follow the drafted guidelines on direct selling to bring clarity in the sector, Kant added.

According to the report, direct selling in India has grown at a CAGR of 16 per cent over the past five years and is presently at Rs 75 billion.

However, "the market grew at a lower rate of 4 per cent in 2013-14 due to slowdown in the industry", the report said.

It added that there are several factors such as fly-by-night ponzi and pyramid schemes that are often confused with direct selling. Lack of a clear definition of the industry and centralised regulations are hampering the growth of the sector.

Fighting the ecommerce froth

That Indian ecommerce firms are highly-valued is no longer even up for debate. But to call the situation a bubble is not only premature, it is incorrect, say experts

  I

n September this year, veteran investor Vinod Khosla, who had backed Google in its earlier days, said 85 percent of Indian ecommerce firms (including Flipkart and Snapdeal) were over-valued. Harsh as his words may have sounded, they were based on trends he had noticed in the American market. And these have continued to play out. In November, fund manager Fidelity marked down its stake in image-based messaging service Snapchat, a unicorn (loosely defined as a startup that has crossed $1 billion in valuation), by 25 percent to $34.5 million. BlackRock had marked down the value of its investment in file hosting service provider Dropbox, another unicorn, by 24 percent, while Square, a financial and merchant services aggregator and mobile payment company, factored in 33 percent discount in its pre-initial public offering (IPO) price to $11–$13 ($4 billion) from the last private funding valuation of $15.46 ($6 billion). 

These three are among the most highly valued tech startups in the US and their devaluations have sent tremors of concern through the industry. India is obviously not untouched by the implications. Consider that almost 90 percent of the investments in the Indian ecommerce story comes from the US.
The sunshine industry seems to have found its clouds. 

So much has changed in the last year-and-a-half: From 2014 to early 2015, it was a buoyant period for the ecommerce industry; investors were trying to enter or stay in India’s consumer internet space. It was the party you were willing to buy a very expensive ticket to.

   Cut to 2015, and it seems that every one, from veteran investors like Khosla to venture capitalists and hedge fund investors, is beginning to question the business model of ecommerce firms and if they can sustain the high valuations they have garnered so far. It doesn’t help that a few firms saw flat to negligibly higher valuations compared to last year.

Homegrown ecommerce numero uno Flipkart had a small increase of 1.3-6.7 percent in its valuation in its latest round of funding in July, from $15 billion to $15.2-16 billion. In the round prior to this one, in May, Flipkart’s valuation rose by 36.7 percent. Last year, its valuation saw a 57 percent jump across two rounds, according to CB Insights data. Snapdeal also saw a similar trend. In 2014, its valuation tripled across its two rounds of funding. This year, in its latest round, its valuation remained flat to marginally higher, said sources.

While valuations are a way to gauge a company’s worth, they tend to go through cycles, sometimes swayed heavily by investor sentiment. The appetite for the Indian ecommerce industry was so strong last year that Japan’s telecom giant SoftBank Group Corp invested nearly $1 billion in India in less than 30 days. This, for instance, explains Snapdeal’s spiralling valuation during that time.

It isn’t that money has suddenly dried up. It still needs to be deployed. But what has changed is the filter employed by investors.

“Today, it’s not about growth; it’s about profitable and sustainable growth. The cash burning scenario is gone. Investors want to know if businesses can scale up in a sustainable manner showing a clear path to profitability and exit for them. As a consequence, valuations have taken a hit because multiples have come down,” says Sanjith Kumar, director at advisory firm Ambit Holdings.

 Growing Caution
The amount of new capital coming into the ecommerce industry is less than what it was six months ago and is reflected in the dwindling number of Series B and C deals in India. According to estimates by investors, if 75 companies are trying to raise funds in the range of $20 million to $40 million today, only about five will succeed. Also, hedge funds, the deep-pocketed alpha-returns-seeking set of investors world over, are in a difficult spot. According to Bloomberg, 417 hedge funds closed down in the first half of 2015 alone, indicating uncertain markets. And the Indian ecommerce industry has been powered by several hedge funds including Steadview Capital and LionRock Capital, both from Hong Kong. 

The capital flow from those who were once very bullish on India is also slowing down. SoftBank invested nearly $1 billion across three deals in India last year. This year so far, it has invested $150.2 million across five transactions here. While Tiger Global’s number of transactions are on a rise, according to VCCEdge’s estimates, its investment value has gone down this year. It has invested in 37 deals worth $229.3 million so far this year compared to 17 deals worth $512.4 million last year.

 
 

  

   

 

Ecommerce to jump 6&% at Rs2.52 cr this year news

The ecommerce industry in India is likely to be worth $38 billion (Rs2,51,720 crore) by 2016, a 67-per cent jump over the $23 billion (Rs1,52,357 crore) revenues for 2015, according to industry body Assocham.

''India's ecommerce market was worth about $3.8 billion (Rs25,172 crores) in 2009, it went up to $17 billion (Rs1,126,11 crores) in 2014 and to $23 billion (Rs1,52,357 crores) in 2015 and is expected to touch whopping $38 billion mark by 2016,'' Assocham said in a statement.

Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics have provided the ecommerce sector in India the unique opportunity to connect with their customers, it said.

There would be over a five- to seven-fold increase in revenue generated through e-commerce as compared to last year with all branded apparel, accessories, jewellery, gifts, footwear are available at a cheaper rates and delivered at the doorstep, it added.

Assocham noted that the buying trends during 2016 will witness a significant upward movement due to aggressive online discounts, rising fuel price and wider and abundant choice will hit the e-commerce industry in 2016.

It observed that mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry.

''Shopping online through smart phones is proving to be a game changer, and industry leaders believe that m-commerce could contribute up to 70 percent of their total revenues,'' the statement added.

In India roughly 60-65 per cent of the total e-commerce sales are being generated by mobile devices and tablets, increased by 50 per cent than the last year and also likely to continue upwards, it added.

It noted that the browsing trends, which have broadly shifted from the desktop to mobile devices in India, online shopping is also expected to follow suit, as one out of three customers currently makes transactions through mobiles in tier-1 and tier-2 cities.

In 2015, 78 per cent of shopping queries were made through mobile devices, compared to 46 percent in 2013.

In 2015, the highest growth rate was seen in the apparel segment almost 69.5 per cent over last year, followed by electronic items by 62 percent, baby care products at 53 per cent, beauty and personal care products at 52 per cent and home furnishings at 49 per cent.

It revealed that Mumbai ranks first in online shopping followed by Delhi, Ahmedabad, Bangalore, and Kolkata.

On the mode of payment, almost 45 per cent of online shoppers preferred cash on delivery over credit cards (16 per cent) and debit cards (21 per cent).

Only 10 per cent opted for internet banking and a scanty 7 per cent preferred cash cards, mobile wallets, and other such modes of payment, it said.

Among the above age segments, 18-25 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments.

The survey revealed that 38 per cent of regular shoppers are in 18-25 age group, 52 per cent in 26-35, 8 per cent in 36-45 and 2 per cent in the age group of 45-60.

Almost 65 per cent of online shoppers are male as against 35 per cent female.

In India, Mumbaikars shop online the most; Delhi ranks second

India's e-commerce market is likely to touch $38 billion mark in 2016, a massive jump over the $23 billion revenues clocked by the industry in 2015, according to an Assocham study.

"Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics have provided...the unique opportunity to companies to connect with their customers," said the study.

While the buying trends during 2015 witnessed a significant upward movement due to aggressive online discounts, rising fuel prices and wider and abundant choice will hit the e-commerce industry in 2016, it pointed out. On the other hand, mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry.

Shopping online through smartphones is proving to be a game changer, and industry leaders believe that m-commerce could contribute up to 70 per cent of their total revenues. The paper reveals that Mumbai ranks first in online shopping followed by Delhi, Ahmedabad, Bengaluru and Kolkata.

The study also noted that one out of three customers currently makes transactions through mobiles in Tier-1 and Tier-2 cities.

 

"In 2015, 78 per cent of shopping queries were made through mobile devices, compared to 46 per cent in 2013," Assocham Secretary General D S Rawat said.

In 2015, the highest growth rate was seen in the apparel segment, almost 69.5 per cent over last year, followed by electronic items, up 62 per cent, baby care products, up 53 per cent, beauty and personal care products at 52 per cent and home furnishings at 49 per cent.

Rapid growth of digital commerce in India is mainly due to increased use of smartphones. Mobiles and mobile accessories have taken up the maximum share of the digital commerce market in India, noted the study.

Moreover, almost 45 per cent online shoppers reportedly preferred cash on delivery over credit cards (16 per cent) and debit cards (21 per cent). Only 10 per cent opted for internet banking and a scanty 7 per cent preferred cash cards, mobile wallets, and other such modes of payment.

The 18-25 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments.

The survey highlights that 38 per cent of regular shoppers are in 18-25 age group, 52 per cent in 26-35, 8 per cent in 36-45 and 2 per cent in the age group of 45-60. Nearly 65 per cent online shoppers are male and 35 per cent female.

The products that were sold most in 2015 include mobile phones, ipad and accessories, MP3 players, digital cameras and jewellery, among others.

India’s e-commerce revenue may touch $38 bn in 2016:

India's e-commerce market is likely to touch $38 billion mark in 2016, a massive jump over the $23 billion revenues clocked by the industry in 2015 .

 

India’s e-commerce market is likely to touch $38 billion mark in 2016, a massive jump over the $23 billion revenues clocked by the industry in 2015, according to an Assocham study.

“Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics have provided…the unique opportunity to companies to connect with their customers,” said the study.

While the buying trends during 2015 witnessed a significant upward movement due to aggressive online discounts, rising fuel prices and wider and abundant choice will hit the e-commerce industry in 2016, it pointed out.

On the other hand, mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry. Shopping online through smartphones is proving to be a game changer, and industry leaders believe that m-commerce could contribute up to 70 per cent of their total revenues.

The paper reveals that Mumbai ranks first in online shopping followed by Delhi, Ahmedabad, Bengaluru and Kolkata. The study also noted that one out of three customers currently makes transactions through mobiles in Tier-1 and Tier-2 cities. “In 2015, 78 per cent of shopping queries were made
through mobile devices, compared to 46 per cent in 2013,” Assocham Secretary General D S Rawat said.

In 2015, the highest growth rate was seen in the apparel segment, almost 69.5 per cent over last year, followed by electronic items, up 62 per cent, baby care products, up 53 per cent, beauty and personal care products at 52 per cent and home furnishings at 49 per cent.

Rapid growth of digital commerce in India is mainly due to increased use of smartphones. Mobiles and mobile accessories have taken up the maximum share of the digital commerce market in India, noted the study.

Moreover, almost 45 per cent online shoppers reportedly preferred cash on delivery over credit cards (16 per cent) and debit cards (21 per cent). Only 10 per cent opted for internet banking and a scanty 7 per cent preferred cash cards, mobile wallets, and other such modes of payment.

The 18-25 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments. The survey highlights that 38 per cent of regular shoppers are in 18-25 age group, 52 per cent in 26-35, 8 per cent in 36-45 and 2 per cent in the age group of 45-60. Nearly 65 per cent online shoppers are male and 35 per cent female.

The products that were sold most in 2015 include mobile phones, iPad and accessories, MP3 players, digital cameras and jewellery, among others.

India’s e-commerce market is likely to touch $38 billion mark in 2016, a massive jump over the $23 billion revenues clocked by the industry in 2015, according to an Assocham study.

“Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics have provided…the unique opportunity to companies to connect with their customers,” said the study.

While the buying trends during 2015 witnessed a significant upward movement due to aggressive online discounts, rising fuel prices and wider and abundant choice will hit the e-commerce industry in 2016, it pointed out.

On the other hand, mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry. Shopping online through smartphones is proving to be a game changer, and industry leaders believe that m-commerce could contribute up to 70 per cent of their total revenues.

The paper reveals that Mumbai ranks first in online shopping followed by Delhi, Ahmedabad, Bengaluru and Kolkata. The study also noted that one out of three customers currently makes transactions through mobiles in Tier-1 and Tier-2 cities. “In 2015, 78 per cent of shopping queries were made
through mobile devices, compared to 46 per cent in 2013,” Assocham Secretary General D S Rawat said.

In 2015, the highest growth rate was seen in the apparel segment, almost 69.5 per cent over last year, followed by electronic items, up 62 per cent, baby care products, up 53 per cent, beauty and personal care products at 52 per cent and home furnishings at 49 per cent.

Rapid growth of digital commerce in India is mainly due to increased use of smartphones. Mobiles and mobile accessories have taken up the maximum share of the digital commerce market in India, noted the study.

Moreover, almost 45 per cent online shoppers reportedly preferred cash on delivery over credit cards (16 per cent) and debit cards (21 per cent). Only 10 per cent opted for internet banking and a scanty 7 per cent preferred cash cards, mobile wallets, and other such modes of payment.

The 18-25 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments. The survey highlights that 38 per cent of regular shoppers are in 18-25 age group, 52 per cent in 26-35, 8 per cent in 36-45 and 2 per cent in the age group of 45-60. Nearly 65 per cent online shoppers are male and 35 per cent female.

The products that were sold most in 2015 include mobile phones, iPad and accessories, MP3   players, digital cameras and jewellery, among others.