According to the latest report generated by industry body ASSOCHAM (Associated Chambers of Commerce and Industry of India) and ComScore, India has now entered into a list of fastest growing Internet markets ranking third among the fastest growing markets worldwide.
Presently, internet user base in India is approximately 125 million, among the BRIC Nations, India has been the fastest growing market adding over 18 million internet users and growing at an annual rate of 41%.
“Internet is getting into the daily life of most of the people and mobile internet will drive the growth of ecommerce, banking, education, healthcare and entertainment in the near future”, said Milind Deora, Minister of state for communication and Information and Technology.
ECommerce in India has grown rapidly across both travel and retail in the last 12 months and has shown an above average growth compared too many categories online. China added over 14 million users to reach 336 million Internet users by the end of July 2012. Russia and India show similar trends in online usage patterns along with similarities in e-commerce and payment types.
Penetration in ecommerce has increased to 60% and has grown to 37.5 million unique visitors a month, an overall growth of 43% annually. The growth has come across all retail categories and most of them show promising transactions and conversion rates along with growth in visitors.
Amazon and Flipkart are the most visited sites accounting 15.4% and 11.5% of visitors respectively. Flipkart leads the way among the online retailers in India with 7.4 million unique visitors a month, growing at 431% annually. Snapdeal has been close second with 6.9 million uniques. Jabong and Myntra have been competing closely in the lifestyle category with over 5.3 million unique visitors each. HomeShop18 has over 4 million unique visitors a month.
There is almost an increase of 10 million unique visitors in last one year, Percentage of unique visitors have grown from 26.1 million in July 2011 to 37.5 million in July 2012.
- Apparel has been the fastest growing subcategory in retail reaching 13.4% online users in India.
- Consumer goods, sports/outdoor products and retail food sub categories have also shown early growth signs.
- Flowers/gifts/greetings is the only subcategory which has shown de-growth of over 33% in the last 12 months.
- Vertical e-Commerce categories including baby products, apparel, shoes and other lifestyle categories have also shown tremendous growth. Wider assortment and product availability have helped these retailers in growing business online.
Comparison shopping continue to dominate, most of the comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow as more categories of retail come online.
IRCTC has led the category with the largest transaction share and dollar share contribution, 1 out of 5 online users in India visit the Indian Railways site with almost 12 million unique visitors monthly.
More retailers online have heavily depended on online marketing to scale. The online marketing spends across all content categories and effective marketing campaigns reaching out the right target audience have increased visitation and hence conversion among retailers.
Direct debit is the most commonly used payment type contributing to over 58% of the overall payments in India. Cash on Delivery which has been a popular mode of payment method in retail category and form close to 7% of the total transactions. American Express has the highest average bill value per transaction at $110 followed by Visa and MasterCard.
Online retail has seen a heavy overlap with social networking and search due to aggressive marketing and strong inclination towards social commerce. Larger portion of online retail is expected from social commerce with India positioning itself as one of the fastest growing social networked user base and also larger size of social groups.
Retail category has seen peculiar growth in last 12 months with a lot of retailers pushing for trials among consumers through discounts and freebies. This is a changing trend as consumers having tried online shopping; the credibility of these sites will further bolster the transaction volume too. The roll out of 3G and 4G broadband services, the National Broadband Plan and much expected opening of the Retail Sector will certainly usher new business opportunities for e-Commerce in the country.