With more than 85% of the world shopping online and Internet spreading its roots in most of the households through smartphones and tablets, online shopping is no longer a fad, even in the developing countries like India. Today, shoppers have become more comfortable with the online notion. Though, consumers have their concerns about the security of online transactions, most seem to be prepared to buy on the web.
Also, with the Internet offering unlimited shelf space, unbounded by operational timings and geographical boundaries, online retail spending has seen quite a positive growth trend in the last few years, especially in the Asia Pacific region. As per the researchers, at least 35 percent of the total number of users shop online, with most traction coming from South Korea and China.
According to the latest forecast by Forrester, the combined online retail spending of Australia, China, India, Japan, and South Korea is expected to become more than double over the next five years, reaching USD 854 Bn by 2018.
The report categorises each country at any one of the three different stages viz,
-> Nascent: Online buyers form a very small share of the total online population, with only a small percentage of Internet users purchasing online
-> Ascending: Online buyer penetration increases much faster
-> Mature: Opportunity for growth still exists, it is constrained by the tailing off of growth in the number of online buyers.
Inspite of having over 150 Mn people on the Internet, being considered as the world’s leading app superpower and having the most potential market in mobile, India still lies in the Nascent stage. As per the research, the poor infrastructure facilities and minimal government support form the root causes of the slow online retail growth in India.
However, the large population and growing youth population is fueling the growth in a number of online buyers. Online retail accounts for less than 1% of the total retail market in India, and thus presents a huge growth potential for international retailers. It can be expected that in future, their comfort with online purchasing will increase as well.
Also, according to another research firm RNCOS, the Indian online retail market will grow at a compound annual rate of around 39% during FY 2013 to FY 2016, owing to the growing culture of Smartphones and tablets. The major factors driving online buying in the country include cash-on-delivery facility, discounts & offers provided by the online retailers and the busy lifestyle in metros.
Talking about China, it falls in the ascending stage. Recently, in a report by management consultancy firm Bain & Company, China’s eCommerce market is growing at an average growth rate of 71% from 2009 to 2012 and is expected to reach USD 539.07 Bn by 2015. The total spending by Chinese consumers on online shopping reached USD 212.4 Bn in 2012, owing to an increase in the internet penetration in the country.
Japan, Australia and South Korea
The online retail market in these countries have reached their saturation stage. They have a mature online buyer population and consumers are already comfortable purchasing items in different categories online. According to the estimations, the money Australians spend online is projected to increase by about USD 10 Bn within the next five years.
The complete report on Forrester online retail forecast can be downloaded from here
Iamwire Take: Though China shall take up largest pie out of this projected number, Indian eCommerce has the ability to surprise everyone and can suddenly pick up high growth and compete with other Asian countries. The key driver for this to happen is the participation of more and more retailers in eCommerce, who are still at the edge of deciding probably because of lack of awareness, high perceived initial costs or lack of right direction. Iamwire believes that India and Indian consumer are highly unpredictable when it comes to adoption of new things. As the eCommerce wave expands, it could be a matter of time when Indian consumers finally decide to do everything online including buying daily grocery.
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