How real or hyped is the Indian opportunity for Internet Retail

OnlineRetailCompared to the more mature markets like that of U.S. and Europe, India’s eCommerce sales are relatively small. According to research firms like ASSOCHAM they are estimated at about USD 1.6 billion in the year 2012.

But being a developing economy and early-stage eCommerce market, India faces several development hurdles, right from getting payments online to order fulfillment to packaging and delivering the product. Moreover, retailing in India is fragmented, unorganised and dominated by tens of thousands of mostly small proprietors.

Today the Indian online retailing market has several thousands of small, individual eCommerce players. A major chunk of the market has been dominated by only about a dozen of well-known, major online retail companies such as Flipkart, Myntra and Yebhi, among others.

Looking back at the eCommerce story in India, the first wave of e-businesses swept across India in the late nineties and early 2001 with the entry of online businesses like, IndiaPlaza and a handful of other companies who were able to survive this first phase of eCommerce in India.

The second phase took off five to six years later with the entry of players like Flipkart. The third phase of eCommerce is what is happening currently — the most dramatic and interesting one — where on one side investors are willing to trust the potential of this largely untapped sector in India, and on the other side several prominent players have given recent shutdowns.

But within great challenges lie great opportunities too, and the maturation of India’s eCommerce ecosystem is going to be no different. Factors like growth in internet penetration, increasing middle class with disposable income and rising number smartphone connected people will help eCommerce industry become one of the most exciting spaces for tomorrow’s global online community. Moreover, the eCommerce revenue figures figures are estimated to touch USD 8.8 billion in 2016.

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So in reality is eCommerce in India as big as it appears? Are the opportunities in online business a farce or a reality?

“Brands which are not present online will increasingly find it difficult to survive and this is not far away, it will happen in next 2-3 years. eCommerce is the sunrise Industry with 24×7 availability at fraction of retail store costs. The right time to get on the bus is now…” believes Pawan Gadia, CEO at one of the leading Retail & Online company in India – Ferns N Petals, which started its eCommerce operations a decade back. The company looks towards doubling its topline in the next 18 months.

Discover more on latest trends in Internet Retail at the upcoming #IRE2014. To contact the author, email at