Author: Divyan Gupta, Founder and CEO, Keshiha Services Pvt. Ltd.
People love buying stuff. So much so that retail sales worldwide including both offline and online will reach a mind numbing $22.492 trillion this year! And this is going to continue witnessing a steady growth over the coming years with sales touching $28.300 trillion by 2018. These figures by e-Marketer as part of its first-ever worldwide forecast of the global retail market and retail eCommerce sales show just why everyone is fighting to succeed in this extremely competitive industry. eCommerce which accounted for 5.9% of the total worldwide retail market in 2014 at $1.316 trillion will increase significantly to 8.8% by 2018.
The total retail sales in India are expected to touch about $818 billion this year after growing about 14% from $717 billion in 2014 and are expected to further grow to about $1,244 billion. Retail eCommerce sales are projected to touch about $7 billion this year from last year’s $5 billion and are expected to touch $17 billion by 2018. However the retail eCommerce sales as a percentage of total retail sales would increase from the current 0.7% to about 1.4% only by 2018. Even though the growth is significantly lower than the 18% and 16.6% projections for the world’s top eCommerce markets, the UK and China respectively, the fact is that it is ushering in a massive change in the way products and services are being made available online for aspiring Indians.
Lifestyle and luxury market is one such vertical where we are seeing traction gaining momentum. Within lifestyle products, apparels, fashion accessories and home furnishings are gaining more traction than other products. The luxury lifestyle market in the country accounts for 10% of total retail and is expanding on a fast pace to reach $18 billion by 2017 from its existing level of $14 billion. With eCommerce coming in, aspiring Indians now have a much easier access to products from international brands and niche brands from within India all at the ease of a click. Increasing brand awareness, global exposure especially for the urbanized Indian youth coupled with rising purchasing power are all contributing to this growth. Products such as Italian sculptures, Italian centerpieces, original artworks as well as art deco and contemporary furniture are now available right from the comfort of one’s home. There are multiple players now operating online to cater to customers, some niche, some generalists. There are newer ways in which customers are being sought, wooed and converted whether that’s by offering exclusive products or white labelled goods or exclusive flash sales. Technologies like augmented reality are being used to let customers connect with products in a way which was earlier not possible.
All these moves are gradually transforming the lifestyle and luxury Industry. Both Indian and foreign lifestyle brands are diversifying their distribution in collaboration with eCommerce players and are reaching customers across the length and breadth of the country without having to spend years and bucket loads of money to be present physically. All of this to reach out to India’s growing consumer class – expected to grow nearly 12-fold from 50 million at present to 583 million by 2025. And this will be including 23 million people likely to be listed among the world’s wealthiest citizens.
On-going liberalization of the retail sector and a focus on Make in India by the present government could also lead to international players doing what is already being done in the food industry–taking local designed products internationally. This will have a very positive impact on the country as the luxury market alone could be responsible for employing about 1.8 million people by 2020. Even more significant would be that this would lead to the preservation of traditional craft skills and heritage along with supporting communities and creating employment. eCommerce has made it possible for companies to connect to the hard-to-reach but aspiring Indian customer and given a new lease of life to the lifestyle and luxury industry.
Disclaimer: This is a guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamWire and the editor(s).