India's E-Commerce Market To Touch USD 50-55 Bn By 2021: Study
India’s e-commerce market is expected to reach USD 50-55 billion by 2021 from the current USD 6-8 billion, according to a recent report by Retailers Association of India and Boston Consulting Group. The e-commerce penetration would be maximum in sectors such as consumer electronics, apparel, homeware and furniture, luxury, health, FMCG and food and grocery. [Read the full report here]
By 2025, consumer electronics would see maximum penetration of e-commerce between 38-42 percent compared to 13-15 percent currently, while food and grocery could see the least growth with 1-3 percent of e-commerce penetration from under 1 percent currently, the PTI report published on The Week. In the last three years alone digital buying has increased from 3 percent in 2013, to 23 percent in 2016. The overall digital influence on consumers has increased from 9 percent to 30 percent during the same period.
The report notes that convenience has overtaken discounts as a key driver for buying online. From 40 percent in 2014, the report notes that more than 55 percent purchase online due to convenience. The digital purchasing has been catalysed by progress in infrastructure, including falling smartphone prices, reducing data charges, and rising smartphone penetration.
Besides, smartphone penetration has increased from 3 percent to 30 percent in the past five years. Besides, the prices fell by up to 50 percent between 2011 and 2015,” the report said.
The report noted that digital adoption by a user base over 35 years of age is much higher in the past two years alone. E-commerce adoption has increased 3.8 times from 4 percent to 15 percent in the over-35 age group between 2014 and 2016, it said. Similarly, social media adoption has increased 2.9 times from 8 percent to 23 percent in the same time period.
The report further noted that in order for companies to take advantage of the current digital wave, they will have to digitise their core business, to unlock significant value. Besides, consumer engagement, integrating all the channels of sale from website and mobile to in-store, and collaborating with marketplaces is key, the report noted.
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