Gen Y To Fuel E-commerce Growth In India
Online shopping of physical goods in India will grow to $8.5 billion in 2016 from just $2 billion in 2013, according to Accel Partners’ India E-commerce Report 2014. The number of online buyers is likely to grow by more than double to reach about 40 million in 2016, said the report.
The report further stated that a major part of this growth may come from the increasing use of the online channel by the younger generation mainly in the 19-24 years’ category. Of the 40 million shoppers expected to be added in the next 3 years, nearly half will come this age group, elaborates the report.
Among the 200 million online shoppers that will come online in the next three years, majority will use smartphones to shop online. Mobile shopping will increase from 4x in 2013 to 24x in 2016, says the
In the last one year, online shopping has also seen tremendous growth in the average order value with penetration of new categories like jewellery and home decor. The GMV of online fashion category has doubled since last year and it is expected to grow by by 400 per cent over the next three years.
With increase in supply of women-oriented categories like jewellery, lingerie and motherhood products, women-influenced online sales in India are expected to grow 5 times in the next three years. About 35 per cent of online GMV (gross merchandise value) in 2016 will be influenced by women, according to the report.
Interestingly, the Tier 2 cities seem to be growing faster than Tier 1 cities in terms of e-commerce adoption. The top three e-commerce cities are Delhi, Bangalore and Mumbai, followed by Pune, Hyderabad and Chennai.
The study also observes that users are becoming more comfortable buying higher-priced items online. “With increasing order values, we see an uptick of EMI payments. Interestingly, third party wallets have a strong value proposition and will be quick to become popular, similar to China,” stated the report.
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