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Travel, E-Com, Utility Lead To India’s Digital Commerce Boom: Study

Digital Commerce Boom

With an online population of over 500 million, India has one of the fastest growing internet populations in the world. It is not surprising then that the country’s digital commerce market is growing at a phenomenal rate. According to a recent report by Internet and Mobile Association of India (IAMAI), India’ digital commerce market expected to reach Rs 2.37 lakh crore by December 2018, driven by strong growth in segments like online travel, e-commerce and utility services.

The industry body, in its report with IMRB Kantar, said the digital commerce market in India is estimated to have grown at a CAGR of 34 per cent between December 2011 and December 2017 to reach Rs 2.04 lakh crore by the end of December 2017.

As per the report, the online travel industry accounted for 54 per cent share (Rs 1.10 lakh crore) of the digital commerce market. Within the travel category, domestic air ticket and railways booking continued to be among top contributors, while bus/cab booking contributed about Rs 5,174 crore.

In the non-travel segment, e-tail contributed Rs 73,845 crore, followed by utility services (Rs 10,201 crore), and matrimony and classifieds (Rs 3,689 crore). Other online service market — which includes online bookings done for entertainment, online grocery and online food delivery — reached close to Rs 6,060 crore. For example, online grocery delivery is the top contributor within this segment with a market value of Rs 2,200 crore. This overall segment is expected to reach Rs 7,800 crore by this year end.

The report said an estimated 295 million people were online in urban India. With the prices of mobile internet seeing a rapid drop, there has been a significant increase in the number of online users and the level of online activity and engagement.

“The growth of internet has created various online avenues and digital shopping is one such avenue where the activity and engagement levels have seen an increase. The Indian shopping ecosystem has been witnessing a massive disruption lately,” the report researcher said, noting that while traditional method of shopping still continues to be strong, shopping using a digital medium is also catching up fast with Indian shoppers.

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