Indian e-tail market to hit $100 bn by 2020

Growing at a steady 50-60 per cent year-on-year, the Indian e-tailing market is expected to reach $80-100 billion in gross merchandise value (GMV) by 2020, RedSeer Consulting said in a study.

The research and advisory firm said growth would be driven by expansion into tier2 and tier-3 cities. The focus area would be on items such as fashion, furniture, and babycare and would move from just sale of mobile phones and big-ticket electronics. Revenue would be generated from areas such as advertising and logistics.

According to RedSeer, more than 230 million new people will come online between 2015 and 2020. “Etailers need to have a clear strategy to induce this population to shop online. They need to increase comfort of tier-II city shoppers, promote use of assisted shopping in a bigger way, deploying try and buy and opening offline stores,” said Anil Kumar, founder and CEO of RedSeer Consulting.

The study also said increasing robustness of payment platforms and promoting wallet use would boost consumer comfort with online shopping which would help in achieving the $100billion target.

There are various reports on the size of the e-commerce sector in India by 2020. Earlier this year, a report released by Google and AT Kearney, Digital Retail 2020 Consumer, stated that with a base of around 175 million, Indian e-commerce could reach $60 billion in GMV by 2020.

The estimates were less than that projected by US investment bank Goldman Sachs last year in October, which pegged the e-tail segment at $69 billion.