India’s online retail market seen growing to $32.7 bn this year
BENGALURU: Online retail sales in India are expected to grow by 31% this year to touch $32.70 billion, led by e-commerce players Flipkart, Amazon Inc. and Paytm Mall, according to a report by marketing research firm emarketer. However, India’s growth rate in retail e-commerce is yet to catch up with countries such as China and Indonesia in the Asia Pacific market.
Flipkart, Amazon and Paytm Mall have been expanding into new sectors, including grocery, and with Walmart’s recent $16 billion acquisition of Flipkart, e-commerce in India is expected to launch more offline retail stores with private labels playing a larger role in segments such as fashion and electronic accessories.
A combination of factors have contributed to India’s growing ranks of digital buyers, including large investments made by companies like Amazon, Flipkart and Paytm Mall, growing internet and smartphone usage, and demographics—the country’s young population and burgeoning middle class.
emarketer estimates that a quarter of India’s population will become digital shoppers by end of 2018, the figure touching 41.6% by 2022.
However, India’s e-commerce market is yet to get into its stride. The online retail market in India has more than tripled since 2015, but it is only expected to contribute to 2.9% of the total retail sales in 2018. This, however, is expected to change in the coming years. By 2022, the sector will be worth $71.94 billion, which is a 120% growth compared to $32.70 billion in 2018, the research firm added.
Comparatively, i n China, online retail already makes up more than 16% of the overall retail market, and is expected to touch 25% in 2020, according to a 2017 report by Goldman Sachs.