ONLINE RETAIL: GLOBAL PERSPECTIVE

US

RETAIL ECONOMY $4.3 trillion

About 10% of retail is online. Though Walmart in the last few years has been ramping up its online presence, the US is a monopoly of Amazon. Between Amazon and Walmart, they have a warehouse every 20 km in the US. Therefore, reaching out to consumers at their homes is quite easy. In fact, 60% of US homes are Amazon Prime members. The other advantage that Amazon has is that US doesn't have taxes equivalent of VAT or GST for online. So, they are able to offer discounts to the customer without taking it out from the pocket.

CHINA

RETAIL ECONOMY $3.0 trillion

Some 15% ($600 billion) is online retail. China didn't allow any US company in its market and instead developed its own ecosystem. Alibaba dominates the online retail market with a 70% share, while JD.com (acquired by Walmart) has a 15-20% market share. While the US online retail game is structured on the pillar of convenience, in China it is convenience, trust and perfect assortment. Online retail in China – like the US – is not subject to taxation, hence e-commerce companies are also able to offer better pricing without giving deep discounts.

INDIA RETAIL ECONOMY $650 billion

Only 3% (around $38.5 billion) is online retail. Unlike the US and China, India's ecosystem has not developed on assortment and convenience but on discounting. India has the same taxation for online as it has in the physical retail store, hence online retailers have little option but to offer heavy discounts to get more consumers on board. Also, unlike the US and China, where there is monopoly of one online retailer, in India it is a multiple play. Physical retailers are gearing up through omni-channel strategies.