Online shopping, e-commerce, online retail…whatever you want to call it, buying stuff online is quick and easy, and it’s taking off globally, with some geographies far outstripping others in terms of growth.
One area where online shopping is really catching on is India, with the online retail market in the country projecting a whopping 55.70 percent CAGR from 2013-2018.
TechNavio takes a look at some of the big factors behind this impressive market growth.
1. Increased Internet Penetration
As of 2013, India had an internet population of about 198 million, which is the third largest after China and the US. It is also the youngest online population when compared with other BRIC nations. Though Indian users spend less time online per capita than users in developed countries, their pattern of online behavior is rapidly converging. Broadband penetration has also increased with the growth and development in both fixed and wireless broadband connections. Apart from internet penetration, the rise in smartphone usage, digital literacy, and purchasing power have seen online retail grow exponentially.
2. Easy Payment Options
The availability of online payment options, a wide range of merchandise, online tracking of shipments, 24/7 customer support, a larger internet reach, and cheaper costs have increased the demand for online shopping among the population.
3. Increasing Time-Poverty
As it turns out, Indian consumers are leading busier and busier lives, and are finding less time to shop. So consumers are seeking alternative ways to free up more time in their crunched schedules. Most of these consumers also spend a significant amount of time at work and at home with access to internet-enabled devices, hence the increasing growth rate in the adoption of the internet and mobile retailing.
4. Younger Demographics
The young Indian population and their growing disposable income levels have driven the growth of the Online Retail Market in the country in recent years. India has the youngest population in the world with over 400 million in the 15-35 years age group, which is one of the largest consumer markets in the world. This population is wired, has access to smartphones and internet and is driven by the convenience of online shopping.
5. Growing Popularity of Celebrity Fashion
In the same vein, the popularity of celebrity fashion has boosted online sales in India in recent years. Production houses, in collaboration with fashion retailers, have launched special edition collections, mostly designed for traditional occasions such as Diwali, and fashion and lifestyle retailers are taking advantage of celebrity fashions.
6. High Growth During Festive Seasons
According to a survey undertaken in August 2013 by ASSOCHAM, online retail recorded growth of 65 percent during the festive season in 2012 compared with the previous year for products such as cellphones, e-tablets, consumer electronics, home appliances, home décor, furnishings, and apparel. To appeal to festive shoppers, online retailers offer huge discounts and interesting deals during the season.
At a glance, the Indian population is younger, busier and more connected than ever, creating a perfect storm for the online retail market in the country.
