India’s digital space is expanding exponentially and has a huge potential for growth. While the country has already become the cynosure for software, bouyed by the growth of smartphones, an ecommerce revolution is brewing, with B2C and B2B companies vying for top consumer sales.
Analysts pin the reason to India’s large and growing consumer base whose disposable income is only set to increase, raising the desire to consume more products and drive sales of both smartphones and online retail up. According to an eMarketer report, India’s e-commerce sales in 2014 were US$5.3 billion, 1/80th the size of China’s US$426.26 billion and 1/58th the size of the US’ US$305.6 billion. China will likely exceed US$1 trillion in retail ecommerce sales by 2018, accounting for more than 40 percent of the total worldwide. Similarly, although India has a population of 1.3 billion, making it the world’s third largest market, slightly more than one in 10 own a smartphone, creating a huge potential for growth.
Considering that India’s population is expected to surpass China’s by 2028, the magnanimity of growth for consumer led digital devices and services is humongous. Its no wonder then, that Jack Ma has decided to start selling in India in August this year. The Hangzhou based entrepreneur millionaire, has already been to India twice this year to meet key decision makers including Prime Minister Modi. Smelling ripe opportunity Ma, has also appointed a startup-genius Suhas Gopinath to help him identify Indian companies in the digital space worth investing in. Confirming the growth potential in the Ecommerce market, Flipkart, India’s largest e-commerce firm, recently raised US$550 million at a valuation of US$15 billion.
Analysts expect as internet infrastructure in India bevy’s up, spreads and as connectivity grows through smartphones, the Ecommerce market will automatically shine. Digital-buyer penetration—a measure of digital reach—is a major factor in determining the success of retail e-commerce sales. India’s digital-buyer penetration was quite low at 24.4 percent in 2014 as compared to the global average of 41.6 percent, according to an eMarketer. The UK leads the world with 88 percent penetration. Ironically, China with 55.2 percent and US with 74.4 percent penetration do not feature in the top five.
As retail ecommerce picks up, Industry insiders also expect other services such as eduction and food related services to be the next big ecommerce game changers. However until then, India will need to fix her chinks across the system for Ecommerce to really take off.