Bengaluru: E-commerce sales in India are expected to grow from $14 billion in 2015 to $55 billion in 2018, says a report by marketing research firm eMarketer.
Pure-play e-commerce companies such as Flipkart Ltd, Snapdeal (Jasper Infotech Pvt. Ltd) and Amazon Seller Services Pvt. Ltd will see more competition, with brick-and-mortar entities such as the Tata group and the Aditya Birla Group announcing plans to enter India’s growing e-commerce market.
Flipkart, India’s largest online marketplace, has raised $3.15 billion in funding, while second-largest firm Snapdeal has raised $1.54 billion. Amazon.com Inc. chief executive officer Jeff Bezos has said he would invest as much as $2 billion in its Indian arm.
Even specialized e-commerce companies like lingerie retailer Zivame (Actoserba Active Wholesale Pvt. Ltd) and women’s fashion portal Limeroad (A.M. Marketplaces Pvt. Ltd) have raised considerable amounts of money to capitalize on the opportunity.
“This rapid growth from Asia-Pacific predicted in eMarketer’s latest forecast for retail sales around the world is in part driven by the rising middle classes in China, India and Indonesia, and the increasing popularity of mobile devices, which is driving more and more people online throughout the region,” said the report.
This year, for the first time, the Asia Pacific region’s global retail spending—$877.61 billion—will make up 52.5% of the worldwide spending of $1670.99 billion, the first time it holds a majority of the world market, according to eMarketer.
China, however, makes up most of this spending, with its 2015 sales at $672 billion, and forecast to grow to $1,568.39 billion by 2018.
Online retail now accounts for 0.8% of all retail sales in India, compared with a global average of 6.3%, and e-Marketer forecasts this would grow to 4.8% by 2019, when it is projected to be 12.8% globally.
“This rapid growth in Asia-Pacific, coupled with faster Internet service and greater mobile uptake, is heating up the competitive landscape where large local players are increasingly vying for market share by improving their logistics and mobile platforms, and in some cases, moving entirely to an app-only service,” said Monica Peart, eMarketer’s director of forecasting.
India has seen the fastest growth in the retail e-commerce section among the Asia-Pacific countries, growing 133.8% in 2014 and 129.5% in 2015. eMarketer also forecasts that this growth will stabilize to 23.9% in 2019, compared with an Asia-Pacific projected average growth of 23.5%.