When we purchase a service or product through internet with an electronics media, it is called “Online Shopping”. Basically online shopping is divided into 2 categories: Travel/Tourism and Online Retail Business. Travel/Tourism websites are like Makemytrip.com, IRCTC.com, Bookmyshow.com, Paytm.com and Yatra.com. These all sites provide some kind of either tickets or service. Like Paytm.com helps to do online recharge while makemytrip.com helps us to make Air/Bus/Rail ticket. Online Retail Websites are those, from where we purchase a product and the product is delivered to our doorstep. Like Flipkart.com, eBay.com and Amazon.in. These websites have a wide range of verity of products and brand. They deliver the purchased goods to our doorstep. Online Ticketing/Tourism/Services contribute 75% to the total revenue.
The growth rate of Online Shopping is gaining pace in India. India is 3rd largest country in this race lacking behind only USA and China. The growth rate of Online Shoppers is more than 30% while world’s average growth rate is just 6-7%. You may be wondered to hear that only 11% of India population is using Internet and only 10 million online shoppers. Think about the number of online shoppers, if 50% of India’s population gets start online shopping. The revenue generation was $2.5b in 2009, $6.3b in 2011 and $14b in 2012 and it is expected to reach to $24b by 2015. It is expected to contribute 4% to our GDP by 2020.
Below figure shows the distribution of Online Retail Shopper in India. We can see the most of the customers around 34% go for Electronics and 30% purchase apparel and accessories online. 3rd and 4th ranks are occupied by Books and beauty products. (Source: The Business Line, Jan 28 2013)
Reasons behind the popularity of Online Shopping in India are following:
1. Internet users are increasing at a rate of 20%.
2. Some specific product may not be available in local market.
3. In online shopping website, we can find a wide of verity and brands. So we can choose the best and cheaper among all.
4. We get discount and other incentives through online shopping, which is generally not available in retail shop. Like Flipkart.com provides 30 days replacement guarantee.
5. We have a busy life schedule. To book a Railway ticket at Ticket Counter may consume entire day but we can book the same ticket online within 2 minute (considering makemytrip.com). So we can save our time through online shopping.
6. We have multiple payment options. So no tension of cash.
7. We get cash on delivery, free home delivery and many other incentives, which are very attractive.
By June 2013, Myntra.com got more than 13 million unique users and Flipkart.com got more than 12 million. Below image shows numbers of unique visitors to the following sites. (Data has been taken from ComScore.com)
There is huge opportunity and gap in Online Shopping Business India. As foreigner players like eBay.com and internet giant Amazon.com is eying for FDI in online business, competition will be become tougher. Right now Amazon.com has entered but does not sell its own product. It has just given platform to online sellers just like ebay.com. Flipkart.com, Snapdeal.com and Infibeam.com have begun their C2C business. So they trying to give a third party seal and earn more revenue. They take some commission to sell the product on their platform. The rate of Internet users and Online Shoppers are very high. We can say that Indian Online Shopping Business is in its Growth state while World’s is getting mature. And other factor that will affect this business is younger India and Smartphones. As these online shopping websites are getting funds/investment of million dollars from Private Equity Firms, they will grow more rapidly and their penetration to Indian markets will reach more deep.
1. Hindustan Times. 31 December 2012. Retrieved 31 December 2012.
2. The Business Line 28 January 2012
3. Issued report of ComScore.com dated August 2013.
5. Forrester Research Inc.
This article may also useful for
1. Advantages of Online Shopping Website
2. Why online shopping market is growing in India
3. Online VS Offline Shopping
4. Indian Online Shopping Websites and their performances
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