Home / Knowledge / News / Apparel/Garments / Indian e-commerce tipped to become profitable by 2020
Indian e-commerce tipped to become profitable by 2020
16
Apr '15
Even as most players in India’s e-commerce space are struggling to break-even, a recent report has estimated that the industry may turn profitable at an operating level by around 2020. According to UBS Securities, the Indian e-commerce market is likely to grow 10 times from the current level and touch $50 billion (Rs 31,169 crore) by 2020, when it also starts making operating profits. “Investor concerns about e-commerce being a bubble in India are misplaced, in our view,” UBS said in the report, according to media reports.
 
“Our analysis of the supply-chain for offline retail by category implies adequate margins for e-tail in future. Inherent operating leverage in the business model and 700 basis points (as a percentage of gross merchandise value) lower discounting should lead to operating profit for the industry by 2020,” the report said. The estimates have been assessed based on a multi-factor approach that includes accessibility, affordability, adaptability, and accountability.
 
UBS Securities believes India’s e-commerce sector is well placed for “significant growth”, which will be driven by the favourable demographics in the country, multifold rise in Internet penetration, and scarcity of organised retail. It also said that players in the sector are already looking to solve “initial issues” around acceptance, lack of credit and debit card penetration, and last-mile delivery through innovative solutions such as cash on delivery and specialised e-logistic operations.
 
“3G rollout and affordable mobile handsets are key drivers, with the bulk of online traffic now mobile driven,” the report said. “We believe telcos and logistics will be beneficiaries while offline retail could be vulnerable. E-commerce will dilute distribution as an edge for consumer companies in India as it conceptually breaks these barriers.”
 
The report added that grocery could be a key segment for growth going forward and success in the category could lead to a significant upside in the estimated valuations of several players.
 
According to the UBS report, standardised products may be vulnerable but premium product brands could see a significant expansion in penetration in previously unserved tier III and IV cities through e-commerce. (SH)
 

Fibre2fashion News Desk - India


Must ReadView All

Uzbekistan, S Korea to launch textile techno park in Sept

Textiles | On 19th Feb 2018

Uzbekistan, S Korea to launch textile techno park in Sept

Uzbekistan and South Korea plan to launch a modern textile techno...

Hyosung to invest Rs 3,000 cr in Maharashtra spandex unit

Textiles | On 19th Feb 2018

Hyosung to invest Rs 3,000 cr in Maharashtra spandex unit

The largest global spandex producer Hyosung Corporation of South...

Courtesy: VF Corporation

Apparel/Garments | On 19th Feb 2018

VF Corp Q4 revenue climbs 20% to $3.6 billion

The revenue of VF Corporation, a global leader in branded lifestyle...

Interviews View All

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Dharmendra Shah
Ozone PB Spintex Limited

‘We have made huge investments to ensure quality yarn production.’

Marazban F Velati
Sutlej Textiles & Industries limited

No training can be effective till the candidate believes in it.

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Amiben Shroff
Shrujan

From its modest beginning in the late 1960s, Shrujan has grown into a...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

February 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
70.6%
No
12.7%
Skip
16.7%

Total Votes: 102

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.7%
No
29.4%
Skip
6.9%

Total Votes: 102

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
88.2%
No
8.8%
Skip
2.9%

Total Votes: 102

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
83.3%
No
7.8%
Skip
8.8%

Total Votes: 102


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search