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

Textiles | On 29th Apr 2017

Textile sector may have uniform GST rate: Irani

The textile sector could have a uniform Goods and Services Tax (GST)...

Textiles | On 30th Apr 2017

Government revamping tech mission on cotton

Indian Government is working to revamp the technology mission on...

Apparel/Garments | On 30th Apr 2017

Columbia Sportswear records Q1 net sales of $543.8 mn

Columbia Sportswear Company has announced record net sales of $543.8...

Interviews View All

Saket Garg
Garg Corporation

The biggest challenge is lack of skilled workforce and competition from...

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Paolo Ocleppo
Sandvik Hyperion

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

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

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

news category


Related Categories:
April 2017

April 2017

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

SUBSCRIBE


Browse Our Archives

GO


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



X