India to be 2nd largest e-retail market by 2034: Report

The Global Payments report by payment processing company Worldpay says that roughly 350 million Indian citizens are already online, and the number is expected to nearly double to 600 million by 2020. According to Google’s ‘Next Billion Users’ team, three Indians are coming online every second and the government is also taking initiatives to promote digital finance in the country.

“Worldpay expects India will overtake the US as the world’s second largest e-commerce market by 2034. The potential opportunity for merchants is enormous, but they must stake their claim today to win over India’s commerce-hungry population. Leading companies are already making their move on the Indian market, including, Amazon, Alibaba, and Flipkart,” says the report.

Mobiles will be the driving force behind e-commerce growth and young people shopping on smartphones are driving a sharp rise in online spend, states the report.

“The National Optical Network, originally scheduled for completion in 2013, will be a major determinant in India’s eCommerce growth. A number of delays have slowed the project down, but trial roll-outs are currently underway and if successful the next few years will result in wider access to fast internet access for millions of Indian consumers,” says the study.

Indian consumers continue to prefer cash on delivery when it comes to online purchases, and while their confidence in cards and sharing data is rising, merchants must provide cash-on-delivery (COD) option to attract local shoppers. The logistics of delivering goods are also a major consideration, as the postal infrastructure is severely underdeveloped in rural areas. Most e-retailers have depended on third party delivery firms until now, but as the market grows and extends beyond city centres many companies will take matters into their own hands; managing deliveries themselves to ensure a reliable service, predicts Worldpay’s report.

India is currently one of the fastest growing e-commerce markets in the world and the citizens of the country prefer COD as it account for 26 per cent of the share followed by bank transfers. Underdeveloped payment infrastructure of the country is a reason why cash is more popular and about 75 per cent of the Indian population does not have a way to pay online. However, cash is likely to decline in favour of other payment methods as the infrastructure develops, according to Worldpay.

The report also predicts that the mobile wallet market of India will reach $5.1 billion by 2020. (KD)

Fibre2Fashion News Desk – India