Digital commerce may grow 300% to touch $128 bn by 2017

09 Dec '15

5 min read

The future of e-commerce is bright and growth will come from mobile platforms, personalization, social media analytics, omni-channel service, and sharing economy business models. The e-commerce industry is an exciting place with the interplay of social, mobility, analytics, cloud (SMAC), digital, 3D and, virtualization. The current high valuations, in spite of losses, perhaps, are indicative of the future potential.

Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics has provided the e-commerce sector in India the unique opportunity to fundamentally alter the way companies connect with their customers.

Online travel, one of the key drivers of India's e-commerce market, accounts for nearly 71 per cent of e-commerce business in India. Though the online retail market in India, currently at $1.6 billion, is a miniscule fraction of India's overall $500 billion retail industry; retail e-commerce has recorded a three-fold growth since 2011, predominantly driven by million dollar investments by domestic and foreign investors.

On the other hand, mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry. Shopping online through smart phones is proving to be a game changer, and industry leaders believe that m-commerce could contribute up to 70 per cent of their total revenues.

The Government's ambitious 'Digital India' project that aims to offer a one-stop shop for Government services will further bolster the sector by introducing internet and broadband to remote corners of the country and increase trade. This initiative through a targeted investment of nearly $17 billion will transform India into a connected economy and also attract investment in electronics manufacturing and create millions of jobs, said Rawat.

It is therefore important to overcome challenges in financing, infrastructure, logistics and focus on building customer loyalty to usher in the next wave of sustainable growth in e-commerce. Dedicated e-commerce laws are required to address issues in the sector's legal and regulatory framework and Banks must play a leading role as 'facilitators' by offering cost effective cash management solutions, secure payment gateways and other relevant banking services, the study highlighted.

In India, online shoppers are expected to increase from 20 million in 2013 to 40 million in 2016. An additional 200 million Indians will access the internet in the next three years, with majority of them coming online through smartphones, the study said. (SH)

Fibre2Fashion News Desk – India

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