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Online retail sales in India to hit $85 bn by 2023: report
25 May '19
2 min read
Online retail sales in India will grow at a five-year compound annual growth rate (CAGR) of 25.8 per cent to reach $85 billion by 2023 in spite of the setbacks of demonetisation in 2016, goods and services tax (GST) in 2017 and the changes in e-commerce policy announced last December, according to a new report by global market research firm Forrester.
Reliance Retail's planned entry into the online retail sector is being widely perceived as the biggest challenge for Amazon and Walmart-Flipkart as the company is well positioned to create massive disruption in the market, the report said. The time is ripe for Reliance Retail, which operates 10,415 stores in more than 6,600 cities.
Amazon and Flipkart will be troubled by Reliance's history of massive discount-based launches, said Satish Meena, senior forecast analyst at Forrester Research.
"Due to the recent changes in eCommerce policy and the restrictions on an inventory-led model for marketplaces with FDI, Reliance Retail is finding a favourable policy environment to launch operations where it can use its existing retail infrastructure to deliver goods to customers," the Forrester report noted.
Reliance launched the food and grocery app among its employees in April 2019 to prepare for the commercial launch later in the year. Reliance Retail is the largest retailer in India, with $18.7 billion in revenue during financial year 2019, and it grew at a CAGR of 55 per cent in the last five years.
To compete, Reliance will have to significantly improve the customer experience, both in stores and on its online channel, because discounts and cashbacks will not generate loyalty for online customers as was witnessed in the Paytm Mall case, Indian media reported citing the Forrester document. (DS)
Reliance Retail's planned entry into the online retail sector is being widely perceived as the biggest challenge for Amazon and Walmart-Flipkart as the company is well positioned to create massive disruption in the market, the report said. The time is ripe for Reliance Retail, which operates 10,415 stores in more than 6,600 cities.
Amazon and Flipkart will be troubled by Reliance's history of massive discount-based launches, said Satish Meena, senior forecast analyst at Forrester Research.
"Due to the recent changes in eCommerce policy and the restrictions on an inventory-led model for marketplaces with FDI, Reliance Retail is finding a favourable policy environment to launch operations where it can use its existing retail infrastructure to deliver goods to customers," the Forrester report noted.
Reliance launched the food and grocery app among its employees in April 2019 to prepare for the commercial launch later in the year. Reliance Retail is the largest retailer in India, with $18.7 billion in revenue during financial year 2019, and it grew at a CAGR of 55 per cent in the last five years.
To compete, Reliance will have to significantly improve the customer experience, both in stores and on its online channel, because discounts and cashbacks will not generate loyalty for online customers as was witnessed in the Paytm Mall case, Indian media reported citing the Forrester document. (DS)
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