India's Online Retail Spending Will Reach $16 Billion By 2018

Jitender Miglani

The Indian online retail market is still nascent, yet it is growing rapidly. Despite all of the existing challenges — underdeveloped logistics and supply chain operations, poor last-mile connectivity, delivery rejections at the doorstep when cash-on-delivery payments are used, and low conversion rates — online retail in India grew by 67% in 2013. Forrester expects India’s online retail spending to grow at a compound annual growth rate (CAGR) of more than 50% over the next five years as more Indian consumers start purchasing online. Our recently published report India Online Retail Forecast, 2013 To 2018 discusses our online retail forecast and the growth drivers for India.

On the demand side, Forrester sees a lot of room for growth in the number of Indian online buyers.

  • India had a total population of 1.28 billion in 2013, nearly 16% (or one in six) of whom are online. While higher PC penetration rates have driven Internet adoption in the developed economies over the past two decades, faster mobile penetration is helping boost the Indian Internet population, thanks to “mobile-only” Internet users.
  • Of all Indian online users, just 14% currently purchase online. Forrester expects the online buyer population in India to grow to 128 million by 2018. 
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