Trends In India's eCommerce Market

Together with our colleague Manish Bahl in Forrester’s New Delhi office, we just published our first report analyzing the eCommerce landscape in India. The report looks at the changing demands of the online shopper in India and the way in which companies in India are adapting to meet these demands. 

In this report, we note that:

India’s eCommerce market is at an early stage. India’s eCommerce market today is small but growing rapidly. From a revenue perspective, India is on par with other early stage eCommerce markets such as Mexico, while substantially smaller than more mature online retail markets such as Brazil and China.

Online buyers in India are not all concentrated in metropolitan areas. Where India differs from its BRIC counterparts is in the degree to which rural buyers have embraced eCommerce. In early stage eCommerce markets, it is typical for most sales to come from major urban areas.  In India, however, rural consumers have already started to buy online. This dynamic is partially due to the large percentage of rural households in India: The United Nations estimates that just 31% of India’s population lives in urban areas, compared to 50% in China, 74% in Russia and 85% in Brazil. As a result, sales from consumers outside of metropolitan areas already make up half of total sales at some leading online retailers in India.  

Companies tend to work with multiple logistics partners. India’s diverse online buying population presents challenges to retailers interested in serving all parts of the country effectively. To overcome logistical issues, retailers and brands selling online tend to have to partner with multiple providers: They will often work with global logistics companies for part of the delivery process, but rely on bicycle couriers for the last mile. Online retailers like Flipkart operate their own delivery networks, as do a variety of other emerging market eCommerce leaders including Ozon in Russia and 360buy in China.

Just like in other emerging markets, a variety of localized payment options is a must. Consumers in India have the option to pay online using bank transfers from a wide assortment of banks, credit cards, debit cards, “card on delivery” and cash on delivery (COD). COD tends to be a highly popular payment option in emerging markets, with India being no exception. High return rates on COD orders, however, can be a rude awakening to online retailers unused to offering this type of payment method.

Comments

In this early stage it is a

In this early stage it is a very contrasting trend that Smaller towns and cities drive substantial chunk of ecommerce in India; main reason being poor retail penetration.

In times to come, our projection says that smaller towns & cities will out grow metros in growth rate as well as sheer volume of ecomm. And Indian Postal Service would be the main logistics backbone to service these widely spread out geographies..

eCommerce in India

I can't think of a hamlet in India with population exceeding 5000, that doesn't have a dish (An instrument that allows Satellite TV channel viewing). Cable TV is the ultimate marketeer of goods- atleast in India. People want the same shoes which their favourite hero wore in a particular Hollywood film.

Internet and in particular, search engines like Google bridge the knowledge gap. Many have the means to pay for the merchandise ( India is world's largest producer of sugar, third largest producer of Tobacco, etc)

All they lack is a physical stockist close by. But, the growth of the logistics industry in India (Remember the dabbawalas of Mumbai ?) ; has solved this problem. Mobile phones has improved communication facilities and started allowing fund transfer.

Rural youth who join engineering colleges in town, start their own websites to village produce in towns and supplement their income by marketing merchandise back home.

These factors seem individually insignificant. But collectively, they become a potent force. The same one which led to the rise of e-commerce in India.

One more lesson on Unity in diversity & Collaborative Team work, isn't it ?

E Commerce in India

Oops, mistakes !

One of the sentences should have read like this -

Rural youth who join engineering colleges in town, start their own websites that sell village produce and supplement their income by delivering urban merchandise back home.

Sincere apologies.

Regards,
Shashank

Online shopping is truly

Online shopping is truly catching on in India, traditional brick and mortar stores are also getting the hand of doing business online. The trends demonstrate that traditional stores will keep on doing sufficient business while the online stores increase their virtual presence on the internet.

logistics issue in rural area

i have a e commerce company, we are in early stages and getting good response from the customers but facing more challenges, most of the business in india doing in cash on delivery based it cause to reduce the margin of the business and consignment in rural area is very difficult .I think e commerce in India growing rapidly and major companies are make huge revenue with huge no of sales but indian consumer are still looking discount for online shopping, most of them preferred COD based shipment , may be in 2013-2014 e commerce in india will get stable business.

http://deeyel.com/

Planning to start an eCommerce Store

Dear All,
We are also planning to start an eCommerce store for Indian Market.

Problems that we are anticipating:
1. How to get deals from vendors, specially when our site is new.
2. How to reduce the shipment cost, as customer is not willing to pay any shipment cost.
3. How to retain customers.

I would highly appreciate the answers to these questions from some of the experienced players.

open cart

This is one of the better blogs i've seen for open cart with lots of information and tips
open cart

E-Commerce & Logistics

Logistics is an integral part of any business, and e-commerce is no exception. Better logistics is required for e-commerce businesses to flourish in Indian rural heartlands. The growth for these two entities (e-commerce & logistics) must be simultaneous.

E-commerce

What trends are going on for rural buyers in India during E-commerce marketing...

its true that in india, not

its true that in india, not all people are connected to the internet and the ecommerce market may not cater to the needs of people from the rural parts of india. but unlike other ecommerce websites mydeals247.com has come up with an innovative idea in order to reach people from rural places as welll, by providing an offline service through which people can buy/sell products offline too.

For rural parts of

For rural parts of india,offline service is the best option & mydeals247.com is providing this service.. so now its not so tough for rural people to buy & sale their choiceable product.

eCommerce india

Currently indian people have purchased things one from the ecommerce and another is mall.
To purchased things from the mall is also new in india so the market is break between two states,
One is who purchased online which is rare today and,
another who are not buy something but also want entertainment,this kind of people go to mall to purchased the stuff and go for entertainment.