Unfazed by slowdown, average online purchases are expected to increase by 78% in 2016 from 66% in 2015 due to attractive deals and aggressive marketing of ever-expanding range of merchandise from clothes to jewellery, from electronics to books, according to an ASSOCHAM-PwC study.
About 55 million consumers purchased something online in 2015 and the number is expected to grow to 80 million this year with better infrastructure in terms of logistics, broadband and Internet-ready devices, it pointed out.
The overall e-commerce industry, valued at $25 billion has been growing at a compounded annual growth rate of about 35-40 per cent each year, the study said, adding that it is expected to cross the $100 billion mark in five years.
In 2015, it showed that a higher amount was being spent on average for popular categories such as bags by 110 per cent, apparel by 68 per cent and cosmetics by 25 per cent, when it comes to online shopping. There was also a significant increase in spending on categories such as watches by 126 per cent and artificial jewellery by 65 per cent.
“The smartphone and tablet shoppers will be strong growth drivers. Mobile phones already account for 11 per cent of e-commerce sales, and their share will jump to 25 per cent by 2017, adds the joint study.
Top reasons given by shoppers in buying through Internet:
- Good discounts / lower prices
- Saves time and efforts
- Convenience of shopping at home
- Wide variety / range of products are available
- Get detailed information of the product
- You can compare various models / brands
Commenting on the findings, Mr. D S Rawat, Secretary General ASSOCHAM said, “E-commerce is big business and getting bigger every day. Online shopping has been embraced by Indians with close to 8-10 million adults making a purchase via the internet in the last year”.
Computer and consumer electronics, along with apparel and accessories, account for the bulk of India’s retail e-commerce sales. These will contribute 40 per cent of the total retail e-commerce sales in 2016 from the current level of 35 percent, said the study.
India’s travel and tourism are second fastest growing travel and tourism industry in the world. Nearly 75 per cent of total travel related business has migrated to e-commerce. With nearly one-third of Internet users already making purchases online, the e-commerce growth will rely more on increased spending from existing buyers than first-time online buyers, it said.
Other factors contributing to the growth of e-commerce include aggressive merchandising and discounting from flash sales and daily deals, more online loyalty programmes and increasing popularity of smartphones and tablet computers among consumers, the study added.
Event tickets, music, consumer electronics, games and consoles, sports equipment, flowers, insurance, home appliances and furniture saw strong growth in the last year, added the paper.
Even with efficiency improvements in individual performance and productivity (IPPs) in the delivery networks, it is estimated that there will be an additional employment of close to 1,00,000 people in these two functions alone by 2017-2020, representing an increase in employment.