Ecommerce in India
Encyclopedia
India
has an internet user base of over 100 million users. The penetration of e-commerce is low compared to markets like the US and the UK but is growing at a much faster rate with a large number of new entrants . The industry consensus is that growth is at an inflection point with key drivers being:
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
has an internet user base of over 100 million users. The penetration of e-commerce is low compared to markets like the US and the UK but is growing at a much faster rate with a large number of new entrants . The industry consensus is that growth is at an inflection point with key drivers being:
- Increasing broadband InternetBroadband Internet accessBroadband Internet access, often shortened to just "broadband", is a high data rate, low-latency connection to the Internet— typically contrasted with dial-up access using a 56 kbit/s modem or satellite Internet with inherently high latency....
(growing at 20% MoM) and 3G3G3G or 3rd generation mobile telecommunications is a generation of standards for mobile phones and mobile telecommunication services fulfilling the International Mobile Telecommunications-2000 specifications by the International Telecommunication Union...
penetration . - Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes
- Availability of much wider product range (including long tailLong tailLong tail may refer to:*The Long Tail, a consumer demographic in business*Power law's long tail, a statistics term describing certain kinds of distribution*Long-tail boat, a type of watercraft native to Southeast Asia...
and Direct ImportsDirect importsDirect Imports are products imported directly into a country and not through the manufacturer's authorized agent/distributor. Since there is no factory-authorized middleman involved in the import of these products, the added costs are lower and the customer pays less...
) compared to what is available at brick and mortar retailers - Busy lifestyles, urban traffic congestion and lack of time for offline shopping
- Lower prices compared to brick and mortar retail driven by disintermediationDisintermediationIn economics, disintermediation is the removal of intermediaries in a supply chain: "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate , companies may now deal with every customer directly, for example via the Internet...
and reduced inventory and real estate costs
Market Size & Growth
India’s e-commerce market was worth about $2.5 billion in 2009. About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Millionas of 2009). India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%. Electronics and Apparel are the biggest categories in terms of sales.Unique to India
Some of the aspects of Indian e-commerce that are unique to India (and potentially to other develping countries) are:- Cash on DeliveryCash on DeliveryC.O.D. is the debut album of rapper Ray Cash. He mentions a title called in "P.A.N." which criticizes bubblegum rap. Cash insinuates that his label before the album's release showed that "it doesn't know what to do with him". This can be proven since his two hits "Sex Appeal" and "Bumpin' my...
as a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be Cash On Delivery (CODCODCod is the common name for fish of the genus Gadus, as well as being used to refer to several other varieties of fish.Cod or COD may also refer to:-Finance and commerce:...
). - Direct ImportsDirect importsDirect Imports are products imported directly into a country and not through the manufacturer's authorized agent/distributor. Since there is no factory-authorized middleman involved in the import of these products, the added costs are lower and the customer pays less...
constitute a large component of online sales. Demand for international consumer products (including long-tail) is growing much faster than in-country supply from authorized distributors and e-commerce offerings like eBayEBayeBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
Global Easy Buy , AmazonAmazon.comAmazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
Global and 20North.com use sophisticated E-commerce and LogisticsLogisticsLogistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and...
technology to create a cross-border supply chainSupply chainA supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
that allows consumers to shop online for international products that are Delivered Duty PaidIncotermThe Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce widely used in international commercial transactions...
to their doorstep.
See Also
- Direct Imports into India
- Direct ImportsDirect importsDirect Imports are products imported directly into a country and not through the manufacturer's authorized agent/distributor. Since there is no factory-authorized middleman involved in the import of these products, the added costs are lower and the customer pays less...
- DisintermediationDisintermediationIn economics, disintermediation is the removal of intermediaries in a supply chain: "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate , companies may now deal with every customer directly, for example via the Internet...
- Electronic CommerceElectronic commerceElectronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...