Online retail in India to touch $76 billion by 2021: Study

MUMBAI: The total size of the business of selling retail goods on the internet, commonly known as e-tailing, is set to touch $76 billion mark by 2021 in the country, according to a study by Technopak.

E-tailing, which is around 6% of the total e- commerce, is estimated to be around $0.6 billion in 2012, said the study ‘E-tailing in India: Unlocking the Potential’.

“In India, e-tailing has the potential to grow more than hundred-fold in the next nine years to reach a value of $76 billion by 2021. The country’s growing internet-habituated consumer base, which will comprise 180 million broadband users by 2020, along with a burgeoning class of mobile internet users, will drive the e-tailing story,” the study said.

The total e-commerce business in India, including other products and services such as travel and financial services, is estimated to be $10 billion in 2012, it said.

It said in India, the retail market at present is primarily served by traditional brick and mortar stores which make up 93% of the total market. Corporatised brick and mortar retail caters to nearly 7%, while e-tailing’s share is 0.1%.

The study observed that the brick and mortar formats would undergo a few changes and the share of e-tailing in the total organised retail pie to grow from 0.1% at present to 5.3% by 2021.

“E-tailing will emerge as a viable third alternative by which corporatised retail can expand its share of the total retail pie.

“The key reason for this disruptive growth lies in the fact that the market-enabling conditions and ecosystem creation for e-tailing will outpace the same for corporatised brick & mortar retail. This growth will offer many advantages to the Indian economy, besides bringing in immense benefits to consumers,” Technopak said.

With the internet users spread across the country, it is an opportunity for e-tailers in India, it said.

“What makes the growth of e-tailing more compelling is the fact that such an internet-habituated consumer is currently spread across India.

“This dispersion does not allow accumulation of enough demand for brick and mortar retailers to open stores. Yet these same consumers, aggregated at a pan-India level, become an attractive opportunity for e-tailers,” it said.

The study estimates that by 2020, 150 million users will have either a laptop or a personal computer.


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