E-commerce market to touch Rs 50,000-crore this year: Study

80 percent of the domestic e-commerce market is related to airline and rail tickets, hotel bookings, and online mobile recharge

PTI | October 31, 2011



The e-commerce market in the country, which is growing at an estimated 40-45 percent against a global growth rate of 8-10 percent, is likely to touch Rs 50,000 crore this year, says a recent study.

About 80 percent of the domestic e-commerce market is travel related, comprising booking of airline and rail tickets, hotel bookings, and online mobile recharge, with online retailing taking in just about 15 percent.

Electronics and apparel are the biggest categories in terms of sales, the study said.

"We believe it's the simplicity of the transaction processes which will facilitate and encourage adoption of e-commerce," First Data India and ICICI Merchant Services general manager B Amrish Rau said in the report.

As per the report, the industry consensus is that growth is at an inflection point with key drivers being increasing broadband access, which is growing at 35 percent month-on- month, 3G penetration, rising standards of living and "a burgeoning, upwardly mobile middle-class with high disposable incomes".

Other drivers include, availability of a much wider product range, including those from international retailers and direct imports, compared to what is available at the brick and mortar retail outlets.

Busy lifestyle, urban traffic congestion, lack of time for offline shopping as well as lower prices compared to brick and mortar retail driven by dis-intermediation, besides reduced inventory and real estate costs, have also been cited as factors driving the growth of e-commerce.

The report sees mobile commerce or m-commerce as the next logical step for domestic merchants in the online space.

"With the growth of mobile phones and increased issuing and use of debit and credit cards, m-commerce will deliver strong growth over the coming years. Google Wallet will ensure that consumers will no longer need to carry their leather wallets. This mobile application securely stores credit cards, offers, gift cards and more on their mobile phone.

"It is changing the face of commerce by enabling customers to simply make 'tap and go' payments with their mobile devices, while increasing loyalty at merchant locations," the report said

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