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Online Shopping Market in India

1 of 26
By Mona Swarnakar
23/04/2013
Table of Contents
 Online Shopping Market –
I.
Number of users and revenue
II. Comparison with the global market
III. Market forecast

 Major players –
I.
II.

Snapshot of the leading players
Market share of players

 Drivers, trends and challenges in the market –
I. Drivers
II. Trends
III. Challenges

 Bibliography
Current Market - Snapshot

Online shopping can be considered a sub-category of e-commerce
Online shopping revenue of India was $14 billion in 2012 and number of online
shopping users was 19.2 million (2012)
Online shopping has doubled to $14 billon in 2012 from $6.3 billion in 2011. This figure

is likely to reach $38 million by 2015, at CAGR of 39.5 percent
It is estimated, that around 27 million are active mobile Internet users (in India), and
currently 4 percent are buying products through mobiles. In the next four years time
it can go up to 20 percent.
Increasing Internet penetration and availability of more payment options boosted
the online shopping market in 2012.
(Percentage of internet users that buy online)

Online buyers

Online shopping equality

Chile

Ready & willing

Mexico
Saudi Arabia
Brazil

China

UAE

Russia

India
Philippines

Infrastructure impediment

Hesitate Shopper

Internet penetration
(Percentage of population that uses internet)

India is in Infrastructure disorder as internet penetration and supply chain infrastructure for
online shopping are lower than global standards, still the sales for online shopping in India (as the
size of the bubble indicates)
India is a big marketplace (1.2 Bn people) but infrastructure—technology, finance, logistics—still
needs to improve, and only 8 percent of the population uses the Internet.
Online shopping sales shares
worldwide, by region, 2011-2015

35.9
27.9

30.5

28

33.5

3.1 5.1
2011

33.4
31.5
25.7

26.9

3.4

5.7

2012
Asia

North America

3.5

38.2

36.2
29.7
24.3

5.9

2013
Western Europe

3.6

28.8
23.4

6.2

2014
Latin America

3.6

6

2015
others

As the above graph shows, currently North America has the highest share of online shoppers.
However, multiple drivers such as increasing internet penetration, availability of more categories
in websites, and entrance of new companies in the online shopping market place is expected to
result in Asia becoming the leading online shopping destination.
Asia’s share is expected to increase from 27.9 percent in 2011 to 38.2 percent in 2015.
Top 5 countries ranked by online
shopping sales, 2011-2013 (billions)

$384.80
$343.43

$301.69
$181.62
$110.04
$56.69

US

$124.76
$109.03

$141.53
$127.82
$112.78

$140.35
$38.08

China

UK
2011

Japan
2012

$47.00 $53.00

Germany

2013

While the US is the clear leader in the online shopping space, China is among the strongest
growing countries; the US is expected to witness a growth of 12 percent for 2012-2013
period, while China is expected to witness a growth of 65 percent for the same period.

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Online Shopping Market in India

  • 2. Table of Contents  Online Shopping Market – I. Number of users and revenue II. Comparison with the global market III. Market forecast  Major players – I. II. Snapshot of the leading players Market share of players  Drivers, trends and challenges in the market – I. Drivers II. Trends III. Challenges  Bibliography
  • 3. Current Market - Snapshot Online shopping can be considered a sub-category of e-commerce Online shopping revenue of India was $14 billion in 2012 and number of online shopping users was 19.2 million (2012) Online shopping has doubled to $14 billon in 2012 from $6.3 billion in 2011. This figure is likely to reach $38 million by 2015, at CAGR of 39.5 percent It is estimated, that around 27 million are active mobile Internet users (in India), and currently 4 percent are buying products through mobiles. In the next four years time it can go up to 20 percent. Increasing Internet penetration and availability of more payment options boosted the online shopping market in 2012.
  • 4. (Percentage of internet users that buy online) Online buyers Online shopping equality Chile Ready & willing Mexico Saudi Arabia Brazil China UAE Russia India Philippines Infrastructure impediment Hesitate Shopper Internet penetration (Percentage of population that uses internet) India is in Infrastructure disorder as internet penetration and supply chain infrastructure for online shopping are lower than global standards, still the sales for online shopping in India (as the size of the bubble indicates) India is a big marketplace (1.2 Bn people) but infrastructure—technology, finance, logistics—still needs to improve, and only 8 percent of the population uses the Internet.
  • 5. Online shopping sales shares worldwide, by region, 2011-2015 35.9 27.9 30.5 28 33.5 3.1 5.1 2011 33.4 31.5 25.7 26.9 3.4 5.7 2012 Asia North America 3.5 38.2 36.2 29.7 24.3 5.9 2013 Western Europe 3.6 28.8 23.4 6.2 2014 Latin America 3.6 6 2015 others As the above graph shows, currently North America has the highest share of online shoppers. However, multiple drivers such as increasing internet penetration, availability of more categories in websites, and entrance of new companies in the online shopping market place is expected to result in Asia becoming the leading online shopping destination. Asia’s share is expected to increase from 27.9 percent in 2011 to 38.2 percent in 2015.
  • 6. Top 5 countries ranked by online shopping sales, 2011-2013 (billions) $384.80 $343.43 $301.69 $181.62 $110.04 $56.69 US $124.76 $109.03 $141.53 $127.82 $112.78 $140.35 $38.08 China UK 2011 Japan 2012 $47.00 $53.00 Germany 2013 While the US is the clear leader in the online shopping space, China is among the strongest growing countries; the US is expected to witness a growth of 12 percent for 2012-2013 period, while China is expected to witness a growth of 65 percent for the same period.
  • 7. Online shoppers Asia pacific, by country, 2011-2015 (Million) 2011 2012 2013 2014 2015 China 178.4 219.8 270.9 374.9 423.4 Japan 70.2 73.3 75.6 78.2 79.2 India 14.5 19.2 24.6 36.2 41.8 South Korea 22.2 23.3 24.4 26.3 26.9 9.8 10.2 10.6 11.2 11.5 2 3.1 4.6 7.4 8.7 37.6 42.2 47 57.3 62.1 Australia Indonesia Others • China boasts the highest number of people who buy goods online in the world—nearly 220 million in 2012 • India's online shopping growing fast. • In India, online shoppers will increase by more than three times by 2015, jumping from 14.5 millions in 2011 to 41.8 millions in 2015.
  • 8. Top states, cities for online shopping in India Top States Mature Cities Destinations with growth prospects 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1. 2. 3. 4. 5. 6. 7. 8. 9. NCR Maharashtra Uttar Pradesh Haryana Gujarat AP Tamil Nadu Karnataka Punjab Rajasthan Delhi-NCR Bangalore Chennai Hyderabad Mumbai Pune Ahmedabad Jaipur Kolkata Lucknow Patiala Bhatinda Faizabad Panipat Dehradun Guwahati Rajkot Kota Ernakulam
  • 9. Online shopping growth chart Future growth of online shopping in India • • 2009 2010 2011 2012 2013E 2014E 2015E The online shopping expected growth rate is 39.5 percent from 2012 to 2015 in India. Online shopping revenue in India estimated to touch $38 million by 2015
  • 10. Table of Contents  Online Shopping Market – I. Number of users and revenue II. Comparison with the global market III. Market forecast  Major players – I. II. Market share of players Snapshot of the leading players  Drivers, trends and challenges in the market – I. Drivers II. Trends III. Challenges  Bibliography
  • 11. Market share of Major players 20% 35% 4% 6% 10% 25% ebay flipkart Snapdeal future Yebhi.com Others
  • 12. Major Players Profile: eBay.in is the Indian version of the popular online shopping portal eBay.com – world’s online marketplace. eBay has a diverse and passionate community of individuals and small businesses. Founder : Pierre Omidyar Revenue: 1407 crores in 2012 Head office: Mumbai Profile: This Indian e-commerce company started with online sales of books in 2007 and later it entered to consumer electronic goods and various other ranges of products. Founder : Sachin and Binny Bansal Revenue: 1200 crores in 2012 Head office: Bangalore
  • 13. Major Players Profile: Snapdeal started on 2010. This sites offers best deals for almost all kinds of products. its provides all types of services to the customers. Founder : Kunal Bahl and Rohit Bansal Revenue: 500 crores in 2012 Head office: New Delhi Profile: This is one among the largest retailers in India and also a part of the Future Group .There are items ranging from mobile, electronics, appliances, home entertainment, home décor, consumer durables and cameras. Founder : Kishore Biyan Revenue: 360 crores in 2012 Head office: Mumbai
  • 14. Major Players Profile: Homeshop18 started on 2008. Here you find large range appliances, kitchen, cameras, mobiles, laptops, online, gifts and more. HomeShop18 has also launched India’s first 24 hour Home Shopping TV channel. Founder : Sundeep Malhotra Revenue: 89.6 crores in 2012 Head office: Noida Profile: yebhi.com started on 2009. Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion eretailer. Founder : Sanjeev Aggrawal Revenue: 100 crores in 2012 Head office: Gurgaon, Haryana
  • 16. Top travel sites among internet users in India in 2012 2.90% 3% Indian Railways is the number one travel site used by the Indian consumers and it covers 19.2 per cent of online travel booking market. After Indian Railway makemytrip.com and yatra.com came in second and third position in 2012. 3.90% 4.60% 8.30% 11.60% 19.20%
  • 17. Detailed category division in India Apparels and accessories 35% Consumer electronics 30% Books 14% Beauty & personal care 10% Home & furnishings Healthcare Baby products 6% 3% 2% Among the all categories, Apparels and accessories category observed the most growth in the previous years and is the number one online shopping category. Also growth is increasing in baby products, health and nutrition, etc. Consumer electronics comes in second number, here buyers are increasingly purchasing mobiles, tabs, electric cookware, etc. Most of the book lovers like to buy books online at good discount rate. Flipkart in the number one player in selling online books in India.
  • 18. Table of Contents  Online Shopping Market – I. Number of users and revenue II. Comparison with the global market III. Market forecast  Major players – I. II. Market share of players Snapshot of the leading players  Drivers, trends and challenges in the market – I. Drivers II. Trends III. Challenges  Bibliography
  • 19. Key Drivers  Increased broadband penetration & usage  Increasing standard of living and buying power of middle class families  Increasing usage of credit and debit cards coupled with a growing young population who spend significant time on the internet  Social networking sites likes Facebook, twitter are very much influencing in driving online retail in India. Many vendors are using it as a strong tool to get marketing and sales influence  Increased usage of online classified & auction portals and their growing awareness  Busy and shifting lifestyles and difficulty in traditional means of shopping  Top drivers of online shopping growth are faster delivery, Cash on Delivery facility, discounted rates, access to branded products and cash-back guarantee on faulty goods
  • 20. Trends:  9 out of 10 online buyers will spend more money in 2013 as compared to previous year.  Non Metro buyers are increasingly buying online with their contribution increasing much more than the metro online buyers.  Online buyers will use Mobile Phones and tablets more to make purchases online than what they did previously.  Among the all categories, Apparels and accessories category witnessed the most growth in the previous years.  As compared to electronics, emerging categories like baby products, health and nutrition will see more growth in near future.  Travel and ticketing will be the most popular category for purchases in 2013 and beyond.
  • 21. Challenges: India's consumer buying behavior is still slow. Lack of proper advertisement and marketing incapability to create a brand image to customers. Online websites are still not so good to attract buyers. Lack of seriousness in maintaining their websites. The web portals don’t support all modes of online transaction which cause transaction frauds. Buyers gather information from various sites, compare and then buy products. buyers spends more time to buy one product. Less finance buyers may wait more before buying. Consumer wait for special deal, like free home delivery.
  • 22. Table of Contents  Online Shopping Market – I. Number of users and revenue II. Comparison with the global market III. Market forecast  Major players – I. II. Market share of players Snapshot of the leading players  Drivers, trends and challenges in the market – I. Drivers II. Trends III. Challenges  Bibliography
  • 24. Appendix - Market Size methodology 1.22 billion (Population of India in 2012) Literacy rate of India is 79.5% Computer literate: 70 million Total internet users:108.5 Total online million shopping users: 19.2 million Top Down approach: Market sizing of online shopping
  • 25. Appendix - Internet users & penetration in India (Million) 194.8 155.8 175.2 133.1 108.5 83.2 2011 2012 2013 2014 2015 2016