State of e-Commerce in IndiaA Research report byforSeptember 2012
Honarable Minister Milinid De-State of Ecommerce in India - Sept 2012r
and e-Commerce are being conceptualized and run today. Social Media is gaining dominance in ourand the citizens.We observe that most companies have a social media strategy in place and Cloud basedThe roll out of 3G and 4G broadband services, the National Broadband Plan and much expectedopening of the Retail Sector will certainly usher new business opportunities for e-Commerce in thecountry.I am happy to note that most of the leading e-Commerce companies are participating in the 2ndASSOCHAM Conference on e-Commerce to deliberate upon the emerging opportunities ine-Commerce in the country.I thank the ComScore Team for this report and convey my good wishes for the success of thisConference.D.S. Rawat,Secretary GeneralState of Ecommerce in India - Sept 2012
comScore MessagecomScore in India is the preferred partner for audience measurement for publishers, agencies and anyone who has abusiness online. I believe that the e-commerce report will help a lot of travel and retail players in tracking competition trends,e-commerce marketeers to harness the potential of various advertising channels and for investors to look deeper into theupcoming trends and potential opportunities.We sincerely thank ASSOCHAM for choosing us as a knowledge partner and giving us this opportunity to present ourKedar Gavane,Director,comScore Inc.State of Ecommerce in India - Sept 2012India is among the fastest growing online market and has registered a 41% growth in the last 12 months. Internet usage hasreached almost 10% penetration in India. With this trend, e-Commerce has shown a very exciting growth trend among traveland retail sites. We expect a similar or even better growth in the coming years as more users come online through easierinternet access and wider mobile internet penetration.The report captures data on transactions, payment types, category retail and also consumer demographics for onlinepurchase behavior. We will continue to add to the list more information on all key players in the market and growth trendsacross all sub-categories in Travel and Retail. We hope that this will be one of the most helpful reports in the industry.
Table of ContentsGlobal online growth trend 2India - Digital achieves critical mass 3Online Users : A Demographic study 4BRIC Nations - a comparison 5e-commerce : Global Trend 6Travel : A closer look 7Retail : A closer look 810Future Trends 11State of Ecommerce in India - Sept 2012
Global online growth trendInternet usage globally has been on the rise with most of the growth has come from markets in AsiaPacific and Latin America. The chart below shows the growth in online population across regionsfrom July 2011 to July 2012. The global online population as of July 2012 stands close to 1.5 billionusers, growing at a rate of 7% Y-o-Y.the month of July 2012 stood at 134 million and grew from 120 million in July 2011. The online usergrowth has primarily been fueled with improved network infrastructure and growing need ofonline content consumption.With a growing user base, the engagement among online users has also grown in the last 12 monthstime spent has increased over 5.4% per visitor and pages viewedhas grown by 7% per visitor. Thefollowing diagram shows the increase in engagement among global users.State of Ecommerce in India - Sept 2012 2Asia Pac Europe North America Latin America Middle East & Africa134134213399617121120206370574Jul 11 Jul 12Unique Visitors (in millions)15+ Age, Home and Work users7%8%3%11% 11%Time spent increased by 5.4% Pages viewed grew by7% Visits increased by 8.7%*Data metrics per visitor (change between july 2011 and july 2012)
India - Digital achieves critical massengagement in terms of time spent and consumption has been on the rise. Even with an explosivegrowth, most of the categories in India are showing below average penetration compared to globalusage patterns. The total internet user base in India (inclusive of shared devices and mobile) is at 124million users in the month of July 2012. 1 out of every 10 Indians are online making it a 10% onlineuser penetration in India.The chart above shows the total internet usage by two segmentsi.15+ age, home and work usersii.Shared usage + mobile users + below 15 age groupNon 15+age, home and work usage has been high in India with close to 50% user base accessinginternet through shared devices and mobile. The time spent has increased by 33% with the user basespending 48 billion minutes online in a month. The consumption of content online has grown to 70billion pages a month from 54.6 billion in July 2011.State of Ecommerce in India - Sept 2012 3Unique Visitors (in millions)The explosive growth in last 12 months has come from all categories and has also increased the
Online Users : A Demographic studyWith the growth of 41% online users, India has seen a growth across demographic segments.75%of total users between the age group of 15-34 years. In july 2012, the female populationcontributed to almost 40% of total users. The chart below shows a demographic segmentationbased on age group and gender in India.With 75% of online audience between the age group of 15-34 years, India is one of the youngestonline demographic globally. This is expected to be a continuing trend in coming years, given the agedistribution in India. The age distribution has also contributed to consumption proportionally and itsnot surprising to see the growth among categories focussed on younger audiences in the last 12months.Among the above age segments, 15-24 years of age group has been the fastest growing agesegment online with user growth being contributed by both male and female segments. The top 5popular categories accessed online are social networking, portals, search, entertainment and newssites.State of Ecommerce in India - Sept 2012 4Demographic Profile of Online users(July 12)
BRIC Nations - A ComparisonAmong the BRIC Nations, India has been the fastest growing market adding over 18 million internetusers and growing at an annual rate of 41%. India is also among the top 3 fastest growing marketsworldwide in the last 12 months.China added over 14 million users to reach 336 million internet users by the end of July 2012.Russia and India have shown similar trends in online usage patterns along with similarities ine-Commerce and payment types.State of Ecommerce in India - Sept 2012 5Unique Visitors (in millions)
e-Commerce : Global Trende-commerce globally has been on the rise. Both travel and retail have grown faster than several othericategories in India.Travel visitation has an overall reach of close to 40% worldwide and has grown over 12% Y-o-Y.Retail visitation has an overall reach of close to 72% worldwide and has grown over 13% Y-o-Y. Morethan a billion people worldwide visit retail sites every month.In India, Travel has always been ahead of the curve in terms of visitation and transactions comparedto world averages and is at 44% penetration and has grown over 41% from last year.Retail has grown 43% and reaches 60% penetration among online users, but is still below worldaverages. This shows the immense potential that the retail category holds in India with online retailfilling the distribution and convenience gap. The ecosystem to support growth in online retail hasalso evolved including improvement in logistics and awareness among brands in making the prouductsavailable online.State of Ecommerce in India - Sept 2012 6Jul 20124439Worlwide India% Reach : TravelJul 201259.972.3% Reach : Retail
Travel : A closer lookState of Ecommerce in India - Sept 2012 7% Reach: Top Travel SitesAverage transaction sizeDuplication among OTAsOnline travelhas seen growth across all subcategories including car rentals, Online Travel Agents, OTSAirlines as well as hotels and travel information sites. As the inter city migration has increased, aproportional upward trend is seen in usage of transport including Train, Air. The top 10 sites among thetravel category show a good mix of travel options as well as information sites showing online usersseeking information on travel options on a regular basis. 1 out of 5 online users in India visit the IndianRailways site.Indian Railways is also among the most visited sites in India with over 12 million unique visitors amonth. There has been an strong overlap among the OTA’s with a lot of consumers trying to comparetravel options before purchase. The diagram above shows that the overlap in the category among thetop 3 OTAs in India.MakeMyTrip, Yatra and Cleartrip individually reach over 11.6%, 8.3% and 3% of total online usersrespectively. But due to strong duplication among the OTA’s the unduplicated reach among the top 3OTA’s is 16.4% of total internet users. The same trend is seen among travel information sites and traveldata aggregators in India.The average transaction sizes among travel sites shows a gradation as below:Unduplicated audience 16.4%
Retail : A closer lookFlipkart leads the way among the online retailers in India with 7.4 million unique visitors a month,growing at 431% annually. Snapdeal has been close second with 6.9 million uniques. Jabong andMyntra have been competing closely in the lifestlye category with over 5.3 million uniques each.HomeShop18 has over 4 million uniques a month.Apparel has been thef a s t e s t g r o w i n gsubcategory in retail andreaches 13.4% online usersin India. Comparisonshopping, as research ofretail online grows continueto dominate. Most of theState of Ecommerce in India - Sept 2012 8Reach % in Jul 2012AmazonFlipkartSnapdealJabongMyntraHomeshop180 4 8 12 188.8.131.521.111.515.4Jul 11 Oct 11 Jan 12 Apr 12 Jul 1237.533.32927.626.1RetailUnique Visitors (in millions) % Reach: Top Retail SitesRetail category penetration has increased to 60% reach and has grown to 37.5 million unique visitorsa month, an overall growth of 43% annually. The growth has come across all retail categories and mostof them show promising transactions and conversion rates along with growth in visitors. The top retailsites shown above in India have each seen a growth of over 100% in the last 12 months.Amazon is the most visited retail site with most of the traffic slipt among Amazon.com, ImDB andJunglee.com.
comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow as morecategories of retail come online. Travel category has shown this trend with high overlap among OTAsand this trend is expected among online retailers as well.Consumer goods, sports/outdoor products and retail food sub categories have also shown earlygrowth signs. Consumer goods being a popular category among horizontal retailers is still way belowglobal averages.Flowers/gifts/greetings is the only subcategory which has shown de-growth of over 33% in the last 12months.State of Ecommerce in India - Sept 2012 9Average transaction sizeVertical e-Commerce categories including baby products, apparel, shoes and other lifestyle categorieshave also shown tremendous growth. Wider assortment and product availability have helped theseretailers in growing business online.More retailers online have heavily depended on online marketing to scale. The online marketing spendsacross all content categories and effective marketing campaigns reaching out the right target audiencehave increased visitation and hence conversion among retailers.The average transaction sizes among some of the top retailers are as below:
Payment type classificationDirect Debit58%Visa21%MastercardSBI29%SBI Debit26%ICICI17%HDFC14%PNB5%AXIS Bank5%Others3%12%cash/COD7%All Others2%Indian Payment Type Transaction Share, Q2 2012IRCTC direct debit breakupAvg transaction size byPayment typeAverage transaction size in India is $31Direct debit is the most commonly used payment type contributing to over 58% of the overallpayments in India. Cash on Delivery which has been a popular mode of payment method in retailcategory and form close to 7% of the total transactions. COD has a much higher contribution amongretail category with more and more online retailers using this option to increase trials among customers.bill value per transaction at $110 followed by Visa andMasterCard. Direct debit average is low compared toCOD average values as most of the direct debittransactions come from IRCTC.The adjacent pie chart shows the break up of directdebit payments in IRCTC. State Bank of India is themost popular direct debit option among train ticketbuyers which ICICI and HDFC contributing to over 17%and 14% respectively.State of Ecommerce in India - Sept 2012 10$48$47$33$21$110$20$178$43VisaMasterCardCash/CODJCBAmerican ExpressDirect DebitPayPalAll OtherThe average transaction size online in India across both Travel and Retail category is $31 between Apr- Jun 2012. This amount is set to increase with consumer confidence in buying higher priced productsin the coming months. Among the payment types, American Express has the highest average
Future TrendsState of Ecommerce in India - Sept 2012 11e-Commerce in India has grown rapidly across both travel and retail in the last 12 months and hasshown an above average growth compared to many categories online. Retail growth has been fueledby several players getting funded, aggressive marketing and the consumer need and convenience tobuy these products online.Travel e-commerce has been above global averages and continues to soar in terms of visitation andtransactions. IRCTC has led the category with the largest transaction share and dollar sharecontribution. Airline, OTAs and hotels have seen steady growth and will remain as standard traveloptions for many consumers in the coming months. Car rentals and bus booking online have showsvery high growth especially among urban consumers. With further penetration of the internet, thesetwo categories will have a great amplified reach and conversion rates.Retail category has seen peculiar growth with a lot of retailers pushing for trials among consumersthrough discounts and freebies. This is a changing trend as consumers having tried online shopping,the credibility of these sites will further bolster the transaction volume on retail sites. Among all retailsites apparel and lifestyle goods have seen an early adoption among consumers. This again is agrowing trend and we see a good amount of contribution in dollar share and transaction share comingfrom lifestyle categories along with home furnishing and lifestyle goods.Comparison shopping has been on a growth but is still underserved compared to global averages. Theneed to compare and consume in India across other online categories like travel, shows a similarconsumer behavior in retail category. In the coming months, expect more and more consumers relyingon online research of products for features and prices.Online retail has seen a heavy overlap with social networking and search due to aggressive marketingand strong inclination towards social commerce. We expect a larger portion of online retail from socialcommerce with India positioning itself as one of the fastest growing social networked user base andalso larger size of social groups.To conclude, e-Commerce has seen tremendous growth in the last 12 months. Models like Cash onDelivery and other consumer centric payment options and improved service quality will boost overallsales. It is definitely the most exciting phase among online retailers and consumers as this learningcurve will put India on the global map as one of the largest e-commerce markets in the comingmonths.
About ASSOCHAMASSOCHAM acknowledged as Knowledge Chamber of India has emerged as a forceful, pro-active,effective and forward looking institution playing its role as acatalyst between the Government andindustry.ASSOCHAM renders its service to over 4,00,000 members which includes multinational companies,more than 400 Chambers and Trade Associations from all over India encompassing all sectors.ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities inCorporate Social Responsibility, Environment & Safety, e-Commerce, Corporate Governance,Information Technology, Agriculture, Nanotechnology, Biotechnology, Defence, Cyber Security,Entertainment & Media, Pharmaceuticals, Telecom, Banking & Finance, Company Law, CorporateFinance, Economic and International Affairs, Tourism, Civil Aviation, Infrastructure, Energy Power,Education, Legal Reforms, Real Estate, Rural Development etc.. The Chamber has its internationalBusiness Chambers in more than 75 countries.Mr. D. S. RawatSecretary GeneralASSOCHAMPh: 011-46550555Email: firstname.lastname@example.orgState of Ecommerce in India - Sept 2012 12
About comScorecomScore is a global leader in measuring the digital world and the preferred source of digitalmarketing intelligence. Through a powerful combination of behavioral and survey insights, comScoremobile arena.comScore provides syndicated and custom solutions in online audience measurement, e-commerce,advertising, search, video and mobile and offers dedicated analysts with digital marketing and vertical-comScore for the industry-leading solutions needed to craft successful digital, marketing, sales,product development and trading strategies.comScore Digital Business Analytics provide following solutions:Audience MeasurementSite AnalyticsVertical Market SolutionsSocial AnalyticsCopy TestingCampaign VerificationAd EffectivenessCross MediaMobile Audience MeasurementNetwork Analytics & OptimizationCustomer Experience& Retention ManagementUser AnalyticsAdvertising AnalyticsMobile AnalyticsState of Ecommerce in India - Sept 2012 13comScore Global Reach - 43 global markets
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Research TeamKedar GavaneAndrea JacobsChristian Lunoe