Ecommerce Sales Will Rise From $7.69B in 2015 to $17.52B By 2018

Emarketer, a leading research firm predicts the retail ecommerce sales in India will nurture at a remarkable rate during the CY 2015 and touch $7.69 billion. In 2014, this sector made sales of $5.30 billion that was a great leap and now this will going to increase up to 45.2%, but there is more to this than meets the eye!

Ecommerce statics

Below is the comparison of Total Retail sales vs Retail Ecommerce sales as published by eMarketer.

Emarketer chart

A closer look at this growth chart of total retail and retail ecommerce sales in India over the 2013-18 period shows:

  • Total retail sales in India will upsurge from the $717.73 billion level go throughout CY 2014 to $818.33 billion in 2015 and will touch $1,244.58 billion by 2018.
  • Total retail sales is increasing at a notable rate, registering a double digit growth figure year after year. Emarketer predicts the rate of growth to pick up by the end of this year and the total retail sales to grow consistently at a rate of 15% from 2016 onwards.
  • Retail ecommerce looks even more promising. Up from $3.59 billion in 2013 to $5.30 billion in 2014 (a phenomenal increase of 47.6%), it is predicted to grow by 45.2% this year and reach $7.69 billion. By the end of 2018, it is expected to touch $17.52 billion.
  • Retail ecommerce sales (which comprises all products ordered over the internet excluding travel) carry on to register an extraordinary growth and increase by leaps and bounds over the 2013-2018 period covered by the report.
  • However, despite the amazing rate at which ecommerce sector is rising, it continues to form only a very small part of the total retail sales in the country.
  • Online retail sales which account for only 0.7% of the total retail sales in 2014 are expected to grow marginally to 0.9% during this year and remain a miserable 1.4% even after the next four years. The ecommerce share continues to hover around a very dismal looking 1% mark.

Ecommerce sector in the country which is still at a promising stage is sparkling with activity at the moment. Major worldwide players like Amazon are flourishing here despite of the FDI limitations, while leading Indian portals like Snapdeal and Flipkart are also trying to get better and bigger.

The year 2014 saw Flipkart catch attention of nearly $1.8 billion from foreign investors in spite of predictors raising a huge question mark about it being over-valued at $11 billion. Similarly, Snapdeal got a $627 million boost from Softbank, one of its major investors.

Amazon which is pretty new on the Indian scene regardless of having firmly established itself as the king of online retail at the global level has already firmly rooted itself here. Even though it operates on the marketplace model because of FDI restraints, the leading online retailer does not want to quit the Indian market. In fact, they want to improve their presence in India by additional pumping in $2 billion in the Indian leg of their operations this year, as assured by their founder owner Jeff Bezos during his visit to India in 2014.

Why Indian Ecommerce scene looks promising & bright?

The online retail sector is completely dependent on the internet. As more and more people in the country are getting connected to the internet, the sector is getting a huge shot in the arm. Though the rate of internet penetration in the country is among the poorest in the world, the number of those connected is rising rapidly. An IAMAI report had already mentioned India crossing the 300 million user mark last year and is expected to touch the half a billion mark by 2016.

Besides that, the smartphone penetration in India is increasing at very fast clip. Cheaper entry level smartphones have made it easier for people to get connected to the internet from their handheld devices. Add to it the fact that the percentage of young population in India (who are the most active online buyers) is extremely huge. The internet is also getting cheaper. All these factors together make the future look bright for the online retail industry.

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