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Indian e-commerce worth Rs 21,000 cr – Gartner

The India eCommerce market will reach $6 billion in 2015, a 70 percent increase over 2014 revenue of $3.5 billion according to market research firm Gartner, Inc.

Digital commerce facilitates a purchasing transaction over the Web, and supports the creation and continuing development of an online relationship with a consumer or business customer across multiple retail, wholesale, mobile, direct and indirect sales, call center, and digital sales channels.

Among the leaders in Indian e-commerce are irctc.com, Flipkart, Amazon, Snapdeal and Jabong.com.

flipkart

“Digital commerce is at a nascent stage in India. However, India is one of the fastest-growing eCommerce markets in Asia/Pacific, “said Praveen Sengar, research director at Gartner.

“India represents a $3.5 billion market, growing at approximately 60-70 percent every year. It represents less than 4 percent of the total retail market. B2C eCommerce leads the market in India, while B2B is limited to organizations that drive online channels to integrate with their partners and distributors.”

Mobile commerce is finding increasing traction in mobile shopping, Gartner added.

Marketplaces, consumer product goods, and food and beverages companies have started investing in mobile commerce. However, less than 5 percent of total digital commerce happens through mobile. Mobile commerce will help organization skip the desktop wave with increasing penetration of affordable smart devices with connectivity and a rapidly growing ecosystem to engage customers on mobile. Thirty percent of traffic for eCommerce sites come from mobile and tablets.

“The digital commerce platform market is maturing; incumbent vendors are investing in building out their commerce platforms, and those in adjacent areas, such as search, order management and marketing — both through organic development and acquisition,” said Mr. Sengar. “Vendors are increasingly focused on execution and winning new customers, sometimes at the expense of articulating future vision. Merger and acquisition activity is increasing, resulting in fewer digital commerce platform options in the market, but also serving to extend the commerce platforms of the established vendors.”

Digital companies will expand investments in personalization, digital marketing, Web analytics and big data in order to stay competitive. India has approximately 200 million users on social networks, and it is an important channel to understand and engage with customers.

“Digital business means “co-opetition”; reaching new markets that will require working with competitors that offer marketplace sites and access to new customers, payment services to acquire global reach, or hosting services to achieve scalability and availability.”

No single deployment or licensing model will dominate the digital commerce market, and in Indian organizations will look at SaaS or open source platform- based digital commerce till the market matures and digital commerce revenue stabilize, it said.

Limited internet penetration, low digital commerce volume, multiple payment models (e.g., cash on delivery, credit card and wire transfers), logistics and fulfillment challenges, higher return rates and low average order value is putting pressure on the profitability and viability of B2C eCommerce businesses. The B2B model is leveraged to drive efficiency in the supply chain. The biggest challenge is getting the business digital commerce strategy right and adequate investments in people, process and technology to engage with customers across channels, which has been ignored by Indian enterprises so far.

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