The online retail industry is pegged to grow at annual rate of 35% to touch Rs. 7000 in 2015, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The easy availability of broadband services and increasing internet penetration across the country will drive this growth.
ASSOCHAM estimates the current market size of online retail at about Rs. 2000 crore. It also predicts that India will be among the top three nations in internet user-base, since India has a large chunk of youngsters eager to adopt new technologies with rapidly changing lifestyles.
India’s online retail industry has come a long way since dot-com bubble. E-commerce portals have taken various measures to attract new customers as well as to retain them. These portals do not shy away from reaching their customers on every front, from mobile to social networking sites like Facebook and Twitter. They have adopted strategies like free home delivery, discounts, cash on delivery, fast service, etc. which have helped them in gaining consumer confidence.
ASSOCHAM also revealed the findings of a random survey conducted during January to June 2011 in ten cities in which 5,000 shoppers were interviewed. The survey reveals interesting trends in e-shopping. The major reason people prefer online shopping to offline shopping is the convenience. People can shop anytime during the 24 hours. They can also collect detailed information about the products as well as compare their prices. Majority of consumers also said they shop online to purchase products that cannot be found in malls and the local markets. But, there were significant number of participants who said they prefer real world shopping to virtual one.
Around 25% of the respondents said they prefer to hangout and shop at swanky malls, upmarket shopping complexes as they not only boast of multi-brand availability under one roof but provide air-conditioned, dust-free atmosphere. A total of 20% of those interviewed said they prefer to shop at local traditional markets because of the familiarity with ambiance, ease of access, variety of goods, early opening and late closing times and shop owners’ relationship with loyal customers.
The bottom-line is, India has a huge untapped market as far as online retail is concerned. The reasons are low base of internet users, slow speed connections, unfamiliarity with the medium, fear of the medium (fear of scams, frauds, losing personal data online) etc. But, as technology progresses, online retail will see exponential growth in India.