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Growth and trends in Indian online retail market
Feb 26, 2013 Published in content, technology

After a year of technological advances, most notably the emergence and rapid adoption of smartphone and tablet technology, the shopper-seller relationship has changed dramatically. The Indian retail sector is now shifting from the brick-and-mortar model (physical retailing) to click-and-mortar model (online retailing) with the rapid adoption of internet by the mainstream population.

What started as a fad seems to have become a necessity – the number of people browsing and shopping online has peaked in recent times and garnered extraordinary press and media coverage. Online retail in India is seeing a phenomenal boom, fueled by rising internet penetration and broadband availability. Today, it reportedly accounts for about 1 per cent of the total retail market, dangling as a tantalizingly big carrot for both domestic and international retailers, all of whom are eyeing a share of this fast growing pie.

Growth prospects in Indian online retail

People are turning to the Internet to buy everything from diapers to books, houses and groceries, pushing e-commerce revenues in the country to US$ 14 billion in 2012 with the possibility of even higher earnings in 2013.

According to ‘India Online Retail Market Forecast & Opportunities 2016’, India will witness changing shopping trends in the next few years. The country is set to become the third largest nation of internet users in the next two years itself. The online retail market in India is expected to grow immensely, given India’s rising middle class, growing disposable income and busy lifestyle in metro cities.

Major online retailing trends in 2013
  • Increasing demand from tier 2 and tier 3 cities: The year 2013 is expected to see increased participation from non-metropolitan cities. In India, however, rural consumers have already started buying online. As a result, sales from consumers outside of metropolitan areas already make up half of total sales at some leading online retailers (such as Jabong, Myntra, Indiatimes Shopping) in India. 
    A recent study by Google India reveals that 51 per cent of traffic for its Great Online Shopping Festival held last December (12-12-12) came from outside the top four metros, and predicts that online shopping will grow exponentially in 2013 with apparel and accessories being the hottest categories. 

    Shoppers Stop too says more than 20 per cent of its online business come from consumers residing at tier II cities and neighborhood
  • Multi-channel commerce strategy: India’s diverse online buying population presents challenges to retailers interested in serving all parts of the country effectively. “As smartphones and tablets continue to proliferate, companies will need to embrace multi-channel commerce strategy in 2013,” as per Sandeep Jaglan, Owner, Purehomedecor.Com
  • Retail based social networks: Online retail has seen heavy overlap with social networking due to aggressive marketing on such platforms. Asking a friend when you’re just about to buy something while on a shopping spree is something we all do – but what is completely radical is throwing the question to your entire social network to fetch as many opinions as possible. Social networks will form an essential part of the E-commerce evolution in 2013 as more than 25 per cent of the total time spent by the user on the internet is used to surf social networking websites such as Facebook and Twitter. Moreover, retailers are busy tracking social networks for product development and customer service too. 
  • Buying behavior: The days are gone when retailers tracked buyer behavior based on loyalty points. Nowadays, online retailers acquire huge volumes of data on both their potential and existing customers based on user browsing habits/number of likes alone
  • Mobile integration: According to Google, currently 30 per cent of all shopping queries in India come from mobile phones. Further, 43 per cent of retailers surveyed note that mobile and tablets are among their top three priorities for 2013. Whether it’s a mobile-optimised site or dedicated app, most retailers are coming to terms with the need for a smartphone or tablet solution. Investing in new or improved mobile apps and mobile-optimized sites, analytics, and traffic and conversion growth have become a must for most companies while creating their marketing strategies. 

Recent Government initiative

The Indian Government recently allowed 51 per cent foreign direct investment in organised retail. This opened doors to many foreign players to open online retail stores in the world's largest democracy.

Latest internet retail event 2013

Internet retail Expo (IRE) 2013 was the latest internet retail event held at Epicentre, Apparel House, Gurgaon during January 31 - February 2, 2013. It is an annual event where strategic discussions and sessions are held by the Key leaders of the Industry to track and accelerate the growth of Indian E-commerce industry. 

IRE 2013 conference was focused on understanding the present state of IRE in India, analyzing category wise Internet retail trends, potential and opportunity and comparing traditional, modern and Internet retailing and analyzing the future potential of IRE. 

The expo has featured over 100 exhibitors from Information & Communication Technology (ICT), Automatic Identification Technology (AIT), and Electronic Payment Systems (EPS). 

By Gaurav Pahwa
View(s) 3987624   |   Comment(s) 5
5 comment(s)
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Tnku wrote at 08:44:36 AM on Dec 23, 2014
Ppl are posting about their products on from all across the world
Devid007 akela wrote at 11:52:14 AM on Dec 05, 2016
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