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India’s retail e-commerce sector small but still growing

India remains an underdeveloped retail e-commerce market, with digital commerce accounting for only a small piece of the country’s total retail sales. However, strong growth is expected over the coming years as increasing numbers of consumers go online for the first time, largely through smartphones.

eMarketer estimates retail e-commerce sales in India will reach $23.39 billion this year, an increase of 75.8% over 2015.

While Western markets, along with China, have seen slowdowns in their economies, India is expected to experience healthy GDP growth due in part to infrastructure investment and ongoing economic reforms.

SEE ALSO: Is India the Next E-Commerce Battleground?

In addition, India has a massive population with a relatively young median age. As this cohort joins the labor force, they will also add to the country’s new, expanding consumer class.

India’s status as a mobile-first market is reflected in its retail m-commerce figures. eMarketer estimates that retail m-commerce sales will total $15.27 billion this year, up 96.3% from 2015. Mobile’s share of e-commerce will continue to grow over the new few years, accounting for 65.3% of all retail e-commerce this year and 80.0% in 2020.

The implementation of robust 4G networks by mobile carriers (which is already underway) as well as the declining costs of 4G devices and service plans will drive increasing digital purchases made via smartphone.

In 2016, 130.4 million people in India will make at least one purchase digitally, which is equivalent to 43.8% of internet users. These figures will increase to 329 million and 70.7% respectively by 2020.

(Source: eMarketer)

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