The Future of Online Shopping in India
The e-commerce industry in India is still in its early stages of development. Online shopping in India is growing fast, aided by the fact that the number of Indians with access to fast broadband internet and smartphones is increasing by leaps and bounds every year. There’s been a massive increase in the use of the Internet and this is expected to continue over the next 4-5 years as well.
As we begin 2016, it makes us very happy to say that there were over 400 million internet users in India. The Government of India’s “Digital India” initiative is meeting a lot of success. Other initiatives, such as Google’s Project Loon are expected to help as well. Talks are on to launch Project Loon in India, which should deliver fast and affordable internet to more people.
Today, online shopping in India is huge. According to an estimate 14% of India’s population buys online on a regular basis. Now, 14% may not seem to be something you would want to boast about at first glance, but when you consider that India’s population is 1.3 billion, well, the number of online shoppers in India is equal to half of the US population and that’s a big deal indeed!
Three companies that have taken the greatest advantage of the new boom in online shopping in India are Flipkart, Amazon and Snapdeal. There are thousands of other players in the online retail industry as well, but none as big as the top-3 of Indian eCommerce, who have invested billions of dollars in the country.
Indeed, the online shopping industry in India is expected to clock a compounded annual growth rate of 35%. It is expected to cross the $100 billion mark by 2020, up from the $17 billion that it is worth today, according to a study by Assocham-Pricewaterhouse Coopers study.
The momentum of the e-commerce sector has been so strong that shopping malls in India have been a huge casualty of this. There’s a vacancy rate of 25% in shopping malls across India and rentals have dropped by over 30% – in just 1 year. It’s even worse in countries with a more advanced online retail industry such as the U.S. and the U.K., where the vacancy rate in shopping malls is 46% and 32% respectively.
As Assocham Secretary General D S Rawat, “Online shopping has shown a handsome growth while brick-and-mortar malls are witnessing a slowdown. The growth in e-commerce looks impressive because of a low base and rising penetration of the Internet.”
Indeed, over the next 15 years, 45% of the malls in India will be converted into non-retail space and replaced by movie theatres, restaurants, discount retailers and so on, according to the study by Assocham-Pricewaterhouse Coopers.
As fast broadband internet becomes accessible to more people India, the online retail industry is only expected to grow further in size. It is expected that over the next few years, more people in rural India will have access to the Internet. Rural internet users will rise from 29% of total internet users in the country in 2013 to around 40% to 50% by 2018.
This is great news because Internet in India has so far been a largely urban phenomenon. As more people in rural India take to the Internet, we expect online retailers in the country modify their business models slightly so as to make rural India a part of their growth strategy as well. There’s a lot of hidden potential here, which is waiting to be explored.
Some of the roadblocks along the way are that internet speeds are not uniform everywhere in India or across ISPs. If you feel your internet speed is not as high as promised by your ISP, check it out at DoSpeedTest.com, the most accurate internet broadband speed checking tool that you will find online. Follow the tips given here on how to increase your internet broadband speed as well.
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