2015 Wrap Up: E-Trail

E-Retail seems to be growing like Pinocchio's nose, the New Year should bring hope that the wooden toy turns into a real and cheerful boy.

- Dr. Yasho V Verma

India is the third largest internet user base in the world with 354 millions accessing it. Even though its penetration is low as compared to US and UK, it is growing really fast adding around 6 million newcomers every month. This inflection along with affordability of smart phones and easy availability of low cost gadgets seem to be a facilitating factor for burgeoning e-commerce companies. Further, this growth story is being fueled by robust investments and M&A activity in the sector.

India’s internet market (gross merchandise value) was about $12.6 billion in 2013 out of which US$2.3 billion was travel related which is almost 70% of total market. CAGR vis-a-vis a global growth rate stands at about 8–10%. Electronics and Apparel remain the biggest selling categories. It is estimated that India Commerce companies combined GMV by close of this year will be over $12billion compared with $45 billion last year. 

Last report from Morgan Stanley on E-tail in India revealed that Flipkart, founded in Oct 2017 led the pack with 44% market share at $6.3 billion. Snapdeal, started in 2010 follows at No.2 slot with 32% share and Amazon India launched in June 2013 owns a 15% market share and had touched $1 billion sale last year. Its parent company was started in 1994.