The top three players in India's e-commerce sector recorded higher gross merchandise value (GMV) last year, compared to that of the top 10 offline retailers, according to global brokerage firm Morgan Stanley.
The combined GMV of Flipkart, Snapdeal and Amazon stood at $13.8 billion (about Rs 94,400 crore) in 2015, while that of the top 10 offline retailers was $12.6 billion (nearly Rs 86,200 crore).
A 50 percent rise in investments in domestic e-commerce companies by venture capitals and private equity firms last year, as against the investment made in 2014, was "probably" responsible for the huge growth in GMV posted by those companies, Morgan Stanley said in a report sent to The Economic Times.
"We now increase our 2020 estimate (of India's ecommerce market) from $102 billion to $119 billion," Morgan Stanley Research said. "This takes our estimate of the total Indian Internet market size from $137 billion to $159 billion (now including online food aggregation business)."
The firm said higher Internet penetration, a growth in the number of online shoppers and a rise in per capita income levels will play a key role in boosting the e-commerce market.
Currently, Indian has the second largest Internet population in the world, it said.
"We expect Internet penetration to increase from 32% in 2015 to 59% in 2020, translating to a near-doubling of the Internet user base," the US bank said.
The brokerage expects the number of online shoppers in India to grow to 320 million by 2020 from 50 million in 2015.
"Per capita incomes are likely to double by 2025 and this should drive higher aspirations of the Indian consumer," the report said.
The top three online retailers had a combined market share of 85 percent in the Indian e-commerce market last year, with Flipkart having a share of 45 percent, following by Snapdeal and Amazon India with 26 percent and 12 percent respectively.