The booming digital commerce market in India is projected to triple to a whopping $128 billion in 2017 from $42 billion now, thanks to mobile and internet penetration, growing mobile-commerce sales and increasing payment options and discounts, a report said on Monday.
"The digital commerce market in India, which has grown steadily to $13.6 billion in 2014 from $4.4 billion in 2010, has gathered momentum due to increasing in mobile and internet usage, multiple payment options, attractive discounts and advanced shipping," said 'Future of e-Commerce: Uncovering Innovation', a joint study by Association of Chamber of Commerce and Industry of India (Assocham) and global audit-cum-consulting firm Deloitte.
Japanese multinational telecom firm SoftBank invested $627 million in Snapdeal in October 2014 and Flipkart bought Myntra fashion site for $370 million in May 2014 while Ola Cabs acquired TaxiForSure for @200 million in March this year.
"With more and more customers using mobile applications (apps) for surfing ordering and transacting, leading e-tailers are registering about 50 percent of the revenue in m-commerce space. As a result, they are focusing on digital strategies to pitch for more business from online platform," said the report.
Noting that supply chain and logistics in e-commerce business were complex to manage due to inadequate infrastructure facilities, Assocham secretary general D.S. Rawat expressed concern that taxation policies for e-business were not well defined.
"The complexity is compounded by transactions across borders for selling goods and services online without foolproof security in place," he said, while releasing the report here.
Asserting that more business would take place in e-commerce space through mobile platforms, personalisation, social media analytics and omini-channel service, Rawat said newer technologies like analytics and 3D printing would lead to a paradigm shift in online businesses.
As shopping online through smart phones becomes a game changer, industry leaders believe m-commerce could generate 70 percent of their total revenue in the coming years.
Online travel, a key driver of e-commerce market, accounts for about 70 percent of e-commerce business in the country.
"For a sustainbale growth in e-commerce, the report recommends releavant laws in the legal and regulatory framework and involvment of banks as facilitators for providing cash management solutions, secure payment gateways and related services," the study highlighted.
Online shoppers are projected to double to 40 million in 2016 from 20 million in 2013, while an additional 200 million people will access the internet over the next three years, with majority of them through smart phones.
"As 75 percent of netizens are in the 15-34 years age group, more online shopping is taking place in this category than in any other segment, indicating a demographic dividend to the advantage of e-commerce growth," said the report.