Indian E-commerce Market To Touch $100 Billion By 2020: RedSeer Consulting

The Indian e-tailing market is projected to grow at a CAGR of 45-50 per cent in the next five years to touch $80-100 billion by 2020, according to a report released today by RedSeer Consulting. The growth will be driven by expansion into tier 2 and tier 3 cities; focus on other categories like fashion, furniture, and babycare; and ancillary revenue sources such as advertising and logistics.

The electronics category continues to dominate the sales at about 50 per cent, followed by fashion at 37 per cent. However, the commission rate for fashion category is highest at 11-15 per cent followed by white goods at 6-9 per cent and mobile phones at 3-5 per cent. Therefore, e-tailers are expected to increase their focus on fashion and other segments in the days to come, said Anil Kumar, founder CEO of RedSeer Consulting.

The report also said that cash burn for the e-tailers have come down in Q1 2016 because of factors like reduced marketing spend, increase in supply chain efficiencies, and reduced employee costs.

In terms of geographies, China, the largest e-commerce market in the world has been slowing down recently and India is likely to emerge as the market with the highest growth potential.

According to the report, Flipkart was the clear market leader in 2015 with a 35-37 share followed by Snapdeal with 21-23 per cent share, and Amazon with 17-19 per cent share. However, Amazon surpassed Snapdeal by March this year. “Amazon grew aggressively with growth driven by both fashion and electronics categories and continued spending on discounting and advertising.”