India might not have an online behemoth such as Amazon yet, but the country is catching up on online buying, reveals a recent report on online trends released by Google. Many e-commerce companies have been mushrooming.
But many experts in the field believe immense potential still remains untapped. "China at its peak had 1,000 deal sites. India had only five," says Rajan Anandan, Vice President and Managing Director of Google India. "There are a total of only about 70 e-commerce companies now. We need a lot more. Currently the industry is worth about $10 billion, but in the next three to four years is expected to rise to $30 to $40 billion."
Initially, most online trade was limited to the purchase of all kinds of tickets and small electronic products such as pen drives, but now it is becoming widespread. According to the Google report, maximum online buying is still of consumer durables which account for 34 per cent of the online market. Apparel and accessories have emerged the second biggest product category with 30 per cent market share. The other categories which are doing well are books with 15 per cent, beauty and personal care with 10 per cent and home and furnishing with six per cent. And guess what? More than 50 per cent of the sales happen in non-metro cities.
Anandan says this is because people is non-metro cities are also becoming fashion and brand conscious. Online sites are helping them overcome the geographic divide. With smartphones in many hands, this is only going to rise. At present 30 per cent of online shopping queries are being generated from mobile phones.
In the past two years the e-commerce industry has seen about $700 million of investment, making it an investor favourite. However, the problems continue. India will need many more online sites, and the quality of service also needs to improve. The study also said that people engage in online buying because it is effortless, takes away the need to travel for purchases and the product is home delivered. But to become multi-billion dollar companies online retailers will have to ensure timely delivery and great product quality, together with a hassle-free facility for returning products if the customer is not satisfied.
After information technology, online buying is poised to become one of the most happening businesses of new economy, creating a whole lot of entrepreneurial and investment opportunities.