India’s e-com to touch 119 billion dollars by 2020, Morgan Stanley study

A new study by Morgan Stanley has pegged e-commerce growth of Indian market from 102 billion dollars ( Rs 69,829.66 crores) to 119 billion dollars (Rs 81,467.93 crores) by 2020. The total Indian internet market size will grow from 137 billion dollars (Rs 93,790.82 crores)to 159 billion dollars(Rs 1,08,852.11 crores). However, a global macroeconomic slowdown could affect the flow of VC/PE money into India, thereby slowing GMV growth and lowering valuation. Last year, Indian received 6.6 billion dollars( Rs 4,518.39 crores) in venture capital and private equity investment, a 50 per cent increase from the previous year. This has contributed to the steep growth in the gross merchandise value for e-commerce companies.

The Indian market has huge potential and this has made it an attractive destination for global investors. The GMV of the top three e-commerce companies is more than that of 10 top offline retailers.

What is fuelling this growth are three factors: greater internet penetration, rise in the number of online shoppers and an increase in per capita income. According to Morgan Stanley report, India adds three internet users every second and is already the second-largest internet market globally in terms of its users. Internet penetration is likely to go up from 32 per cent in 2015 to 59 per cent in 2020. India is estimated to have almost 320 million online shoppers by 2020. Presently there are about 50 million. Also, per capita income would double by 2025, thereby driving higher aspirations of the Indian consumers.

The top three e-commerce portals held a market share of 83 per cent in 2015. Flipkart maintained its number 1 position with a 45 per cent market share, followed by Snapdeal at 26 per cent and Amazon at 12 per cent.