‘India’s online market on fast growth track’ says SBI Research

An SBI Research report states, India’s e-retailing, which comprises online retail and online marketplaces, has become the fastest-growing segment in the larger market. It’s grown at a CAGR of around 56 percent during 2009-14. The e-retail market was around six billion dollars (over Rs 39,000 crores) in 2015.

“Our research indicates that only by considering the discount prices and that too for a select group of products, CPI inflation would be at least 25 bps lower that the actual CPI numbers,” SBI Research has said in its Ecowrap report. According to the report, CPI inflation numbers may be understating due to a variety of inflation estimation biases, of which e-commerce is one of the reasons. “A potential source of bias can arise when shifts to lower price discount outlets are inadequately reflected,” the report said.

“The increasing use of smartphones, tablets and broadband and 3G/4G has led to developing a strong consumer base which is likely to increase further. So, there is a need to include the prices charged by the e-retailers like Flipkart, Snapdeal, Amazon, while calculating the CPI index, and if done so there may be a downward bias,” it said.

The findings are based on a price index developed by SBI Research which takes into account the prices being offered by online mega-stores and a re-estimated CPI inflation based on this probabilities. “Our results indicate that only by considering the discount prices and that too for a select group of products, CPI inflation would be at least 25 bps lower that the actual CPI numbers,” it said.