Only four crore Indians shop online, A T Kearney study

Despite the euphoria around e-commerce in India, only 39 million people which is a small fraction of India’s 1.2-billion population, actually shop online, says a recent study by global management consultancy firm A T Kearney. India's e-commerce market grew 27 percent in 2014 to 3.8 billion dollars (over Rs 23,700 crores), while the US, the largest e-commerce market in 2014, was 238 billion dollars (over Rs 14,85,000 crores) in size, the study titled 2015 Global Retail E-Commerce Index revealed.

While there have been many positive developments in e-commerce segment in India in 2014, A T Kearney said only 69 percent of the country's population has ‘more than limited’ access to broadband and mobile internet. It said this could be a major reason for the low penetration of e-commerce in the country. “India remains un-ranked (in our 2015 Global Retail E-Commerce Index),” said the US-based firm, adding that the market would prove to be “challenging for some time to come”. The firm estimates online spending to grow 21 percent in India over the next five years, slightly higher than its estimated global average.

The US is ranked first in A T Kearney’s 2015 Global Retail E-Commerce Index, followed by China, the UK, Japan and Germany. Some other countries that beat India to make to the list of top-30 e-commerce nations include Brazil, Chile, Venezuela, Finland, Saudi Arabia, Argentina and Ireland.

As per a report by Grant Thorton, there were 23 merger and acquisition deals in the e-commerce space in India in 2014, with a combined value of Rs 3,444 crores and 80 private equity deals with a combined value of Rs 16,356 crores. As per the Kotak Institutional Equities report estimates, by FY20, the number of people shopping online will grow thrice and the proportion of those online who will shop from websites will increase to 45 percent from 20 percent at present.