Indian e-tail market to reach 100 million customers, 15 billion dollars

That online shopping in India has a huge growth potential in view of a growing middle class and tech savvy consumers is no secret but now it's official: According to Google’s annual Online Shopping Growth Trends report, there will be 100 million online shoppers in India by 2016, spending an estimated 15 billion US dollars.

Compared to just four years ago, this means a twelve fold increase from 8 million online shoppers in 2012. In 2014, there are 35 million online shoppers in India, the report found. In terms of volume, India's e-commerce market is expected to grow to 15 billion US dollars in 2016 and even 56 billion US dollars by 2023 according to an Assocham survey.

Forty percent of those predicted 100 million online shoppers will be women who, interestingly, outspend men by two times in tier 1 cities. It is expected that in the next 12-18 months, they will be shopping more online and on their mobile devices.

The survey, conducted by Google India in collaboration with Forrester Research, was carried out between March 31 and July 30 2014. It included 6589 respondents covering 50 cities including tier 1, tier 2 and tier 3 cities.

The main driver of e-commerce growth in India is the trend to shop from mobile devices. "Mobile is driving most if not all the growth on the internet. All the big markets like China and the US, developed as desktop markets, but India is being developed as a mobile market," confirmed Rajan Anandan, Google India's vice president and managing director.

Snapdeal's Rohit Bansal even goes a step further, seeing India as an m-commerce market: "Mobile is the way for e-commerce, in fact, we believe India is an m-commerce market, not an e-commerce market. In tier 2 and tier 3 cities mobile is driving growth, and in some cases 80 percent of our business is coming from these markets."

The survey confirms this, as according to Google, 1 out of 3 people in tier 1 and tier 2 cities are are already shopping via mobile devices. In tier 3 cities, where access to stores and even the internet may be limited, half of all transactions are carried out via a mobile device.

In terms of motivation to shop online, discounts are not the main driver. According to the survey, 65 percent of people buy due to convenience, 64 percent because of variety and 60 percent to improve social status. Thus, the behaviour of the Indian online shopper mimics that of people in developed markets.

In terms of categories, skin care, baby care and home furnishings are fast growing online shopping categories, and apperal comprises 64 percent of all shopping search queries.