India to be fastest growing e-commerce market

India is the fastest growing e-commerce market in Asia/Pacific, says a new report by tech

research house Gartner. The nation’s e-commerce market will grow by 70 percent in 2015 from 3.5 billion dollars (over Rs 21,460 crores) in 2014 to 6 billion dollars (over Rs 36,780 crores), it says. However, the study also points out that India’s digital commerce market is “at a nascent stage” with online retailing still representing less than four per cent of the nation’s total retail turnover, with B2C ecommerce leading the growth.

Mobile commerce is finding increasing traction in mobile shopping. Marketplaces, consumer product goods and food and beverages companies have started investing in mobile commerce. However less than 5 percent of total digital commerce happens through mobile, concludes Gartner study. “Mobile commerce will help organisations skip the desktop wave with increasing penetration of affordable smart devices with connectivity and a rapidly growing ecosystem to engage customers on mobile. 30 percent of traffic for e-commerce sites come from mobile and tablets,” it says.

Digital companies will expand investments in personalisation, digital marketing, Web analytics and big data in order to stay competitive. India has approximately 200 million users on social networks and it is an important channel to understand and engage with customers. No single deployment or licensing model will dominate the digital commerce market and in Indian organisations will look at SaaS or open source platform- based digital commerce till the market matures and digital commerce revenue stabilise.

Limited internet penetration, low digital commerce volume, multiple payment models (e.g., cash on delivery, credit card and wire transfers), logistics and fulfillment challenges, higher return rates and low average order value is putting pressure on the profitability and viability of B2C ecommerce businesses.