Online retail to touch Rs 7,200 cr in two years

Growing at a rate of 40 percent, the online retail market

is expected to double in the next two years to Rs 7,200 crores as social media and mobile phones are driving growth in online sales. The e-retailing market has grown from Rs 1,800 crores in 2011 to Rs 2,500 crores in 2012 and is about to touch Rs 3,600 crores in 2013, says a recently published study by Franchise India. The study expects the market to grow to Rs 5,100 crores next year and Rs 7,200 crores by 2015.

Online browsers have become more confident about paying online. Factors that are helping the growth are increasing number of internet users, increasing time spend on internet and positive impact of social media and mobile applications. India is among the fastest-growing internet markets adding more than 20 million users every year. At present, there are more than 137 million users. Indians spend 13 hours on browsing, 10 hours on socialising and six hours on emails every week, the research said.

The country has 40 million online shopping visitors per month and this number is increasing at the rate of 45 percent annually. Among various categories, apparels has been growing fastest reaching 15 percent online users in India. Books, music and apparel accessories are other categories showing tremendous growth.

Around 55 percent of the online users are on the social networking sites. Social media facilitate the consumers in identifying the brands of interest and connect with them instantly. Social networking sites not only share information, but they accelerate the reach of the brand also. It is expected that transactions through social media will form a big part of online retail in the future with India positioning itself as one of the fastest growing social-networked user base.

Similarly, mobile applications will be increasingly capitalised by retail in the future. People are now mainly using mobile apps to check product availability, discounts and prices. The retailers will gain if they understand how consumers are engaged in mobile shopping behaviours and design their strategies accordingly.