Indian e-commerce likely to cross $100bn mark by 2020

With an online population of 500 mn in 2017, India has one of the fastest growing Internet population in the world. But, despite a growing internet and smartphone penetration, Indian e-commerce penetarion is still under penetrated in comparison to other geographies. e-commerce users which are about 48% of internet users in US and about 22% in China; are just 10% of the total internet users in India.

According to research firm RedSeer Consulting forecast, the Indian e-commerce industry which is currently pegged at $53bn would cross $100 bn marker by 2020.

The number of online shoppers which is currently pegged at 50 mn is expected to grow at a CAGR of 28% to reach the 120 mn marker by 2020. Of these 50 mn online shoppers, there are just 20 mn monthly active e-tailing users. With the growing habit of online usage, there is huge headroom of growth for the e-commerce firms to increase the number of users in the near future, says RedSeer.

The Indian e-commerce is dominated by the giants Flipkart and Amazon is pegged at $18bn (including fashion). the firm expects the e-commerce industry to grow due to the rapid addition of online shoppers with online penetration increasing to 7-8%.

Online cabs, which is currently pegged at $2.1 bn is likely to grow much larger as it is just 1-2% of the overall public transportation rides now in India.

The smaller sectors like online food delivery, e-pharmacy, groceries, etc. which are currently less than $1 bn but have huge headroom for growth.

The research firm has categorized e-commerce sector into four types basis the market size and online penetration.

Proven Value – These are sectors which have grown to a good market size with decent online penetration. We have OTAs, online ticketing, online food delivery and online cabs in this category.

Large Potential – These are sectors which have grown to a good market size but have very low online penetration. And hence there is huge growth expected here with growing online population. This category comprises online groceries, online fashion, and e-tailing.

Emerging – These are the new upcoming sectors which have low market size very low online penetration. These are hence growing at a much faster rate than the other sectors. Hyperlocal and online medicine delivery are key sectors in this category

Organic – These are sectors which have gained good online penetration and have achieved a good market size. And hence further growth in these can happen only organically. We have online matrimonial and online real estate classifieds in this category.