Apparel accounts for bulk of India’s e-commerce sales, says a study

Apparel is one of the few categories that account for the bulk of India’s e-commerce sales. On average, about 85 per cent of the amount spent on e-commerce was for apparel, according to a joint study by The Associated Chambers of Commerce & Industry of India (ASSOCHAM) and Resurgent India.

The rise of digital natives, better infrastructure in terms of logistics, broadband and internet-ready devices to fuel the demand in e-commerce will result in an increase in online shoppers from 69 million in 2016 to over 100 million in 2017, said the study.

Bangalore was the leader of online shopping in 2016 with Mumbai and Delhi following closely.

In Bangalore, 69 per cent of the population chose to buy daily routine products through e-shopping in 2015-16, which is likely to increase to 75 per cent this year for various categories including apparel and sporting goods.

About 65 per cent of the people in Mumbai shopped online and this number might go up to 70 per cent this year for various categories including apparel and apparel gift certificates. Close to 61 per cent of the total population of Delhi shopped online for daily routine products last year and this number is expected to rise to 65–68 per cent by the end of 2017, states the study.

Indian e-retail increased by 48 per cent from $3.59 billion in 2013 to $5.30 billion in 2015 and it is expected rise by 65 per cent to touch $17.52 billion by the end of 2018.

M-commerce already accounts for 30-35 per cent of e-commerce sales, and its share will jump to 45-50 per cent by 2017 as more companies shift towards it. There was a surge in the number of people shopping on mobile across India with tier II and III cities displaying increased dominance. About 50 per cent of the traffic came from mobile and a majority of them were first time customers, adds the paper. 

Online shopping has been embraced by Indians with 25-30 million adults making a purchase via the internet in the last year. Early teens are also becoming more involved with e-commerce.

The total retail sales in India will increase from the $717.73 billion during CY 2014 to $1,244.58 billion by 2018, as per the joint study. Growing at an impressive rate of 15 per cent, the Indian retail sector is registering a double digit growth figure year after year.

The e-commerce sector also faces some challenges that include absence of e-commerce laws, low entry barrier leading to reduced competitive advantages, rapidly changing business models, urban phenomenon, shortage of manpower and customer loyalty.

The opportunities for the sector include reduction of money transactions in all sectors, improvement of net banking facilities across the country, implementation of demonetisation policy and government’s policies on banking and financial sectors, notes the study.