Bain & Co: India has massive potential for online retail penetration, Asian region growing swiftly
India’s online retail penetration is growing at a fast pace. The country has been listed along with China and South Korea as leading global online retail expansion by a recent Bain & Co. report.
According to the latest Bain & Co. report, online retail expansion in Asia is growing at three times the global rate, with India experiencing the fastest pace of growth.
In terms of 2017 online retail penetration, the report listed China as having the highest rate at 20 percent with a compound annual growth rate (CAGR) in the period from 2013 to 2017 at 33 percent. India was ranked eighth globally in terms of its 2017 online retail penetration which stood at five percent. However, the country had a CAGR from 2013 to 2017 of 53 percent which was the highest out of all 11 countries listed.
One reason that India’s growth is at a far faster pace than some other countries is that growth began to pick up later than some other Asian nations which already have a higher rate of penetration. However, this still means that the Indian e-commerce market is one to watch with the highest CAGR fuelled by a growing middle class, increased investment (both foreign and domestic), and citizens’ greater purchasing power.
The report highlighted the vast potential in India’s online retail market as its online penetration is only at an estimated five percent. If the CAGR continues at a similar pace then the size of the Indian online market will be massive in the near future.
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