India’s e-commerce industry witnessed slowdown in 2016, says report

By

Maverick Martins

Published
Jan 31, 2017

India’s e-commerce industry is witnessing a slowdown with a mere 12 percent growth with revenues of revenues of USD 14.5 billion in 2016 as compared to the180 per cent growth it clocked in 2015, said research firm RedSeer.

According to RedSeer, the biggest impact of this 'adverse market condition' was faced by established players like Flipkart and Snapdeal, whose growth remained flat, if not worsened.

However, new entrants like Amazon have succeeded in altering the market share game and captured big portion of the aggressively-contested industry, it added.

Considering that the e-tailing industry grew at over 100 per cent for two consecutive years before 2016, RedSeer expects the 2020 numbers to be USD 80 billion.

"For these numbers to be achieved, the industry would need to grow at 45 per cent CAGR over the next four years, from the exit GMV run rate of 2016," it said.

RedSeer Consulting founder and CEO Anil Kumar said the Indian E-tailing players might have faced a lot of challenges in 2016, but fundamentally this sector is expected to grow 4X-5X times in the next 4 years.

"2017 will be a hotly-contested year, and will differentiate the best from the rest, and also shape the Indian e-Commerce industry for the many years to follow," he added.

The report said developments like government regulations on discounting and marketplace, demonetisation, slow new customer acquisition and funding drying up were some of the "speed breakers" of the year 2016 for the industry.