India's e-commerce market could reach 50 billion dollars next year

By

Isabelle Crossley

Published
Dec 26, 2017

A joint study conducted by Assocham and Deloitte has predicted that India’s e-commerce market, of which fashion makes up one of the biggest parts, could reach $50 billion in 2018.

As online shopping continues to increase in popularity, the Indian e-commerce market is showing no signs of slowing down. After electronics, fashion is the second highest selling product online in India and brands are increasingly having to formulate online strategies in the country lest they fall by the wayside. The current value of the e-commerce market in India is pegged at $38.5 billion but, according to the joint study, the market is expected to reach a value of $50 billion by the end of next year.  

The joint study also pointed out how the market in India is different to many other countries.

For example, the study remarked: "More than 50 per cent of online transactions are done on cash on delivery method and it is available across 600 cities and towns of India."

This method is far less common in many other countries. However, with the rise of digital payments through businesses such as PayTm, and with many of such businesses launching mobile payment apps, this could start to change. Customer distrust of digital payments is slowing this growth but, following last year’s demonetisation, it seems very likely that digital payments will become the main way to pay for goods online.

Mobile use for online shopping is also on the rise, according to the joint study. One out of three customers currently makes transactions using their mobile phones in Tier 1 and Tier 2 cities and Tier 3 cities are also opening up to mobile shopping. Many fashion, accessory, and makeup brands are launching their own shopping apps to make mobile shopping easier and a few recent launches include the multi-brand fashion store Pernia’s Pop-Up Shop and beauty brand Nykaa.

The study paints a picture of a fast growing e-commerce landscape in India that, whilst presents a lot of opportunities for brands to use it to grow, also presents a harshly competitive landscape that brands must learn how to navigate.