Online shopping bucks slowdown; to rise 12% in 2016

Unfazed by slowdown, average online purchases are expected to increase by 12 per cent to 78 per cent in 2016 from the previous year due to attractive deals and aggressive marketing of ever-expanding range of merchandise including clothes, according to an Assocham-PwC study.

About 55 million consumers purchased something online in 2015 and the number is expected to grow to 80 million this year with better infrastructure in terms of logistics, broadband and Internet-ready devices, the study pointed out.

The overall e-commerce industry, valued at $25 billion has been growing at a compounded annual growth rate of about 35-40 per cent each year, the study said, adding that it is expected to cross the $100 billion mark in five years.

In 2015, it showed that a higher amount was being spent on average for popular categories such as bags by 110 per cent, apparel by 68 per cent and cosmetics by 25 per cent, when it comes to online shopping. There was also a significant increase in spending on categories such as watches by 126 per cent and artificial jewellery by 65 per cent.

"The smartphone and tablet shoppers will be strong growth drivers. Mobile phones already account for 11 per cent of e-commerce sales, and their share will jump to 25 per cent by 2017,” the study said.

Commenting on the findings, D S Rawat, Secretary General Assocham said, “E-commerce is big business and getting bigger every day. Online shopping has been embraced by Indians with close to 8-10 million adults making a purchase via the internet in the last year”.

Computer and consumer electronics, along with apparel and accessories, account for the bulk of India's retail e-commerce sales. These will contribute 40 per cent of the total retail e-commerce sales in 2016 from the current level of 35 percent, said the study.

Other factors contributing to the growth of e-commerce include aggressive merchandising and discounting from flash sales and daily deals, more online loyalty programmes and increasing popularity of smartphones and tablet computers among consumers, the study added.

Even with efficiency improvements in individual performance and productivity (IPPs) in the delivery networks, it is estimated that there will be an additional employment of close to 1,00,000 people in these two functions alone by 2017-2020, representing an increase in employment.

According to the study, good discounts/lower prices, saving time and effort and convenience of shopping at home were the three top reasons for buying through internet.