the state of indian online retail market and the way ahead by satish meena at etailing india...

Status of Indian Online Retail Market and Way AheadSatish Meena

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New eCommerce Markets Often Follow A Similar Path

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India Represents A Developing Large Opportunity for Online Retail

Source: Forrester Readiness Index: eCommerce, 2016

India is in Phase Three, primarily purchasing goods such as media and electronics, that can be easily compared online, but is on it’s way to Phase Four

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Sizing The Indian Opprtunity

Source: Census of India Data

Tier 1 to Tier 4 Cities Represents Just 31% of Total Population

8 Tier 1 Cities (Population greater than

5 million), 8%

32 Tier 2 Cities (Population between 1 to

5 million) , 4%

39 Tier 3 Cities (Population between 0.5

and 1 million), 3%

4,300 Tier 4 Cities (Population less than 0.5

million), 16%

99,000 Villages (Population greater than

2000), 37%

130,000 Villages (Population between 1000 and 1999), 17%

145,000 village (Population between 500

and 999), 10%

219,000 villages (Population between 0

and 499), 5%

Where 1. 3 Billion Indians Live?

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Over 70 Million Customers Bought Online in 2016

Source: Forrester Research

Online Buyers Accounts for Only 17% of Total Online Population in 2016

16% 17% 18% 20% 21% 23%

50% 49% 48% 47% 46% 45%

34% 34% 33% 33% 32% 32%

2015 2016 (F) 2017 (F) 2018 (F) 2019 (F) 2020 (F)

Buyers Browsers Sideliners

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Categories Bought Online

Source: Consumer Technographics Asia Pacific Online Benchmark Survey, 2016 (Metro India)

Clothing And Footwear Lead Online Purchases Followed by Consumer Electronics

17%18%

21%21%

25%30%30%

31%32%

34%36%36%37%

38%38%38%

39%46%

52%53%

Pet suppliesPet food

FurnitureLarge appliances

JewelryHome décor/linens

GroceriesChildren's products

ToysBooks

Cosmetics/beauty productsDigital music downloads

Small domestic appliancesComputers and computer…

Hair carePersonal appliances

Skin careElectronics

FootwearClothing and accessories

In the PAST THREE MONTHS, which of these products have you purchased ONLINE?

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Online Spending Per Buyer Took a Hit in 2016

Source: Consumer Technographics Asia Pacific Online Benchmark Survey, 2014, 2015, 2016 (Metro India)

In spite of a Decline in 2016, Online Spending Grew 25% from 2014

19,332₹

29,006₹

24,092₹

2014 2015 2016

In the PAST 3 MONTHS, about how much in total (including shipping and handling) have you spent buying products online, regardless of how you paid?

Mean Spending

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Sales on Big Billions Day Growing Rapidly

Source: Press

Over $1 Billion in Online Retail Sales During the Period of Big Billions Day by All Online Retailers

One Day EventSnapdeal - $100 MM

Five Day EventAmazon launched Great

Indian Festive Sales

Five Day EventAmazon- $400 MM

$100

$300

$500

2014 2015 2016

Flipkart GMV on Big Billions Day ($Million)

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Customer Experience Became More Important Amazon Surpassed Flipkart As Indian Consumers' Preferred Online Retail Destination

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CX Index Scores Improved In Almost All Industries In India In 2016The Distribution Of Industry Scores In Forrester's India CX Index, 2016

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2016 Online Retail Status – Current Status And Forecast

Source: Forrester Data Online Retail Sales Forecast, 2016 To 2021 (Asia Pacific)

In spite of Hiccups in 2016 India Still The Fastest Growing Market; Expected to Grow at a CAGR of 31% from 2016-21

Computer hardware, Consumer Electronics

and Appliances48%

Apparel and Footwear24%

Media (books, music, and videos)

6%

Homeware and furniture6%

Beauty and cosmetics5%

Grocery2%

Toys1%

Other8%

2016 Online Retail Sales By Category; Total Online Retail Sales = $16 Billion

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Online Research Is Becoming the Biggest Influencer Before Purchase

Source: Consumer Technographics Asia Pacific Survey, H2 2016 (n=1,386)

With the Increasing Penetration of Smartphones and Online Buyers Purchasing More via Mobile Phones, the Web’s Influence is Much Larger Than Just Online Retail Sales

12%12%13%13%

15%15%15%

18%20%20%20%

22%23%24%24%25%

32%52%

67%

Review websitesOnline portals

Coupon apps/servicesManufacturer websites (e.g., Panasonic, L'Oréal)

Online videosMobile messaging apps

Comparison shopping sitesRetailer websites

Online adsDirect mail

Social media or blogsStore associates

In-store ads/promotionSearch engines

Offline media advertisements/shows (e.g., TV, radio,…Shopping apps

Looking at the product in a storeFriends or family

Amazon, Flipkat, Snapdeal

Which of the following did you use to research your most recent product before it was bought?

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Web Influence on Offline Sales is 3X of Online Retail Sales

Source: Forrester Data Web-Influenced Retail Sales Forecast, 2015 To 2020 (Asia Pacific)

Web Impacted Sales = Online Retail Sales + Web Influenced Offline Retail Sales

$58 BillionWeb Impacted Retail

Sales

$140 BillionWeb Impacted Retail

Sales

2.2%5.6%

92.2%

Online Retail Sales as % of Total Retail Sales Web Influenced Ofline Retail Sales as % of Total Retail Sales

4.5%8.7%

86.8%

2016 2020

Thank you

forrester.com

Satish Meenasmeena@forrester.com