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

© 2017 Forrester Research, Inc. Reproduction Prohibited 2

New eCommerce Markets Often Follow A Similar Path


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


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?


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


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?


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


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)


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


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


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


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?


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 [email protected]

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

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