labels: e-business
B2C e-commerce in India to cross Rs2,300 crorenews
29 June 2005

The total value of e-commerce activities within India crossed Rs570 crore during 2004-05, according to a research conducted by Internet & Online Association of India, (IOAI) a non-profit industry organisation. The report estimates growth in excess of 300 per cent during the next couple of years and says Rs2,300-crore worth of e-business will be conducted within the country by the year 2006-07.

"Though it is at a nascent stage right now, there's a huge prospect for e-commerce in the country," says Kiran Karnik, head of the National Association of Software and Service Companies.

The research was undertaken to understand the profile, internet usage, products purchased along with propensity to buy along with the nuances of shopping online with the shopper's affinity and aversions to online shopping.

3,099 respondents' views were solicited of which 55 per cent (1,716) had shopped online and 87 per cent (1,493) had shopped more than once forming the base of the report. The report makes actionable recommendations on how online retailers can fill gaps in the online environment as well as how they can utilise unique elements of the online shopping experience to create a competitive advantage over the physical retailing world.

"The rapid development of e-commerce is forcing companies today to adopt business strategies revolving around the internet," says Neville Taraporewalla, chairman of IOAI. "The report reflects the changing face of business trends in India. Today, the internet population is 25+ million and is expected to grow at 100 million by 2007 and the report can act as a guideline on how online retailers can use this new business environment for their advantage," he adds

Flight and train bookings are contributing to the growth, besides direct purchases.Among the metros, Mumbai led in all categories, except jewellery, where Delhi came out on top. Calcutta scored in online music sales.

India, with a population of over a billion, has around 2.5 crore internet users. The study found that most shoppers access the internet from office, followed by those who access it from home. Some also go to cyber cafes.

Mahendra Swarup, vice chairman of IOAI, added further," This business module is cost effective, easily accessible and profitable in many functional areas. Consumers and retailers both desire a safe, simple and comprehensive online shopping experience that will truly realise the range of power of the internet. The report highlights ground realities of the online shopping environment and shoppers' attitudes and perceptions towards e-commerce."

According to Preeti Desai, president, Internet and Online Association of India, "E-Commerce is coming of age in India. Changing lifestyles and shopping habits, a similar metro / non metro consumption of media and internet and 'multiple internet access points' will propel e-commerce
transactions to Rs 2,300 crores in 2006-2007 from the current Rs1,180 projection for 2005-2006, an over 100 per cent increase. "

"From a business perspective it offers unlimited shelf space, it isn't bound by operational timings and geographical boundaries and an opportunity to cater to country-wide city markets (for consumers and suppliers alike) at a comparative minuscule cost to an audience all set to grow to a 100 million by 2007. From a consumers perspective it allows greater access (hence the high response rate by tier 2 cities) to markets and an opportunity to make informed decisions on purchases.

also see : Click here to see full report

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B2C e-commerce in India to cross Rs2,300 crore