Consumer e-commerce transactions to cross Rs9000 crore by 2007-08
08 Oct 2007
At the end of FY 2006/07, the market size of this segment was estimated to be Rs7080 crore and the average rate of growth for the year 2007-08 was projected to be 30 per cent.
The unique feature of the study was that for the first time an attempt was made arrive at a consensual industry definition of consumer e-commerce. The agreed definition of consumer e-commerce, according to the study, was: "Buying and selling of products and services on the internet or on any other application that relies on the Internet. In other words, it comprises transactions for which Internet acts as a medium for contracting or making payment or for consuming the service/product by the end consumer, who is an individual."
Combinations of these three conditions can be as follows:
- Paying online and consuming online
- Consuming online and paying offline
- Contracting and paying online and consuming offline
The study covered the following segment in arriving at the current and projected market size of consumer eCommerce:
1. Online travel, comprising travel aggregators, tour operators, hotels and railways
2. E-tailing, comprising online retailers and online auctions
3. Classifieds, comprising online jobs, online matrimony, online property, online automobile and general classifieds
4. Paid content subscription, comprising research, articles, exclusive videos, etc
5. Digital downloads, from internet to mobiles and internet
The online travel segment lead the pack with Rs5,500 crore for 2006-07 and an expected growth rate of 30 per cent to reach Rs7000 crore by the end of 2007-08. The size of online classifieds, the next large segment was around Rs540 crore at the end of 2006-07. It is expected to reach Rs820 crore by the end of 2007-08. eTailing stood at Rs850 crore in the year 2006-07 and is expected to be Rs1,105 crore industry at the end of 2007-08. Digital downloads and paid content accounted for the rest.
| MARKET SIZE FOR THE YEAR | 2006-07 (Figures in Rs. Crores) | 2007-08 (Figures in Rs Crores.) |
| Online travel industry | 5,500 | 7,000 |
| Online non-travel industry | 1,580 | 2,210 |
| - eTailing | 850 | 1,105 |
| - Online classifieds | 540 | 820 |
| - Pain content subscription- Online classifieds | 20 | 30 |
| - Digital downloads | 170 | 255 |
| Total B2C/ C2C E-commerce market | 7,080 | 9,210 |
According to the study the major triggers of e-commerce in India were:
- Saves time and efforts
- Convenience of shopping at home
- Wide variety / range of products are available
- Good discounts / lower prices
- Get detailed information of the product
- You can compare various models / brands
And some of the major barriers at present were:
- Not sure of product quality
- Cannot bargain/Negotiate
- Not sure of security of transactions / Credit card misuse
- Need to touch and feel the product
- Significant discounts are not there
- Have to wait for delivery
"Consumer eCommerce is a major driver of the economy and we are happy that it has achieved a very decent size in India," said Dr Subho Ray, president, IAMAI. "It is perhaps the only sector, which has operated under sometimes hostile and at all other times indifferent policy environment. It is the right time for policy makers to extend its support to this industry as it has done for other so called sunrise industries and create an environment where this industry feels inspired, secured free to innovate"
(See:Full
report "Consumer E-Commerce Market in India 2006/07")