Triggered by increasing internet usage, discounting and investment by online retailers, India’s ecommerce market is expected to breach the USD100-billion mark by FY20, says a report by Goldman Sachs, revising its previous estimate.
The overall online market, including travel, payments and retail, in the country could reach USD103 billion, the US investment bank said in a report this month. The figure is a 27 per cent jump from the USD81 billion it estimated in May.
The majority of this upward revision is contributed by the etail segment, which is estimated to reach USD69 billion by FY20 compared with $47 billion earlier.
“Higher growth in this space is due to the higher-than-expected internet and smartphone penetration, digital wallet adoption, last-mile logistics investments, continued discounting and better execution,” analysts Rishi Jhunjhunwala, Venkat Surapaneni and Piyush Mubayi wrote in the Goldman Sachs report.
In 2015, Google India estimates the combined gross merchandise value (GMV) of India’s e-commerce companies is likely to exceed USD12bn, up from USD4.5bn in 2014.
Earlier this month, Snapdeal’s chief product officer noted that traffic rose every year during Diwali, but “what is surprising is that the traffic does not go back to the previous rate in the week after Diwali … the new figure becomes the base for the next year.”