Home Retail Limited brick-and-mortar reach driving online shopping growth: Report

    Limited brick-and-mortar reach driving online shopping growth: Report

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    According to a recent survey released by CBRE India Consumer Survey 2015, online shopping trends in India are expected to continue to grow, fuelled by deep penetration of mobile devices. The survey indicates that the consumers are likely to shop online more frequently in forthcoming years.

    “A large majority of Indian shoppers anticipate spending more through both online as well as physical retail platforms in coming years. However, a much larger percentage (nearly 80%) of shoppers feel that they are likely to spend more via online shopping routes, in comparison to those who expect to spend more at physical stores,” the survey said.

    The rapid growth of the online consumer base is due to increase in adoption of devices like smartphones, tablets, and laptops, and access to the internet through broadband and 3G. “India’s Internet user base is expected to reach 550 million by 2020, with a penetration of nearly 40%, from the current estimated base of 243 million and penetration of 19%,” said a report by retail consultancy firm Technopak in India Retail Report 2015.

    The report notes that while the organized brick-and-mortar retail, has been in India for two decades now, its contribution to total retail is still low, at only 8% in 2014. “Organised B&M retail is concentrated in the top 25-30 cities and most B&M retailers and brands are unable to meet the rising aspiration in smaller cities. This skew in retail presence has also fuelled the demand for online channels due to their wider reach and delivery to even such smaller cities and towns where B&M retail stores are either not viable or will take years to reach.”

    Furthermore, the India’s young population – with 75% of the Internet audience falling in the age bracket of 15-34 years — is the reason for the increasing growth of online shopping in India.

    “This age segment forms the core customer base for e-tailing in India as they are aspirational, well-connected, tech-savvy, and mobile and have high spending power. They are not only Internet-habituated but also comfortable with making online transactions. Such favorable young demographics will continue to drive the growth of e-tailing in India,” Technopak said.