Home Latest News Annualised GMV for e-commerce firms in India dips 10 pc in Q2

Annualised GMV for e-commerce firms in India dips 10 pc in Q2

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Annualised GMV for e-commerce companies in India fell 5-10 per cent in the second quarter of 2016 to US$13 billion, impacted by fewer discounts by players like and , research firm RedSeer said.

Annualised GMV for e-commerce firms in India dips 10 pc in Q2
Over the past few quarters, the online retail industry has seen a large number of acquisitions as well as shutdowns, as some of the companies have struggled to grow amid heated competition and drying up of investor funds

“While there was a strong growth pattern in calendar year 2015, the annualised gross merchandise value (GMV) run rate for the Indian e-tailing industry dropped sharply in size in both quarters of 2016 till date,” Founder and CEO, RedSeer Consulting, Anil Kumar was quoted by PTI as saying.

According to a PTI report: Gross Merchandise Value or GMV refers to the total sales made through an e-commerce platform. The quarterly/monthly GMV figure is projected for the full year to arrive at the annualised GMV run rate. He added that the run rate has fallen from US$17 billion in the last quarter of 2015 to US$14 billion in January-March 2016 and further down to US$13 billion in the consecutive quarter.

“However, driven by increasing Internet and smartphone penetration (especially in Tier II cities), growing disposal income and increasing comfort with online shopping across categories, the GMV is expected to grow at a CAGR of 50-60 per cent to US$80-100 billion by 2020,” he was quoted by PTI as saying.

Talking about the coming quarters, he was quoted by PTI as saying, “Q3 is expected to be flat, while by Q4, we should see the GMV going back to about US$17 billion, helped by the festive season”.

Kumar attributed the fall in GMV run rate to e-commerce companies offering fewer discounts as part of their efforts to curtail cash burn. “Going ahead, we may see the discounts being offered under special sale offers instead of being spread out throughout the year,” he was quoted by PTI as saying.

Asked about consolidation in the e-commerce industry in India, Kumar was quoted by PTI as saying, “We expect there will be 2-3 players who would account for 70 per cent of the market.”

Over the past few quarters, the online retail industry has seen a large number of acquisitions as well as shutdowns, as some of the companies have struggled to grow amid heated competition and drying up of investor funds. Recently, (which was bought by Flipkart) acquired rival for $70 million. Last year, Snapdeal had bought Exclusively.com to strengthen its fashion business.

According to RedSeer, the average order value (AOV) will grow marginally from US$33 (in 2015) to US$36 (in 2020), while number of monthly transactions per shopper is pegged to grow from 1.5 to 1.9 over the same time frame.

“While the AOV won’t go up drastically, the growth will be driven by addition of new users and more consumers shopping online for high frequency categories like fashion and FMCG,” Kumar was quoted by PTI as saying.