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India among top 10 countries with highest e-commerce potential: Report

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Although Asia Pacific’s overall retailing industry registered a 4% sales decline in 2020 as a result of the Covid-19 pandemic. the region continues to drive the industry forward, thanks to tech giants, such as Alibaba and JD.com. Second to Latin America, Asia Pacific is predicted to see the highest value sales CAGR for retailing during 2020–2025, with digitalisation, connectivity and demographics being key growth drivers in the region’s evolution as an innovation hub post-pandemic, says market research firm Euromonitor International in its new report Top 100 Retailers in Asia 2021.

[According to Euromonitor, there are some more prominent winners to reckon with — India for its massive domestic consumption-driven economy, Japan and South Korea’s advanced technologies and China’s burgeoning middle class.]

The region reported double-digit growth in e-commerce in 2020. World-class mobile connectivity enables digital transformation in industries like retailing, supported by extremely tech-savvy consumer segments in Asia Pacific. Proximity payment has become the next big opportunity for many fintech players while retailers integrate their online and offline operations to better serve their customers who are more connected than ever,” the report states.

According to Euromonitor, there are some more prominent winners to reckon with — India for its massive domestic consumption-driven economy, Japan and South Korea’s advanced technologies and China’s burgeoning middle class.

These four markets also unsurprisingly, happen to be among the world’s top 10 countries with the highest e-commerce potential, according to Euromonitor International’s E-Commerce Readiness Model.

After seeing double-digit current value growth for the last few years, retail sales in India declined in 2020. This can be attributed to apparel and footwear specialist retailers, department stores and home and garden specialist retailers, amongst others. With consumers restricted to their homes, the demand for groceries increased. Some consumers preferred to shop locally, popping into traditional grocery retailers and convenience stores to minimise the time spent in stores. At the same time, grocery retailers partnered with food delivery companies such as Swiggy, and even ride hailing companies such as Uber, to deliver groceries to consumers’ homes.

[E-commerce players such as Amazon, Walmart-owned Flipkart and Reliance, have already partnered with traditional grocery retailers. For instance, Reliance started a new initiative in conjunction with WhatsApp which enabled consumers to purchase from nearby grocery stores.]

With low footfall in stores selling non-essential products even after reopening post-lockdown, players had to think of new ways to attract consumers. For instance, apparel and footwear specialist retailers and department stores experimented with the “store on wheels” concept. On the other hand, strong growth was accelerated in food and drink e-commerce in 2020,” notes Deepika Chandrasekar, Senior Research Analyst, Services and Payments Euromonitor International.

“E-commerce players such as Amazon, Walmart-owned Flipkart and Reliance, have already partnered with traditional grocery retailers. For instance, Reliance started a new initiative in conjunction with WhatsApp which enabled consumers to purchase from nearby grocery stores,” she adds.

In the forecast period (2020-2025), store-based retailers, such as modern grocery retailers, are expected to look towards second- and third-tier cities for growth opportunities. “As more brands invest in e-commerce going forward, and with the rising smartphone penetration rate in the country, mobile e-commerce is expected to see a particularly strong increase, the highest within retailing in the forecast period,” Chandrasekar states.