Online retail market soon to be valued at $70 billion

The Indian ecommerce market is growing fast and how. According to reports recently released, ecommerce market in India is projected to touch a value of $60 – $70 billion over the next five years, which means that it will be four times its present value.

The report is titled, Retail 2020: Retrospect, Reinvent and Rewrite and is jointly prepared by the Boston Consulting Group and the Retailers Association of India. It was shared at the Retail Leadership Summit 2015 conducted in Mumbai this week.

According to the report, this growth will be driven by a wider reach and accessibility of the internet, which basically will happen through cheaper internet connections available through mobile phones. The more the number of internet users, the faster the growth of ecommerce, as predicted by the report.

Customers will also get attracted to ecommerce because of the better product options, better discounts and more variety. Also, a variety of payment options like cash on delivery and mobile wallets will accelerate this growth.

The report encourages online sellers to use social media and word of mouth as the strongest means of publicity- which would primarily require their services to be impeccable and up to the mark.

Is all well?

We have been harping on the ecommerce growth potential in India since a long time. However, this report raises a few alarming questions. If the reach of ecommerce is going to be encouraged by various elements including the cash on delivery method, online marketplaces have a big challenge they will be facing. Cash on delivery is a very expensive method for ecommerce operations, online banking or card payments being the most convenient. In fact, for healthy growth, cash on delivery should slowly fade off from the Indian ecommerce scene. If this payment method will still be a crucial part of Indian ecommerce in the future, the online retail industry will have to tackle a truly alarming challenge.