Exactly last year in February 2015, Morgan Stanley predicted that Indian ecommerce market would reach $102 billion by 2020. Although in its latest 2016 ecommerce report, It has revised the estimated figure to $119 billion considering the ever-growing online industry.

Internet penetration one of the key growth drivers

Morgan Stanley report stated, “We now increase our 2020 estimate (of India’s ecommerce market) from $102 billion to $119 billion. This takes our estimate of the total Indian Internet market size from $137 billion to $159 billion (now including online food aggregation business).”

It laid out 3 primary reasons, which compelled it to reconsider ecommerce market size prediction. They are:

• Growth of Internet penetration – To increase from 32% in 2015 to 59% in 2020
• Increase in per capita income of Indian buyers – expected to double by 2025
• Rising number of online shoppers – To touch 320 million by 2020 from 50 million online shoppers in 2015

India’s internet user base nearly doubled in 2015 and it will continue to grow. Internet penetration coupled with rising smartphone users has fuelled the growth of mcommerce, which is why ecommerce biggies are paying special attention to their mobile platform.

Flipkart, Snapdeal and Amazon’s GMV surpasses top offline retailers

Another interesting revelation of the Morgan Stanley report is that the combined Gross Merchandise Value (GMV) of three ecommerce leaders – Amazon, Flipkart and Snapdeal in 2015 is more than the top ten offline retailers.

While GMV of the three ecommerce biggies in 2015 was $13.8 billion (about Rs 94,400 crore), offline retailers’ GMV was $12.6 billion (nearly Rs 86,200 crore).

One of the reasons for ecommerce companies’ high GMV is said to be the 50% increase in investments in the online industry. Etailers received $6.6 billion from investors in 2015.

The report also revealed that Flipkart leads the Indian ecommerce industry with 45% market share, followed by Snapdeal with 26% and Amazon with 12%.

India retains the fastest growing ecommerce market in the world title

Just like last year, the Indian ecommerce industry continues to remain one of the fastest growing markets in the world. The above listed findings of the Morgan Stanley report is one such proof. As the cloud over FDI in ecommerce is expected to clear soon, it won’t be surprising if next year the estimated figures are revised again.