Ecommerce markets are buzzing with great opportunity for Indian businesses. A study states, it is expected to rise ten-fold in the next five years to reach $100 billion penetrating rural areas with Internet facilities, smartphones usage and digital network.
The industry report titled, “Direct Selling; Mapping the industry across Indian states” predicts the ecommerce commerce sector growth to grow from $10 billion to $250 billion in the next ten years as digital networks spread in rural areas.
According to DIPP Secretary Amitabh Kant, “India in next 10 years, in my mind 10 years, would be close to $250 billion of e-commerce” while giving out the report on direct selling by industry group Ficci and KPMG. The boom is happening with the digital space taking over in the rural areas states Kant. He further states that ecommerce would be driven in local languages.
India was expected to have over 350 million smartphones by the year 2017 and it possibly looks it has achieved that target looking at the present scenarios. E-retailing and other retail outlets will co-exist and grow together. Kant added that they would see the trends growing with almost 500 million Indians connected to Internet that adds up to huge amount of opportunity.
Rapid urbanization will help create an economy driven by middle class. By the year 2030, almost 350 million people would have moved from rural to urban areas and by 2050, 700 million would have moved to urban areas according to Kant. He further added, by the year 2025, 50% Indian economy would be driven by middle class.
The reports states that direct selling in India has reached to over 75 billion (in Rupees), this shows a growth of 16% CAGR. However, the Report also stated that, “the market grew at a lower rate of 4% in 2013-14 due to slowdown in the industry”.
The report concluded showing lack of clear definition of the industry and central regulations that are hampering the growth of sector. Other factors like fly-by-night Ponzi and pyramid schemes are confused with direct selling.