E-retailing industry in India has come a long way since the internet revolution. It has evolved significantly in the last decade and there are many aspects of e-commerce like TV shopping, online shopping and mobile shopping of which online shopping has emerged as the shining star.
E-retailing industry in India has majorly three models based on the participants involved: Business to Business (B2B), Business to Consumer (B2C) and Consumer to Consumer (C2C).
Figure 1 Online Retailing Models in India
Source: NPCS Research
Business to Business (B2B): Under this form of e-commerce set up, the transaction/buying-selling takes place only between two businesses without the involvement of the consumer. The end product is purchased by one business from another and then sold to the consumer under their brand name.
Business to Consumer (B2C): This model is one of the most widely used models in the Indian e-commerce industry. B2C has held the major share in the market and are retailing transactions with individual shoppers.B2C transactions range from apparels, footwear, electronics, stationary to gifts etc.
Consumer to Consumer (C2C): In this type of model, the transacting parties are two consumers. In here, customers can sell directly to other customers via any online site and have the product shipped directly to another consumer.
1.1 Segmentation of the Industry
Figure 2 Indian E-Commerce Industry- Segmentation
1.1.1 Online Travel
Indian online travel market is one of the fastest growing travel markets in the world and is also the largest segment in the Indian e-commerce industry. Not very long ago, India was invisible on the global online travel industry map but today, the country has emerged as one of the top tourist destinations.
The trend for buying travel tickets online can be traced to the establishment of the IRCTC (Indian Railways Catering and Tourism Corporation) portal in 2002. Today IRCTC is the largest travel site used by Indian consumers for making online bookings followed by makemytrip and yatra.com.
The chart below demonstrates the growth of online travel market in the last 5 years.
Figure 3 Indian Online Travel Industry- Market Size (2007-12, In INR Billions)
Source: NPCS Research, IAMAI
The industry has grown exponentially since 2007 registering a CAGR of ~45% during 2007-12.
E-tailing or E-retailing is the second largest category of Indian e-commerce industry. E-tailing or online retailing includes consumer items like electronics, mobile phones, computer peripherals, home appliances, apparels, jewellery, shoes and toys. Besides the categories mentioned above, lifestyle accessories like watches, books, beauty products and perfumes and baby products are gaining traction.
Moving along the changing trends, today’s Indian consumers increasingly want to enjoy the convenience of shopping online. They do not want to go through the hassles of rushing to brick and mortar stores; instead, they want to order the products of their choice by sitting at home and get the goods delivered at their doorsteps. And such changes have led to the explosive growth of e-tailing industry in the nation. Top e-retailers in the Indian e-commerce landscape are ebay, flipkart and snapdeal contributing ~70% of the e-tailing market.
Figure 4 Indian E-Tailing Industry- Market Size (2007-12, In INR Billions)
Source: NPCS Research, IAMAI
The chart above demonstrates the growth of e-tailing industry in India which recorded a CAGR of ~45% during 2007-12.