INTERNET RETAILING IN INDIA

Euromonitor International
January 2016
INTERNET RETAILING IN INDIA Passport I

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 2
Channel Data ............................................................................................................................... 3
Table 1 Internet Retailing by Category: Value 2010-2015 ......................................... 3
Table 2 Internet Retailing by Category: % Value Growth 2010-2015 ........................ 3
Table 3 Internet Retailing GBO Company Shares: % Value 2011-2015 ................... 4
Table 4 Internet Retailing GBN Brand Shares: % Value 2012-2015 ......................... 4
Table 5 Internet Retailing Forecasts by Category: Value 2015-2020 ........................ 5
Table 6 Internet Retailing Forecasts by Category: % Value Growth 2015-2020 ....... 5

© Euromonitor International
INTERNET RETAILING IN INDIA Passport 1

INTERNET RETAILING IN INDIA

HEADLINES
 Sales through internet retailing increase by 140% in current value in 2015, to reach Rs1.3
trillion
 Mobile internet retailing continues to see stronger current value growth than internet retailing
in 2015 with value sales up by 183%
 Flipkart Online Services maintains its lead in internet retailing in 2015, with a 50% value share
 Internet retailing is expected to grow at a value CAGR of 26% at constant 2015 prices in the
forecast period

TRENDS
 Internet retailing continued to have strong growth in 2015. The channel is extremely popular
with consumers due to the convenience and low pricing online retailers can offer. Apart from
the convenience and price, internet retailing has become one of the most sought-after
channels due to the growth of smartphones in the country. As almost all online retailers have
mobile applications, and every consumer in urban areas has a smartphone, shopping online
literally has become the most common form of shopping. Consumers are shopping on the go,
at the lowest prices possible.
 Current value sales through internet retailing increased at a 65% CAGR over the 2010-2015
review period and increased by 140% in 2015. The channel continued to grow steadily from
2010 to 2015, and with the help of mobile internet retailing during 2015, internet retailing
registered even stronger growth.
 Apparel and footwear internet retailing continues to be the most popular product being sold
via internet retailing. This is because the number of retailers selling apparel and footwear is
the highest, due to the high profit margin. As a result of this, whilst shopping online
consumers have the most options for finding the apparel and footwear they want.
 Video games hardware internet retailing is the least popular product sold via this channel, as
the pirated versions of this are easily available across store-based retail outlets in India at
much lower prices. As a result consumers prefer not to buy it online. Furthermore, not a lot of
retailers are involved in selling these products, so consumers do not have a lot of options to
buy video games hardware online.
 Brand loyalty towards any particular retailer in 2015 was low amongst consumers. Consumers
are very open to the idea of experimenting with new retailers, based on reviews online. This is
a relatively new trend, as consumers until 2014 were still sceptical about the channel and new
retailers. However, in 2015, consumers were more open to experimenting with newer
retailers.
 Cash on delivery continues to be the most common payment option in India, as all retailers
give this option and consumers prefer it because it allows them to check the product prior to
making the payment.
 Mobile internet retailing has become extremely popular amongst consumers, as it allows them
to shop on the go, and works perfectly even when the internet connection is weak, which is a
common situation in India.

© Euromonitor International
INTERNET RETAILING IN INDIA Passport 2

COMPETITIVE LANDSCAPE
 Flipkart Online Services maintained its leading position in internet retailing in 2015, with a
52% retail value share. The company had its “big billion” sale in 2015, which was an equally
big success as in 2014. This company was already one of the most established retailers in
this channel, and it has continued to enjoy its first mover advantage. In addition to that, the
company continues to have strong logistical support, which helps it to deliver goods on time
without any hassles, which is a big advantage the retailer has over its contemporaries.
 Flipkart Online Services enjoyed the biggest growth in share in terms of value sales in 2015.
This was observed as the company continued to push its fashion and lifestyle products, which
included apparel, footwear, personal accessories, eyewear, bags and luggage. These
products are extremely popular with consumers, as a result of which Flipkart has successfully
attracted a huge consumer base.
 Internet retailing continues to be popular amongst consumers due to the low pricing offered by
retailers. The quality and price offered by all the retailers, especially the leading ones –
namely Flipkart Online Services, Jasper Infotech and Amazon.com – are similar. The website
design is modern and very easy to navigate. However, none of the retailers provided loyalty
schemes or credit facilities until 2015.
 Internet retailing emerged as a very strong channel under non-store retailing over the 2010-
2015 review period after becoming the largest channel in non-store retailing in 2008, due to
the convenience, and large number of options in terms of products, retailers, pricing, and
quality available at the consumers’ disposal.
 The sales performance of internet retailers continues to be stronger now that it is a more
established channel and has a larger variety of products as compared to bricks and clicks,
where traditional generally focus on a particular type of consumer product.
 E-marketplaces were extremely popular in 2015. Most internet retailers in 2015 were
marketplaces, for example, Flipkart Online Services, Jasper Infotech and Amazon.com, as it
is a more lucrative model, and allows retailers to sell a much wider product variety as
compared to in-store specialist retailers.

PROSPECTS
 Value sales of internet retailing overall are expected to increase at a CAGR of 21% at
constant 2015 prices over the forecast period, but mobile internet retailing will be the most
important sales driver. Small-screen viewing was already a phenomenon that was taking over
retail behaviour of consumers over the review period, as it allowed consumers to do
purchases on the go. This trend has further materialised due to the popularity of mobile
applications which make it very convenient for consumers to use, even when the mobile
internet connection is weak. This will trend continue over the 2015-2020 forecast period as
well.
 Consumer electronics, apparel and footwear, leisure and personal goods will be the most
popular products sold via this channel over the forecast period. These products are the most
popular in store-based retailing as well, and as they are priced lower in internet retailing,
consumers will shift to this channel for their shopping preferences.
 Video games hardware and pet care will be the least popular products in this channel over the
forecast period as these products are available for relatively cheaper prices at offline stores.
Furthermore, in the case of video games hardware, the availability of pirated products is very
high in India, and will continue to be so in the forecast period; consumers will obviously end
up buying these, as the price difference is massive with the pirated versions being much

© Euromonitor International
INTERNET RETAILING IN INDIA Passport 3

cheaper. In the case of pet care products, consumers in prefer to feed their pets home-made
food, and are expected to continue to do so in the forecast period.
 Mobile internet retailing will drive the growth of internet retailing in the 2015-2020 forecast
period, with value sales expected to rise at a constant value CAGR of 31%. This is expected
as the mobile application platform is extremely popular due to its ease of use and providing
the possibility of shopping on the go, even with weak internet connection. This will continue in
the forecast period as well.

CHANNEL DATA
Table 1 Internet Retailing by Category: Value 2010-2015

INR bn
2010 2011 2012 2013 2014 2015

Apparel and Footwear 8.9 12.4 25.9 51.4 103.9 193.5

Beauty and Personal Care 0.3 1.0 2.3 3.8 5.1 5.9
Consumer Appliances 3.1 3.7 4.5 5.5 6.4 7.5
Consumer Electronics 20.2 28.2 46.1 76.7 119.7 168.6
Consumer Health 1.3 1.9 2.6 3.3 4.2 5.2
Food and Drink - - - - 4.2 6.3
Home Care - - - 0.0 0.2 0.3
Home Improvement and - - - - - -
Gardening
Homewares and Home - - - - 2.3 16.0
Furnishings
Media Products 7.1 9.9 12.8 16.4 20.6 24.3
Personal Accessories 7.9 12.4 17.4 22.6 34.6 47.0
and Eyewear
Pet Care 0.0 0.0 0.0 0.0 0.1 0.1
Traditional Toys and 0.1 0.1 0.1 0.2 0.2 0.2
Games
Video Games Hardware 0.0 0.0 0.0 0.0 0.0 0.0
Other Internet Retailing 33.1 41.1 43.9 47.0 117.2 530.1
Internet Retailing 82.1 110.9 155.8 226.9 418.7 1,005.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 2 Internet Retailing by Category: % Value Growth 2010-2015

% current value growth, retail value rsp excl sales tax

2014/15 2010-15 CAGR 2010/15 Total

Apparel and Footwear 86.2 85.0 2,067.3

Beauty and Personal Care 14.3 81.5 1,871.5
Consumer Appliances 17.4 19.4 143.1
Consumer Electronics 40.8 52.8 734.3
Consumer Health 23.5 31.0 285.1
Food and Drink 50.5 - -
Home Care 70.7 - -
Home Improvement and Gardening - - -
Homewares and Home Furnishings 602.2 - -
Media Products 18.1 27.9 241.7
Personal Accessories and Eyewear 35.6 42.8 494.4

© Euromonitor International
INTERNET RETAILING IN INDIA Passport 4

Pet Care 36.4 42.3 484.5

Traditional Toys and Games 19.3 21.6 165.8
Video Games Hardware 18.9 26.5 223.3
Other Internet Retailing 352.1 74.1 1,500.5
Internet Retailing 140.0 65.0 1,123.9
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 3 Internet Retailing GBO Company Shares: % Value 2011-2015

% retail value rsp excl sales tax

Company 2011 2012 2013 2014 2015

Flipkart Online 0.5 11.5 26.0 31.6 52.0

Services Pvt Ltd
Jasper Infotech Pvt Ltd 0.1 0.3 1.1 12.3 19.9
Amazon.com Inc 1.0 1.1 1.2 13.5 9.2
Dell Inc 23.7 16.9 12.9 7.7 3.6
Rocket Internet GmbH - 1.6 2.3 3.2 1.8
eBay Inc 1.0 1.0 0.9 0.6 0.3
Network18 Group 0.8 0.8 0.7 0.5 0.2
Apple Inc 0.1 0.3 0.5 0.4 0.2
Times of India Group, The 1.2 0.9 0.6 0.3 0.2
Indiaplaza India Pvt Ltd 0.5 0.4 0.3 0.1 0.1
Rediff.com India Ltd 0.7 0.4 0.3 0.1 0.1
Actoserba Pte Ltd 0.2 0.2 0.2 0.1 0.0
Future Group 0.2 0.1 0.0 0.0 0.0
Myntra.com 2.8 5.8 5.9 - -
Sify Ltd 0.7 0.5 0.4 - -
Digitail Management 0.9 - - - -
Services Pvt Ltd
Trinethra Super Retail - - - - -
Pvt Ltd
Others 65.7 58.1 46.8 29.6 12.4
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 4 Internet Retailing GBN Brand Shares: % Value 2012-2015

% retail value rsp excl sales tax

Brand Company (GBO) 2012 2013 2014 2015

Flipkart Flipkart Online 11.5 26.0 27.5 49.8

Services Pvt Ltd
Snapdeal.com Jasper Infotech Pvt Ltd 0.3 1.1 12.3 19.9
Amazon Amazon.com Inc 1.1 1.1 13.4 9.2
Dell Dell Inc 16.9 12.9 7.7 3.6
Myntra Flipkart Online - - 4.1 2.3
Services Pvt Ltd
Jabong.com Rocket Internet GmbH 1.6 2.3 3.2 1.8
eBay eBay Inc 1.0 0.9 0.6 0.3
HomeShop18 Network18 Group 0.8 0.7 0.5 0.2
App Store Apple Inc 0.3 0.5 0.4 0.2
Indiatimes Shopping Times of India Group, The 0.9 0.6 0.3 0.2
Indiaplaza Indiaplaza India Pvt Ltd 0.4 0.3 0.1 0.1
India Online Rediff.com India Ltd 0.4 0.3 0.1 0.1

© Euromonitor International
INTERNET RETAILING IN INDIA Passport 5

Junglee.com Amazon.com Inc 0.1 0.1 0.1 0.1

Zivame Actoserba Pte Ltd 0.2 0.2 0.1 0.0
Futurebazaar Future Group 0.1 0.0 0.0 0.0
Myntra Myntra.com 5.8 5.9 - -
Sify Sify Ltd 0.5 0.4 - -
Letsbuy Digitail Management - - - -
Services Pvt Ltd
Fab Mall Trinethra Super Retail - - - -
Pvt Ltd
Others 58.1 46.8 29.6 12.4
Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 5 Internet Retailing Forecasts by Category: Value 2015-2020

INR bn
2015 2016 2017 2018 2019 2020

Apparel and Footwear 193.5 291.7 362.3 455.3 566.1 703.8

Beauty and Personal Care 5.9 8.0 8.7 9.4 10.1 10.8
Consumer Appliances 7.5 8.3 9.1 9.8 10.7 11.7
Consumer Electronics 168.6 222.6 282.6 350.4 424.1 500.3
Consumer Health 5.2 5.9 6.7 7.5 8.3 8.7
Food and Drink 6.3 8.7 11.6 14.9 18.7 22.7
Home Care 0.3 0.4 0.4 0.5 0.6 0.8
Home Improvement and - 0.0 0.0 0.0 0.0 0.0
Gardening
Homewares and Home 16.0 27.1 36.3 40.9 49.0 58.7
Furnishings
Media Products 24.3 26.9 28.7 30.1 31.0 31.9
Personal Accessories 47.0 56.6 62.4 67.4 78.9 91.5
and Eyewear
Pet Care 0.1 0.1 0.1 0.2 0.2 0.2
Traditional Toys and 0.2 0.3 0.3 0.3 0.4 0.4
Games
Video Games Hardware 0.0 0.0 0.0 0.0 0.0 0.0
Other Internet Retailing 530.1 770.2 1,125.8 1,010.5 1,368.5 1,692.3
Internet Retailing 1,005.0 1,427.1 1,935.1 1,997.4 2,566.7 3,133.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: Forecast value data in constant terms.

Table 6 Internet Retailing Forecasts by Category: % Value Growth 2015-2020

% constant value growth, retail value rsp excl sales tax

2015/2016 2015-20 CAGR 2015/20 TOTAL

Apparel and Footwear 50.8 29.5 263.7

Beauty and Personal Care 36.9 13.0 84.5
Consumer Appliances 10.1 9.1 54.9
Consumer Electronics 32.0 24.3 196.7
Consumer Health 15.1 11.0 68.8
Food and Drink 38.7 29.2 259.8
Home Care 35.9 21.8 167.8
Home Improvement and Gardening - - -

© Euromonitor International
INTERNET RETAILING IN INDIA Passport 6

Homewares and Home Furnishings 69.5 29.7 266.6

Media Products 10.9 5.6 31.2
Personal Accessories and Eyewear 20.5 14.3 94.8
Pet Care 22.4 21.0 159.9
Traditional Toys and Games 13.7 13.9 91.9
Video Games Hardware 12.7 8.5 50.3
Other Internet Retailing 45.3 26.1 219.3
Internet Retailing 42.0 25.5 211.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: Forecast value data in constant terms.

© Euromonitor International