'Online retail at all time high with 1 mn retailers'

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SME Times News Bureau | 05 Apr, 2014
Internet and Mobile Association of India (IAMAI) has released industry figures that indicate robust growth in the online retail business in India estimating the number of online retailers as close to 1 million as of date.

"Nearly 1 million large and small retailers make use of online marketplaces to reach out to their customers in India today. These online retailers represent a very wide range of categories including electronics, books, apparel, accessories, footwear and jewellery," President IAMAI, Subho Ray Friday said in a press release.

"The presence of such a large number of online sellers testifies to the efficiencies, disinter-mediation, lower capital costs and deep outreach that online marketplace provides to the retailers," he added.

The association has estimated that online retail accounted for USD 12.6 billion showing a year-on-year CAGR of 34 percent since 2009 and is expected to escalate further as policy and FDI issues are addressed and delivery logistics come of age.

Industry experts have pointed out that growth in the online retail space in India is following a global trajectory and is proving to be sustainable and profitable marketing and distribution model. Agglomeration and consolidation in the online retail business is also a strong indicator of the robust fundamentals of the business model.

The Association has identified key segment drivers such as, apparel and jewellery brands which are marketing and selling their products increasingly through the online channel. IAMAI reports that increasingly OEMs have begun launching their products exclusively through online marketplaces and investing in their own brand marketing. This has led to market expansion, pricing competition which is leading to better products at cheaper prices for consumers.

IAMAI has noted that while technology platforms tend to be run from city centres, the bulk of logistical management such as storage, godowns and deliveries are being handled from Tier 2 or Tier 3 cities. "This is leading to more equitable employment generation and bridging the urban rural divide," said Dr. Ray.

Regional growth patterns are also encouraging, according to IAMAI. Trends indicate that apparel and fashion accessories make the majority of sales in the east and south, while jewellery, leather and consumer item sales are prominent in the north and western sectors. As of current capacities, online retail is growing at roughly an equitable growth rate across regions in India with a slight advantage for the western region over the extreme eastern belt. However, this regional imbalance is expected to level out soon since online retail has been found to serve distant or under-served areas particularly well.

IAMAI is a young and vibrant association with ambitions of representing the entire gamut of digital businesses in India. It was established in 2004 by the leading online publishers, but in the last nine years has come to effectively address the challenges facing the digital and online industry including mobile content and services, online publishing, mobile advertising, online advertising, e-commerce and mobile & digital payments among others.