India B2C e-commerce Report 2018

19 November, 2018

E-Commerce Destinations

B2C e-commerce turnover in India rose to €20 billion in 2017, up 20% from 2016. This figure is expected to grow in 2018 to a forecasted €25 billion with a similar projected growth rate of 20%.

‘There are multiple drivers for increasing percentage of online payments for Indian consumers. Internet and smartphone penetration is probably the first big driver for cashless payments. An entire generation of Indians have had their first direct experience of using the internet through smartphones…the number of smartphone users in India is predicted to rise to 530 million by 2018, which is
roughly a third of its population.’

Rohit Kulkarni, Country Manager of Payoneer India

Growth & Upcoming Markets

Internet penetration is on the rise in India, with 40% of the population forecasted to be using the internet in 2018, up from 37% in 2017. Although this may seem like a small percentage in comparison to other countries, India’s population is actually quite large at 457 million people. According to Statista, India is the 2nd largest online market, ranked only behind China. Of the 40% of the population online, an estimated 48% will shop online in 2018, resulting in an astounding 224 million online shoppers.

E-commerce Landscape

Indian consumers are more comfortable purchasing less expensive items online. In fact, when asked which items were bought online in the past 12 months, 75% said clothing, 59% shoes, 51% consumer electronics, 47% bags & accessories, 42% books/movies/music/games, and 41% cosmetics and body care.

Indian consumers are also more interested in shopping cross-border for fairly inexpensive items, namely clothing & footwear (45%), cosmetics (26%), mobile phones (24%), toys (20%) and gifts/flowers (17%). However, 66% of online shoppers only purchase domestically, while 27% shop both domestically and cross-border. Another 7% shop only cross-border. The main reasons consumers are shopping cross-border include better quality (42%), trustworthiness (37%), better conditions (26%), and a broader product range (24%).

Trustworthiness, however, is not only an issue for cross-border shopping. Indian consumers seem to really struggle with trust in webshops, as well as consumer reviews. An overwhelming 65% of consumers do not trust product ratings, 72% believe fake consumer reviews are the ‘norm’, and 56% do not trust product reviews. Additionally, likely due to poor logistics throughout the more rural parts of the country as well as trust, cash-on-delivery is still forecasted to be the preferred payment methods amongst Indian consumers.

 

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