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Online retail in the country is expected to be $170 billion by financial year 2030, growing at an average of 23 percent yearly, according to a Jefferies report.
Online retail, which is currently around 25 percent of total organised retail market in India, can potentially increase to around 37 percent of the total organised retail market during this period, the report said.
Currently, the total online retail in the country is pegged at $18 billion.
Spends per online shoppers, which is estimated at Rs 12,800 is expected to increase to Rs 25,138 by FY30, with consumers shopping online for other segments, beyond electronics and apparel.
It noted that electronics, including mobile phones, has grabbed the market share from physical retailers, largely due to heavy discounting and cashback online in electronics.
“Apparel and electronics have been present as categories in online retail space for quite some time now in India, but online grocery is increasingly witnessing new consumers as companies such as Bigbasket and Amazon Pantry are heavily advertising their discounting days, which takes place at the start of every month,” the report said.
“We believe that new customers will continue to enter online grocery, given low differentiation in grocery and convenience for consumers. However, penetration of online retail in grocery will continue to remain lower,” it said.
Personal care, including make-up, too is gaining its market share online.
Jefferies noted that increase in online penetration has been a function of both discounting and convenience, however, over the medium term, discounting in the system should rationalise and convenience will be the key driver.
However, it observed that product quality remains a key concern for most of the consumers shopping online and there have been lot of instances in the country where consumers have got a counterfeit or a fake product, especially in categories such as perfumes and cosmetics.
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Source: Global Economy