Digital commerce in India to reach Rs 211,005 cr by year-end: IAMAI-IMRB

The digital commerce market has grown at a CAGR of 30 per cent between December 2011 and December 2015 and was valued at Rs 125,732 crore by the end of December 2015. It is estimated to reach Rs 211,005 crore by December 2016, according to the Digital Commerce Report 2015 published by the Internet and Mobile Association of India (IAMAI) and IMRB.

The report finds that online travel industry continues to grow strongly with 61 per cent share while share of online non-travel has improved over the previous year to reach 39 per cent. In December 2015, share of e-tail was 29 per cent. Mobile Phone and Accessories, PCs and Apparel and Footwear continue to be the dominant categories that are selling within the e-tail segment.

Domestic air ticket and railways booking continue to be among top contributors to the online travel spends. These were the segments that were the top contributors in previous year also. Hotel booking has seen a substantial movement in Y-o-Y growth at 165 per cent, from Rs 1,965 crore in December 2014 to Rs 5,200 crore in December 2015. Spend on online railway ticket booking has also grown at around 34 per cent, from Rs 16,200 crore in 2014 to Rs 21,708 crore in 2015. Online travel is expected to grow at a CAGR of around 40 per cent to reach Rs 122,815 crore by end of 2016.

The report also finds that e-tailing maintained a strong performance with a 57 per cent Y-o-Y growth. Among e-tail categories, Mobile Phone and Mobile Accessories continue to be the top contributor to the overall pie. Given that there is an increased demand for smartphones in India, this could be a contributing factor. Computer and consumer electronics, as well as apparel and accessories, account for the bulk of India retail ecommerce spends contributing close to 49 per cent collectively to overall spend in the e-tail segment.

Apparel and Footwear sale has almost doubled as compared to the previous year, recording a 52 per cent Y-o-Y growth from Rs 4,699 crore in December 2014 to Rs 7,142 crore in December 2015. This segment is expected to gain further momentum and reach Rs 72,639 crore by end of 2016.

According to the report, financial services market grew at a CAGR of around 17 per cent between 2012 and 2015. The market reached close to Rs 5,231 crore in terms of transactions as of December 2015. The demand for online utility payment is expected to reach Rs 6,068 crore by December 2016.

Other online service market that includes booking movie tickets and tickets for other events, online commuting or cab hire, online grocery and food deliver, was Rs 3,823 crore in December 2015. In December 2014, the market was around Rs 2,025 crore. In future online grocery and online food delivery are expected to emerge as big ticket items. Demand for other online service is expected to grow at a CAGR of 36 per cent to reach Rs 5,207 crore by December 2016.