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E-commerce is Rs 9,200 Cr market in India
By siliconindia
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Wednesday, 10 October 2007, 19:30 IST
Mumbai: The e-commerce market in India is expected to touch Rs 9,210 crore by the end of fiscal year 2007-08. The market which has an estimated market size of Rs 7,080 crore at the end of 2006-07, is expected to grow at an average rate of 30 percent in 2007-08, according to a survey conducted by the Internet and Mobile Association of India (IAMAI) and Indian Market Research Bureau (IMRB).
Among the various businesses, online travel segment which leads the pack is expected to grow at the rate of 30 percent and reach Rs 7,000 crore by the end of 2007-08. This would be followed by Online Classifieds, which is projected to reach Rs 820 crore. eTailing (online retail) marked Rs 850 crore in the year 2006-07 and is expected to be a Rs 1,105 crore industry at the end of 2007-08. Digital downloads and paid content accounted for the rest.
As per the study, the three major factors of e-Commerce in India were saving of time, convenience associated with shopping at home and the availability of a range of products. However, the report also highlighted the challenges to growth such as product quality, the ability to bargain and security issues with regard to e-transactions.
The report also said that due to the recent growth in malls and hypermarkets, e-Commerce has to bank on the convenience and discount platform as there is no way that it can compete with the offline platforms on the experience provided.
The contribution from the non-metros is expected to increase by the end of 2007-08. This change would be bought about by higher internet penetration in small towns and limited reach of physical distribution channels of established sellers. These factors, coupled with higher disposable income, would compel the net users in these towns to buy online.
In future, e-Commerce will be more vibrant through mobile phones rather than PCs. As the mobile users become familiar with online buying, the purchase of high-involvement products is expected to rise.