E-tailing will contribute as much as 25% of the total organised retail sales in by 2020 and will reach $60bn in gross merchandising value, according to ‘Digital Retail 2020’ released by Google and A.T. Kearney.
The report predicts that the total number of online shoppers will grow to 175m by 2020 and one third of customers will drive two third of total online shopping spends.
Some of the other findings of the report include a 5X growth in number of women shoppers by 2020 and women currently shopping online will more than double their share of online spend.
Lifestyle (apparels and accessories) as a category will overtake consumer electronics to become the largest online category by 2020 at 35% of the total online spends. Consumer electronics will be at 20% by 2020. Niche categories like home (furniture and furnishing) and personal care will see high adoption due to assortment and convenience of purchase especially in Tier 2+ cities.
By 2020, 55% of online volumes will be driven by cashless transactions (as opposed to ~40% today). Mobile wallet share will double by 2020 to reach 15% from current 8%. The base of online sellers will need to grow by 5X+ to cater to the increase in demand from users across geographies and improve delivery capabilities.
As per the report, value added service will be a key differentiator and over 90% of the online buyers will be willing to pay for premium value added services -- over 46% of online buyers said that they will be willing to pay extra charges for faster delivery; 37% for hassle free return and 35% were willing to pay more for extended warranty.
Rajan Anandan, VP & Managing Director, Google SEA & India, said, “The e-Tailing Industry in India is at an inflection point and will touch 175 million online buyers by 2020. Having said that,the next three to four years will be critical for the Industry to get on the path of sustained profitability."