Skip to main content

Online revenue sales set the cash registers ringing for India’s e-tailers

A majority of businesses are very keen on adopting online platforms for increased revenue sales in India. Over 54% of businesses reported a growth of more than 20% since going online in revenue sales. These were the findings from a research study conducted by strategic market research consultancy Spire Research and Consulting spanning from August to October 2014. The full report is also available upon request.

The research study aptly titled, ‘India’s E-Tailing Industry – Seller’s Perspective’ was released at a press conference held in New Delhi today. The study was conducted across 13 states in India spread over 300 retailers in 3 sectors consisting of apparel, consumer electronics and food. These insights concentrated on current online shopping trends and its effect on sellers. Furthermore, the data was gathered through one-on-one, online and telephonic modes of communication.
More businesses are going online and using it as an extension of their brand
As shown in Table 1 above, Spire’s study revealed majority of businesses have accepted online platforms as an extension of their brand. Businesses in the apparel (82%) and food (80%) sectors seem to have an advantage by going online as compared to consumer electronics (72%). Moreover, consumer electronics seem to have a lower potential as consumers are more inclined to be involved in the purchasing process.

There is expected growth from other sectors as well which consist of baby products, books, home décor and jewelry. Japnit Singh, Senior Director, Singapore and India of Spire Research and Consulting commented by adding in, “We are pleased to introduce this study on the e-tailing space, considering the country is one of the fastest growing markets for e-commerce globally. The research clearly shows that, sellers in India have a positive sentiment towards e-commerce with maximum traction seen in apparel and food businesses. Our study clearly indicates a growing trend towards adoption of online channels. Over 50% of businesses accounting for significant revenue share from online sales even right now, with revenue shares set to rise significantly over the next five years.”

Most businesses expected to benefit from online sales
As shown in table 2 above, most businesses are leveraging online sales to gather up to 20 – 50% revenue due to emergence of more online specialists, convenient payment modes and increased awareness among inexperienced sellers. Spire forecasts that by 2020, 45% of businesses will see their online share grow to between 20 – 50% of sales.
Challenges for sellers in e-tailing industry

Despite challenges – e-tailing is set to grow further. There were relatively few obstructions faced by sellers/respondents when Spire conducted the study which consisted of:
Lack of robust payment mechanisms
Cash On Delivery (COD) options were prone to risks as well as payment delays
Difficulties in logistics and order placements
Challenges for sellers in e-tailing industry
On the other hand, businesses were expected to gain sales revenue from traditional/offline channels with sellers following a dual strategy of combining online with offline sales. Furthermore, the report also revealed the e-tailing space would eventually be dominated by a few large capital heavy organizations given the need for nationwide logistics infrastructure and a currently limited consumer base. At the same time, Tier 2 and Tier 3 cities were expected to have a faster adoption rate with greater sales margins derived directly from online channels. Furthermore, these channels will follow integrated strategy combining both offline and online sales.

Conclusion

The Spire study revealed that over 54% of businesses reported a growth of more than 20% in revenue sales since going online. Now widely accepted as an extension of any brand – online channels are raking in the moolah. With the study covering 3 major sectors – businesses in the apparel and food industries had more profits than those in the consumer electronics sector.
Spire believes that despite challenges such as lack of robust payment infrastructure, risk in COD payment options and difficulties in logistics as well as order placements – the e-tailing industry in India is poised for growth. Moreover, the study gives clear indications of an emerging trend towards adoption of online channels – with over 50% of businesses accounting for significant revenue share from online sales.

Comments

Popular posts from this blog

The ultimate precious cargo – Human organs

The transportation of human organs – especially a donor’s heart – is usually done by packing it in ice inside a cooler box and getting it to the hospital as quickly as possible. Transporters have to race against time. The heart is only viable and capable of being transplanted between 4 and 6 hours after death. But a lot can go wrong during such journeys – traffic jams, bad weather or mechanical difficulties can cause delays. In addition, a heart can be damaged if it is warmed up at the end of surgery; meaning it cannot be “tested” until the transplant operation is complete. The introduction of a new heart-preservation system is set to change all that. Manufactured by Transmedics Inc. in Massachusetts, it is specifically designed to pump oxygenated donor blood and keep the heart in “a warm, beating and functioning physiological state outside of the body”. Moreover, the heart can be monitored to keep beating for up to 12 hours. Should trials of this new system be successf...

Germany: The Eurozone’s economic powerhouse

Germany is the fourth largest global economy today. Its exports amounted to EUR107 billion in March 2015 – an all-time high since the 1950’s. Despite being the only European nation with a strong manufacturing base and rising employment rate, will Germany succeed to drive Eurozone’s stagnant economy? And what lessons does Germany’s economic success hold for the rest of the world? Germany’s resurgence With the second lowest unemployment rate in the European Union (EU) at 5.3 per cent, Germany’s economy has survived many setbacks. The economic success dates back to the Industrial Revolution due to the early adoption of coal production and rail transportation. Moreover, the fall of the Berlin Wall – the reunification of West and East Germany – and the expansion of the EU created huge market opportunities for Germany. Often regarded as the ‘Sick man of Europe’, Germany had almost lost hope of returning to rapid economic growth, undergoing recessions in 2003 and a dismal 1.2 p...

Spire shares business advice to start-ups on Indonesian market entry

On 17 July, Spire participated as a market advisor at the National University of Singapore (NUS) Market Validation Program in Jakarta, Indonesia. Jeffrey Bahar, Deputy Chief Executive Officer, Spire Research and Consulting Group held sessions with Singaporean companies planning to expand their business into Indonesia. Jeffrey pointed out the utility of high-tech approaches for start-ups entering Indonesia, such as online advertising, usage of the Internet of things (IoT), data analytics and even Artificial Intelligence (AI). These approaches enable starts-ups to bypass mature importer-principal relationships that may be hard to overcome through conventional means. He also shared with individual companies his thoughts on developing customized strategies for Indonesian market entry. Get more information :  https://www.spireresearch.com/newsroom/events/spire-shares-business-advice-to-start-ups-on-indonesian-market-entry/

Asia-Pacific nations poised to sign the world’s largest multi-lateral trade agreement, RCEP, in 2020

After six years of negotiations, more than a dozen countries in the Asia-Pacific are poised to sign the world’s largest trade agreement, known as the Regional Comprehensive Partnership (RCEP), in 2020. This agreement would boost commerce among participating countries by lowering tariffs as well as standardizing customs rules and procedures. The RCEP will widen market access, especially for those countries that do not have existing many bilateral trade agreements in place. Will India pay a price for its decision to stay out of the RCEP? Read more:  https://www.spireresearch.com/newsroom/spirethoughts/asia-pacific-nations-poised-to-sign-the-worlds-largest-multi-lateral-trade-agreement-rcep-in-2020/

2022: Recovery or Resurgence?

  The Covid-19 pandemic officially marks a grim second year this year. Nonetheless, there is some optimism among scientists that while the virus will become endemic, its threat to human life could reduce over time.  In the first of a three-part Spirethoughts instalment examining analysts’ predictions for the new year ahead, we look at 3 economic and social trends that are likely to affect the global economy in 2022.   Debt and inflation to grow . Global debt accelerated during the pandemic as governments continued to borrow. Twenty-five nations, including the US and China, now have total debt amounting to more than 300% of GDP, as central banks contribute to inflation by printing money, deepening the debt trap. Inflation, while on the rise, seems unlikely to hit the historic double-digit levels of the 1970s, as government spending should ease in 2022.   Industries overheat amid global warming “greenflation”.  The other continuing story with global imp...