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India's E-Commerce Sector Awaits More Billion Dollar Babies in 2015

The passing year saw big investors from India and abroad putting their money on various e-commerce ventures, which got funds to the tune of $3 billion from individuals, companies and private equity firms.
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India's E-Commerce Sector Awaits More Billion Dollar Babies in 2015

New Delhi: From Amazon to China's Alibaba to Flipkart, everyone wants to have a pie of the burgeoning e-commerce market in India and consumers are not complaining with sweet sale deals coming their way.

No one has any doubt about future growth prospects of the e-commerce market in India and experts believe that the country may see many more billion-dollar entities in this space during the new year 2015, while expanding the size of this over $3 billion marketplace.

The passing year saw big investors from India and abroad putting their money on various e-commerce ventures, which got funds to the tune of $3 billion from individuals, companies and private equity firms.



The industry players expect the fund inflows to continue, or maybe get stronger in 2015 as well.

"With large scale global investments, growth of niche category e-commerce firms and the entry of global competitors/ brands, e-commerce landscape in India looks very promising," said homegrown online marketplace major Flipkart Co-founder and CEO Sachin Bansal.

Today, India is one of the fastest-growing e-commerce markets in Asia/Pacific along with China. With increase in internet penetration, adoption of smartphones and lower data rates, the way India shops is completely changing, he added.

Kunal Bahl, co-founder and CEO of Snapdeal, said that e-commerce sector saw phenomenal growth this year and is changing the way people shop.

"We are focused on delivering the best shopping experience for customers. We are investing heavily on logistics and our platform so that consumers have a richer experience," he added.

Analysts say the online shopping space in India is expanding at a massive scale and the journey is not yet over.

Consulting firm PwC's India Technology Leader Sandeep Ladda said the e-commerce sector has seen unprecedented growth in 2014.

Also, in terms of funding, renewed market sentiments post the formation of the new government helped and overall business confidence significantly improved, Mr Ladda said

Research firm Technopak's Associate VP Pragya Singh said 2014 was an inception year for the e-commerce space with intense competition and investor interest.

"Players had an urgency to scale up and grab leadership positions. Leaders are beginning to emerge," she added.

Apart from the traditional online formats of retail and lifestyle, newer online business segments like classifieds, real estate, grocery and healthcare have also become popular and will continue to gain traction, she added.

Going ahead, she said the market will see leaders emerge more clearly as the competition will intensify.

Besides, niche players will evolve as well as the logistics will continue to evolve. Also the sector might see consolidation, she added.

Along with online shopping, online payments industry is also witnessing a strong growth. The further development of online payment and mobile commerce offers great opportunities in 2015 as well.

For consumers in small towns and cities across India, mobile devices will be the only contact point in their evolution towards becoming online customers, while others in big cities will use smartphones along with computers.

Payment solutions provider Oxigen said journey of online payment mechanism was primarily driven by cash on delivery as it accounted for a major share contributing to the sales.

E-commerce and payments brands significantly encouraged transition and transactions flow through mobile application as a platform, Oxigen Services Deputy MD Sunil Kulkarni said.

"The 3 key e-commerce players - Snapdeal, Flipkart and Amazon - with their special schemes pushed for traffic from online to mobile application resulting in tremendous traffic shift," he added.

In 2015, he said that mobile is expected to be a major platform in view of smartphone population touching 100 million users including Android, Windows and iOS.

PayU co-founder and CEO Nitin Gupta said 2014 saw an increased number of payments happening through mobile devices.

The number increased 2-3 times from 2013 levels and now mobile devices account for 35 per cent of total transactions.

"2015 will see a deeper marriage between offline and online in terms of collecting payments. Many small merchants like brick and mortar shops, mom and pop shops, individuals etc will start collecting payments online," he said.

Also, he added, there will be an increase in adoption of online collection among establishments like electricity boards, schools. There will also be a rise in the number of people using mobiles to pay at physical stores.

"2015 will also see a surge in the use of wallet services to make payment with a lot of benefits being provided by payment companies to the users," he said. .

"It was driven by rapid technology adoption led by the increasing use of devices like smartphones and tablets and access to the Internet through broadband, 3G, etc, which led to increase in online consumer base," he added.



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