 "Online retailing will triple to Rs 50,000 cr in 3 years , says Crisil")
The buzz around ecommerce and online retailing in India is getting louder. Rating agency Crisil has said the online retailing market will triple to Rs 50,000 crore in three years.
It expects the buoyant trend to sustain in the medium term, and believes the market willgrow at 50-55 percent CAGR to Rs 50,4oo croreby 2015-16.
[caption id=“attachment_77437” align=“alignleft” width=“380”]  Image: Thinkstock[/caption]
Though it expects e-commerce revenues to more than double to around 18 percent of organised retail by 2016 from around 8 percent in 2013, its share of the overall retail (organised + unorganised) pie will be just over 1 percent.This is compared with the US and UK’s 9-10 percent share and around 4-5 percent in China.
Crisil says new players in nichesegments such as grocery, jewellery and furniture, together with investments by existing players in theapparel and electronics verticals, will be the main drivers of the sector.
The impact of online retail is most evident in segments where there is low product differentiation, like books, music and electronics. Traditional booksellers and music stores are shutting shop after being unable to compete with online discounts. Add to that costs like lease rentals and inventory costs and brick and mortar stores don’t stand much of a chance.
For instance, Videocon-ownedPlanetM has been closing stores since 2012. Between2011 and 2013, it shut over 100 shops. In an attempt to adapt, PlanetM has adopted a kiosk-based model for expansion which saves lease rentals.
Crisil advises that physical retailers will have to up their digital game and establish a strong online presence to stay in the game. But, the report, says if precedence is anything to go by, and here Crisil uses American examples Wal-Mart and BestBuy, there is no reason why physical retailers cannot become a formidable presence in the virtual space.
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