A country with a huge nominal GDP based on 2015 data, India has already replaced Japan to be the 3rd biggest economy in PPP terms. Based on the current data, China ranks number 1 followed by the United States, India, Japan and Germany. With the positive economic trajectory of the country, it has successfully shifted from agriculture to services in a span of 30 years with a shift in focus to the growing manufacturing sector of the country.
In the 1980s, the percentage share of agriculture to the Indian economy was 36% but now the share is reduced to 17% with the services sector getting the highest percentage share at 53%.
High purchasing power parity
In today’s world where purchase modes have moved to prefer the online mechanism, ecommerce and online sales are expected to continue to increase. This will facilitate buying habits which are already being fueled by high purchase power and wider choice.
Based on the data from the OECD released in 2012, India has a high percentage share of the world total when it comes to GDP at purchasing power parity next to China and the United States. The increase in the disposable income is attributed to younger people who prefer discretionary spending.
Brand conscious purchase habits
We see a price sensitive market transforming into one with heightened brand awareness. This has caused a sea change in purchase tendencies and has opened up the Indian market to a wider shopping experience and more opportunities for sellers. Plus concepts like credit cards are contributing towards a rapidly growing consumer culture.
E-commerce and online sales
As more people have disposable income to purchase products of their choice, it presents a good opportunity to boost various businesses including ecommerce and online sales of different goods. It is also apparent that Indian customers willing to spend on regular purchases are not restricted to urban areas but are widely spread all over the country.
Marketers can use innovative strategies to reach their end consumer. Some begin with metros and then spread out to the Tier 2 cities, while others focus on specific belts or sections of the country at a time. In any case, the entire country is open to spending depending on the relevance of the product in that area. This demonstrates good potential in a fast connecting nation.
Top E commerce players in India
As a growing trend, a large section of Indian shoppers have begun to opt for the convenience of online shopping, placing the following websites in the top 5 positions:
- Indiatimes.com (shopping section)
- Rediff.com (shopping section)
The future of E commerce in India
In 3 years time, it is projected that retails sales in India are soon to overtake that of North America and Europe. Currently, the retail market size of India is similar to that of Germany. As retail sales continue to grow, the e-retail market will follow. It is projected that in the next 6 years, the Indian e-commerce will continue to grow. In fact, the country data is estimated to reach about USD 22 to 30 billion by 2020.