Online retail swells to $12.6 bn, with one million traders

India has about one million online retailers — small and large — which sell their products through various e-commerce portals, according to a recent report by the Internet & Mobile Association of India (IAMAI).

These retailers sell products across categories such as electronics, books, apparel, accessories, footwear and jewellery. The presence of such a large number of online sellers testifies to the efficiency, lower capital costs and deep outreach that the online marketplace provides to the retailers, said Subho Ray, president, IAMAI.

According to the IAMAI report, online retail in the country touched $12.6 billion (Rs 62,967 crore) in 2013.

Online giant Flipkart.com is one such example. Its February sales figures show its annualised gross merchandise value (GMV) has crossed the $1-billion mark (about Rs 6,000 crore), a landmark the company targeted to achieve in 2015.

GMV is the industry term for the total worth of sales transacted on the e-commerce portal. Snapdeal, another key e-commerce player, is expected to top $1-billion mark in GMV soon.

IAMAI has identified key segment drivers such as apparel and jewellery brands, which are marketing and selling their products increasingly through the online channel. The Association’s report notes that consolidation and growth of logistics will drive further development of the sector.

According to the report, although marketplace players run from city centres, the bulk of logistical management such as storage and deliveries are being handled from Tier-II or Tier-III cities. This leads to “equitable employment generation and bridging the urban rural divide”, says Ray. 

Regional growth patterns indicate that apparel and fashion accessories account for the bulk of sales in the east and south, while jewellery, leather and consumer item sales are prominent in the northern and western sectors.

While online retail is growing at roughly an equitable growth rate across all regions in India, the western region has a slight advantage over the extreme eastern belt.