Thanks to the increasing broadband services and an emerging middle class, Asia- pacific region will be ahead of North America in worldwide business-to-consumer ecommerce sales.
North America has always been a major player in this sector. This year, for example, eMarketer estimates the US and Canada will account for 33.4% of all online sales—but that’s down from 35.6% last year and 38.1% in 2010.
Sales as a portion of the worldwide total are also falling in Western Europe, where many countries have a relatively mature ecommerce market. In 2010, Western Europe made up 28.7% of all online B2C sales, but that will drop 2.5 percentage points this year.
Asia-Pacific is the region driving down these mature markets’ shares. By next year, 34% of all ecommerce sales will come from Asia-Pacific, up 8 points over 2010 and finally surpassing North America’s share. (Asia-Pacific passed Western Europe’s share of B2C ecommerce in 2011.)
Also next year, China will become the main source of online buying in Asia-Pacific, jumping ahead of traditional leader Japan. By 2013, China will have increased its share of the B2C ecommerce total by 10 points compared with 2010, when it made up just 3.7% of the worldwide total. Within Asia-Pacific alone, China’s rise to prominence—and Japan’s corresponding fall—is even starker.
Another report by Forrester reveals that while compound annual growth rates in the mature e-commerce markets of Japan, South Korea, and Australia will run 11% to 12% over the next five years, in the rapidly growing markets of China and India, these growth rates will be 25% and 57%, respectively.
The report also highlights the rapid growth of the e-commerce market in neighbouring China, where a CAGR of over 20% will take the market to over $350 billion.
Considering the fact that youth form a significant proportion of the regular Internet users (approximately 78% of the regular Internet users are in the age group of 19-35) and average household disposable incomes are on the increase, consumerism has majorly set in.
if we consider the most successful e-commerce website in India, it tells us about the expansion of e-commerce. Flipkart clocked revenues of Rs 500 crore in FY 2011-12, a ten-time increase from Rs 50 crore in FY 2010-11.
As far as its presence in the country is concerned, the company expanded its logistics (or FKL, which we deciphered as Flipkart Logistics) to 37 cities from 7 cities in the previous fiscal year. Till September last year, the company had reportedly grown that to 13 cities; so it is roughly doubling its logistics reach every 5-6 months.
In line with its superfast distribution growth, its employee strength has grown four times to 4,800, from 1,200, in a year’s time.
Additionally, the total number of items shipped in FY 2011-12 rose almost seven times, with the company shipping 6.47 million products as against 0.96 million in the previous fiscal.
The company’s customer base also increased more than ten times to 2.08 million from 0.2 million over the past one year while website visits increased to 102 million, from 40 million.
Last year, the company came up with new features like the Flipkart wallet (it allows users to store money with Flipkart and redeem the same to purchase products), EMI facility for payment and product comparison, among others.
The company also added a number of new categories to its product portfolio including audio players, health and personal care products, large appliances, stationery and digital content (in the form of the digital music store Flyte). As of now, Flipkart offers products across 12 categories but even that is not enough as the company is still looking to expand its range of products.
E-commerce sales in India will surpass $1 billion for the first time this year and reach $8.8 billion by 2016. India’s e-commerce industry is set to grow on the back of rising demand from consumers and increasing penetration of technology. These statistics give credence to the fact that E-Commerce in India is here to stay.
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