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Indian e-Tailing Industry Grew by Only 12% in 2016

Amazon have succeeded in altering the market share game and captured big portion of the aggressively-contested industry.

Press Trust Of India

Updated:January 31, 2017, 12:28 PM IST
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Indian e-Tailing Industry Grew by Only 12% in 2016
Amazon have succeeded in altering the market share game and captured big portion of the aggressively-contested industry. (File Photo)

After a whopping 180% growth in 2015, the Indian e-tailing industry expanded by merely 12% in 2016 to clock revenues of $14.5 billion, research firm RedSeer said.

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According to RedSeer, the biggest impact of this "adverse market condition" was faced by established players like Flipkart and Snapdeal, whose growth remained flat, if not worsened.

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However, new entrants like Amazon have succeeded in altering the market share game and captured big portion of the aggressively-contested industry, it added.

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Terming 2016 as the "speed-breaker year", the report said the industry GMV (that was growing at an annualised triple digit rate from 2013 onwards) dropped down to about 15% in 2015.

A lot of sceptics announced this as the doomsday for the Indian e-tailing market (and consumer internet in general)- with their views being further fuelled by the devaluation of Flipkart, the bellwether for the industry, by various funds, it said.

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Considering that the e-tailing industry grew at over 100% for two consecutive years before 2016, RedSeer expects the 2020 numbers to be $80 billion.

"For these numbers to be achieved, the industry would need to grow at 45% CAGR over the next four years, from the exit GMV run rate of 2016," it said.

RedSeer Consulting founder and CEO Anil Kumar said the Indian E-tailing players might have faced a lot of challenges in 2016, but fundamentally this sector is expected to grow 4X-5X times in the next 4 years.

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