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