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Indian ecommerce market to touch Rs 46,520 crore in 2011: IAMAI

According to a report on the Indian ecommerce industry released by the Internet and mobile Association of India (IAMAI), the market size of ecommerce is expected to grow by 47 per cent and touch Rs 46,520 crore by end of 2011. The internet commerce industry had its total market size increasing from Rs 19,688 crore by the end of 2009 to an estimated Rs 31,598 crore in 2010.

According to a report on the Indian ecommerce industry released by the Internet and mobile Association of India (IAMAI), the market size of ecommerce is expected to grow by 47 per cent and touch Rs 46,520 crore by end of 2011. The internet commerce industry had its total market size increasing from Rs 19,688 crore by the end of 2009 to an estimated Rs 31,598 crore in 2010.

The report further highlighted that the online travel industry which presently is the largest contributor to the ecommerce market constitutes about 77 per cent of the total market share and has grown to an estimated Rs 25,258 crore by end of December 2010. The online travel market is estimated to grow by 50 per cent and touch Rs 37,890 crore by December 2011.

As of 2009, after online travel, eTailing takes second position with 7.82 per cent market share at Rs 1,550 crore. In eTailing, computers and computer peripherals account for Rs 560.52 crore while cameras, mobiles and MP3 players contribute Rs 389 crore. eTailing is predicted to grow by 62 per cent and touch Rs 2,700 crore by 2011.

Another area that has shown significant growth is the financial services market that has grown from Rs 1,540 crore to an estimated Rs 2,000 crore by end of December 2010. This sector is expected to grow by 34 per cent and touch Rs 2,650 crore by end of December 2011. The report also highlights that areas like digital downloads is predicted to grow by 62 per cent and touch Rs 1,100 crore by December 2011. Other major contributors to ecommerce which include online classifieds (jobs, online matrimonial, cars, real estate), movie tickets, food delivery and gaming subscription are estimated to be Rs 1,210 crore.

According to the report, barring few services such as online ticketing, Indian consumers are not shopping online. Large numbers of surfers use internet to look for information about the product or service they want to buy followed by physical visit to shop for buying. Around 13.6 million internet users looked for information for purchasing product or services online. Of these, 7.47 million purchased product or services online.

Among the online shoppers, 89 per cent accessed internet to look for information on online travel services and 80 per cent actually purchased product or services belonging to online travel using internet. Cameras and mobiles were looked for information by 62 per cent of online shoppers, however only 12 per cent actually bought it over internet. This indicates that even online shoppers access internet to know more about products like cameras and mobiles but only handful of them actually use internet to purchase the same. Various reasons for not shopping online as mentioned by internet users include lack of trust, security concerns, uncertainty about product and service quality.

The report also highlighted that online shoppers use debit cards and internet banking as mode of payment for shopping online. Credit cards follow closely at second position. Paying against delivery comes at third position whereas demand draft and mobile payment is almost negligible.

The results of the report have been arrived at by conducting primary research among internet users in 15 cities as well as secondary research for triangulating the findings from external sources. Primary information about ecommerce was collected by 800 individuals through face-to-face interviews during I Cube 2009, a syndicated product of eTech, IMRB International. Secondary research was done to understand the structure and dynamics of the net commerce market in India. Information from various published resources was used to perform a data validation check.

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