E-commerce leader Flipkart may have already grossed $1 billion in sales, but other leading e-tailers are fast catching up.Myntra and Snapdeal are both anticipating to hit the billion dollar mark soon.
Ganesh Subramanian, COO, Myntra.com, says the Bangalore based firm hopes to attain $ 1 billion in sales by 2016."We are on track towards attaining this goal," says Subramanian.While Sachin Bansal, Flipkart co-founder says the company has attained the $ 1 billion sales mark a year ahead of their target, " this means we have grown 100x in the last three years."
Snapdeal on the other hand expects to cross the billion dollar sales mark by next year, which like the rest of the players in the fray, had recently raised funds to steer ahead its growth plans and build up its systems.Experts however point out that these $ 1 billion ambitions are "too small", when compared to sales of global e-commerce giants like eBay, that is gunning to sell merchandise worth $ 110 billion in two years time.
"E-commerce companies here are doing it all to gain a competitive edge. Be it raising funds or targeting tier II and III cities," says Harminder Sahni, managing director of consultancy Wazir Advisors.Online retail sales in India are forecast to grow to $ 76 billion by 2021, from just about $ 600 million at the end of 2012, as per retail consultancy Technopak.
This $ 76 billion nonetheless looks minuscule compared to China, where online retail sales are expected to touch $ 650 billion by 2020, from about $ 20 billion two years ago, as per McKinsey numbers."Indians are still hesitant to actively shop online and buy in large numbers. The last few years have seen the rise of countless firms across product categories in the e-commerce domain. Average spends by Indian consumers are limited," says a retail consultant.
Data from US based analysts comScore and Retail Decisions states Indians on an average spend between $24-35 per online transaction. American shoppers on the other hand spend $150-160 per online transaction.However Bansal feels the growth potential is huge.
"The virtual mall culture has spread to tier II and III markets owing to an increase in disposable income of consumers, coupled with restricted choices available offline. An immense opportunity is waiting to be tapped in these markets."With limited average consumer spends, rise of multiple e-tailers, the market looks set to engage in some fierce competition which can lead to consolidation, buyouts and washouts of small companies.According to Swati Bhargava, co-founder, of cashback site Cashkaro, the Indian market is getting extremely competitive. "Competition is good but can lead to consolidation. In the future, some players will survive, others won't."
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