E-commerce companies are gaining traction fast as after Flipkart, Myntra and Snapdeal set to hit the billion dollar sales mark soon.
Ganesh Subramanian, COO, Myntra.com, said the Bangalore-based firm hopes to attain $1 billion in sales by 2016.
"We are on track towards attaining this goal," said Subramanian.
Sachin Bansal, Flipkart co-founder said the company has attained the $1 billion sales mark a year ahead of its target, growing 100x in the last three years.
Snapdeal, on the other hand, expects to cross the billion dollar sales mark by the next year. The company, like the rest of the players, recently raised funds to steer its growth plans and build its systems.
Experts, however, said these $1 billion ambitions are "too small", when compared with sales of global e-commerce giants like eBay, that is gunning to sell merchandise worth $ 110 billion in two years.
"E-commerce companies here are doing it all to gain a competitive edge. Be it raising funds or targeting Tier II and III cities," said 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 with China, where online retail sales are expected to touch $ 650 billion by 2020, from about $20 billion two years ago, according to McKinsey.
"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," said a retail consultant.
According to data from US based analysts comScore and Retail Decisions, Indians, on an average, spend $24-35 per online transaction. American shoppers, on the other hand, spend $150-160 per online transaction.
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 and 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.
Swati Bhargava, co-founder, of cashback site Cashkaro said 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."