State of e-Commerce in India

A Research report by
for
September 2012
Honarabl e Mi ni ster Mi l i ni d De-
State of Ecommerce in India - Sept 2012
r
and e-Commerce are being conceptualized and run today. Social Media is gaining dominance in our
and the citizens.
We observe that most companies have a social media strategy in place and Cloud based
The roll out of 3G and 4G broadband services, the National Broadband Plan and much expected
opening of the Retail Sector will certainly usher new business opportunities for e-Commerce in the
country.
I am happy to note that most of the leading e-Commerce companies are participating in the 2nd
ASSOCHAM Conference on e-Commerce to deliberate upon the emerging opportunities in
e-Commerce in the country.
I thank the ComScore Team for this report and convey my good wishes for the success of this
Conference.

D. S. Rawat,
Secretary General
State of Ecommerce in India - Sept 2012
comScore Message
comScore in India is the preferred partner for audience measurement for publishers, agencies and anyone who has a
business online. I believe that the e-commerce report will help a lot of travel and retail players in tracking competition trends,
e-commerce marketeers to harness the potential of various advertising channels and for investors to look deeper into the
upcoming trends and potential opportunities.
We sincerely thank ASSOCHAM for choosing us as a knowledge partner and giving us this opportunity to present our
Kedar Gavane,
Director,
comScore Inc.
State of Ecommerce in India - Sept 2012
India is among the fastest growing online market and has registered a 41% growth in the last 12 months. Internet usage has
reached almost 10% penetration in India. With this trend, e-Commerce has shown a very exciting growth trend among travel
and retail sites. We expect a similar or even better growth in the coming years as more users come online through easier
internet access and wider mobile internet penetration.
The report captures data on transactions, payment types, category retail and also consumer demographics for online
purchase behavior. We will continue to add to the list more information on all key players in the market and growth trends
across all sub-categories in Travel and Retail. We hope that this will be one of the most helpful reports in the industry.
Tabl e of Contents
Global online growth trend 2
India - Digital achieves critical mass 3
Online Users : A Demographic study 4
BRIC Nations - a comparison 5
e-commerce : Global Trend 6
Travel : A closer look 7
Retail : A closer look 8
10
Future Trends 11
State of Ecommerce in India - Sept 2012
Global online growth trend
Internet usage globally has been on the rise with most of the growth has come from markets in Asia
Paci fi c and Latin America. The chart below shows the growth in online population across regions
from July 2011 to July 2012. The global online population as of July 2012 stands close to 1.5 billion
users, growing at a rate of 7% Y-o-Y.
the month of July 2012 stood at 134 million and grew from 120 million in July 2011. The online user
growth has primarily been fueled with improved network infrastructure and growing need of
online content consumption.
With a growing user base, the engagement among online users has also grown in the last 12 months
time spent has increased over 5.4% per visitor and pages viewedhas grown by 7% per visitor. The
following diagram shows the increase in engagement among global users.
State of Ecommerce in India - Sept 2012 2
Asia Pac Europe North America Latin America Middle East & Africa
134 134
213
399
617
121 120
206
370
574
Jul 11 Jul 12
Unique Visitors (in millions)
15+ Age, Home and Work users
7%
8%
3%
11% 11%
Time spent increased by 5.4% Pages viewed grew by7%
Visits increased by 8.7%
*Data metrics per visitor (change between july 2011 and july 2012)
India - Digital achieves critical mass
engagement in terms of time spent and consumption has been on the rise. Even with an explosive
growth, most of the categories in India are showing below average penetration compared to global
usage patterns. The total internet user base in India (inclusive of shared devices and mobile) is at 124
million users in the month of July 2012. 1 out of every 10 Indians are online making it a 10% online
user penetration in India.
The chart above shows the total internet usage by two segments
i. 15+ age, home and work users
ii.Shared usage + mobile users + below 15 age group
Non 15+age, home and work usage has been high in India with close to 50% user base accessing
internet through shared devices and mobile. The time spent has increased by 33% with the user base
spending 48 billion minutes online in a month. The consumption of content online has grown to 70
billion pages a month from 54.6 billion in July 2011.
State of Ecommerce in India - Sept 2012 3
Unique Visitors (in millions)
The explosive growth in last 12 months has come from all categories and has also increased the
Online Users : A Demographic study
With the growth of 41% online users, India has seen a growth across demographic segments.75%
of total users between the age group of 15-34 years. In july 2012, the female population
contributed to almost 40% of total users. The chart below shows a demographic segmentation
based on age group and gender in India.
With 75% of online audience between the age group of 15-34 years, India is one of the youngest
online demographic globally. This is expected to be a continuing trend in coming years, given the age
distribution in India. The age distribution has also contributed to consumption proportionally and its
not surprising to see the growth among categories focussed on younger audiences in the last 12
months.
Among the above age segments, 15-24 years of age group has been the fastest growing age
segment online with user growth being contributed by both male and female segments. The top 5
popular categories accessed online are social networking, portals, search, entertainment and news
sites.
State of Ecommerce in India - Sept 2012 4
Demographic Profle of Online users(July 12)
BRIC Nations - A Comparison
Among the BRIC Nations, India has been the fastest growing market adding over 18 million internet
users and growing at an annual rate of 41%. India is also among the top 3 fastest growing markets
worldwide in the last 12 months.
China added over 14 million users to reach 336 million internet users by the end of July 2012.
Russia and India have shown similar trends in online usage patterns along with similarities in
e-Commerce and payment types.
State of Ecommerce in India - Sept 2012 5
Unique Visitors (in millions)
e-Commerce : Global Trend
e-commerce globally has been on the rise. Both travel and retail have grown faster than several other
icategories in India.
Travel visitation has an overall reach of close to 40% worldwide and has grown over 12% Y-o-Y.
Retail visitation has an overall reach of close to 72% worldwide and has grown over 13% Y-o-Y. More
than a billion people worldwide visit retail sites every month.
In India, Travel has always been ahead of the curve in terms of visitation and transactions compared
to world averages and is at 44% penetration and has grown over 41% from last year.
Retail has grown 43% and reaches 60% penetration among online users, but is still below world
averages. This shows the immense potential that the retail category holds in India with online retail
filling the distribution and convenience gap. The ecosystem to support growth in online retail has
also evolved including improvement in logistics and awareness among brands in making the prouducts
available online.
State of Ecommerce in India - Sept 2012 6
Jul 2012
44
39
Worlwide India
% Reach : Travel
Jul 2012
59.9
72.3
% Reach : Retail
Travel : A closer look
State of Ecommerce in India - Sept 2012 7
% Reach: Top Travel Sites
Average transaction size
Duplication among OTAs
Online travelhas seen growth across all subcategories including car rentals, Online Travel Agents, OTS
Airlines as well as hotels and travel information sites. As the inter city migration has increased, a
proportional upward trend is seen in usage of transport including Train, Air. The top 10 sites among the
travel category show a good mix of travel options as well as information sites showing online users
seeking information on travel options on a regular basis. 1 out of 5 online users in India visit the Indian
Railways site.
Indian Railways is also among the most visited sites in India with over 12 million unique visitors a
month. There has been an strong overlap among the OTAs with a lot of consumers trying to compare
travel options before purchase. The diagram above shows that the overlap in the category among the
top 3 OTAs in India.
MakeMyTrip, Yatra and Cleartrip individually reach over 11.6%, 8.3% and 3% of total online users
respectively. But due to strong duplication among the OTAs the unduplicated reach among the top 3
OTAs is 16.4% of total internet users. The same trend is seen among travel information sites and travel
data aggregators in India.
The average transaction sizes among travel sites shows a gradation as below:
Unduplicated audience 16.4%
Retail : A closer look
Flipkart leads the way among the online retailers in India with 7.4 million unique visitors a month,
growing at 431% annually. Snapdeal has been close second with 6.9 million uniques. Jabong and
Myntra have been competing closely in the lifestlye category with over 5.3 million uniques each.
HomeShop18 has over 4 million uniques a month.
Apparel has been t he
f a s t e s t g r o w i n g
subcategory in retail and
reaches 13.4% online users
i n I ndi a. Compar i son
shopping, as research of
retail online grows continue
to dominate. Most of the
State of Ecommerce in India - Sept 2012 8
Reach % in Jul 2012
Amazon
Flipkart
Snapdeal
Jabong
Myntra
Homeshop18
0 4 8 12 16
6.5
8.5
8.6
11.1
11.5
15.4
Jul 11 Oct 11 Jan 12 Apr 12 Jul 12
37.5
33.3
29
27.6
26.1
Retail
Unique Visitors (in millions) % Reach: Top Retail Sites
Retail category penetration has increased to 60% reach and has grown to 37.5 million unique visitors
a month, an overall growth of 43% annually. The growth has come across all retail categories and most
of them show promising transactions and conversion rates along with growth in visitors. The top retail
sites shown above in India have each seen a growth of over 100% in the last 12 months.
Amazon is the most visited retail site with most of the traffic slipt among Amazon.com, ImDB and
Junglee.com.
comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow as more
categories of retail come online. Travel category has shown this trend with high overlap among OTAs
and this trend is expected among online retailers as well.
Consumer goods, sports/outdoor products and retail food sub categories have also shown early
growth signs. Consumer goods being a popular category among horizontal retailers is still way below
global averages.
Flowers/gifts/greetings is the only subcategory which has shown de-growth of over 33% in the last 12
months.
State of Ecommerce in India - Sept 2012 9
Average transaction size
Vertical e-Commerce categories including baby products, apparel, shoes and other lifestyle categories
have also shown tremendous growth. Wider assortment and product availability have helped these
retailers in growing business online.
More retailers online have heavily depended on online marketing to scale. The online marketing spends
across all content categories and effective marketing campaigns reaching out the right target audience
have increased visitation and hence conversion among retailers.
The average transaction sizes among some of the top retailers are as below:
Payment type classifcation
Direct Debit
58%
Visa
21%
Mastercard
SBI
29%
SBI Debit
26%
ICICI
17%
HDFC
14%
PNB
5%
AXIS Bank
5%
Others
3%
12%
cash/COD
7%
All Others
2%
Indian Payment Type Transaction Share, Q2 2012
IRCTC direct debit breakup
Avg transaction size by
Payment type
Average transaction size in India is $31
Direct debit is the most commonly used payment type contributing to over 58% of the overall
payments in India. Cash on Delivery which has been a popular mode of payment method in retail
category and form close to 7% of the total transactions. COD has a much higher contribution among
retail category with more and more online retailers using this option to increase trials among customers.
bill value per transaction at $110 followed by Visa and
MasterCard. Direct debit average is low compared to
COD average values as most of the direct debit
transactions come from IRCTC.
The adjacent pie chart shows the break up of direct
debit payments in IRCTC. State Bank of India is the
most popular direct debit option among train ticket
buyers which ICICI and HDFC contributing to over 17%
and 14% respectively.
State of Ecommerce in India - Sept 2012 10
$48
$47
$33
$21
$110
$20
$178
$43
Visa
MasterCard
Cash/COD
JCB
American Express
Direct Debit
PayPal
All Other
The average transaction size online in India across both Travel and Retail category is $31 between Apr
- Jun 2012. This amount is set to increase with consumer confidence in buying higher priced products
in the coming months. Among the payment types, American Express has the highest average
Future Trends
State of Ecommerce in India - Sept 2012 11
e-Commerce in India has grown rapidly across both travel and retail in the last 12 months and has
shown an above average growth compared to many categories online. Retail growth has been fueled
by several players getting funded, aggressive marketing and the consumer need and convenience to
buy these products online.

Travel e-commerce has been above global averages and continues to soar in terms of visitation and
transactions. IRCTC has led the category with the largest transaction share and dollar share
contribution. Airline, OTAs and hotels have seen steady growth and will remain as standard travel
options for many consumers in the coming months. Car rentals and bus booking online have shows
very high growth especially among urban consumers. With further penetration of the internet, these
two categories will have a great amplified reach and conversion rates.
Retail category has seen peculiar growth with a lot of retailers pushing for trials among consumers
through discounts and freebies. This is a changing trend as consumers having tried online shopping,
the credibility of these sites will further bolster the transaction volume on retail sites. Among all retail
sites apparel and lifestyle goods have seen an early adoption among consumers. This again is a
growing trend and we see a good amount of contribution in dollar share and transaction share coming
from lifestyle categories along with home furnishing and lifestyle goods.
Comparison shopping has been on a growth but is still underserved compared to global averages. The
need to compare and consume in India across other online categories like travel, shows a similar
consumer behavior in retail category. In the coming months, expect more and more consumers relying
on online research of products for features and prices.
Online retail has seen a heavy overlap with social networking and search due to aggressive marketing
and strong inclination towards social commerce. We expect a larger portion of online retail from social
commerce with India positioning itself as one of the fastest growing social networked user base and
also larger size of social groups.
To conclude, e-Commerce has seen tremendous growth in the last 12 months. Models like Cash on
Delivery and other consumer centric payment options and improved service quality will boost overall
sales. It is definitely the most exciting phase among online retailers and consumers as this learning
curve will put India on the global map as one of the largest e-commerce markets in the coming
months.
About ASSOCHAM
ASSOCHAM acknowledged as Knowledge Chamber of India has emerged as a forceful, pro-active,
effective and forward looking institution playing its role as acatalyst between the Government and
industry.
ASSOCHAM renders its service to over 4,00,000 members which includes multinational companies,
more than 400 Chambers and Trade Associations from all over India encompassing all sectors.
ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities in
Corporate Social Responsibility, Environment & Safety, e-Commerce, Corporate Governance,
Information Technology, Agriculture, Nanotechnology, Biotechnology, Defence, Cyber Security,
Entertainment & Media, Pharmaceuticals, Telecom, Banking & Finance, Company Law, Corporate
Finance, Economic and International Affairs, Tourism, Civil Aviation, Infrastructure, Energy Power,
Education, Legal Reforms, Real Estate, Rural Development etc.. The Chamber has its international
Business Chambers in more than 75 countries.
Mr. D. S. Rawat
Secretary General
ASSOCHAM
Ph: 011-46550555
Email: d.s.rawat@assocham.com
State of Ecommerce in India - Sept 2012 12
About comScore
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Mobile Analytics
State of Ecommerce in India - Sept 2012 13
comScore Global Reach - 43 global markets
You
State of Ecommerce in India - Sept 2012 14
For India e-commerce queries : please contact
kgavane@comscore.com
aramaswamy@comscore.com
Research Team
Kedar Gavane
Andrea Jacobs
Christian Lunoe