Fuelled by the sustained growth of the online travel industry, the Indian e-commerce market will gallop at an impressive growth rate of 47 per cent to over Rs 46,000 crore in the 2011 calendar year, a report said.
"This growth is primarily driven by the online travel industry, which contributes 76 per cent to the total net commerce industry in India today," a report released by the Internet and Mobile Association of India (IAMAI) said.
The Internet commerce industry in India has seen a manifold increase in the last couple of years, with the total market size increasing from Rs 19,688 crore (Rs 196.88 billion) by the end of 2009 to an estimated Rs 31,598 crore (Rs 315.98 billion) in 2010.
By the end of 2011, the net commerce market size is expected to grow by 47 per cent and touch Rs 46,520 crore (Rs 465.20 billion), the study by the industry body said.
Comprising about 81 per cent of the total e-commerce in the country, the online travel market, which includes booking rail and air tickets, hotel accommodations and tour packages, is estimated to grow by 50 per cent and touch Rs 37,890 crore (Rs 378.90 billion) by December, 2011.
In the travel portfolio, which was worth Rs 14,953 crore (Rs 149.53 billion) in 2009, domestic air travel contributed 63 per cent, followed by railway tickets (28 per cent).
Others, such as international air travel (Rs 548 crore [Rs 5.48 billion]), hotel bookings (Rs 308 crore [Rs 3.08 billion]), bus tickets (Rs 294 crore [Rs 2.94 billion]), tour packages (Rs 86 crore [Rs 860 million]) and travel insurance (Rs 52 crore [Rs 520 billion]), contributed the balance 9 per cent of the total online travel market.
Another area that has shown significant growth is the financial services market, such as online insurance payments and transactions through trading accounts, which grew from Rs 1,540 crore (Rs 15.40 billion) to an estimated Rs 2,000 crore (Rs 20 billion) during the one-year period ending December 2010.
Comprising 8 per cent of the e-commerce market, this sector is expected to grow by 34 per cent and touch Rs 2,650 crore (Rs 26.50 billion) this calendar year.
The report also highlights that other areas like digital downloads and e-retailing are showing promise and growing rapidly.
These sectors are predicted to grow by 62 per cent and touch Rs 1,100 crore (Rs 11 billion) and Rs 2,700 crore (Rs 27 billion), respectively, this year.
E-tailing, which includes purchases of durable products such as electronic items, home and kitchen appliances, as well as personal items like apparels and jewellery, constitutes 8 per cent of the overall e-commerce market in the country.
Bullish on the growth prospects of the online market, the report, however, observed that in the last few years, online spending has been skewed toward specific categories such as travel or certain products in e-tailing.
"This behaviour has evolved recently and is expected to blanket different kinds of products and services purchased over the Internet and mobile networks. While online travel will continue to comprise a major proportion of the overall market, e-tailing and digital downloads could experience a high growth," it noted.
According to the study, around 7.4 million people in the country bought products over the Internet in 2009.
"Barring few services such as online ticketing, broadly speaking, Indian consumers aren't shopping online. Large numbers of surfers use the Internet to look for information about the product or service they want to buy followed by a physical visit to a shop for buying," it observed.
The IAMAI report was compiled based on primary research among Internet users in 15 cities, as well as secondary research for triangulating the findings from external sources.
