One expert says the the e-commerce market in India is barely in its infancy, but it's coming on leaps and bounds.
E-commerce market in India ‘doubling every year’
Kashyap Vadapalli, the chief marketing officer and head of new business at the Mumbai-based online furniture retailer Pepperfry, talks about the e-commerce sector in India.
What are the growth trends in the online retail market?
The market evolution in India only started two or three years ago. If you go back to as late as 2009, 2010, many of the large players that you see today weren’t even around or they had just started and were in the early stages of being start-ups. I just think that e-commerce per se has started taking off only in the last two to three years. The trajectory is very steep. I think the market is doubling every year. At this rate, in the next three to five years we could talk about a fairly decent chunk – 5 to 6 per cent – of total retail getting online.
Is there more interest in investing in India’s e-commerce sector now?
Not all the firms that got investment in 2010, 2011 survive today but I think as of now more than 50 per cent of them are continuing. Obviously there could some more consolidation as we go into the next couple of years. The interest that was generated is now being continued but it’s more rational in the sense that people are able to pick and choose the winning horses and put their investments behind them in 2013 and 2014. But in 2011 it was more about spreading the net far and wide. That’s the shift that has happened. The interest continues to be there because the underlying premise of a high- growth, potentially large-sized market has not changed.
What’s your strategy going forward?
We would like to invest in certain logistics infrastructure because in India there isn’t a very well-built logistics infrastructure to serve the customer in terms of moving large bulky items in retail furniture – moving one piece of furniture across 2,000 kilometres in a profitable way, that infrastructure doesn’t exist. We serve our top six cities from our existing three furniture hubs but as we expand our hubs servicing capabilities to the next 20 cities, that would be another area we would put investments behind. Right now we have the funds we require to grow over the next few quarters but we would be looking at raising funds [for further growth].
* Rebecca Bundhun