India, Phone

India E-Commerce Booming Thanks to Mobile Internet

January 8, 2024         By: Michael Foster

Cheap oil is scaring a lot of investors away from emerging markets, but new data suggests one market they should jump into is India, especially when it comes to the e-commerce sector.

That’s because the country is seeing strong growth in retail e-commerce sales, helped by deep penetration of the mobile internet.

According to eMarketer, 47% of India’s 1.2 billion were smartphone users in 2014, and over half of the country is going to be on a smartphone in 2015. The growth of India smartphone usage is expected to remain at around 7% annualized through 2018. Of those users, eMarketer believes 34.1% access the mobile internet at least once a month.

With more mobile phone usage, the e-commerce market is expected to swell to $7.7 billion this year, a 45% rise from 2014. That number excludes travel spending, which historically has grown faster than other pockets of mobile web-driven e-commerce growth.

Growth in e-commerce is also driven by brick-and-mortar stores, which are experimenting with augmented reality and online/offline convergence experiences to drive sales. According to Harsh Shah of Shopsense, brands who incorporate online and offline marketing see a 12-15% growth in sales.

While mobile internet usage and augmented reality marketing are hot trends in India, many analysts believe that the potential of m-commerce in the country is far from being fully realized.

Still, many marketers struggle with location-based targeting that would send a marketing message to a consumer based upon where they are, and what stores are near them.

Additionally, the difficulty in scaling solutions for small businesses to incorporate mobile marketing with their offline efforts has left the market under-penetrated.

Sujit Zachariah, a former Yahoo employee who established startup Nifty Window, is working on this project. Zachariah’s company is establishing a solution that allows marketers to display and submit offers to mobile phone users in real time, and to target those offers based upon how close they are to an actual physical store.

With more mobile internet consumption and more demand for offline/online marketing tools, the growth of mobile-driven e-commerce is unlikely to cool in India in the near term.