India’s e-commerce market picked up sharply in the second half of 2017 after nearly 18 months, driven by strong growth at Flipkart and Amazon India and new entrant Paytm E-commerce. Online retail grew by 23 per cent to $17.8 bn in 2017, up from $14.5 bn in gross merchandise value (GMV) last year, according to RedSeer Management Consulting.The expansion of online retail is expected to accelerate this year, with the market projected to increase by as much as 60 per cent to $28-30 bn in GMV, which refers to the value of goods sold on a site after discounts, according to RedSeer estimates.
The primary factor behind the bullish estimate is that the firm expects the number of new online shoppers to increase significantly after two years of near-stagnation in contrast to 2016 and 2017, when most growth was because of existing users, according to a report in a top Indian financial daily. According to RedSeer Founder CEO Anil Kumar, even the non-sale months in the second half of 2017 were much higher than the first, and therefore, there are enough signs that the market should see very high growth next year. The efforts by Flipkart and Amazon to penetrate tier 2 and tier 3 cities and PayTM’s aggressive expansion plans will drive the market next year, Kumar said.