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DPIIT retail

Online retail growth remains flat in past 2 years, declines to 26% in 2017: Forrester

DPIIT retail

Online retail has experienced hyper growth during 2010-14 period, however it faced slow down in the last three years. While e-tail registered massive growth of 133 per cent in 2014, it took nosedive in 2017 with a mere growth of 26 per cent.

Online retail had been growing over 100 per cent during 2013-15 but it remained flat in past two years, according to a report by Forrester. Online retailers saw growth slowing down and undergone revaluation of business models, mentions report.

Online retail

According to Satish Meena, Senior forecast analyst at Forrester, the impact of demonetisation and decline in customer spend. The report titled ‘Predictions 2018 India report’ notes that in 2017, online retail had touched $19.6 billion in market size.

In 2017, the share of online retail climbed 2 per cent, while brick & mortar has 7 per cent penetration of overall retail market. The report predicts 2018 as the year of offline retailers. Offline retailers would be drawing considerable investment interest of large offline as well as online groups.

Four months ago, the e-commerce major Amazon had picked up a 5 per cent stake in Shoppers Stop for Rs 179.26 crore. The investment came as the e-commerce platform Paytm and Flipkart’s Myntra are focusing on offline retail.

Besides large horizontal players, vertical focuses companies such as Pepperfry, Urbanladder, and Voonik are exploring offline channel to drive sales.

Also read: Voonik is underway its 5th pivot, to setup offline franchise stores in smaller cities

Investment in offline clothing and grocery-focused companies are expected to touch all-time high in 2018, notes the report. In 2017, offline retailers have over 43 per cent share in clothing, 28 per cent in footwear and 21 percent in consumer electronics.

Meanwhile, online retailers have 11 per cent share in consumer electronics, 8 per cent in footwear and 3 per cent in clothing, adds the report.

In 2018, intelligent agents like smart speakers (Google Home and Amazon Echo) will directly influence 10 per cent of purchase decisions. Such agents will leverage data to increasingly influence consumers. The report also highlights that 67 per cent of retailers are unprepared to exploit intelligent agents.

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