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Technology spurs surge in India's e-commerce

By Greta McClain     Aug 11, 2014 in Technology
The e-commerce boom may seem like old news to some, but for those in many parts of the world, the online shopping trend is relatively new and is growing at an impressive rate.
The e-commerce boom began in the mid-nineties with the birth of such online giants as Amazon, eBay, Yahoo! Auction and PayPal. Online sales throughout North America and Western Europe grew steadily, while Eastern Europe, Asia and the Middle East lagged behind. That has begun to change however, especially in some South Asian countries.
Currently, an estimated 70 percent of individuals living in North America or Western Europe purchase items online. Roughly 50 percent of those living in the South and Far East regions of Asia make online purchases. That number is growing however, with reports showing Asia leading in online sales by 2015.
One South Asian country seeing tremendous e-commerce growth is India. In 2009, India's e-commerce market stood at $2.5 billion. By 2012 it has reached $8.5 billion, and reached nearly $16 billion in 2013. In fact, e-commerce sales in India is predicted to surpass those of Russia and Brazil, and be virtually tied with Australia by 2016 according to The Hindu Business Line.
Technology has been the key to India's online shopping growth. Broadband internet availability, which was seen as a luxury some ten years ago, has rapidly spread through the county in recent years. The number of Internet users in India rose 42 percent in 2013, translating to 213 million users. Perhaps what is more surprising is that the growth in Internet users is not limited to India's larger cities. According to the Internet and Mobile Association of India, there were 68 million Internet users in rural areas of Indian in October 2013. That number was predicted to grow to 72 million before the end of the year.
Internet availability is not the only technological advance aiding in India's online shopping trend. The relatively low cost and popularity of mobile devises in India has also fueled the e-commerce surge. According to a Financial Express article, India had 68 million mobile Internet users in 2012. In 2013 that number jumped to 130 million users, an increase of more than 60 percent.
Forbes Magazine reports that India's 243 million internet users in 2014 surpasses the number of users in the United States, and is only second to China.
One example of the rise and success of e-commerce in India involves New Delhi entrepreneur Kunal Bahl. Bahl launched the online shopping website Snapdeal in 2010. With an original goal of 100 purchases a day, Snapdeal now sells a Sari, just one of the products offered in their inventory of 500 various product, every twelve seconds. The company is on tract handle more than $1 billion in sales in 2014.
The rise in Internet shopping sales within India has caught the attention of the global e-commerce giant Amazon. The company recently announced plans to invest $2 billion to expand its operations in India.
There is little doubt India has joined the e-commerce revolution and that the growth of available technology has spurred the trend. Vani Kola, managing director of Kalaari Capital, told the Irish Times:
“E-commerce in India is poised to take advantage of larger shifts in society. The whole industry has begun swiftly growing and evolving.”
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