IIn tte r n e tt & E --C o m m e r c e n erne & E Commerce

What is the global scenario and Indian market to offer?

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Last few years forecasts about rise of Internet consumer base and broadband penetration in India have been too bullish to project according to Market trends and research analysts reports. However continued Govt support with de-licensing of this sector and liberal policies have given regular boost to this industry achieving good YOY growth.

Internet and broadband penetration levels were low in initial years, but increased significantly from 0.1% in 1998 to 4.5% in 2005 in India. At the end of 2006, Internet subscriptions rose to 8.5 million, of which two million were broadband showing a phenomenal increase (at the rate of 128% between December 2005 and December 2006). However the number of actual Internet users in India is much larger, approximately fourfold in comparison to the number of subscriptions mentioned above (estimated to be 33 million Internet users in Sept 2006, of which 25 million can be regarded as active users) The country with inhabitants around 1.1 billion throws prospects of cumulative growth in front of Industrial conglomerates. The Internet population which was estimated 100mn internet users in India by year-end 2006, representing a penetration rate of just below 10%, is expected to grow close to 300 million by Y2009.

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IIn tte r n e tt & E --C o m m e r c e n erne & E Commerce

What is the global scenario and Indian market to offer?

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Broadband services are becoming more widely available, with a number of multinationals launching services. Low cost of broadband shall boost increase of Internet usage countrywide. The growing popularity of cybercafs is playing a big role in fuelling Internet development in India. Subscriber growth continues to be driven by heavy usage of the comparatively cheap internet cafes. E-commerce and high demand for .in domain registrations are also factors for the increase in online users. The ".in" domain registrations have already surpassed 150,000. With indications from Indian government looking to encourage growth, all operators are looking forward to invest in their broadband business. The states have set a truly ambitious target of 10mn broadband subscribers by the end of 2007-09, and that by the end of 2011, there will be just 30mn broadband subscribers in India, accounting for approximately 2.5% penetration, which would still be a minuscule figure for a country of around 1.1 billion inhabitants.

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IIn tte r n e tt & E --C o m m e r c e n erne & E Commerce

What is the global scenario and Indian market to offer?

E Commerce E-commerce is considered as the next big thing that will drive internet usage growth in India driven by growing number of credit cards, good online shopping places, ticketing websites and the way banking is done today. From a business perspective E-commerce offers unlimited shelf space, it isn't bound by operational timings and geographical boundaries and an opportunity to cater to country wide city markets (for consumers and suppliers alike) at a comparative miniscule cost. From a consumers perspective E-commerce allows greater access (hence the high response rate by tier 2 cities) to markets and an opportunity to make informed decisions on purchases. The ecommerce industry in India is all set to touch Rs. 9210 crore by the end of FY08. (30% jump from Rs 7,080 crore in 07). According to market speculations and research units the growth shall be in:

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IIn tte r n e tt & E --C o m m e r c e n erne & E Commerce

What is the global scenario and Indian market to offer?

Some of the recent interesting market developments in India have been: E-Commerce activities within India has exceeded USD 125M during FY2004-05 The number of credit cards in India has shot up from 6.5mn in 2002 to 9 mn in 2003 and expected to reach 35mn by Y2010 Online shoppers like Home delivery about online shopping, and Time saving, also 24x7 thing, they also like the Ease of use and product comparison features It has been observed that most of the Online Shoppers start their e-Shopping journey with buying Air/ Railway Tickets. This is primarily because the service provided in case of Travel, especially Ticketing is undifferentiated with the place of buying the tickets. The buyer is ensured that he would get the same service as his co-passenger who has bought his tickets from the physical counters. Out of the 13.2 million internet users across 26 cities in India in Y2006, 14.2% use the Internet to buy travel tickets; 5.5% people do online shopping especially products like Books, Flowers, Gifts etc. and 5% people deal in stocks and shares through the internet. IRCTC which is a railway ticket booking website issues out 196,000 tickets generating $6.3MN of revenue every month. Size of Online classifieds industry stands at Rs. 820 crores (Online Matrimony Segment = 140, Online Jobs Segment = 600, other segments: property, automobile, etc = 80 crores). Size of Digital Download Industry is Rs. 255 crores (50% jump from last year)

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IIn tte r n e tt & E --C o m m e r c e n erne & E Commerce

What is the global scenario and Indian market to offer?

Major reasons for growth of E-commerce in India

Drivers The Indian economy have seen a consistent growth of 7-8% per annum in recent years, which has resulted into : Growing middle class incomes Consumer spending increase in leisure items and services like entertainment, vacation etc. Indian consumers tend to spend 10.4% on vacation related activities Growing army of credit card holders and internet users are opting to book air tickets online Discounts and freebies by online ticket booking sites E-Commerce is benefiting by a pull from customers and push from investors Insistence by large businesses that all their clients/vendors link to e-commerce Defensive reaction to competitors -Herd mentality followed by the companies Reduction in transaction cost and better product quality There is an overall maturity in the delivery cycle (payment sites, fraud detection and delivery) which has further enhanced the growth. Triggers

Saves time and efforts Convenience of shopping at home Wide variety / range of products are available Good discounts / lower prices Get detailed information of the product You can compare various models / brands

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IIn tte r n e tt & E --C o m m e r c e n erne & E Commerce

What is the global scenario and Indian market to offer?

Future E-Commerce in India shall see a lot of action in the Employment, Travel, Matrimonial and elearning arena Online Travel Booking shall be the killer e-commerce application in India closely followed by online retailing websites E-governance and finance services along with insurance and health services will be the next big thing in e-commerce.

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