E - tailing will become a substantial channel for the organised retail sector, contributing as much as 25 per cent of its total sales in by 2020 and reaching $60 billion in gross merchandising value, a report said here on Tuesday.
"Digital Retail 2020", launched by Google and A. T. Kearney, predicts that the total number of online shoppers will grow to 175 million by 2020 and one third of customers will drive two third of total online shopping spends.
As per the report, value added service will be a key differentiator and over 90 per cent of the online buyers will be willing to pay for premium value added services - - over 46 per cent of online buyers said that they will be willing to pay extra charges for faster delivery; 37 per cent for hassle - free return and 35 per cent were willing to pay more for extended warranty.
The report was compiled by combining primary research of over 3, 000 consumers, qualitative interactions of over 60 plus consumers and A. T. Kearney's proprietary model predicting e - commerce spend across categories, income segments, and geographies in 2020.
"The e - tailing industry in India is at an inflection point and will touch 175 million online buyers by 2020.
Having said that, the next three to four years will be critical for the Industry to get on the path of sustained profitability, " said Rajan Anandan, vice president and managing director, Google Southeast Asia and India.
"As per the report some of the areas that will accelerate and support profitability include following a focussed approach to drive deeper engagement with 60 million high value customers as they will drive two - third of the total spends on e - tailing.
"Innovative delivery models and creating omni channel presence will help bring on board new online shoppers and help grow the overall share of e - tailing from the organised retail Industry in India, " he added.
Some of the other findings of the report include a fivefold growth in number of women shoppers by 2020 and women currently shopping online to more than double their share of online spend.
"As the internet continues to grow, digital presence is paramount for brands and organised retail.
It will influence 50 per cent of all purchase decisions be it in discovery or comparison.
Our data reveals that majority of buyers will continue to purchase online even if there are no discounts.
With the right game plan and focused efforts the e - tailing industry will grow at a healthy compound annual growth rate of 40 per cent plus, " said Ajay Gupta, partner with A. T. Kearney.