Over half of India's 120 million shoppers may double their spend this year

• According to Morgan Stanley, as online shoppers mature so does their spending capacity.
• 49% of total shoppers having been spending online for less than two years.
• In India, a growing number of e-commerce users come from the Tier II and III cities.

When a person moves from physical shopping to online, he or she spends very little in the first two years. And more than half of India’s online shoppers are less than two years old.

However, the good news for e-tailers is that from the third year onwards there is an exponential jump in purchases made by the same shoppers. Global investment firm Morgan Stanley’s research has shown that it actually doubles.

With the average ‘maturity’ of Indian online shoppers standing at 3.3 years today, there’s only scope for growth of Indian e-commerce.

According to a report done by FICCI and PwC on Indian e-commerce, the Indian retail market is expected to cross $1.3 trillion by 2020.

The smartphone penetration in the country has led to the increase in online shopping. A study done by ASSOCHAM shows that the increase in Indian e-commerce comes from “phone shoppers” from the country’s Tier II and III cities.

It is this market opportunity that has brought in the bigwigs of global retail to set up shop in India. Walmart with its acquisition of Indian unicorn Flipkart is finally aiming at success in the online market. But Walmart also has a massive competition from Amazon India. For Amazon, India is one of its biggest markets which is why it has been pumping in money constantly into the country notwithstanding the losses.

And all of this is challenged by India’s Mukesh Ambani. Ambani, who hopes to achieve the same success in e-commerce as his telecom project Reliance Jio did, is reportedly looking to enter the e-commerce market during Diwali 2019.

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