Japan says ‘Moshi-Moshi’ to Indian eCommerce

With the e-Commerce sector in India rapidly growing, foreign retailers want a piece of the growing pie. Apart from the traditional matured players from the US and UK, eCommerce players from Japan too want to enter the Indian market.

“The eCommerce players from the US, Europe and Japan are seeing slower growth in home markets. They are increasingly looking to enter developing economies of India, Brazil and China which have forecasted growth rates of more than 20% over coming years. Most popular e-commerce categories are non-consumable durables and entertainment related products,” said DS Rawat, general secretary of industry body ASSOCHAM.

It should be noted that Japan has requested the Indian government to open up the eCommerce sector for foreign direct investments (FDI). At present, the FDI cap is as low as 1.7%.

Reports have suggested that Japanese online retail giants such as Rakuten and Uniqlo have shown keen interest in entering the Indian ecommerce market. Interestingly, the largest investment in the eComemrce sector has been made by Japanese technology major SoftBank, when it invested $90 million in online real estate firm Housing.com. The company also plans to invest nearly $10 million in the Indian eCommerce sector in a phased manner in the next few years.

According to a study by ASSOCHAM and Deloitte, the online retail market is expected to cross $16 billion by the end of 2015. “The digital commerce market in India has grown steadily from $4.4 billion in 2010 to $13.6 billion in 2014 and likely to touch $16 billion by the end of 2015 on the back of growing Internet population and increased online shoppers,” added Rawat. Currently, the online travel constitutes 61% of the overall sector while e-tailing makes up about 29%.