Online retail profits have been leapfrogging for the past few years in India. Especially with the advent of cheap smartphone technology and the enthusiasm online retail platforms have provided in terms of m-commerce, online sales have truly skyrocketed. The first question every prospective online retailer has in mind is – ‘What do I sell?’ There are differing answers to this question, depending upon various perspectives.

One way is to figure out the most popular product to sell and enter the extremely competitive market. Since a large market base is divided by many suppliers, you are bound to get a small share, but the opportunity for growth is slow. The other way is to create a market base using a niche product. This article makes a good case for this strategy. Also check out Chris Anderson’s Long Tail Phenomenon, which describes this course of action, is detail.

The point is, whichever way you go, you do need to know about the current demand trends in the market. These trends can directly affect you, or they can affect you through a secondary market basis. But it is important to know. Therefore we are providing information about the Indian online retail market in this post, and its current demand trends and hottest product categories. Let’s take a look.

Demand Trends in the Indian Online Retail Market in 2015

Market Description

The total turnover of the e-commerce market in India is supposed to hit $16 billion in 2016. Of this, nearly 31% belongs to online retail and 61% belongs to the travel industry while the rest can be chalked up to wholesale and other services. According to the data gathered by Accel India, the number of internet users in India will grow to more than 400 million by 2016. Of these, more than 60% generally frequent e-commerce websites. The conversion rate from visitors to buyers is expected to jump to 2.9% from 2.7% in 2013. This means that the gross turnover due to online retail will exceed $8.5 billion in 2016.

Hot Product Categories

According to a study by the Internet and Mobile Association of India, or IAMAI, mobile phones and their accessories are the highest selling items on online retail websites like Flipkart and Snapdeal. The online retail industry, growing at the rate of more than 33% currently, favours various product categories in the following order –

  1. Mobile phones and accessories: Mobile phones and accessories hold a 41% market share with sales worth around Rs. 9,936 crore.
  2. Apparel, footwear, etc.: Personal items like apparel, footwear and other accessories come second in the race for the most popular online retail category. They cover around 20% of the market with sales upwards of Rs. 4,699 crore.
  3. Consumer Durables: Consumer durables like kitchen appliances and other accessories account for 14% of the online retail market. The sales in this category have been worth Rs. 3,404 crore.
  4. Laptops/notebooks/other electronic items: Laptops and other electronic items consist of 10% of the market with sales up to Rs. 2,780 crore
  5. Home furnishings: Home furnishings show sales of Rs. 1,059 crore
  6. Books: Books have garnered sales of Rs. 648 crore.

These are some of the sales figures for the year 2014-15. We hope these will help you in your strategy to sell on online platforms.

For any help or queries, get in touch with Browntape. We are India’s leading online retail solutions experts and we are always happy to help!

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