E-tailing sites lead digital growth; e-service plays second fiddle

E-tailing sites lead digital growth; e-service plays second fiddle

Author | Saloni Surti | Tuesday, Jun 04,2013 8:53 AM

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E-tailing sites lead digital growth; e-service plays second fiddle

In the constantly expanding digital bubble, e-tailing websites seem to be on greener pastures as compared to e-service portals. According to the Internet Economy Watch Report for the month of April 2013 published by the Internet & Mobile Association of India (IAMAI), 24.84 million people have accessed various e-tailing sites with 2253.35 million page views.

On the other hand, user reach for job and matrimonial websites is 13.28 million and 7.17 million respectively, with 447.68 million and 104.99 million respective page views. As compared to e-tailing, job and matrimonial websites, online travel segment has less reach, with 11.14 million reach and 477.52 million page views.

The growing e-tailing pastures
Growth of e-commerce in India was catalysed by the combination of various elements. Arrival of high-end technology, trend of informed and educated consumer choice and the arrival of social media and micro blogging practically re-defined the e-commerce segment.

“E-commerce has now become main-stream,” said Deepa Thomas, e-Commerce Evangelist, eBay India. “Due to distribution efficiency and the wide collection available, online shopping has now become very easy. Also, e-tailing websites have managed to educate their TG with the help of social media, which has led to significant rise.”

The Internet Economy Watch Report suggests that the online visit to designer labels and book segments has increased by 58 per cent and 76 per cent respectively, when compared to the numbers of corresponding month last year. A significant increase has been registered in the online users visit to mobile segment. The number of visits has increased to 7.07 million in April 2013 from 4.52 million in April 2012.

While most of the product categories have seen a surge in terms of search, spas and restaurants are the only sectors that have witnessed a drop – 0.35 million in 2013 as compared to 0.57 million in 2012.

Thomas added that spas and restaurants being usually looked up in deal websites receive a slight set back as the business model for such websites it not a very sustainable one. Also, consumers look at something which gives them lifetime value, which they do not get in a spa or restaurant deal. For instance, consumers purchase a deal on the discounted price for the first time. However, if they want to go the same place second time, they have to go on regular prices, which might not mean as much value to them.

Slow e-service waters
In spite of issues such as shortage of growth capital and stiff competition, e-tailing websites have managed to show significant growth. However, e-service sites such as travel, matrimonial and job portals have given a mixed performance.

Matrimonial and job portals displayed barely any northward movement. Number of resumes uploaded in 2013 dropped to 1.06 million from 1.09 million in 2012. Also, the number of matrimonial uploaded in 2013 witnessed a two-point growth with 0.62 million in 2012.

Travel websites on the whole showed significant growth. Number of railway tickets booked in 2013 increased to 4 million from 2.14 million is 2012. But, online bookings of air tickets saw de-growth from 0.91 million in 2012 to 0.57 million.

Subho Ray, President, IAMAI expressed that the travel transactions have proved to be the primary fueling factor of the digital commerce industry. As of 2012, among internet users, online travel leads the pack with 73 per cent share in digital commerce (Rs 34,544 crore). This segment is estimated to show 30 per cent growth by the end of year 2013 and reach to Rs 44,907 crore.

The growth of classifieds market has emerged as one of the strongest trends in 2013. “Classifieds market has seen a significant growth and is estimated at Rs 2,354 crore in 2012,” added Ray. “The classifieds segment includes services such as online jobs, which contribute to a huge 60 per cent valuing at Rs 1,380 crore, online matrimony form another 22 per cent (Rs 508 crore), other B2C classifieds (car, real estate, etc.) contribute about 7 per cent (Rs 166 crore). B2B classifieds comprises 13 per cent of the overall classifieds market,” he said.

Ray explained that classifieds as a category has grown with a CAGR of 45 per cent from 2009 and is expected to grow by another 30 per cent and reach Rs 3,061 crore by end of Dec 2013. 

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