The Growth of Online Retail in India by Sam Kligman

http://www.businessweek.com/articles/2013-04-11/ebay-helps-snapdeal-an-ebay-wannabe-in-india

Ironically, even though a large part of India’s population pays their professions off of providing services online to foreign customers its own “online retail comprises only 0.2% of India’s retail market.” This becomes less ironic when one considers the fact that only 10% of India’s population is online with “barely 10 million Indians having high-speed access.” However, this fraction of online retail is growing at 45% a year and companies like Snapdeal are quickly stepping in to fill the gap with local eBay-like services. Snapdeal much like MakeMyTrip is banking its success on the projected proliferation of low-cost phones and tablets that are making their way to a large part of India’s population. I think we will have to wait and see whether this business model will be successful in the long run in India. It has been known to work unites dates where national shipping is much more reliable and online purchases much more trusted. Furthermore, if as the article says “85% of transactions [in India] are in cash” which in my mind poses a large hurdle; one that online retailers will have to overcome somehow or else they will most likely fail. Since only time will tell how this industry actually fares, it is careless to make further projections, but if I were a betting man I’d say it definitely has a chance at being highly successful. EBay’s CEO John Donahoe certainly thinks so since it has invested $50 million in the 100-employee company.

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