Several years ago, China’s triple-digit growth in B2C E-Commerce was stunning. But as the market has advanced, growth rates have started to decline and another leader from the BRIC block is moving to the lead in terms of online retail growth – India.
Still, the Chinese B2C E-Commerce market has significant room for growth. Internet penetration on the 1.4 billion population was only around 50% in 2014, less than in Brazil or Russia and below the standard of the advanced Asia-Pacific markets such as Japan and South Korea. Although more than one half of Internet users were already making purchases online, as of mid-2015, the number of online shoppers is expected to increase further as more consumers get Internet access. The growth potential is especially high in rural areas, which makes China’s E-Commerce giants Alibaba and JD.com invest in expansion of their delivery capabilities and reach to cover smaller cities and villages.
Meanwhile, India, which is also vastly populated, with its 1.3 billion population ranking close behind China, is much less advanced than China in B2C E-Commerce. Less than 20% of the population had Internet access in 2014 and of them less than a quarter shopped online. Travel still accounted for the majority of total online sales in India last year, leaving physical products such as electronics and clothing far behind. Furthermore, cash on delivery remained the most popular way of paying for online purchases, with a negative impact on the profitability of online retailers. But the prospects for growth from this low base are bright. Backed up by vast investment, the leading online merchants such as Flipkart and Snapdeal expect to turn profitable within the next few years. All things considered, India is predicted to be ahead of other BRIC countries in online retail growth in the five years following 2014.
For more details about the development of B2C E-Commerce in China and India check our dedicated reports “China B2C E-Commerce Market 2015” and “India B2C E-Commerce Market 2015”, as well as related press releases and infographics.