Feb. 25, 2013
-- There is no doubt that India is one of the fastest growing economies in the world, second only to China, India’s economic growth is a result of its trading power on the world stage. According to Google online shopping India
grew by 128% in 2011 and 2012. Amazon currently estimates that India has over 100 million internet users. The Associated chamber of Commerce and Industry in India put this phenomenal increase down to the increasing upper and middle class of Indian society. With exquisite tastes and busy lifestyles more members of Indian society are now shopping online. What are the major factors behind this growth? Can it continue?
India has become a global power house in the global economy which has led to an increase in wealth across the country. Wealthy business owners have benefited from this growth, as India is able to transport its raw materials, like textiles and services and computer programming across the world. With one of the most highly educated societies, it is no wonder that the increase in wealth in India has resulted in a dramatic increase in on-line shopping.
Luxury brands such as Gucci have recognised this and have set up stores in places like Mumbai's prestigious trident galleria. There will always be a place in modern India for high end luxury stores but the on-line market is starting to explode. Many Indians are successful due to their hard work and sound business knowledge. As a result they often work long hours in order to make the most of their commercial enterprises. Lack of time and much needed convenience has resulted in a dramatic increase in on-line shopping in India. This is added to the fact that there is an increasing wealthy younger generation who are computer literate and tech-savvy.
From expensive cars like Mercedes and Lamborghinis, to luxury clothing brands made with the highest quality material, the luxury goods being sold in India is ever increasing. With an estimated 126,000 millionaires the luxury goods industry in India is estimated to be worth around $3 billion and rising.
India’s economy, following the financial crash of 2008, has slowed down. Despite this India’s economy continues to grow over 5% per annum when many western countries are flat-lining. It is difficult to see how the current trend in online shopping is going to decline. With continued investment and growth, on-line shopping in India can only go one way, up.
The other factor which is likely to lead to a continued increase in on-line sales, is due to current business legislation in India. Foreign investors are not allowed to own 100% of their retail outlets and the maximum they can hold is 51%. This has put some luxury brands off from setting up shop in India. This obstacle has resulted in luxury brands, in particular high end fashion retailers, focusing their on-line media marketing efforts geared towards on-line shopping. The current trends of the on-line shopping industry in India show no signs of slowing down, according to industry experts 2013 and beyond will only bring more growth to on-line sales.
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