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The Indian Online Retail eCommerce Sales is estimated on $9.3 billion for 2011. Recent news publications predict that the Indian E-commerce Market will grow to 24 billion USD in just 2 years from now | Cash-On-Delivery (COD) is by far the dominant preferred payment method.
Payment Market | India
The land of the Indian Rupeeh ranks 2nd on the world’s population list with over 1.2 billion people. The Gross Domestic Product (GDP) is estimated $4,463 billion for 2011 | 4th on the GDP world ranking. Zooming in on the GDP per capita, India takes only 160th place with just over $3,600 USD | against $48,100 per US capita. Over 121 million people are presumed to have internet access | just over 10% of the total population. An estimated 3% of all mobile phone subscription are smartphone related. Around 300.000 tablets have been sold in 2011 (best guess).
The online Indian sales market is estimated on $9.3 billion for 2011. Recent news publications predict that the Indian E-commerce Market will grow to 24 billion USD in just 2 years from now. In 2025 the Indian e-retail sales is to touch the $260 billion. The dominant online sector is travel which accounts for over 70% of total online sales | including airline tickets, hotel bookings and railway tickets. Retail is estimated to take a share of 10-15% | Electronics and Apparel are the biggest categories in terms of online retail sales.
Payment Market | Payment Methods India
Credit card penetration (MasterCard, Visa, Diners, American Express, JCB) is still fairly low and that is reflected in payment methods used online. Cash-On-Delivery (COD) is by far the dominant preferred payment method | contributing to almost 80%. The COD is perceived as unsustainable as it pushes up the cost of transaction by $0.60 to $1.20 per transaction. Given the low profitability and small ticket size on Indian E-commerce sites, the entire gross margin gets erased by COD. Next to credit cards and COD Indian online shoppers can use Net Banking (online bank transfers) | e.g. HDFC Online Banking, Citibank NRI and ICICI Bank.
Payment Market | Payment Gateways India
Payment gateways or Payment Service Providers are the ‘hub’ for eCommerce merchants to various payment methods. Below a couple of Payment Gateways that operate on the Indian Market and support Indian (local) payment methods.
Indiapay | EBS | CC Avenue | Paysignet | Cashwala.com | 2checkout.com | ABCpayments | HDFC Bank Payment Gateway | ZaakPay
Payment Market | Merchant Acquirers
Merchant Acquirers are the financial institutions that authorize and settle payments to the merchant account. Payment Gateways are connected to these merchant acquirers. Below the Merchant Acquirers that are licensed to operate on the Indian Market.
ICICI Merchant Services |
Payment Market | Research & Publications
yStats.com | India B2C E-commerce Report 2011
Reportlinker.com | e-Commerce Industry India
IndiaInternet | Payment Gateway and Merchant Account Comparison
UPDATED: 9 October 2012