Is Internet Retail in India Entering An Inflection Point?

There’s a buzz in India around Internet Retail. Every day I come across a new website that is catering to the Indian thirst for consumption (found a magic retailer today). Furthermore,  e-commerce has launched into mass marketing. FutureBazaar, part of Kishore Biyani’s Future Group, and SnapDeal, part of Jasper have both spent sizeable amounts on marketing to the masses. This has made me wonder is Internet Retail in India finally at an inflection point? With this mission in mind I started looking for Google search traffic data to see what I could learn.I ran a search of the top e-commerce websites in India to try to figure out which one has the highest “interest” gauged by Google searches (my proxy for web traffic). I ran through a long list of businesses including SnapDeal, Futurebazaar, Chaupaati.in etc. (I didn’t include travel websites) and narrowed the list down to 4 that gave me the highest hits as of Jan 2011:

Indian’s Most Popular E-commerce Websites

1.      HomeShop18 – One of India’s most trafficed e-commerce website is an off-shoot of TV18’s  Home Shopping Network channel that offers a range of products from books to kitchen items

2.      FlipKart – primarily an online book retailer but also sells DVDs /CDs, mobile phones

3.      Infibeam – has a striking resemblance to Amazon.com’s website with a product offering that covers books, movies, electronics, gifts, etc.

4.      Rediff Shopping – part Rediff.com, sells everything from books to accessories, provides a platform to vendors selling product

 

Source: Google Insights, India; Scale reflects how many searches have been done for a particular term, relative to the total number of searches done on Google over time

FlipKart has seen traffic triple in the last year and Infibeam has seen it double. The graphs are certainly beginning to show that magic “S shape” but the scale is relative, so its hard to tell if they are just growing off a very small base. I wanted to compared the interest in “Flipkart” to other search terms including popular brands and publications.

Source: Google Insights

Flipkart is amazingly getting to 10% of the “interest” that a brand like Honda or Micromax commands online in India and one-half of that of Disney (which probably speaks more of Disney than Flipkart). Given the trends above it doesn’t seem like long before it will start to overtake some of these other search terms.

So what does this mean? Clearly this is not bullet-proof evidence but it does show consumers are beginning to engage and trust in online retail, and online brands have begun to form. Now’s the right time for an Internet-based start-ups in India – people who use the likes of Flipkart will be more willing to try other e-commerce websites. There’s clearly still a long way to go for online retail in India,  but if you want to make a bet on online retail now is the right time to start learning.

Bottom Line: India’s interest in Online retail is growing very quickly and some e-commerce websites are starting to build mass awareness.

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