Indian e-retail market may see 250% growth in 3 years: Crisil report

India’s e-retail market may rise by 250 per cent in the next three years as players shift from discounts to consolidation, geographical diversification, business realignment and enhancing customer loyalty, says a Crisil report. The market is 1.5 per cent (Rs 70,000 crore) of the overall Rs 49-trillion Indian retail sector, implying enormous growth potential.

The online shopping segment has trebled over the past three fiscals due to rising Internet penetration, awareness of online shopping as well as alluring deals and discounts.

"After the initial phase where e-retailers focused only on gaining market share through discounts, the next phase will be characterised by consolidation, geographical diversification, business realignment, as well as enhancing customer stickiness," a news agency reported quoting the Crisil report.

A frenzied search for unicorns in the past couple of years ended badly for many investors, who saw their equity wiped out and resulted in about 26 prominent start-ups shutting shops in the past two years.

The company’s analysis of 11 major e-retail firms showed that around 45 per cent of the over Rs 40,000 crore invested between fiscals 2013-14 and 2015-16 was wiped off due to losses at e- retailers. The funding trend indicates cautious and focused investing with an eye on profitability, the report said.

As the online customer base in the country is largely concentrated in major cities, faster growth will slow down in these regions as it is already highly penetrated and players would need to move into small towns to sustain growth, the report added.