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Online Travel Continues to Dominate India Ecommerce

Online retail is just beginning to chip away at travel’s ecommerce market share

June 13, 2013 | Retail & Ecommerce

Travel was the first industry to garner significant digital sales in India, and according to the Internet & Mobile Association of India (IAMAI) and Indian Market Research Bureau (IMRB) International, it remains by far the biggest segment of B2C ecommerce sales. Totaling $345.44 billion INR ($6.44 billion) in 2012, online travel sales accounted for nearly three-quarters of all B2C ecommerce sales, as noted by the IAMAI and IMRB’s “Digital Commerce” report from May 2013.

B2C Ecommerce Share in India, by Segment, Dec 2009-Dec 2013 (% of total)

While travel remains dominant, other types of ecommerce are catching on, and the IAMAI estimates travel’s share will decrease to 71% by December 2013. Online retail sales—“etailing,” according to the report—are expected to grow more than 50% in 2013 and reach just more than $100 billion INR ($1.87 billion) by year’s end, driving non-travel sales’ increase in market share.

B2C Ecommerce Sales in India, by Category, Dec 2009-Dec 2013 (billions of Indian rupees)

While other types of ecommerce are gaining steam in India, online travel sales are still rising fast, estimated to increase by $103.63 billion INR ($1.9 billion) in 2013, a greater raw increase than for total etailing sales, which is by far the largest not-travel category. The IAMAI/IMRB report noted that transit tickets—air, rail and bus—comprised 97% of all online travel sales in 2012, with this category heavily dominated by domestic air tickets (50% of all online travel sales) and rail passes (39%). Only 2% of all online sales came for lodging accommodations, which means there’s still plenty of room for growth in online hotel bookings.

Online Travel Sales in India, by Category, 2012 (billions of Indian rupees and % of total)

eMarketer’s projection for travel ecommerce sales in India is higher than the IAMAI’s, with the category estimated to have reached $9.61 billion last year. But the growth forecast for 2013 is similar: eMarketer anticipates digital travel sales will rise by 29.1% this year. The IAMAI expects growth of 26.7%.

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