The Hindu Business Line : India to log 84 pc growth in e-com revenue: IDC

INDIA is expected to log the highest compounded annual growth rate (CAGR) of 83.7 per cent among Asia-Pacific countries in e-commerce revenues between 2003-08, even exceeding the growth rate displayed by neighbouring China in the five-year period, according to research firm IDC.

"On a country-by-country basis, India is expected to show the highest CAGR of 83.7 per cent in e-commerce revenue from 2003 to 2008, thus marginally exceeding the CAGR of 81 per cent expected in China," according to IDC's forecast on Asia Pacific internet market.

However, China's e-commerce revenue is projected to represent one third of the Asia/Pacific market excluding Japan by 2008. More mature markets such as Australia, Korea, and Singapore are also expected to display strong growth rates for their e-commerce markets. Singapore's e-commerce revenue is forecast to increase at a five-year CAGR of 38.3 per cent by 2008.

As per the forecast, the Asia Pacific (excluding Japan) market would see Internet users grow at a CAGR of 17.8 per cent from 2003 to 2008, while online buyers would increase at 30.7 per cent CAGR during the same period. Consequently, Business-to-Business (B2B) e-commerce is estimated to grow rapidly at a CAGR of 59.1 per cent.

"The Asia/Pacific market (excluding Japan) is becoming an increasingly attractive e-commerce environment. To enhance their competitiveness, companies must invest in e-commerce solutions and pursue the expanding market aggressively by taking advantage of vast online opportunities," IDC said.

With a healthy Internet usage growth recorded in the first half of 2004, and continued positive economic growth across the region, many businesses have been driven to increase their online services offerings, it added.

"China's rapid Internet growth has also witnessed a good number of users being turned into buyers and bringing good profits for many online businesses in the last few years. These burgeoning Internet trends are expected to drive an explosion of the overall ecommerce market by 2008, where B2B commerce will make up a large portion this growth," IDC said.

Business-to-consumer (B2C) e-commerce is also expected to grow rapidly through 2008, although it will pale against B2B ecommerce, which remains a significantly larger channel. This would be led by consumers' willingness to make online purchases, as the Internet becomes a more respected and trusted medium. Initially, new Internet users would be reluctant to conduct any kind of business online, citing security reasons as their main concern, it said emphasising that it was crucial for today's businesses to implement secure e-payment systems so as to foster users' trust in e-commerce sites.

In addition to improved security, the increased penetration of credit cards as well as a better understanding of conducting e-commerce through the Internet would contribute towards the growth in B2C e-commerce.

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