Cross-border e-commerce taking giant strides now

Written by Sayan Chakraborty | Bangalore | Updated: Jul 28 2014, 07:55am hrs
India is fast catching up on cross-border e-commerce export and import of goods through online channels with the US, UK, Australia, China and Germany emerging as preferred business destinations.

Cross-border e-commerce in India has taken great strides to become three times the size of the $3.1-billion domestic e-commerce market. Driven by small and medium entrepreneurs who are tapping into overseas markets and the Indian consumers appetite for electronic gadgets, it stood at $9.8 billion in 2013, poised to grow at a CAGR of 30%.

Indian merchants have curated a global clientele for niche Indian products, exporting ethnic wear, handicraft, leather fashion accessories and semi-precious jewellery, which account for $1.8 billion or over half the value of the domestic e-commerce market. Out of the $8-billion imports, bulk of the orders comprise gadgets like mobiles, laptops and internationally acclaimed books, revealed data provided by Delhi-based Federation of Indian Exports Organisation (FIEO).

Since the Reserve Bank of India has raised the financial limit for online transactions from $3,000 to $10,000, we will see an increase in trading of hallmarked gold jewellery as well, said Ajay Sahai, director-general and CEO, FIEO.

The US, UK, Australia, Russia and Israel are major export destinations for Indian merchants taking the online route while China, Germany, Malaysia and Singapore are preferred import hubs.

According to Sahai, most of the medium and small entrepreneurs use global online marketplaces like eBay or Amazon to trade, while a handful have set up their individual online stores. The online marketplaces, however, account for about 95% of online exports in numbers and around 85% of the transaction value.

Global online marketplaces are mainly used for retail sales. But, we export large volumes to whole-sellers through our own online store. Online is certainly a better route as it gives you a continuous flow of new customers. Besides, we save significantly on infrastructure costs, said Sandeep Mehrotra, owner of silverware manufacturer Progress Enterprises. We sell goods worth R6-8 crore annually through e-commerce to international markets.

Sahai, however, said India has a long way to go before it catches up with the likes of China and the US in cross-border e-commerce exports. China is already exporting goods worth $20 billion through outbound e-commerce, while the number for India is only $1.8 billion. The Centre should provide a seamless environment to realise the full potential of cross-border e-commerce, he saiz.

Indian merchants are enthused by the scope for growth, with the global cross-border e-commerce market poised to grow from $105 billion in 2013 to $307 billion in 2018. Around 15,000 Indian merchants are listed on eBay, exporting around 9 lakh products to 31 international markets. Besides exports, consumers from over 2,638 cities in India are importing products from global eBay merchants from 141 countries, said Navin Mistry, head-retail exports, eBay India. He further added that around 36% exporters have recorded a growth rate of 20% while over 30% of the merchants have reported 21-40% growth.