Apple’s Sales Growth in India is Great for Global Ecommerce

Jul 25, 2014 7:21 AM  By

india-500Apple reported that its third quarter revenues were up 6%, and CEO Tim Cook attributes that to its progress in the BRIC countries, where iPhone sales were up a very strong 55% year-over-year.

And that, coupled with strong iPad sales, could lead to an ecommerce boon in those countries – in particular, India.

iPad sales grew overall in the developing markets, with particularly strong year-over-year growth in India, where they were up 45%, Cook said during Apple’s third quarter earnings call.

While India is seen as an emerging economy, its ecommerce market is still immature. Currently, only 17% of the population is connected to the internet and less than 2% of the population shops online, according to research by Netherlands-based The Paypers.

But India’s ecommerce market is expected to grow soon. According to an infographic produced by Baynote, ecommerce sales in India is expected to grow from $13 billion U.S. is 2013 to a range of $50 billion to $70 billion by 2020.

ipad-iphone-300The government of India is also looking to broaden its ecommerce market. According to a report published June 4 by Reuters, India could allow foreign direct investment in its ecommerce sector soon, which would pave the way for global online retailers such as Amazon to expand their business.

India currently bans global online retailers from selling goods directly to customers, but allows them to own 100% of a marketplace business, where third-party suppliers can use their platform. Should India open ecommerce up to etailers that sell direct to consumer, it would pave the way for merchants and manufacturers to localize their websites to do business there.

Last June, Amazon launched a marketplace in IndiaAmazon.in. Meanwhile, eBay earlier this year made a major investment in India-based marketplace Snapdeal  to get its foot in the door there. Flipkart also has a major marketplace presence in India.

And this month, Walmart is launching a B2B ecommerce platform in India.

India could very well be a strong omnichannel market as well. Rob Garf, Vice President of Industry Strategy with Demandware, points out that in emerging markets like India, consumers’ first online shopping experience often starts on mobile devices, and that becomes their medium of choice.

And as U.S.-based retailers look to expand their brick-and-mortar footprint to India, they will find it’s going to be necessary to think mobile-first.

“In the U.S., with the advent of UPC codes, we have had the digital cash register since the 1970s,” Garf said during an interview at IRCE 2014.”In emerging markets, they don’t have that infrastructure. So merchants go right to the mobile POS.”