With the rise of multiple online platforms and devices, it comes as no shock that the E-commerce or the online retail industry is quickly becoming one of the biggest financial sectors in the world. As the e-retail market continues to grow into new heights, you can only expect it to grow even further since there seems to be no stop to the developments being made in the online world.
In India, particularly, the e-commerce sector has become the fastest growing sector in the country. Because of this, there seems to be a need to recalculate retail prices as the online business industry seems to have an effect on the actual price index of products due to the heavy discounts offered in online stores.
According to a report, with a compound annual growth rate (CAGR) of 56 per cent from 2009 to 2014, E-commerce is no doubt the fastest growing sector in India. In fact, it now has a value of around USD 6 billion this 2015. According to a research, if the discount prices of a certain group of products would be considered, then the CPI (consumer price index) would be 25 bps lower than the actual CPI data.
One of the main reasons why E-commerce is growing at a rapid rate is because of the increase use of smart phones, tablets and other mobile or handheld devices. This has all led to a massive consumer base and it would seem as if this consumer base would only grow stronger. With a population of more than a billion residents, that is truly astounding.
For this reason, it would be important to include the actual prices charged by major online companies to determine if there would be a downward bias in the CPI index. It also doesn’t help that the top e-commerce companies are running a massive sale discount as of late.
This is all according to the latest research report by the State Bank of India (SBI). Although the continued rise of e-commerce may be affecting the CPI, which is making it difficult to properly calculate, it would seem that consumers are all still too happy with it. There is no stopping the consumers from getting what they want. They could look for foreign sites like UglyChristmasSweater.com or they could just go to the top e-commerce companies like Amazon to satisfy their needs as a consumer.