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Direct Overseas Sales, Pioneering New Markets beyond China in India

MK Business News and KITA held a "How to Increase Direct Sales" seminar... 

"The Indian online mall will rapidly grow six-fold within six years"

Director Raunak Raheja of India's e-commerce corporation ShopClues lectured at the "India • ASEAN e-commerce market seminar" held at COEX, Samseong-dong, Seoul on August 31. Approximately 400 people including Korean businessmen participated to make this event a success. [Reporter Chung-woo Lee]

"The Indian online shopping market is expected to grow rapidly, close to six-fold in six years from $17 billion in 2014 to $100 billion in 2020. I hope Korean companies with competitive products will participate in the Indian e-commerce market, which is growing fast."

On August 31, Vice President Nitin Kochhar of ShopClues (one of the three major e-commerce companies in India), stated the above during the seminar on "India • Southeast Asia (ASEAN) e-commerce market strategy."

He further announced, "India’s population of 1.2 billion has a variety of people and target groups that demand all types of products. I would like to show the competitive products of South Korea to Indians." Now that consumption without borders became a new distribution trend through direct overseas purchase and sales, this seminar was prepared to foster and support the "online sellers" who sell products to consumers all over the world. Approximately 400 people including Korean businessmen and direct sales shopping mall officials attended this event, and they showed their overwhelming interest.

Currently, the biggest market for direct overseas sales is China, which accounts for more than 50% of Korean e-commerce exports (overseas direct sales). Nonetheless, the lands of opportunity with growth potential are located all over the world, and India receives the most attention among them. 

Vertically growing Indian e-commerce market (unit=$100M)

* Source = Indian Chamber of Commerce and Industry

The e-commerce market size of India reached $17 billion (19 trillion KRW) last year, which is only 6% of the Chinese market. In terms of potential, however, India is expected to catch up with the Chinese market in the near future. Currently, there are about 200 million smartphone holders in India. This is expected to increase to 400,005,000 people within 3 years.

Considering that 52% of online shopping in India is done on smartphones, more rapid growth is expected within a couple years. Recently, the shopping mall ShopClues (one of the participating companies in the e-commerce market seminar in Korea) has shown a monthly average sales growth of 20%.

Vice President Kochhar explained, "Home • kitchen appliances and electronics products comprise a high proportion of online purchases in India, however, this line of merchandise is still an emerging market. The purpose of visiting Korea this time is to discover a competitive and diverse product line." About 200,000 products are currently sold at ShopClues, which fell far short of the largest open markets in Korea, including Auction and Gmarket (with about 100 million products). ShopClues is desperate to recruit sellers who will sell products in the mid to high price range. For businesses promoting the launch of online malls for overseas direct sales, India with its low-competition market could be a new opportunity.

Online marketplaces in Southeast Asia, including Indonesia, are expected to be readily accessible to Korean companies with the booming of the Korean Wave’s K-pop and drama series on TV. The e-commerce market of the Association of Southeast Asian Nations (ASEAN), including Indonesia, shows an annual growth rate of more than 60% on average. The market size of $770 million (900 billion KRW) last year is expected to grow to $35 billion (41 trillion KRW) by 2020.

CEO Guk-jong Yoo of Lejel Shopping (the biggest home shopping company in Indonesia) attended as a speaker. He introduced the case of "Happycall Double Sided Pan" which has already been successfully exported to the local market.

He emphasized, "When a Korean company enters the overseas market for the first time, it experiences difficulty navigating the local market. However, I don't recommend accessing the market this way because it is too difficult. Consumers want to purchase a good product at a reasonable price in every country." CEO Yoo advised, "In order to enter the markets in developing countries, particularly in Southeast Asia, it is necessary to use a time machine strategy, which entails reusing the already utilized marketing strategy in Korea."

Executive Director Jae-chul Lee of KITA remarked, "KITA will help Korean products enter the Indian and Indonesian markets, especially as Korean exporting companies see the two countries’ huge potential, as they help directly sell to consumers." On this day, KITA signed a memorandum of understanding (MOU) to support ShopClues, Lejel Shopping and Korean companies with their entrance into the Indian and ASEAN markets.