As per reports, approximately one-fifth of the retail turnover is being transacted online which is low as compared to markets like South Korea and Japan having 85% and 80% of the total retail turnover is transacted over the Internet. Hong Kong and Singapore market’s net-based transactions account for only 15% of the retail turnover.

Internet trading in India has grown 100% every year during the last 5 years. Almost 45% of the total retail trading is expected through the online network.

The Internet seems like the biggest leveler, enabler and differentiator as the broking industry will split into two parts where one would like to call itself wealth management providers while others will concentrate on the high volume business by providing lower charges.

Online trading costs could see a slide for some more time with broking firms trying to expand their pool of retail business.

Other than cheap Internet usage charges, India expects a PC penetration growth of 25%, which seems to continue for the next couple of years. Also, India is the fastest growing mobile market with telephony market growing at around 50% per annum.

According to a research analysts, the broking community is targeting at around 5-7 crore users as these people will have some type of investible income that can get into equity and debt which works fine for second tier cities having prospect of converting the mobile user into an investor is much higher.

Anil Kaul, CEO, ICICI Direct, says “Internet broking has a huge potential and can be one of the fastest growing markets in the country. It is getting competitive but players who can provide security, content and convenience on an integrated platform will maintain their market shares.”

ICICI Direct has a 63% marketshare in online broking. According to Elkins/Mcsherry, broking commissions are down 26% across the world.

Internet served the broking industry to take charge of the expenses through generic trade engines and draw the retail investor towards it. Brokers doubt these costs to drop down to the level of the developed markets i.e. there will not be much edge to play the cost-cutting game as margins will be under pressure.