Indian ecommerce market could outpace more mature markets to become the third largest market in the world with US$ 350 billion by 2030.
Advantage India
Growing
Demand
*India’s social commerce has the potential to expand to US$16–20 billion in FY25, growing at a CAGR of 55-60%.
*India’s e-commerce market is expected to reach US$ 111 billion by 2024 and US$ 200 billion by 2026.
Attractive
Opportunities
*In 2022, the Indian ecommerce market is predicted to increase by 21.5%, reaching US$ 74.8 billion.
*India’s e-commerce market is expected to reach US$ 350 billion by 2030.
Policy
support
*100% FDI is allowed in B2B e-commerce.
*100% FDI under the automatic route is permitted in the marketplace model of E-commerce.
Increasing
Investments
*The recent rise in digital literacy has led to an influx of investment in E-commerce firms, levelling the market for new players to set up their base, while churning out innovative patterns to disrupt old functioning.
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Last updated: Oct, 2022
Introduction
In recent years India has experienced a boom in internet and smartphone penetration. The number of internet connections in 2021 increased significantly to 830 million, driven by the ‘Digital India’ programme. Out of the total internet connections, ~55% of connections were in urban areas, of which 97% of connections were wireless. The smartphone base has also increased significantly and is expected to reach 1 billion by 2026. This has helped India’s digital sector and it is expected to reach US$ 1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of India’s e-commerce sector. India’s e-commerce sector has transformed the way business is done in India and has opened up various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to-business (C2B). Major segments such as D2C and B2B have experienced immense growth in recent years. India’s D2C market is expected to reach US$ 60 billion by FY27. The overall e-commerce market is also expected to reach US$ 350 billion by 2030, and will experience 21.5% growth in 2022 and reach US$ 74.8 billion.
Market Size
The Indian online grocery market is estimated to reach US$ 26.93 billion in 2027 from US$ 3.95 billion in FY21, expanding at a CAGR of 33%. India's consumer digital economy is expected to become a US$ 1 trillion market by 2030, growing from US$ 537.5 billion in 2020, driven by the strong adoption of online services such as e-commerce and edtech in the country.
According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025.
With a turnover of $50 billion in 2020, India became the eighth-largest market for e-commerce, trailing France and a position ahead of Canada.
Propelled by rising smartphone penetration, the launch of 4G network and increasing consumer wealth, the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion in 2017.
After China and the US, India had the third-largest online shopper base of 150 million in FY21 and is expected to be 350 million by FY26.
Indian consumers are increasingly adopting 5G smartphones even before the rollout of the next-gen mobile broadband technology in the country. Smartphone shipments reached 169 million in 2021 with 5G shipments registered a growth of 555% year on year 2021. Indian consumers are increasingly adopting 5G smartphones even before the rollout of the next-gen mobile broadband technology in the country. Smartphone shipments reached 150 million units and 5G smartphone shipments crossed 4 million in 2020, driven by high consumer demand post-lockdown. According to a report published by IAMAI and Kantar Research, India’s internet users are expected to reach 900 million by 2025 from ~622 million internet users in 2020, increasing at a CAGR of 45% until 2025.
For the 2021 festive season, Indian e-commerce platforms generated sales with a Gross Merchandise Value (GMV) of US$ 9.2 billion, a 23% increase from last year’s US$ 7.4 billion.
Investments
Some of the major developments in the Indian e-commerce sector are as follows:
- In June 2022, Amazon India signed an MoU with Manipur Handloom & Handicrafts Development Corporation Limited (MHHDCL), a Government of Manipur Enterprise to support the growth of artisans and weavers across the state.
- India’s eCommerce sector received US$ 15 billion of PE/VC investments in 2021 which is a 5.4 times increase year on year. This is the highest investment value received by any sector ever in India.
- In February 2022 Xpressbees a logistics ecommerce platform become a unicorn valued at US$ 1.2 billion in 2022. The firm raised US$ 300 million in its Series F funding.
- In February 2022, Amazon India launched One district One product (ODOP) bazaar on its platform to support MSMEs.
- In February 2022, Flipkart launched the “sell back program” to enable trade in smartphones.
- In January 2022, Walmart invites Indian sellers to join its US market place with an aim of exporting US$ 10 billion from India each year by 2027.
- In January 2022, Flipkart has announced expansion in its grocery services and will offer services to 1,800 Indian cities.
- In November 2021, XPDEL US- based ecommerce announced expansion in India.
- In September 2021, CARS24, India's leading used car e-commerce platform, has raised US$ 450 million in funding, comprising a US$ 340 million Series F equity round and US$ 110 million in debt from various financial institutions.
- In September 2021, Amazon launched Prime Video Channels in India. Prime Video Channels will give Prime members a seamless experience and access to a variety of popular video streaming services.
- In September 2021, Bikayi, a mobile commerce enabler, raised US$ 10.8 million in a Series A funding round, led by Sequoia Capital India.
- Flipkart, India's e-commerce powerhouse, announced in July 2021 that it has raised US$ 3.6 billion in new funding from various sources including sovereign funds, private equities and Walmart (parent company).
Government Initiatives
Since 2014, the Government of India has announced various initiatives, namely Digital India, Make in India, Start-up India, Skill India and Innovation Fund. The timely and effective implementation of such programs will likely support growth of E-commerce in the country. Some of the major initiatives taken by the Government to promote E-commerce in India are as follows:
- As of June 8 2022, the Government e-Marketplace (GeM) portal served 10.35 million orders worth Rs. 258,359 crore (US$ 33.07 billion) to 60,632 buyers from 4.56 million registered sellers and service providers.
- In a bid to systematise the onboarding process of retailers on e-commerce platforms, the Department for Promotion of Industry and Internal Trade (DPIIT) is reportedly planning to utilise the Open Network for Digital Commerce (ONDC) to set protocols for cataloguing, vendor discovery and price discovery. The department aims to provide equal opportunities to all marketplace players to make optimum use of the e-commerce ecosystem in the larger interest of the country and its citizen.
- National Retail Policy: The government had identified five areas in its proposed national retail policy—ease of doing business, rationalisation of the licence process, digitisation of retail, focus on reforms and an open network for digital commerce—stating that offline retail and e-commerce need to be administered in an integral manner.
- The Consumer Protection (e-commerce) Rules 2020 notified by the Consumer Affairs Ministry in July directed e-commerce companies to display the country of origin alongside the product listings. In addition, the companies will also have to reveal parameters that go behind determining product listings on their platforms.
- Government e-Marketplace (GeM) signed a Memorandum of Understanding (MoU) with Union Bank of India to facilitate a cashless, paperless and transparent payment system for an array of services in October 2019.
- Under the Digital India movement, Government launched various initiatives like Umang, Start-up India Portal, Bharat Interface for Money (BHIM) etc. to boost digitisation.
- In October 2020, Minister of Commerce and Industry, Mr. Piyush Goyal invited start-ups to register at public procurement portal, GeM, and offer goods and services to government organisations and PSUs.
- In October 2020, amending the equalisation levy rules of 2016, the government mandated foreign companies operating e-commerce platforms in India to have permanent account numbers (PAN). It imposed a 2% tax in the FY21 budget on the sale of goods or delivery of services through a non-resident ecommerce operator.
- In order to increase the participation of foreign players in E-commerce, Indian Government hiked the limit of FDI in E-commerce marketplace model to up to 100% (in B2B models).
- Heavy investment made by the Government in rolling out fiber network for 5G will help boost E-commerce in India.
Road Ahead
The E-commerce industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology and training and has a favourable cascading effect on other industries as well. The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest E-commerce market in the world by 2034. Technology-enabled innovations like digital payments, hyper-local logistics, analytics-driven customer engagement and digital advertisements will likely support the growth in the sector. India is also planning to introduce Open Network for Digital Commerce (ONDC). ONDC will enable e-commerce platforms to synchronize search results on all the e-commerce platforms and display products and services from every platform. This will further boost business for MSMEs and help fuel India’s e-commerce growth. The growth in the sector will further encourage employment, increase revenues from export, increase tax collection by exchequers, and provide better products and services to customers in the long term.
The Indian e-commerce sector is likely to expand in different markets. India’s e-retail market is expected to continue its strong growth - it registered a CAGR of over 35% to reach Rs. 1.8 trillion (US$ 25.75 billion) in FY20. Over the next five years, the Indian e-retail industry is projected to exceed ~300-350 million shoppers, propelling the online Gross Merchandise Value (GMV) to US$ 100-120 billion by 2025.
According to Bain & Company report, India’s social commerce gross merchandise value (GMV) stood at ~US$ 2 billion in 2020. By 2025, it is expected to reach US$ 20 billion, with a potentially monumental jump to US$ 70 billion by 2030, owing to high mobile usage.
References: Media Reports, Press releases, Business Standard, Economic Times, LiveMint, Times Now, Times of India
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Partners
FAQs
How is e-commerce industry growing in India? ›
This has helped India's digital sector and it is expected to reach US$ 1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of India's e-commerce sector.
What is the size of the eCommerce industry? ›...
| Report Attribute | Details |
|---|---|
| Market size value in 2020 | USD 10.36 trillion |
| Revenue forecast in 2027 | USD 27.15 trillion |
| Growth Rate | CAGR of 14.7% from 2020 to 2027 |
The e-commerce market in India was valued at INR 6,210.96 Bn in 2021. It is anticipated to reach a value of INR 26,459.18 Bn by the end of 2027, expanding at a compound annual growth rate (CAGR) of ~26.71% during the 2022 - 2027 period.
What is the current status of e-commerce in India? ›India's e-commerce market is expected to reach $350 billion by 2030, says a recent IBEF report. The Indian online grocery market is estimated to reach $18.2 billion in 2024, expanding at a CAGR of 57 per cent.
What is India's market size? ›...
There are two distinctive stages of growth: Entrepreneurial - You grow in sales, number of orders, popularity but you still operate on a small scale, probably sell in limited markets, don't have many employees, etc. Corporate - The business goes next-level, expanding into new markets, adding more products and staff.
What are the growth factors of e-commerce? ›The rapid adoption of smartphones, easy and affordable access to technology, and the convenience of shopping from anywhere, at any time are the major reasons for the rapid growth of online commerce.
What is the role of e-commerce in India? ›e-commerce has emerged as one of the fast-growing trade channels available for the cross-border trade of goods and services. It provides a wider reach and reception across the global market, with minimum investments. It enables sellers to sell to a global audience and also customers to make a global choice.
Who are the 5 largest e-commerce companies in the world? ›| # | Name | 1d |
|---|---|---|
| 1 | Amazon 1AMZN | 4.31% |
| 2 | Alibaba 2BABA | 1.43% |
| 3 | Meituan 33690.HK | 12.47% |
| 4 | Pinduoduo 4PDD | 1.76% |
E-commerce (electronic commerce) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. These business transactions occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer or consumer-to-business.
What is the current state of ecommerce? ›
It's estimated that there were 2.14 billion global digital buyers in 2021 and e-commerce accounted for 18.15% of retail trades in 2021.
Who is leading ecommerce in India? ›Bigbasket.com is leading the Indian e-commerce market, with e-commerce net sales of US$1,222 million in 2021 generated in India, followed by ajio.com with US$1,119 million. Third place is taken by reliancedigital.in with revenues of US$752 million.
Which is the no 1 e-commerce company in India? ›1) Amazon eCommerce Company In India
% Since its inception in India in 2010, the ecommerce site has grown to an estimated 322.54 million monthly visitors, making it by far the most popular online business website in India's ecommerce space.
"E-Commerce is great platform not only to develop infrastructure but also increase employment rates in India and thus overall impact in increasing economic and social growth in Indian economy." One of the most significant benefits of e-commerce for a developing nation like India is its ability to assist rural areas to ...
What is the future of eCommerce in India? ›Companies across sectors have realized the importance and growth potential of the e-commerce industry. India Brand Equity Foundation (IBEF) report indicates that the Indian eCommerce industry is geared to surpass that of the US online market sector by 2034.
Which is the No 1 industry in India? ›Taking all three sectors into consideration, the textile industry is the largest industry in India. It accounts for around 20 percent of the industrial output and also provides employment to over 20 million individuals. Further, it contributes around 33 percent of the total export earnings.
What is the market growth rate of India? ›| Statistics | |
|---|---|
| GDP growth | 8.7% (2021e) 6.8% (2022f) 13.5% (Q1 2022-23) 6.1% (2023f) |
| GDP per capita | $2,466 (nominal; 2022 est.) $8,293 (PPP; 2022 est.) |
| GDP per capita rank | 143rd (nominal; 2022) 127th (PPP; 2022) |
| GDP by sector | Agriculture: 16.38% Industry: 29.34% Services: 54.27% (FY 2020-21) |
Chandni Chowk, Delhi
It is the largest wholesale market where you can find endless shops and stalls of food, jewelry, electronics, spices, art, antiques, souvenirs, and many knick-knacks.
In 2022, e-commerce sales were forecast to show the highest growth in Asia, Australia, and the Americas. Singapore and Indonesia would lead the way, with online sales increasing by more than 36 and 34 percent respectively.
What is the fastest growing e-commerce? ›U.S. e-commerce annual sales growth 2022, by product category. Automobile and auto parts was the e-commerce category with the highest expected year-over-year growth between 2021 and 2022.
Is e-commerce a growing industry? ›
The growth of digital commerce represents a permanent change in how people shop. In fact, Morgan Stanley's industry model, along with other data, suggests that e-commerce will continue to gain traction, even in countries where online shopping is already popular.
What are the 7 features of e-commerce? ›- User-Friendly Design. Perhaps the most important feature customers want in an ecommerce site is a good user experience. ...
- Mobile-Friendly Features. ...
- Multiple Payment Options. ...
- 24/7 Customer Service. ...
- User Reviews. ...
- User Features and Discounts. ...
- Extensive Product Information.
Stage 1 – Start-up & fast growth. Stage 2 – Plateauing growth or consolidation. Stage 3 – Renewed growth by implementing change (new platforms, features, resources/people or strategies)
What is scope of e-commerce? ›Scope of e-commerce is explained below : E-commerce includes : (a) Business to Business Commerce (B2B) - It involves business transactions between two or more business organisations through computers or electronically.
What are the main objectives of e-commerce? ›The primary goal of e-commerce is to reach maximum customers at the right time to increase sales and profitability of the business. Functions of e-commerce include buying and selling goods, transmitting funds or data over the internet.
What are 5 important requirements for e-commerce? ›- Payment Systems. A significant component to consider is the payment system for your shopping cart. ...
- Mobile-Friendly Website and Storefront. ...
- Customizable Themes and Templates. ...
- Integration of Third-Party Apps. ...
- Customer Support and Interface. ...
- Conclusion.
- B2C (Business-to-consumer). B2C businesses sell directly to their end-users. ...
- B2B (Business-to-business). ...
- B2B2C (Business-to-business-to-consumer). ...
- B2G (Business-to-government). ...
- C2B (Consumer-to-business). ...
- D2C (Direct-to-consumer). ...
- C2C (Consumer-to-consumer).
1. China. China is the world's biggest e-commerce market, led by e-commerce subsidiaries of the Alibaba group – Taobao, Alibaba.com and Tmall. With an annual growth rate of 21%, China is also one of the fastest-growing e-commerce markets.
Who is the leader in eCommerce industry? ›Today, Amazon is by far the largest e-commerce company in the world by revenue.
Is Ecommerce an industry or sector? ›The e-commerce sector has been one of the most transformative industries on the planet because it offers qualities that traditional brick-and-mortar shopping methods often can't compete with, such as enhanced convenience and personalization.
Why is e-commerce industry important? ›
Advantages of e-commerce
Companies can reach a wider audience. Companies have lower operational costs. Shopping from home is more convenient for the consumer. Consumers can easily comparison shop across different brands.
- Amazon US.
- Samsung.
- eBay US.
- Amazon Japan.
- Rakuten Japan.
- Amazon Germany.
- Amazon UK.
- Amazon India.
Fewer barriers to entry mean more online retailers
The ecommerce industry is expected to grow by almost $11 trillion between 2021 and 2025. As businesses came online during the COVID-19 pandemic, the global trend toward digitization surged ahead at lightning speed.
As a matter of fact, e-commerce continues to show no signs of slowing, and the momentum from 2020 has continued to gather. Despite a slowing global market, conflict in Europe, and a struggling supply infrastructure, online retail sales are expected to account for 21% of all global retail sales in 2022.
Is ecommerce popular in India? ›According to Statista, India had over 35 billion digital transactions valued at over $769 billion in 2021. By 2026, the digital transaction volume is expected to exceed 214 billion. The share of company-owned e-commerce platforms has increased in comparison to online platforms used by marketers to drive sales in India.
Who started e-commerce in India? ›Ahead of time: Meet the man who started India's first e-commerce site in the 90s. K Vaitheeswaran started India's first e-commerce website Fabmart.com back in 1999. Before there was Flipkart, Myntra, and Snapdeal, there was Fabmart. Before the Bansals, there was K Vaitheeswaran.
When did e-commerce start in India? ›The introduction of internet in India in 1995 marked the beginning of the first wave of e-commerce in the country.
How many people use ecommerce in India? ›...
India will have more ecommerce users by 2025 than US' population.
| Year | Ecommerce users |
|---|---|
| 2020 | 150 million |
| 2025 | 350 million |
| 2030 | 500 million |
Some of the challenges faced by e-commerce in India are: 1. Infrastructural Problems, 2. Absence of Cyber Laws, 3. Privacy and Security Concern, 4.
What are the problems faced by e-commerce in India? ›There are many big problems and challenges faced by an e-commerce industry. Factors like safety and security of online money transaction being the biggest problem along with others, have curb the smooth expansion of the online industry in the country.
What is the market size of digital marketing in India? ›
...
| REPORT FEATURES | DETAILS |
|---|---|
| Forecast Period | 2022-2027 |
Bigbasket.com is leading the Indian e-commerce market, with e-commerce net sales of US$1,222 million in 2021 generated in India, followed by ajio.com with US$1,119 million. Third place is taken by reliancedigital.in with revenues of US$752 million.
What is the size of Indian advertising industry? ›...
Competitive Landscape.
| REPORT FEATURES | DETAILS |
|---|---|
| Historical Period | 2017-2021 |
| Forecast Period | 2022-2027 |
- Amazon takes the number one spot as the biggest consumer internet and online service company globally, with a market cap of approximately $1,735 billion. ...
- The digital commerce platform, Alibaba.com, ranked second with a market cap of $614.8 billion.
There are more than 200 million smartphone users and 550 million internet subscribers living in India in 2019. This trend is being advanced by important rural-to-urban movements as poor villagers explore opportunities in India's advanced cities.
What is the digital growth rate of India? ›The revenue share of eCommerce-Electronics & Media amounts to 20.8% in 2021. The internet penetration in India is forecast to amount to 76.5% in 2026.
Who is the No 1 digital marketing company in India? ›Pinstorm is one of India's top-rated digital marketing agencies. It is a full-service supplier with a reputation for being a leader in content marketing.
What is the future of ecommerce in India? ›Companies across sectors have realized the importance and growth potential of the e-commerce industry. India Brand Equity Foundation (IBEF) report indicates that the Indian eCommerce industry is geared to surpass that of the US online market sector by 2034.
Which e-commerce is famous in India? ›Flipkart
Being India's biggest homegrown ecommerce company, Flipkart has been in a neck and neck competition with Amazon for pole position. Founded in 2007, Flipkart was acquired by Walmart in 2018 for US$16 billion, which, at the time, was called the world's largest ecommerce deal.
Television in India remains the booming source for ads among traditional media – thanks mostly to a sustained love for daily soaps, reality shows, movies, and cricket in particular. Digital advertising in India has seen tremendous growth in recent years.
Who is the biggest advertiser in India? ›
1. China. China is the world's biggest e-commerce market, led by e-commerce subsidiaries of the Alibaba group – Taobao, Alibaba.com and Tmall. With an annual growth rate of 21%, China is also one of the fastest-growing e-commerce markets.
What is the biggest e-commerce industry? ›1. Fashion and Apparel. Sector includes: Web stores selling fashion items and brands including clothing, shoes, and accessories. Fashion and Apparel remains the most popular eCommerce industry in the world, with sales expected to reach a whopping $1003.5 billion by 2025.