What is the Future of eCommerce Business in India?


India is online, and India means business!

India is going through an exciting phase of digital transformation. Driving the explosive growth of e-commerce business in India is the internet, smartphones, digital payments, and logistics.

The numbers are mind-boggling. In 2004, internet penetration in the country was 4 percent. In 2017, it shot up to 34.42 percent and touched 48.48 percent in 2019.


At the end of March 2019, there were 636 million internet users, a number expected to reach 829 million by 2021. In the same period, China recorded 840 million internet users and expected to grow to 975 million by 2023. The United States’ numbers are lower at 285 million.

In 2019, the internet penetration growth rate in rural India stood at 25.36 percent. By 2021, it is expected to touch 45 percent.


The Golden period of E-Business has arrived


India is the fastest-growing e-commerce market in the world, and by 2034, it will surpass the United States to emerge as the second largest e-commerce market after China.

By e-commerce revenue, India currently ranks 6th after China, the United States, Japan, the United Kingdom, and Germany. In 2017, the revenue from e-business in India stood at $39 Billion. It is expected to cross $120 Billion by 2020.

The arrival of 4G in India is accelerating the shift from feature to smartphones across all mobile user segments. It has led to consumers preferring online purchases of goods and services.

Driving this mega transformation in consumer habits are E-commerce giants like Amazon, Flipkart, and Paytm Mall, among others.

Global e-commerce giants like Amazon, Alibaba, and Walmart, along with a large number of private equity and venture capital firms, have made large investment bets on India and with good reason.

At 34.4 percent, the biggest segment of online shoppers was between ages 25 and 34, in 2019. The next biggest segment was between 18-24 years with 30.6 percent share, followed by those between 35 and 44 years with 24.4 percent.


Domestic purchases dominated as international purchases by domestic customers remained mostly stagnant at 6 percent of the total market, between 2017 and 2019.


The Top 10 websites in 2019 by estimated monthly visitors:

  1. Amazon India: 365.5 Million visitors

  2. Flipkart: 221.5 Million visitors

  3. Snapdeal: 83.5 Million visitors

  4. IndiaMart: 42.8 Million visitors

  5. BookMyShow: 43.4 Million visitors

  6. Myntra: 27.8 Million visitors

  7. FirstCry: 16.1 Million visitors

  8. Nykaa: 13.7 Million visitors

  9. 1mg: 7.45 Million visitors

  10. Paytm Mall: 5.9 Million visitors

Internet, Smartphone, Digital Payment, and Logistics, triggering the exploding opportunity

India is online, and India means business!

For the first time, a small business owner in a remote part of India is connected to a buyer in another remote corner. The person now has an equal opportunity to connect with 121+ Billion customers.

In 2017, the Average Revenue Per User (ARPU) in e-commerce in India was $ 42.53. In 2019, it rose to $49.44, and by 2023, it is expected to touch $ 67.70.

It may seem small, but when you take into account the potential market of 121+ Billion buyers, it presents a powerful reason for all stakeholders to jump onto the e-commerce bandwagon.

A critical part of driving the e-business is the adoption of digital transactions by the stakeholders. In 2019, payments through E-wallet comprised the highest market share among all payment formats, with a 43 percent share.

Cash on Delivery (COD) was next with 28 percent, followed by Debit and Credit cards – 20 percent, Bank transfers – 5 percent, while other options comprised 4 percent.

Udaan, a b2b online trading platform, connects small traders, wholesalers, and manufacturers in 80 cities, offering an opportunity for customer outreach in over 500 cities and towns.

Internet and smartphones, as drivers of e-commerce, are well known. However, it is the power, convenience, and safety of digital payments, which has delivered a positive customer experience. It does not discriminate between gender, buyer status, location, or purchasing power.

In a country where ‘time’ seemed to be in abundance, it is ‘time’ that is emerging as an important differentiator between shopping platforms in delivering a great shopping experience.

The efficient distribution and logistics ecosystem comprising large warehousing hubs, mini-distribution centers, last-mile transportation, and digital tracking are together contributing to the success of e-commerce in India.

Rural India to lead the next phase of e-trade

In the 90s, Burlington’s was the leader in Mail Order Catalogue. Contrary to perception, its clients were mainly from popular Tier-II towns like Ludhiana, Indore, Coimbatore, and Surat, among others.

Tier-II and Tier-III towns and cities are driving the present online revolution. The point is, the ordinary Indian living far away from the hustle and bustle of urban India has the same aspirations as his counterparts living in the metro cities.

Online shopping has brought the market place to his doorstep, and like consumers anywhere in the world, the buyer now has a wide choice.

Deals, Discounts, Upsells, and Cross-Sells are encouraging impulse purchases, and so, the next phase of explosive growth will come from rural India, as disposable incomes increase.

The introduction of 5G in the next few years and its penetration into Tier-II, III, and IV towns will trigger the next e-revolution.

Credit - Debu C (www.mapsofindia.com)

Zodioeuf Connect

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