For many years eCommerce could have been considered something of a slow burn in India. Much of the population would complete their purchases within their local neighborhoods with little to no reason to venture online. Adoption was taking place, but at a slow rate, and then the world faced the global pandemic of COVID-19. Thrown into a world where neighborhood shopping was no longer an option, eCommerce was ready to take center stage.
There’s no hiding from the fact that the market size of eCommerce in India is growing, and growing rapidly. It is predicted that it will increase by a massive 21.5% over the course of 2022 to $74.8 billion, with a forecast of reaching $188 billion by 2025. This vast growth has come thanks to the advent of internet connections and growing mobile use. With smartphones able to access online marketplaces, receive marketing via multiple channels, and allow users to make payments online, eCommerce shows no signs of slowing in growth.
Online shopping is rapidly growing in popularity and use within India. In fact, the growth that eCommerce has seen within India is remarkable. The Digital India drive from the government has seen the number of internet users in India grow to nearly 785 million when last measured in 2021. Low-cost products, quick delivery, and the sheer quality of life improvement that online shopping offers have driven the growth across the country.
India is changing how it shops and how it does business, even when the country was ravaged by Covid, eCommerce sales still grew by 5% in 2021.
eCommerce has been driven by mobile users to such an extent that it is often referred to as mCommerce in India. Over 80% of all eCommerce sales were completed via a mobile device in 2021, with that figure expected to rise to 84% by 2025.
Mobile use has certainly fuelled eCommerce growth, but also a simple increase in digital purchasers has forced growth. In 2020, India had roughly 265 million eCommerce customers, potentially fuelled by the pandemic, in 2022 that number increased by 47 million to 312.7 million.
Arguably, one of the biggest drivers of eCommerce growth has been the Digital India government-backed initiative. Alongside other pro-India initiatives such as Make in India, Start-up India, Skill India, and Innovation Fund, business owners in India are being encouraged to build, create and take their businesses online.
The platform is proving successful, and as recently as June 8 2022, the government’s own Government e-Marketplace (or GeM) has completed 10.35 million orders worth $33.07 billion.
It shouldn’t come as a surprise that the future looks bright for eCommerce in India. Government-backed schemes, proven US-backed eCommerce platforms, an internet-enabled populace, and a growing infrastructure that can cope with the demand. All of these factors point to sustainable and impressive growth.
The key elements remain accessibility, logistics (deliveries and supply chain), and reliable online payments. There is, naturally, some mistrust in online retailers given centuries of successful commerce that has relied on personal connection but attitudes are changing and trust is growing.
Four key players are primarily driving the growth of eCommerce in India. That’s not to say that there aren’t others out there taking their market share, but these 4 are taking the lion’s share. Shopify, Amazon, Flipkart (from Walmart), and Facebook are the most popular with business owners, and with their proven track record, growing features, and acceptance by consumers, it’s no real surprise.
Since its launching in India in 2013 Shopify websites have begun to spring up across the country. The brand is wildly popular and established in Western countries, but there is still a mere handful across India. CartInsight.io offer actionable intelligence on Shopify and other eCommerce users and reports that there are only 350 Shopify stores in India, but that number is growing.
Setting up a store is a straightforward process with pricing starting at only Rs. 750 a month.
The US and European giant took an initial foothold in India in 2010 and has grown ever since. It is, as of 2021, the most popular online retailer in India with a reach of nearly 90% of India’s audience today.
The biggest competitor to Amazon, Flipkart (acquired by Walmart for $16 billion in 2018) holds a market share of nearly 40%. Many sellers and consumers alike trust and like to work with Flipkart, not least thanks to their well-advertised big billion days.
Facebook is no less popular in India than it is around the world. The social media giant allows businesses in India to sell their products through the Facebook marketplace. Considering this with the combination of WhatsApp marketing techniques, in-app payments, and the trust of a global brand, it’s no surprise that Facebook is driving a huge eCommerce boom in India.
It’s fair to say that eCommerce in India is booming. More and more businesses are turning to the online world and making the most of a wider audience. It’s not just businesses that are realizing the potential that the sector has, in fact, in order to try and quash the US-centric companies noted above, the Indian government launched its own platform (ONDC). With government back options, a population willing to shop online, and a rapidly expanding technical network, this is just the start of eCommerce growth in India.