E-Commerce Growth in India

E-commerce has transformed the way business is done in India. The Indian E-commerce market is expected to grow to US$ 188 billion by 2025 from US$ 46.2 billion as of 2020. By 2030, it is expected to reach US$ 350 billion. In 2022, the Indian e-commerce market is predicted to increase by 21.5%, reaching US$ 74.8 billion.

India’s e-commerce market is expected to reach US$ 111 billion by 2024 and US$ 200 billion by 2026.

Much of the growth for the industry has been triggered by an increase 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% connections were wireless.

Market Size :

The Indian online grocery market is estimated to reach US$ 26.93billion 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 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, 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 140 million in 2020.

Indian consumers are increasingly adopting 5G smartphones even before roll out 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 in 2021. Indian consumers are increasingly adopting 5G smartphones even before roll out 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 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 worth US$ 9.2 billion Gross Merchandise Value (GMV), a 23% increase from last year’s US$ 7.4 billion.

Investment :

Some of the major developments in the Indian e-commerce sector are as follows:

1. 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.
2. In February 2022, Xpressbees became a unicorn with a US$ 1.2 billion valuation after raising US$ 300 million in its Series F funding.
3. In Februrary 2022, Amazon India launched One district One product (ODOP) bazaar on its platform to support MSMEs.
4. In Februrary 2022, Flipkart launched the “sell back program” to enable trade in smartphones.
5. In Janaury 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.
6. In January 2022, Flipkart has announced expansion in its grocery services and will offer services to 1,800 Indian cities.
7. In November 2021, XPDEL US- based ecommerce announced expansion in India.
8. 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.
9. In September 2021, Bikayi, a mobile commerce enabler, raised US$ 10.8 million in a Series A funding round, led by Sequoia Capital India.
10. 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).
11. In June 2021, Flipkart added a new fulfilment centre (FC) in Dankuni, West Bengal. The FC is spread over 2.2 lakh sq. ft. and has a potential to create ~3,500 direct jobs.
12. In June 2021, Grofers, the grocery delivery start-up, reportedly entered the unicorn club, after raising US$ 120 million from Zomato, the food delivery platform.
13. In June 2021, Mastercard invested an undisclosed amount in Instamojo, a payments firm, to help digitise online stores and process their payments more seamlessly.
14. In May 2021, Amazon introduced a video streaming service within its shopping app called MiniTV for users in India. MiniTV features web series, comedy shows and content on tech news, food, beauty and fashion.
15. In May 2021, Flipkart strengthened its grocery infrastructure to cater to customer safety and demand across India. In this quarter, it is planning to further expand its fulfilment centre capacity for grocery by over 8 lakh square feet across Delhi, Kolkata, Chennai, Coimbatore and Hyderabad..
16. In May 2021, Flipkart announced that it is in talks with sovereign funds, private equity majors and other investors to raise up to US$ 2 billion at a valuation of US$ 30 billion.
17. In April 2021, Flipkart announced a commercial alliance with Adani Group to improve the company's logistics and data centre capabilities and create about 2,500 direct jobs.
18. In April 2021, Flipkart announced to acquire Cleartrip, an online travel technology firm. Flipkart announced to purchase 100% shareholding of Cleartrip as the company expands its investments to broaden its digital commerce offerings for customers.
19. In April 2021, Kirana commerce platform ElasticRun raised US$ 75 million in a round led by existing investors—Avataar Venture Partners and Prosus Ventures.
20. In March 2021, Amazon acquired Bengaluru-based retail tech start-up Perpule for Rs. 107.6 crore (US$ 14.5 million).
21. In March 2021, Purplle, an online beauty store, raised US$ 45 million from Sequoia Capital India, Verlinvest, Blume Ventures and JSW Ventures.
22. In March 2021, Captain Fresh, a B2B marketplace for seafood, raised US$ 3 million in seed capital led by Matrix Partners India and Ankur Capital.
23. In March 2021, the Confederation of All India Traders (CAIT), which represents 80 million traders and 40,000 trader associations, announced the launch of a mobile app for its e-commerce portal, ‘Bharat E-market’. The association aims to get more small traders to sell online easily through smartphones.