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Indian e-commerce market to touch $120bn in 2025
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e-com growth in India
The e-commerce market in India has been witnessing high growth during the past few years. It continued to grow even during the COVID-19 pandemic as wary consumers preferred online channels for purchases. Against this backdrop, e-commerce sales are forecasted to rise at a compound annual growth rate (CAGR) of 18.2% between 2021 and 2025, to reach Rs. 8.8 trillion ($120.1bn) in 2025. According to GlobalData, e-commerce payments in India grew by 12.2% in 2020 and is estimated to register a growth of 16.8% to reach Rs 4.5 trillion ($61.5bn) in 2021.The COVID-19 pandemic has fast-tracked consumers’ transition to digital payments in most markets, a trend also seen in India. Rising consumer preference for online shopping, proliferation of e-retailers and emergence of new payment methods will continue to drive e-commerce growth in India.
E-commerce has transformed the way consumers shop in India, supported by increase in Internet and smartphone penetration, rise in digital literacy among consumers and government’s digital push. Over the past one year, despite a decline in consumer spending, economic slowdown and uncertainty caused by COVID-19, e-commerce sales continued to surge. While sectors such as travel and accommodation were affected due to lockdown and travel restrictions, a strong growth was seen in online purchases of retail goods such as grocery, electronics, and healthcare products. Leading e-commerce retailers Flipkart, Amazon and BigBasket have seen an increase in orders each month since the outbreak of the virus. To support non-cash payments, e-commerce companies are offering multiple digital payment options. For instance, in June 2021, Flipkart introduced quick response (QR) code-based payment for pay-on-delivery shipments, enabling consumers to switch from cash on delivery to UPI-enabled digital payment.
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