Future of Ecommerce in India: Key Statistics & Trends 2024 Skip to main content

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29th Jun, 2021
9 min read

What is the Future of Ecommerce in India?

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The future of ecommerce is rapidly evolving, with new technologies and changing consumer behaviors driving growth and innovation. Nowhere is this more apparent than in India, where ecommerce has become an increasingly important part of the retail landscape. The importance of ecommerce for the retail industry and the economy cannot be overstated, particularly in a country as vast and populous as India. The ecommerce business in India has become a key driver of growth and innovation, providing consumers with greater convenience, choice, and access to a broader range of products and services. As more and more Indians turn to online shopping for convenience, value, and variety, the future of ecommerce in India looks brighter than ever.

According to India Brand Equity Foundation (IBEF), India is expected to be the fastest-growing ecommerce market in the world in the coming years, with sales projected to reach more than US$ 300 billion by 2030. Ecommerce has opened up new opportunities for businesses to reach a larger audience and expand their reach beyond traditional brick-and-mortar stores. As the ecommerce market in India continues to evolve, it is clear that it will play a significant role in the country's economy and retail landscape.

The importance of ecommerce is rising owing to the benefits it offers. It creates a unique identity in the online world while helping you sell and market your products or services online. This blog post will discuss the significance of ecommerce and the impact of ecommerce on businesses in today's digital landscape.

Why is Ecommerce Important?

The future of ecommerce in India will be driven by several key factors, including technological innovation, the growing purchasing power of customers, and the emergence of a new group of shoppers who differ from existing ones.

ecommerce marketing strategy plan

Ecommerce is essential for several reasons:

  • Convenience: With ecommerce, customers can shop for products or services from their homes anytime. This convenience is a significant factor in the increasing popularity of ecommerce.
  • Global reach: Ecommerce enables businesses to expand their reach beyond physical storefronts to a global audience. Businesses can reach customers who may not have been accessible before, and customers can access products and services that may not have been available in their local areas.
  • Cost-effective: Ecommerce saves on costs associated with physical storefronts, such as rent and utilities. It can result in lower consumer prices and higher profit margins for companies.
  • Personalization: Ecommerce enables businesses to gather customer data and personalize the shopping experience. It can result in increased customer loyalty and repeat business.

Ecommerce has become a vital component of the retail industry in India, having transformed the landscape and becoming an integral part of the modern economy.

Trends of Ecommerce Business in India

The ecommerce market in India is rapidly evolving, and several trends are shaping its growth. Here are some of the significant trends in the Indian ecommerce market:

  • Mobile commerce: With the increase in smartphone usage, mobile commerce has become a significant driver of the present status of ecommerce in India. Many ecommerce companies have invested in mobile apps to provide a seamless shopping experience for customers.
  • Social commerce: Social media platforms have become a popular channel for ecommerce companies to reach customers and sell their products. It is expected to continue as more businesses leverage social media to drive sales.
  • Hyperlocal delivery: Hyperlocal delivery is gaining traction in the ecommerce market, offering faster delivery times and greater customer convenience.
  • Personalization: Ecommerce companies are increasingly investing in technologies that provide a personalized shopping experience for customers. It includes using data analytics and AI-powered tools to understand customer preferences and offer tailored product recommendations.
  • Rural ecommerce: As internet penetration increases in rural areas, ecommerce companies are targeting these markets to expand their customer base. It is expected to continue as more rural consumers embrace online shopping.

According to Statista, the average retail ecommerce revenue per user in India is expected to grow to over 83 U.S. dollars in 2025.

average retail ecommerce revenue per user in India stat

Source: Statista

The Indian government's Digital India initiative aims to achieve a trillion-dollar online economy by 2025. As part of this effort, the government has formed a steering committee to oversee the development of an ecommerce platform backed by the government. The Open Network for Digital Commerce (ONDC) is the proposed platform that will serve as the infrastructure for the final storefront, similar to popular ecommerce platforms like Flipkart and Amazon. In addition, the committee will provide oversight on the policy for the ONDC, which is poised to transform the ecommerce business in India.

How Does India’s Ecommerce Sector Stack Up Against Other Countries?

The ecommerce sector in India has shown tremendous growth and potential compared to other countries in recent years. India's ecommerce market is expected to reach more than US$ 110 billion by 2024, which indicates the importance of ecommerce in India.

In comparison, other countries such as China and the US have a more mature ecommerce market. However, the present status of ecommerce in India is rapidly catching up and is poised for significant growth in the coming years. However, the growth rate of the ecommerce sector in India is significantly higher than that of China and the US.

Therefore, it is clear that the ecommerce business in India is on the rise and has the potential to establish itself as a leading competitor in the global ecommerce market.

Exploring the Factors Driving the Potential of the Ecommerce Market in India

The ecommerce industry is witnessing enormous potential due to several factors, such as increased internet penetration, changing consumer behavior, the adoption of smartphones, and the growing popularity of online shopping. Additionally, the convenience of online shopping, the availability of a wide range of products, and attractive offers and discounts are driving more and more customers to switch to ecommerce platforms.

Furthermore, with the advancements in technology and logistics, ecommerce companies can now provide faster delivery, easy returns, and a seamless shopping experience, further fueling the growth of ecommerce business in India.

Let's explore the underlying factors propelling the growth potential of the ecommerce market in India.

  • Improved User Experience

Improved user experience refers to the enhanced experience that a user has while interacting with a website or application. With the rise of ecommerce, focusing on providing customers with a seamless user experience has become essential. A user-friendly website design, faster loading times, personalized recommendations, and easy navigation contribute to an improved user experience. As a result, ecommerce businesses can increase customer satisfaction, retention, and loyalty, leading to enhanced sales and revenue.

  • Increasing Internet Penetration

One of the key factors driving the potential of the ecommerce market in India is the increasing internet penetration in the country. This trend allows businesses to reach a larger audience and sell their goods or services online. In addition, with the rise of affordable smartphones and cheaper data plans, more people are accessing the internet than ever before, creating a massive opportunity for ecommerce businesses to tap into. It is expected to persist in the upcoming years, further bolstering the growth of India's ecommerce industry.

  • Investment in Technology

With the increasing usage of mobile devices and the internet, the ecommerce industry is investing in technologies like AI, virtual reality, and chatbots that can enhance customer experiences. These technologies provide personalized customer experiences, streamline supply chain and logistics management, and lead to business cost savings. In addition, the Indian government's push towards digitization and the growth of digital payments have paved the way for adopting new technologies in the ecommerce sector. As a result, investment in technology will play a vital role in the growth and success of the ecommerce market in India.

  • Government Support

Government support plays a pivotal role in the potential growth of the ecommerce market in India. The Indian government acknowledges the significance of ecommerce for the economy and has taken various measures to promote its development. The government's Digital India campaign aims to boost internet connectivity and encourage digital transactions. Furthermore, policies such as the Goods and Services Tax (GST) and Foreign Direct Investment (FDI) have created a conducive business environment for ecommerce companies. It has attracted investments and fostered growth in the ecommerce sector in India.

  • Rise of Omnichannel Strategies

Omnichannel represents the integration of multiple channels, such as online, offline, mobile, and social media, into a single shopping experience for customers. In the ecommerce sector in India, omnichannel retail has gained significant importance in recent years. By adopting an omnichannel strategy, ecommerce businesses can provide customers with a personalized shopping experience, increasing customer loyalty and retention. Additionally, integrating data analytics and AI-powered technologies has enabled companies to gain insights into customer preferences to optimize their omnichannel strategy and drive growth.

  • Investment in Logistics Infrastructure

With increased competition in the market, companies are investing heavily in logistics infrastructure to ensure faster and more efficient delivery of products to their customers. It includes building warehouses, distribution centers, and last-mile delivery networks. The investment in logistics has not only improved the delivery experience for customers but has also helped reduce the cost of logistics for ecommerce companies. With the growth of ecommerce business in India, there has been a corresponding growth in the logistics industry, which has become a significant contributor to the economy.

The future of ecommerce in India significantly impacts the country's retail industry and economy. With the rise of ecommerce, traditional brick-and-mortar retailers face stiff competition, forcing them to adopt new strategies to stay afloat. In addition, the convenience and accessibility of ecommerce have made it a preferred choice for many consumers, particularly during the COVID-19 pandemic. This growth will lead to new jobs, increased government revenues, and a boost to the overall economy. Therefore, the future of ecommerce in India holds great promise for the country's retail industry and economy.

Expectations for the Future of Ecommerce in India

The future of ecommerce in India looks promising as the sector continues to see growth and innovation. With a large population and increasing adoption of digital technology, ecommerce is expected to play a significant role in shaping the future of retail and the economy. In addition, the government's focus on digital transformation and initiatives such as Digital India and the ONDC will likely create a favorable environment for ecommerce businesses in the coming years.

It's essential to hire a professional ecommerce development company to tap into the potential of the booming e commerce market in India. With the increased use of digital payments, adoption of AI-powered technologies, and rise of omnichannel retail, the future of ecommerce in India looks promising. However, the significance of ecommerce cannot be ignored, as it continues to significantly impact the retail industry and economy with no signs of slowing down.

Competition and Market Saturation

The ecommerce market in India is increasing, but it is also becoming more competitive. As more businesses enter the market, the level of competition is expected to intensify, making it challenging for new entrants to establish themselves. Additionally, there is a risk of market saturation as more and more businesses enter the market, making it difficult for existing players to maintain their market share. However, despite these challenges, you cannot ignore the significance of ecommerce in India.

With the continued growth of the sector, it is expected that new opportunities will arise, and businesses that can innovate and adapt to changing consumer preferences will be able to thrive. The future of ecommerce in India is bright, and companies that can navigate the challenges and capitalize on the opportunities will be well-positioned for success.

The ecommerce business in India is expected to increase, fueled by advancements in technology and increased adoption of digital payments. The importance of ecommerce in India is also being recognized by the government, which invests in initiatives to promote and support the industry. With the continued significance of ecommerce in the modern economy, it is clear that the future of ecommerce in India will be characterized by continuous growth, development, and opportunity.

Conclusion

As a web development company, Innoraft recognizes the potential of the booming ecommerce market in India. The present status of the ecommerce sector in India is promising, with the industry offering numerous opportunities for businesses and entrepreneurs to thrive. Moreover, as the government continues to push for a digital economy and with the increasing use of digital payments, the ecommerce market is set to grow further in the coming years.

The future of ecommerce in India holds immense significance for the country's economy. As businesses adopt new technologies and omnichannel strategies, the ecommerce business in India will become even more competitive and diverse. Therefore, the future of ecommerce in India is full of opportunities, and businesses must be prepared to embrace them to succeed in this ever-evolving market.