India E-commerce Market: Rapid Digitalization and Government Initiatives Driving the Market Growth

India E-commerce Market size was valued at USD 67.62 Billion in 2023 and is expected to grow at a CAGR of 31.13 percent from 2024 to 2030 to reach USD 450.81 Billion.
India E-commerce Market Overview
The E-commerce market in India has grown remarkably in the past few years. There is a transformation in the way people shop and do business. India has become one of the most dynamic e-commerce markets in the world because of its vast population, increasing internet penetration and thriving digital ecosystem. The country has become the eighth-largest market for e-commerce, trailing France, and a position ahead of Canada. In FY21, the country had the third-largest online shopper base of 150 million after China and the US. India’s e-commerce sector has opened various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to-business (C2B). As per research, India B2B E-commerce market is expected to rapidly during the forecast period. The India D2C E-commerce market also held the major share in the India E-commerce industry in 2022 and is expected to grow rapidly in the future.To know about the Research Methodology :- Request Free Sample Report
India E-commerce Market Dynamics
Government Initiatives Driving the India E-commerce Market

Regulatory support is majorly helping streamline e-commerce operations. The Government of India has taken many initiatives, namely Digital India, Make in India, Start-up India, Skill India and Innovation Fund. The implementation of such programs on time and effectively is expected to support growth of E-commerce in the country during the forecast period. The Digital India initiative has boosted the adoption of e-commerce by encouraging consumers to shop online. The various e-commerce policies and guidelines introduced by the government addressing several aspects including FDI (Foreign Direct Investment), consumer protection, data privacy, and marketplace conduct help to foster transparency and trust among consumers and businesses.

Some of the initiatives taken by the Government to promote E-commerce in India are:



1
As of November 2022, the Government e-Marketplace (GeM), an online platform for public procurement in India, served 12.28 million orders worth US$ 40.97 billion from 5.44 million registered sellers and service providers for 62,247 buyer organizations.


2
The Department for Promotion of Industry and Internal Trade (DPIIT) is reportedly planning to use the Open Network for Digital Commerce (ONDC) to set protocols for cataloging, vendor discovery and price discovery in order to systematize the onboarding process of retailers on e-commerce platforms.


3
National Retail Policy: The ease of doing business, rationalization of the license process, digitization of retail, focus on reforms and an open network for digital commerce are the five areas identified by the government. They state that offline retail and e-commerce are required to be administered in an integral manner.


4
The Government has launched many initiatives such as Umang, Start-up India Portal, Bharat Interface for Money (BHIM) etc to boost digitalization under the Digital India movement.


5
Huge investments by the Government in rolling out fiber network for 5G is expected to help boost E-commerce in India


6
The Indian Government has hiked the limit of FDI in E-commerce marketplace model to up to 100% (in B2B models) to increase the participation of foreign players in E-commerce



Increasing Investments Creating Opportunities for the India E-commerce Market

The investments coming from various sources such as venture capitalists, private equity firms, and foreign direct investment (FDI) play a crucial role in creating opportunities for the e-commerce market in India. Investments are helping e-commerce platforms to improve their customer experience by highly investing in user interface (UI) and user experience (UX) design, personalized recommendations, responsive customer service, and seamless navigation. This is leading to higher customer retention and loyalty. The increasing investments are enabling e-commerce companies to diversify their product offerings. This diversification includes the addition of new categories, exclusive merchandise, and collaborations with both local and international brands, which results in the broadening of consumer choices. The increasing funding for Indian e-commerce marketing and branding activities through investments is expected to create brand awareness and attract new customers.

Some of the examples of the investments are:



1
In 2021, the e-commerce sector of India has received USD 1.2 billion of PE/VC investments, which is a 5.4 times increase year on year.


2
CARS24, a leading used car e-commerce platform in India, raised USD 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


3
Bikayi, a mobile commerce enabler, raised US$ 10.8 million in a Series A funding round, which was led by Sequoia Capital India in September 2021


4
Xpressbees, a logistics ecommerce platform has become a unicorn valued at USD 1.2 billion in 2022. The firm also raised USD 300 million in its Series F funding.



Rising Data Privacy Concerns Challenging the India E-commerce Market

The online shopping market and online retail market in India have grown rapidly and are expected to continue growing during the forecast period. As more consumers are turning to online shopping, they are entrusting e-commerce platforms with their personal and financial information. E-commerce platforms collect extensive customer data, which includes personal information, purchase history, and payment details. The mishandling or breach of this data has severe consequences, including legal actions, financial penalties and reputational damage. There were huge number of high-profile data breaches involving Indian e-commerce companies in 2022. For example – In July 2022, the personal information of over 100 million users of the e-commerce platform Meesho had been leaked. The non-compliance with data privacy regulations results in legal repercussions, which include fines and penalties. These financial risks are substantial and detrimental to a company's bottom line.
India E-commerce Market Regional Insights
The Western Indian E-commerce market held the largest share in 2022 and is expected to grow at a high rate during the forecast period. The e-tailing market in India, especially on the west side of the country is growing rapidly. Maharashtra is the e-commerce hub of Western India. In the state, Mumbai is the financial capital and the presence of key e-commerce companies, logistics providers, and tech startups in Mumbai has made it an important center for e-commerce operations. Western Indian has a diverse consumer base, including urban centers such as Mumbai and Pune with developing cities and towns. Gujarat is also a major industrial and commercial hub in the in Western India having various manufacturing and trade activities. This makes the state a one of the key markets for B2B e-commerce with the companies in the sectors such as textiles, chemicals, and pharmaceuticals relying on e-commerce for their procurement and supply chain solutions.

The North Indian E-commerce market has grown majorly in the past few years and is expected to retain this growth during the forecast period. The people of the Northeast have always been known for their unique and elegant sense of style. Rock culture, which is renowned in a number of towns in this region, including Shillong, Guwahati, Gangtok, Aizwal, and others, has instilled strong fashion sensibilities in the people of these states, just as it does in any other metropolitan and urban Indian metropolis. That's why branded fashion accessories and apparel sell out so rapidly on the internet. These are the key factor that is expected to drive the growth of the market in North India during the forecast period.
India E-commerce Market Segment Analysis
Based on Type: The market is segmented into B2B (Business-to-Business), B2C (Business-to-Consumer) and C2C (Consumer-to-Consumer). The B2C (Business-to-Consumer) segment held the largest India E-commerce Market share in 2023. This is attributed to the increasing internet penetration and usage of smartphones.

Based on Product Category: The market is segmented into Electronics and Appliances, Fashion and Apparel, Beauty and Personal Care, Food and Grocery, Furniture and Home Décor and Others. The Electronics and Appliances segment held the largest India E-commerce Market share in 2023. This is attributed to the increasing middle class population with the increase in disposable income.
India E-commerce Market Competitive Landscape
As per the research, the Indian e-commerce market is highly competitive and is expected to remain high during the forecast period. This is attributed to the increasing demand for e-commerce in India and the increasing number of players entering the market. The Indian e-commerce companies compete on factors such as price, selection, convenience, and customer service.

Amazon launched its Prime Video Channels in India in September 2021. These channels provide its members with a seamless experience and access to various popular video streaming services. The company also launched its One District One product (ODOP) bazaar on its platform to support MSMEs in February 2022. Flipkart launched its “sell back program” to enable trade in smartphones in February 2022. The company also expanded its grocery services to 1,800 Indian cities.
India E-commerce Market Scope: Inquiry Before Buying



India E-commerce Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 67.62 Bn.


Forecast Period 2024 to 2030 CAGR:
31.13%
Market Size in 2030:
US $ 450.81 Bn.


 Segments Covered:
by Type
B2B (Business-to-Business)
B2C (Business-to-Consumer)
C2C (Consumer-to-Consumer)


by Product Category
Electronics and Appliances
Fashion and Apparel
Beauty and Personal Care
Food and Grocery
Furniture and Home Décor
Others



India E-commerce Market by Region:
1. East India
2. West India
3. North India
4. South India
India E-commerce Key Players
1. eBay
2. Amazon
3. Phone pay
4. Google
5. Flipkart
6. Snapdeal
7. Jabong
8. Myntra
9. Paytm
10. MakeMyTrip
11. Infibeam
12. Nykaa
13. Limeroad
14. Cleartrip.com
15. BigBasket
16. JioMart
17. Grofers
Frequently Asked Questions
1] What is the expected CAGR of the India E-commerce Market during the forecast period?
Ans. During the forecast period, the India E-commerce Market is expected to grow at a CAGR of 31.13 percent.

2] What was the India E-commerce Market size in 2023?
Ans. USD 67.62 Bn was the India E-commerce Market size in 2023.

3] What is the expected India E-commerce Market size by 2030?
Ans. USD 450.81 Bn is the expected India E-commerce Market size by 2030.

4] What are the major India E-commerce Market segments?
Ans. The market is divided by Product Category, Type and Region.

5] Who are the key players in the India E-commerce Market?
Ans. eBay, Amazon, Phone pay, Google, Flipkart, Snapdeal, Jabong, Myntra, Paytm, MakeMy Trip, Infibeam, Nykaa, Limeroad, Cleartrip.com, JioMart, BigBasket and Grofers