Introduction

India is a shopper’s paradise now, albeit, online. The unrivalled population in India armed with smart gadgets is spoilt for a choice.After a surge in digital adoption during COVID-19, the Indian e-commerce market is estimated to be worth over $55 billion in gross merchandise value in 2021.Aided by declining broadband subscription prices & high speed connectivity, consumers have become the driving force of e-Commerce in the country. From buying groceries to furniture, movie tickets, trains tickets to booking cabs –e-Commerce has empowered the consumers. With digital device & social media, online sellers are getting unprecedented opportunity for growth & have thus become continuously more attractive for investors.

100% FDI under automatic route is allowed in Business to Business (B2B) marketplace model

Current Scenario

  • E-commerce & consumer internet companies in India received more than $ 4.32 billion from private equity & venture capital players in 2019
  • Each month, India adds 10 million daily active internet users-the highest rate globally
  • Number of smartphones per 100 people has risen from 5.4 in 2014 to 26.2 in 2018.According to 2019 data nearly 50% of all online retail transactions were done over a smartphone

Investment Opportunities

  • Electronics & Apparel, which constitute 70% of the e-commerce market in terms of transaction value
  • Other upcoming categories such as baby products, furnishing, personal care, food & groceries
  • Consumer internet companies, Technology enabling innovations like IoT, digital payments, hyper-local logistics, analytics driven customer engagement & digital advertisements

Why Invest?

  • Most of Indian internet users are in the age group of 15 to 34 years. This category shops more than the remaining population. Peer pressure, rising aspirations with career growth &fashion encourage this segment to shop more than any other category. Thus, India enjoys a demographic dividend that favors the growth of e-Commerce.
  • In coming years, as internet presence increases in rural areas, rural India will yield more e-Commerce business
  • 3 out of every 5 orders are from tier-2 & smaller towns, a target audience of nearly 200 million online shoppers by 2025 is expected

Read Ahead

  • India’s online shopper base to be 2ndlargest globally by 2030 with nearly 500-600 million shoppers. . By 2034, India is predicted to surpass USA to become the 2nd largest e-commerce market globally
  • The industry is quick to adapt to new technologies. Increased use of safe means of digital payments likely to enhance future of e-commerce business in India
  • Digital India program of the Government aims at creating a trillion dollar online economy by 2025
  • Heavy investment by Government in rolling out fibre-network for 5G will help boost e-commerce in India
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