While Indian e-commerce is growing at a stellar rate, initiatives such as Digital India, Skill India, Startup India and Make in India are also contributing to the growth of the online trade.
Several of Narendra Modi-led BJP government’s initiatives are providing a fillip to the growth of the Indian e-commerce industry. While Indian e-commerce is growing at a stellar rate and is the fastest growing online business industry in the world, initiatives such as Digital India, Skill India, Startup India and Make in India are also contributing to the growth of the online trade, CARE Rating said in a report. The industry has witnessed an annual growth rate of 51%, which is the highest globally, and from $24 billion in 2018, the industry is expected to touch $200 billion by 2026; over eightfold growth in eight years, according to ASSOCHAM-Forrester study paper as well Retail Association of India (RAI).
Indian e-commerce is also flourishing on the back of higher internet penetration, increasing quality of internet in the country, advancements in payments and computing on mobility platforms, changing consumer behavior and shopping patterns and the availability of products priced at lower rates on e-commerce platforms. “E-commerce is probably creating the biggest revolution in the retail industry, and this trend will continue in the years to come,” the CARE Ratings report said.
Early this year, the government had amended FDI (Foreign Direct Investment) policy in e-commerce for all the entities operating as e-commerce marketplace. Effective from February 1, 2019, the policy changes provide clarity and strengthen the regulatory framework governing FDI in e-commerce marketplace entities in India and also sought to provide a level playing field among online and offline traders. This came in the light of traditional retailers accusing e-commerce entities of distorting market place by predatory pricing and unfair trade practices. It was expected that the tightened norms will considerably affect e-commerce business in India.
In India, the share of electronics and accessories sales is the highest on e-commerce platforms with over 40% sales happening in these two categories. Lifestyle and apparel is another leading category with over 25% sales. Home & Living account for 5%, food and grocery for 2-3% and other category sales are about 20-30%, according to the report. Currently, the Indian e-commerce landscape is dominated by players such as Jeff Bezos’ Amazon and Walmart acquired Flipkart.