There is little doubt that with increasing connectedness, the virtual world is becoming an important marketplace for goods and services. In fact, given cost efficiencies, the penetration of e-commerce is only bound to surge. A Morgan Stanley analysis holds that this “megatrend” (a Forbes term for globally transformative forces) is spreading at a rate that will see emerging economies close a significant gap with developed economies in terms of e-commerce penetration in the next 3 years. By 2018, nearly 50% of the online population in emerging economies will be transacting online for goods and services while the average penetration in developed economies will be at 63%. At the moment, the emerging market penetration averages just under 30% of the online population while that in mature economies, it is a little over 55%.
India—on the back of surging smartphone uptake and the resulting connectedness—will race ahead at a furious pace, increasing penetration from the 2014 level of below 20% to a little over 50% by 2018. The new penetration data should be seen as a pointer towards setting a clear policy environment for e-commerce, especially e-tail, given the opposition it is seeing from corporate brick-and-mortar retail. The spending on online retail, as per estimates, is unlikely to pinch brick-and-mortar retail, as it will remain a small part of overall retail spending in the next few years. However, e-tail’s implications for the nation’s economy are too significant—its boom will spill over to other sectors, from logistics to small and medium manufacturers, which will get a low-cost marketplace to sell wares—for us to ignore.