E-commerce market India to surpass $91bn in 2023

Research conducted by GlobalData predicts that India's e-commerce market is set to surpass $91 billion in 2023. Overall, the transaction value of India's e-commerce market is projected to grow from $49 billion in 2019 (INR 3.4 trillion) to $91 billion in 2023 (INR 6.3 trillion).

The research report 'India Cards & Payments: Opportunities and Risks to 2023' concludes that the rising internet penetration rate supports the growth of the e-commerce market. Benefits, such as faster delivery methods offered by retailers, the rising online shopping preference by consumers and discounts helped too.

Payment method stimulation in India

Another reason for e-commerce growth lies in the efforts of the Indian government to promote online shopping. To encourage digital payment acceptance among merchants, the government is mulling guidelines for cost-effective payment solutions. During the Union Budget 2019 presentation, the Indian government announced a merchant discount rate waiver on digital payments. For example, payments made via Bharat Interface for Money (BHIM), UPI, UPI QR Code, Aadhaar Pay, certain debit cards, National Electronic Funds Transfer (NEFT), and the Real-Time Gross Settlement (RTGS) system. Further guidelines are still awaited from the government prior to implementation.

With Indians being increasingly price-sensitive, the growth of e-commerce can be attributed to the benefits offered by online retailers. These can be discounts, cash-back and loyalty points on purchases. Annual online sale festivals such as ‘Flipkart Big Billion Days’ and ‘Amazon Great Indian Sale’ too have resulted in the exponential growth of e-commerce sales. Retailers are also extending their product lines to further penetrate into the market. In May 2019, Flipkart launched online grocery store ‘Supermart’, extending its presence from fast-moving consumer goods to groceries.