Indian e-commerce market has been witnessing high growth during the past few years, a trend that is expected to continue with the value of e-commerce sales expected to grow by 21.5 percent to reach the value of INR 5.5 trillion (US$ 74.8 billion) in 2022, according to GlobalData, a data and analytics company.
E-commerce has transformed the way consumers shop in India in the last few years, supported by increase in Internet and smartphone penetration, rise in digital literacy among consumers and government’s digital push. The COVID-19 pandemic has further accelerated the shift towards online shopping. The emergence of new variant will further push people to opt for online channel.
According to GlobalData’s E-Commerce Analytics, e-commerce payments in India is forecasted to rise at a compound annual growth rate (CAGR) of 18.2 percent between 2021 and 2025, to reach INR8.8 trillion (US$120.3 billion) in 2025.
“The COVID-19 pandemic has fast-tracked consumers’ transition to digital payments in most markets, a trend also seen in India.” said Ravi Sharma, Banking and Payments Lead Analyst at GlobalData.
While Indian consumers were comfortable shopping non-essential products like fashion and electronic products even prior to the pandemic, a similar trend can now be seen even for essential products like grocery. Blinkit (formerly Grofers) and BigBasket are the major players in this space with Amazon and Flipkart also making their mark.
The rise in e-commerce has also supported electronic payments as merchants are encouraging consumers to opt for digital payments. To support non-cash payments, in June 2021, Flipkart introduced quick response (QR) code-based payment for pay-on-delivery shipments enabling consumers to switch from cash on delivery to UPI-enabled digital payments.
“An exciting time lies ahead for e-commerce and payment companies in India with increasing number of buyers preferring online shopping over in-store purchasing.” concluded Sharma.