India’s E-Commerce Market is Ramping Up to Compete on a Global Scale

E-commerce players, Flipkart, Amazon, and Paytm Mall are driving the growth of online sales in India, with figures expected to reach $32.7 billion by the end of the year, according to research from eMarketer.

It’s estimated that 25 percent of India’s population will take up online shopping by the end of 2018, with this figure rising to 41.6 percent by 2022. This rapid expansion is believed to be a result of American department store chain, Walmart, acquiring India’s largest e-commerce player, Flipkart in a US$16 billion deal.

Amazon has also been investing heavily in the space, expanding its own presence by dropping extra cash into the market, and training local craftsman on how to use its platform to generate sales outside of their local communities. The e-commerce giant has also made heavy investments in internet and smartphone usage in the country, encouraging the country’s younger and middle-class populations to jump online.

“E-commerce is booming in India thanks to increased internet users and cheaper smartphones,” said Eric Haggstrom, forecasting analyst at eMarketer.

Traditionally, India has only held a minute footprint in the global e-commerce sphere, with online sales currently representing only 2.9 percent of its total retail sales. However, its online retail market has reportedly tripled since 2015, with predictions claiming it will grow well beyond this year’s projection of $32.7 billion, to a total worth of $71.94 billion by the end of 2022.

How India Compares with the Global E-Commerce Market

India’s e-commerce industry still has a lot of ground to cover to catch up to the markets in other countries, especially the likes of America, and the Asia Pacific area.

For instance, online shopping in China already equates to 16 percent of the country’s overall retail market, with this figure expected to increase to 25 percent within the next two years. This continued growth is predicted to occur thanks to continued investments in logistics and omnichannel shopping experiences by e-commerce providers, such as Alibaba. 

“These companies are making large investments, which include improved logistics and payment systems, as well as offering deep discounts, which will fuel future growth in the market,” Haggstrom said.

Australia’s e-commerce industry is also expanding, with research from Australia Post revealing that Aussie shoppers spent $21.3 billion online in 2017, representing a growth of 18.7 percent between 2016 and 17.

Amazon’s international growth also signals greater worldwide adoption of the e-commerce market, with its marketplaces in Germany and the UK alone accounting for more than 17 percent of its sales in 2017.

Online retail in India is also expected to rise in the coming years, as it was revealed last week that Amazon intends to invest a further $2 billion into its local marketplace, on top of the $5 billion commitment the company had previously made in the emerging market.

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