E-RetailIndustryinIndia-Oct202 where you can

E-RetailIndustryinIndia-Oct202 where you can

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  E - COMMERCE MARKET ININDIA BRICKWORK RESEARCH October 2024
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  E-Commerce Market inIndia Coverage • Executive Summary • Market Overview  Market Size • India’s Edge on the E-Commerce sector in India • India in the Global e-commerce market • Top 10 e-Commerce Markets Worldwide • Online Retail Market • Key Investments • Industry Trends • Growth Drivers & Barriers • Key Players in the E-Commerce Industry • Market Segmentation • Technological Innovations • Market Categorization • Industry Risks • Government Initiatives • Outlook
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  Executive Summary • TheIndian e-commerce market is expected to grow at a compound annual growth rate (CAGR) of 27% to reach $163 billion (bn) by 2026 • E-commerce, the online sale of tangible commodities, has significantly expanded corporate reach and sales potential, encompassing various industries and businesses with both physical and digital outlets • The increasing internet penetration and smartphone usage, the broad adoption of digital payment methods, rapid urbanization activities, and the Government of India's (GoI) deployment of supportive policies are some of the major factors that are driving the market • Nearly 100% of Indian pin codes have adopted e-commerce, with over 60% of transactions from tier two cities and smaller towns, which contribute to nearly half of all shoppers and three of five orders. The average selling price in these areas is slightly lower than in tier-1 cities. Electronics and apparel make up about 70% of the market, while emerging categories include ed-tech and hyperlocal services Key players 24.10% 22.30% 20.00% 18.00% 16.00% 14.20% 14.00% 12.50% 10.60% 10.50% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% Fastest Growing e-commerce Markets 16.10% 5.05% 1.78% 0.43% 0.33% 0.12% 0.08% 76.12% Flipkart Amazon India Big Basket Snapdeal Paytm Mall Pepperfry Grofers Others 92% 8% Offline Retail Online Retail 2024 86% 14% Offline Retail Online Retail Online retail out of total retail in India 2028F
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  Market Overview Market sizeof e-commerce industry in India (2014 – 2030F) – in $ bn • E-commerce has revolutionized the global marketplace with unmatched convenience. Recently, India’s e- commerce market has surged, fuelled by its large population, increasing internet access, and dynamic digital ecosystem • The Indian e-commerce market is expected to grow at a CAGR of 27% to reach $163 bn by 2026 • India's quick commerce market, In hyperlocal mobility, is predicted to grow to a $5.5 bn market size by 2025 in the hyperlocal mobility space. Leading the industry are businesses like Swiggy and Zomato, who are launching new microsegments like carpooling and e-scooter rentals • India, with the world’s second-largest internet user base of 881 million (mn), is set to become the third- largest online retail market by 2030, driven by its expanding internet users and dynamic digital economy • Ajio, Amazon.com Inc., Flipkart India Private Limited, Naaptol Online Shopping Pvt. Ltd, Nykaa E-Retail Pvt. Ltd, Purplle, Shopclues (Clues Network Pvt. Ltd.), Snapdeal Limited, and Tata Cliq (Tata Group) are a few of the prominent industry participants in the growing Indian e-commerce sector • The future scenario has India leading the way in online shopping, with an anticipated 500 mn shoppers by 2030 • During 2019 and 2026, the number of online shoppers in India is expected to increase dramatically at a CAGR of 22% to 88 mn in rural India and 15% to 263 mn in urban India • Government initiatives like the National Logistics Policy aim to smoothen deliveries to hinterlands, making logistics efficient and cost-effective. Government initiatives like Jan Dhan Yojana, BharatNet Project, and the introduction of Goods & Service Tax (GST) have played a crucial role in shaping India's digital economy. Through its ‘Digital India’ campaign, the Government of India is aiming to create a trillion-dollar online economy by 2025 • With 540 mn Indian language users accounting for 73% of India's internet subscribers, local language and mobile-first content availability has increased significantly, with a potential market size of $53 bn • Key mergers and acquisitions in the e-commerce sector have been notable, with companies like Zomato and PhonePe making strategic moves to strengthen their positions • India's e-commerce sector is thriving due to increased smartphone adoption, rising affluence, and affordable data prices, making it the world's second-largest internet market Number of annual online shoppers in India (2019 to 2027F) - in mn 67 84 102 123 145 163 300 0 50 100 150 200 250 300 350 2021 2022 2023 2024 2025 2026 2030 105 140 185 250 425 0 50 100 150 200 250 300 350 400 450 2019 2020 2021 2023 2027
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  India’s Edge onthe E-Commerce sector in India 01 02 03 04 Attractive Opportunities • The Indian e-commerce industry is projected to reach $ 300 bn by 2030, experiencing significant growth • The Government e-Marketplace platform's Gross Merchandise Value (GMV) doubled in FY24, surpassing Rs. 4 Lakh Crore (US$ 47.96 bn), primarily due to a 205% increase in service procurement Policy Support • The latest guidelines on FDI in e-commerce allow the marketplace model to accept 100% FDI using the automatic method • E-commerce in India will increase owing to the government of India's significant investment in the rollout of a 5G fiber network Increasing Investment • Amazon CEO Andy Jassy announced a commitment to invest $26 bn in India by 2030, with $11 bn already invested • Google LLC is investing $350 mn in Flipkart as part of a $1 bn funding round led by Walmart, aiming to expand the company's business and improve its digital infrastructure • Tata Group invests $1 bn in Tata Neu, $2 bn in its digital division, while Walmart plans to invest over $2 bn in India's e-commerce and payments markets Growing demand • India's B2B online marketplace is projected to reach a $200 bn opportunity by 2030, highlighting significant growth potential • India's social commerce market is set to expand to $16- 20 bn by FY25, with a remarkable CAGR of 55-60% • The rise in e-commerce is expected to drive third-party logistics shipments to 17 bn within the next 7 years, supported by a base of 936.16 mn internet subscribers
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  India in theGlobal e-Commerce market • Indian B2B start-ups are poised to boost their export potential due to the country's expected 12.3% increase in merchandise exports to $116.7 bn in Q1, and the potential for growth in the $8 trillion (trn) global B2C e-commerce market by 2030 • The US mid-market sector's growth spurs entrepreneurs to explore international business opportunities. Social media platforms like Facebook and Instagram enable B2C businesses to connect globally, transcending geographic boundaries through in-app purchases Technology leading the path of e-commerce evolution • Modest Goods Export Share: India holds a mere 1.9% of global goods exports but excels in services, accounting for 4.4% of the total. • Technology Investments: Businesses are investing in tech-driven solutions for logistics, financial support, and tax compliance to enhance export performance. • Leveraging IoT and AI: Companies are using IoT and AI to improve supply chain management, reduce costs, and streamline decision-making for international expansion. Potential path • Indian companies are revolutionizing the retail industry by introducing innovations like customization, robots, automation, blockchain, and artificial intelligence, fostering a more transparent, efficient, and sustainable sector. • India aims to become a global e-commerce hub, but must prioritize tax and compliance issues to avoid legal and financial risks and ensure sustained growth, despite the rapid expansion of global businesses. • To successfully navigate foreign trade and fully benefit from the global e-commerce sector, Indian companies must utilize advanced technology and develop long-term success strategies. Top 10 e-Commerce Markets Worldwide 3023.66 1163.49 195.97 193.42 147.43 118.9 97.32 97.14 82.81 79.36 0 500 1000 1500 2000 2500 3000 3500 China USA UK Japan South Korea India Germany Indonesia Canada France
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  Online Retail Market Numberof Internet users in India (2018-2023) in Mn • Currently, over 820 mn people in India are active internet users. 442 mn of them currently reside in rural areas of the nation. Internet usage rose by 8% annually in 2023 • Because of the "Digital India" initiative, there were 895 mn internet connections in India as of June 2023, marking a significant growth • The e-commerce vertical is expected to drive the six-fold expansion in India's internet economy, which is projected to reach $1 trillion (trn) by 2030 from $155–175 bn in 2022 • The percentage of the Indian population with internet access was 52.4% in 2024. With 14.1 GB of data consumed monthly per person, India leads the globe in data consumption • The nation is among the top users of data worldwide and has the second-highest number of active internet users worldwide. With an average of 14.1 GB used per month, it has the most data usage of any smartphone • India's social commerce might reach $70 bn by 2030, owing to rising mobile penetration, and grow to $ 16–20 bn in FY25 at a CAGR of 55–60% • A survey released by IAMAI and Kantar Research, projects that the number of internet users in India would increase from approximately 700 mn in 2022 to 900 mn by 2025 • With over 950 mn users, India is the 2nd largest internet market in the world with 131.16 Lakh Cr UPI transactions in FY 2023-24 Internet Penetration Rate in India (2014-2024) 499.95 644.55 757.98 900.35 1060.09 1240.78 0 200 400 600 800 1000 1200 1400 2018 2019 2020 2021 2022 2023 13.5% 14.9% 16.5% 24.0% 28.5% 33.7% 43.4% 46.3% 48.1% 51.5% 52.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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  Key Investments Number ofprivate equity and venture capital investments in the e- commerce sector across India (2015 to 2023) • Investments from venture capital and foreign direct investment are key to India’s e-commerce growth, enhancing customer experience and product diversity. This funding boosts brand awareness and attracts new customers • A total of $341 mn in private equity and venture capital investments have been made in the e-commerce sector in the month of April,2024 • ONDC, a network launched by the Government of India in 2022, aims to provide equal opportunities to MSMEs to thrive in digital commerce and democratize e-commerce. In 2022, Indian e-commerce and consumer internet companies raised $15.4 bn in PE/VC funding, 2x increase from $8.2 bn in 2020 • In 2023, the Indian e-commerce sector saw 85 private equity and venture capital investment (PE/VC) deals. This was a decrease from 162 deals in the previous year. The highest number of investments was recorded in 2021 • The online e-commerce market makes up for around 25 percent of the total retail market in India and is expected to reach a share of nearly 40 percent by 2030 189 97 78 105 159 149 198 162 85 0 50 100 150 200 250 2015 2016 2017 2018 2019 2020 2021 2022 2023 Recent Investments in the Indian e-Commerce Market Aug 2024: Quick commerce startup Zepto has raised $340 mn led by General Catalyst, increasing its valuation to $5 bn. With $1 bn in total funding this year, Zepto plans to expand into new cities and raise its warehouse count to 700 by March 2025. New investors like Dragon Fund and Epiq Capital participated, while existing backers such as Lightspeed Venture Partners increased their stakes. Jun 2024: Zomato has invested a total of Rs 2,300 crore in Blinkit since August 2022, when it purchased the company for Rs 4,477 crore in all-stock transactions. May 2024: E-commerce giant Flipkart has raised around $350 mn from tech giant Google in its $950 mn round, at a valuation of $36 bn. Mar 2024: Myntra received a $54 mn fund infusion from parent Flipkart, at a time when the online fashion platform is witnessing intense competition from Reliance’s Ajio and Tata Cliq Jan 2024: CARS24, India's e-commerce platform for pre-owned vehicles, announced today the closing of a $450 mn round of funding, including a $340 mn Series F equity round alongside $110 mn debt from diversified financial institutions.
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  Industry Trends By 2025,350 million Indians are expected to be e-commerce users, mostly due to the country's youthful population, increased connectivity, and widespread availability of low-cost smartphones. Due to the extensive use of smartphones and mobile internet, a sizable part of e- commerce transactions in India are completed through mobile devices. Mobile commerce represents a fundamental shift in the way that customers interact with e-commerce platforms, not merely a fad. Electronics and clothing have historically accounted for the majority of e-commerce sales, but other product categories— like groceries, household necessities, and health and wellness—have grown significantly, particularly in the wake of the COVID-19 pandemic. Social commerce, or the use of social media platforms for online sales, is growing in popularity. Influencers are vital in determining customer preferences and increasing purchases on social media sites like YouTube, Instagram, and TikTok. E-commerce businesses are making significant investments in technology and logistics to boost consumer satisfaction, delivery times, and operational effectiveness. AI, AR, and machine learning innovations are being used to provide customized shopping experiences. India's E-Commerce Surge Mobile Commerce Revolutionizes India Diverse E-Commerce Growth Surge Influencers Drive Social Commerce Tech Investments Enhance E- Commerce
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  Growth Drivers India's growingeconomy and inexpensive data plans have led to the country's second-largest internet market, attracting a large consumer base eager to take advantage of e-commerce platforms' wide choices and affordable prices. By 2026, over 80% of India's population will have cellphone access, and the Unified Payments Interface (UPI) will significantly enhance digital commerce, enabling $1.5 trn transactions. By 2026, rural and tier 2-4 municipalities are expected to dominate demand, fueled by fast commerce and government initiatives. With 87% of Indian households predicted to have internet connections by 2025, the growing internet penetration rate is one of the main reasons. But compared to 2019, the amount of time spent using a mobile device to access the internet has increased by 21%. A multitude of services are now provided online as a result of increased internet penetration throughout the nation owing to the government of India's Digital India project. The inevitable outcome of increased internet usage has been that consumers have embraced online shopping and payments in addition to using digital means to obtain necessities. E-commerce saves customers time and effort by enabling them to purchase conveniently from the comfort of their homes or while on the go. Example: Because they make it convenient for customers to get food without having to leave their homes or offices, food delivery services like Zomato and Swiggy have become incredibly popular. Affordable Data Plans UPI Drives India’s Digital Commerce Growth Rural Markets Set to Lead Demand Surging Internet Access Transforms India Digital India Drives Online Services Adoption Digital India Drives Online Services Adoption
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  Industry Barriers Counterfeit andIntellectual Property Infringement Technological Disruptions and Cybersecurity Threats Logistics Challenges Hinder E-Commerce Growth Cash Culture Challenges E-Commerce Trust There have been reports in India of inferior and counterfeit goods being marketed on well- known e-commerce platforms. It can erode customer confidence and have negative financial and legal repercussions for e-commerce businesses. Technological advancements, artificial intelligence, and cybersecurity risks are posing challenges to the e-commerce industry, leading to increased consumer skepticism about credit card usage. India faces numerous infrastructure and logistics challenges, particularly in rural and isolated areas, which pose significant challenges for e-commerce businesses in terms of last-mile delivery efficiency. Connectivity Issues Hinder E-Commerce Expansion Despite increased digital payments, a significant portion of Indians still engage in cash transactions, necessitating e-commerce businesses to overcome barriers and boost trust in electronic transactions. Even while more people are using the internet, some areas continue to have problems with connectivity and digital literacy. Companies with e-commerce websites must deal with these problems if they want to attract more clients.
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  Key Players inthe E-Commerce Industry Name Logo Category Year Founded Key Professionals Revenue Employees Description Amazon India Internet Retail 1994 Samir Kumar (Country Manager) INR ~222 bn (India operation - FY2023) Over 45,000 associates Amazon is a global retailer which offers consumer products, advertising, subscriptions, and devices like Kindle and Echo, operates online and in stores, and provides AWS services. Flipkart Internet Retail 2007 Kalyan Krishnamurthy (Group CEO) INR over 560 bn (FY 2023) ~22,000 Flipkart is an Indian e-commerce company focusing on consumer electronics, fashion, home essentials, groceries, and lifestyle products. Myntra Internet Retail 2007 Nandita Sinha (CEO) INR 43.75 bn (FY 2023) ~8,354 Myntra is an established Indian fashion eCommerce store offering a diverse range of high-end clothing, shoes, cosmetics, and home furnishings for men, women, and kids. Tata CLiQ Internet Retail 2016 Gopal Asthana (CEO) INR 78.5 Cr. (FY 2023) ~490 Tata CLiQ is an e-commerce company owned by Tata Digital, under the Tata Group, which operates in categories such as Fashion, Footwear, and Accessories. Meesho E-commerce, Software, and Tech 2015 Vidit Aatrey (CEO) Sanjeev Barnwal (CTO) INR 5735 Cr. (FY 2023) ~1,441 Meesho is an online marketplace that facilitates trade between suppliers, resellers and customers. IndiaMart Internet Marketing B2B Marketplace 1996 Dinesh Chandra Agarwal (CEO) INR 985 Cr. (FY 2023) ~5,186 IndiaMART is an online B2B marketplace, connecting buyers with suppliers. The channel focuses on providing a platform to SMEs, Large Enterprises and individuals. FirstCry Internet Retail 2010 Supam Maheshwari (CEO) INR 5,632 Cr. (FY 2023) ~5,700 FirstCry is an Indian e-commerce company focused on baby products retailing. As of June 2023, the company had over 900 brick-and-mortar stores of FirstCry and BabyHug across India. Nykaa Internet Beauty and Personal Care 2012 Falguni Nayar (CEO) INR 5,144 Cr. (FY 2023) ~4,900 Nykaa is an Indian cosmetics, personal care, skin care and perfume company, which sells beauty, wellness and fashion products.
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  Market Segmentation Three marketsegments are distinguished: Business-To-Business (B2B), Business-To-Consumer (B2C), And Consumer-To-Consumer (C2C). In 2023, the Business-To-Consumer (B2C) market category in India had the biggest share of the e-commerce market. This is explained by the rise in smartphone use and internet penetration. Businesses that operate under the B2C (business-to-consumer) model range widely, from modest shops and conventional mall locations to cutting-edge online retailers like Nykaa and Amazon. B2C companies used to be physical locations like restaurants, retail stores, and small enterprises that sold goods to customers directly and without the need for middlemen. But with the introduction of e-commerce platforms that allow for the direct sale of goods and services online, the internet changed this industry. In India, notable examples of B2C e-commerce businesses include Amazon, Flipkart, Ola, Swiggy, Nykaa, OLX, and BookMyShow. • The India D2C e-commerce market also held the major share in the India e-commerce industry in 2023 and is expected to grow rapidly in the future • The B2B e-commerce sector in India is vast, varied, and ever-expanding. It serves a variety of buyer and seller groups, including manufacturers, distributors, wholesalers, retailers, service providers, and exporters. A broad number of product categories are also covered, including consumer, industrial, healthcare, and digital services goods as well as agricultural and agricultural products. • Some of the factors that are driving this growth are: o The growing demand from international consumers for affordable, high-quality Indian goods, particularly in industries like software services, engineering items, textiles, handicrafts, and pharmaceuticals o An increase in supply coming from Indian vendors looking to reach a global audience and broaden their market o The availability of online marketplaces with tools for currency conversion, payment processing, shipping assistance, customs clearance, and dispute settlement that make cross-border trade easier. Among these are TradeIndia, Alibaba, eBay, Amazon Business, and IndiaMART. • India’s B2B e-commerce market is also poised to benefit from the recent developments in the global scenario, such as: o The successful hosting of the G20 Summit in New Delhi on September 9 and 10, 2023, which showcased India’s leadership role in addressing global challenges like climate change, sustainable development, digital transformation, multilateralism, and women empowerment o The conclusion of multiple trade agreements and collaborations with important nations and areas, such as the US, the EU, the UK, Japan, Australia, ASEAN, Africa, and the Middle East, has improved India's economic cooperation and global integration. o The introduction of various programs aimed at increasing India's manufacturing output and exports, including the National Export Policy (NEP), the Production Linked Incentive (PLI) scheme, the Make in India program, and the Atmanirbhar Bharat (Self-reliant India) campaign.
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  Technological Innovations India’s InternetEconomy ($ bn) Smartphone User Base in India (mn) • In recent years, e-commerce in India has surged, driven by digital payments, rising internet penetration, and smartphone use. The expanding middle class and improvements in internet infrastructure present significant opportunities for global companies 125 175 1000 0 200 400 600 800 1000 1200 2018 2022 2030F 931 1100 800 850 900 950 1000 1050 1100 1150 2024 2025F • Tech-Driven Trends Shaping E-Commerce o Artificial Intelligence (AI) and Machine Learning (ML): AI and ML enhance personalization through data analysis, improving recommendations, inventory management, and fraud detection. o Augmented Reality (AR) and Virtual Reality (VR): AR and VR allow customers to visualize products in their environments, especially in fashion and furniture, enhancing the shopping experience. o Chatbots and Virtual Assistants: These tools provide instant support, answer FAQs, and guide purchases, improving customer service and reducing costs. o Voice Commerce: Enabling shopping via voice commands, voice commerce is set to grow with the popularity of smart speakers. o Mobile Commerce (M-commerce): As mobile usage rises, optimizing e-commerce for mobile devices is essential to reach a broader audience. o Blockchain Technology: Blockchain offers secure transactions and enhances trust through supply chain tracking and payment security. o Subscription-based Models: These models provide regular deliveries, fostering customer loyalty and generating recurring revenue. o Social Commerce: Integrating e-commerce with social media, businesses can sell directly through platforms, leveraging their vast user bases. o Rise of Voice Search: With voice assistants' popularity, optimizing for voice search through natural language queries is becoming crucial. o Green E-commerce: Focusing on sustainability, this trend includes eco-friendly practices and appeals to environmentally conscious consumers.
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  Market Categorization • Thee-commerce market is predicted to surpass $100 bn by 2028, with the Food and Beverage (F&B) sector contributing over a third of the forecasted market size. Other booming sectors include Fashion, Electronics, and Media, each experiencing double-digit growth compared to 2023 • The market is segmented into Electronics and Appliances, Fashion and Apparel, Beauty and Personal Care, Food and Grocery, Furniture and Home Décor and Others. The Electronics and Appliances segment held the largest India e-commerce Market share in 2023. This is attributed to the increasing middle-class population with the increase in disposable income • The Indian Fashion e-commerce market size is anticipated to witness a CAGR of 34% during the forecast period 2023-2030, owing to the rising popularity of online shopping and the convenience it offers to consumers. Key players operating in the India Fashion e-commerce market include Nykaa, Meesho, Limeroad, Trendin, Myntra, Ajio, Flipkart, and Amazon India • The Indian electronics e-commerce market is projected to reach $25.6 bn by 2024, accounting for over 20% of the total e-commerce market. With a CAGR of 14.2% from 2024 to 2028, the market volume is expected to hit $43.5 bn by 2028 • The Indian online grocery market reached $9.0 bn in 2023 and is projected to grow to $80.6 bn by 2032, with a CAGR of 26.7% from 2024 to 2032. Key drivers include increased internet penetration, smartphone usage, urbanization, busy lifestyles, the COVID-19 pandemic, product availability, and competitive pricing • According to an article published in November 2023, the beauty and personal care sector in India is expected to grow significantly, with a projected 3.86% annual increase and a 143% gain in volumes year over year. Even while offline sales are still the majority, e-commerce is predicted to increase by 18.2% by 2025 due to digitization and automated supply chains from modern cosmetic brands Market share of India's e-commerce retail segments in 2022 33% 21% 20% 11% 6% 4% 5% Smartphones Electronics and appliances Fashion and apparel Food and FMCG Furniture and Home décor Beauty and personal care Others 35 32 23 18 27 20 20 17 27 20 25 28 2 11 16 17 5 6 5 6 3 4 5 7 1 7 6 6 2015 2021 2025 (E) 2030 (E) Total online retail ($ billions) Mobile Devices Electronics and Appliances Fashion Food and FMCG Furniture and décor Beauty and personal care Others Share of online retail spending (%) 10-13 50-55 140-160 280-300 Total online retail $ bn) Total online retail ($ bns) 2021-30 CAGR (%) Mobile Devices 15-17 Electronics and Appliances 20-22 Fashion 27-30 Food and FMCG 27-30 Furniture and décor 22-24 Beauty and personal care 30-35 Others 20-22 Average 20-22
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  E-Commerce – RegionalInsights Western India: E-Commerce Powerhouse • In 2023, the Western Indian e-commerce market accounted for the greatest share, and in the years to come, growth at a rapid pace is anticipated. The center of Western India's e- commerce is Maharashtra. Mumbai is the financial hub of the state and a major hub for e-commerce activities due to the concentration of major logistics corporations, software startups, and e-commerce companies there. Gujarat: B2B E-Commerce Hub • Gujarat, which engages in a variety of manufacturing and commerce activities, is another important industrial and commercial centre in Western India. Because of this, the state is one of the major markets for business-to-business e-commerce, with businesses in industries like chemicals, pharmaceuticals, and textiles depending on e-commerce for supply chain and procurement solutions. North India: Rising E-Commerce Fashion Hub • The e-commerce market in North India is expected to grow due to the refined style of Northeasterners and their strong ingrained fashion sensibilities, particularly in cities like Shillong, Guwahati, Gangtok, and Aizwal, which has led to rapid online sales of branded clothing and accessories. North India: E-Commerce Dominance • North India dominates the Indian e-commerce market, with major firms like Amazon, Flipkart, Bluestone, FirstCry, Myntra, FashionandYou, and ShopClues serving the region's fashion- conscious populace, increasing e-commerce revenue. Tier II Warehousing Demand Grows • Only about 28% of the warehousing stock is in Tier II cities, despite the fact that 7 out of 10 online buyers live in Tier 2+ cities. This is creating a demand for Grade A warehousing assets in cities like Jaipur, Lucknow, Kolkata, Nagpur, and Ludhiana. Institutional investors have committed about $10 bn to the construction of Grade A storage assets between 2017 and 2022.
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  Industry Risks The riseof OTT platforms could lead to a more sedentary lifestyle, turning people into "couch potatoes" and reducing social interactions. The Union Commerce Minister, Piyush Goyal emphasized that activities like dining out and social interactions are essential for human development and connection, which are at risk as more individuals rely on online solutions. Piyush Goyal stressed the need for a balanced evaluation of e-commerce's impact on traditional retail sectors like restaurants and local stores. While acknowledging e-commerce as an enduring presence, he highlighted the importance of critically assessing its growth. He noted that it threatens small retailers' high-margin products essential for their survival and raised concerns about Amazon's billion-dollar loss, suggesting it may reflect predatory pricing practices and questioning the broader implications for the Indian economy Government Concerns for the e-commerce market in India Cybersecurity Risks: Data breaches, denial-of-service attacks, malware infections, and other cyberattacks can compromise client information and cause operational disruptions on e-commerce platforms. Payment Fraud: A business's reputation may suffer as well as monetary losses from chargeback fraud, identity theft, and credit card fraud, among other forms of fraud that can affect online transactions. Disruptions to the Supply Chain: E-commerce companies depend largely on effective supply chain management. Any delays, stockouts, or disgruntled customers may result from natural disasters, geopolitical unrest, or transportation problems. Regulatory Compliance: E-commerce companies have to go by a number of laws and rules, such as tax laws, consumer protection statutes, and data privacy legislation (such the CCPA and GDPR), which can be complicated and differ between jurisdictions. Competition and Price Pressure: Businesses in the highly competitive e-commerce sector are always under pressure to provide competitive prices, which can reduce their profit margins and have an adverse effect on their long-term viability.
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  Government Initiatives • By2025, BharatNet broadband aims to connect 3,61,000 communities in 16 states • 173,000 Grame Panchayats were connected to the 5,466,000 kilometers of optical fiber cable that had been laid as per the Economic Survey of 2021–2022 • To promote digitization, the government developed a number of programs under the Digital India movement, including Umang, the Start-up India Portal, and the Bharat Interface for Money (BHIM). • The Draft National e-Commerce Policy of the Indian Government promotes foreign direct investment in the marketplace model of e-commerce. It also says that the E-commerce sector's FDI regulation was created to guarantee fair competition for all players • 100% FDI allowed under automatic route in B2B E-commerce and in marketplace model of e-commerce. 100% FDI under Government approval route for E-Commerce by Food Retail Companies, provided products retailed are manufactured and/or produced in India. • The telecom operator gave subscribers free high-speed internet access for the first seven months • The draft states that e-commerce sites and apps must be operated by a registered entity in order to function in India. Bharat Net and Digital India The government required permanent account numbers (PANs) for international businesses running e-commerce platforms in India in October 2020, revising the equalization levy regulations of 2016. The sale of goods or the provision of services through a non-resident ecommerce operator was subject to a 2% tax in the FY21 budget. Udaan is a B2B online commerce network that links online merchants with small and medium-sized manufacturers and wholesalers. They also receive technology support, payments, and logistics from it. ▪ The platform distributes to more than 500 places in India and has merchants in more than 80 cities. Permanent account numbers (PAN) mandated E-commerce draft policy Udaan A new steering committee has been established by the Indian government to oversee the creation of an official e-commerce platform. The government-backed Open Network for Digital Commerce (ONDC) e-commerce network will have its policy overseen by the newly established committee, which was established by the Commerce Ministry. The final shop, which would resemble somewhere between Flipkart and Amazon, will be set online using the infrastructure provided by the ONDC. Open Network for Digital Commerce (ONDC)
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  Government Initiatives The Departmentfor Promotion of Industry and Internal Trade (DPIIT) is apparently proposing to use the Open Network for Digital Commerce (ONDC) to create protocols for cataloguing, vendor finding, and price discovery in an effort to systematize the onboarding of shops on e-commerce platforms. Their goal is to give all market participants equitable opportunity to utilize the e-commerce ecosystem to its fullest potential for the benefit of the nation and its citizens. The government had identified five areas in its proposed national retail policy—ease of doing business, rationalization of the license process, digitization of retail, focus on reforms and an open network for digital commerce—stating that offline retail and e-commerce need to be administered in an integral manner. Ecommerce Ecosystem E-commerce enterprises are required to publish the nation of origin alongside product listings under the Consumer Protection (E-Commerce) Rules, 2020, which were notified by the Consumer Affairs Ministry in July. They will also need to disclose the criteria used to determine which products are included on their platforms. The Government e-Marketplace platform in India doubled its Gross Merchandise Value in FY24, surpassing the $47.96 bn threshold. The increase was primarily due to a 205% surge in service procurement, accounting for 50% of the GMV. GeM aims to improve efficiency, transparency, and trust in procurement. Consumer Protection Rules National Retail Policy Government e-Marketplace Portal (GeM)
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  Outlook E-commerce Growth Projections Expanding ConsumerBase Thriving in India’s E- Commerce E-commerce Growth Projections Future Potential of Indian E- Commerce India's e-commerce market is set to become the second-largest globally by 2034, driven by innovations like digital payments and data-driven customer engagement, ensuring sustained expansion. As the e-commerce sector evolves, businesses must navigate challenges and seize growth opportunities. Understanding consumer preferences, leveraging technology, and adopting customer-centric strategies are crucial for success. Embracing these changes will unlock significant potential for companies in India's growing digital economy. The Indian e-commerce industry is set for significant growth, driven by diversity and competition through omnichannel strategies and new technologies. Businesses must be ready to seize these opportunities to thrive. India's e-commerce market is set to become the second-largest globally by 2034, driven by innovations like digital payments and data-driven customer engagement, ensuring sustained expansion. India gained 125 mn online shoppers in three years, with another 80 mn expected by 2025. The Government e- Marketplace platform's GMV has doubled in FY24, surpassing $47.96 bn, primarily due to a 205% increase in service procurement
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