eCommerce in India underwent a significant transformation due to the COVID-19 pandemic.
While some brick-and-mortar businesses struggled during the economic downturn, online businesses generally thrived.
Many companies experienced an uptick in traffic and customer growth, while others discovered new niche products to sell, resulting in new entrants to the e-commerce market.
In 2020, the Indian e-commerce market was worth $26.8 billion compared to $38.5 billion dollars in 2021*.
That’s a 43.6 percent year-on-year growth for the sector. In the same year, India’s eCommerce sector received US$ 15 billion of PE/VC investments which is a 5.4 times increase year on year. This is the highest investment any sector has ever received in India.
According to a report published on ResearchGate, eCommerce in India surpassed $62 billion in 2023 and is expected to follow a minimum 14% year-on-year growth rate until 2028.
This significant expansion along with the initiatives led by the Indian government is a powerful driving force for e-commerce growth.
ECommerce in India: The Evolving Market
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ECommerce in India has seen its fair share of growth especially in the behavior of customers, with a significant shift towards online shopping.
Due to an abundance of products and the emergence of new categories such as groceries, home salon services, and quick goods and services delivery, the Indian e-commerce market has seen a significant rise in popularity. This has led consumers to rely heavily on online shopping to meet their needs.
The rise of large multinational corporations and international brands entering the Indian e-commerce market has given them greater visibility and made it easier for customers to engage with their products.
Thus, the increased popularity of online shopping is a result of various factors –
- Availability of international brands and new shopping segments
- Improvements in product accessibility and expansion of product categories
- Altered customer behavior skewed towards shopping online since the pandemic
The above factors combined with the Indian government’s initiatives like ONDC, create several opportunities for businesses in the online marketplace.
As the industry grows, challenges pertaining to infrastructure and logistics, limited reach in rural areas, and lack of trust in online transactions have to be overcome.
Strategies for Staying Ahead
Personalization and Customization
Data and analytics have been a cornerstone for eCommerce in India to flourish. It has been the focus of several businesses as they provide valuable insights into customer behavior and the forces that drive them.
The adoption of Artificial Intelligence can prove to be invaluable in providing hyper-focused customer predictions that shed light upon new ways of personalizing their experiences.
Utilizing these understandings to tailor marketing campaigns and recommendations as per the user’s wants and needs can add tremendous value.
Being Mindful of Customers’ Needs
Another advantage of data analytics is incorporating it to drive the decision-making process so companies can better understand consumer preferences.
This includes offering products that align with current trends, such as eco-friendly, vegan, and sustainable options, which are becoming increasingly important to consumers.
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Additionally, with analytics, companies can identify areas for improvement and make necessary changes to their business strategies and operations. This allows them to stay competitive and meet the evolving needs of their customers.
Mobile Traffic
It isn’t news that most website traffic is through mobile devices. People spend a significant part of their day using mobiles, hence optimizing the shopping experience for smartphones via apps and mobile-optimized websites is essential.
This allows companies to leverage mobile-specific features such as push notifications – reminders, alerts, order updates – that improve the brand recall ability.
Expansions to New Regions
India being such a diverse country with one of the highest populations in the world, can be extremely beneficial for companies looking to expand.
Focusing on Tier 2 and Tier 3 cities by creating content in their language and making their product/service accessible to them will help brands connect to audiences most companies fail to serve.
Social eCommerce in India
The younger generation comprises a significant amount of the online demographic, heavily using platforms such as Snapchat, Instagram (Reels), and YouTube (Shorts).
According to the Future of Commerce, global sales via social media platforms were estimated at 992 billion dollars in 2022. This data is critical for businesses as they must be visible on these platforms to reach their audiences and drive revenue.
Diversification
Businesses such as Nykaa, JioMart, and Flipkart have diversified their product offerings into new segments, improving eCommerce in India.
Image Source: Tvisha
This has helped the companies tap into different markets and cater to new audiences, increasing their customer base. It has also established itself as a one-stop shop wherein the customer can stay on one platform for all their shopping needs.
Final Thoughts
The online marketplace has seen a considerable evolution in the last decade alone.
With the country becoming increasingly digital-savvy and the government’s efforts to improve accessibility to all corners, the e-commerce market has yet to hit its strides.
As new players enter the online retail domain, the scope for growth and opportunities continue to be promising.
India benefits from a robust customer base inclined towards shopping online, and the demand for e-commerce goods and services will match if not surpass the supply.
By adopting the above strategies and a platform giving visibility into retail data analytics, brands can remain competitive and stay ahead in the market.
*Data sourced from Statista and Mordor Intelligence.
Frequently Asked Questions About ECommerce in India
Which e-commerce platform is best in India?
The best e-commerce platform in India depends on the type of shopping experience you prefer:
- Flipkart – Known for competitive pricing, great deals, and strong logistics, especially in Tier-2 and Tier-3 cities.
- Amazon India – Offers a vast selection, superior customer service, and a seamless shopping experience.
- Myntra – The go-to platform for fashion and lifestyle products.
- Snapdeal – Known for budget-friendly deals across various product categories.
- Nykaa – Popular for beauty and personal care products, with exclusive brand collaborations.
Verdict: Flipkart and Amazon India dominate the general e-commerce space, while niche platforms like Myntra, Nykaa, and AJIO excel in specialized markets.
What is ecommerce in India?
Ecommerce in India refers to the buying and selling of goods and services online, facilitated by digital platforms, mobile apps, and electronic payments. It covers various sectors, including:
- Retail (Amazon, Flipkart, Snapdeal) – Online marketplaces offering a wide range of products.
- Food Delivery (Zomato, Swiggy) – Platforms that allow consumers to order food from restaurants.
- Grocery (BigBasket, JioMart, Blinkit) – Online supermarkets delivering daily essentials.
- Fashion & Beauty (Myntra, Nykaa, AJIO) – E-commerce platforms specializing in apparel, cosmetics, and accessories.
- B2B (Udaan, IndiaMART) – Online platforms connecting businesses for wholesale trade.
Is e-commerce successful in India?
Yes, e-commerce in India has been highly successful due to factors like affordable internet access, increasing smartphone penetration, digital payments, and improved logistics. Key indicators of success include:
- Growing Consumer Base – Over 400 million online shoppers are expected in India by 2027.
- High Growth Rate – The Indian e-commerce market is projected to grow at a CAGR of 18.7% through 2028.
- Government Support – Initiatives like Digital India, UPI payments, and ONDC (Open Network for Digital Commerce) are accelerating growth.
Despite challenges like intense competition, regulatory issues, and supply chain constraints, the sector continues to thrive and evolve.
How big is the e-commerce market in India?
- As of 2024, India’s e-commerce market is valued at $147.3 billion and is expected to reach $350 billion by 2030.
- India ranks among the fastest-growing e-commerce markets globally, fueled by digital transformation and increasing consumer trust in online shopping.
- The industry is diversifying beyond traditional categories like electronics and fashion to include groceries, pharmaceuticals, and financial services.
What are the challenges faced by Indian e-commerce businesses?
- Regulatory Scrutiny – Platforms like Amazon and Flipkart have faced antitrust investigations over alleged unfair practices.
- Logistics & Infrastructure – Delivering to remote areas remains a challenge despite rapid improvements.
- Fraud & Cybersecurity – Online scams and counterfeit products continue to be concerns for customers.
- Sustainability Issues – Quick-commerce platforms (like Blinkit and Zepto) are under scrutiny for their long-term feasibility.
What is the future of e-commerce in India?
- Integration of AI & Machine Learning – Personalized recommendations and chatbots for better customer experience.
- Expansion into Rural Markets – Companies like JioMart are targeting rural consumers.
- Social Commerce Growth – Platforms like Instagram Shops and Meesho are leveraging social media to drive sales.
- Increased Adoption of ONDC – The government-backed Open Network for Digital Commerce aims to democratize e-commerce and reduce dependency on large platforms.
