An overview of the e-commerce industry of India and the world! – Part 2

– Voxytalksly takes a look at where the Indian e-commerce market currently stands in comparison to foreign markets
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  • Similar to the US and China, bigger online retailers are securing multiple rounds of funding in order to expand their market penetration. Worthy mentions are VoxPop Clothing ($1 million from Blume Ventures in 2014), BabyOye was acquired by Mahindra Retail, Ekstop was acquired by the Godrej Group to support their Nature’s Basket stores.
  • Avendus Capital reports that the Indian e-commerce market, especially the online travel booking market in India will have a growth rate of 22% over the next 4 years and reach at least Rs 54,800 crore ($12.2 billion) in size by 2018. Indian e-tailing industry is also estimated to grow to Rs 53,000 crore ($11.8 billion) in 2018 which was Rs 3,600 crore (US$800 million) in 2011. That is a huge jump!
  • The e-commerce sector is estimated to reach Rs. 211,005 crore by December 2018 of which online travel currently accounts for 61% of the e-commerce market.
  • According to Google India, there were 35 million online shoppers in India during 2014 and we have successfully crossed the 100 million mark by the end of the year
  • According to a study done by the Indian Institute of e-commerce, India is expected to generate $100 billion online retail revenue by 2020 out of which at least $35 billion will be through fashion e-commerce.

Difference between India and the international markets like US and China

  • Broadband penetration has increased by about three times in the last two years but is still far behind other countries if e-commerce sales are factored in. Forbes reports that India has around 243 million Internet subscribers which are more than the total users in the US, but our volume of e-commerce sales is 1/3rd in comparison to theirs.
  • Users in USA and China make an average of 6 times more online transactions than Indians which is way too low for e-commerce to break-even in India currently.
  • Foreign customers have better access to Credit Cards and PayPal, but Indians are still stuck with Cash on Delivery. This forces local e-tailers to lure them with heavy discounting in order to secure prepaid orders. This reduces their target revenue significantly. Despite having a 1.252 billion strong population, India has only 18.8 million credit cards which are at least 1/5th of the international markets.
  • Amazon US uses various e-commerce logistics in order to make faster deliveries like drones, cabs, bikes, etc. whereas in India delivery time is way too slow. Hourly delivery is still a longshot in India.
  • India also faces numerous site crashes (Big Billion Days crash Freedom 251 crash, etc., issues in ERP systems and mismatched product specifications whereas international markets don’t make such silly mistakes. Additionally, no e-commerce company has been able to scale their operations to reach all postal codes in India; they still rely on India Post (horrifically slow) to service the entire country.
  • In foreign countries especially in the European Union, the Maximum Retail Price and lowest possible price both are fixed, but in India only MRP figures in government guidelines.
  • Affiliate marketing in India is still an unheard process. Only Amazon India has been able to bring in their International experience to India in this sector. This is why the couponing and cashback websites are flourishing in India, but the e-commerce websites are taking a hit in revenue.


International e-commerce markets, especially the US have a firm and established e-commerce sites in the form of Amazon and Walmart. India is still getting used to the fact of e-commerce purchasing as a norm. The emergence of a single leader in the industry is tough due to the fact that the country is so diverse.

No single entity can cater to the likes of all the people; this is why we have different websites offering different products. To cater to this vast diversity in demands, India needs diversified businesses to handle the whims and fancies of Indians.

Thankfully, the current Indian Modi government is progressing in the right direction. In a recent development, the central government has made a case for developing a national e-commerce policy and the formation a consolidated legal framework to address the challenges of the e-commerce sector of the country to help the government realize the opportunities in the global business-to-consumer (B2C) space for ease of doing business with partner countries.

Commerce Secretary Rita Teaotia said in a workshop at Delhi, “Most important for us at this point in time as policy-makers and also as stakeholders who are at the receiving end… We do not have a national e-commerce policy and we do not have a consolidated legal framework to deal with it. So if we look at the e-commerce… we do need a broad policy that looks at the broad elements, that we will use to realize the opportunities,”

Thanks to its push for revenue generation through digital media and the establishment of a digital economy, we are right on track to beat the US markets supposedly in a span of 10 years or so.

That is a wonderful idea! Kudos to the development of India.


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