The India e-commerce market size was valued at USD 88.6 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 19.6% from 2023 to 2030. The increasing penetration of 5G and 4G internet services in India, coupled with the adoption of low-cost smartphones and other consumer electronics devices such as laptops and tablets, is gaining momentum; thus, providing exposure to online shopping is a major factor driving the market growth. Likewise, government initiatives such as Made in India, Startup India, and 100 % foreign direct investment in B2B e-commerce is expected to support middle and small enterprise to enter the e-commerce space, further driving the market growth
The Indian e-commerce market has been among the major beneficiaries of the COVID-19 pandemic, with containment measures introduced the country to the convenience of online shopping. The shopping pattern across the country experienced a structural shift with e-commerce companies such as Flipkart Private Limited and Amazon.com, Inc. observing that the prioritization of safety and social distancing coupled with large smartphone user-based and low-cost data plans have further galvanized the growth of e-commerce in tier 2 and tier 3 cities during the pandemic. The pandemic also propelled the purchase frequency of FMCG products such as fruits, vegetables, pulses, grains, beverages, cleaning supplies, and cosmetics, thereby creating new growth opportunities for the Indian e-commerce market.
The growing traction of E-commerce in India has led to the generation of a large amount of user data, which is being leveraged by the market players to devise customer-centric trends and experiences. Data management, predictive analytics, machine learning, and artificial intelligence are at the forefront of driving innovation in the Indian e-commerce space. Trends such as personalized recommendations, user experience, and customization are possible through the optimum availability of data. Moreover, the market is also experiencing the emergency of hyper-local deliveries through Quick Commerce. Quick commerce typically refers to the rapid delivery of FMCG and consumer electronics products within a span of 10-30 minutes. Q-commerce is gaining momentum in metro cities while establishing its foothold in tier 2 cities. The model is based on dark stores situated near localities to facilitate fast deliveries, thereby augmenting the e-commerce market growth.
Based on the application, the India e-commerce market is segmented into automotive, books & stationery, beauty & personal care, clothing & footwear, home appliances, consumer electronics, home appliances, sports & leisure, and others. The home appliances segment has the largest market share in 2022. The increasing purchase of home appliances through e-commerce websites is attributed to advantages such as exposure to a wide range of products, side-by-side comparison of features and costs coupled with consumer reviews. While making a purchase, consumers prefer to compare prices and products through different e-commerce and manufacturers' sites to derive a purchase decision. Buying products through e-commerce channels helps the consumer explore different brands and compare costs while receiving discount incentives such as first-time buyer coupon codes, festive season discounts, offers on credit cards, end-season sales, and points redemption, which further helps decrease the cost of the product, which further prompts the customer to choose e-commerce channels to buy the products.
Key players operating in the market are Amazon.com Inc., Alibaba Group Holding Limited, Flipkart Private Limited, eBay Inc., Nykaa, Kirana Kart Technologies Private Limited (Zepto), Ajio, Purplle, Grofers, Meesho, Tira., Snapdeal, Dunzo, Swiggy instamart and Supermarket Grocery Supplies Pvt Ltd (Bigbasket) The market players are constantly working towards product enhancement and merger & acquisition activities, and other strategic alliance to gain market share.
The following are some instances of such initiatives:
In October 2023, Flipkart Private Limited, an India-based e-commerce platform, launched Flipkart Commerce Cloud, a retail intelligence suite solution for e-commerce platforms and retailers leveraging artificial intelligence and machine learning. The suite comprises retail media solutions, forecasting solutions, inventory management, and pricing solutions. The solution is designed to expedite the online journey of retailers with more than 40 plug-and-play components.
In August 2023, Flipkart Private Limited, an India-based e-commerce platform, launched a new app-in-app fashion application, SPOYL. The new app is developed keeping Gen Z shoppers in mind. The app offers more than 40,000 products ranging from western wear to footwear. Apart from the shopping experience, SPOYL also features unisex product navigation for gender-neutral apparel and gender-agnostic style browsing.
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