India’s e-commerce sector is a lot smaller than you would think
The rising assumption about the size of indias ecommerce market has raised many eyebrows across the globe and many have taken to find out what exactly is the potential of the Indian ecommerce market. The market has received funds from some of the world’s biggest capital firms and retailers.
The results of these ventures were not so satisfactory though,
According to a US-based research firm known as the eMarketer it is estimated that India’s e-commerce sector is around $33 billion at the moment. These numbers were shared with Quartz. Which concludes e-commerce will account for just 2.9% of India’s total retail market in 2018. However, by 2021, it is expected to cross $50 billion, growing around 50% in a time span of three years.
Considering that the world’s largest e-commerce acquisition was announced in India last month when Walmart announced it was going to buy a majority stake in flipkart which is its homegrown entity for $16 billion which was huge. The deal value was $ 22 billion.
The Indian e-commerce sector plays host to many other players which are valued in billions of dollars. An example of this is the American e-tailer which serves as Amazons India arm. It has been reported to hold a value of $16 billion. A digital payments firm paytms e-commerce, Paytm Mall, apparently holds a value of approximately $2 billion. Another huge ship, Shopclues, was estimated to hold a value of $1.1 billion in 2017.
With all the values of the players given above $3 billion doesn’t look like a lot of money but still the players out in the market are not shy from heavy investment in the market.
Amazon has been reported to spend $2 billion in addition to $5 billion . The CEO Jeff Bezos has made his intention clear by commiting such a big sum to india. Alibaba from China has also been heavily invested in, backing Paytm Mall and grocery delivery startup BigBasket.
These investments are a sign of hope and a speculation that the ever increased usage of internet will help push the ecommerce market into a forward flow. According to an estimate over 337 million Indians which makes about a quarter of the population- are likely to have access to smartphones by the end of 2018. From this portion only 25% of the population can be expected to shop online this year but by the end of 2022 the percentage of online shopping is expected to rise to 42% according to eMarketer estimates.