A Seminar Paper on Indian E-Commerce Industry and

Its High Growth Drivers

Abstract
E-Commerce sector is in a big boom and has shown high exponential growth in the concluded
years Online shopping is trending to a great extent in the tier I cities and very soon the tier II and
tier III cities are catching up very fast with the penetration of internet and mobile telephony in the
remote rural areas. The vulnerability of the changing demographics, varying lifestyles, increasing
income and internet exposure act as a great inducement to the E-Commerce sector. This paper
deals with exploration of challenges in the E-Commerce industry of India, and how innovators are
constantly coming up with novel ideas to keep the customer interested. The study reveals the high
growth drivers to boost the Indian E-Commerce industry as a whole and study the critical success
factors which are prerequisite for the potential growth of E-Commerce in India.

Key words: E-Commerce, Web Portals, Online Shopping.

1. Introduction:-
E-commerce is a boom in the modern business. E-commerce means electronic commerce.
E-commerce involves buying and selling of goods and services, or the transmitting of funds
or data, over an electronic network, predominantly the Internet. E-commerce is a paradigm
shift influencing both marketers and the customers. Rather e-commerce is more than just
another way to boost the existing business practices. It is leading a complete change in
traditional way of doing business. This significant change in business model is witnessing a
tremendous growth around the globe and India is not an exception. A massive internet
penetration has added to growth of E-commerce and more particularly start-ups have been
increasingly using this option as a differentiating business model. Moreover E-Commerce
has significant influences on the environment. Although the model is highly used in current
business scenario but the option has not been explored at its fullest. The current research
has been undertaken to describe the scenario of E-Commerce, analyze the trends of E-
Commerce. The study further examines the key variables imperative for the success of E-
commerce business models. The main types of electronic commerce are: business-to-
business (B2B); business to- consumer (B2C); business-to-government (B2G); consumer-to-
consumer (C2C); and mobile commerce (mcommerce).
The e-commerce has transformed the way business is done in India. The Indian e-commerce
market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Much
growth of the industry has been triggered by increasing internet and smartphone penetration. The
ongoing digital transformation in the country is expected to increase India’s total internet user
base to 829 million by 2021 from 636.73 million in FY19. India’s internet economy is expected to
double from US$ 125 billion as of April 2017 to US$ 250 billion by 2020, majorly backed by
ecommerce. India’s E-commerce revenue is expected to jump from US$ 39 billion in 2017 to US$
120 billion in 2020, growing at an annual rate of 51 per cent, the highest in the world.

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2. Review of literature:-
The e-commerce has transformed the way business is done in India. The Indian e-
commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as
of 2017. Much growth of the industry has been triggered by increasing internet and
smartphone penetration. The ongoing digital transformation in the country is expected to
increase India’s total internet user base to 829 million by 2021 from 636.73 million in FY19.
India’s internet economy is expected to double from US$ 125 billion as of April 2017 to US$
250 billion by 2020, majorly backed by ecommerce. India’s E-commerce revenue is
expected to jump from US$ 39 billion in 2017 to US$ 120 billion in 2020, growing at an
annual rate of 51 per cent, the highest in the world.
Propelled by rising Smartphone penetration, the launch of 4G networks and increasing
consumer wealth, the Indian e-commerce market is expected to grow to US$ 200 billion by
2026 from US$ 38.5 billion in 2017 Online retail sales in India are expected to grow by 31
per cent to touch US$ 32.70 billion in 2018, led by Flipkart, Amazon India and Paytm Mall.
During April-June quarter 2019, Smartphone shipment in India grew 9.9 per cent year-on-
year to 36.9 million shipments. It is expected to reach 160 million in 2019.
During 2018, electronics is currently the biggest contributor to online retail sales in India
with a share of 48 per cent, followed closely by apparel at 29 per cent.
3. Research Objectives :-
1. To understand the present status and trends of E-Commerce.
2. To reveal the key variables influencing the increased usage of E-Commerce.
3. To Know changing scenario of e-commerce.
4. To know customer satisfaction.
4. Research Methodology
Sources of Data:-
There is very little published report available for e-business developing in India. The data
collection and methodology was mainly divided in two parts:
a. Primary Data
b. Secondary Data
A. Primary Data:-
The descriptive researched approach was used to gather the required information and data
from the available literature. The info about the potential position challenge and e-business
implementation in India was analysed by reviewing international and national companies.
B.Secondary Data:-
It is used for the analysis purposes and the information is retrieved from the data sources
like magazines, various business reports, reputed journals, newspapers and various web
portals.
5. Research Design:-
This research study adopted survey and content analysis in order to find the effectiveness and
impact of e-commerce sites on product or the service the target market.

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6. Data Analysis and Interpretation:-

1. Growth of internet user in India.

Interpretation:-
This statistic provides information on the number of internet users in India from 2015 to
2023. in 2018, India had 483 million internet users. This figure is projected to grow to 666.4
million internet users in 2023. Despite the untapped potential, India already is the second-
largest online market worldwide. The majority of India’s internet users are mobile phone
internet users, who take advantage of cheap alternatives to expensive landline connections
that require desktop pcs and infrastructure. as of 2016, India had 320.57 million mobile
phone internet users and forecasts estimate 492.68 million Indian mobile phone internet
users by 2022.

2. Which is most preferred e-commerce website?

COMPANY NAME PERCENTAGES OF USER

FLIPKART 45%
AMAZON 35%
OTHER 30%
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 PERCENTAGES OF USER
FLIPKART AMAZON OTHER

27%
41%

32%

INTERPRETATION:-
In this above pie chart shows the most preferred E-commerce sites in india.41% user prefer
flipkart, 32% amazon and 27% other e-commerce site like myntra,olx and so on.

3. E-COMMERCE Industry sales growth rate in India?

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INTERPRETATION:-
The eCommerce industry in India has a huge potential for growth, but the market is
showing signs of a slowdown. Earlier this year, eMarketer predicted that retail eCommerce
sales in India would grow by more than 75.8% to reach $23.39 billion in 2016. eMarketer,
however, has revised its previous estimate; now the total retail eCommerce sales are
expected to increase 55.5% to reach $16.02 billion by the end of 2016. The growth rate has
been cut down by a roughly 20% point from the previous estimate. However, mCommerce
industry in India continues to grow and contribute largely to the retail eCommerce sales
with 65.3% share reaching $10.46 billion in 2016.Between 2016 and 2020, retail
eCommerce sales in India is estimated to increase 3x, reaching $47.45 billion. While the YoY
growth will slow down to 22% by 2020, the retail eCommerce industry in India is expected
to account a sizable share of total retail sales.

4. Growth of e-commerce retail logistics market in India.

INTERPRETATION:-

The Indian logistics sector is on a big growth tide. According to the domestic rating agency
ICRA, Indian logistics sector is expected to grow at a rate 8-10 per cent over the medium
term. This is an improvement over the compound annual growth rate (CAGR) of 7.8 per
cent at which the industry grew during the last five years. The logistics industry of India is
currently estimated to be around US$ 160 billion. With implementation of GST the sector is
expected to benefit and touch US$ 215 billion over the next two years, as per the Economic
Survey 2017-18.
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The last couple of years have seen significant development for this industry which is
reflected in the global rankings. According to the Global Ranking of the World Bank's 2016
Logistics Performance Index, India jumped to 35th rank in 2016 from 54th rank in 2014 in
terms of overall logistics performance. The report also showed that India’s logistics sector
has improved its performance on all the six parameters used in the ranking. This is a huge
jump of 20 ranks and clearly indicates the growth of the sector.
5. Online retail vs total retail in India?

 There are a lot of opportunities for e-retailers in India to capitalize upon with the
gradually growing internet penetration in India.
 As of 2016-17, online retail made up 1.5 per cent of overall retail market in India and
20 per cent of organised retail market.
 The online retail market in India increased from US$ 14.5 billion in 2016 to US$ 17.8
billion in 2017 and is estimated to reach US$ 28-30 billion by 2018.

7. Findings:-
 Google and Tata Trust have collaborated for the project ‘Internet
Saathi’ to improve internet penetration among rural women in India.
 nternet subscribers in India stood at 665.31 million in June 2019.
 In the festive sale (September 29-October 4, 2019), the e-tailers in
India achieved US$ 3 billion of Gross Merchandise Value (GMV).
 Amazon India launched the Amazon Marketplace Appstore which
will provide solutions to sellers.
 Value of Unified Payments Interface (UPI) transactions recorded
1.15 billion transaction worth more than Rs 1.913 trillion (US$ 27
billion) in October 2019.

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 Under Internet Saathi project over 26 million women were benefitted
in India and it reached 2.6 lakh villages and reached 20 states.
 Under the Digital India movement, government launched various
initiatives like Udaan, Umang, Start-up India Portal etc.
 Under the project ‘Internet Saathi’, the government has influenced
over 16 million women in India and reached 166,000 villages
 Udaan, a B2B online trade platform that connect small and medium
size manufacturers and wholesalers with online retailers and also
provide them logistics, payments and technology support, has
sellers in over 80 cities of India and delivers to over 500 cities.
 According to the UN’s eGovernance index, India has jumped 11
positions to 107 in 2016 from 2018 in 2014.
 The government introduced Bharat Interface for Money (BHIM), a
simple mobile based platform for digital payments.
 overnment e-Marketplace (GeM) signed a Memorandum of
Understanding (MoU) with Union Bank of India to facilitate a
cashless, paperless and transparent payment system for an array of
services in October 2019.
 In February 2019, the Government of India released the Draft
National e-Commerce Policy which encourages FDI in the
marketplace model of e-commerce
 In order to increase the participation of foreign players in the e-
commerce field, the Indian Government hiked the limit of foreign
direct investment (FDI) in the E-commerce marketplace model for up
to 100 per cent (in B2B models).
 The heavy investment of Government of India in rolling out the fiber
network for 5G will help boost ecommerce in India
 In the Union Budget of 2018-19, government has allocated Rs 8,000
crore (US$ 1.24 billion) to BharatNet Project, to provide broadband
services to 150,000 gram panchayats
 In August 2019, Amazon acquired 49 per cent stake in a unit of
Future Group.
 Reliance to invest Rs 20,0000 crore (US$ 2.86 billion) in its telecom
business to expand its broadband and E-commerce presence and to
offer 5G services.
 In September 2019, PhonePe launched super-app platform 'Switch’
to provide a one stop solution for customers integrating several other
merchants apps.

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  In November 2019, Nykaa opened its 55th offline store marking
success in tier II and tier III cities.
 Flipkart, after getting acquired by Walmart for US$ 16 billion, is
expected to launch more offline retail stores in India to promote
private labels in segments such as fashion and electronics. In
September 2018, Flipkart acquired Israel based analytics start-up
Upstream Commerce that will help the firm to price and position its
products in an efficient way.
 As of March 2019, Flipkart launched its internal fund of about US$
60-100 million to invest from early stage to seed innovations related
to e-commerce industry.
 Paytm has launched its bank - Paytm Payment Bank. Paytm bank is
India's first bank with zero charges on online transactions, no
minimum balance requirement and free virtual debit card
 As of June 2018, Google is also planning to enter into the E-
commerce space by November 2018. India is expected to be its first
market.
 Reliance retail is going to launch online retail this year. It has already
launched its food and grocery app for beta testing among its
employees.
 E-commerce industry in India witnessed 21 private equity and
venture capital deals worth US$ 2.1 billion in 2017 and 40 deals
worth US$ 1,129 million in the first half of 2018.
 Google and Tata Trust have collaborated for the project ‘Internet
Saathi’ to improve internet penetration among rural women in India.

8. Suggestion:-
There are lots of errors people make when it comes to designing their ecommerce
website. In most instances, using a free site builder is a terrible idea. That is
because consumers have come to expect a level of professionalism when they
spend money. Anyone over the age of ten will manage to spot an amateur design
a mile away. So, be sure to employ the services of a dedicated development firm
with an excellent track record. Most specialist designers will publish portfolios
and testimonials online. That means the process of sorting the wheat from the
chaff and identifying the best brand shouldn’t take a long time. Entrepreneurs
will also want to avoid the following:
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  Making the site too complicated.
 Using too many different colors.
 Publishing too much information.
 Failing to release enough information.
 Not choosing a catchy domain name.
 Purchasing photography equipment
 Investing in editing softwar

9. Conclusion and Recommendations:-

E-Commerceing is a different experience for retailers as well as customers
supported with heavy internet user base in India. But there are a lot of
anxieties about e-shopping to the customers doing online shopping for the
first time. The reasons may be due to cultural and perceptual background of
the customers. This will come down as the customers engage themselves
more and more to the web portals experience the digital environment and
remove the hesitation. It is very apparent that if the fundamental principles
are set right, the e-shopping becomes more.
Online shopping has inspired and largely overturned the society as a whole.
The use of advanced technology has led to open up doors and opportunities
to the changing lifestyle in the present world. Safest payment methods,
different range of products and lesser price are the three substantial ways by
which the variety of products, quicker services and reduced price are the
three significant ways in which online shopping influenced people in India
and world as a whole. Although the e-shopping is associated with frauds and
disputes, motivates the criminals to fudge the system and access secret
information; the advanced technology helps in blocking the hackers and
crooks to the internal information.

This will certainly help in curbing the ill facets associated with the E-
Commencing and boosting the confidence in customers to emerge E-
Commencing as an enormous success in the future.

10. References
1. https://www.ibef.org › Industry (2018),“Retail goes Online- An Indian
Perspective”, IJMT, 19(2),1-11.
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2. "Internet users in India to cross 500 mn in 2019: Prasad"
(http://www.business-standard.com/article/economy-policy/internet-users-in-
india-to-cross-500-mn-in-2016-prasad-116050401237_1.html).Business
Standard. 5 May 2016 . Retrieved 23 May 2016.

3. Mohanty, A.K. & Panda, J. (2018),“Retailing in India: Challenges and

Opportunities ”,The Orissa Journal of Commerce, 29(2),69-79.

4. Pandey, Akhilesh Chandra (2019). “An empirical study of buying behavior

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5. Pandey, Akhilesh Chandra (2018),Strategic Imperatives in retail revolution,

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