E-COMMERCE

December 2023
For updated information, please visit www.ibef.org
Table of Contents

Executive Summary 3

Advantage India 5

Market Overview 7

Recent Trends and Strategies 15

Growth Drivers 20

Key Industry Contacts 27

Appendix 29

2
Executive summary…(1/2)

▪ Indian e-commerce is expected to grow at a compound annual growth Indian E-commerce Market (US$ billion)
rate (CAGR) of 27% to reach US$ 163 billion by 2026.
▪ In FY23, the Gross Merchandise Value (GMV) of e-commerce
400 350.0
reached US$ 60 billion, increasing 22% over the previous year. In
FY22, the GMV of e-commerce stood at US$ 49 billion.
▪ India’s e-commerce will reach US$ 99 billion by 2024, growing at a 188.0
200
27% CAGR over 2019-24, with grocery and fashion/apparel likely to
be the key drivers of incremental growth. 74.8

▪ India’s e-commerce market is expected to reach US$ 350 billion by

2030, with grocery and fashion/apparel likely to be its key growth 0
2022F 2025F 2030F
drivers.
▪ For the 2021 festive season, Indian e-commerce platforms generated
sales worth US$ 9.2 billion gross GMV (Gross Merchandise Value).
▪ E-commerce sales are expected to increase at a CAGR of 18.2% India’s Internet Economy (US$ billion)
between 2021-2025 to reach Rs. 8.8 trillion (US$ 120.1 billion).
▪ Online penetration of retail is expected to reach 10.7% by 2024, 1200
versus 4.7% in 2019. 1000
1000
▪ The retail market in India is projected to reach US$ 2 trillion by 800
2032 from US$ 690 billion in 2021.
600
▪ India had the third-largest online shopper base of 190 million in 400 250
FY21, which is expected to be 350 million in FY26. 125
200
▪ India’s digital sector is expected to increase multi-fold and reach 0
US$ 1 trillion by 2030. 2018 2020F 2030F

Note: GMV - Gross Merchandise Value, CY – Calendar Year, F-Forecast

Source: Media sources, Global Internet: e-commerce's steepening curve' published by Goldman Sachs, Forrester Research, News Articles

3
Executive summary…(2/2)

▪ Through its ‘Digital India’ campaign, the Government of India is India’s E-commerce Festive Statistics
aiming to create a trillion-dollar online economy by 2025.

▪ The Indian online grocery market is estimated to reach US$ 26.93 Festive Festive
billion in 2027 from US$ 3.95 billion in FY21, expanding at a 8.3 88
Month CY20 Month CY20
CAGR of 33%.
Festive Festive
10.7
▪ With a turnover of US$ 50 billion in 2020, India became the Month CY23P 8
Month 140
CY23P
eighth-largest market for e-commerce, trailing France and a
position ahead of Canada. 0 5 10 15 0 50 100 150

▪ The B2C E-commerce is expected to grow steadily over the GMV (US$ billion) Users (Million)
forecast period, recording a CAGR of 8.68% during 2023-27.

Note: GMV - Gross Merchandise Value, CY – Calendar Year, CAGR-Compounded Annual Growth Rate, P-Projected
Source: Media sources, Global Internet: e-commerce's steepening curve' published by Goldman Sachs, Forrester Research, News Articles

4
Advantage India

5
Advantage India
1. Attractive Opportunities
► Indian e-commerce is expected to grow at
a compound annual growth rate (CAGR)
of 27% to reach US$ 163 billion by 2026.
► India’s e-commerce market experienced
strong sales growth in 2021 and is
expected to grow by 21.5% in 2022.
► India’s e-commerce market is expected to
reach US$ 99 billion by 2024 and US$ 350
billion by 2030.
2. Growing demand
► India's Business-to-Business (B2B) online
marketplace would be a US$ 200 billion
opportunity by 2030.
► India’s social commerce has a potential to
expand to US$ 16-20 billion in FY25,
implying a CAGR of 55-60%.
► Driven by beauty and personal care
(BPC), India's live commerce market is
expected to reach a gross merchandise
value (GMV) of US$ 4-5 billion by 2025.
► Due to a surge in e-commerce, annual
warehousing space absorption in the top
eight Indian cities will increase to 76.2
million sq. ft. by March 2026, up from 31.7
million sq. ft. in 2021.
► India has gained 125 million online
shoppers in the past three years, with
another 80 million expected to join by
2025, according to a report by Kantar.
Note: FDI - Foreign Direct Investment
Source: Media sources
6
4. Policy Support
► In India, 100% FDI is permitted in the
B2B E-commerce.
► As per the new guidelines on FDI in
E-commerce, 100% FDI under
automatic route is permitted in the
marketplace model of E-commerce.
► Heavy investment made by the
Government of India in rolling out
1 4 fiber network for 5G will help boost
E-commerce in India.
3. Increasing Investment
► Amazon CEO Mr. Andy Jassy announced
ADVANTAGE
that the company is committed to invest
INDIA US$ 26 billion in India by 2030, out of which
2 3 US$ 11 billion has already been invested.
► In the first quarter of the calendar year
2022, PE/VC investments in the Indian e-
commerce sector stood at US$ 2.66 billion
with 47 total deals.
► In February 2022 Xpressbees a logistics e-
commerce platform became a unicorn with
a US$ 1.2 billion valuation after raising US$
300 million in its Series F funding.
► In September 2021, CARS24, India's
leading used car e-commerce platform, has
raised US$ 450 million in funding, Series F.
► Flipkart announced in July 2021 that it has raised US$ 3.6 billion in new funding
from various sources including sovereign funds, private equities and Walmart
(parent company).
► Walmart is preparing to spend over US$ 2.5 billion in India as the retailer doubles
down on the opportunities it sees in India’s e-commerce and payments markets.
 Market Overview

MARKET OVERVIEW

7
Growth of e-commerce in India… (1/2)
▪ With over 800 million users, India was the second-largest internet
market in the world with Rs. 125.94 lakh crore (US$ 1.52 trillion) UPI
transactions in 2022.
India spending on online commerce, (%) (Jan 2020–Sep 2020)
▪ India's e-commerce festive season sales are expected to clock in a
gross merchandise value of US$ 10.88 billion in 2023, an increase of
18-20% compared to the previous year.
35%
▪ The Indian e-commerce sector is ranked 9th in cross-border growth
in the world, according to the Payoneer report. India’s cross-border
e-commerce was expected to grow by 17.3% in 2022.
21% 19%
▪ The quick commerce sector in India currently has a market size of
17% 17%
US$ 700 million (as of 2023) and is likely to grow eight times to
reach a US$ 5.5 billion market value by 2025.
8%
▪ Indian e-commerce is projected to increase from 4% of the total food
and grocery, apparel and consumer electronics retail trade in 2020
to 8% by 2025.

▪ As of November 2022, the GeM portal served 12.28 million orders -3%
worth Rs. 334,933 crore (US$ 40.97 billion) from 5.44 million
registered sellers and service providers for 62,247 buyer
organizations.
-20%
▪ India's consumer digital economy is expected to become a US$ 1
Feb’20 Mar’20 Apr’20 May’20 Jun’20 Jul’20 Aug’20 Sep’20
trillion market by 2030, growing from US$ 85-90 billion in 2020,
driven by strong adoption of online services such as e-commerce
How much has India spent on online commerce?
and edtech in the country.

Notes: *Estimated, F - Forecast, PSUs - Public Sector Undertakings

Source: Media sources, Global Internet: e-commerce's steepening curve' published by Goldman Sachs

8
Growth of e-commerce in India… (2/2)

▪ According to Global Data, e-commerce sales are expected to increase at a CAGR of 18.2% between 2021 and 2025 to reach Rs. 8.8 trillion
(US$ 120.1 billion).

▪ According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025.

▪ India’s booming e-commerce market is driven by affordable smartphones and low-cost data plans, leading major retail and consumer goods
makers to increase their investments in the online space.

▪ According to a recent report by Redseer, India’s e-B2B market is projected to reach a GMV of US$ 100 billion by 2030.

▪ According to a Deloitte India Report, as India is moving towards becoming the third-largest consumer market, the country's online retail market
size is expected to reach US$ 325 billion by 2030, up from US$ 70 billion in 2022, largely due to the rapid expansion of e-commerce in tier-2 and
tier-3 cities.

▪ A total of US$ 23 billion in private equity and venture capital investments have been made in the online retail sector over the last five years,
according to a report.

▪ By 2023, the revenue of the furniture e-commerce market is projected to reach US$ 252 billion, with an expected annual growth rate of 3.98%
between 2023-27.

Note: GMV- Gross Merchandise Value, B2B- Business-to-Business

Source: Media sources, Global Internet: e-commerce's steepening curve' published by Goldman Sachs

9
Rising internet users in India

▪ In 2021, the number of internet connections in India significantly

increased to 830 million, driven by the ‘Digital India’ program. The Internet connections in India (in million)
total volume of wireless internet data usage has surged 7 times over
since 2018. 1000.0

▪ India's internet economy is expected to register six-fold growth and

900.0
touch US$ 1 trillion by 2030, mainly driven by the e-commerce
vertical, from US$ 155-175 billion in 2022.
800.0
▪ Internet penetration in India has increased from 4% in 2007 to 45% in
2021.
700.0
▪ India’s internet penetration rate stood at 47% of the total population
at the start of 2022.
600.0
▪ India has the highest data consumption rate worldwide at 14.1 GB
data per person a month. 500.0
▪ The number of active internet users in the country is the second 900.0
highest globally and is also one of the largest data consumers 400.0
globally. It has the highest data usage per smartphone at an average
700.0
of 14.1 GB per month.
300.0
▪ India’s social commerce has the potential to expand to US$ 16-20
billion in FY25, at a CAGR of 55-60%, with a potentially monumental 200.0 412.6
jump to US$ 70 billion by 2030, owing to high mobile usage.
▪ According to a report published by IAMAI and Kantar Research, India 100.0
internet users are expected to reach 900 million by 2025 from ~700
million internet users in 2022.
0.0
▪ As of December 2022, there were 700 active internet users aged 2 FY19 FY22 FY25E
years and above. Of these, rural India accounted for 425 million
users, which was almost 44% higher than the number of active
internet users in urban areas, with 295 million users.
Note: Internet penetration - number of internet subscribers per 100 population, Q - Quarter
Source: TRAI, Economic Times, Live Mint, Department of Telecommunications, Bain & Company - Unlocking Digital for Bharat

10
Online retail market
Shares of Various Segments in e-commerce Retail (2021)

Consumer electronics and

7.0% appliances

4.0% Fashion
6.0%

Food and FMCG

11.0%
52.0%
Furniture and Décor

20.0% Beauty and Personal Care

Others

▪ According to a Deloitte India Report, as India is moving towards becoming the third-largest consumer market, the country's online retail market size is
expected to reach US$ 325 billion by 2030, up from US$ 70 billion in 2022, largely due to the rapid expansion of e-commerce in tier-2 and tier-3 cities.

▪ A total of US$ 23 billion in private equity and venture capital investments have been made in the online retail sector over the last five years, according
to a report.

▪ The online retail market in India is estimated to be 25% of the total organized retail market and is expected to reach 37% by 2030.

▪ The e-retail market is expected to continue its strong growth and reach US$ 120-140 billion by FY26.

▪ After China and the US, India had the third-largest online shopper base of 190 million in 2021. Over the next five years, the Indian e-retail industry is
projected to exceed ~300-350 million shoppers, propelling the online Gross Merchandise Value (GMV) to US$ 100-120 billion by 2025.

▪ Driven by lower data rates and investments to enhance customer experience, the Indian e-retail witnessed a rapid increase in shopper penetration, as
online platforms are innovating to onboard the next billion shoppers.

▪ Over the next decade (2021-30), India's e-commerce business will rise 7x to US$ 300 billion. According to JP Morgan analysts, the next phase of
expansion will be led by e-grocery and smaller communities.
Source: Report by eMarketer, Kalaari Capital - Imagining Trillion Dollar India, AT Kearney

11
Online retail vs total retail in India

Online retail out of total retail in India (2019) Online retail out of total retail in India (2024F)

4.7% 10.7%

95.3% 89.3%

Offline Retail Online Retail Offline Retail Online Retail

▪ There are lot of opportunities for E-retailers in India to capitalize upon with the gradually growing internet penetration in India.

▪ The contribution of online retail market in the total retail market in India is estimated to increase to 10.7% by 2024, when compared to 4.7% in
2019.

Note: F- Forecasted
Source: Redseer, Crisil, Report by EY, Indian Private Equity and Venture Capital Association

12
E-tailing market by business model

E-commerce

Marketplace Model Inventory-led Model

▪ Marketplace model adheres to the standards and directions of a ▪ Inventory-led models are those shopping websites where buyers
zero-inventory model. choose online from within a range products owned by the online
shopping company or websites. Then website take care of the
▪ The E-commerce marketplace offers a digital platform for
whole process end-to-end, starting with product purchase,
consumers and merchants without a need for warehousing the
warehousing and ending with product dispatch.
products. Marketplaces offer shipment, delivery and payments
help to merchants by tying up with various logistics companies and ▪ Few examples of inventory-led model are Yepme and
financial institutions. LatestOne.com.
▪ The new FDI policy has permitted 100% FDI in the E-commerce
marketplace model under the automatic route.

▪ In December 2021, Amazon added 4.5 lakh (450,000) new sellers,

the total cumulative sellers were over 10 lakh. More than 90% of
these sellers are local and medium businesses.

▪ Hyperlocal e-commerce startup, Magicpin announced that its daily

order volume has zoomed 100-fold to 10,000 per day from over
100 within a month of joining thew government-promoted Open
Network for Digital Commerce (ONDC) network.

▪
Source: PwC, News Articles

13
Key players in e-tailing market

14
 Recent Trends and Strategies

RECENT TRENDS AND STRATEGIES

15
Policy and initiatives give a boost to the industry… (1/4)
ANCILLARY SERVICES
• In February 2022, Amazon India launched the One District One Product (ODOP) bazaar on its platform to support MSMEs.
• In February 2022, Flipkart launched the “sell back program” to enable trade in smartphones.
• In January 2022, Walmart invited Indian sellers to join its US marketplace with an aim of exporting US$ 10 billion from India

1 •
each year by 2027.
In September 2021, Amazon launched Prime Video Channels in India. Prime Video Channels will give Prime members a
seamless experience and access to a variety of popular video streaming services.
• In September 2021, Flipkart launched a programme to spot and build direct-to-consumer (D2C) brands on its platform through a
service fee model.
• By 2025, India will be home to 650 million users who consume short-form videos.

AGREEMENT & PARTNERSHIP

• In October 2023, a tech-driven logistics platform iThink Logistics announced a strategic collaboration with India Post to boost e-
commerce deliveries across remote parts of the country.

2 •

•
In September 2021, Shipway, an e-commerce enabler, announced a collaboration with Instamojo, an e-commerce platform for
D2C brands and MSMEs, to give Instamojo shop owners faster shipping and various automated services.
In June 2022, Amazon India signed an MoU with Manipur Handloom & Handicrafts Development Corporation Limited
(MHHDCL), a Government of Manipur Enterprise to support the growth of artisans and weavers across the state.
• In July 2023, the post office departments of Canada and India recently entered into an agreement, which is aimed at facilitating
e-commerce exports and establishing International Tracked Packet Service (ITPS) between the two countries.

EXPANSION
• As of May 2023, the Indian government's open e-commerce network ONDC has expanded its operations into 236 cities in the
country while adding more than 36,000 merchants.
• In October 2022, ONDC Beta launched in Bengaluru.

3 •
•
•
In January 2022, Flipkart announced expansion in its grocery services and will offer services to 1,800 Indian cities.
In November 2021, XPDEL US- based ecommerce announced expansion in India.
In September 2021, Zoomcar, a car-sharing platform, announced expansion in Indonesia and Vietnam.
• In May 2021, Flipkart strengthened its grocery infrastructure to cater to customer safety and demand across India. In this
quarter, it is planning to further expand its fulfilment center capacity for grocery by over 8 lakh square feet across Delhi, Kolkata,
Chennai, Coimbatore and Hyderabad.

Source: Media sources, Company websites

16
Policy and initiatives give a boost to the industry… (2/4)
PERSONALIZED EXPERIENCE
• Site visitors demand a one-of-a-kind experience that caters to their needs and interests. Technology is available
even to smaller players to capture individual shoppers’ interests and preferences to generate a targeted shopping
experience.
• Many E-commerce websites provide a personalised experience to customers to cater to their needs and interests
depending upon their location, choices, products they like or buy, and the websites they visit.
4 • To give a more personalized experience, E-commerce companies have adopted voice search technology. Myntra
is the first to adopt it.
• In February 2022, Flipkart announced plans to enter live commerce in India.
• In September 2021, Amazon India announced that sellers will now be able to register on Amazon, in the
marketplace and manage their online businesses in three more Indian languages, i.e., Malayalam, Telugu and
Bengali.

ASSISTED COMMERCE
• To expand their reach, brands are tying up with assisted E-commerce organizations which provide local merchants
with a platform to place their orders. Under this, customer get help in placing order online through a merchant shop
and the product gets delivered either to the shop or to customer’s address directly.
5 • Eshopbox, a tech-enabled third-party logistics (3PL) provider, is expected to redefine the ecosystem of new-age e-
commerce by helping retailers unlock their e-commerce potential. Businesses of all sizes can use Eshopbox to
streamline their e-commerce operations, from start-ups such as Oziva, Meraki and Plum to businesses such as
Clarks, Blackberrys and Raymonds.

SUBSCRIPTION FOR E-COMMERCE

• E-commerce companies are increasingly adopting subscription model to provide extra benefits and tailored
services to customers to suit their needs.

6 • Amazon, which introduced Amazon Prime in 2016, saw its Amazon Prime subscribers reach ~21.8 million as of
January 2022.
• In June 2023, Amazon India launched its new and affordable Amazon Prime Lite membership plan for shoppers
in the country.
• Swiggy, Zomato and Myntra keep on offering benefits through their subscription models to attract consumers..
Source: Media sources, Company websites

17
Policy and initiatives give a boost to the industry… (3/4)
PRODUCT CATEGORIES
• Brands are adapting to the change in consumption habits towards essentials, electronics, home furnishing and

7 other comfort-related product categories. This shift has happened since the pandemic and is forecast to stay in
the near future. Inventory stocking of fashion and accessories has recorded an all-time low this year.

DIGITAL MARKETING
• 2020 has witnessed a shift in the consumer basket towards essentials and a drastic change in shopping
modality towards e-commerce platforms. Brands and companies are adapting to this consumer behaviour

8 change by increasing their marketing spends on digital media to acquire market share and tap target
audiences.
• As per the report, 34% business respondents have increased digital media budgets while 23% have
focused more on eCommerce selling.

GEOGRAPHIC FOCUS
• Companies are increasingly focusing their sights on Tier II and Tier III cities this year, as the demographic
landscape and pocket spends of these cities are evolving. The revenue share of Tier II+ cities has been
9 growing and digital marketing efforts can be targeted directly to these potential customers. Ecommerce
transactions in Tier 2 cities were all time high in 2021 which was 80% higher than the previous year.

FUND RAISING
• In 2021, India’s e-commerce sector got US$ 15 billion in PE/VC investments, a 5.4-fold increase over the previous

10 year. This is the greatest investment value ever obtained by any Indian sector.
• Xpressbees, a logistics ecommerce platform, raised US$ 300 million at a US$ 1.2 billion valuation.

Source: Media sources, Company websites, Modern Marketer Reckoner Report by GroupM and MMA

18
Policy and initiatives give a boost to the industry… (4/4)
NEW E-COMMERCE PORTAL
• In March 2021, the Confederation of All India Traders (CAIT), which represents 80 million traders and 40,000 trader
11 associations, announced the launch of a mobile app for its e-commerce portal, ‘Bharat E-market’. The association
aims to get more small traders to sell online easily through smartphones.

Merger & Acquisition

• In April 2021, Flipkart announced to acquire Cleartrip, an online travel technology firm. Flipkart announced to

12 purchase 100% shareholding of Cleartrip as the company expands its investments to broaden its digital commerce
offerings for customers.
• In March 2021, Amazon acquired Bengaluru-based retail tech start-up Perpule for Rs. 107.6 crore (US$ 14.5
million).

Source: Media sources

19
 Growth Drivers

GROWTH DRIVERS

20
Growth drivers for e-commerce

1 2 3

GOVERNMENT INITIATIVES INCREASING AWARENESS INVESTMENT

▪ Government initiatives like Digital
India is constantly introducing
people to online modes of
commerce.
▪ Favourable FDI policy is attracting
key players.
▪ The Government has proposed
“National E-commerce Policy” and
has set up a lawful agenda on
cross-border data flow where no
data will be shared with a foreign
Government agency without prior
authorization from the Indian
Government.
▪ As the awareness of using internet ▪ India is the land of occasions and
is increasing, more and more Increasing FDI inflow, domestic
people are getting drawn to E- investment, and support from key
commerce. industrial players is helping the
growth of E-commerce.
▪ Whether it’s sellers, buyers, users
or investors, more and more people
are adapting to the use doing
commerce online.

21
Demographic factors
Millennials are the
most active
• Although shoppers between 25 and 34 years of age
have been the most active on E-commerce portals,
a surprising number of older people have
Convenience of E- increasingly started to shop online.
• However, the age group of 15-34 years are the
commerce major consumers of E-commerce.
• The popularity of web series among millenials is
• Online retailers now deliver to
growing immensely.
15,000-20,000 pin codes out of
nearly 100,000 pin codes in the
country.
• With logistics and warehouses
attracting an estimated investment Tier II and tier III
of nearly US$ 2 billion by 2020,
the reach of online retailers to cities provide major
remote locations is set to increase.
• Amazon expanded its fulfilment sales
network by 40% with more than 60
• Metro cities like Bengaluru, Mumbai and
fulfilment centres in 15 states
Delhi has accounted for most of the
offering 40 million cubic feet to
online shopping in absolute numbers.
sellers.
• Less densely populated regions have
• In June 2021, Flipkart added a
generated a larger proportion of online
new fulfilment centre (FC) in
sales.
Dankuni, West Bengal. The FC is
• E-commerce is experiencing remarkable
spread over 2.2 lakh square foot.
growth in India's Tier-2 and Tier-3 cities,
and has the potential to create
according to insights shared by Mr.
~3,500 direct jobs.
Vivek Somareddy, Vice President, India
and Emerging Country Seller Fulfilment,
Amazon India.
• The e-commerce market’s share of
Tier-3 cities grew from 34.2% in 2021 to
41.5% in 2022, shows data.
Source: Economic Times, Media sources

22
Factors driving e-commerce growth
1. Growth of logistics and 6. Payment's modernisation
warehouses • In terms of the real-time digital
• Online retailers now deliver to 15,000- payment infrastructure, backed by
20,000 pin codes out of nearly 100,000 UPI and 24x7 NEFT, India has
pin codes in the country. been ahead of the curve.
• With logistics and warehouses attracting • The COVID-19 pandemic has led to
an estimated investment of nearly US$ a further rise in digital, contactless
2 billion by 2020, the reach of online payments as customer behaviour
retailers to remote locations is set to has shifted from cash to card.
increase. 1 6 5. Consumer spending
2. Internet content in local
• In India, ~66.6 billion transactions
languages worth US$ 270.7 billion are
• Online retailers see this segment as the projected to shift from cash
new growth driver with significant influx transactions to card and digital
of mobile subscribers, who are now
comfortable with languages other than
2 5 payments by 2023 and rise to US$
856.6 billion by 2030.
English.
• Indian language users on the internet 4. Employment generation
are expected to reach 540 million by the
end of 2021. • In September 2021, Amazon stated
that it has generated over 110,000
3. Mobile commerce
• Online retailers’ growing reach in town
3 4 seasonal job opportunities across its
operations network, in preparation for
the festive season.
and cities beyond metros is driven by an • In September 2021, Flipkart
increased usage of mobile internet. announced that this year it is creating
Increased ownership of smartphones is direct seasonal employment for
helping more Indians access shopping >115,000 people, of which 15% are
websites easily. women and people with disabilities.
• Number of smartphone users in India is • Average salary in India is expected to
expected to reach 887.4 million by 2030. increase by 10.2% in 2023 and the e-
Notes: CAGR - Compound Annual Growth Rate commerce segment has the highest
Source: Media sources, KPMG Report - E-commerce Retail Logistics India projected salary growth at 12.5%.

23
Increase in smartphones driving e-commerce growth

Smartphone User Base in India (million) India’s Smartphone Shipments (million)

180
1,200
175
1,000 170
1000
165
800
750 160
600
155 175.0
169.0
400 150
145
200 152.0 151.6
140
0 135
2021 2026F 2020 2021 2022 2023E

▪ The proliferation of mobile devices combined with internet access via affordable broadband solutions and mobile data is a key factor driving the
tremendous growth in India’s E-commerce sector.
▪ The number of smartphone users in India is expected to reach 1 billion by 2022.
▪ Indian consumers are increasingly adopting 5G smartphones even before roll out of the next-gen mobile broadband technology in the country.
Smartphone shipments reached 169 million in 2021 with 5G shipments registered a growth of 555% year on year in 2021.
▪ The Indian government is emphasising on increasing the local value-addition on the manufacturing front. As the government’s schemes—such as
Production Related Incentive (PLI) progress to impact the overall electronic manufacturing ecosystem—mobile phone production is expected to
increase in the coming years. Brands such as Micromax and Lava are expected to take advantage of the 'Atmanirbhar Bharat' initiative and
schedule their comeback.

Note: F – Forecast, E-Estimated

Source: IMF, World Bank, International Data Corporation (IDC), Counterpoint Research, Media Sources

24
Government and private initiatives influencing e-commerce (1/3)

1
Bharat Net and Digital India
▪ BharatNet broadband aims to connect 3,61,000 villages across 16 states by 2025.
▪ As of Economic survey of 2021-22, 546,000 kilometres of optical fibre cable were laid, with 173,000 gramme panchayats connected.
▪ Under the Digital India movement, Government launched various initiatives like Umang, Start-up India Portal, Bharat Interface for
Money (BHIM) etc. to boost digitisation.

2
E-commerce draft policy
▪ The Government of India’s Draft National e-Commerce Policy encourages FDI in the marketplace model of E-commerce. Further, it
states that the FDI policy for E-commerce sector has been developed to ensure a level playing field for all participants.
▪ According to the draft, a registered entity is needed for the E-commerce sites and apps to operate in India.
▪ The telecom provider offered free high-speed internet access to users for first seven months.

3
Permanent account numbers (PAN) mandated
▪ In October 2020, amending the equalisation levy rules of 2016, the government mandated foreign companies operating e-commerce
platforms in India to have permanent account numbers (PAN). It imposed a 2% tax in the FY21 budget on the sale of goods or
delivery of services through a non-resident ecommerce operator.

4
Udaan
▪ Udaan is a B2B online trade platform to connect small and medium size manufacturers and wholesalers with online retailers. It also
provide them logistics, payments and technology support.
▪ The platform has sellers in over 80 cities of India and delivers to over 500 cities.
Source: Bain & Company - Unlocking Digital for India, Union Budget 2019-20, Media Sources

25
Government and private initiatives influencing e-commerce (2/3)

5
Open Network for Digital Commerce (ONDC)
▪ The Indian government has formed a new steering committee that will look after the development of a government-based e-
commerce platform. The new committee, set up by the Commerce Ministry, will provide oversight on the policy for Open Network for
Digital Commerce (ONDC), which is an e-commerce platform being developed with the government’s backing. The ONDC will serve
as the infrastructure for setting up the final storefront, which will be something similar to Flipkart and Amazon.

6
Ecommerce Ecosystem
▪ In a bid to systematise onboarding of retailers on e-commerce platforms, the Department for Promotion of Industry and Internal
Trade (DPIIT) is reportedly planning to utilise the Open Network for Digital Commerce (ONDC) to set protocols for cataloguing,
vendor discovery and price discovery. Their aim is to provide equal opportunities to all marketplace players to make optimum use of
the ecommerce ecosystem in the larger interest of the country and its people.

7
National Retail Policy
▪ The government had identified five areas in its proposed national retail policy—ease of doing business, rationalisation of the licence
process, digitisation of retail, focus on reforms and an open network for digital commerce—stating that offline retail and e-commerce
need to be administered in an integral manner.

8
Consumer Protection Rules
▪ The Consumer Protection (E-Commerce) Rules, 2020, notified by the Consumer Affairs Ministry in July direct e-commerce
companies to display the country of origin alongside product listings. In addition, they will also have to reveal the parameters that go
behind determining product listings on their platforms.

Source: Bain & Company - Unlocking Digital for India, Union Budget 2019-20, Media Sources

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Government and private initiatives influencing e-commerce (3/3)

9
Government e-Marketplace Portal (GeM)
▪ Government e-Marketplace (GeM) is an online platform for public procurement in India that was launched on August 9, 2016 by the
Ministry of Commerce and Industry with the objective of creating an inclusive, efficient, and transparent platform for the buyers and
sellers to carry out procurement activities in a fair and competitive manner.
▪ Through automation and digitization of processes, GeM has led to higher process efficiencies, better information sharing, improved
transparency, reduced process cycle times, and a higher level of trust among bidders, which in turn have resulted in greater
competition and higher savings.
▪ In FY23, the procurement of goods and services from the government portal crossed the Rs. 2 lakh crore (US$ 24 billion) mark.

Source: Bain & Company - Unlocking Digital for India, Union Budget 2019-20, Media Sources

27
Key Industry Contacts

28
Key industry Contacts

Agency Contact Information

Address: 122, 1st Floor, Devika Tower

Corporate Business District, Nehru Place
New Delhi -110 019
Phone: +91 011 41582722
E-commerce Association of India
Fax : +91 011 41582722
Email: info@ecai.co.in
Website: www.ecai.co.in

111/112, Ascot Centre, Next to Hotel Le Royal Meridien,

Sahar Road, Sahar, Andheri (E), Mumbai-400099.
Tel: 91-22-28269527—28
Retailers Association of India (RAI)
Fax: 91-22-28269536
E-mail: info@rai.net.in
Website: www.rai.net.in

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Appendix

30
Glossary

▪ CAGR: Compound Annual Growth Rate

▪ GMV: Gross Merchandise Value

▪ FDI: Foreign Direct Investment

▪ FY: Indian Financial Year (April to March)

▪ GOI: Government of India

▪ Rs: Indian Rupee

▪ US$: US Dollar

▪ Numbers have been rounded off to the nearest whole number, wherever applicable.

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Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11
2005-06 44.28 2006 45.33
2006-07 45.29 2007 41.29
2007-08 40.24 2008 43.42
2008-09 45.91 2009 48.35
2009-10 47.42 2010 45.74
2010-11 45.58 2011 46.67
2011-12 47.95 2012 53.49
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09 2017 65.12
2017-18 64.45 2018 68.36
2018-19 69.89 2019 69.89
2019-20 70.49 2020 74.18
2020-21 73.20 2021 73.93
2021-22 74.42 2022 79.82
2022-23 78.60 2023* 83.15

Note: *Until November 2023

Source: Foreign Exchange Dealers’ Association of India

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