E-commerce in India

The e-commerce in India was $147.3 billion in 2024, with 18.7% CAGR through to 2028 which will be further fueled by the technology innovations (5G & 6G based higher internet speed, AI and ML based hyper-personalized shopping experience, immersive AR and VR virtual try-ons and virtual stores, blockchain based enhanced supply chain transparency and increased trust among consumers), cheaper data rates, rising smartphone adoption, increased market penetration (Tier II and Tier III cities which contribute 60% of business and Direct-to-consumer (D2C) brands grew from 2% five years ago to now 15 % with projected future CAGR of 40 %), and evolving consumer behaviors (12% growth in Gross Merchandise Value (GMV) and 23.8 % growth in digital payments fueled by [[Unified Payments Interface}UPI]]. By 2027, the number of Indian ecommerce consumers will 400 million as compared to 312.5 million in 2022. India had an Internet user base of about 690.0 million in 2023, about 40% of the population. Despite being the second-largest user base in world, only behind China (1.079 billion, 48% of population), the penetration of e-commerce is low compared to markets like the United States (266 million, 84%), or France (54M, 81%), but is growing, adding around 6 million new entrants every month. The industry consensus is that growth is at an inflection point.

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities. Demand for international consumer products (including long-tail items) is growing faster than in-country supply from authorised distributors and e-commerce offerings. Long tail business strategy allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The term was first coined in 2004 by Chris Anderson.

In 2023, the largest e-commerce companies in India were Flipkart, Snapdeal and Amazon. In 2018, Amazon beat Flipkart and was recorded the biggest ecommerce in India in terms of revenue. In 2020, Flipkart heavily outsold Amazon by almost two to one by sales during festive retail season.

In 2022, the pilot phase of the Open Network for Digital Commerce was launched.