Republic Economic Summit: India's e-commerce industry continues upward trend amid COVID

In le up to first-ever Republic 'India Economic Summit' scheduled for November 26 in national capital, Republic World establishes an overview of world's fifth-largest economy and key contributory factors to its growth, crisis and sustenance. At  Republic Economic Summit 2021, Union Ministers and top corporates are set to ideate on pressing questions, especially in a post-COVID apparatus, while profound economists will place  world's fastest-growing major economy under microscope. 

At a time when global economy is showcasing an inflection point amid COVID-19, let us understand  penetration of e-commerce & retail in Indian context. 

Nature of e-commerce & retail in India

With an internet user base of more than 696.77 million, reflecting about 40% of country's population, India's e-commerce sector is growing at an unprecedented pace, especially in aftermath of nationwide lockdowns in a work-from-home economy of post-COVID era.

In dition to customers' convenience and endless products via e-shopping, India's e-commerce industry thrives on sale of more hard-to-find items inste of only selling large volumes of popular items, thus realising significant profits. Strategists say that e-commerce has led to emergence of several niche players who primarily specialise ir products closer to a me, and get acquired by big players subsequent to getting popular in-demand amongst consumers. 

According to National Investment Promotion & Facilitation Agency, country's e-commerce sector is estimated to surpass USD 350 billion mark in gross merchandise value (GMV) (volume of goods sold via e-commerce platforms) and become third-largest online retail market by 2030.

India's e-commerce & retail in recent past

Driven by socio-demographic and socio-economic factors such as urbanisation, income growth along a drastic surge in nuclear families, concept of door-step delivery comes across as a boon. In light of smartphones and internet being recognised as basic amenities in fast-paced system, e-commerce in retail industry has transformed India's business approach. 

Since 2014, GoI's initiatives such as Digital India, Make in India, Start-up India, Skill India dovetaile with  country's image as a thriving forum to launch numerous digital initiatives and sustain m too. 

Driven by strong option of online services in day-to-day purposes such as food delivery, apparels sales and education sector, India's e-commerce accounted for almost half of smartphones that were sold and about a fifth of clos purchased in first half of 2021. In 2020 itself, e-commerce entities logged more than USD 8 billion in private equity and venture capital across 400 legally enforceable deals. 

India's e-commerce & retail amid COVID-19

While retail market in India was rar unorganised amid COVID-19, sector did not witness a downward trend in customers' demands or even options me available to m. organised retail market has increased significantly between 2012-2020 to its current value at 12% of total retail and is expected to climb to 18% by 2025. 

Surveys denote 75% of tritional grocery stores (kirana), after COVID-19 outbreak, are interested in venturing into digitisation and while only 3% were tech-enabled in 2018, nearly 70% in tier 1 cities and 37% in tier 2 cities currently are keen to resort to technology to augment ir business operations. Also, owing to National Payments Corporation of India's UPI (Unified Payments Interface), anyone with a bank account and a cellular phone can transfer money to beneficiaries using a mobile phone, in a country with approximately 75 crore mobile users which is second-highest in world. 

Secondly, or than online grocers, prominent retail categories that recorded notable increases were apparels and accessories sector with 18% growth while consumer electronics and home and living recorded a 6% growth. Notably, growth in e-commerce industry has directly impacted micro, small & medium enterprises (MSME) with cascing effects on several or sectors too. Understandably so, a boost in aforementioned sector has likely enhanced employment, revenues from export and provided better quality products and services to customers.

Of late, resultant upward trajectory in India's e-commerce is vanced by technology-enabled innovations such as customer engagement, vertisements, digital mode of payments, payments getaways, a study of demand basis hyper-local analytics, etc.

government, under leership of PM Narendra Modi, has repeatedly stated  need to prioritise digital upliftment and reiness in a bid to attract more homegrown, indigenous and local businesses as producers and not only consumers in e-commerce and retail industry.