India has seen a dramatic shift towards acceptance and rise of the ecommerce industry in India over the past few years. Be it the introduction of options like Cash on Delivery or the ground-breaking out-of-the-box efforts of companies like Flipkart, Snapdeal, Myntra, Jabong etc to establish their presence in the domestic ecommerce market, the number of first generation entrepreneurial ventures operating in the industry has seen a phenomenal jump over the past few years. At the same time, global giants like eBay, Amazon etc are leaving no stone unturned to gain substantial market share while the market is still in its early days.
According to a recent report by Goldman Sachs, the domestic e-commerce market is expected to account for around 2.5 per cent of India's GDP by 2030, growing 15 times and reaching US$ 300 billion. The report further added that the current market size of e-commerce industry in India is around US$ 20 billion and factors like hyper growth in affordable smartphones, improving infrastructure, and a propensity to transact online are the key factors for the bullish projections for the domestic industry. "Further, India's attractive demographics – the youngest population in the world – should lead to over 300 million new online shoppers in the next 15 years, making e-tailing the largest online segment," the report said.
It is interesting to note that close to currently 60 per cent of e-commerce transactions in India take place through the cash-on-delivery mode but the payment landscape is evolving fast with the launch of digital wallets and payment banks. Segments like online travel, digital advertising market and electronic payments have the potential to catalyse domestic companies into multi-billion dollar businesses. In fact, India is expected to have the second largest digital population in the world with 1 billion users by 2030, largely powered by the increasing online mobile penetration.
"India has enough spectrum and telecom infrastructure to provide 3G data coverage to 25-30 per cent of the population," the report pointed out and further mentioned that the "3G-enabled smart phones are available for US$ 40 with more than 900 phones launches last year." With a private funding of over US$ 6 billion in 2014 alone, the industry is expected to witness a significant inflow of foreign funding in the sector in the coming years.