E-commerce market in India 2022-2027

E-commerce market in India 2022-2027

The e-commerce market in India was valued at INR 6,210.96 Bn in 2021. It is anticipated to reach a value of INR 26,459.18 Bn by the end of 2027, expanding at a compound annual growth rate (CAGR) of ~26.71% during the 2022 – 2027 period. The market has grown exponentially over the past five years due to the surge in Internet and smartphone users, improved policy reforms, and increase in disposable income. Mobile wallets, Internet banking, and debit/credit cards have become popular among customers for making transactions on e-commerce platforms.

Market segment insights:

Based on product categories, the market can be segmented into online travel, retail, financial services, matrimony and classified, and other services. Consumers’ buying patterns have changed significantly, especially regarding categories, such as health and pharma, groceries, and food deliveries. In 2021, the online travel segment in India was impacted severely by the COVID-19 pandemic. By 2027, the online retail sector is expected to dominate the e-commerce market in India because of a growing consumer base and increasing FDIs.

COVID-19 impact assessment:

With more consumers spending time indoors and working from home, the demand for goods such as air-conditioners, refrigerators, laptops, desktop computers, food deliveries, and all other necessities had reached an all-time high. Because of the pandemic, consumers’ shopping patterns have changed. The pandemic necessitated the use of new technology tools and zero-contact arrangement to cater to the unprecedented demand. As a result, online retail market expanded significantly along with online food and grocery delivery market.

Competitive insights:

E-commerce companies have brought in various technologies, such as voice recognition, virtual reality (VR), augmented reality (AR), fintech, artificial intelligence (AI), and machine learning (ML) to attract customers and compete with other players. Organizations such as Amazon, Flipkart, Goibibo, Ola, Zomato, and Ixigo have employed voice assistants for assisting customers with their queries, thereby improving customer satisfaction. They also use fintech-based payment platforms such as PayPal, Apple Pay, Google Pay, and Amazon Pay to offer secure and efficient online payment methods to consumers.