Impact of COVID-19 on Indian E-Commerce Industry

Impact of COVID-19 on Indian E-Commerce Industry

PRE-COVID-19 SCENARIO OF THE INDIAN E-COMMERCE INDUSTRY

The Indian e-commerce industry was growing significantly at a CAGR of 23.2% in the pre-COVID-19 scenario, owing to the rising disposable income, cohesive government policies, and the growing internet penetration. The factors that drove the growth of the e-commerce industry in the pre-COVID-19 scenario include strong and steady growth of internet users and inclination towards online shopping. With the growing internet penetration, internet users in India are expected to reach 835 million by 2028, as of 2021, internet subscribers in India stood at almost 665 million as per India Brand Equity Foundation (IBEF). In addition, the growth in the e-commerce industry in India can be substantiated by the increasing number of online shoppers.

Industry Growth Factors-

Each month, India is witnessing additional 10 million (approximately) daily active internet users to the internet community supporting the e-commerce industry.

Online shoppers in India are expected to reach 220 million by 2028.

Digital transactions reached $100 billion by 2021.

In addition, an increasing number of exclusive products in the market and lower prices of goods due to the direct distribution channel further contributed to the growth of the e-commerce market. Further, the Indian e-commerce industry is an escalating sector due to continuous efforts of the Indian Government and its digital transformation programs such as ‘Make in India’, and the introduction of Goods and Services Tax (GST), improvement in infrastructure through the Sagarmala and Bharatmala initiatives, Dedicated Freight Corridors, E-way bill, and Dedicated Port Delivery.

Few Digital Transformation Programs-

Bharat Net and Digital India- The project has a target to digitally connect 250,000 gram panchayats by March 2021. The Government has also planned to set up 500,000 Wi-Fi hotspots for providing broadband service to 50 million rural citizens. Under the Digital India movement, the Indian Government launched various initiatives such as Udaan, Umang, Start-up India Portal, and so on.

E-commerce Draft Policy- The Government of India’s Draft National e-commerce Policy encourages Foreign Direct Investment (FDI) in the marketplace model of e-commerce. Further, it states that the FDI policy for the e-commerce sector has been developed to ensure an equal opportunity for all participants.

Internet Saathi- Under this project, Google and Tata Trust have collaborated to improve internet penetration among rural women in India. The project has benefited over 26 million women in India and reached 260,000 villages by 2021 since its launch in 2015.