COVID provides much needed boosts to Indian e-commerce industry
The pandemic has brought in a shift in consumer behaviour, providing a major fillip to India’s e-commerce industry that is now poised to touch $90-100 billion in the next 3-4 years. While challenges brought in by the pandemic impacted businesses, many new avenues also opened up.
The opportunities that modern retail present are significant for businesses of all sizes, including the kirana ecosystem. E-commerce platforms are also doing its best to help small businesses and artisans embrace the power of technology and be a part of the modern retail opportunity.
E-commerce has been gaining traction over the years and in 2019, more than 10 per cent Indians had already shopped something online. This trend was further accelerated after the lockdown forced people to stay indoors. Many turned to online platforms for buying grocery and other essentials during this time and have continued to do so after the lockdown was lifted.
Almost 100 per cent pin codes in India have seen e-commerce adoption. This includes categories like fashion, appliances, furniture, etc. More than 60 per cent of transactions and orders in India come from tier two cities and smaller towns. Industry experts still believe that they are scratching the surface when it comes to e-commerce adoption in India. Out that only 3.5 per cent of Indian commerce is online as compared to more than 25 per cent e-commerce adoption in China, and other developed economies that have 10-25 per cent adoption rates.
COVID-induced spike in e-commerce has actually changed several categories, there is a new normal. And the meaning of essential categories has also completely changed. It is believed that Indian e-commerce economy has seen a permanent shift for the positive.
Over the next few years, Indian e-commerce economy will be bigger than modern retail today. The pre-COVID growth rates of e-commerce were roughly 26-27 per cent but if you look at the post-COVID estimates, it has gone closer to 30 per cent. In the next three to four years, what the industry was estimating the e-commerce market size was roughly in the range of about USD 50-60 billion, today, the same numbers are actually close to USD 90-100 billion.
