As per IBEF,
-
The Unified Payments Interface (UPI) facilitated a total of 140.35 billion transactions, with the platform processing over Rs. 20.45 lakh crore (US$ 245.20 billion) in value.
-
Indian e-commerce platforms generated sales worth US$ 5.67 billion gross GMV (Gross Merchandise Value) during the the first week of 2023 festive season,
A report in Financial Express has predicted that the Indian Ecommerce industry will grow to a whopping $325 billion, and by the same year the country’s digital economy to reach an astounding $800 billion. Given these facts and figures, it’s clear that India’s e-commerce revolution has reached a new milestone, making it one of the driving forces behind India’s economic growth.
This edition of “The People Weekly” will delve deeper into the phenomenal growth of India’s ecommerce industry, the factors driving its expansion, and the future outlook for this dynamic industry.
Ecom Boom
A few months ago, WEF, World Economic Forum, in collaboration with Accenture published a white paper on the impact of LLMs or Large Language Models on jobs, as part of the “Jobs of Tomorrow” series. While acknowledging the job market impact of LLMs, the report also foresees new roles and evolving work dynamics. The market for LLMs is witnessing significant growth and is projected to reach USD 140.8 billion by 2033, growing at a CAGR of 40.7%.
The ecommerce industry in India is set to grow at a CAGR of 22% to reach over 300 billion USD in 2030. The ecommerce presently makes up around 7% of the retail market and is currently valued at 70 bn USD. In the year 2023, the GMV(Gross Merchandise Value) reached 60bn USD which is a 22% increase from the previous year.
The B2B ecommerce space which is now at 1% of overall B2B market, will reach 5% and is projected to grow to become a $200 Bn market by 2030. B2C space is expected to grow at a CAGR of 8.3% during the said period.
This growth and boom is also seen in the either sectors of ecommerce like D2C, C2C and C2B. The D2C segment is expected to grow at a CAGR of 38% and reach $61.3 Bn in 2027 which is four times the existing market size. Amongst all these, the largest share is held by the B2C segment dominated by players like Amazon and Flipkart.
The B2C segment reigns supreme in the Indian e-commerce landscape. Fashion, food, and electronics are poised for explosive growth in the coming years.
Some of the major factors that are responsible for the ecommerce boom are
- Increased Internet Penetration: The rise in smartphone adoption and affordable internet plans have made online shopping accessible to a vast population. India presently has around 820 million active internet users and around half of them belong to rural india.
- Growing Middle Class: A burgeoning middle class with higher disposable incomes is driving demand for a wider range of products and services.
- Young and Tech-Savvy Population: India’s young population is highly tech-savvy and comfortable with online transactions.
- Government Initiatives: The government has implemented various policies to promote e-commerce, including Digital India, Make in India, skill india, the national retail policy etc. The GMV of GeM platform (Government e marketplace) has doubled to cross 4 lakh crore, in FY’24.
- Improved Logistics: The development of efficient logistics networks has made it easier for e-commerce companies to deliver products across the country. It is expected that the logistics industry will handle 17 billion shipments in the next 7 years as per IBEF.
- Competitive Pricing: Online retailers often offer competitive prices and exclusive deals, attracting customers.
- Diverse Product Offerings: E-commerce platforms provide access to a wide variety of products, including international brands.
- Convenience and Accessibility: Online shopping offers the convenience of 24/7 shopping and home delivery.
- Cash on Delivery (COD): This payment option has been crucial in building trust among customers who may be hesitant about online payments.
- Digital Payments: The adoption of digital payment methods like UPI has made online transactions more secure and convenient.
Emerging Trends in Ecommerce
It is forecasted that by 2028, the online retail market size will increase by 7% to capture a total share of 14% in the total retail market.
Some of the emerging trends that can be seen in the Indian ecommerce space are
- ONDC Expansion : As more e-commerce giants join the Open Network for Digital Commerce (ONDC), the market is becoming increasingly democratised and inclusive. In just two years, ONDC has onboarded over 2.3 lakh sellers and service providers, demonstrating its rapid growth.
- Rural Ecommerce : Over half of India’s e-commerce transactions in 2023 originated from rural areas. With rising smartphone penetration, this trend is set to accelerate. Initiatives to improve rural infrastructure, logistics, and digital literacy are fueling e-commerce growth in these regions.
- Rise of Quick Commerce : The booming QC market is expected to witness significant growth in the coming years, driven by increasing demand for convenience and speed.
- Live Commerce : Live commerce is a form of e-commerce that involves selling products online through live video broadcasts. This interactive shopping experience allows customers to watch live streams, ask questions, and make purchases directly from the stream. Live commerce is gaining traction in India, especially among younger demographics.
- Social Commerce: E-commerce platforms are integrating social media features to enable seamless shopping experiences via social media platforms and leverage the power of influencers
- Sustainable E-commerce: Consumers are becoming more conscious of sustainability, and e-commerce businesses are adopting eco-friendly practices and offering sustainable product
- AR and VR : The use of augmented reality (AR) and virtual reality (VR) in e-commerce is expanding, providing customers with immersive shopping experiences that
are set to increase further in the coming years
E-commerce Boom and Job Creation
The e-commerce industry in India is emerging to be one of the major economic contributors and has so far generated 16 million jobs. There are numerous opportunities both in the tech domain as well as non tech domain. In fact with the explosion of AI, tech related roles are seeing a surge in demand in the ecommerce space. Roles in data analytics, AI-driven machine learning, generative AI and product management have seen significant demand. While, overall there has been a 40% increase in employment opportunities in the ecommerce space Marketing roles have seen an increase in demand by 30%. SEO specialists , RPD management and digital marketing are seeing surge in demand. In fact SEO specialist, PPC, SEM roles are most sought after. 2 major domain where there are plenty of opportunities but a dearth of talent are data analytics and customer experience
Skills required for those working in the ecommerce space is a mix of both tech skills as well as soft skills like communication, creativity, problem solving and adaptibility. Continuous upskilling is a must for those working in the ecommerce space. Be it leadership roles or senior/mid managerial roles or IT /non IT roles, startups are always on the look out for those talents who are able to aligns themselves culturally .
PeopleLogic Opinion
Ecommerce is more than just a digital storefront; it’s a gateway to a world of convenience and choice. With the click of a button, consumers can access a vast array of products and services, from the latest gadgets to personalised experiences. As technology continues to evolve, so too does the way we shop. From virtual reality try-ons to AI-powered recommendations, the future of ecommerce is exciting and full of possibilities. There is no doubt that the ecommerce industry will witness unprecedented growth in the coming years. With the fast paced advancement in technology and changing consumer behaviour, the ecommerce industry is on a continuous metamorphosis evolving daily.
In this dynamic landscape, having the right talent on board is crucial for the success of any ecommerce business. PeopleLogic, one of the best recruitment agencies in india, with its impressive track record of serving ecommerce clients, can help you find the ideal talent to propel your organisation forward.Our comprehensive recruitment process ensures that we identify candidates who not only possess the necessary skills but also align with your company culture. Whether you’re looking to fill a key leadership role or build a high-performing team, PeopleLogic, who are also one of the top leadership hiring consultants in India, can provide the talent solutions you need,whether its leadership roles or mid /senior managerial roles or tech/non tech roles.
