India’s ecommerce market to reach $150 bn by 2022: report
NEWDELHI: India’s e-commerce market, which includes sectors such as e-travel, online retail and financial services, can grow to as much as $150 billion by 2022, buoyed by increasing income levels and more online users, according to a new report.
The current industry size is pegged at $36 billion, says a combined industry report by information technology industry lobby group Nasscom and PWC India.
By 2022, 150 million users are expected to transact digitally and will mainly be based in Tier 2 and 3 cities with dif- ferent preferences in languages, payment modes and products vis-à-vis the existing base of users.
The report estimated that India’s middle class population will surge to 540 million in 2022 from 380 million in 2017, and the number of online users will rise to 850 million. The report’s estimates are based on gross merchandise value in e-tail and e-travel; transaction margins in online financial services; commission and ad revenues for online consumer services; and subscription and ad revenue for the digital content category. B2B commerce has been excluded.
E-commerce is expected to grow at a compounded annualized rate of 24% between 2017-2022 as internet penetration doubles to 60%. The sector will create 1 million jobs and push 15 million small and medium enterprises towards revenue generation, adds the report titled Propelling India towards global leadership in e-commerce. Currently, on the global e-commerce readiness index, India (10%) ranks behind countries such as Brazil (20%), China (30%) and Russia.
While big players like Amazon Seller Services Pvt. Ltd and Flipkart Pvt. Ltd, keep consumers hooked online by offering deep discounts, even new startups are able to attract the average Indian consumer online and ensure loyal business. Amid the optimism about e-commerce, the new draft policy has proposed several restrictions including curbs on discounts.
reported earlier in August that both Flipkart and Amazon were lobbying fiercely to get the draft e-commerce policy scrapped.
“There are some good things about the policy that incentivize more SMES to come online,” said Sangeeta Gupta, senior vice-president at Nasscom.
“I hope the government will use that and not create a stifling environment and the potential highlighted in the report can be realised, while taking into account customers data and other imperatives, which needs to be addressed but not only by the way which the policy suggests.”