India’s e-commerce boom: Projected to grow by 23.8% by 2024

Ravi Sharma, Principal Analyst, Banking and Payments at GlobalData, highlighted that the rise in internet and smartphone penetration has been key to the sustained growth of e-commerce in India. According to the Telecom Regulatory Authority of India, the number of internet subscribers in the country reached 954 million in March 2024, a significant increase compared to the 881 million recorded in March 2023. This growth in the internet user base is encouraging more merchants, especially small and medium-sized enterprises (SMEs), to enter the e-commerce space.

Major e-commerce players, both domestic and international, such as Flipkart, Amazon and Myntra have capitalised on this growth by offering attractive promotions and discounts through massive sales events such as Flipkart Big Billion Days, Amazon Great Indian Sale and Myntra Big Fashion Festival Sale. These initiatives not only increase consumer engagement in online shopping but also reinforce India’s position as a key market for e-commerce.

In terms of payment methods, there has been a noticeable shift in Indian consumer preferences. In 2023, alternative payment methods such as mobile and digital wallets accounted for an impressive 58% of the online payments market, according to GlobalData’s Consumer Financial Services Survey 2023. This shift reflects a transformation in consumer behavior, moving away from traditional payment methods. Brands such as Amazon Pay and Google Pay have become increasingly popular, consolidating their position in the digital payments market.

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While payment cards remain the second most popular option for online transactions, with a market share of 25.7%, the use of cash, which has historically been the preferred method for payments in physical stores, has declined significantly in online purchases, accounting for just 6.2% of the market. The acceptance of electronic payment methods for cash on delivery orders, such as the QR code payment option offered by Flipkart, is contributing to increased adoption of digital payments in e-commerce.

The future of e-commerce in India looks bright, driven by government initiatives such as ‘Make in India’ and ‘Startup India’, which have empowered numerous SMEs to expand their manufacturing capacity and sell their products on online platforms, both domestically and internationally. These policies are playing a crucial role in the growth of the country’s e-commerce market.

Sharma concluded that the upward trend in e-commerce sales in India is likely to continue in the coming years, supported by rising consumer preference, improving payment infrastructure and increasing popularity of alternative payment solutions. This growth will not only transform the country’s digital economy but will also position India as one of the most dynamic e-commerce markets globally.