Indian E commerce sector has witnessed tremendous growth in the recent past. Presently, India is the second largest marketplace for internet and smartphone in the world. Here are some facts relating to Indian e commerce sector:
2. Till April 2020, under the Digital India initiative the internet connections rose to 782.86 Million in India, significantly.
3. From the total of the above stated connections, about 61% are in the urban places and about 97% of this are wireless.
4. Also, the most preferred payment method among the people is UPI payments. About 50% consumers use this way to complete their transactions online.
5. Due to the COVID-19 pandemic, e-commerce or online shopping has become the most preferred way of shopping among the Indian consumers.
6. Since May 2020, specific categories in the e-commerce market, such as Grocery, Fashion, Electronics and Home Furnishings have shown a massive growth on monthly basis.
A data reveals that the 60% of orders made online are from the small towns and tier-2 cities in India. The e-commerce sector is expected to see a surge very soon as the future opportunities lie in the rural areas of the country.
8. The youngest internet users are between 15 to 34 years, gives an additional demographic advantage over other countries as these shop more than the other remaining population of the country. It is expected that approximate of 200 Million users or online shoppers will be there by the year 2025.
The e-commerce sector has completely transformed the way the business is operated in India. This market is expected grow from 46.2 Billion USD in 2020 to a whopping 111.40 Billion USD by the year 2025 in India. The credit for sudden boost in the e-commerce market in India can be said to be contributed by the increase in internet users and the penetration of the smartphone culture.
Due to aforesaid reasons, there is a huge opportunity in this sector and more and more foreign players are making investment in this sector by either opting for joint ventures with existing Indian companies or opting for foreign company registration in India in the form of wholly owned subsidiary.
Current status of FDI in the E-Commerce Sector:
. Here is the data showing the current status of the FDI received in the e-commerce sector-
1. The e-commerce industry in India has crossed the 100 Billion USD mark in the year 2020.
2. As per the Indian Foreign Direct Investment (FDI) policies, 100% investment through the Automatic Route is allowed in this model of Business to Business (B2B) marketplace.
3. In the year 2019, the e-commerce and the internet consumer have received more than 4.32 Billion USD from the venture capitalists and private equity investors.
Areas where investment can be made in E commerce Sector
Here are the key areas of the e-commerce sector where one should make investments-
b. Apparels and clothing
c. Food and Grocery
e. Personal care and make-up
f. Home furnishings
g. Digital payments
h. Digital advertisements
i. Consumer internet
Thus, it is evident from above that Indian e commerce sector provides a huge opportunity for investment by foreign players and this sector will continue to contribute significantly in India/s GDP in coming years.