E-Commerce
Fastest growing e-commerce market in the World
The Indian e-commerce industry has been on an upward growth trajectory. After a surge in digital adoption during COVID-19, the Indian e-commerce market is estimated to be worth over $55 Bn in Gross Merchandise Value in 2021. By 2030, it is expected to have an annual gross merchandise value of $350 Bn. Further, as of 2021, more than 348 Mn users were conducting online transactions, and nearly 140 Mn were shopping online.
Young demography, increasing internet and smartphone penetration, and relatively better economic performance are some key drivers of this sector. With 830 Mn users, India is currently the 2nd largest internet market. In 2021, digital wallets were the leading payment method for e-commerce transactions with a share of 45.4%
Close to 100 per cent of pin codes in India have seen e-commerce adoption. More than 60 per cent of transactions and orders in India come from tier two cities and smaller towns. The e-commerce trend is gaining major popularity even in tier-2 and tier– 3 cities as they now make up nearly half of all shoppers and contribute three of every five orders for leading e-retail platforms. The average selling price (ASP) in tier-2 and smaller towns is only marginally lower than in tier-1/metro cities. Electronics and apparel make up nearly 70 per cent of the e-commerce market, when evaluated against transaction value. Other new upcoming categories within e-commerce include ed-tech, hyperlocal and food-tech; E-Commerce funding in India grew by ~600% YoY in 2021
Internet users added monthly
FDI permitted in B2B E-commerce
E-Commerce Market by 2030
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E-Commerce of Single Brand Product Retail allowed, provided company establishes physical stores within 2 years from start of online retail.
Government Support
The government is backing technologies such as UPI, RuPay, DigiLocker, eKYC to help promote digital transactions, increase its adoption in smaller cities, as well we to drive innovation in this space. In the FY22 Budget, a INR 1,500 crore scheme was proposed to financially incentivise digital payments.
Ecommerce is set to benefit from government initiatives to boost rural broadband penetration within the ambit of Digital India. BharatNet is one such program, with an outlay of INR ~61000 Crore, aimed to bring broadband connectivity to India's 2,50,000 Gram Panchayats
The Government has launched the ODOP programme with the aim of selecting, branding, and promoting One Product from each District (One District – One Product) of the country to enable holistic socioeconomic growth across all regions.
Rules delineate roles and responsibilities for marketplace and sellers, and will reinforce competition and efficiency within the Indian e-commerce market
A draft policy that aims to create a framework for helping achieve holistic growth of the e-commerce sector, supporting it along with other initiatives such as Make in India and Digital India
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FAQs
Subject to the conditions of SBRT under the FDI policy (link:), a single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e- commerce. Further, as per policy, retail trading through e-commerce can also be undertaken prior to opening of brick & mortar stores, subject to the condition that the entity open brick and mortar stores within 2 years from date of start of online retail
For any further queries, please write to us at retail@investindia.org.in
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"1) Marketplace based model of e-commerce means providing an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between the buyer and seller.
2) Inventory based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.
For more information, click here
For any further queries, please write to us at retail@investindia.org.in"
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"No, FDI is not permitted for inventory based model of e-commerce.
For any further queries, please write to us at retail@investindia.org.in"
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"A draft e-commerce policy was prepared and put up in the public domain on February 23, 2019 for comments/suggestions. Comments from over 120 stakeholders (companies, Industry associations, think tanks, foreign governments) have since been received. The Govt. is currently working on finalising the policy. Click here for the draft policy.
For any further queries, please write to us at retail@investindia.org.in"
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As per the FDI Policy, E-Commerce marketplace is not supposed to exercise control or ownership of the inventory. Inventory is deemed to be controlled by the marketplace if more than 25% of purchases of a vendor on the marketplace are purchased from the marketplace entity or its group companies.
For any further queries, please write to us at retail@investindia.org.in
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