The Indian e-commerce industry has been on an upward growth trajectory. In FY 2022-23, Government e-marketplace (GeM) registered its highest ever Gross Merchandise Value of $2011 Bn. GeM has achieved a cumulative GMV of more than 4.5 Lakh Cr until 23rd Jul 2023 (since inception). Hence, considering the saving estimates as reported above, GeM has facilitated savings worth more than INR 40,000 Cr since its inception. As per TRAI’s Indian Telecom Services Performance Indicators Jan-Mar 2023, the internet penetration in India as of Mar 2023, is over 880 Mn, and the number of telecom subscribers as of Mar 2023 is over 1172 Mn.
The e-commerce industry in India is growing on levers such as increased smartphone penetration, increased affluence and low data prices, providing impetus for e-retail growth. With over 800 Mn users, India is the 2nd largest internet market in the world with 125.94 Lakh Cr UPI transactions in 2022.
Close to 100% of pin codes in India have seen e-commerce adoption. More than 60% 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% of the e-commerce market, when evaluated against transaction value. Other new upcoming categories within e-commerce include ed-tech, hyperlocal and food-tech.
ONDC, a network launched by the Government of India in 2022, aims to provide equal opportunities to MSMEs to thrive in digital commerce and democratize e-commerce. In 2022, Indian e-commerce and consumer internet companies raised $15.4 Bn in PE/VC funding, 2x increase from $8.2 Bn in 2020.