Role Of E-Commerce on Indian Economy. Growth Of market and how it grows. Market Size In India.

1. Role Of E-Commerce In India
Abstract
Being driven by a young demographic profile, increasing internet
penetration and relative better economic performance, India e-
commerce revenue is expected to jump from $30billion in 2016 to $120
billion in 2020, growing at an annual rate of 51%, the highest in the
world, according to a joint ASSOCHAM (Associated Chambers of
Commerce and Industry)Forrester study paper. India had an internet
user base of about 354 million as of June 2015 and is expected to cross
550 million in 2017. The largest e-commerce companies in India are
Flipkart,Sanpdeal, Amozon India and Paytm. Customer is not bound to
the local market but has expanded its search to international markets.
E-commerce is the term which has made a profound change in the way
purchase and buying has been done these days. As American and
European market shave reached the maturity phase, Asia is becoming
increasingly attractive to businesses, especially to e-commerce firms
that thrive on global and scalable business models. Asia is a large and
rapidly growing region with a rising spending capacity of middle class,
growing internet usage and an acute penetration of mobile phones.

2. Introduction
E-commerce (Electronic Commerce or Ec) is the buying and selling of
goods and services, or the transmitting of funds or data, over an
electronic network, primarily the internet. These business transactions
occur either as:
 Business-to-Business (B2B)
 Business-to-Consumer (B2C)
 Consumer-to-Consumer (C2C)
 Consumer-to-Business (C2B).
 Business-to-Administration (B2A)
 Consumer-to-Administration (C2A)
The e-commerce market continues to grow in India. E-commerce
conducted using mobile devices and social media is on the rise as well.
Current Scenario
Online shopping in its early stage was a simple medium for shopping
with fewer options. The users can just place an order and pay cash on
delivery. But, in last few years this field has been renovated to a high
extent and hence fascinated many customers. Today online shopping
has become a trend in India and the reason behind the adoption of this
technique lies in the attractive online websites, user friendly interface,
bulky online stores with new fashion, easy payment methods, no bound
on quantity and quality one can choose the items based on size, colour,
price, etc. Despite being a developing country, India has shown a
commendable increase in the e-commerce industry in the last couple of
years, thereby hitting the market with a boom. Though the India online
market is far behind the US and the UK, it has been growing at a fast
page. Further, the addition of discounts, coupons, offers, referral
systems, 30 days return guarantee, 1-7 days delivery time, etc. to the
online shopping and the E-market have added new flavours to the
industry. The key drivers of in Indian e-commerce have been:-
Increasing broadband internet and 3G penetration.
Growing living standards.
Availability of much wider product range and varieties.
Busy lifestyles and lack of time for offline shopping.

3. Increased usage of online categorized sites.
Mobile Commerce:-
The latest trend in e-commerce it to focus on mobile based shopping.
Snapdeal now getting half of its traffic from mobile, up from 5%
around a year back and flipkart gets 40% traffic from mobile up from
15%. As price of smart phone reduce, these figures will only increase.
For this reason, the larger e-commerce firm has started focusing on
mobile commerce.
Online Grocery store:-
Online grocery stores are gaining popularity in India due to absolute
convenience, ease of shopping and a fast growing market.
Punexpress.com, Milestore.com Atadaal.com have already entered the
market and are gaining popularity. They provide discounted product
and free home delivery. All of these stores are targeting the Indian
housewife, who are yet to move to e-commerce way of shopping.
Innovation in logistics:-
The addition of the new concept in the e-commerce industry had been
recently observed when Amazon patented its new delivery model
called the prime air which is expected to be launched in the upcoming
years. This model will use the highly technically embedded drones or
helicopters for the instant delivery of the times. These will be
programmed in such a way that using a GPS system they will identify
the exact address for delivery and drop the item right in front of the
doors of the customers. These aerial vehicles will prioritize the public
safety and are designed asper the commercial aviation standards.

4. Some example of e-commerce websites in India :
Flipkart.com Working checking out for :Gadgets, Books, Home
appliances, computer peripherals
Infibeam.com Worth checking out for :Gadgets, Lifestyle products,
Books, Home Appliances.
Ebay.in Worth checking out for : Everything under the sun
Shopping indiatimes.com Worth checking out for : Everything
Shopping rediff.com Worth checking out for : Mobile and Computer
accessories.
Futurebazaar.com Worth checking out for : Home related appliances
Homeshop18.comWorth checking out for : Electronic items, Home
appliances.
These are literally hundreds of shopping sites out there and its really
difficult to cut through the clutter. It helps to manually get to the right
site for the product category of your choice.
Impact Of E-Commerce In India
The impact of E-Commerce industry are still in very nascent stage but
are visible. The impact at the moment can be seen in the following
sectors:-
1. Technology- One of the major drivers of technology will be E-
Commerce industry and vice versa. We are seeing new age
technological solutions(AI/Machine Learning) being taken up
to solve the business problems to bring commerce to everyone
digitally. This is seen in both B2C and B2B sector. Investment
into technology sector is happening to drive growth in the E-
Commerce domain.
2. Logistics- Logistics industry is both a bottleneck and a driver
for e-commerce industry. For the same we see how last mile
and inter-city logistics solutions have come up to digitally
connect the different stakeholders across the country. The Uber
model of moving passengers is implemented in some form or
the other in the logistic sector. The growth of E-Commerce will
drive innovation in the logistic sector to make the products
available to the end user.

5. 3. Travel- At the moment 70% of the contribution to E-
Commerce comes from the travel sector which includes the
online ticket bookings to other travel arrangements. This has
made the market competitive by bringing all players on the
same platform and has also given consumer more options.
Travel industry will be earliest adopters to become completely
digitised and that is thanks to E-Commerce.
4. Education- One of the industries to have the most profound
impact of E-Commerce is the education. The ability of E-
Commerce to provide quality education to everyone is
immense. India will have one of the biggest set of youth
population and hence the scope for education sector to be the
biggest achievers because of E-Commerce is sure.
5. Etail- The flag bearers of the E-commerce wave have been the
various E-Retail commerce platforms. Etail sector is projected
to contribute to around 3% of the total Retail sells by 2020 and
is at present around 1%. This wave is seen in both B2C and C2C
model and is bound to grow further. This is not only for goods
but also has captured the food sector.
6. Other Industries- The way of working in the Real Estate sector
is already seeing the change because of the E-Commerce
industry. This will change further with all property related
transactions coming online and getting closed online as well.
Banking sector is benefiting as well with reduced operations
cost of online transactions. E-Commerce in health care has
brought health related solutions to the urban India and will
further penetrate deep into Tier I and Tier II cities.
7. Support Industries- There are various support industries
which have developed because of E-Commerce. These are
digital advertising, analytics, payment gateways etc.. These will
become billion dollars sectors as E-Commerce grows
exponentially.
Besides the impact to these industries, E-Commerce is helping make
the market more competitive, driving better customer experience and
driving accessibility of goods to all. E-Commerce is also bringing
transactions online which makes the system more transparent and to an
extent may further drive technological adoption. This will also help in

6. driving corruption levels down with everything coming online. The
impact are profound and will evolve with time.
E-commerce Industry in India
 Internet penetration in India grew from just 4 per cent in 2007 to 35.03
per cent in 2017, registering a CAGR of 24.23 per cent between 2007
and 2017.
 As of December 2017, internet penetration in India’s urban areas stood
at 64.84 per cent and 20.26 per cent in the rural areas.
 Urban India with an estimated population of 444 million as per 2011
census, already has 295 million using the internet as of December 2017.
 Rural India, with an estimated population of 906 million as per 2011
census, has 186 million internet users as of December 2017. There is
therefore a great opportunity for increasing penetration in the rural
areas.
 Analysis of ‘Daily Users’ reveal that both in Urban and Rural India, the
younger generations are the most prolific users of internet.
 Rising internet penetration is expected to drive ecommerce growth in
India.

7.  The Indian e-commerce industry has been on an upward growth
trajectory and is expected to surpass the US to become the second
largest e-commerce market in the world by 2034.
 The e-commerce market is expected to reach US$ 64 billion by 2020
and US$ 200 billion by 2026 from US$ 38.5 billion as of 2017.
 With growing internet penetration, internet users in India are expected
to increase from 481 million as of December 2017 to 829 million by
2021.
 Rising internet penetration is expected to lead to growth in ecommerce.
 India’s internet economy is expected to double from US$125 billion as
of April 2017 to US$ 250 billion by 2020, majorly backed by
ecommerce.
Investments/ Developments:
Some of the major developments in the Indian e-commerce sector are
as follows:
 Flipkart, after getting acquired by Walmart for US$ 16 billion, is
expected to launch more offline retail stores in India to promote
private labels in segments such as fashion and electronics. In
September 2018, Flipkart acquired Israel based analytics start-up
Upstream Commerce that will help the firm to price and position
its products in an efficient way.

8.  Paytm has launched its bank - Paytm Payment Bank. Paytm bank
is India's first bank with zero charges on online transactions, no
minimum balance requirement and free virtual debit card
 As of June 2018, Google is also planning to enter into the E-
commerce space by November 2018. India is expected to be its
first market.
 E-commerce industry in India witnessed 21 private equity and
venture capital deals worth US$ 2.1 billion in 2017 and 40 deals
worth US$ 1,129 million in the first half of 2018.
 Google and Tata Trust have collaborated for the project ‘Internet
Saathi’ to improve internet penetration among rural women in
India
Government Initiatives:
Since 2014, the Government of India has announced various initiatives
namely, Digital India, Make in India, Start-up India, Skill India and

9. Innovation Fund. The timely and effective implementation of such
programs will likely support the e-commerce growth in the country.
Some of the major initiatives taken by the government to promote the
e-commerce sector in India are as follows:
 In order to increase the participation of foreign players in the e-
commerce field, the Indian Government hiked the limit of foreign
direct investment (FDI) in the E-commerce marketplace model
for up to 100 per cent (in B2B models).
 In the Union Budget of 2018-19, government has allocated Rs
8,000 crore (US$ 1.24 billion) to BharatNet Project, to provide
broadband services to 150,000 gram panchayats
 As of August 2018, the government is working on the second
draft of e-commerce policy, incorporating inputs from various
industry stakeholders.
Conclusion
The e-commerce industry been directly impacting the micro, small &
medium enterprises (MSME) in India by providing means of financing,
technology and training and has a favourable cascading effect on other
industries as well. The Indian e-commerce industry has been on an
upward growth trajectory and is expected to surpass the US to become
the second largest e-commerce market in the world by
2034. Technology enabled innovations like digital payments, hyper-
local logistics, analytics driven customer engagement and digital
advertisements will likely support the growth in the sector. The growth
in e-commerce sector will also boost employment, increase revenues
from export, increase tax collection by ex-chequers, and provide better
products and services to customers in the long-term.