E-commerce has brought about a renaissance in the way business is done in India. India being one of the fastest growing economies in the world, has been a catalyst to the sudden rise of the e-commerce sector on its on soil. With the government allowing 100 per cent FDI on ecommerce business, billions of investments have flowed in which have helped in the exponential growth of the ecommerce business. In India, digital penetration has increased significantly. According to the recent statistics, 604.21 million people use the internet which is expected to swell to 830 million by the year 2021.
Today, the ecommerce business in India is worth US$ 40 billion and is expected to grow by US$200 billion by 2026. Today ecommerce business has become a necessity rather than an option. With the proliferation of cheap internet and the option of shopping from the comfort of the home, people are now flocking to online stores. This has led to the growth of the ecommerce business. For businesses, it is impossible to survive if they do not have a business online.
Modes of e-commerce
There are three modes of ecommerce based on the participants involved in the transaction.
1.Consumer to Consumer(C2C): In this type of business, the consumer sells the product directly to the consumer. The consumer attracts the customer through various strategies and sells the products.
2.Business to Consumer(B2C): This is the most prevalent business model that is conducted over the internet. Here the transaction is carried out between a business and a consumer.
3.Business to Business(B2B): This business is conducted between two business houses where the orders are mostly in bulk.
Market size of ecommerce business
The proliferation of 4G network, availability of cheaper smartphones and increasing consumer wealth has fuelled the growth of the ecommerce business. Online retail sales are expected to touch more than US$ 40 billion by 2019. Electronics is currently the biggest contributor to online retail sales in India with a share of more than 50 % followed by apparel.
Role of Government
The government is also playing a significant role in promotion and growth of this ecommerce business. The Narendra Modi government has earmarked a whopping 1 lakh crore for startups who are keen on embracing the digital route and bring innovation to augment the ecommerce industry. By hiking FDI to 100 percent for B2B models too, the government has welcomed the participation of foreign players. It has also made heavy investment in the rolling of 5G network to boost ecommerce business. Besides these, the government has launched various initiatives including Udaan, Umang, Start-up-India Portal. Udaan is a B2B initiative that connects small and medium traders with online retailers and provides technology, payment and logistics support.
The ecommerce industry has directly impacted the small and medium industries by transforming the way they conduct business. It has taken them on the route to greater profitability by providing them financing, technology and training. With innovations like digital payments, AI driven customer engagement and hyperlocal logistics, the ecommerce sector will surpass the US to become the second-largest ecommerce market by 2034. The rise of ecommerce will increase employment opportunities, boost revenues from export and increase tax collection. It will lead to a better India in the coming future.