A Review of Indian E Commerce Market
Volumn 4

A Review of Indian E Commerce Market

Prof. Rachana Deshmukh#1, Prof. Pallavi Chaudhari*2, Prof. Archana Potnurwar#3

#1,2,3 Assistant Professor, Priyadarshini Institute of Engineering & Technology, RTMNUniversity, India


2 pallavichaudhari1@gmail.com



E-commerce or electronic commerce, is nothing but the buying and selling of products or services with the help of Internet.It is from the last two decades is  one of the highest growing businesses, with India having great market potential for investments. The huge   level of  investment is going on in this field since last year and more is expected in coming years. India is expected to surpass the US to become second largest e-commerce market in the world by 2034 [1]. This massive change is the ultimate result of the rapid growth in use of mobile and internet users in both urban and rural cities. Also, the digital literacy has led to an influx of investment in e-commerce firms, levelling the market for new-players to set up their base while churn out innovative patterns to disrupt old functioning. This paper reports the consistent stepping up of E-commerce specifically in Indian market.

Keywords- e-commerce, online, origin, growth, technology

I. Introduction

Nowadays E-commerce has become the part of people’s lifestyle. All are so comfortable and used to it that the thought of living without ecommerce seems unfathomable, complicated. It wasn’t until only a few decades ago that the idea of ecommerce had even appeared. Ecommerce was introduced 40 years ago and, to this day, continues to grow with new technologies, innovations and thousands of businesses entering the online market each year. The user freindliness, convenience, safety, has exponentially improved the user experience of ecommerce since its eastablishment in the 1970’s.

I.I The Origin of E-Commerce

  • The year 1991 noted a new chapter in the history of the online world where e-commerce became a hot choice amongst the commercial use of the internet. At that time nobody would have even thought that the buying and selling online or say the online trading will become a trend in the world and India will also share a good proportion of this success.
  • 2002: India first came into interaction with the online E-Commerce via the IRCTC. The Indian government took a major step by making its people to book the train tickets online with less or no hussles and bussles.
  • 2003: Airline agency encouraged, web booking to save the commission given to agents and thus in a way made a major population of the country to try E-Commerce for the first time.
  • 2007: The steady growth of Indian Market in the field of E commerce has largely started motivating Indian people and other business players also to try this technique for their businesses and gain high profits. Though online shopping has been present since the 2000 but it gained popularity only with deep discount model of Flipkart.
  • 2014: Previously, Online shopping was a simple medium, without offering much options for shopping. But, in last few years this field has been renovated greatly by the virtue of highly sophisticated softwares and hence fascinated many customers. Today, the people belonging to urban areas of India has made online shopping as a trend. The reason behind such a growth lies in the attractive online websites, user friendly interface, bulky online stores with new fashion, easy payment methods (i.e. secure pay online via gateways like paypal or cash-on-delivery), no bound on quantity & quality, one can choose the items based on size, color, price, etc. The following reasons lead to this drastic change in ecommerce industry[8]
  • Increasing broadband Internet and 4G penetration.
  • Growing Living standards
  • Availability of much wider product range
  • Busy lifestyles and lack of time for offline shopping
  • Increased usage of online categorized sites
  • Evolution of the online leading branded marketplace with websites like eBay, Flipkart, Snapdeal. Amazon, etc.

II. Growth of E-Commerce in India

Propelled by rising smartphone penetration, the launch of 4G networks and increasing consumer wealth, the Indian e-commerce market is expected to grow to US$ 188 billion by 2025. According to the survey, it was reported that In India number of internet users  is about 450 million as of July 2017, i.e. equal to the 40% of the population of India. Despite being the second-largest user base in world, only behind China (650 million, 48% of population), the penetration of e-commerce is low compared to markets like the United States (266 million, 84%), or France (54 M, 81%), but is growing at an unprecedented rate, adding around 6 million new entrants every month. The industry consensus is that growth is at an inflection point.Earlier food and grocery were never thought of as items for online trading. But, due to change of working habits, and consumers seeking for convenience, there are now innumerable small and large E-commerce companies which are selling out provisions and food items. The rise in awareness about the benefits of online trading, there has been a significant growth in investment in the field of E-commerce business. The results of another online shoppers survey in India (The Internet& Online Association of India [IOAI], 1999) reveal interesting phenomena. Fifty-five% of the visitors to e-commerce sites have adopted the Internet as a shopping medium. The highest% (46%) of online shoppers fall in the 26 to35 year age group. Regarding the educational background of the online shoppers, 83% are graduates or postgraduates [6]. The graph below shows the statistical rate of increase the number of internet users in India from 2012 [5].

Fig1:  Total number of internet users in India from June 2012 to June 2016 (in millions)

This tremendous growth in the number of internet users in India leads India towards sustainable position creating ample of opportunities not only in established business but even in start-ups.

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 in2034.

III. Rising Internet Penetration In India

There has been exponential growth reported of Internet penetration in India. From just 4 per cent in 2007 to 34.08 per cent in 2016, reporting a direct increase of 89 per cent in 2016 over 2007 on record.

  • Urban India with an estimated population of 444 million already has 269 million (60 per cent) using the Internet.
  • There is again a great scope for increasing internet penetration in the rural areas. As per 2011 census, only 17 % population in Rural India, uses internet.
  • 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.

IV. Online Retail Vs Total Retail In India

Fig 2: Online Retail Vs Total Retail In India

In 2016 the retail out of total retail in India was just 2.5% where as it is expected to rise to 5% by 2020.

V. Growth drivers for Ecommerce

Increasing awareness, Government initiatives, investment are the main growth drivers for E-Cmmerce.  The awareness of using internet is increasing more and more people are being drawn to Ecommerce. Whether it sellers, be buyers, users or investors, people have started getting used to online mode or commerce.

Government initiatives like Digital India, Smart City are constantly introducing people to online modes of commerce. Favourable FDI policy is attracting key players.

Increasing FDI inflows, domestic investment support from key industrial players is helping in the growth of E-Commerce.

Fig 3:  Growth drivers for E-Commerce

 VII. Key Players of Ecommerce

VIII. Conclusion

On-line privacy is usually top most concern of Indian be fitting consumers. What to speak of Indian consumers it is known that almost 61% of US users of internet discarded E-Commerce purchase on the ground of security and privacy issues. Moreover, the Indian consumers are afraid of the fact that to what extent the E-Commerce players would be able to protect their privacy from being cheated or their money being misappropriated. Besides, most of the E-Commerce players donot assure officially the customers regarding confidentiality of their data [2].


  1. www.ibef.org
  2. Sheshadri Chatterjee, “E-Commerce in India: A Review on Culture and  Challenges” 2015 International Conference on Soft Computing Techniques and Implementations- (ICSCTI), Volume 2, Issue 4, July 2015.
  3. Nisha Chanana, Sangeeta Goele, “FUTURE OF E-COMMERCE IN INDIA”, International Journal of Computing & Business Research ISSN (Online): 2229-6166 Proceedings of ‘I-Society 2012′ at GKU, Talwandi Sabo Bathinda (Punjab).
  4. http://www.iamwire.com/2014/07/e-commerce-in-india-past-present-future/27805
  5. https://www.statista.com/statistics/490664/internet-users-total-number-india/
  6. RASHMI BANSAL,” Growth of the Electronic Commerce in Chinaand India: A Comparative Study” Journal of Asia-Pacific Business, 12:356–374, 2011 ISSN: 1059-9231 print/1528-6940 online
  7. Vyomkesh Nandan, Madhurima, Saru Dhir, Anchal Garg, Madhulika,”Statistical Analysis of Indian E-Commerce Market”, 2015 International Conference on Soft Computing Techniques and Implementations- (ICSCTI) 978-1-4673-6792-9/15/$31.00©2015 IEEE [8] http://www.iamwire.com/2014/07/e-commerce-in-india-past-present-future/27805
  8. http://www.iamwire.com/2014/07/e-commerce-in-india-past-present-future/27805

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