Market Size 2021 6.

1 Lakh Crore
E-Commerce Growth Rate 2021 27% CAGR

All figures
based on
2019-20 data
Revenue (MN) 10,847.6 Cr. 34,610 Cr. 846.4 Cr. 707.445 Cr. 266 Cr.
Net Profit 37.6 Cr. (3150 Cr.) (274 Cr.) 147 Cr. 41.7 Cr.
Founded 1994 2007 2010 1996 2016
Market Share 31.2% 31.9% 0.138% 0.115 0.043%

Market Size Sector Composition Rise in No. of Internet Users

Furniture 800
4% 634.5
250 Food %
200 188 Grocery Jewellery Others 600 479.3
200 7% 7% 2% 394.8
150
Consumer 400 304.5
250.6
Electronic
100 84 s 200 123.3
64 50 76
39 40%
50 20 14 0
Apparels
0

2015
2016
2017
2018
2019
2020
2021
40%
2027
2025
2021
2020
2018
2017
2015
2014

Smart Phone Shipment News & Facts Other Major Players

Ø Indian E-commerce Sector is
80% predicted to grow at 2 7 %
60% 26%
20% CAGR and expected to reach
40% 26% 20% 16% $99 Billion by 2024 with
11%
20% 15% 11% Grocery and Fashion are key
24%
23% 16% 15% drivers.
0%
Ø Amongst the E-commerce,
40% users will be increased to
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60% by 2025.
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 Growing Trend of Market Size in India

Market Size of E-commerce

250
Values in Billion USD

200
200 188
27% CAGR
150

100 84
64
50 39
50 20 14
0
2027 2025 2021 2020 2018 2017 2015 2014
Years
Ø Owing to the increasing internet user base and favorable market conditions, India has a lot of
potential in the e-commerce industry. Growing at an exponential rate, the market value of the
e-commerce industry in India was approximately 84 billion U.S dollars in 2021. This number
was estimated to reach 200 billion U.S. dollars by 2027.

Ø The competition in the e-commerce business in India is Fierce. The market is filled with many
local and foreign companies trying to hold the maximum market share. As of 2021, Amazon is
the Leading Online Market Place in India with 323 Million visits per month and more than 500
Million USD sales.

Ø In a Survey conducted by Statista May 2020 about permitting e-commerce platform to deliver
goods in India after COVID lockdown, the majority respondents voted in favor. Increasing
Growth in the e-commerce industry is attributed to a number of reasons. Digitizing the
economy and providing cheap internet to the people are few of many reasons that boosted
the growth of digital sales in India.

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 Sector Composition

Ø The online retail market in India is estimated to be 25% of the total organized retail market and
is expected to reach 37% by 2030.

Ø E-retail market is expected to continue its strong growth and will nearly be Rs. 1.8 trillion (US$
25.75 billion) by FY20.

Ø Over the next five years, the Indian e-retail industry is projected to exceed ~300-350 million
shoppers, propelling the online Gross Merchandise Value (GMV) to US$ 100-120 billion by 2025.

Ø Driven by lower data rates and investments to enhance customer experience, the Indian e-retail
witnessed a rapid increase in shopper penetration, as online platforms are innovating to
onboard the next billion of shoppers.

Furniture
4%
Food % Grocery JewelleryOthers
7% 7% 2%
Consumer
Electronics
40%

Apparels
40%

Shares of Various Segments in e-commerce

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 Key Trends - Rising Internet Users in India

No.of Internet Users in India

800
761.29
Values in Millions

700 696.77
600 636.73
500 493.96
400 422.2
342.65
300 302.36
200
100
0
2014 2015 2016 2017 2018 2019 2020 2021 2022

Years
Ø In 2020, the number of internet connections in India significantly increased to 747.41 million,
driven by the ‘Digital India’ program. Out of the total internet connections, ~97%
connections were wireless.

Ø Internet penetration in rural India is expected to grow at a rate of 45% by the end of 2021
compared to the 2020 rate of 22% .

Ø Number of active internet users in the country is the second highest globally and is also one
of the largest data consumers globally. It has the highest data usage per smartphone at an
average of 10.40 GB per month.

Ø According to Bain & Company report, India’s social commerce gross merchandise value
(GMV) stood at ~US$ 2 billion in 2020. By 2025, it is expected to reach US$ 20 billion, with a
potentially monumental jump to US$ 70 billion by 2030, owing to high mobile usage.

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 Key Trends – Increase in Smart Phone Users Driving its
Growth
Ø India’s smartphone shipments grew 23% YoY to reach over 38 million units in Q1
2021. These were the highest ever first-quarter shipments.

Ø New product launches, promotions and financial schemes, as well as pent-up demand
coming from 2020, drove the smartphone market in Q1 2021.

Ø Xiaomi led the market in Q1 2021 with a 26% shipment share. Five out of the top 10
smartphone models in the country were from Xiaomi.

Ø Smartphone users in India is expected to reach at 859 million by 2022

Ø The Indian government is emphasising on increasing the local value-addition on the

manufacturing front. As the government’s schemes—such as Production Related
Incentive (PLI) progress to impact the overall electronic manufacturing ecosystem—
mobile phone production is expected to increase in the coming years

Indian Smart Phone No.of SmartPhones users in

India
Shipments Market Share
700 634.58
80%
600
60% 26% 500 479.34
20%
16% 11% 394.82
40% 400
26% 20% 304.51
15% 300 250.66
20% 11%
23% 24% 16% 15% 200 123.3
0% 100 76
Xiaomi Samsung Vivo Realme
0
2020 Q3 2020 Q4 2021 Q1 2015 2016 2017 2018 2019 2020 2021

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 How Much has India Spent on e-commerce ?

India Spending on e-commerce

40%
30%
20%
10%
0%
Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
-10%
-20%
-30%

Ø India's e-commerce orders volume increased by 36% in the last quarter of 2020, with
the personal care, beauty and wellness (PCB&W) segment being the largest beneficiary.

Ø India's e-commerce festive sale season from October 15 to November 15 (2020)

recorded gross sales worth Rs. 58,000 crore (US$ 8.3 billion) for brands and sellers, up
65% from Rs. 35,000 crore (US$ 5 billion) last year.

Ø The Indian e-commerce sector is ranked 9th in cross-border growth in the world,
according to Payoneer report.

Ø Indian e-commerce is projected to increase from 4% of the total food and grocery,
apparel and consumer electronics retail trade in 2020 to 8% by 2025

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 How Much has India Spent on e-commerce ?

Ø As most Indians have started shopping online rather than stepping outside their houses,
the Indian e-commerce sector witnessed an increase.

Ø E-commerce sales in India were estimated to increase by only 7-8% in 2020, compared
with 20% in China and the US.

Ø As of February 15, 2020, the Government e-Marketplace (GeM), listed 1,071,747 sellers
and service providers across over 13,899 product and 176 service categories. For the
financial year 2020-21, government procurement from micro and small enterprises was
worth Rs. 23,424 crore (US$ 3.2 billion).

Ø The e-commerce market is expected to touch the US$ 84-billion mark in 2021 on the back
of healthy growth in the Indian organized retail sector.

Ø In 2020, the e-commerce industry across India spent a considerable portion of its digital
advertising budget on paid search ads, followed by 26 percent on social media and 21
percent on online video advertising. Amongst other industry verticals, e-commerce had the
largest share of digital ad spends on paid search advertising, by STATISTA RESEARCH
DEVELOPMENT.

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 Government and Private Initiatives Influencing e-commerce

Bharath Net and In the Union Budget of 2020-21, the Government has allocated Rs. 8,000 crore
Digital India (US$ 1.24 billion) to Bharat Net Project to provide broadband services to
150,000-gram panchayats.

The Government of India’s Draft National e-Commerce Policy encourages FDI in

E-commerce Draft the marketplace model of E-commerce. Further, it states that the FDI policy for
Policy E-commerce sector has been developed to ensure a level playing field for all
participants.

In October 2020, amending the equalisation levy rules of 2016, the

Permanent Account government mandated foreign companies operating e-commerce platforms in
Numbers (PAN) India to have permanent account numbers (PAN). It imposed a 2% tax in the
mandated FY21 budget on the sale of goods or delivery of services through a non-
resident ecommerce operator.

Udaan is a B2B online trade platform to connect small and medium size
Udann manufacturers and wholesalers with online retailers. It also provide them
logistics, payments and technology support.

Open Network and The Indian government has formed a new steering committee that will look
Digital Commerce after the development of a government-based ecommerce platform like
(ONDC) Amazon, Flipkart.

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 Online Retail Vs Total Retail In India

Online retail out of total retail in Online retail out of total retail in
India (2020) India (2030F)

5% 8%

95% 92%

Offline Retails Online Retails Offline Retails Online Retails

Ø There are lot of opportunities for E-retailers in India to capitalize upon with the
gradually growing internet penetration in India. The raise in India is registered as 5%
in 2020 and may raise till 8% in 2030.

Ø With this forecast in hand, it is time for Retailers to try out with Online Retails which
will yield them fruit.

F – FORECASTED

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 COVID Impact

Ø Pandemic has accelerated the e-commerce industry in India by a decade, revolutionizing the
way brands operate, run, and grow their businesses, as well as how consumers choose to
shop and pay.
As per Nielsen India’s E-commerce consumer panel, there was a double rapid increase in
average spend of online shoppers for various categories.

COVID Effect
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
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Growth since FY18 COVID Impact

Ø B2B marketplaces are amongst the worst hit as most of their supplies are dependent
on exports as well as imports. Industrial, safety and MRO supplies are severely affected,
with most of the production lines for them based out of China.

Ø In the aftermath of the Coronavirus outbreak, factories aren't operating to their full
capacity resulting in reduced production and contributing to the supply-demand
inequity.

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 COVID Impact

Ø India’s supply chain sector was severely impacted due to COVID led disruptions but tech-
enabled logistics companies began to gain pace to deliver essentials during lockdown.
Traditional business were severely impacted while tech driven logistics start-ups were better
placed to run their operations.

Ø For example, in the freight forwarding Industry, traditional freight forwarders on an average
had been operating at 30-40% capacity on an average whereas a digital player such as
Freightwalla could operate at 60-70% percent capacity of volumes.

More Than More Than

9% 21%
Million

Shipments were Struck Of orders were delayed

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 References & Disclosure

References :
§ https://www.ibef.org/industry/ecommerce
§ https://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_AMZN_2020.pdf
§ https://corporate.indiamart.com/2020/05/12/full-year-and-fourth-quarter-ending-march-31-
2020/
§ e-commerce-and-consumer-internet-sector-india-trendbook-2021.pdf

Disclosure :
• The Reported was prepared based on the company report published in FY2020
• The stock prices are subjected to change based on day-to-day trade value in stock market.
• The recommendations are only based upon same technical analysis of these stocks. The
author would not be responsible for any loss.

REPORT PREPARED BY
ERA : Sowmiya Narayanan G, SRM University
ERA Mentor : Mr. Sanjay TG, IIM Sirmaur
BA Mentor : Mr. Anmol Raghuvanshi, IIM Kashipur

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