Shriram Subramanian said as India becomes a $5 trillion economy, e-commerce will continue to annually grow at about 25 per cent per annum from $60 billion in FY2023
India's digital economy is primed for remarkable expansion, with industry experts projecting the country's e-commerce sector to reach a staggering $1 trillion valuation by 2030. This remarkable growth will be primarily driven by the e-commerce industry, which is expected to rank third globally and be worth a substantial $325 billion.
The year 2023 has been a pivotal turning point for India's e-commerce landscape, marked by significant shifts in consumer trends, technological advancements, and regulatory changes. In a virtual roundtable hosted by InGovern Research Services, a leading corporate governance advisory firm, industry experts delved into the notable developments and the essential role of customer trust in fueling the ongoing expansion of this sector.
Siju Narayan, Chief Experience Officer at RexEmptor Consult LLP, emphasized that the growth of quick commerce cannot be viewed in isolation from the broader retail industry landscape. He praised the government's efforts in priming the entire country through the establishment of robust digital and financial infrastructure, with the consumer protection aspect being a top priority.
Madhumita Mohanty, a retail consultant and educator, attributed the e-commerce growth to the increasing penetration of mobile phones and the internet, coupled with rising aspirations, disposable incomes, urbanization, and the widespread adoption of UPI (Unified Payments Interface). She highlighted that a critical growth driver is the surging demand from Tier-II and Tier-III cities, where consumers often lack access to diverse brands and products locally, and e-commerce bridges this gap.
Shriram Subramanian, Founder and MD of InGovern Research Services, projected that as India transforms into a $5 trillion economy, the e-commerce sector will continue to grow at a remarkable rate of 25% per annum, from $60 billion in FY23. He noted that e-commerce players are benefiting from significant tailwinds, responsibly enabling small and medium enterprises to sell both domestically and globally through their selling programs, while continuously investing in tools and processes to enhance customer trust.
The experts also addressed the disruptive impact of quick commerce on the e-commerce landscape, emphasizing that as the sector evolves, players must cater to the changing needs of consumers across India's diverse cities and towns. Srinath Sridharan, Business Advisor and a member of the Fintech Association for Consumer Empowerment's Governance Council, cautioned that while capital fosters innovation, the absence of robust and proven consumer protection poses inherent risks.
Maintaining a responsible and sustainable consumption economy with the next two decades in mind, demands a balance between growth and safeguarding consumer interests, according to Sridharan. K Giri, Director General of Empower India, highlighted that customers gravitate towards platforms that ensure safety, convenience, and reliable delivery, and that players like Amazon, Flipkart, and eBay have been able to instill a sense of trust with consumers, which will drive increased GMV (Gross Merchandise Value) traction for the online shopping space.
The experts underscored the pivotal role of consumer trust in the success of online businesses, emphasizing the importance of transparency, data security, user-friendly interfaces, efficient logistics, and responsive customer support in fostering trust within the e-commerce sector. They cited the example of Amazon, which has invested heavily in combating fake reviews and protecting customers, and encouraged smaller sellers to emulate these strategies by prioritizing transparency and investing in basic data security measures.
Experts also emphasized the need for flexible government policies to foster growth, support sellers, and uphold customer interests, as these regulatory frameworks will be instrumental in steering the e-commerce sector towards sustainable growth and maintaining a conducive environment for all stakeholders.
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