A variety of e-commerce startups enjoyed a steady inflow of private equity and venture capital. This enabled innovation designed to meet local needs. In recent years, some internet startups had effortlessly found a stronghold in niche markets of necessity, becoming household names and verbs. Some of these successes include food delivery services like Swiggy and Zomato, Grofers and Big Basket for grocery online, ticketing company BookMyShow and travel/hospitality companies Oyo and MakeMyTrip.
Retail online had gained speed in the last decade. Despite online sales accounting for just three percent of all retail in 2017, the digital commerce sphere was estimated to reach 330 million buyers online by 2020. Smartphone use had also supported the transition to mobile shopping to a point where it was estimated that every third Indian shops online using a smartphone. Amazon and Flipkart were the largest players in this segment, battling neck and neck every festive season over extravagant sales. Discounted periods during Dusshera and Deepavali in 2019 generated about three billion U.S. dollars in gross merchandise value within this market.
Digitization made huge leaps, thanks in part to the Digital India initiative by the government, enabling electronic and online infrastructure throughout the country. The overnight demonetization of selected currency notes in November 2016 also played a major role in expanding the reach of digital payments in particular. Although the latter caused massive economic disruption and chaos in the weeks following the announcement, digital use, specifically for payments, became explosive because of the shortage of cash. In 2020, the economic impacts of the coronavirus (COVID-19) lockdown since late March also boosted the adoption of online payments due to home confinement measures.
Even in the face of slight missteps, the e-commerce market in the country seemed to mold into available containers, resilient and gaining speed. By 2025, the government’s aim to create a trillion-dollar digital economy might be become a reality after all.
