As a country with the world’s second largest population, 1.3 billion people, Indian B2C E-Commerce is finally taking its stand on the world stage as one of the fastest growing E-Commerce markets in the world. India’s current one-digit percentage share of global E-Commerce sales could more than double by 2021. India is also expected to have the highest CAGR amongst the top 5 Asian markets from 2016 to 2021. Propelled forward by tech-savvy Millennials, there are forecasts that India could potentially outpace the USA, and come in second only under China by 2034 in terms of online retail sales.

The recent demonetization reforms did lead to the scaling back of some growth predictions. Nevertheless, the overall outlook is still optimistic, as the cash on delivery dependent country becomes more accustomed to online payment systems, allowing E-Commerce to further expand. Last year, India also experienced important regulation changes to foreign direct investments, allowing 100% FDI in B2C E-Commerce marketplaces. However, no single retailer is allowed to have more than one-quarter of sales on such a marketplace and the marketplace provider is not allowed to directly or indirectly influence sales prices. This type of FDI is not permitted in the inventory-based model of E-Commerce.

Cross-border E-Commerce is showing a strong foothold in India. Cross-border online spending from online shoppers in India is forecasted to skyrocket between 2016 and 2017, with a high double-digit percentage, respectively. As of the end of 2016, one in four online shoppers made cross-border purchases, with a small percentage of those having made online purchases exclusively via foreign merchants. Cross-border online shoppers shopped the most from foreign retailers in the USA, the UK and China.

Within India the competition for the top marketplace is heating up. Amazon, one of the market leaders in India for the last several years, is limited to offering pure marketplace services due to FDI stipulations, but they have continued to push capital to develop the country’s unit. Following significant funding from foreign investors, Flipkart, another major marketplace in India, is working on expanding buyers and product categories. China-based Alibaba Group has chosen India’s leading mobile wallet provider, Paytm, as a partner for the expected electronic payment system expansion.

For further details, see the full report titled “India B2C E-Commerce Market 2017”.