Indian Ecommerce 2.0: Bringing The Bazaars Home

The ecommerce market in the country is growing not only in size but also in the diversity of sellers and buyers. The year ahead will unveil many new dimensions of the next phase of India’s ecommerce journey.

- Kunal Bahl

A striking part of the Indian ecommerce industry in 2018 has been the rapid emergence of buyers from India’s tier II and III cities. Consider this: Beard trimmers were one of the hottest selling items in 2018. And it wasn’t just the metrosexual men from big cities buying them. The orders came in fast and steady from remote parts of Odisha, Bihar, Jharkhand, Assam and Haryana. This growth of ecommerce into India’s non-metro cities will accelerate in 2019 and over the next few years, for some obvious and some emerging reasons.

The single biggest factor for this growth has been the sharp drop in data prices (down by nearly 90 percent in the last two years), and a sharp surge in data consumption (up nearly 10x in the last one year). This, in turn, has led to a huge demand for affordable smartphones (there are ample choices below 7,000 now available across all online platforms).

The numbers reveal the foundation for this growth. At the beginning of 2019, India has more than 330 million smartphones and nearly 226 million users are connected to social media networks. The number of current online shoppers in India is about 100 million. This is a largely homogeneous segment—English speaking, relatively high-income, mostly metro buyers and voracious internet users. These consumers have good brand awareness and are motivated by deals and convenience. Most importantly, they have the disposable income to make discretionary purchases when tempted by discounts on branded products, including smart phones, electronics and fashion (apparel, footwear, cosmetics etc).