A BIG PUSH FOR PROFITABILITY

E-commerce startups are striving to find an ideal market niche as they juggle growth and profitability.

- By Devika Singh

IT WAS NOT so long ago when questions were being raised about the viability of e-commerce companies. “Even in 2018, investors were trying to figure out if e-commerce will be just about Amazon and Flipkart or anything else beyond it,” recalls Rahul Garg, founder and CEO of B2B e-commerce company Moglix.

Look around in 2025, and there are multiple layers of e-commerce businesses in India—from marketplaces and direct-to-consumer (D2C) platforms to B2B e-commerce and more recently the quick commerce phenomenon, making e-commerce an unmissable part of a consumer goods company’s go-to-market strategy. “Even food delivery was a fairly questionable category because of the unit economics then. And then Covid-19 happened and gave impetus to e-commerce startups in all shapes and forms,” adds Garg.

With multibillion-dollar funding, e-commerce has emerged as the segment with the highest number of startups. E-commerce startups raised as much as $46.7 billion in funding in India from 2019 till date in 4,825 rounds of funding, according to data from startup intelligence firm Tracxn. The largest funding during the period went to B2C e-commerce at $30.9 billion, followed by marketplaces at $27.3 billion and B2B e-commerce at $6.7 billion.

“We have seen a big shift where e-commerce has become a way of life as compared to 15 years ago when there was a big question of whether people will buy things online," says Kapil Makhija, MD & CEO of Unicommerce eSolutions, an e-commerce tech solutions firm.

However, the segment (barring quick commerce) has recently experienced a decline in funding, reflecting a broader trend of cautious investment during this funding winter, driven by economic uncertainty. According to data from Tracxn, e-commerce startups received approximately $17 billion in funding in 2021. However, this amount dropped to $3.9 billion in 2023 and was $5 billion in 2024.