As of May 2020, there were 636.77 million Internet users in India, or over 40% of the country's total population. The penetration of e-commerce is low compared to markets like the United States or France, despite having the second-largest user base in the world, just behind China. However, it is expanding, with an average of 6 million new users joining the market each month. According to industry agreement, growth is about to turn.

75% of all e-retail transactions in India are made using the most popular payment option, cash on delivery. Demand for imported consumer goods is increasing more quickly than domestic supply from approved wholesalers and online stores. Instead of merely selling big volumes of a small number of popular things, long tail business strategy enables enterprises to realise significant profits by selling low volumes of difficult-to-find items to numerous clients. Chris Anderson originally used the phrase in 2004.

The three biggest online stores in India in 2017 were Flipkart, Snapdeal, and Amazon. In terms of revenue, Amazon overtook Flipkart in 2018 to become India's largest e-commerce company. By sales during the holiday retail season in 2020, Flipkart significantly outsold Amazon by about a two to one margin.

Market size and growth

In 2009, the estimated value of the Indian e-commerce market was $3.9 billion. Avendus Capital's "India Goes Digital" report estimates the 2011 Indian e-commerce sector to be worth $28,500 billion. Today, a major component of this business is made up of online travel. Over the following four years, the Indian online travel market grew at a 22% annual rate, reaching 54,800 crore by 2015. 

The Indian e-tailing market was valued at $3,600 billion in 2011 and is anticipated to reach $53,000 billion in 2015. In 2013, the market increased to $12.6 billion. The value of the e-retail market in 2013 was $2.3 billion. In 2013, the Indian e-commerce market accounted for almost 79% of all transactions. Google India estimates that there were 35 million online shoppers in India in the first quarter of 2014, and that number would likely surpass 100 million by the end of 2016.

The ecommerce sector, which grew at the quickest rate in India, was estimated to be worth $24 billion in 2017. In 2018, the e-commerce market reached $38.5 billion. Out of the 100,000 pin codes in India, it is projected that one in three shops sell via smartphone and online retailers deliver to 20,000 pin codes. According to Goldman Sachs, the size of the Indian e-commerce market will be $99 billion, with online retail projected to increase at a 27% compound yearly growth rate (CAGR) from 4.7% in 2019 to 11% by 2024. 

By 2024, the under $2 billion online grocery market will be worth $29 billion. By 2024, there will be more than 5 million daily online grocery orders, up from 3,000 per day in 2019. By 2021, 16.1% of all eCommerce sales will be non-groceries.

According to real estate consultant Colliers International, the COVID-19 lock-downs will result in a rise in online orders for same-day delivery of necessities, particularly in tier-1 cities like Mumbai, Kolkata, Bengaluru, Chennai, and New Delhi. This will increase the demand for warehousing of 5,000 to 10,000 square feet size.In Bengaluru, Flipkart will launch a hyperlocal service named Flipkart Quick to begin 90-minute delivery.The number of "Add to Cart" clicks on Amazon's website increased four times.

Additionally, it began providing auto insurance through the Amazon app and mobile website in collaboration with Acko General Insurance.With the addition of 10 new warehouses, Amazon now has 60 locations across 15 states in India, covering an area larger than 100 football fields.

According to a report from software as a service (SaaS) company Unicommerce, e-commerce is becoming more prevalent outside of Tier-1 cities, with the majority of growth occurring in Tier-2 and Tier-3 towns and villages as a result of better last-mile delivery and boosting vernacular language content[26]. Additionally, consumers are expanding their range of online shopping options from major retailers like Amazon and Flipkart to niche brand websites.

Conclusion

With 636.77 million internet users, or more than 40% of the country's population, India's e-commerce business is growing. The market is predicted to reach $99 billion by 2024, with cash on delivery accounting for 75% of transactions. The Indian e-commerce market is predicted to expand at a compound annual growth rate of 27%. The COVID-19 lockdowns are projected to boost online same-day delivery orders, particularly in tier-1 cities. Because of improved last-mile distribution and increased vernacular language content, development is concentrated in Tier 2 and Tier 3 cities and villages. Consumers' online buying alternatives are expanding, from major shops to boutique brand websites.