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The e-commerce market in India is set to overtake that of the US and become the second largest in the world in less than two decades, going head-to-head with China, according to a new research. With 350 million Indians currently online, the number is expected to nearly double to 600 million by 2020, the research adds.
Though it currently accounts for a small portion of global e-commerce spend, online and mobile shopping in India is poised for explosive growth over the next 20 years, according to the Global Payments Report by Worldpay, a payments company.
Ron Kalifa, Vice-Chairman at Worldpay, noted in a statement: “Our research has uncovered a number of trends that point to India’s potential for astounding e-commerce growth in the next two decades. The market is predicted to reach $63.7 billion by 2020 and overtake the US by 2034.”
The report noted that growth would occur around the world, but emerging markets are leading the charge, particularly India, where e-commerce is predicted to mature by 28 per cent per year from 2016 to 2020, thanks to massive surges in internet penetration, a swelling millennial population and the rising uptake of mobile phones.
According to Google’s ‘Next Billion Users’ team, three Indians are coming online every second.
The Worldpay report has said the National Optical Network (NON), originally scheduled for completion in 2013, is set to be a major determinant in India’s e-commerce growth. The NON aims to provide broadband connectivity to over two lakh gram panchayats at a cost of ₹20,000 crore. Though a number of delays have slowed the project, trial roll-outs are currently underway, which will result in wider access to fast internet access, the report adds.
Another major factor according to the report is the country’s huge uptake of mobilephones. The price of data plans running two times cheaper than in China and three times cheaper than in the US.
As the country’s middle class switches over to 3G and 4G networks, India is expected to see more mobile shopping, especially amongst millennials, the report states, adding young people shopping via smartphones are already responsible for sharp increases in India’s online spend.
For the annual report compiled using a combination of data, insights, findings from Euromonitor, Datamonitor and yStats, Worldpay analysed 30 markets around the world, including India, China, Hong Kong, Malaysia, Taiwan, South Korea, Singapore and Australia in Asia-Pacific.
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