A four way Royal Rumble in Indian e-commerce
US-based research and advisory firm Forrester has shared a report about the Indian e-commerce duopoly breaking into a four way competition. India’s Amazon-Flipkart ecommerce duopoly is quickly becoming a four-way competition, with Tata and Reliance joining the royal rumble. The four companies own a combined 80% of India’s online retail market.
The report titled The State Of Online Retail in India states that each company “is manoeuvring to gain market share.”
Tata has acquired platforms such as BigBasket; Reliance on the other hand has invested in Dunzo and Netmeds.
It’s also being reported that Tata has been seeking clearance to start operating on the Unified Payments Interface (UPI) as a third-party payments service. It has also been reported by Economic Times that Tata Digital was seeking more funds from its parent company Tata Sons for expansion.
Offline shrinkage and online growth
The report has emphasized that India’s overall retail growth slowed for the first time after several years of double-digit growth. This has happened due to the Gross Domestic Product (GDP) shrinking by 7.3% in FY21. The online retail space has grown by 5%, adding $1.6 billion in sales.
The report has predicted that Indian online market is set to grow around 20% year-on-year to hit $85.5 billion by 2025.
Post-pandemic e-commerce trends
Before the advent of pandemic, smartphones, computer hardware and software, and consumer electronics were the growth engines for e-commerce. But the pandemic nudged the e-commerce sector towards groceries and personal care products.
India’s opportunistic future
Forrester’s E-Commerce Readiness Index 2020 categorizes India as a “large and developing opportunity for online retail”. Only the US and Chinese markets have managed to represent larger opportunities.
The number of online buyers in India jumped from 71.5 million in 2016 to 179.5 million in 2020, and Forrester expects this number to hit 291.5 million by 2025. This growth will be largely driven by smaller towns and rural areas, as per the report.
Therefore, with the government policies and companies improved competition circumstances, this is an actual Amrit Kaal.
