Authors: Dr. Uttam Kumar Jha, Col Shubhojit Bhattacharya (Retd)
DOI Link: https://doi.org/10.22214/ijraset.2022.47170
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India is widely recognized as one of the most dynamic emerging e-commerce markets. While accounting for only 3 percent of total retail sales in the country, e-commerce is nevertheless already an INR4,299 billion (US$61.1 billion) market.3, 4
With 80 percent of the 1.4 billion population yet to make their first online purchase,5, 6 India’s growth potential is huge. Major marketplaces Amazon, JioMart and Flipkart are all key platforms competing for market share. Global merchants are attempting to capitalize on India’s e-commerce growth story: Walmart made a $1.2 billion investment in Flipkart in 2020, after buying a majority stake in 2018.7
Both urban and rural India are rapidly integrating the internet into everyday life. There are 293 million active internet users in urban India, and approximately 200 million active users in rural India. Growth is driven by rural India, which registered a 35 percent increase in internet users in 2019.8
India is becoming a test bed for international brands to trail innovative e-commerce services. For example, India was the first market for Mastercard’s® Identity Check Express, the card brand’s new mobile-first 3D secure solution.9 India is a launch market for Instagram’s forthcoming TikTok-style video function, Instagram Reels, which will enable brands to work with influencers to market products.10
II. HIGH GROWTH SET TO STABILIZE TO 2023
III . RAPIDLY RISING SMARTPHONE PENETRATION DRIVES CONFIDENT MOBILE COMMERCE PREDICTION
IV. APPS SURGE AHEAD OF BROWSERS AS PREFERRED WAY TO SHOP VIA MOBILE
V. CARDS AND DIGITAL WALLET SHARE INDIAN PAYMENT MARKET, AS CASH DECLINES
VI. IMPORT TAX REGULATIONS SET TO BECOME STRICTER AND MORE STREAMLINED
VII. WIDE-RANGING ONLINE CONSUMER PROTECTIONS ARE NOW IN FORCE
A. Regulation/trends
India’s Consumer Protection Act 2019 came into force in July 2020. The Act requires e-commerce merchants to provide information on their sites outlining their return, refund, exchange, delivery, payment, security and complaints procedures.
The Act also means merchants must acknowledge receipt of a complaint within 48 hours and address it within a month.30
B. Barriers or Benefits to e-commerce Market Entry
Delivery challenges are still prevalent across India. International and domestic couriers can have difficulties fulfilling deliveries to remote locations and villages, which can slow down international shipments. India Post is experienced in reaching remote locations, so many merchants favor using it to reach these regions.31
The Reserve Bank of India sets the country’s exchange-control policy and administers foreign exchange regulations in consultation with the government of India. The country’s foreign exchange control regime is governed by the Foreign Exchange Management Act (FEMA).32
C. Factors Driving the cost of Payment Acceptance
In January 2020, the government removed the merchant discount rate on RuPay and real-time payment system Unified Payments Interface. This was charged by banks to merchants for electronic payments processing in an effort to promote digital payments.33 It also mandated digital acceptance by this means for all businesses with a turnover greater than $7K under The Central Board of Direct Taxes (CBDT) guidelines.
J.P. Morgan has analyzed 34 e-commerce markets to decipher the trends and challenges driving global e-commerce in 2020. To access our insights on a country-by-country basis, click here.
[1] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Online Selling India, 2020. [2] The economic times, March 2019. ‘Internet users in India to reach 627 million in 2019: Report.’ Accessed July 2020. [3] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via India Brand Equity Foundation, 2019. [4] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via India Brand Equity Foundation, 2019. [5] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020. [6] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via the United Nations, 2020. [7] ft.com, July 2020. ‘Walmart leads $1.2bn investment into India’s Flipkart.’ Accessed July 2020. [8] theeconomictimes, March 2019. ‘Internet users in India to reach 627 million in 2019: Report.’ Accessed July 2020. [9] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via India Brand Equity Foundation and The Paypers, 2019. [10] www.businessinsider.in, July 2020. ‘It’s official – Instagram Reels sets out to capture the TikTok market in India.’ Accessed July 2020. [11] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020. [12] ciol.com, April 2020. Indian ecommerce sees a drastic 30% decline during Janata Curfew.’ Accessed August 2020. [13] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via India Brand Equity Foundation, 2019. [14] export.gov, October 2018. ‘India – eCommerce.’ Accessed July 2020. [15] Ibef.org, December 2018. ‘E-commerce Industry in India.’ Accessed February 2019. [16] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company and WPL, 2020. [17] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020. [18] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via India Brand Equity Foundation, 2019. [19] statcounter.com, July 2020. ‘Mobile operating system market share India.’ Accessed August 2020. [20] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020. [21] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Ecommerce Foundation, 2019. [22] similarweb.com, July 2020. ‘Top App Store apps in India.’ Accessed July 2020. [23] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via the Bank for International Settlements, 2020. [24] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020. [25] Amazon.in, 2020. ‘About Pay on Delivery.’ Accessed July 2020. [26] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via PayPal Cross-Border Consumer Research, 2018. [27] theeconomictimes.com, February 2020. ‘Buying from foreign ecommerce sites may get costlier.’ Accessed July 2020. [28] theeconomictimes.com, February 2020. ‘Buying from foreign ecommerce sites may get costlier.’ Accessed July 2020. [29] thehindu.com, July 2020. ‘Tough, new e-commerce rules kick-in next week.’ Accessed July 2020. [30] thehindu.com, July 2020. ‘Tough, new e-commerce rules kick-in next week.’ Accessed July 2020. [31] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Online Selling India, 2020. [32] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020. [33] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via PYMNTS, 2020.
Copyright © 2022 Dr. Uttam Kumar Jha, Col Shubhojit Bhattacharya (Retd). This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Paper Id : IJRASET47170
Publish Date : 2022-10-25
ISSN : 2321-9653
Publisher Name : IJRASET
DOI Link : Click Here