EC Business in India

E-commerce, which emerged in the early 90s, stands for purchasing, selling, and exchanging goods or services using internet-enabled electronic devices. E-Commerce enabled websites and the Internet have become part of today’s business.

India is expecting a significant increase in the next 5 years, according to recent reports. The ever-expanding community of 3G/4G users is changing the scenario in India as the Indian smart-phone market which playing a significant role to fast growing E-Commerce market in India already grew 10% annually in 2018. Indian accounts for more than 10% of the global smart-phone market with a total of 137 million smartphones shipped in 2018 – up from 124.9 million in 2017. By using various on-line facilities, E-Commerce has led to innovations on delivery time, ease of transactions and features like drone delivery or artificial intelligence. The e-tailing industry dealing with jewelry, apparel and kitchen appliances is another significant contributor. The popularity of online wallet, cashback and coupon websites in India promotes hassle free functioning.

Amazon, Flipkart, Myntra, Snapdeal, Jabong stand testimony to the enormous success of E-Commerce in India, one of the fastest growing markets in the Asia Pacific region. 2016 recorded a growth of 70% and the consumer base almost touched 100 million in 2017, ensuring profits and growth. Nearly 35% of transactions happen through mobile phones – triple that of the percentage in the last fiscal.

Key factors:

  • Manageable quantities, personalized services, innovative schemes
  • Reduction in the cost of broadband internet facilities
  • More domain registrations at cheaper maintenance rates
  • Internet facilities and health services extended to the rural sector.

Business Models

B2B, B2C (Amazon, Flipkart), C2B (, C2C (OLX, eBay)

Branding & Marketing:

The current average CPA (cost per acquisition or the marketing metric that measures the aggregate cost to acquire one paying customer on a campaign or channel level) is currently not practically sustainable for small start-ups. However, niche businesses can drive sales even in very low CPA, as the customer base is limited.


GST supports easy inter-state and state-to-state business.

Mobile Apps:

According to Google, 84% of offline shoppers use apps on Google Play store or iOS app store to navigate nearest stores, check inventories, scan barcodes, etc.


A large number of customers still prefer ‘touch and feel’ shopping.

With several players in the market, the customer is offered big discounts, promotional coupons, easy return options etc. resulting in low margins but the critical element is the last mile delivery of the product to the customer with full satisfaction.


E-commerce is a self-sustainable business opportunity ideally suited for entrepreneurs, if implemented wisely. It can survive even amidst drops in the stock market. With its tremendous scope.

The ongoing digital transformation in the country is expected to increase India’s total internet user base to 829 million by 2021 from 560.01 million as of September 2018. India’s internet economy is expected to double from US$125 billion as of April 2017 to US$250 billion by 2020, majorly backed by E-Commerce.

E-commerce has a bright future in India.